' SHAHNAWAZ TARIQ, J.---Through the instant first appeal, the appellant Aijaz Mehmood has impugned the judgment dated 29-10-2009 and decree dated 17-11-2009, passed by the learned Banking Court No,IV, Karachi, whereby the Suit No,1183 of 1997 filed by the respondent for recovery of outstanding dues was decreed.
2. Relevant facts leading to the instant appeal are that the appellant being sole proprietor of Messrs Mehmood Industries, opened Current Account(s) in the branch of respondent bank in April 1982 and May 1983 respectively. Upon his request and execution of personal guarantee dated 31-7- 1983, the appellant was extended credit facility of Rs,700,000. The appellant further applied to the respondent for enhancement of the credit facility, and same was again enhanced to the extent of Rs,5,350,000 in the month of September, 1983 and for such enhancement, he executed promissory note in the sum of Rs,3,000,000 with minimum interest 4% per annum. In order to secure the said credit facility, the appellant entered into hypothecation agreement dated 11-8-1983, whereby he pledged his stock(s) of PVC resins and chemical in favour of the respondent. The appellant also executed general security agreement relating to goods whereby he pledged all the bills, documents of title, transportation documents, insurance policies etc. Relating to his goods in trade in favour of the respondent. The appellant fully utilized the said credit facilities from time to time by withdrawing the amount(s) from his said current account maintained with the respondent for the purpose of negotiation of a number of Import bills through the respondent and the said import bills were not cleared by the appellant as a result of which and also due to overdraft utilized facility by him, huge debit balance have accumulated in his current account, which the appellant failed to clear despite promises made by the appellant and repeated reminders of the respondent in this regard.
3. It is further stated in the appeal that the respondent attached incomplete statement of account with the plaint i.e, from 3-4-1983 to 14-12-1984 and from 15-5-1984 to 25-10-1987. Through a legal notice dated 16-9-1987, the respondent demanded whole amount outstanding against the appellant, but despite receipt of notice, the appellant failed to clear the dues outstanding against him, which were accumulated to the extent of Rs,1,489.621.50. Hence the respondent filed Suit No,764 of 1987 before this Court, which was subsequently transferred to the Banking Court due to change in pecuniary jurisdiction, and was re-numbered as Suit No,1183 of 1997 for recovery of the said amount. The appellant filed application under section 7(11) of the Banking Companies (Recovery of Loans) Ordinance, 1979, read with Order VII, Rule 3 and section 151, C.P.C., seeking leave to defend the suit, inter alia, denying the claim of the respondent and execution of documents, by raising the plea that the signatures of the appellant were obtained on blank documents/proformas, which were subsequently filled in, in respect of said transaction. However, the leave to defend the suit was granted subject to furnishing security to the extent of Rs,1,197,212, which was furnished to the satisfaction of the Nazir of this Court.
4. The appellant filed his written statement whereby he admitted the opening of the current account, but denied the execution of personal guarantee to secure the repayment of outstanding dues, request for credit facility and its subsequent enhancement and execution of promissory note and letter of hypothecation, which were subsequently filled in un-authorizedly. He further stated that entire overdraft facility was cleared on 11-2-1984 and paid more than the principal amount including the value of the goods pledged with the respondent.
5. It has further alleged that the statement of account filed by the respondent along with the plaint was incorrect and the respondent had charged compound interest and mark up, which was not agreed to, and as such the question of re-payment does not arise.
6. From the pleadings of the parties, following, issues were framed by the learned trial Court:--
(i) What is the effect of the personal guarantee executed by the defendant dated July 31, 1983?
' Whether the defendant opened a current account with the plaintiff in April, 1983 in which he has given a credit facility up to Rs,700,000 -and whether the said credit facility was enhanced in September, 1983 to Rs,5,350,000?
(iii) What is the effect of the promissory note given by the defendant to the plaintiff in the sum of Rs,3,000,000 dated August 11, 1983?
(iv) What is the effect of the letter of hypothecation dated August 11, 1983?
(v) What is the effect of the general security agreement dated December 24, 1983?
(vi) Whether the accounts statement as presented by the plaintiff are correct?
