1. ' MS. SOOFIA LATIF, J.---By this order, I intend to dispose of two applications bearing C.M.A. No,11320 of 2008 filed by defendants Nos.1 to 5 and C.M.A. No,11321 of 2008 filed by the defendant No, 6 for leave to defend the above suit.
2. ' The circumstances giving rise to these C.M.As. Are that the plaintiff Messrs Habib Bank Limited filed a suit for recovery of Rs,69,677,726.25 against the defendants on the grounds that at the request of defendants Nos.1 and 2 a running finance facility and a sight letter of credit facility were sanctioned through an agreement for financing on mark-up basis dated 21-1-2003 and the sale price was agreed at Rs,8 Million and the purchase price payable by the said defendants to the plaintiff on or before 31-12-2003 was agreed at Rs,9.840 Million. As a security for repayment of the above mentioned purchase price, the defendants Nos.1 and 2 executed a promissory note, letter of hypothecation dated 21-1-2003 in favour of plaintiff. In order to further secure the repayment the defendant No,6 executed her personal guarantee dated 21-1-2003 in favour of plaintiff. According to the plaintiff the defendants Nos.1 and 2 instead of settling their outstanding liabilities, again requested the plaintiff for extension of aforesaid facilities of different amounts from time to time, which were sanctioned to them through different agreements of financing and on every time as a security for repayment, defendants Nos.1 and 2 executed promissory notes, letters of hypothecations, trust receipts and defendant No,2 also executed personal guarantee and defendant No,6 also mortgaged her immovable property viz plot No,B-13, Block-A, measuring 400 square yards, K.D.A. Officers Cooperative Housing Society Ltd, she also executed memorandum of deposit of title deeds dated 26-3-2003 and 15-8-2007 in favour of the plaintiff. It is also the case of plaintiff that despite all the concessions and renewals granted by the plaintiff at the request of defendants, they have committed deliberate and wilful breach of the terms and conditions of the above said agreements and they are deliberately avoiding to pay the outstanding amount to the plaintiff. According to the plaintiff the summary of disbursement of amount, repayments, mark-up and the total outstanding is as under:-- "A. Running Facility: Amount disbursed Rs.33,355,677.74 Amount repaid Rs.23,579,266.03 Principal outstandingRs.9,776,411.71 Mark-up Rs.1, 288, 710.54 Rs. 11,065, 122.25 B. Demand Finance Facility Amount disbursed Rs. 15,000,000.00 Amount repaid Rs. 1,875,000.00 Principal outstandingRs. 13,125,000.00 Mark-up Rs.1,720,528.00 Rs. 14,845,528.00 ' Total outstanding amount of the above mentioned Running Finance Facility (A) and Demand Finance Facility (B) comes to A+B=Rs,25,910,650.25."
3. ' According to the plaintiff interest based facilities in foreign exchange in the sum of US$ 542,479.00 was also sanctioned out of which a sum of US$ 33,272.00 is payable by the defendant No,1 towards the interest at the agreed rate, thus total amount payable by the defendant No,1 to the plaintiff comes to US$ 575, 751.00. Hence, the above suit.
4. ' In response to the summons issued to the defendants through all modes of service provided under the law, the defendants Nos.1 to 5 filed leave to defend application jointly whereas defendant No,6 filed leave to defend application separately.
5. ' The defendants Nos.1 to 5 in their applications have challenged the maintainability of suit. They have not denied the disbursement of loan, availing of loan amount, execution of documents. They have taken a plea that their signatures were obtained by the plaintiff on blank papers. However, the defendants Nos.1 to 5 have disputed the rate of mark-up.
6. ' In her leave to defend application the defendant No,6 has denied the execution of personal guarantee, memorandum of deposit of title deed and mortgage deed. According to her she is old, illiterate and Pardanasheen lady aged abott 80 years never executed such documents. She also disputed her signatures on the above said documents. According to her the documents were always with her son and the Bank might have collusively got possession of the said documents.
7. ' In the end, the defendants Nos.1 to 6 have prayed for grant of leave to defend the suit unconditionally.
8. ' I have heard learned counsel for the parties at length and also gone through the entire documents available on record very carefully.
