MIAN SAQIB NISAR, J. ---C M. No.190-B/2009: The bank has filed the noted execution application, in which vide order dated 17.9.2002 a notice was issued to the judgment- debtors (hereinafter referred to as the applicants); in response thereto, the applicants moved the instant application (C.M. No. 190/B of 2009), which through this order, is being disposed of.
2. For comprehending the controversy, it is expedient that certain relevant facts of the case must be incorporated. The bank filed a suit for the recovery of Rs. 81,149,891.17 against the applicants, during the pendency whereof, the parties entered into a compromise dated 7.10.2000, which culminated into a consent decree dated 22.1.2.001, following are the relevant/important terms of the compromise decree:---
(a) That M/s. HIRRA FARUQ'S LTD. (the company) have admitted arid Muslim Commercial Bank Ltd., has accepted the. Liability of Rs. 78,218,591,17/- payable by the Company.
(b) That Company shall pay the afore-said total liability of Rs. 78,218,591.17 in 14 quarterly instalments of Rs. 5.587,042.22 each to the bank.
(c) That the payment of the said instalments of the afore-said amount shall commence after 120 days of signing of the compromise agreement and HIRRA FARUQ'S LTD. Will issue 14 post dated cheques in favour of Muslim Commercial Bank Ltd.
(d) That no interest will be charged on the aforesaid agreed amount of Rs. 78,218,591.17/-, however, if M/s. HIRRA FARUQ'S LTD. Commit any defaults in making payment of two instalments as afore- said then the bank shall be entitled to charge mark-up on the then outstanding agreed amount as well as expenses incurred by the Bank at the rate of 15% per annum from the date of default till realization of full agreed amount.
(e) That in case of default making payment of any two instalments of the afore-said amount or default in fulfilling any terms of compromise agreement the Bank shall have the right at its sole discretion and without reference M/s. HIRRA FAROOQ's LTD. With or without intervention of Court to takeover/recover and sell all the properties, projects/Assets and ; stocks of M/s. HIRRA FARUQ'S LTD.
And proceeds thereof shall be utilized for the adjustment of the then outstanding agreed amount and mark-up thereon as per claused of this agreement."
Pursuant to the above, the applicants though made certain payments but admittedly not in-strict conformity therewith; as there were certain deficiencies not only in terms of the installment amounts but the timing as well. Anyhow, as per the decree, the applicants were required to make the payments commencing from 6.2.2002 and discharge the t total liability till 6.5.2004, but till the later date, only an amount of Rs. 26,996,825.00 Million was paid; even thereafter, the decree was not satisfied thus constraining the decree holder/bank to institute the noted execution petition against the applicants. During this period, a Circular No. 29, dated 15.10.2002, was issued by the State Bank of Pakistan and taking advantage of the above, the applicants got their liabilities settled from the competent forum as envisaged by the letter dated 14.10.2004, issued by Muhammad Rafique Member/Secretary of the State Bank of Pakistan, for the resolution of the cases. The decision of the committee reads as follows:--- "The committee decided that borrower should settle their outstanding liabilities on payment of Rs.
43.630 Million determined asunder:- 75% of the outstanding liabilities against mortgage or project assetsRs. 37.070 M F.S.V. of pledged stocks Rs. 6.560 M Total:Rs. 43.630 M The above amount shall be paid by the borrower as under:- 10% down payment to be paid at the time of signing of settlement agreement.
Balance 90% in 12 equal, quarterly instalments over a period of three years.
After full payment of the settlement amount, all security documents including personal guarantees shall be released by the Bank.
In case of any single default in payment of settlement installment, the above arrangements would be cancelled and Bank would be entitled to recover entire outstanding liabilities as per their record/decree issued by the Court."
3. On the basis of the above, an agreement dated 1.4.2005 was between the parties, which is founded upon and is in strict in-conformity with the decision of the Committee and it is expedient to reproduce Para 4 of the agreement which reads as under:- "That in case of failure by the Company and the Guaranfors to pay anyone of the above- mentioned 12 quarterly instalments on its due date, the same shall constitute a wilful default and in that event this settlement Agreement shall stand revoked and eligibility of the Company and the Guarantors to enjoy concessions/relaxations under the subject S.B.P. Circular shall also cease to exist forthwith and the same will be treated as withdrawn/cancelled. Consequently, Company and the Guarantors will be liable to pay the full decretal amount/the Actual Liability referred to above with mark-up till realization of the full decretal amount with costs as provided in the Decree dated 22.1.2001 for Rs. 78.219 M passed in Civil Suit No. 69-B/2000 less payments received after the date of decree. In the above event, MCB shall also be entitled to demand immediate payment of the entire balance of the Decretal amount/Actual Liability with mark-up thereon as afore-said and on failure of the' Company/Guarantors to pay the demanded amount within seven days, to take possession of the mortgaged properties as per the description given in the plaint in Civil Suit No. 69- B/2000.