(vii) Whether the defendant has acknowledged his liability to the bank, if so to what effect?
(viii) Whether this Court has jurisdiction to hear the above matter?
(ix) To what amount is the plaintiff due?
(x) Whether the plaintiff is competent to charge high rate of interest/mark up/profit never agreed upon between the parties?
(xi) Whether the plaintiff has retained defendant's goods, which are to be returned?
(xii) What should the decree be?
7. Both parties have examined one witness from each side before the trial Court and after conclusion of evidence, they filed their written arguments in support of their respective claims.
8. Considering the arguments and other relevant material available on record, the learned Banking Court has passed the impugned judgment dated 29-10-2009 in the following terms:--
(a) A decree against the defendant in the sum of Rs, 1,489,621/50 together with the interest and profit at the rate of 19% per annum with quarterly rests from the date of filing of this suit till payment of the decretal amount by the defendants.
(b) Cost of the suit.
9. We have heard the arguments of the learned counsel for the parties and scanned thoroughly the relevant record with their assistance.
10. Mr. Masood Anwar Ausaf, learned counsel for the appellant has contended that the learned Banking Court has failed to take into consideration that the documents filed do not support the claim of the respondent as mentioned in the plaint that same were executed prior to sanction of the credit facility and the respondent with ulterior motives has filled in the blank columns without knowledge of the appellant. He further contended that the learned Banking Court has failed to decide the application under section 151, C.P.C. Filed by the appellant for return of surety as well as application under section 151, C.P.C. Filed by respondent to direct the appellant for payment of godown charges and taking over the pledged goods, therefore, the impugned judgment is liable to be set aside on this sole ground. He relied upon 2006 CLD 132 and 1993 CLC 334.
11. He further submitted that the learned Banking Court has passed the judgment and decree in abrogation to the provisions of the Financial Institutions (Recovery of Finances) Ordinance 2001 and allowed the interest at the rate of 19% per annum as prayed in prayer clause (a), which was never agreed by the appellant.
12. In rebuttal, Mr. Muhammad Imtiaz Agha, learned counsel for the respondent argued that statement of account filed along with the plaint contains all the required details and the attorney of the appellant has admitted that all payments made by them were mentioned in the statement of account filed by the respondent. He further contended that the learned trial Court has fully considered the execution of documents, such as, execution of personal guarantee for the amounts sued, request for credit facility as well as enhancement thereof, demand promissory note and the letter of hypothecation of the goods/stocks, and the finance facility extended to the appellant and subsequent enhancement thereof, was fully availed by him.
13. Learned counsel lastly contended that the pendency of applications of both the parties will not affect the impugned judgment passed by the learned trial Court, which is based upon sound reasons, and law relied upon by the learned counsel for the appellant regarding pending applications is not applicable upon the circumstances of present appeal.
14. During the trial, Umer Mahmood attorney of the appellant was examined as Exh.D, and he has admitted execution of all documents referred by the respondent. For the appropriate conclusion, relevant portions of his cross-examination are reproduced as fellows:- "It is correct that the sole proprietor of Mahmood Industries is Mr. Aijaz Mahmood. It is correct that the loan subject matter of this case was obtained by Mr. Aijaz. The entire correspondence and documentation in this case was done under the signature of Mr. Aijaz Mahmood. It is correct that Aijaz Mahmood had opened this account No,01-007178-01 with the plaintiff bank in May, 1983.
