1. ' MS. RUKHSANA AHMED, J.---The plaintiff/Bank being the assignee and successor in interest of ABN Amro Bank (Pakistan Limited) which has subsequently merged into the plaintiff Bank, has filed the present suit against the defendant for recovery of Rs, 137,216,749 along with costs of funds from the date of default till its realization, sale of mortgaged property, pledged goods and other reliefs under the Financial Institutions (Recovery of Finances) Ordinance 2001, as the defendant had applied to the plaintiff to avail various finance facilities like Finance against Trust Receipt, Letter of Credit and Finance against imported merchandise from the plaintiff/ Bank.
2. ' The defendant is the sole proprietor of Vaid Impex involved in the business of importing and exporting goods and had availed various finance facilities from time to time from the plaintiff/Bank since 2006 and the defendant for the purpose of securing the repayment obligation towards the plaintiff Bank and in order to formalize the above arrangement/understanding into writing, the defendant executed/ submitted the following documents with the plaintiff:-
(a) Agreement for finance.
(b) Irrevocable Authority.
(c) Demand Promisary Note.
(d) Letter of continuity ' And under the Offer Letter had created from time to time registered mortgage over the immoveable properties of the defendants.
3. ' On default of repayment of the obligations despite reminders being sent by the plaintiff bank which remained un-replied. The cause of action accrued on the plaintiff to file the present suit. On service of the suit the counsel for the defendant filed his leave to defend application being CMA.
4. No,7832 of 2009 under section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001.
5. ' The defendant denied the allegations contained in the plaint and stated that serious disputes exist between the plaintiff and the defendant, which can only be resolved after leading of proper evidence. He has further argued that the suit is not maintainable under the law as the same is filed without resolution of Board of Directors of the plaintiff/Bank as such the suit having been filed by incompetent persons/attorneys who were duly not authorized the suit is liable to be dismissed on this ground alone.
6. ' Amongst the preliminary objections and defense pleas the defendant controverts and denies propriety, authenticity, admissibility and effectiveness of the claims and allegations of the plaintiff bank against the defendant alleging that the plaintiff Bank has not come to the Court with clean hands and therefore, is not entitled to the relief as claimed and the plaint is liable to be dismissed.
7. The alleged claim apart from being false, baseless, exaggerated, arbitrary and is based on concocted pleas. The exorbitant amount and unwarranted demands of the plaintiff as claimed in the suit which is based on alleged mark up and liquidated damages for which the plaintiff is not entitled in the absence of substantial documentary evidence.
8. ' Unauthorized, unlawful and illegal mark up upon mark up and other charges had been claimed by the plaintiff which were never agreed upon between the parties as such the same requires complete evidence to be brought on record before this Court to achieve the justice. The statements annexed to the plaint in which the plaintiff has allegedly and miserably failed to provide the correct complete and factual information of the accounts held between the parties.
9. ' It is the contention of the defendant that at the very onset there was no transaction between himself and the plaintiff Bank i.e. The Royal Bank of Scotland as the first facilities which were enjoyed by the defendant were with Prime Commercial Bank which was later merged, into ABN Amro Bank. As such the defendant had never been the customer of the present plaintiff Bank and neither availed any financial facility from them. While admitting Annexure-B to the plaint which is a letter extending credit facilities by Prime Bank to Messrs Vaid Impex dated 12th December, 2006 placed on page 41 of the plaint, wherein a running finance facility of Rs,70.000 Million was sanctioned to the defendant and at that time it is stated that the defendant was A already doing business with Muslim Commercial Bank, Paper Market Branch, Karachi and the Manager of that Branch joined Prime Commercial Bank Limited, Paper Market Branch, Karachi and he persuaded the defendant for doing business with Prime Commercial Bank Limited and the defendant started business relations with the said Bank. While admitting to the Annexure C to C/4 to the Plaint being executed by the defendant in favour of Prime Commercial Bank, it is alleged that the same was signed in Blank and filled by the Bank as per their choice of amount, date and other particulaRs, It is here that the Bank little deliberately concealed and suppressed the material facts between the defendant and the plaintiff Bank and it is because of this suppression that the defendant suffered colossal financial loss, which in fact is of much higher amount than the so-called claim made by the plaintiff in the instant suit.
10. ' The defendant denies mortgaging the property in favour of the plaintiff Bank. It is alleged by the learned counsel that at no time any transaction was carried out with the Royal Bank of Scotland and neither were his clients served with any Notice before the filing of the suit and the dispute is a factual dispute. The Bank had filed a Constitutional Petition bearing No,292 of 2006 before this Court in which the defendant was not made party and it was due to the lethargy of the plaintiff Bank i.e. Prime Commercial that the defendant suffered huge losses in his business. It is further also acknowledged that when Prime Commercial merged with ABN Amro the defendant executed certain documents in their favour which are annexed to the plaint as Annexure G on page 107 onwards.