9. C.M.A. No,11320 of 2008 ' The contention of Mr. Ramesh Kumar appearing for defendants Nos.1 to 5 is that the suit is not maintainable as framed. It is urged that the defendants Nos.1 to 5 are entitled to grant unconditional leave to defend the above suit as the statement of account has not been prepared in terms of the agreement and the calculation is based on adding interest upon interest, hence requires evidence. It is further urged that all the documents i,e, agreements of finance, promissory notes, letter of hypothecations and memorandum of guarantees were signed on blank documents, therefore, do not have any sanctity under the provisions of the Financial Institution (Recovery of Finances) Ordinance, 2001. It is also urged that the plaintiff have committed breach of its commitments by adding mark-up upon mark-up while preparation of the statement of accounts, therefore, it requires to be re-assessed by an independent Accountant. Mr. Ramesh has requested for the grant of unconditional leave to defend to the defendants Nos.1 to 5.
10. ' Conversely, Mr. Nadeem Akhtar appearing for plaintiff has contended that the C.M.A. No,11320 of 2008 is not maintainable as it has been filed and verified by the defendant No,3 Hafizur Rehman for self and allegedly on behalf of defendants Nos.1, 2, 4 and 5. Whereas no authorization or power of attorney has been filed by him to show that he has any authority on behalf of defendants Nos.1, 2, 4 and 5. In support of his contentions Mr. Nadeem has relied upon 1998 CLC 1152 and 2004 CLD 1227.
11. Mr. Nadeem has further contended that the defendants have not discussed at all in their applications, actual amount availed by them or disbursed by the plaintiff, the amount repaid by them, and the amount which is outstanding according to them, therefore, in view of non- compliance of such mandatory requirements of subsections (3) and (4) of section 10 of Ordinance of 2001, applications are liable to be dismissed. In support of his contention he has relied upon Bank of Khyber v. Messrs Spencer Distribution Ltd. 2003 CLD 1406, Zeeshan Energy Ltd. And others v. Faisal Bank Ltd. 2004 CLD 1741 and Allied Bank of Pakistan Ltd. v. Mohib Fabric Industries Ltd. 2004 CLD 716.
12. Mr. Nadeem has denied that the plaintiff had obtained the signatures of defendants on blank documents. However, he has contended that leave to defend cannot be granted mere on the ground that blank documents were executed when such execution of the documents is not denied or disputed. In support of his contentions Mr. Nadeem has relied upon Messrs International Traders through Proprietorship and others v. Union Bank Limited 2003 CLD 1464; Messrs Aima Industries (Pvt.) Ltd. And others v. Allied Bank of Pakistan Limited 2003 CLD 1770; Karim Bakhsh v. House Building Finance Corporation. 2004 CLD 212 and Tariq Javed and another v. National Bank of Pakistan 2004 CLD 838. Mr. Nadeem has further contended that in several letters written by the defendants to the plaintiff they have not only admitted having committed default but they also promised to settle their outstanding liabilities and such letters prove all the admissions of the defendants regarding outstanding amount against them, therefore, the defendants Nos.1 to 5 are not entitled to any leave to defend the suit.
13. ' Having considered the respective contentions advanced by both learned counsel, case-law cited by them, it appears that though the defendants in the above applications have challenged the maintainability of suit but neither in the application nor during the course of arguments the learned counsel appearing for defendants has satisfied this Court as to under what provision of law the suit is not maintainable. No case-law has been cited by him in this regard, hence no substance is found in the above contentions.
14. ' As regards the first preliminary objection Praised by the counsel for plaintiff regarding non-signing of application by defendants Nos.2, 4 and 5, it appears from the application that admittedly it has been signed by the defendant No,3 Hafizur Rehman as authorized agent of defendants Nos.1, 2, 4 and 5. Along with the application a resolution has been filed, which shows that the defendant No,3 Hafizur Rehman was authorized to handle and sign all papers related to the case between H.B.L.
15. And Paragon Industries (Pvt.) Limited. Admittedly this resolution is signed by the Directors of the company and not by the defendants Nos.2, 4 and 5 in their personal capacity. Except this resolution no other authority letter, power of attorney to have been given by defendants Nos.2, 4 and 5 to defendant No,3 in their personal capacity, has been filed nor A any affidavit of defendants Nos.2, 4 and 5 has been filed in support of the application, therefore, they cannot claim the present application to have been filed on their behalf, too and the application will be considered only filed by the defendant No,3 and also on behalf of defendant No,1 being authorized by a Resolution.
16. Reference can be made in the case of Messrs U.B.L v. Sindh Technical Industries 1998 CLC 1152 and Masood Alam v. Muslim Commercial Bank 2004 CLD 1227.