Under the said account number Mr. Aijaz has availed of/utilized over draft facility. It is correct that the Mr. Aijaz had executed a personal guarantee against the utilization of the said over draft facility. We had opened three L/Cs with the plaintiff bank. It is correct that the present suit pertains to the L/C No, 830203. It is correct that this L/C was opened on 18-8-1983 for US $ 1,98,000. Through this L/C we had imported PVC Resins. It is correct that Rs, 26,80,207.20 is the principal amount of the said L/C. It is correct that plaintiff bank has paid Rs,18,99,074/ 80 towards the custom duty and taxes on behalf of the defendant. The said principal along with custom duty comes to be Rs,45,79,282. It is correct that the plaintiff bank had paid, on our behalf, to the foreign exporter and custom duty for the sum of Rs,45,82,400. No mark-up or interest is included in the aforesaid figures amount. Through the letter, we had assured the bank that we would clear up the said outstanding in 24 instalments. It is correct that we had requested the bank for two 'rears time for liquidation of our liability. We have not submitted in connection with this case before this Hon'ble Court any evidence (documentary) to establish our payments made to the bank after 31-8-1985. It is correct that we have not cleared our liability within the period of one year from the date of availment. It is correct that the clause 2 of annexure-A, as available now, discloses that the bank would be entitled to charge interest @ minimum 19%. Whatever payments have been made bq us the same find place in the statement of account. It is correct that after receiving the letter dated 16-9-1987 annexure F to the plaint we have neither replied to the said letter nor made payment as demanded therein". (Emphasis added)
15. Perusal of the above cross examination of the attorney of the appellant, it is crystal clear that he has not denied the execution of all the documents and signatures of the appellant thereon, produced by the respondent, such as, execution of personal guarantee for the amounts sued, request for credit facility as well as enhancement thereof, demand promissory note and the letter of hypothecation of goods. He has also admitted that appellant opened current account as well as three LCs. He also admitted that the appellant has requested the respondent to clear the outstanding dues in 24 instalments. He also admitted that the amounts paid by the appellant were mentioned in the statement of account filed by the respondent, and they also did not produce any material to show that the mark-up was charged by the respondent at the high rate. He admitted that Rs, 26,80,207.20 was the principal amount of the said L/C and bank had paid Rs, 18,99,074/80 towards the custom duty and taxes on behalf of the defendant, and said principal amount along with custom duty comes to be Rs, 45,79,282, He admitted, that the bank had paid, on their behalf, to the foreign exporter and custom duty for the sum of Rs,45,82,400. He admitted that no mark-up or interest was included in the aforesaid figures of amount, and they had also requested the bank for two years time for liquidation of their liability. They had not submitted any documentary evidence to establish any payment made to the bank after 31-8-1985. He admitted that they had not cleared their liability within the period of one year from the date of availment, and as per the clause 2 of annexure-A, the bank would be entitled to charge interest @ minimum 19%.
16. Perusal of the material available on the record further reflects that the appellant has alleged that all the documents executed by him, were with blank columns which were filled in by the respondent Bank unauthorizedly.
17. We would like to refer the identical case-law to-strengthen our discussion to resolve the controversy. In case of Cotton Export Corporation of Pakistan (Pvt.) Limited v. Messrs Rupali Cotton Industries and 4 others 2002 CLD 1430, it has been held that plea of defendant-guarantor was that she had not signed letter of guarantee, such simple and bald denial without placing on record any prima facie proof could not furnish a valid ground for grant of leave to defend the suit, unless the document had been shown to be forged and fabricated.
18. In case of Muhammad Arshad and others v. Citu Bank. N.A., Lahore 2006 SCM R 1347, the Hon'ble Supreme Court has held as under:- "We are not at all impressed by the contention raised on behalf of the petitioners that the genuineness and authenticity of the agreement, dated 26-6-1999 is not above board as the relevant columns were left blank and filled in subsequently by the Bank. In our considered view the plea of "Blank Columns" would hardly renders any assistance to the case of petitioners. In view of the provisions as contained in section 20 read with section 118 of the Negotiable Instruments Act, 1881 no benefit could be given to the petitioner on the ground that the agreement was not completely filled in when executed as it would have no substantial bearing on the validity of the agreement. In this regard reference can be made to case Muhammad Sarfraz Khan Rana v.
Government of the Punjab PLD 1990 Lah.
88. It is well-settled by now that "Negotiable Instrument" .Act provides that where one person signs and delivers to another paper stamped in accordance with law, either wholly blank or having written thereon incomplete negotiable instrument, in order that it may be made, or completed into negotiable instrument, he thereby gives prima facie authority to person who receives that paper to make or complete it as case may be into negotiable instrument for any amount. Furthermore, section 118 of Negotiable Instrument Act, provides that presumptions are attached to negotiable instruments, which, inter alia includes that negotiable instrument was made or drawn for consideration and that every instrument bearing date was made or drawn on such date.
