The plaintiff has filed the instant suit for recovery of Rs,66.263 millions as due on 13.12.2005 against Defendants No, 1 to 7 jointly and severally along with cost of funds, liquidated damages and cost of the suit. It is further prayed that the plaintiff be allowed to sell the pledged shares in the open market.
2. The case of the plaintiff as disclosed in the plaint is that the plaintiff claims to be a financial institution as defined by Section 2(a) of the Financial Institution (Recovery of Finances), Ordinance 2001 which was previously carrying on its business in the name and style of Al-Faisal Investment Bank Ltd. and such name has subsequently been changed, after the fulfilments of due formalities, to Faisal Bank Ltd., the plaintiff in the instant case. The suit has been filed through Sheraz A.Chaudhry and Ahmad Nauman Khan who, it is alleged, are the Principal Officers of the plaintiff- bank, and are duly authorized to file the suit and to sign and verify the plaint on the basis of Power of Attorney, appended with the plaint. Defendant No, 1, it is contended, is a public limited company incorporated under the Companies Ordinance, 1984, while Defendants No, 2 to 7 are the Directors of Defendant No, 1 company and have been impleaded as guarantors, hence it is contended that Defendants No, 1 to 7 are customers as defined u/S. 2(c) of the Ordinance, 2001.
3. It is the case of the plaintiff-bank that Defendant No, 1 applied for and was granted a finance facility of Rs,60 millions, vide facility letters dated 10.6.2000 and 13.6.2000, which, it is contended, was duly signed on behalf of Defendant No, 1 in token of acceptance of the terms and conditions mentioned therein. It is further alleged that Defendant No, 1 had also passed a resolution dated 10.8.2000 in respect of the said finance facility. It is the case of the plaintiff that Defendant No, 1 executed inter-alia Murabaha Financing Agreement, the Payment Schedule, Agency Agreement, Purchase Order, Disbursement Request, Receipt for a sum of Rs,60 millions, an Undertaking to repay Rs,89.962 millions, a Promissory Note as well as General Financial and Collateral Agreement. Copies of the aforesaid documents have been appended with the plaint. Furthermore, Defendant No, 1, vide its letter dated 21.8.2000, requested for disbursement of finance facility and allegedly the plaintiff-bank, vide its letter dated 22.8.2000, complied with the disbursement request by enclosing a cheque of Rs,60 millions.
4. It is also contended that Defendants No,. 2 to 7 separately executed personal guarantees of Rs,89.962 in respect of repayment of the finance facility, copies of such alleged personal guarantees are also appended with the plaint.
5. It is the case of the plaintiff that the said Finance Facility was also secured through mortgage of properties by way of deposit of title deeds. The properties mortgaged are described in Paragraph 13 of the plaint and the document of title deed i,e, sale-deed dated 19.7.1990 allegedly stands deposited with the plaintiff-bank. Supporting letters from the other banks including the first charge holder are also referred to and appended with the plaint. It is also the case of the plaintiff-bank that the Finance Facility in question was secured vide hypothecation agreement dated 10.8.2000 and pledge of shares mentioned in Paragraph 17.1 of the plaint and the scripts whereof are allegedly in the custody of the plaintiff-bank. It was also the case of the plaintiff-bank that the liability has been acknowledged by various letters as well as in the balance-sheet of Defendant No, 1 company which are also appended with the plaint. It is further contended in the plaint that the liability under the Finance Agreement was rescheduled by the defendants who failed to repay the amount in accordance with the understanding of rescheduling. In the above perspective, it is contended that a sum of Rs,66.263 millions is allegedly due jointly and severally from the defendants to the plaintiff. The amounts disbursed to the defendant and amounts received from the defendants by the plaintiff-bank are allegedly set forth in the schedule appended, with the plaint.. In the above perspective, the plaintiff-bank has sought a decree for Rs,66.263 million along with cost of funds, liquidated damages and cost of the suit. Permission to sell the pledged goods is also prayed for.
