SALMAN HAMID, J. - Aggrieved by judgment and decree dated 30.01.2010 and 19.02.2010 respectively, (Impugned Decision), handed down by Banking Court I, Karachi, (Banking Court), in banking suit No. 1130/2008 (the Suit), Shahi Textiles, Naseem Ahmed, S. Ali Ahmed, Muzammil Hussain and Fahad Ahmed (the Appellants) filed present Appeal under Section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, (2001 Ordinance), against Habib Bank Limited (Respondent), with the prayers that the Impugned Decision be set aside by this Court with a direction to it (Banking Court) to decide the Suit after recording evidence.
2. In a nutshell the background of the Appeal is that the Appellants availed different financial facilities against proper documentation and securities, which amongst others, included guarantees and a mortgage; Repayments of the financial facilities not forthcoming, despite demands, Respondents filed the Suit against the Appellants for recovery of amount of Rs.
25,449,430.00 as on 24.03.2008 with cost of funds in terms of Section 9 of 2001 Ordinance before the Banking Court. The financial facilities those were availed of by the Appellants were also renewed and revised. Financial facilities showing accrued mark-up as on the date of filing the suit reflected as under:- S.No Particulars Principal Accrued Mark- Up
1. RF 1,996,854 60,457
2. FAFB 18,035,0001,677,120
3. FAFB(one off) 3,000,000 314,184
4. PAD 365,815 Sub-Total 23,397,6692,051,761 Outstanding Amount 25,449,430
3. After service of the Suit through daily Jang and Dawn, Karachi, both dated 0i.11.2008, Appellants filed leave to defend application wherein though availing and renewal/revision of financial facilities was not denied, it was mentioned that the security documents those were obtained from the Appellants in lieu of financial facilities were blank and that the Respondents were not entitled to charge, mark-up, it being compounded. PAD amount of Rs. 365,815' was also disputed inasmuch as according the Appellants it was not released by the Respondents. It was also mentioned that Respondents kept in their custody valuable imported goods belonging to the Appellants, worth of which was double the amount claimed in the Suit. It was also alleged that the Respondents illegally debited the amount from their account as a resuIt whereof they (Appellants) suffered losses.
Allegation of loosing a number of buyers for want of/lack erf timely financing by the Respondents was also raised.
4. After hearing, leave to defend application was disposed of by the Banking Court by its Order dated 24.10.2009 since no substantial questions of law as well as facts were raised or found.
However, the Appellants and the Respondents were directed to file breakup along with repayment vouchers. It seems that such exercise was carried out and after looking into such documents and the accounts, Impugned Decision came in.
5. Learned counsel for the Appellants mainly argued that the Banking Court did not appreciate the fact that first the Respondent was to present the bills for clearance to the foreign buyer and upon dishonour, Appellants were liable thereunder for encashment. It was urged that the bills were never presented for such purpose. No due notice of dishonour of such foreign bills was given by the Respondents to the Appellants before filing the Suit and requirements of Section 30 of Negotiable Instruments Act, 1881 were not adhered to. It was also argued that the Banking Court was duty bound to have looked into this aspect of the matter as it was a substantial; question of law as well as of facts. In support of his contentions, learned counsel relied upon Veerappa Chetty v. Vellayan Ambalam and others (AIR 1919 Madras 179), C.C. Sinha v. Bidhu Bhusan De and another [AIR 1955 Calcutta 562 (V.42.C.175 Nov)], Kanhyalal and others v. Ram Kumar and others, AIR 1956 Rajasthan 129 (AIR V 43 C 40 Aug)], F. Nanak Chand Ramkishan Das and others v. Lai Chand Ganeshi Lai and others [AIR 1958 Punjab 222 (V.45 C 60)],' United Bank Itd. v. Taj Seafood Industries, Karachi and 4 others (PLD 1975 Karachi 410), United Bank Limited V. Azmat Trading Co. (Pvt.) Itd. And 5 others (2001 CLC 1172), Haji Abdullah Khan and others v. Nisar Muhammad Khan and others (PLD 1965 SC 690), Lahore Cantt. Park View Cooperative Housing Society v. Muhammad Ishaq etc, (2000 SCJ 672), National Bank of Pakistan v. Shaharyar Textile Mills Itd. (2003 CLD 1370).