19. In the view of the identical observations of the honourable Supreme Court as referred supra, the plea agitated by the appellant that documents executed by him, were with blank columns which were allegedly filled in without his knowledge and permission, but despite of that he himself has not step-in in the witness box to strengthen his allegations. Resultantly, when the appellant has admitted his signatures on the documents executed by him in respect of the opening of LCs and availing the credit facilities, then he neither can challenged the terms and conditions mentioned in said documents nor can disown those documents on the plea of fraud or to be forged, therefore, the plea of the appellant that blank columns of the documents were filled in unauthorizedly carries no weight for consideration.
20. Reflecting the above scenario, we are of the considered view that the respondent has discharged its liability to establish its claim of outstanding dues against the appellant, but the appellant has miserably failed to defeat, disprove and negate the burden shifted upon him by the respondent in this context.
21. Coming to the next contention raised by the counsel for the appellant regarding two undecided applications under section 151, C.P.C., i.e, first application filed by the appellant with prayer to release the Defence Saving Certificates deposited as the surety amount in compliance of the order passed by the Sindh High Court or in the alternate release the documents of property bearing plot No,240-B, mentioned at 1(b) above to the appellant; Second, the application moved by the respondent with prayer to direct the appellant to deposit an amount of Rs, 203,306 which has been paid by the respondent on the account of godown charges in which the pledged goods of the appellant were lying. It is pertinent to mention that from bare reading of the impugned judgment, it reflects that the learned trial court has framed 12 issues covering all four corners of the controversy going on between the parties to decide their respective claims strictly on merits. The relief claimed by the respondent through said application has already been decided by the trial court while deciding the entire outstanding dues of the respondent, therefore, -it can safely be concluded that said application is deemed to be disposed of. While the application of the appellant is concerned, the surety documents were furnished by the appellant with the Nazir of this Court in pursuance of the order dated 17-12-1990 passed by this Court, whereby conditional leave to defend was granted to the appellant. It is also important to mention that during the pendency of the suit, the application of the appellant to return the surety furnished in pursuance of the order leave to defend the suit, claiming that he has already paid over and above amount to respondent, which even otherwise was not possible for the trial Court to decide summarily as the issue of over and above payment allegedly made by the appellant could not be decided without recording evidence of both parties and considering their respective documents.
22. We have carefully examined the contentions canvassed by the learned counsel for both the parties and case-law cited by the learned counsel for the appellant. In case of Messrs Bashir Leather Int. (Pvt.) Ltd. And 2 others v. Muslim Commercial Bank Ltd. 2006 CLD 132, it has held that Banking Court dismissed the application for setting aside ex parte decree but did not pass any order on the application for the condonation of delay, and thus the same would be deemed to be pending, hence case was remanded back to decide said application. In case of Pak Carpet Industries Ltd. v. Government of Sindh and 2 others 1993 CLC 334, it has held that on filing of application for production of additional evidence, the appellate court issued notice for its hearing, but without deciding said application and keeping it pending, court heard and decided the main appeal, High Court in exercise of revisional jurisdiction set aside order of appellate court and remanded back the case to decide afresh after hearing the parties. In above mentioned cases the pending applications were touching to merits of cases and their decisions might have changed the orders passed by the courts, while the situation in present appeal is totally different, therefore, we have no hesitation to conclude that the facts and circumstances of the above referred case- law are quite distinguishable from the peculiar circumstances of the instant appeal, and the decision of pending applications in either way, would not affect, alter and change the merits and final findings of the impugned judgment, and the appellant cannot take any benefit in this context mere agitating the technicalities, while he has miserably failed to establish his case on merits.
Consequently, we are not impressed by the arguments advanced by the learned counsel for the appellant that the impugned judgment is liable to set aside mere on the score of the pendency of the miscellaneous applications.
23. For the foregoing reasons, we are of the considered view that all the material facts relating to the controversy in hand and documentary evidence placed on record were fully discussed, perused and taken into consideration by the learned trial Court while passing the judgment, and the appellant has failed to point out any illegality and infirmity in the impugned judgment, which does not call for any interference and same is maintained. Accordingly, instant appeal being devoid of merits stand dismissed with no order as to costs.