SALMAN HAMID J.---CMA No,9684 of 2009: Suit for recovery of Rs,100,798,440 as on 31-7-2009 with liquidated damages @ 20% and cost was preferred by the plaintiff on or about 26-8-2009 against the defendant. After service, this leave to defend application under section 10 of Financial Institutions (Recovery of Finances) Ordinance 2001 (Ordinance 2001) was filed on 15-10-2009.
2. Finance Facility in the sum of Rs,50 million was extended by the plaintiff to the defendant in or about October 2004 which was fully availed of by the defendant. In or about 13-12-2007 a request was made by the defendant for enhancement of the above. Running Finance Facility from Rs,50 million to Rs,70 million. Upon deliberation of the defendant's request Running Finance Facility of Rs,50 million was improved to Rs,70 million. Obligatory financing documents which amongst others included agreements for financing on markup basis dated 8-5-2008 for the sum of Rs,79,574,159 (resale price), promissory note, letters of continuity, letter of arrangements, confirmation and undertakings, letter of disbursement and personal guarantees, all were of the alike date and amounts as of financing agreements were also executed by the defendant in favour of the plaintiff.
3. Adding up to the above execution of security documents, the defendant also mortgaged its two immovable properties i.d. (i) Plot No,201, Sector 25, Korangi Industrial Area, Karachi including land, building, plant and machinery (ii) Plot No,55/1, measuring 1000 square yards, Khayaban-eHafiz, Phase V, PDOHS, Karachi (Mortgaged Properties) in respect whereof memoranda of deposit of title deeds dated 8-5-2008 was executed. Subrogation agreement dated 3-6-2008 and certificate of registration in respect of the Mortgaged Properties was brought on record. It was the case of the plaintiff that despite availing above Running Finance Facility to the size of Rs,70 million, the defendant failed in making repayments thereof. Thus present suit emerged.
4. This assert of the plaintiff was shorn of by the defendant. The resistance as put forward in the leave to defend application was that the defendant by no means requested for enhancement of Running Finance Facility from Rs,50 million to Rs,70 million; in fact a request was made for enhancement of Running Finance Facility from Rs,50 million to 90 million. It was also augmented in the leave to defend application that the plaintiff only enhanced the Running Finance Facility to the extent of Rs,20 million and that this enhancement of Rs,20 million was also attuned towards alleged outstanding mark-up., Execution of various agreements/documents were lavished. It was stated that such were not signed and executed by the defendant. It was also stated in the leave to defend application that the plaintiff had assured the defendant that it will enhance the Running Finance Facility up to Rs,40 million but the same was not enhanced to such an extent. It was also mentioned that the additional collateral was on the appreciative that enhancement of Rs,40 'million would be given to the defendant by the plaintiff. No substantial questions of law or facts were raised in the leave to defend application and no documents to bear out their defence were filed, except a copy of plaint being Suit No,B-108 of 2009, favoured by the defendant against the plaintiff.
5. It would be seen from the contents of the leave to defend application that though in particular it was mentioned in the plaint that the defendant is a defaulter and mammoth amount was outstanding, all that the defendant had to shape up was that 'the amount as alleged is not due from the defendant and that The plaintiff may render true and proper accounts in Suit No,B-108 of 2009 which is pending against them (plaintiff) for the same purpose'. Casual attitude of the defendant needs no embellishment and the same is palpable from copy of paragraph 11 of the leave to defend application. Nothing was brought on record or fixed in the entire leave to defend application why the amounts as claimed by the Plaintiff were not due and payable. Just saying that the amount is not due and payable was not adequate or does not get ahead of the test whereby it becomes a substantial question of fact or law for fortitude which would give the right to the defendant for leave. Nowhere in the leave to defend application availing of Running Finance Facility/LC Finance was disputed or denied. Even the default', alleged by the plaintiff was not explicitly denied or disputed. Tongue of leave to defend application would show the contrary inasmuch as it was only stated that suit for accounts has been preferred and that losses were sustained by the defendants for want of promised enhancement up to Rs,90 Million of Running Finance Facility. Nowhere it was disputed or denied that enhancement up to Rs,70 Million was not availed of. In point of fact even the effecting of documents, entered into after enhancement up to Rs,70 Million was not 'distinctively denied. Only it was stated that the documents were blank and signatures were obtained on last pages of the documents. Such stand to my mind spells out admission of execution of documents and taking benefit of the enhancement of Running Finance Facility.
6. Even otherwise unfolding of the leave to defend application would confirm that no substantial questions of law and fact at all were brought up by the defendant, save what has been mentioned hereinabove. Only preliminary legal objections were raised, which too were general in nature. It was alleged that the suit was not maintainable and that no resolution of the board of directors was produced. It was also mentioned that the plaintiff has come to this court with unclean hands and its claim is based on surmises and conjectures and that since the Suit No,B-108 of 2009 has been preferred by the defendant against the plaintiff, present suit is not maintainable.