M.C.B. Shall also have right to appoint receiver of the said properties and sell the same without recourse to a Court for the recovery of all amounts receivable from the Company and the Guarantors as afore-said."
4. On account of the agreement, an order was passed by this Court on 6.9.2005 disposing of the execution application with permission to the decree-holder to seek the revival of the same in case the applicants fails to abide by the terms thereof.
5. On 10.9.2007, the decree-holder filed C.M. No. 318-B of 2002 complaining that the applicants have failed to satisfy the decree in terms of the agreement and therefore, the execution process be revived, this was accordingly accepted Vide order on 30.10.2007; the decree- holder/bank thus for the satisfaction of its decree applied for the sale of the mortgaged properties of the applicants; the Court auctioneers were appointed; attempts were made but the object could not be achieved; during all the period, no objection was ever raised by the applicants challenging the decree in any manner whatsoever. A C.M. No. 51-B of 2009 was filed by the decree-holder with the following prayer:- "It is, therefore, most respectfully prayed that this Honourable Court may be pleased to make an order for directing the Court auctioneers to sell through public auction the assets specified in para- 3 above."
Upon which notices were issued and in response thereto, the applicants moved C.M. No. 190-B of 2009, under Order 21, Rule 83 read with Section 151, C.P.C. Asserting that in order to satisfy the decree, they have paid substantial amounts and only the balance of Rs. .13.864 Million is outstanding and a request was made to the Court that for the payment of this amount, four months time be allowed to them.
6. Kh. Saeed-uz-Zafar, learned counsel for the applicants has argued that they have paid an amount of Rs. 26,996,825/- prior to 6.5.2004 while after the compromise dated 1.4.2005, a further amount of Rs. 29,766,250/- has been deposited, thus in this manner, total amount which the applicants have paid is Rs. 56,63,075.00/- and therefore, only an amount of Rs. 13.864 Million is outstanding as the remaining amount claimed by the decree-holder is the interest, which has been illegally, unlawfully and un-authorized by charged, due to their default in the payment of-the amounts, as per the decree dated 22.1.2001, whereas it is unrecoverable for two counts, firstly, the interest is prohibited as per Circular No. 13 of the State Bank of Pakistan and secondly, it violates the Injunctions of Islam. It is thus argued that the decree to the extent of* interest is void and nullity in the eyes of law and is in-executable. It is also submitted that the admission or a consent of a party to something, which is unlawful or infringes the Islamic principles has no sanctity; as per decision of the Resolution Committee of the State Bank of Pakistan, which culminated into an agreement dated 1.4.2005 between the parties, an amount of Rs. 43.630 Million is the principal amount, which the applicants were obliged to pay, out of this, admittedly they have paid an amount of Rs. 29.667 Million and therefore, the liability stands reduced to Rs. 13.864 Million, which remains payable, Any interest charged by the Bank after 1.4.2005 upon that amount of Rs. 43.630 Million is illegal for the submission earlier made (noted in para-6 supra) and also that in term of the provisions of Section 59 of the Contract Act, because the payments made by the applicants should have been appropriated towards the principal amount alone.
In support of his above submissions, the learned counsel has relied upon the judgments reported as Habib Bank v. Messrs Qayyum Spinning Ltd. (2001 M LD 1351 )agriculture Development Bank of Pakistan v. Mubarak Dairies Limited and others (2008 CLD 738) and Mubarak Dairies Limited ) and others v. Agricultural Development Bank of Pakistan through Manager (2001 CLC 1096). He has further submitted that as per the provisions of Order 21, Rule 83, C.P.C., the applicants are entitled to be given reasonable time for the disposing of their properties, so as to satisfy the decree (only to the extent of Rs. 13.86417 because the mark-up amount is not admitted as payable by the applicants).
