' SYED HAMID ALI SHAH, J.---Plaintiff No,1 is a private company limited by shares, while plaintiffs Nos.
2 and 3 are its directors. Relationship between the plaintiffs and the defendants is that one of banker and customer. Plaintiff No,1 availed from defendant No,2, financial assistance in the form of running finance facility of Rs,8.4 million where under the agreement of finance, dated 26-4-1992 (Exh.D-3), was executed and signed between the parties. Plaintiffs Nos.2 and 3, being guarantors, signed letter of guarantee, dated 26-4-1992 (Exh.D-4 and Exh.D-5 respectively). Plaintiff No,2 marked lien vide Exh.D-2, against his foreign currency account bearing No,40655-9, maintained with defendant, whereby the executant authorized the bank to adjust the liabilities to recover the entire outstanding principal amount with mark-up, through a debit entry, in case of default.
Admittedly, the amount of loan was availed and disbursed to plaintiff No,1 and liability was not paid off, which resulted into adjustment of the liability, from foreign currency account (jointly maintained by plaintiffs Nos. 2 and 3) on 8-7-1993 and 12-7-1993.
2. Learned counsel recorded evidence of the parties. Plaintiffs produced two witnesses, namely Muhammad Khan Malik (P.W.1/plaintiff No,2) and Dr. Mrs. Akhtar Malik (P.W.2/plaintiff No,3).
Defendants, on the other hand, brought to the witness box Muhammad Akram Malik, Officer, Habib Bank Limited as D.W.1 Documentary evidence of the defendants comprises of Exh.D-1 to Exh.D-15.
3. Learned counsel for the plaintiffs referred to section 176 of the Contract Act, 1872 and submitted that a reasonable notice is mandatory, which the defendants have not issued to the plaintiffs before adjusting the outstanding liabilities from the foreign currency account of plaintiffs Nos. 2 and 3. He added that clause 3 of Exh.D-3 (agreement of finance), is silent with regard to due date for the payment of purchase price. It was vehemently argued that since no date of repayment was expressly stipulated in the agreement of finance, therefore, the question of default could arise only, when notice is issued and payment is not made in response to the notice. Learned counsel submitted that reading section 176 of the Contract Act, with agreement of finance (Exh. D-3) as well as the letter of lien (Exh.D-2), there was no lawful justification for adjustment of loan amount from the foreign currency account. Since no period for payment has been stipulated in the loan agreement therefore question of default would arise only when notice, for payment is served upon plaintiff. Learned counsel emphasized that the period of one year, mentioned in the sanction letter (Exh.D-10) for the payment of loan, cannot be considered as agreed period for payment of loan, as the agreement of finance is not based on sanction letter. The sanction letter/Exh.D-10 is dated 6-6- 1992, while agreement of finance was executed and signed by the parties on 26-4-1992. While placing reliance on the case of "Habib Bank Limited v. Messrs Qayyum Spinning Ltd." (2001 MLD 1351), it is contended that sanction letter, being an internal document, cannot bind the parties to the disadvantage of the customer. Learned counsel contended that Exh.D-11 to Exh.D-14, were addressed wrongly to the Taunsa Gypsum/plaintiff No,
1. The notice for adjustment of the foreign currency account, was required under law, to be served upon the account holder only. Learned counsel went on to argue that notice is essential to the pawnor, within the contemplation of section 176 of the Contract Act. Learned counsel went on to argue that these notices, even otherwise, have no value, as they were sent to plaintiff No,1 at incomplete address. He added that address of plaintiff as mentioned in the Account Opening Form (Exh.D-6), is 11-A, Asad Jan Road, Lahore Cantt.
