' AQEEL AHMED ABBASI, J.---Being aggrieved and dissatisfied with the impugned order dated 29- 11-2010 passed by the learned Judge of Banking Court No,II, Karachi in Suit No,39 of 2009 on leave to defend application filed by the appellant and the impugned judgment dated 6-1-2011 and decree dated 25-1-2011 whereby the suit of the respondent Bank has been decreed, the appellant namely Atif Manzoor son of Manzoor Ahmed has filed instant appeal under section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001.
2. Brief facts as recorded by the learned Judge of Banking Court No,II, Karachi, are that the respondent bank i.e, Messrs Faysal Bank Limited filed a suit under Financial Institutions (Recovery of Finances) Ordinance, 2001 for the recovery of Rs,47,136,050 along with mark-up against the present appellant along with respondents Nos.2 to 5. It was stated that the respondent No,5 i.e, Messrs F.R.
Corporation Private Limited upon the request of the appellant and respondents Nos.2 to 4 being the directors and guarantors approached the respondent No,1 Messrs Faysal Bank Limited, who extended an Ijara. Finance Facility to respondent No,5 in pursuance of Lease Agreement dated 26th February 2004 in respect of eleven (11) Isuzu. Buses, detail of which is as under:-- Sr.No. Reg.# Year of Reg.Engine # Chases # Make
1. 6BGI-51683PMTI12UV3000146
2. JB-0092 2004 6BGI-51684PMTI12UV3000147Isuzu
3. JB-0093 2004 6BGI-51685PMTI12UV3000148Isuzu
4. JB-0094 2004 6BGI-51686PMTI12UV3000149Isuzu
5. JB-0095 2004 6BGI-51687PMTI12UV3000150 Isuzu
6. JB-0096 2004 6BGI-51688PMTI12UV3000151Isuzu
7. JB-0097 2004 6BG1-51689PMTI12UV3000152Isuzu
8. JB-0098 2004 6BGI-51690PMTI12UV30001153Isuzu
9. JB-00120 2004 611ETTC-03 ET1342 3000010 Isuzu
10. JB-00122 2004 611ETTC-01 ET1324 3000008 Isuzu
11. JB-00122 2004 611ETTC-02 ET1324 3000009 Isuzu
3. In consideration of the Ijara Facility granted by the respondent Bank, the appellant and the respondents Nos.2 to 5 executed letter of continuity dated 26-2-2004, Promissory Note dated 26-2- 2004 and undertaking dated 26-2-2004 in favour of the respondent Bank. The appellant namely Atiq Manzoor and the respondents Nos.2 to 4 also executed their personal guarantees dated 26-2- 2004 in favour of respondent bank. It is stated that the aforesaid Ijara Facility was fully availed and utilized by the respondent No,5. However, the appellant and the respondents Nos.2 to 5 in breach of the terms and conditions as stated in various' documents duly executed by the appellant and respondents Nos.2 to 5 in favour of the respondent bank, failed to repay their outstanding liability when the same fell due. It has been stated that the appellant and the respondents Nos.2 to 5 failed to, perform their obligations in accordance with Ijara Agreement and despite various demands and reminders they have failed to pay the outstanding liabilities amounting to Rs,47;136,050 on their respective due dates, hence committed default. It has been further stated in the impugned judgment that appellant Atif Manzoor and respondent No,2 namely Abdul Rasheed Khan vide letter dated 23rd February, 2006 and 25th May, 2007 admitted the liability but failed to pay the amount as per their commitment. The appellant and the respondents Nos.2 to 5 have availed the facility for the period of 5 years and as per repayment schedule they were required to pay six instalments, whereas they have failed to repay the full monthly instalment. It has been further stated that the respondent bank had no option but to approach the Court for the recovery of outstanding amount.
The respondent bank having failed to recover the outstanding liability against the appellant and respondents Nos.2 to 5, filed Suit No,39 of 2009 before the Banking Court for recovery of outstanding amount along with mark-up after fully complying with the provisions of section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 in accordance with law.
4. Appellant and the respondents Nos.2 to 5 filed leave to defend application undef section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 seeking for unconditional leave to defend. Learned Banking Court No,II, Karachi after having heard all the learned counsel for the parties, dismissed the same vide order dated 29-11-2010. Consequently, after hearing all the learned counsel for the parties, the impugned judgment dated 6-1-2011 and the Final Decree dated 25th January, 2011 was passed by the learned Judge of Banking Court No,1 Karachi in favour of the respondent bank, which has been impugned only by the present appellant namely Atif Manzoor through instant First Appeal.