6. Pursuant to summons from this Court, two applications for leave to defend the suit have been filed. PLA No, 33-B/2006 has been filed on behalf of Defendants No, 1, 2, 4 to 7 and PLA No, 34-B/2006 has been filed on behalf of Defendant No, 3.
7. The plaintiff separately filed replies to PLA No, 33-B/2006 and PLA No, 34-B/2006. Along with the said replies, a certificate as well as a further statement of accounts was also filed by the plaintiff.
8. Counsels for the parties have been heard and record perused.
9. Mr. Munawar-ul-Islam, Advocate on behalf of Defendants No, 1, 2, 4 to 7 has contended that the mandatory requirements of Section 9 of the Financial Institution (Recovery of Finances) Ordinance 2001 have not been complied with by the plaintiff-bank. It is contended that a plaint must necessarily be supported firstly by statement of accounts and secondly it must also clearly specify the amount of finance availed, the amount repaid and the outstanding amount. It is further contended that the statement of accounts must clearly specify all debt and credit entries as well as the balance at the close of the period. All entries must also be clearly described so as to ascertain from which account the amounts have been withdrawn and in which account the same had been credited. It is contended that the contents of the plaint and the statements of accounts appended therewith do not fulfil the mandatory requirements of Section 9, hence the plaint is Non- Est in law and is liable to be rejected. In support of his contentions, the learned counsel has relied upon the judgments reported as: (i) Bankers Equity Ltd. Vs. Bentonite Pakistan Ltd. (2003 CLD 931),
(ii) C.M. Textile Mills Ltd. Vs. Investment Corporation of Pakistan (2004 CLD 587), (iii) United Dairy Farms Pvt. Ltd. Vs. United Bank Ltd. (2005 CLD 569, (iv) Habib-ur-Rehman vs. Judge Banking Court No, IV, Lahore (2006 CLD 217), and (v) judgment of Division Bench of this Court in F.F.A. No, 24/2007 titled "Peco International vs. Allied Bank Ltd.".
10. The learned counsel has further contended that Annexure-A to the reply to PLA which is a further statement of accounts does not pertain to the relevant period and the entries therein do not support the contentions in the plaint. Without prejudice to the above, it is contended by the learned counsel that the contents of the plaint and the contentions as to rescheduling are self contradictory. Even otherwise, the said rescheduling is not proved on record. In such an eventuality, Defendants No, 1, 2, 4 to 7 are entitled to leave to defend the suit. In support of his contentions, he has further relied upon the judgments reported as: (i) United Bank Ltd. Vs. Ch. Ghulam Hussain (1998 CLC 816), and (ii) Muhammad Mujtaba and 5 others vs. The Bank of Punjab (2004 CLD 712).,
11. The learned counsel has further pointed out that additional documents have been appended with the reply to the PLA which prima facie justify the grant of leave to defend the suit. In support of aforesaid contention, the learned counsel has relied upon the judgments reported as: (i) Nusrat Textile Mills Ltd. and 8 others vs. United Bank Ltd. (2005 CLD 1421) and (ii) AIR 1928 PC 80. The pledge of shares has been denied. It is further contended that no mortgage in law was ever created as only copies of the sale-deed appear to have been given to the plaintiff-bank. In support of his contention, he has relied upon the judgment reported as: Mst. Irshad Bibi vs. Muslim Commercial Bank Ltd. and 3 others (2003 CLD 46). It is also specifically contended that the entire liability has been paid off by the defendant-company. In response to the alleged admission made by the defendant in its Balance Sheets, the learned counsel contends that such admissions are not binding on the defendant as the same is factually incorrect and wrong in law. In support thereof, the learned counsel has relied upon the judgments reported as: (i) United Leather Exports and 4 others vs. National Bank of Pakistan (2005 CLD 1391), (ii) Barkhurdar us. Muhammad Razzaq and others (PLD 1989 SC 749). The learned counsel has further contended that even otherwise the plaintiff must rely on the strength of its own case rather than the contents of PLAs. In support of his contention, the learned counsel has relied upon the judgments reported as: (i) 1996 MLD 1819, (ii)
1996 CLC 202, (iii) 1992 CLC 2524, (iv) 1996 MLD 1040, and (v) 1971 SCMR 432. It is further contended that in view of rescheduling, Defendants No, 2 to 7, who were guarantors, stand discharged of the liability. In support of his contention, the learned counsel has relied upon the judgments reported as: (i) 2007 CLD 1205 (ii) AIR 1981 Madras 180, and (iii) 2002 CLD 509.