11. ' In rebuttal the plaintiff Bank has denied each and every allegation made in the leave to defend and has argued that the same is not maintainable in law and liable to be dismissed in limine on the following legal and factual grounds:--
(a) The answering defendant throughout the leave application has admitted availing the finance facility from the plaintiff Bank.
(b) The defendant has created mortgage in favour of the plaintiff Bank.
(c) The execution of each and every document as mentioned in the memo of plaint by the defendant.
(d) Partial payments towards the plaintiff Bank by the defendant.
(e) The defendant has admitted partial outstanding amount.
12. ' The plaintiffs Advocate has argued that the leave application under reply does not comply in substance with the mandatory provisions of subsections (3), (4) and (5) of section 10 of the Financial Institutions (Recovery of Finances) Ordinance 2001. No substantial questions of facts and law have been raised that require evidence to be recorded to attach any valuable and relevant document in support of defendant's version and to give particulars as required under section 10(4) of the Ordinance. The mandatory provision as mentioned above not being complied with by the defendant the leave to defend is liable to be dismissed upon the same, and the penal provisions of section 10(6) of the Ordinance as well.
13. ' In view of the above, the plaintiff Bank humbly prays that this Leave Application under reply does not comply in substance with the mandatory provisions of Ordinance and therefore shall be liable to be dismissed by this Court.
14. ' In rebuttal to the replication the defendant counsel has reaffirmed the contents of his leave to defend and has stated that after the merger of ABN Amro it became a nonentity and the Power of Attorney is regulated under 1982 Act by Section 28 and has out lived its originality and as the Bank is a corporative body governed under the Companies Ordinance the Resolution has to be there as well as the Articles of Memorandum and Association. In the present case no resolution of plaintiff Bank was filed or passed and as such legal and factual grounds are made out favouring the defendant and the controversy cannot be decided unless evidence is led.
15. ' The defendant counsel has in fact agitated that the Bank after filing the Constitutional Petition before this Court and the defendant having surrendered the sugar imported to the Prime Commercial Bank and further the money had already been received by the Bank even from the Nazir as such this Court should in all earnestness considers the reasons agitated by the defendant in juxtaposition and not in isolation. Even the petitioner Bank did not make the defendant party to the proceedings. Lastly the Plaint is full of controversial allegations.
16. ' After listening to the arguments of the learned counsel and perusal of the documents, the main contention of the defendant onset of his arguments, was that the present suit had been filed incompetently by unauthorized personnel of the plaintiff Bank as can be seen from Annexure-A to the plaint which is a Power of Attorney executed by ABN Amro in favour of Adnan Qayyom Khan employee of the Bank. To this the plaintiff Bank has submitted that the Prime Commercial Bank was merged into ABN Amro Bank and all the liabilities, interests, accounts of Prime Commercial Bank were transferred to the ABN Amro Bank with the permission under the Rules and Regulations of State Bank of Pakistan. Thereafter the ABN Amro Bank was acquired by the plaintiff Bank being the Royal Bank of Scotland Limited with the approval of State Bank of Pakistan and again all the liabilities, interests accounts of ABN Amro Bank were subsequently transferred to the plaintiff Bank.
17. It is further the admission of the defendant that he was the customer of Prime Commercial Bank so all his payments obligations and liabilities which he owed to the Bank under the terms and conditions of the Finance Agreements, after the merger/acquisition of Prime Commercial Bank into ABN Amro Bank and then ABN Amro Bank to Royal Bank of Scotland to stand transferred to the latter. The aforementioned mergers were published in widely circulated national newspapers and the acquisition took place with the approval of the State Bank of Pakistan and Ministry of Finance.
18. ' In view of the above the objection of the defendant on the suit being filed incompetently is overruled and further due to the candid admission of payments made and payments due by the defendant and the same not being supported by documentary evidence of any repayments made by the defendant and further admission to the execution of the several documents to which the defendant has admitted in his leave to defend application, this Court is dismissing the leave to defend application as in the same the defendant has failed to raise any substantial questions of law and facts and in fact it does not comply in substance with the mandatory provisions of subsections (3), (4) and (5) of section 10 of the Ordinance and lastly the non-compliance of the mandatory provisions of section 10(4) of the Ordinance and thus the parties are directed to file their respective break up of accounts within two weeks from today.