6. Appeal was opposed. It was argued by the learned counsel for the Respondent that in the Suit all the outstanding liabilities as on 24.03.2008 were disclosed in terms of the rations of Section 9(3) of the 2001 Ordinance. Against such disclosure, all that was stated by the Appellants, in rebuttal, was only that nothing was due and payable and Respondent's claim comprised of compound mark- up. It was asserted that all that has now been raised by the learned counsel for the Appellants in the Appeal, in the first place, was not urged before in reply to Respondent's claim as was available in the Suit (particularly paragraph 22) and therefore not allowed to be raised now inasmuch as such is a factual agitation/argument. It was also asserted that the Impugned Decision would show that the PAD amount as claimed by the Respondent was not allowed by the Banking Court, which was the only amount disputed by the Appellants in their leave to defend application. It was also argued that after dismissal of leave to defend application on 24.10.2009 the Appellants and Respondent were directed to file documents/vouchers. Even at such time nothing of the sort, as now attempted to be raised, was brought up. Hence the Impugned Decision came in, which was just, legal and proper and require no interference of this Court. '
7. We have heard the learned counsel for the Appellants and the Respondent and also perused the record. Narration of the Appeal would show that the only ground that was urged was that the Banking Court failed to appreciate and/or explore to find out if the Respondent, before filing the Suit presented bills for payments and whether upon dishonour the Suit was filed by the Respondent? It may be noted that after refusal of leave to defend application by the Banking Court on 24.10.2009, the Appellants and the Respondent were directed to submit their breakup along with repayment vouchers. This shows the fact that despite dismissal of leave to defend application the Appellants again had a chance to submit break-up along with repayment vouchers. Requirements of Section 9(3) of 2001 Ordinance had been fully complied by the Respondent and it was shown what was the amount due and payable and the mark-up accrued thereupon. It is apparent from the record, particularly from the leave to defend application that mandatory requirement of Section 10(3), (4) and (5) had not been complied with, which became all the more important in the face of the argument raised for the first time by the Appellants in the Appeal. Section 10(4) of 2001 Ordinance demands that the leave to defend application shall state certain facts, including amount of finance availed, the amount repaid with dates of payment etc. The leave to defend application that was filed by the Appellants was silent as to the above requirement of Section 10(4) of 2001 Ordinance and that even the compliance of sub-sections (5) & (6) of 2001 Ordinance was not made. It is the consistent view of the Courts that the provisions of Section 10 of 2001 Ordinance are mandatory and non-compliance thereof is fatal. It has come on record, quite amply, that the ground raised by the Appellants in the Appeal was not raised or even argued before the Banking Court and therefore, such cannot be allowed to be raised, before this Court, more particularly when such was purely factual. Nevertheless Order dated 02.02.2011, passed by this Court in the Appeal would show that the documents were produced by die Respondent to show that payments against foreign bills were not made and requisite notice of dishonour was served on the Appellants. Time was sought by the Appellants for comments/affidavit. Record of the file shows no comments/affidavit. In such view of the matter it became apparent that even the argument of presentation of bills and dishonour thereof and notice thereafter to the Appellants after 2013 M/s. Faisalabad Oil Refinery V. M/s. Golden Alpine dishonour, as stipulated under Section 30 of the Negotiable Instruments Act, 1881 and argued by the Appellants' counsel frizzled out. Various citations relied upon such proposition of law, gauged from the state of affairs at Appellants' end are of no assistance inasmuch as requirements of the law had been fully complied with by the Respondents that is to say dishonour of bills established.
8. Having observed as much, we may also say that the various precedents cited by the learned counsel for the Appellants asserting that a ground not raised and/or taken at the first available time and/or at trial stage can always be raised at a later stage and/or at the appellate level was also not available in view of what transpired in the Appeal and exposed hereinabove. .It goes without saying that the ground raised by the learned counsel for the Appellants in the Appeal for the very first time was not at all, even remotely, legal, as claimed. It was factual inasmuch as it was argued and quite strenuously that the Banking Court failed to appreciate and explore if the bills were presented for payment by the Respondents and if the same had been dishonoured or not and only if such was the outcome, then the Suit could have been filed. Since no such ground was raised in the leave to defend application appreciation or otherwise thereof was not possible.
9. We have examined the Impugned Decision in view of above expositions and find that the same is legal; apt to the facts and circumstances of the Suit and does not call for any interference. We are, therefore, persuaded not to dislodge the findings of the Banking Court. ResuItantly, this Appeal fails