17. ' Adverting to the next preliminary objection of learned counsel for the plaintiff regarding non- compliance with the mandatory requirement of subsections (3) and (4) of section 10 of Financial Institution (Recovery of Finances) Ordinance, 2001, it is obvious from listed application that the requirements of section 10(3)(4) have not been complied with while filing above application. The defendants failed to give actual amount of finance availed by them; the amount paid by them; the dates of payment; amount of finance and other amounts relating to the finance payable by them to the plaintiff's Bank; the amount of finance and other amounts, which they dispute as payable by the plaintiffs bank; thus, the defendants have comprehensively failed to comply with the provision of section 10(4) of the Ordinance, 2001. In such circumstances 1 have to see whether the above application filed by the defendants in the present form is maintainable. The provisions of sections 10(3)(4) and (5) of Ordinance, 2001, inter-alia provide that the application for leave to defend shall be in the form of a written statement, containing summary of substantial questions of law and facts, and also giving certain particulars to be furnished by the defendant regarding the finance, i,e, finance availed, amount paid by the defendant etc. And that such an application must be accompanied by all the documents in support of substantial questions of law and facts raised by the defendants. If the afore-noted provisions of law are placed in juxtaposition with the contents of the applications, filed by the aforementioned set of defendants, the only irresistible conclusion, which can be drawn is that the defendants did not comply with the aforesaid provisions of law. In the above perspective, I have no hesitation to say that the defendants have failed to file leave applications as required under the law and they have not complied with the requirement as contained in sections 10(3)(4) and (5) of Ordinance, 2001.
18. ' Section 10(6) of Ordinance, 2001 provides that an application for the grant of leave, which does not comply with the requirements of subsections (3), (4), (5) of section 10 (ibid), the same shall be rejected, unless the defendant disclose therein sufficient cause for his inability to comply with any such requirement. In the instant case as discussed above, the application filed by the defendants does not fulfil the mandatory requirements of sections 10(3), (4) (5) of the Ordinance, 2001.
19. Moreover, the defendants have also not shown sufficient cause in their applications for their inability to comply with the said B requirements, even the learned counsel for defendants have also not satisfied me on this point, therefore, the above application is liable to be rejected under section 10(6) of the Ordinance, 2001. Reference can be made to the cases of Zeeshan Energy Ltd. And 2 others v. Faisal Bank Ltd. 2004 CLD 716, 741; Habib Bank Ltd v. Messrs Sabcos (Pvt.) Limited 2006 CLD 244, Bank of Khyber v. Messrs Spencer Distribution 2003 CLD 1406, Sandi Pak Industrial and Agriculture Investment Company (Pvt.) Limited Ltd. v. Mohib Textile Mills Ltd. And others 2002 CLD 1170.
20. ' Coming now to the merits of application, in their applications the defendants have not denied the sanctioning of the financial facilities in favour of defendant No,
1. They have also not denied the execution of all documents and their signatures thereon. It is obvious from the record that at the time of availing the facilities, the defendant's company not only executed the charge documents but the defendant No,6 also mortgaged her property and in addition thereto the defendants Nos.2, 3 and 6 executed their personal guarantees favouring the plaintiff. It also appears from the record that the defendants Nos.1 and 2 executed finance agreements, demand promissory notes, letter of hypothecations, Trust receipt, and bill of exchange. However, they have raised objection that their signatures were obtained on all documents including guarantees on blank papers, hence do not have any sanctity under the provision of Ordinance, 2001. It is well-settled principle of law that signing of blank document amounts to creating or impliedly authorizing the bank to fill in any amount at a later point of time. In this regard I am fortified by the law laid down in Messrs United Bank Ltd., v. President, Bazm-e-Salat and another PLD 1986 Kar. 464 and Messrs Bank of Oman Limited v. Messrs East Asia Trading Co. Ltd. And 4 others 1987 CLC 288. It has been observed that admittedly all the defendants have not denied the execution of any document, therefore, the defendants are estopped to wriggle out from this position on the well-known principle of approbate and reprobate as per principle laid down by the Honourable Supreme Court in the case of Haji Ghulam Rasool and others v. The Chief Administrator of Auqaf, West Pakistan PLD 1971 SC
376. In the instant case upon the execution of the finance agreements which are twenty in numbers, I find that all were signed on behalf of Paragon Industries, therefore, this contention of learned counsel for defendants has no force and does not appeal to common sense that the defendant No,3 being educated person could have signed on blank papers at the force of plaintiffs bank. Admittedly neither the defendants made any complaint to any Forum nor approached to any Court of law for cancellation of above said documents. This plea of defendants appears to be desperate attempt to wriggle out of their contractual obligations and to save themselves from liquidating the financial liabilities incurred by them through the execution of the documents, availment of different financial facilities by defendant No,1 and failure to liquidate them.