He then submitted that the word 'Cantt' is missing in the address, at which the notice was sent to the plaintiff. The notice due to faulty address never reached the addressee. Learned counsel has referred to the statement of D.W.1, who has categorically stated in his statement that he remained unaware of any action of the defendants qua the adjustment of liabilities from his foreign currency account. It is contended that the statement of D.W.1 reflects that the defendants' witness was unaware about the notice. The witness stated that one Mr. Sajid Ilyas. Zaidi, Officer of the Bank, has issued notice. Non-appearance of Sajid Ilyas Zaidi in the witness box, is fatal and makes the factum of issuance of notice, a hearsay evidence. No receipt of issuance of notice or of receipt of the notice, has been produced in evidence. It was submitted that P.W.1, and P.W.2, in their examinations in chief, have categorically stated that no notice was given by them. The statements of witnesses (P.W.1. And P.W.2) stand proved to the extent that notice was not served upon the plaintiffs as the witness was not cross examined in this regard. Learned counsel supported this contention by referring to the case of "Mst. Nur Jehan Begum through Legal Representative v. Syed Mujtaba Ali Naqvi" 1991 SCMR 2300. Learned counsel submitted that foreign currency account, was maintained by plaintiffs Nos.2 and 3 jointly, while lien was created by plaintiff No,2 only. Lien so created, has no legal force and carries no value. The lien can be created by a person, who is an absolute owner of the property, under lien. In a joint account, plaintiff No,2 was not absolute account holder, thus the lien is defective. While placing reliance on the cases of "Faisal Bank through duly appointed Attorney v. Messrs Zimindara Rice Mills" and 21 others 2007 CLD 1164; "Messrs Muhammad Siddiq, Muhammad Umar and another v. The Australasia Bank Limited" PLD 1966 SC 684; "Messrs Continental Syndicate of Trade v. Lloyds Bank Limited" PLD 1966 Karachi 556; "Central Bank of India v. Syed Muhammad Abdul Jalil Shah" 1999 CLC 671, it was contended that notice before the adjustment of lien, was mandatory requirement of law. Learned counsel has submitted that the relief of credit of adjusted amount through reverse entry in the foreign currency account, as approved by the plaintiff, can be granted, even if, there is no specific issue framed in this respect. It was contended that the parties knowingly led their evidence in response to the pleadings. The relief can be granted according to prayer, although a specific issue is not framed or struck by the Court.
Learned counsel supported this contention by referring to the cases of "Muhammad Sharif and 3 others v. Mahla through Legal Representative and others" 2007 MLD 547; "Mst. Munira Rafique Anwar through Legal Representatives v. Khalid Javed Anwar" and others PLD 2005 Lahore 662; "Sindhi v.
Ashiq Al! And 10 others" 2005 YLR 2994; 2000 YLR 2645; "Muhammad Jan v. The State" 2000 YLR 2094; "Eada Khan v. Mst. Ghanwar and others" 2004 SCMR 1524; "Muhammad and 9 others v.
Hasham Ali" PLD 2003 SC 271; "Muhammad Akram alias Raja v. Muhammad Ishaque" 2004 SCMR 1130.
' Learned counsel has summed up his arguments with the contention that no specific period was stipulated in the agreement for re-payment of the amount between the Banker and the borrower although the time was mentioned in sanction advice (Exh.D-10), but this clause was not incorporated in the agreement, which was executed subsequent to the sanction advice. In case of conflict between the sanction advice and agreement. It is agreement, which is subsequent in date is to survive. Learned counsel; in support of this contention has referred to the case of reported as PLD 1959 W.P. Kar.
348.