5. Learned counsel for the appellant before us has contended that the learned Banking Court has not examined the evidence nor taken into consideration the contention of the defendants in this suit whereby the execution of the finance documents including the guarantees in favour of the bank was disputed by the defendant. It has been further contended by the learned counsel that neither the appellant was the Director of respondent No,5 i.e, F.R. Corporation (Pvt.) Ltd. Nor he has executed any loan document or the guarantee, whereas the signatures on the said documents produced by the bank were forged. Learned, counsel further submits that once the above dispute was raised before the learned Banking Court through leave to defend application filed under section 10 of the Fi,nancial Institutions (Recovery of Finances) Ordinance, 2001, it was the duty of the learned Banking Court to grant the leave and record the evidence in this regard. It has been further contended that the learned Banking Court has not taken into consideration any submission of the defendant, whereas, the impugned judgment does not contain any reasoning, hence liable to be set aside. Learned counsel for the appellant further argued that while granting loan even the legal formalities were not fulfilled by the respondent bank, as the respondent bank did not secure the production of article and memorandum of association and resolution of Board of Directors of respondent No,5 company before granting subject finance facility to the respondent No,5. Per learned counsel, there was no relationship between the appellant and the respondent bank either as of customer or as a guarantor in respect of subject finance facility, hence the suit against the appellant was liable to be dismissed. In support of his contention, the learned counsel has placed reliance on the following cases.
(1) American Express Bank Ltd. v. Adamjee Industries Limited 1995 CLC 880
(2) Al-Hadayat Textile through Proprietor and 2 others v. Soneri Bank Limited 2003 CLD 105
(3) Kamran Zali v. Messrs Union Bank Limited and 4 others 2002 CLD 876.
6. Conversely, the learned counsel for the respondent No,1 i.e, Messrs Faysal Bank Limited has vehemently controverted the contention of the learned counsel for the appellant and has supported the order as well as impugned judgment and decree passed by the learned Banking Court. It has been submitted by the learned counsel that the learned Banking Court, after having taken into account the availability of all the required finance documents, which were duly executed by the present appellant in his capacity as Director of the Company and also as a guarantor in respect of the finance facility, has passed the impugned judgment strictly in accordance with law.
Per learned counsel, the appellant has executed all the documents relating to finance facility, lease agreement in respect of subject vehicles in his capacity as Director of Messrs. F.R. Corporation (Pvt.) Ltd., whereas the letter of continuity, promissory note and undertaking in respect of outstanding liability were also executed by the present appellant. Per learned counsel, the contention of the learned counsel for the appellant, whereby it has been stated that the appellant was not the Director of the Company i.e, Messrs F.R. Corporation (Pvt.) Ltd. Is contrary to the facts and record of the Security Exchange Commissioner of Pakistan. It has been further contended that no such objection was raised by the appellant before the learned Banking Court in his leave to defend application, whereas the appellant before this Court is making an attempt to deny his signatures on the documents which were duly attested by independent witnesses. It has been contended by the learned counsel for the bank that the appellant has not been able to dispute the availing of the finance facility and the default committed by the appellant along with remaining respondents, on the contrary the appellant has made an attempt to raise frivolous objections, which are contrary to the documents available on record. While concluding his arguments, learned counsel has submitted that since the respondent bank after having complied with the provision of section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, duly supported by the relevant finance documents and the statement of account submitted in terms of section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 has successfully established his claim beyond doubt, whereas the appellant could not point out any error in the impugned judgment or could raise any substantial question of law before the learned Banking Court, therefore, or even before this Court, therefore, instant appeal is liable to be dismissed with costs.
