' FAROOQ ALI CHANNA , J.---The appellant First Dawood Investment Bank Limited has filed this Banking Appeal against the judgment and decree dated 5-11-2010, passed by learned Single judge of this Court in exercise of Banking Original Jurisdiction in Civil Suit No,B-69 of 2009, Re: House Building Finance Corporation Limited v. First Dawood Investment Bank Limited, filed by the respondent under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (hereinafter referred as Ordinance 2001) against the appellant for recovery of Rs,7,87,37,672 along with cost of funds, charges and cost. As per claim of respondent, they in pursuance of the letter request dated 11-9-2008 of appellant for borrowing of Rs,7,50,00,000 placed the said amount with the appellant against 17% per annum Mark up for a period of 94 days through broker AMZ Seiturities (Pvt.) Limited. The appellant availed and utilized duty the finance facility, but failed to repay the same as agreed between the parties, therefore, the respondent served a legal notice upon the appellant, calling them for repayment of due amount. The appellant responded the legal notice through its advocate, however did not discharge its liability, therefore the respondent filed the said suit.
2. In pursuance of notice, the appellant filed leave to defend application under section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 read with section 151, C.P.C., admitting the claim of the respondent, however, challenged the maintainability of the suit and jurisdiction of the learned single Judge of this Court exercising Banking original jurisdiction and contended that neither the appellant was maintaining the bank account with the respondent bank, nor applied for any loan facility under the normal banking transaction, therefore, subject transaction does not fall under the ambit of banking transaction nor the relationship of customer and the financial institutions exist between the parties, hence the provisions of Ordinance, 2001 are not attracted to the proceedings of the said suit.
3. The learned Single Judge of this Court after affording an opportunity of hearing to the counsel for both the parties dismissed the leave to defend application filed by the appellant under section 10 of the Ordinance, 2001 and consequent whereof Decreed the suit of the respondent in the sum of Rs,7,50,00,000 with costs along with cost of funds from the date of default till realization vide judgment dated 5-11-2010, which is impugned in this appeal.
4. Learned counsel for both the parties while arguing the matter have referred to certain documents and placed the same on record for the assistance- of this Court. Learned counsel for the appellant has also relied upon cases reported as Karachi Electric Provident Fund v. National Investment (UNIT) Trust and others (2003 CLD 1026) and National Bank of Pakistan v. S. G. Fibre Limited and others (2004 CLD 689). Learned counsel for the respondent has also placed reliance upon the cases reported as Messrs Speedway Fondmetall Pakistan Ltd. v. NIB Bank Ltd. (Formerly PICIC) (2010 CLD 896) and Messrs Fancy Manufactures Limited and another v. Equity Participation Fund (2004 CLD 444).
5. From perusal of the balance sheet for June 30, 2012 referred during the course of arguments, the appellant itself has shown one of the current liabilities of short term borrowing in the sum of Rs,8,14,18,223, which includes the amount borrowed from the respondent. Learned counsel for the appellant in his arguments has also admitted the liability of respondent, however his contention was that the amount disbursed by the respondent in favour of the appellant was not a finance facility as the respondent was not competent to lend money to any entity for any purpose other than its mandate as defined in the preamble of House Building Finance Corporation Limited. In support of his contention learned counsel has referred to preamble and clauses Nos.1 to 5 of the Memorandum of Association of House Building Finance Corporation Limited, which impose specific bar upon the respondent to lend money other than to provide or arranging finance for the purpose of development, constructing, purchasing or making any alteration or improvement to any immovable property including commercial and industrial property, office, showrooms, shops, educational institutions and hospitals. Learned counsel has further contended that the disbursement of the subject amount was in fact an investment made by the respondent in the business carried on by the appellant. Per learned counsel, respondent has not produced any document before the learned Single Judge of this Court to show that the money was disbursed by the respondent at the request of the appellant, nor the respondent has produced the sanction order containing the terms and conditions of the grant of finance facility, therefore, there exists no relationship of "customer" and "financial institution" between the parties. It has been contended that the entire proceedings in the instant matter and the impugned judgment and decree passed by the learned Single Judge of this Court under the Ordinance 2001 were without jurisdiction.
6. Conversely, the learned counsel for the respondent has contended that the respondent i,e, House Building Finance Corporation was converted into a limited company and was registered under the Companies Ordinance 1984, by the Government of Pakistan in the year 2006. It had taken over all assets, running business, contracts, liabilities and proceedings of the House Building Finance Corporation. Its Balance Sheet Notes for the accounts ended in December, 2009 show the lending to Financial Institutions, including the subject disbursement, to the appellant. The State Bank of Pakistan approved the Balance Sheet Notes and thereby recognized the subject disbursement as "lending money". Learned counsel has further contended that no doubt the prime business of respondent is to provide or arrange finance for the purpose of developing, constructing, purchasing or making any alteration or improvement of the immovable property, but after its transformation from corporation into a public limited company, the respondent company was registered under the Companies Ordinance 1984 in the year 2006 as Financial Institution as defined in para No,16-A (Definitions) as a Development Financial Institution(DFI). Clause 22 of the Memorandum of Association authorize the board of the respondent to invest surplus funds in such manner as the board may determine from time to time and the subject disbursement to the appellant was made in pursuance of clause 22 of Memorandum of Association of the Company.