4. Learned counsel for the defendants, on the other hand, referred to the prayer made by the plaintiffs and contended that the plaintiffs have sought declaration to the effect that encashment of foreign currency be declared as illegal and be reversed. As consequential relief, it was prayed that credited amount along with accrued interest thereon at State Bank's authorized rate of interest, be reversed in the account. The alternative prayer was made to the effect that an amount of Rs,76,751,804 as compensation/damages along with mark-up till realization be decreed. Since the plaintiffs pressed their relief to the extent of alternate and no issue was struck in this regard. No issue was struck regarding declaration of adjustment, as illegal and it's reversal, as the plaintiffs restricted -their suit to the alternate relief only. Learned counsel contended that account was maintained in the name of the company and the account holder company, made no prayer for a decree in it's favour. Reading prayer in the plaint as a whole, reflects that guarantors, who were the Director of the company, had sought relief against the defendant. Dispute is in fact between the company and it's Directors and the defendant-Bank has no role in the controversy. Learned counsel' in this regard referred to para.4 of the plaint. Learned counsel has emphasized that the nature of the transaction as it exists is a contract of lien is the transaction which is governed under section 171 of the Contract Act. Learned counsel, in response to this contention, has referred to the letter of lien (Exh.D/2). He exphasized that this document contains the condition that without notice to the plaintiff, the amount under lien is subject to encashment. Learned counsel went on to argue that plaintiffs stance that subject account maintained with the defendant-Bank is a joint account is incorrect. Exact nature of the account is "either or surviver" and referred to account opening form (Exh.D-6). He added that the account, which is "either or survivor" can be operated by either of the accountholders. So far as the lien is concerned, he submitted that it is an admitted fact as has been stated as such by P.W.1 in his examination in chief, that the earlier account was created against the facility granted by the defendant amounting to Rs,1.4 million. This facility has been granted to plaintiff No,1 and other defendants stood surety for re-payment of the amount. Learned counsel added that the statement of P.W.1 speaks about the validity of lien by one of the account- holder. Learned counsel submitted that account which can be operated by single signatures of either of the account holders (even when one among the account-holders dies) empowers him to create lien singly. Learned counsel submitted that to establish the claim of damages, it is essential requirement that the plaintiff must state the damages statedly suffered by him on each head separately and the same requires it's proof through evidence. He contended that not a single witness has given the estimate of loss which the plaintiff has suffered. While referring the case of "Umar v. S.A. Rana" PLD 1957 W. P. 760 he contended that right of lien survives until the time the goods or amount against which the lien is created, are written or paid of and it is immaterial that who was the owner or who had created the lien.
5. Heard learned counsel for the parties and record perused.
6. Plaintiffs filed a suit for declaration, mandatory injunction and also for recovery of Rs,76.6 million, as compensation/damages, in the Banking Court No,1 Lahore. The suit was subsequently transferred to this Court, from Banking Court, on enforcement of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997. The defendant sought leave to defend the suit through application PLA No,68-B of 1999. The petitioners/defendants were granted leave to defend the suit, resultantly the written statement was filed wherein the defendants controverted the assertions made in the plaint raised various preliminary objections and out of divergent pleadings of the parties, the following five issues were framed and the evidence thereto was recorded:--
(1) "Whether the suit is within time? OPP
(2) Whether the suit is not maintainable having not been filed by an appropriate person? OPD
(3) Whether the suit has not been filed by a duly authorized person? OPD
(4) Whether the plaintiff is entitled to a decree for recovery of the amount claimed against the defendants? OPP
(5) Relief?
' My issue wise finding is as under:-- Issue No,1 Issue No,1, is vital for the determination of instant controversy and I will take up this issue first. It is the case of the plaintiffs that they came to know about the impugned debit entries dated 8-7-1993 and 12-7-1993 from foreign currency account and adjustments towards outstanding balance of Running Finance Facility, on 3-3-1994 i,e, when the statement of account was delivered to the plaintiffs. The cause of action, arose when the amount was withdrawn, transferred and adjusted towards outstanding balance in the loan account. The suit was instituted on 25-21998, in the Banking Court, Lahore. Learned Banking Court returned the plaint to the plaintiff for it's presentation before the Court of competent jurisdiction, on 31-3-1999. Plaintiff then filed the suit in this Court on 19-4-1999 and the same was fixed for hearing, for the first time on 20-4-1999. Starting point of limitation, in the instant matter, is the date on which the withdrawal from foreign currency account, was made. The period of limitation for the institution of the suit for declaration is 6 years which in the instant case was uptill 12-7-1998. The starting point of period of limitation, if taken from the date of knowledge, then period of six years lapses on 3-3-1999. Taking the starting point of limitation either from the date of withdrawal or from the date of knowledge, the plaintiff has not instituted present suit, in this Court within a period of 6 (six) years, according to the provisions of Article 120 of the Limitation Act, 1908.