7. I am afraid to note that none of the preliminary objections were substantial enough whereby the defendant would made themselves entitled for leave. As to the first objection that the suit is not maintainable because provision of subsection (3) of section 9 were not complied with, it may be observed that on 18-8-2010 this court was pleased to order filing of statement of accounts by both the parties. In compliance of such Order, the record of the file would show that on 1-9-2010 summary of statement of accounts of the defendant was filed by the plaintiff which reads as under:-- Defendant was allowed Running Finance Facility of Rs. 50 million on October, 2004. 50,000,000.00 On Defendant's request Running Finance Facility was enhanced from Rs. 50 million to Rs. 70 million on May 5, 2008 70,000,000.00 Opening Outstanding Principal as on May 5, 2008A 49,999,612.64 B 26,197,279.72 Add: Total Withdrawals from May 6, 2008 to June 16, 2009 (Total Debit Transactions)
Total Disbursement/Withdrawals(A+B)=C 76,196,892.36 Less: Payments/Deposits from May 6, 2008 to June 16, 2009 (Total Credit Transactions)D 6,208,072.00 Total Outstanding Principal (C - D) = E 69,988,820.36 Add: Overdue Markup charged upto 31-12-2008F 9,666,580.41 Total Claim as on 31-12- 2008(E + F) = G 79,655,400.7 In its replication, it was stated by the plaintiff that dates of payments and disbursements and amounts were clearly mentioned in the plaint and as a result compliance of the provisions of subsection (3) of section 9 of the Ordinance 2001 were fully complied with. Above and beyond the summary of statement of accounts, filed by the plaintiff it would become clear that detailed entries of accounts were produced to validate its claim as on 31-12-2008. Record would show that despite Order dated 18-6-2010, no break-up of accounts till the date of hearing of this application was filed by the defendant. Coming to other preliminary objection regarding authorization of the officers of the plaintiff in filing the suit, I have examined relevant resolution which was passed by the plaintiff for filing present suit and the special power of attorney (Anuexure P/1 to the plaint). These two documents utterly fulfil the requirements of law. The suit was therefore filed authorized and competently.
8. It is well settled by now that mere filing of suit for accounts by the borrower does not mean and form valid, good or substantial ground for leave. The defendant has to stand on its on and has to make out a case for leave to defend it.
9. It is astonishing to see and observe that not even for jot sake an atom of evidence was brought on record by the defendant to show that it (defendant) has repaid the amount of Running Finance Facility and nothing was due and payable and/or whatever amount is due and payable has not yet fallen due: It is also astounding that despite filing of above summary of statement of accounts by the plaintiff in terms of this court's Order dated 18-8-2010 neither objections on such summary of statement of accounts were raised by the defendant nor any summary of statement of accounts in confutation thereof was filed. This unreceptive attitude of the defendant shows that whatever due amount was claimed by the plaintiff seems to be tolerable to the defendant.
10. Under the facts and circumstances i,e, that no substantial questions of law and facts having been raised by the defendant and that only by passing the amounts claimed by the plaintiff has been denied, that, too by taking the stand that the suit against the plaintiff is pending , which has already observed above is not sufficient to claim leave, this application is dismissed.
11. Still, the plaintiff is directed to show explicitly entry by entry the mark-up charged by it from the defendant and its rate from 1-1-2008 till date which should also reflect that such rate of mark-up was in terms of the finance agreements, executed between the plaintiff and defendant. Similarly the defendant is also directed to file details of summary of statement of accounts, showing the amount till date availed of and the dates of payments' of such amounts and the amounts due and payable along with calculation of agreed rate of mark-up in terms of the finance agreements.
Above exercise be over and done within a week time from the date hereof. Adjourned to 6-5-2011.
CMA No, 4701 of 2010. Through this application erudite counsel for the plaintiff seeks restraining order against the defendant from creating third party interest in Mortgaged Properties, on the fear that the plaintiff has come to know from dependable sources that the defendant is attempting to fashion third party interest therein (Mortgaged Properties) where after it (defendant) will leave Pakistan to trounce the decree that may be passed ultimately.
12. Allegation and/or fear raised in the application is illusive. No evidence, substantiating the allegation of selling of the Mortgaged Properties and parting of defendant from Pakistan was brought on record. Since the two immovable properties are Mortgaged Properties, their separation at the hands of the defendant is secluded and far off. Even otherwise defendant is a limited company, therefore, cannot leave Pakistan, as alleged. There is no allegation that the directors/guarantors of the defendant are endeavoring to leave Pakistan after selling their assets.
It seems that to daunt the defendant, present application has been moved. I find no virtues in the application and the same is hereby dismissed.