12. In the light of the above contentions, the learned counsel seeks unconditional leave to defend the suit on behalf of Defendants No, 1, 2, 4 to 7.
13. Mr. Shahid Ikram Siddiqi, Advocate on behalf of Defendant No, 3 has adopted the arguments advanced on behalf of Defendants No, 1, 2, 4 to 7. In addition thereto, he has further argued that in view of Sections 132 to 135 of the Contract Act, as the original Finance Agreement has been altered without the consent of the guarantor-Defendant No, 3, his liability stands discharged. In support of his contention, he has relied upon the judgments reported as: (i) 2007 CLD 1205, (ii) PLD 1984 Karachi 21, (iii) PLD 1968 SC 83, (iv) NLR 1990 Civil 609, (v) AIR 1963 SC 746, (vi) AIR 1929 Lahore 203, and (vii) AIR 1931 Oudh 426. He has further contended that the suit has not been filed by a duly authorized representative as there is no document on record to show that the President of the plaintiff-bank was authorized to execute the Power of Attorney relied upon by the plaintiff-bank and appended with the plaint. In support of his contention, he has relied upon the judgments reported as: (i) 2005 CLC 731, (ii) 2006 SCMR 437, (iii) 2000 SCMR 472, (iv) 2004 CLD 1356, and (v)
PLD 1999 Karachi 260. The learned counsel also contended that the statement of accounts appended with the plaint and relied upon by the plaintiff does not qualify as. statement of accounts as required by law and in support of his contention, he has relied upon the judgment reported as: (i) 2006 CLD 217, (ii) 1997 SCMR 943, (iii) 2004 CLD 587(g), (iv) 2004 CLD 1338, (v) 2004 CLD 1356.
14. The learned counsel adds that the bank has charged markup till 18.3.2004 which is beyond the contractual period and is not admissible in law in view of the judgment reported as: Textile Management Pvt. Ltd. vs. NIT. (2002 CLD 276). Similarly, prompt payment bonus has not been deducted from the claim which is the requirement of law as laid down in the judgments reported as: (i) PLD 2000 Karachi 246, (ii) M/s State Engineering Corporation Ltd., Islamabad through Manager (Personnel) S.M. Akram Farhat (2004 CLD 1344), and (iii) Textile Management Put. Ltd. vs. N.I.T. (2002 CLD 276). In the above context and without prejudiced to his arguments, the learned counsel has contended that at best a sum of rupees which qualifies Rs,45,715,136/- can be due from the defendant.
