' IQBAL HAMEED-UR-RAHMAN, J.---This is suit filed by two of the attorneys of the plaintiff Habib Bank Limited, namely, Awais Anwar, Manager Operations and Zafar Iqbal Baig Mirza, Senior Manager Remedial, for the recovery of Rs,72,979,877.56 (rupees seventy two million nine hundred seventy nine thousand eight hundred seventy seven and paisa fifty six only) as of 30th November, 2009 along with cost of funds and interest and other charges till realization of the whole amount through sale of mortgaged and charged assets and properties under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. The defendants were issued summons in accordance with law to enable them to seek leave to appear and defend the suit. In pursuance of the same, defendants Nos.1 to 5 have filed PLA No,102-B of 2010 while defendant No,6 has filed PLA No,33-B of 2010.
2. The instant suit of the plaintiff bank is that Faiqa Trading Company (Pvt.) Limited, defendant No,1, availed Finance Facility from the plaintiff bank, which was duly secured by guarantees of the Directors, defendants Nos.2 to 5, as well as through mortgage by defendant No,2 of his personal properties. The Finance Facility was duly availed, as such, defendants Nos.1 to 5 are jointly and severally liable for the repayment of the same while defendant No,6 is also a financial institution wherefrom defendants Nos.1 to 5 have availed finances against the mortgaged properties of defendant No,2, has been impleaded as a pro forma defendant in the suit.
3. It is averred in the suit that defendants Nos.1 to 5 had approached the plaintiff bank in December, 2007 and requested for the grant of finances to meet its working capital requirement in carrying out its business operation. The plaintiff bank, acceded to the request of the defendants Nos.1 to 5 by allowing Running Finance Facility of Rs,60,000,000 (rupees sixty million) and they availed the same on 13-12-2007 by executing following charged documents:--
(1) Agreement for Financing on mark-up basis dated 13-12-2007.
(2) Demand Promissory Note dated 13-12-2007 in favour of the plaintiff bank in the amount of Rs,76,100,000 (rupees seventy six million and one hundred thousand).
(3) Letter of Hypothecation dated 21-1-2008 in favour of the plaintiff bank in the amount of Rs,80,000,000 (rupees eighty million) creating a Pan Passu charge with National Bank of Pakistan.
(4) Letter of Authority dated 13-12-2007.
(5) Undertaking to use the Finance Facility for the purpose it was so granted.
(6) Registered mortgage executed by defendant No,2.
(7) Equitable mortgage by defendant No,2 by deposit of title deed dated 13-12-2007.
' Defendants Nos.1 to 5 duly availed the Finance Facility and could not repay the same on its expiry.
It is further averred that defendants Nos.1 to 5 sought extension from the plaintiff bank which the plaintiff bank allowed and extended the repayment date of the Finance Facility till 31-12-2008, on account of which defendants Nos.1 to 5 again executed an agreement for Finance on mark-up basis along with a Demand Promissory Note dated 30-11-2008. It is also averred that on the expiry of the extension period, defendants Nos.1 to 5 again approached the plaintiff bank for renewal of the Running Finance Facility and the request of defendants Nos.1 to 5 was acceded to again by the plaintiff bank vide its letter dated 3-2-2009 and the said renewal was to expire on 30-11-2009 and on account of renewal of the Running Finance Facility, defendants Nos.1 to 5 executed an Agreement for Financing on mark-up basis dated 3-2-2009 and Demand Promissory Note dated 3-2-2009. It is further averred that the said renewal was secured by defendants Nos.2 to 4 by executing personal guarantees in favour of the plaintiff bank vide guarantee letter dated 3-2-2009 and in addition, defendant No,2 executed Memorandum of Deposit of title deeds dated 3-2-2009 whereas the already executed Letter of Hypothecation and Registered Mortgage Deeds were deemed to have been duly renewed. It is further averred that during the currency of the Renewed Running Finance Facility being availed by defendants Nos.1 to 5, request was made for the grant of additional finance and after completion of due formalities, the plaintiff/bank vide its letter dated 30-6-2009, sanctioned the Excess over limit of Rs,6,000,000 (rupees six million) in favour of defendants Nos.1 to 5 for a period of 90 days, on account of which, defendants Nos. 1 to 5 executed an Agreement for Financing dated 30-6-2009 and Demand Promissory Note accompanied by a Letter of Authority and the same was also secured by the guarantees of defendants Nos.2 to 4 by executing their personal guarantees and in addition, defendant No,2 executed a memorandum of Deposit of title deeds dated 30-6-2009. It is further averred that on the expiry of the Renewal Finance Facility on 30-11-2009, defendants Nos.1 to 5 defaulted in the repayment of principal, mark- up and other amount, as such, they are liable to pay the plaintiff bank an amount of Rs,72,979,877.56 (rupees seventy two million nine hundred seventy nine thousand eight hundred and seventy seven and paisa fifty six) as on 30-11-2009 and the same is duly supported by a statement of account as well as Schedule-I attached with the plaint as per provisions of section 9(3) of the Financial Institutions (Recovery of Finances) Ordinance, 2001. It is also averred that in spite of repeated demands, defendants Nos.1 to 5 failed to make payments. It is also averred that legal notices were served upon defendants Nos.1 to 5 and in spite of the same, defendants Nos.1 to 5 have failed to pay the outstanding liabilities of Rs,72,979,877.56 (rupees seventy two million nine hundred seventy nine thousand eight hundred seventy seven and paisa fifty six). Hence the suit by decreed with cost of funds.
