' SALMAN HAMID, J.---This is a suit for recovery of Rs,632,767,927 with cost of funds and for sale of mortgaged/hypothecated properties/assets of the defendants, filed under section 9 of the Financial Institutions (Recovery of Finances) Ordinance 2001 (Ordinance 2001) due and payable from 23-12-2010.
2. After presentation of the plaint on 30-12-2010, process under section 9(5) of Ordinance 2001 were issued to the defendants Nos.1 to 7 by all modes. Receipt of courier, registered post acknowledgement due and publications of daily Dawn and Daily Jang Lahore and Rawalpindi all dated 11-1-2011 are available on record and show that the defendants have been duly served. The record would further show that despite service on above defendants and despite lapse of statutory period for filing leave to defend application, no application was filed. This case, as a result was put up for final disposal in Court on 1-3-2011. On such date the injunction application (C.M.A No,13178 of 2010) for an order, restraining the defendants from creating third party interest in respect of Ijarah equipment/assets (Annexure B/2) and invoice dated 10-11-2007, which was moved earlier, wherein injunction was also operating, was also fixed which was confirmed on that day. Break up of accounts was ordered to be filed. The matter was thereafter adjourned again for final disposal to 23-2-2011. Record of the file would show that under cover of Statement dated 9-3-2011, presented on 10-3-2011, complete break up of summary of outstanding amounts, involved in the Suit, was filed by the plaintiff.
3. The case of the plaintiff was that the defendant No,1 are its principal borrower to whom it (plaintiff) sanctioned, approved and granted various finical facilities from time to time which were as under:--
(i) Murabah Facility amounting to Rs,47 Million.
(ii) Ijarah Facility amounting to Rs,9.170 Million.
(iii) Inland LC Sight Facility amounting to Rs,130 Million. (hereinafter referred to as, "the Facilities")
4. Security documents were also executed by the defendants in favour of the plaintiff, in respect of the Facilities. (paragraph 5 of the plaint).- Upon perusal of these documents, it transpired that the defendants Nos.2 to 7 executed personal guarantees dated 30-4-2009 in favour of the plaintiff and therefore such defendants are personally liable for repayment of amount guaranteed to the extent of Rs,215,000,000. It was the case of the plaintiff that despite availing the Facilities, the defendants completely failed to clear the same. Resultantly, the plaintiff through their counsel notified the total over dues and outstanding liability by causing legal notice dated 29-1-2010, whereby the defendants were specifically called upon to pay back the outstanding liability. Through letter dated 12-2-2010 the defendants acknowledged receipt of the legal notice and communicated that response to it would be sent soon. This never came forth. Reminder dated 10-3-2010 was sent by the plaintiff but to no avail. However, the defendants from time to time approached the plaintiff for restructuring their liability. This was not adhered to keeping in view unprofessional and non-serious corporation attitude of the defendants. Agreed tenure of the Facilities having expired, it was notified by the plaintiff to defendant No,1 through notice dated 15-11-2010.
5. Plaintiff is a registered charge holder over the defendant No, l's all present and future current assets, including raw material, work in progress, stocks, stocks in transit, finished and semi finished goods etc. Lying stored to be stored at defendant No,1's premises at Malir near Gharo or elsewhere in Pakistan, including all documents of title and sale proceeds and also has a charge over defendant No, l's all present and future book debts, outstanding moneys, receivables, bills, contracts, engagements, securities and rights etc. Relevant, charge that was created and reported in report dated 8-8-2008 was also brought on record.
6. The Finances were fully disbursed by the plaintiff and had been fully utilized by the defendants from time to time but they failed to pay/settle the Finances, which was in clear breach of their contractual and legal obligation. The defendants continued to make defaults in their Obligations with the result that a sum of Rs,63,277,679.27 became due and payable up to 23-12-2010. Under the Islamic mode of financing/banking, after expiry of the limit, facility approval of profit is stopped and thereafter as per agreed terms, the charity is to be recovered from the customer for the defaulted amount/period which is not to the credit of the plaintiff bank but is to be given to the bank to be utilized by it for some welfare/charitable purposes. This is what was argued by the plaintiff.
7. The summary of Statement of account filed by the plaintiff has been examined, wherein Murabaha Facility/principal outstanding amount is shown to be Rs,39,996,266.92 and agreed profit thereon is calculated and shown as Rs,377,417.73. In addition to these two amounts, an amount of Rs,12,980,141.62 is shown to be towards Charity; whereas an amount of Rs,8:536,325.82 has been shown as cost of funds, calculated at the rate of 15.51% and 15.29% as per State Bank of Pakistan notified rate vide letter No, BPRD /BLRD-06/ 811/ 20618/ 2009- 7069 dated 24-10-2009 and BBRD /BLRD-06/811/ 17979 /2010-7382 dated 5-10-2010. Besides Murabaha Facility breakup, Ijarah Facility breakup is also mentioned in the summary of Statement of account, wherein principal outstanding amount is shown as Rs,9,171,548.00. Agreed profit against this ljarah Facility is calculated at Rs,752, 305.00 and Charity is calculated in terms of the Agreements to the extent of Rs,806,692.00. Cost of funds towards this ljarah Facility is calculated at Rs, 15.51% and 15.29% as per State Bank of Pakistan notified rate vide letter No,BPRD/BLRD06/811/20618/2009-7069 dated 24-10-2009 and BBRD/BLRD- 06/811/17979/2010-7382 dated 5-10-2010, which comes to Rs, 1,328,237.59.
8. There is nothing on record whereby it can be deduced that these amounts are not due and payable by the defendants to the plaintiff, more particularly when 'the legal A notice that was sent despite receipt by the defendants was not responded and liability mentioned therein not disputed or denied. Only it was mentioned that they (defendants) will revert back to it in due course of time.
Under the circumstances, the principal outstanding amount and agreed profit' together with cost of funds as calculated by the plaintiff is accepted against Murabaha Facility and Ijarah Facility.
However, Charity of Rs, 12,980,141.62 against A Murabaha Facility and Charity of Rs,806,692.00 against Ijarah Facility is declined inasmuch as that according to me it is nothing but markup on markup and cannot be allowed in any form. The relevant provision which is available in the Murabaha and Ijarah Facility Agreements would show that such amounts are charged at 22% of the contract price and it is mentioned that this amount would be utilized by the bank for charitable and religious purposes, "as well as for providing interest free loans". The bare -reading of the stipulations of the Agreements would show that these Charities charged at 22% on the contract price are nothing but markup under the guise of Charity. These two amounts are therefore declined. Under the circumstances, and looking at the above unrebutted position from the side of the defendants, the suit of the plaintiff is decreed to the extent of prayers (a) for which the amounts mentioned in Statement of summary of Accounts minus Charity, mentioned against B Murahaba and Ijarah. Finance is allowed. Prayer (b), (c), (d) and (e) are also granted.. The plaintiffs shall also be entitled to the attachment and sale of personal properties of the guarantors for recovery of balance decretal amount. The plaintiff is also allowed cost of funds in terms of section 3 of Ordinance 2001, minus the cost of funds already shown by the plaintiff in the summary of statement of account. The plaintiffs are also entitled for the cost of the .