15. Syed Ali Zafar, Advocate for the plaintiff-bank has controverted the contentions raised on behalf of the defendants and stated that no plausible defence has been made out and the defendants are not entitled to any leave to defend the suit. He has reiterated that the liability of the plaintiff- bank has been admitted in the balance-sheets which fact alone proves the case of the plaintiff- bank. In support of his contentions, he has relied upon the judgments reported as: (i) Deputy Custodian of Enemy Property vs. KESC (1986 CLC 2808); (ii) HB Ltd. vs. Karim Cotton Mills (1998 CLC 1403), and (iii) Habib Bank Ltd. vs. Orient Rice Mills Ltd. (2004 CLD 1289. In addition thereto, the learned counsel has contended that the mandatory requirements of Section 10(6) have not been complied with by the defendants as no detail of the amount availed and the amount repaid has been spelt out, which fact alone is sufficient for rejection of the applications for leave to defend the suit. In support of his contention, he has relied upon the judgments reported as: (i) NBP vs. EFFEF Industries Ltd. (2002 CLD 1431), (ii) Bolan Bank Ltd. vs. Baig Textile Mills Ltd. and others (2002 CLD 557), (iii) Saudi Pak Industrial and Agricultural Investment Company Ltd. vs. Mohib Textile Mills Ltd. and others (2002 CLD 1170), (iv) Bankers Equity Ltd. vs. Bentonite Pakistan Ltd. and others (2003 CLD 931), (v) Bank of Khyber us. Spencer Distribution Ltd. and others (2003 CLD 1406), (vi) Allied Bank of Pakistan us. Mohib Fabrics Industries Ltd. (2004 CLD 716), (vii) Zeeshan Energy Ltd. vs. Faysal Bank Ltd. (2004 CLD 1741), and (viii) Habib Bank Ltd. vs. Sabcos Pvt. Ltd. (2006 CLD 244). Adds that even otherwise, the statement of accounts appended with the plaint is sufficient in law to fulfil the requirement of Section 9 of the Ordinance, 2001. The learned counsel has also relied upon the contents of the guarantee more particularly clauses 4 and 11 thereof and on the basis thereof he contends that the Guarantors-Defendants No, 2 to 7 are not discharged from their liability as a consequence of the aborted rescheduling.
16. Counsels for the parties have been heard and record perused.
17. The main thrust of the contentions raised on behalf of the defendants is that the mandatory requirements of Section 9 of the Financial Institution (Recovery of Finances) Ordinance 2001 has not been complied with. The said provision of law reads as under:-- "Procedure of Banking Courts: (1) Where a customer or a financial institution commits a default in fulfilment of any obligation with regard to any finance, the financial institution or, as the case may be, the customer, may institute a suit in the Banking Court by presenting a plaint which shall be verified on oath, in the case of a financial institution by the Branch Manager or such other office of the financial institution as may be duly authorized in this behalf by power-of-attorney or otherwise.
(2) the plaint shall be supported by a statement of account which in the case of a financial institution shall be duly certified under the Bankers' Books Evidence Act, 1891 (XVII of 1891), and all other relevant documents relating to the grant of finance. Copies of the plaint, statement of account and other relevant document shall be filed with the Banking Court in sufficient numbers so that there is one set of copies for each defendant and one extra copy.
(3) The plaint, in the case of a suit for recovery instituted by a financial institution, shall specifically state:--
(a) the amount of finance availed by the defendant from the financial institution;
(b) the amounts paid by the defendant to the financial institution and the dates of payment; and
(c) the amount of finance and other amounts relating to the finance payable by the defendant to the financial institution upto the date of institution of the suit.
(4) .........................
(5) ........................."
18. The aforesaid provision came up for interpretation before a Single Bench of this Court in the case of "Bankers Equity Ltd." supra, wherein a consortium of financial institution' had filed the suit and appended with the plaint was a set of documents alleged to be the statement of accounts.
The said documents were filed on behalf of each of the financial institutions and merely contain single entries of principal, mark-up, CED and outstanding balance or sale price, purchase price etc. Individual transactions were not set out. The learned Single Judge was pleased to observe as follows: "As per settled 'Banking Practices', every amount/sum advanced or paid to the customer or sum expended/incurred for and on behalf of a customer by a banking company is entered as 'debit' in the books of the Bank and the money received from or on behalf of the customer is entered in these books as customers 'credit' to arrive at a credit or debit balance."
In the aforesaid circumstances, the learned Judge in Paragraph 16 of the judgment concluded that the said documents were in fact Certificates of Balance and not a statement of accounts and hence the mandatory requirements of Section 9 of the Ordinance have not been fulfilled and the plaint was rejected. A Division Bench of this Court in the case of "M/s. CM. Textile Mills Pvt. Ltd.", supra, after examining the documents appended with the plaint which too included single entries of principal, mark-up excise duty and total outstanding concluded that the same was not a statement of accounts but was a Certificate of Balance (COB).