4. Learned counsel for defendants Nos.1 to 5 has contended that the defendants have not been served in accordance with law and through the newspapers, they gained the knowledge of the institution of the suit on 8-2-2010 and filed PLA No,102-B of 2010, which is within time. It is further contended that the defendants have raised substantial questions of law and fact which need to be taken into consideration and an unconditional leave to appear and defend the suit be granted to them. It is further contended that the plaintiff bank have not complied with the mandatory provisions of section 9(3) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, which straightaway merits rejection of the plaint as the plaintiff/bank have not given details of the Finances as required by law. It is further contended that the plaintiff/bank have asserted in the plaint that the defendants availed three Financial Facilities through three financing agreements dated 13-12-2007, 30-11-2008 and 3-2-2009 for Rs,60-M, 60-M and 6-M whereas statement of account annexed with the plaint only depicts sanction of Rs,60-M facility only once and the disbursement of the same was made on 23-1-2008 whereas in the agreements dated 30-11-2008 and 3-2-2009, no disbursement of any Finance Facility was disbursed as manifested from the statement of account and there is no debit entry on the dates i.e. 30-11-2008 or 3-2-2009 regarding the disbursement of Rs,60-M and Rs,6-M. It is further contended that as per sanction letter dated 13-12-2007, the mark-pp/pricing has been indicated @ 12.5% whereas in the sanction letters dated 3-2-2009 and 30-6-2009, no mark-up rate has been indicated except 3-M-KIBOR+3.5% as such, the plaintiff/bank have in its plaint not indicated that at what rate of mark-up has been charged mark-up. It is further contended that according to the calculation of the defendants and according to the statement of account attached by the plaintiff with the plaint, the defendants have made a total repayment of Rs,69,646,505.00 whereas the amount disbursed by the plaintiff/bank is Rs,66,000,000.00, therefore, the defendants have made excess payment to the plaintiff/bank amounting to Rs,3,446,505.00 and similarly the mark-up calculated by the plaintiff bank at the rate of 12.5% comes to Rs,14,240,976.00 and the mark-up paid to the plaintiff bank by the defendants is Rs,10,796,218.00 and the difference payable by the defendants is Rs,3,444,158.00 and the same is calculated as detailed below:-- Excess Paid to Bank Rs,3,464,505.00 Mark Up Payable Rs,3,444,758.00 Difference to be paid by the Bank Rs,201,747.00 ' It is apparent that the defendants have made an excess payment of Rs,201,747.00 which the plaintiff/bank are liable to refund. In view of the above, the defendants are entitled to the grant of unconditional leave to appear and defend the suit. It is further contended that the excess amount claimed by defendants Nos.1 to 5 has not been rebutted in reply of the plaintiff/bank, thus, it would be deemed that the claim of defendants Nos.1 to 5 has been accepted by the plaintiff/bank.
5. Learned counsel for defendant No,6 has contended that defendant No,6 National Bank of Pakistan has already filed a suit for recovery of Rs,4,16,52,041.07, which is pending and the suit being prior in time, the plaintiff bank have no locus standi to mention the mortgaged property. It is further contended that there is no relationship of the banking company and customer between the plaintiff and defendant No,6, as such, the suit under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, is not maintainable against defendant No,6. It is further contended that there is no contractual obligation between the plaintiff and defendant No,6 nor there is any violation of breach of any obligation, as such, the plaintiff bank have no cause of action to file the instant suit against defendant No,6 and in the circumstances, this court has no jurisdiction to proceed under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 against defendant No,6. It is further contended that building and machinery of defendant No,1 having been mortgaged with defendant No,6 under registered mortgage deed which is also prior in times the plaintiff bank have no claim or charge against the property which is under the first charge of defendant No,6, as such, the suit of the plaintiff bank against defendant No,6 is liable to be dismissed. It is further contended that defendant No,6 is not a proper and necessary party, as such, the suit to the extent of defendant No,6 merits rejection under Order VII, rule 11, C. P. C.