Learned counsel has further contended that word 'investment' has wide connotation, which includes the finance facility and to lend money etc.
7. We have heard both learned counsel for the parties and perused the record which shows no dispute with regard to the disbursement of the amount by the respondent to the appellant against 17% markup for a period of 94 days, its ailment and utilization fully so also the repayment of an amount of Rs,32,83,562 towards mark-up by the appellant. The sole controversy raised by the appellant in the instant appeal is that the subject disbursement of Rs,7,50,00,000 was an investment and not finance facility as the same was not lend at the request of appellant. The above controversy has been resolved by the learned Single Judge in the impugned order/judgment after a detailed discussion on the terms "Customer" and "Finance" defined under section 2(c) and (d) of Ordinance 2001, it has been held that the term "Customer" as contained in the Ordinance 2001 means a person to whom finance has been extended by a financial institution, whereas the term "Finance", as provided under section 2(d) of the Ordinance, 2001, includes equity, support or any other financial accommodation provided by the financial institution to a customer.
8. In the instant case, admittedly, the disbursement of an amount of Rs,7,50,00,000 was made at the request of appellant by the respondent against certain terms and conditions as reflected in the letter dated 11th September, 2008, including payment of mark-up 17% by the appellant. Keeping in view the nature of transaction, we have no hesitation to observe that issuance of such letter by the appellant, accepting the terms of borrowing and disbursement of Rs, 7,50,00,000 by the respondents to the appellant amounts to sanction of finance facility, hence covered under the Ordinance, 2001. As per scheme of Financial Institutions (Recovery of Finances) Ordinance 2001, the burden of proof in the instant case to the effect as to whether disbursement of amount in pursuance of the letter dated 11th September, 2008 was merely an investment A and not extending finance facility, rest upon the appellant, which the appellant could not properly discharge before the learned Single Judge. On the contrary, from perusal of their own documents, particularly the terms of aforesaid letter and their annual accounts note No,27, the appellant itself has shown the amount of Rs,7,50,00,000 as borrowing from development financial institution, it is clear that the transaction between the appellant and respondent was between a Customer and Financial Institution, hence covered under Financial Institution (Recovery of Finances) Ordinance, 2001.
9. In order to examine the contentions of learned counsel for the appellant that the disbursement of money in the instant case was an investment and not a loan or Finance, we would like to refer to the dictionary meaning of words "LOAN" and "FINANCE". The word Loan is defined in Advanced Law Lexicon, 3rd Edition (Extensivelu Revised & Enlarged) Volume 3, J-P 2005 as under:-- ' Word 'loan' also includes not only any actual advance, whether of money or in kind, but also a transaction on a bond bearing interest executed. The word loan also includes money lend on interest by an organization to any other on condition that it is repaid, generally for a specific time and often at an agreed rate of interest.
' Similarly, the word Finance is defined in Black's Law Dictionary (8th Edition) as under:-- "aspect of business concerned with the management of money, credit, banking and investments".
10. In the instant case admittedly, the subject amount was disbursed to the appellant by the respondent on the condition that it shall be repaid within specific time of 94 days along with agreed interest at the rate of 17%. The above condition covers sufficiently the ingredients of loan/money lending/finance as defined hereinabove. The appellant through their letter dated 11-9- 2008 in fact approached the respondent for borrowing of Rs,75 Millions and not for investment of said amount in the business, as argued by the learned for the appellant. Moreover, the appellant could neither produce or refer to any investment agreement or execution of any other document or letter, which possibly support the claim of the appellant that subject transaction was not covered under the Financial Institutions (Recovery of Finances) Ordinance, 2001. Besides hereinabove, the word "investment" in common parlance means an expenditure to acquire property or assets to produce revenue or to contribute some capital in the business carried by someone on profit and loss basis, whereas, in the instant case no such expenditure has been made by the respondent to acquire any asset/property, therefore such disbursement of money cannot be termed as "investment".
11. Learned Single Judge of this Court while exercising Banking original Jurisdiction is like a Civil Court as provided under section 7(a) of Ordinance, 2001 and the Civil Courts are required to do substantial justice between the parties. From perusal of the impugned order passed by the Single Judge of this Court, it is observed that controversy in the suit has been decided on merits and not on technical considerations. In view of hereinabove circumstances, we are of the opinion that the appellant has miserably failed to establish their case that the amount disbursed to them by the respondent was an investment and not a finance facility/loan. No error has been pointed out by the learned counsel for the appellant in the impugned order passed by the learned Single Judge of this Court, whereby it was held that there exists the relationship of "Customer" and "Financial Institution" between the parties, hence the Court had the jurisdiction to entertain the suit and decide the same under Financial Institutions (Recovery of Finances), Ordinance, 2001. The findings of the learned Single Judge in this regard are neither coram non judice, nor perverse or suffer from any legal infirmity, therefore, the impugned order does not require any interference by this court in the instant appeal, which was dismissed vide our short order dated 21-8-2013, and these are the reasons of such order.