19. In both the aforesaid cases, it was held that the statement of accounts must be a copy of the ledger or book of accounts maintained by the financial institution identifying each and every entry of debit or credit with clarity and further the same must not only be certified under the Bankers'
Books Evidence Act, 1891 but also support the claim, set-forth in the plaint before it can be held that the mandatory requirements of Section 9 have been complied with.
20. In the case of "M/s. United Dairies Farms Pvt. Ltd.", supra, a Division Bench of this Court while interpreting Section 9 of the Ordinance held that not only the provisions of Section 9 are mandatory but also that the individual transactions must be identified in a format comprehensible to any reasonable person reading it in the ordinary course. It must be set out in a mode that clearly describes the nature of the entries and arranges the same in a manner that distinguishes the various categories of amounts so that the evidentiary presumption of the Bankers' Books Evidence Act, 1891 is fulfilled.
21. In the case of "Habib-ur-Rehman and others vs. Judge Banking Court No, 4", supra, a Division Bench of this Court held that where the entries in a statement of accounts were not decipherable as the ambiguities and the description of the entries could not be explained, there is a triable issue and an application for leave to defend could not be dismissed. In the said case, an appeal against the judgment of the Banking Court was accepted and the case remanded.
22. In RFA No, 24/2007, supra, a Division Bench of this. Court noticed that several debit entries were merely identified as "transfer" suggesting that such amount had been transferred to another account and such transfer could not be identified from the record or explained by the learned counsel for the financial institution. The appeal was accepted and leave to defend the suit granted subject to deposit of the admitted liability.
23. The upshot of the aforesaid judgments would reveal that the provisions of Section 9 are mandatory, secondly two separate duties are cast on the plaintiff in a suit filed under Section 9 of the Ordinance firstly to state in the plaint, the finance availed, the amount paid back and the balance amount outstanding. In addition thereto, the plaint must be supported by a statement of accounts which in the case of a financial institution must be duly certified under the Bankers' Books Evidence Act, 1891. Such statement of account not only should show each individual transactions separately whereby any amount was availed (or otherwise debited) or paid back (or otherwise credited) but also such statement of accounts must support the claim in the plaint. Furthermore, each and every entry credit or debit must be satisfactorily identified not only as to its date but also its mode and manner. Such identification must be sufficient to make the statement of accounts comprehensively to any reasonable person reading the same. In order to satisfy the minimum requirements of Section 9(2) and to avoid rejection of the plaint, the statement of accounts appended therewith must specifically identify the amounts advanced or paid to the customer or any sum expended or incurred for or on his behalf as a debit entry along with all payments received from the customer or on his behalf as a separate credit entries with the final balance. The deficiency, if any, in the due identification of the individual entries may give rise to triable issue subject to a bona-fide dispute raised by the defendants in respect thereof.
24. In the instant case, Para 21 purports to comply with the provisions of Section 9(3) of the Ordinance. In the said paragraph, the amount of finance availed by Defendant No, 1 is stated as Rs,60 millions and the amount received from Defendant No, 1 is stated as 37.861 millions "as per schedule attached". In the attached schedule, there is a date of disbursement of the amount of Rs,60 millions and in addition thereto, 34 other entries of re-payment of principal and/or profit are also specifically mentioned along with dates thereof.
25. Along with the plaint, a statement of accounts is also available at page 200. The said document which appears to be certified under the Bankers' Books Evidence At, 1891, also contains one debit entry of Rs,60 millions along with its date and 34 separate credit entries along with their respective dates with regard to amounts adjusted against principal and/or profit. A separate column of outstanding principal amount also forms part of the said document. Further, it has been noticed that the nature of the transaction is not specified in respect of the entry of disbursement. The mode of disbursement i,e, cheque with its number etc. is absent. Similarly, with reference to the 34 credit entries, the mode of such payment is also absent. There is no mention as to whether such credit entries are the result of deposits by way of cheque, cash, transfer, bank draft etc.