21. ' As regard the amount of guarantees, the defendants Nos.2 and 3 have disputed the amount of guarantees, but admitted their signatures thereon. Section 20 of the Negotiable Instrument Act, provides that where one person signs and delivers to another a paper stamped in accordance with law, either wholly blank or having written thereon an incomplete negotiable instrument, in order that it may be made, or completed into a negotiable instrument, he thereby gives prima facie authority to the person who receives that paper to make or complete it, as the case may be. Even if it may be considered that the documents were given blank, even then in view of the above-noted provisions of law the defendants are estoppel to challenge the legality, validity and genuineness of these documents. Reference can be made to the cases of Muhammad Sharif v. Muhammad Hashim Paracha and others PLD 1987 Kar. 76, Abdul Aziz v. Mahmoodul Hassan and others 1988 CLC 337, Prudential Commercial Bank v. Hyderi Ghee Industries Ltd and others 1999 MLD 1694, Bank of Khyber v. Spender Distributors 2003 CLD 1406, Bazm-e-Salat and others v. Messrs United Bank Ltd.
22. PLD 1989 Kar.
23. 150.
24. In the instant case it is proved from the documents on record that the defendants have signed/executed the documents and undertaken, as per said terms of the personal guarantees and other documents to liquidate the outstanding amount in case the principal debtor i,e, the company fails to liquidate the amounts. Further in their letters annexures P-71, P-72, P-73, P-74 and P-76 the defendants have clearly admitted the claim of plaintiff and they promised to settle their outstanding liabilities. In view of the execution of the personal guarantees and other documents as well, the said defendants cannot now shirk from liquidating their liabilities, and they are jointly and severally liable to liquidate the liabilities of company under the provision of the contract Act.
25. ' For the reasons discussed above, defendants Nos.1 to 5 have comprehensively failed to raise any serious and bona fide dispute warranting the grant of leave to defend the suit, thus the listed C.M.A.
26. No,11320 of 2008 is found to be devoid of any force and is hereby dismissed on the ground of non- maintainability and on merits as well.
27. C.M.A. No,11321 of 2008 ' Mr. Neel Kashev appearing for defendant No,6 has also challenged the maintainability of the suit and contended that the defendant No,6 is an old and Pardanasheen lady aged about 80 years and illiterate woman and at the time of execution of mortgage papers she did not have any independent advise to understand the papers which were got signed from her by the Bank with misrepresentation of the facts, hence the mortgaged is illegal in the eyes of law. Mr. Neel Kashev has denied that the defendant No,6 in consideration of the facilities mentioned in the plaint, as security for re-payment had mortgaged her immovable property viz plot No,B-13, Block-A, measuring 400 square yards, K.D.A, Officers Cooperative Housing Society Ltd. Karachi and he also denied that she had executed any memorandums of deposit of title deeds dated 26-3-2003 and 15-8-2007 in favour of plaintiffs Bank. Mr. Neel Kashev has also denied that the defendant No,6 has handed over any title documents to the plaintiff. It is urged that the documents which are always in the possession of her sons and the Bank might have collusively got possession of the said documents. Mr. Neel Kashev has requested to grant unconditional leave to defend to the defendant No,6. In support of his contentions he has relied upon PLD 1969 Karachi 324, PLD 2008 SC 140, CLD 2005 Law Notes 94 and 2002 CLD 876.
28. ' Conversely Mr. Nadeem Akhtar appearing for plaintiff contended that admittedly defendant No,6 had executed memorandum of deposit of title deeds dated 26-3-2003 and 15-8-2007 and registered mortgage deed dated 9-5-2003 and 10-11-2007. Mr. Nadeem has drawn my attention to the photographs of defendant No,6 appearing on the registered mortgage deed and contended that the photographs of defendant No,6 appearing on the above documents did not appear of a Pardanasheen lady and further mortgage documents were witnessed by her own son the defendant No,3. In support of these contentions Mr. Nadeem has relied upon Mst. Mahmooda Begum and others v. Major Malik Muhammad Ishaq and others 1984 SCMR 890, Mst. Hawa v.
