This First Appeal has been filed against the order of the Banking Court dated 8-10-2007 in Suit No.87 of 2005 whereby the Banking Court had decreed the suit of the plaintiff, the present respondent in the sum of Rs.3,693,310 jointly and severally against the present appellants.
We have heard Mr. Sohail H.K. Rana, learned counsel for the appellants and Mr. Abdul Qayyum Abbasi, learned counsel for the respondents.
The main contention of the learned counsel for the appellant is that since he had applied for a lease facility with which he could purchase 19 busses from Hino Pak Motors and the facility was provided only for 4 busses and therefore he could not initiate his business of plying busses and had voluntarily returned the buses to the present respondents who had after repossession sold the same and then filed the suit against him for Rs.4,095,926, the working of which is as follows:--
(A) Period of lease 5 years (60 months)
(B) Rental per month Rs.258,000
(1) Total lease amount Rs.12,300,000
(2) Outstanding rentals from January 4 to July 4 Less:Rs. 1,806,000
(1) Rental Paid through monthly installmentsRs.1,006,690
(2) Recovery through the sale proceeds of four Vehicles Rs.7,600,000 which were repossessed by the Plaintiff in July 4 Balance Payable Rs.3,693,310 Add: Late Payment ChargesRs.329,880 Total Received Rs 4,023,190 Against this computation the defendant in that suit and the present appellant had filed a statement of accounts in which he had claimed that adjustment for front end fee amounting to Rs.600,000, facilitation charges Rs.1,600,000 and also computed the cost of returned vehicles on Rs.10 Million and thus claimed excess payment of Rs.2,702,500. He therefore prayed that the impugned order may be set aside and the Banking Court may be directed to allow him the excess amount claimed.
The arguments of the learned counsel were vehemently opposed by the learned counsel for the respondents who submitted that he had advanced a leased amount of Rs. 12,300,000 and was entitled to payment of Rs. 14,706,000 in 60 equal installments payable during the period of lease which was 5 years. He submitted that however in the suit he had claimed the amount only on the basis of actual disbursement of loan and not the amount which was payable to him on the basis of agreement. However, the learned counsel submitted that the front fee and the facilitation charges were miscellaneous expense which are for examination of documents and proceedings of lease application and cannot be adjusted against the lease amount sanctioned. He also submitted that amount had not been paid by the present appellant. So far as the security deposit of Rs.1,230,000 is concerned the learned counsel submitted that this deposit was adjusted against the excess amount of Rs.2,400,000 which he had subtracted from the actual amount payable to him. He also drew our attention to clause 13.03 of the lease agreement by which the present appellant had indemnified the respondents from any loss arising from any event of any default and on the termination of the agreement. He therefore prayed the appeal may be dismissed and the orders of the Banking Court may be confirmed.
After examining the case in the light of the arguments of the learned counsel we have reached the conclusion that even if we accept the contention of the learned counsel for the appellant that he had returned the busses voluntarily because he could not start his business. It was on the basis of his action that the agreement was terminated and therefore under the provisions of clause 13.03 he has to make the losses good which had been incurred by the respondent. At this stage we feel that it will be relevant to reproduce clause 13.03 of the agreement for the sake of convenience:-- "13.03. The Lessee further indemnifies the Lessor against any loss or expense which the Lessor shall certify as rightly incurred by it as a consequence of the occurrence of any Event of Default and Termination, or arising out of any mis-representation of the Lessee.
From a perusal of the above clause we are of the view that the appellant cannot back out of the indemnity provided by him.
We are also of the view that even if front end fee and facilitation charges have been paid these are document charges and are not adjustable against the lease amount disbursed.
We, are, however, of the view that since the suit was only filed for the recovery of Rs.40,23,190 as mentioned above, therefore, the present respondent had voluntarily given up their claim for the amount of difference between the amount which had to be paid to them and amount actually disbursed by them and since they have not claimed the excess amount therefore the learned Banking Judge was not justified in not allowing adjustment of the security deposit of Rs.1,230,000 against the decretal amount by standing that it has been off set against the above differential amount. We would, therefore, modify the order in the following manner:-
1. Decreed amount Rs.3,693,310
2. Less (being security deposit)
3. Estimated interest for 12 InstallmentsRs.246,000
4. Modified amount payable Rs.27,09,310 This amount will be recoverable along with cost of funds as provided under the law.