26. After examining the documents in question in the light of the law as laid down in the judgment of this Court, referred to above, this Court has no hesitation in holding that the same is not a certificate of outstanding or a certificate of balance but a statement of accounts and is sufficient to satisfy the mandatory requirements of Section 9 of the Ordinance inasmuch as individual transactions are set out separately along with dates thereof and the documents is duly certified in accordance with the Bankers' Book Evidence Act, 1891. However, the absence of material particulars with reference to the nature of the individual transactions, must necessarily be examined in context of a bona-fide dispute if any raised by the defendants in respect thereof for which purpose the pleadings of the parties must be examined.
27. In Para 5 of the plaint, it is contended that the finance facility of Rs,60 millions was applied for by Defendant No, 1 approved by the plaintiff-bank vide facility letter mentioned therein which was signed on behalf of Defendant No, 1 in token of acceptance of the conditions of the said finance facility. In the PLA filed by Defendants No, 1, 2, 4 to 7 in response thereto, after a bald denial it is stated "the finance facility has been fully discharged by Defendant No, 1 and nothing remains due".
The application for the finance facility and its approval, the issuance of the facility letters and the signing of the same by Defendant No, 1 in token of acceptance of its terms and conditions has not been denied.
28. In Para 7 of the plaint, the list of eleven documents has been mentioned with the contentions that the same were executed and accepted by Defendant No, 1 as acknowledgement of and to secure the said finance facility. In the said PLA, in response to Para 7, it is merely stated that its contents are denied and the contents of earlier paragraphs are reiterated. There is no specific denial of the execution of the said documents in the said Paragraph or in the earlier paragraphs.
29. In Para 8 of the plaint, it is stated that Defendant No, 1 requested for disbursement of the finance facility of Rs,60 millions and in pursuance thereof a cheque was duly signed by Defendant No, 1 in token of having received the disbursement of Rs,60 millions. In response, in Para 8 of the said PLA after a bald denial it is stated, "that all amounts payable under the Finance Facility have been duly paid by Defendant No, 1 and no amount remains due or payable".
30. In Para 19. of the plaint, it is stated that Defendant No, 1 has neglected to pay the amount due i,e, Rs,66.263 millions comprising of principal and profit receivable which have been identified separately. In response, after a bald denial it is stated "it is averted that Defendant No, 1 has completely and fully performed the terms of the agreement and nothing remains due or payable towards the plaintiff bank". There is no specific denial of the amounts due or payable. In Para 21 of the plaint the amount of the finance availed by Defendant No, 1 and repayments made along with the outstanding thereafter have been specified. In respect thereof in the said PLA after a bald denial it is stated, it is averted that Defendant No, 1 has completely and fully performed the terms of the agreement and the amounts claimed are neither due nor payable". In Para 22, the outstanding liability as on 3.12.2005 has been specified including the principal and profit recoverable. In response, in the said PLA after a bald denial it is stated, "it is averted that Defendant No, 1 had completely and fully performed the terms of the agreement and the amounts claimed are neither due no payable".
31. In various grounds raised in the PLA it has been specifically pleaded that the liability has been discharged and no amount is due.
32. A perusal of the contentions of Defendants No, 1, 2, 4 to 7 as disclosed in the PLA makes it clear and obvious that there is no specific denial as to applying for the finance, its approval and subsequent disbursement. The execution of none of the documents sued or relied upon by the plaintiff-bank has been denied.
33. The statement of accounts must necessarily be examined in the above context. There is only one debit entry of Rs,60 millions. The said entry pertains to the disbursement of the finance in question. Such disbursement has not been denied or disputed. The mode of such disbursement has been clearly identified in Para 8 of the plaint which has not been specifically denied. In the circumstances, the absence of the identification as to the mode of such disbursement in the statement of accounts pales into insignificance. With reference to the credit entries, there is no dispute. It is also not the case of the said defendant that any amount paid and tendered by the defendants is not reflected in the said statement of accounts. No such averment has been made in the PLA nor any document or receipt in support thereof appended therewith. In addition to the above, not only the liability has been acknowledged and accepted by Defendant No, 1 in the various letters appended with the plaint but more significantly also in the audited balance sheet of Defendant No, 1 which is appended with the plaint and not denied by the defendants.