29. Muhammad Yousuf and others PLD 1969 Kar. 324, Messrs Ideal Life Insurance Co. Ltd. And another, v. Mst. Khairunnisa A.G. Mirza 1980 CLC 1375. He has further contended that during the period from March, 2003 to November, 2007 the defendant No,6 did not take any action against the plaintiff and her son who according to her, got her signature on the mortgage documents nor he initiated any proceeding for cancellation of mortgage documents nor applied for return of the original title documents of the mortgage property.
30. ' Having considered the respective submissions advanced by the learned counsel, I do' not find any substance in the contention of learned counsel for defendant No,6. The memorandum of deposit of title deeds dated 26-3-2003, 15-8-2007, registered mortgage deed dated 9-5-2003 10-11-2007 show that her photograph appearing on the above said mortgage documents do not appear of a Pardanasheen, lady. Moreover, the registered mortgage deeds Annexure P.68 and 69 were admittedly executed before the concerned sub-Registrar in presence of witnesses who admittedly is the son of defendant No,6. It also appears that at Sr. Nos. 3 and 4 there is specific endorsements of the sub-Registrar that the defendant No,6 admits the execution of these deeds. Such facts rebut the said plea of defendant No,6 that she is Pardanasheen lady and she had not signed such documents. In the case of Mst. Mahmooda Begum and others v. Major Malik Muhammad Ishaq and others 1984 SCMR 890, it has been held that "a Pardanasheen lady is one who remains behind the curtain and has no communication except from behind the pardah with any male person save a few privileged relations or dependents. Such lady has no access to independent advice other than from such persons. Pardahnasheen lady as a matter of rule is not ignorant, weak minded having no capacity to understand her affairs because of living in seclusion".
31. ' In the case of Mst. Hawa v. Muhammad Yousuf PLD 1969 Kar. 324, it has been observed that the fact that whether independent advice was available to a Pardanasheen lady at the time when she entered into a transaction can be taken into consideration in order to determine whether she thoroughly comprehended and had deliberately offer own freewill carried out the transaction. It is found that the document was conceived and executed by her freewill, it shall be upheld notwithstanding the fact that the executant is a Pardanasheen lady. The legal protection given to a Pardanasheen or an illiterate woman cannot be transmuted into a legal disability.
32. ' It is also to be noted that besides the execution of memorandum of deposit of title deeds, registered mortgage deeds, the defendant No,6 also executed four personal guarantees and in her application she has not denied the execution of such guarantees her signature thereon. Nothing has been mentioned, either in the application or in her affidavit that she ever made any complaint or lodged F.I.R about missing of documents of her property or that she approached to any forum, if her signature was manipulated on the mortgage documents. All such facts clearly show that the defendant No,6 had executed and signed such documents with her own wish and now she has taken such objections only in order to save herself from the outstanding liability of the plaintiff.
33. ' For the reasons discussed above, the defendant No,6 also failed to raise substantial question of law and facts to be tried by the Court in respect of which evidence needs to be recorded, hence the above listed C.M.A. No,11321 of 2008 is dismissed. The case laws cited by the learned counsel for defendant No,6 are distinguishable and not attracted to the facts of the instant case.
34. The plaint is verified on oath, therefore, the allegations made therein shall be deemed to be admitted. The plaintiff has produced photocopies of all the documents on the basis of which the present suit has been filed, execution of whereof has been admitted by the defendants in their applications for leave to defend the suit. Moreover, the statement of accounts are duly verified/certified under the Banker's Books Evidence Act, 1891, to which the presumption of correctness is attached. There is no rebuttal of the aforesaid documents or? Record. Consequently the suit of plaintiff is decreed against the defendants jointly and severally in the sum of Rs,25,910,650.25 with cost of funds at the prevailing rate of the State Bank of Pakistan from the date of filing the suit till realization of decretal amount. Further the suit is decreed against the defendants jointly and severally in sum of US$ 575,751.00 with interest thereon at agreed rate of 11.25% from the date of filing the suit till realization of the decretal amount. The prayer: for attachment and sale of the mortgaged property bearing Plot No,B-13, Block A, measuring 400 square yards, K.D.A. Officers Cooperative Housing Society Ltd, Karachi with construction thereon, attachment and sale of all the hypothecated goods, merchandise, products, stocks, stocks-in- trade, raw materials, work-in-progress, finished and unfinished goods, plant, machinery, equipment, tools and receivables belonging to defendants Nos.1 and 2 along with cost of suit is also allowed.