7. Heard. Admitted facts of the case ere: that initially a consent decree for an amount of Rs.
78,219,891 -17 was passed by this Court in favour of the bank and against the applicants; they have failed to discharge their full liability / in terms of the afore-said decree, as only an amount of Rs.
26,996,825 was paid; the process of execution was initiated by the decree-holder for the satisfaction of the remaining decree, but during the pendency thereof, the matter was referred to and settled by the Resolution Committee of the State Bank of Pakistan; in view of the decision of the Committee, a compromise dated 1.4.2005 was again entered into between the parties, which when filed ^ in the Court, was approved and the execution application was disposed of conferring right upon the decree-holder to have its revival in case of the failure of the applicants to fulfill their obligations under the agreement dated 1.4.2005; as the agreement was not fulfilled therefore upon the application (C.M. No. 318-B of 2007), execution application has been revived; after 1.4.2005, the applicants have only paid an amount of Rs. 29.667 Million.
8. The applicants on the basis of the decision of the State Bank's resolution committee, out of their free consent had entered into an agreement dated 1.4.2005 and to make the payments strictly in terms thereof and in case of default to discharge the decree dated 22.1.2001. It has not been established, if they adhered to the agreement dated 1.4.2005; obviously, in such a situation, the consent decree dated 22.1.2001 revived and it was thus their legal obligation to make the payments in accordance therewith. The bank has placed on record the statement of accounts, which shows that the mark-up has been calculated as per day default at the rate of 15%; it is not established by the applicants, if the calculations are erroneous, unauthorized or illegal or is against the consent decree dated 22.1.2001, which now should be executed because of the applicants' own default in performance of their duty, under the agreement dated 1.4.2005.
9. For the submission of learned counsel for the applicants that the interest in the garb of mark-up being Un- Islamic cannot be charged from the applicants, even if it is based upon a consent decree, because such a decree shall be void and nullity in the eyes of law, has no force and is misconceived. I am not convinced, if the consent decree dated 22.1.2001, is void ab initio or nullity in the eyes of law on account of want of jurisdiction or for any other reason of the nature^ there is vital and conspicuous distinction between a factually or legally erroneous and infirm decree, as against the one which is void. Only for the reason that certain amounts of mark-up even holding/considering it to be an interest is a part of the consent decree, which is in pursuant to the agreement between the parties, and has not been challenged by them before any forum would not render the decree as nullity and in-executable; furthermore, arid without prejudice to anyone's case, such decree at the best may be termed an illegal decree but not void and it is settled law that an Executing Court cannot go behind a decree. In support of the above, reliance can be placed upon Happy Family Associates v. Messrs Pakistan International Trading Co. (PLD 2005 Lahore 621), Soneri Bank Limited through Duly . Authorized Attorneys v. Idrees Ahmad Siddiqi and another (2005 CLD 1003) and Precision Engineering Ltd. And others v. The Grays Leasing Ltd. (PLD 2000 Lahore 290). It may be relevant to mention that according to the provision of Section 15 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, under which the decree was passed the Court had the jurisdiction to award interest/mark-up. Thus in the facts and circumstances of the case, the judgment reported as Habib Bank v. Messrs / Qayyum Spinning Ltd. (2001 M LD 1351) has no application.
10. As regards the contention about the application of Section 59 of the Contract Act, is concerned, suffice it to say that the said provision has no relevance to the proposition involved in the matter; the applicants as repeatedly stated are liable to satisfy the decree dated 22.1.2001 in toto and whatever amount was paid by them has been accordingly adjusted considering each of the installment due in the decree as the principal amount, therefore, the submission has no force.
Besides it has not been established on the record by the applicants that any express instruction was given to the decree-holder for the appropriation of the payments in a particular manner, whereas, it is not a case which can be said to be covered by the "implied rule" about the appropriation of the payments as enunciated by the said section.
11. About the application under Order 21, Rule 83, C.P.C. Is concerned, I am not convinced that the applicants are entitled to any relief thereunder, because this request seems to be an abortive attempt to seek further postponement of the execution of the decree dated 22.1.2001 and nothing else. It may not be out of place to mention here that the request lacks bona tides as various attempts have been made by the Court to sell the property of the applicants including mortgaged property but all those fail, never ever before, they came forward to make any such request; if the applicants are allowed the alienation by mortgage or lease or private sale, it shall further complicate the matter, resultantly, this application has no merits and is hereby dismissed.