34. While Section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 casts a duty on a plaintiff-financial institution to disclose with clarity the amount of finance disbursed, received back and the current outstanding amount, a similar duty is also cast on the defendant by virtue of Section 10 of the Ordinance. The relevant portion whereof is re-produced hereunder:-- "Leave to defend: (1).......................
(2) .............................
(3) .............................
(4) In the case of a suit for recovery instituted by a financial institution the application for leave to defend shall also specifically state the following--
(a) the amount of finance availed by the defendant from the financial institution, the amounts paid by the defendant to the financial institution and the dates of payments;
(b) the amount of finance and other amounts relating to the finance payable by the defendant to the financial institution upto the date of institution of the suit;
(c) the amounts of finance and other amounts relating to the finance payable by the defendant to the financial institution upto the date of institution of the suit;
(d) the amount if any which the defendant disputes as payable to the financial institution and facts in support thereof; Explanation: For the purposes of clause (b) any payment made to a financial institution by a customer in respect of a finance shall be appropriated first against other amounts relating to the finance and the balance, if any against the principal amount of the finance.
(5) The application for leave to defend shall be accompanied by all the documents which, in the opinion of the defendant, support the substantial questions of law or fact raised by him.
(6) An application for leave to defend which does not comply with the requirements of sub- sections (3), (4) where applicable and (5) shall be rejected, unless the defendant discloses therein sufficient cause for his inability to comply with any such requirement.
(7) .............................
(8) .............................
(9) .............................
(10) .............................
(11) .............................
(12) .............................
35. A penalty has been provided for non-compliance of inter-alia the requirements of Section 10(4), hence in view of the aforesaid as well as the context in which it is written, it is clear and obvious that the provisions of Section 10(4) are mandatory in nature as has also been held in the cases of "Bank of Khyber vs. Spencer Distribution Ltd. and others", supra, and "ABL vs. Mohib Fabrics Industries Ltd.", supra. However, it has also been noticed that in case of non-compliance of the provisions of Section 10(4) of the Ordinance, no penal consequences would come into effect if sufficient cause for non-compliance is disclosed in the PLA, as has been stated in Section 10(6) of the Ordinance. In the PLA, filed on behalf of Defendants No, 1, 2, 4 to 7, it has been noticed that the requisite disclosure of the amount disbursed, the amount repaid and the amount outstanding, if any, has not been made at all. Hence Section 10(4) has not been complied with. It has also been noticed that no explanation, reasons or cause for non-compliance has been stated in the PLA, hence it is not necessary to determine whether such cause or explanation is sufficient or not.
36. The situation with reference to compliance or otherwise of Section 10(4) of the Ordinance by Defendant No, 3 is very interesting in the PLA filed by the said Defendant No,
3. Para 33 reads as follows:-- "In view of the above in compliance with the provisions of the Section 10(4) Ordinance it is submitted that: Amount of finance availed by the answering defendant: Nil Amounts paid by the defendant: Total Amounts payable upto the date of the suit: Nil Amount which the answering defendant disputes: Total suit- amount."
37. It is interesting to note that the amount of finance availed is "Nil" and the amount paid back is "Total". If nothing was received, what was paid back? The qualification of the amounts are also conspicuous by their absence. It is difficult to hold that the provisions of Section 10(4) of the Ordinance has been complied with even by Defendant No, 3.