6. On the other hand, learned counsel for the plaintiff/ bank at the very outset has stated that defendants Nos.1 to 5 have failed to raise any substantial question of law and fact, as such, the leave application of defendants Nos.1 to 5 merits to be rejected, more so when there is no specific denial on the part of defendants Nos.1 to 5 of the availing of the Finance Facility and execution of the finance documents, guarantees, mortgages, deposit of original title documents of their mortgaged properties with the plaintiff/bank and the same are still lying with the plaintiff/bank, hence in view of such admissions, nothing requires rebuttal from the plaintiff/bank, as such, the outstanding claim of the plaintiff/bank be decreed forthwith and in this respect, reliance is placed upon Muhammad Ramzan v. Habib Bank Limited 2005 CLD 1376. It is further contended that there has not been any violation of section 9 of the Financial Institutions (Recovery of Finances)
Ordinance, 2001 as the plaintiff/bank have annexed Schedule-I with the plaint which forms of the plaint, as such, full compliance of the required provisions of law has been made and in addition, duly certified statement of account, which has been attached with the plaint, full depicts availment of the Finance Facility from time to time and the payments made by the defendants. It is further contended that the defendants initially obtained the Finance Facility on 13-12-2007 and thereafter on their request, the same had been extended on 30-11-2008 as well as renewed on 3-2-2009 and subsequently also defendants Nos.1 to 5 have duly acknowledged the said extension and renewal by executing the charge creating documents and all the three finances were secured through registered as well as equitable mortgage, as such, the plaintiff/bank are entitled to the grant of a decree in the sum of Rs,72,979,877.56 (rupees seventy two million nine hundred seventy nine thousand eight hundred seventy seven and paisa fifty six only) along with cost of funds, which is duly corroborated through the statement of account as well as the Schedule-I attached with the plaint. Moreover, the PLA filed by defendants Nos.1 to 5 is time barred by five days and on this account also, the same merits dismissal. It is further contended that defendants Nos.1 to 5 are trying to mislead this court by stating that an excess amount of Rs,201,747.00 is due to them because in fact the Finance Facility is like the over draft finance limit and it is a fixed limit, in which the withdrawals are made by the defendants and payments are subsequently made to keep the finance within the limit of the sanctioned amount as such, the calculations made by defendants Nos.1 to 5 are incorrect and the Finance Facility availed by defendants Nos.1 to 5 are duly depicted in the statement of account and the same are according to the books of the plaintiff/bank, as such, the statement of account, which is duly certified according to the Bankers' Books Evidence Act, 1891, depicts an actual amount as well as the outstanding liabilities of defendants Nos.1 to 5. It is further contended that defendants Nos.1 to 5 have failed to raise any substantial questions of law and fact, as such, their application merits dismissal and the suit of the plaintiff/bank be decreed as prayed for.
7. So far as defendant No,6 is concerned, learned counsel for the plaintiff has stated that it has been impleaded as a pro forma defendant and in the instant suit and no relief has been prayed against the said defendant and that the plaintiff/bank is a part passu charge holder with defendant No,6 on the assets of defendant No,1, therefore, defendant No,6 is a necessary and proper party, as such, it has been impleaded.
8. I have given my anxious consideration to the arguments advanced on behalf of both sides. I have also gone through the record available on the file.
9. In the instant case, the availing of Running Finance Facility is not denied by defendants Nos.1 to 5 and the documents attached with the plaint duly support the same. Defendants Nos.1 to 5 have executed the documents, which have not been denied by them as the said Finance Facility half also been extended and renewed on the request letters of defendants Nos.1 to 5. The only ground raised by defendants Nos.1 to 5 is that there has been a mis-calculation on the part of defendants Nos.1 to 5, as such, the defendants have made an excess payment of Rs,201,747.00. I am afraid the excess amounts calculated by defendants Nos.1 to 5 are not accordingly correct. The statement of account attached with the plaint duly depicts the availing of the Finance Facility and thereafter its subsequent disbursement, extension and renewal are duly reflected in the statement of accounts, as such, it duly shows credit and debit entries, therefore, the contention of learned counsel for defendants Nos.1 to 5 that the defendants have made an excess amount of Rs,201,747.00 to the plaintiff/bank is not sustainable.
10. Moreover, from the perusal of the sanction letter, it appears that the mark-up has rightly been calculated as agreed in the sanction letter. Even otherwise, the defendants could not succeed in raising any question of law and fact, which needs recording of evidence.
11. In view of the above perspective, PLA No,102-B of 2010 filed by defendants Nos.1 to 5 is dismissed.
Resultantly, the suit of the plaintiff/bank is decreed against defendants Nos.1 to 5 jointly and severally for a sum of Rs,72,979,877.56 (rupees seventy two million nine hundred seventy nine thousand eight hundred seventy seven and paisa fifty six only) along with cost and cost of funds.
12. So far as defendant No,6 is concerned, it has been impleaded as a pro forma defendant and no relief is granted against the said defendant.
13. Under section 19(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, the judgment-debtors are afforded 30 days to satisfy the decree. Thereafter, the suit stands converted into execution proceedings without the need to file a separate execution petition and no fresh notice need be issued to the judgment-debtors in this regard. The decree-holder bank shall file particulars of the mortgage, pledged, hypothecated properties and other assets of the judgment- debtoRs, To come up for further proceedings on 3-8-2010.