7. We have heard both the learned counsel and perused the impugned order, judgment and decree passed by the learned Banking Court and have also examined the grounds raised by the appellant in its leave to defend application filed before the Banking Court. On perusal of the impugned judgment passed by the learned Banking Court, it is seen that the respondent bank while filing suit for recovery of the outstanding liability against the present appellant and respondents Nos.2 to 5, has substantially complied with the provision of Section 9 of the Financial Institutions (Recovery of Finances) Ordinance 2001, as the claim was duly supported by statement of account, all the finance documents, including the sanction of finance facility, lease agreement, receipt of delivery of vehicles, letter of continuity, promissory note, undertaking and guarantee duly signed by the appellant and other Directors of the Company. On the other hand, the appellant while filing leave to defend application under section 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001, before the learned Banking Court, could not raise any substantial legal ground to dislodge the claim of the respondent bank. On the contrary, a false plea was taken by the appellant whereby it was stated that the appellant was not the Director of the respondent company. Such assertion on the face of it stands belied in view of the certified copy of Form 29 under section 205 of the Companies Ordinance, 1984 issued by the security Exchange Commission of Pakistan, wherein the name of the present appellant namely Atif Manzoor son of Manzoor Hussain has been mentioned as one of the Directors of Messrs F.R. Corporation (Pvt.) Ltd. Since 2003.
8. From perusal of the contents of the leave to defend application filed by the present appellant along with respondent No,2, the execution of the finance documents or availing of the finance facility has not as such been disputed, whereas in para-3 of the leave to defend application, the execution of guarantee in their personal capacity has been disputed on the ground that signatures are doubtful. It has never been the case of the appellant before the learned Banking Court that no finance facility was awarded to the appellant and respondents Nos.2 to 5, nor its availment has been denied. On the contrary, some frivolous and technical objections have been raised, which are not even supported by any documents, rather the same are contrary to the available record. It has also been noted that several documents and correspondence filed by the respondent bank in the recovery suit were not filed by the appellant along with instant appeal, whereas such documents have been placed on record by the learned counsel for the respondent bank. Such documents including the statement of account showing disbursement of the finance facility, its availment and the re-payments by the appellant, resolution of Board of Directors of Messrs F.R. Corporation (Pvt.)
Ltd., authorizing the present appellant and respondent No,2, both the Directors of the Company, to open the account with the respondent bank and to operate the same on behalf of the Company, and the certified copy of the general terms applicable to all accounts, containing the signature of the present appellant and respondent No,2, have been placed on record. Whereas, in addition to above mentioned documents, several other letters written by the appellant and the respondent No,2 to the respondent bank in connection with availment of finance facility, sale invoice in respect of the subject vehicles, promissory note, undertaking, execution of personal guarantee and other correspondence have also been placed on record by the respondent bank, which prima facie establish the active role and participation of the present appellant throughout in the entire process of availing the finance facility and execution of charged documents.
9. We have also observed that after dismissal of the leave to defend application filed by the present appellant and the respondent No,2 jointly, all the respondents Nos.2 to 5 including the present appellant were duly represented by their respective counsels before the learned Banking Court No,II, Karachi, however, none else, except the present appellant has filed any appeal against the impugned judgment and decree. The present appellant has also failed to point out any illegality or error in the impugned judgment whereas no substantial legal ground has been raised by the appellant, which may require this Court to interfere with the impugned order, judgment and decree, which otherwise depicts correct legal position.
10. We may observe that once a financial institution files a suit for recovery, after having complied with the requirements of section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, by furnishing duly certified statement of account, the documents relating to the grant of finance and the detail of amount of finance availed by the customer, amounts repaid, with dates of payments, and the amount of finance and other amounts relating to the finance payable upto the date of institution of suit, the burden to dislodge the said claim shifts upon the customer who is required to file leave to defend application in terms of section 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001 in the form of written statement containing summary of the substantial question of law as well as of facts in respect of which evidence is required to be recorded. It shall also specify the details as mentioned in subsection (4) of section 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001. We are of the opinion that in the instant case the respondent bank has complied with the provisions of section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, whereas the appellant could not dislodge the claim of the bank by raising any substantial questions of law and fact which may require recording of evidence, whereas no substantial compliance of the provisions of section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 has been made. Reference in this regard can be made to the case of the Hon'ble Supreme Court in the case of Apollo Textile Mills Ltd. And others v. Soneri Bank Ltd., PLD 2012 SC 268. Whereas, the case-law relied upon by the learned counsel for the appellant is of no assistance, as the ratio of the same is not attracted to the facts of the present case.
11. We are of the opinion that the defence taken before the Banking Court or even before this Court by the appellant is illusionary, whereas, merely a tacit objection alleging the signatures on one or two documents to be doubtful, in the absence of any other substantial legal ground, would not justify filing the leave to defend application by a customer, and the same cannot be treated as proper compliance of the provisions of section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. In view of hereinabove facts and circumstances of this case, instant appeal was dismissed vide our short order dated 18-10-2012 and these are the reasons for such short order.