38. Be that as it may, the main thrust of the arguments of the learned counsel for Defendant No, 3 is that the personal guarantee has been discharged in view of the rescheduling of the original finance. In this regard, it may be noted that Defendants No, 1, 2, 4 to 7 in Para 18 on merits of its PLA have denied the rescheduling. Similarly, Defendant No, 3 in her PLA in reply to Para 18 on merits has also denied rescheduling in the absence of supporting documents. The defendants cannot, on one hand, deny the rescheduling and then attempt to take advantage thereof by pleading discharge of their liability as sureties. Furthermore, in the plaint, in Para 18 of the plaint, it is merely stated that rescheduling was allowed with respect to the profit as payable on ,11.6.2003 of Rs,5.7 millions which amount was to be paid separately by monthly instalments to be secured by further charge on the present and future fixed assets of Defendant No,
1. It is nobody's case that such amount was paid in monthly instalments, as allegedly agreed between the parties nor was any further documentation for creating additional charge executed inter-se the, parties despite the fact that the requisite permission had been obtained from other financial institutions. Furthermore, Paragraph s 4 & 11 of the guarantee on the record read as under:-- "4. You may as you think fit and without reference to me/us grant to the Customer time or other indulgence to make or accept any arrangement or composition with him in respect of any payment hereby guaranteed and also vary or renew any agreement(s) under or pursuant to which financial and banking facilities were extended or release, realize or in any way deal with any securities or rights now or hereafter held by you in respect of the sums due under the said agreement.
11. This guarantee and your rights here under shall not be affected or prejudiced by your holding or taking any other or further securities or by your varying, releasing or omitting or neglecting to enforce any such securities or by you varying or determining any credit to the Customer or by your renewing bills of exchange, promissory notes or other negotiable instruments or giving time for payment or granting any other indulgence to or making any other arrangements with or accepting any composition from the Customer or any person or persons, corporation or corporations liable on any bills, of exchange, promissory notes or other negotiable instruments or securities held or to be held by you.
39. A perusal of the aforesaid provisions of the guarantees makes it clear and obvious that the guarantors i,e, Defendants No, 2 to 7 have given express consent to the variation of the terms of the Finance Agreement or rescheduling of the debt of the principal debtor. In presence of such a blanket provision, rescheduling does not discharge the sureties of their liability as has been held by this Court in a case reported as: Mian Aftab A.Sheikh and two others vs. M/s. Trust Leasing Corporation Ltd. and others (2003 CLD 702).
40. The learned counsel for Defendant No, 3 has taken the objection that the suit has not been filed or verified by a duly authorized representative on behalf of the plaintiff-bank. The instant suit has been filed through and signed and verified by M/s. Sheraz A. Chaudhry and Ahmad Nauman Khan.
Two separate powers of attorney in favour of the above said officers of the bank have been executed by the plaintiff-bank, which are on the record, authorizing them to file the suit and sign and verify the pleadings. Even otherwise, Mr. Sheraz A.Chaudhry is apparently the Branch Manager of the Branch concerned which is obvious from a certificate on the foot of the statement of accounts, appended with the plaint at page 200 thereof. Thus, in view of Section 9(1) of the Ordinance 2001, even if the plaint had been signed by Mr. Sheraz A.Chaudhry alone, it would have been valid in law. An attempt has also be made to raise the issue for some prompt payment bonus, however the learned counsel has been unable to point out any document on the basis whereof the bonus is being claimed.
41. In view of the above, it is clear and obvious that neither PLA filed on behalf of Defendants No, 1, 2, 4 to 7 nor PLA filed on behalf of Defendant No, 3 fulfils the mandatory requirements of Section 10(4) of the Financial Institution (Recovery of Finances) Ordinance 2001. Even otherwise, no triable issue or plausible defence has been made out by or on behalf of any of the defendants. Consequently, PLA No, 33-B/2006 and PLA No, 34-B/2006 are without any merits and are hereby dismissed.
42. In the facts and circumstances of the case and as is obvious plaint from the and the documents appended therewith, the plaintiff- bank is entitled to the amount of principal plus profit minus payments made which in the instant case would be as follows: Principal amount:60,000,000/- Profit: 29,962,397/- Total: 89,962,397/- Payments made:37,860,960/- Remaining amount:52,101,437/-
43. In view of the above, the plaintiff-bank is entitled to decree of the aforesaid amount.
Consequently, the suit is decree in favour of the plaintiff-bank and against the defendants jointly and severally for a sum of Rs,52,101,437/- along with cost of funds and cost of the suit.