7. Although the plaintiff, prior to the institution of the suit in this Court, presented plaint in the Banking Court, Lahore. Plaintiff amended the plaint, which resulted into return of the plaint. The same was then represented in this Court. A period of one year, one month and 6 days was consumed in this exercise. B' The plaintiff then took 19 days to institute the suit in this Court. The question will arise that the plaintiff will be entitled to exclusion of time, spent in pmsuing the matter before learned Banking Court. The plaint after it's return from the Court not having jurisdiction, is represented before the Court having jurisdiction, the suit will not be continuation of earlier suit.
Plaint presented to a Court lacking jurisdiction in the matter is neither a "suit" nor "proceedings in the suit". The Court to which such plaint is presented, cannot adjudicate upon the merits of the case, nor can it give any relief to the plaintiff. To treat a plaint a suit, the plaintiff has to show that it is properly C stamped and presented before the Court which has the jurisdiction over the parties, subject-matter and the territorial jurisdiction. The Court has to see that subject-matter of suit is not barred under any law. The absence or presence of these ingredients may result either in return or in rejection of the plaint. Learned Division Bench of the Honourable Sindh High Court in this perspective, in the case of "Hawa Bai and 6 others v. Abdus Shakoor" and 8 others PLD 181 Karachi 277, after considering various judgments including the judgments from the Indian jurisdiction, found that plaint filed in the Court of proper jurisdiction, after having been returned from another Court on the ground that it had no jurisdiction in the matter, is a fresh suit for all intents and purposes and not merely a continuation of old proceedings in the former Court.
8.The plaint on it's return is represented in the Court of competent jurisdiction is fresh suit. The period of limitation will be computed from the date of accrual of cause of action till filing of the suit in the Court of competent jurisdiction. Once the time has begum to run, no subsequent disability or inability to sue stops it. Provisions of section 9 of the Limitation Act clearly provide that limitation once commences, it would continue to run, unless the case falls within any exceptions provided for limitation. Plaintiff sought amendment in the plaint, when the period of limitation was nearing it's expiry. Plaintiff amended the plaint consequently learned Banking Court returned the plaint. Plaint was represented in this Court, when the time for filing the suit had already been lapsed.
9. Time consumed in prosecuting another civil proceeding with due diligence, can be excluded in computing the period of limitation, where the proceedings are prosecuted in good faith. The plaintiff has to move an application to seek benefits under section 14 of the Limitation Act, 1908. The Court by itself cannot ascertain that proceedings founded upon the same cause of action or for the same .Relief, before the Court having no jurisdiction, were prosecuted in good faith. To establish "good faith", it's narration is essential requirement and that purposes can be achieved through filing of an application. Moving for amendment at the fag end of the period of limitation, cannot be termed as an act in good faith. "Good faith" as defined in section 2(7) of the Limitation Act, 1908 excludes everything from the purview of good faith which is not done with due care and attention.
What is done without due care and attention cannot be deemed to be done in good faith. The advantage of section 14, has neither been availed by the plaintiffs through a proper application, nor the same is available to plaintiffs as element of good faith as defined under section 2(7) is lacking.
10. The plaintiffs could challenge the withdrawal from foreign currency account within two years of the knowledge of withdrawal and adjustment towards loan. Article 32 governs such dispute. Period of limitation prescribed for compensation for breach of contract is three years, while declaratory suit is to be instituted within six years of accrual of cause of action. Three causes of action are joined together in the suit and the suit on each cause of action had become barred by limitation, when the plaint was represented in this Court.
11. The period of limitation has to be computed from the date on which the plaint was represented in this Court. The suit is thus barred by limitation. Resultantly the issue is decided in favour of the defendant and against the plaintiff.
' Issues Nos.2, 3 and 4.
12. The findings on Issue No,1, are sufficient for the decision of this case, therefore, decisions on these issues is not necessary.
13. For the foregoing, the instant suit has been instituted after the period of limitation, prescribed under law and is, therefore, dismissed with no orders as to the costs.