' ABID AZIZ SHEIKH, J.---As we have heard the case at full length, therefore, we are deciding it as a Pakka Case. This appeal is filed under section 22 of the Financial Institutions (Recovery of Finances)
Ordinance 2001 against the judgment and decree dated 22-2-2007 passed by the learned Judge Banking Court No,1 Multan, whereby the learned Judge while dismissing the application for leave to defend of the appellants decreed the suit in favour of respondent-bank for Rs,12,19,918 with costs of the suit and cost of the funds.
2. Briefly, stated the facts of the case are that the respondent-Bank filed a suit for recovery of Rs,12,19,918 along with the markup against the appellants. The respondent bank claimed that appellant No,1 was a partnership firm, whereas the appellants Nos.2 and 3 are its partners and the appellants Nos.4 and 5 were the guarantors of the finance availed by the appellants Nos.1 to 3, and further appellants Nos.2, 4 and 5 were also sued in capacity of mortgagor of the property to secure the finance facility extended by the respondent-Bank. As per contents of the plaint, on the request of the appellant No,1 through its partners, a cash finance limit of Rs,1.5 millions was allowed vide sanction advice dated 21-11-1998. Subsequently, on the request of the appellants to the respondent- Bank the above facility was enhanced, however, mark up of Rs,360,480 for the year 1998 and mark up of Rs,322,648 for the year 1999 in respect of aforesaid facility remained outstanding in the accounts of the appellants. The respondent Bank further claimed that the appellants also availed a demand finance facility of Rs,5,00,000 on 9-1-2001 and the markup on the said demand finance facility was of Rs,36,790 till 30-6-2001. The suit was filed for the recovery of the outstanding finance facility, which comes to Rs,12,19,918.
3. The appellants filed a petition for leave to defend the suit and various entries of the statement of accounts were challenged and it was claimed that the appellants have paid back the entire outstanding amount claimed in the suit. The learned Banking Court vide judgment and decree dated 22-2-2007 dismissed the application of the appellants for leave to defend the suit and decreed the suit for the amount of Rs,12,19,918 with costs of the suit and cost of the funds. Hence, this appeal.
4. Learned counsel for the appellants argued that in the petition for leave to defend, the appellants have specifically challenged various entries in the statement of accounts. Adds that markup on the finance facilities CF.4 and CF.6 has been illegally charged beyond the expiry period. Submits that there is no disbursement shown in respect of Demand Finance facility (DF.13). The learned counsel further contends that the entries in the statement of accounts are without any particulars, therefore, it cannot be treated as statement of accounts under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 read with Banker's Book Evidence Act, 1891.
Argued that none of the grounds raised in the petition for leave to defend was discussed and adjudicated in the impugned judgment, therefore, the same is liable to be set-aside and the appellants are entitled for the grant of leave to defend the suit. Reliance is placed on the cases of Apollo Textile Mills Limited and others v. Soneri Bank Limited (2012 CLD 337), National Bank of Pakistan v. Messrs Latif Shakir Textile Mills Limited and another (2007 CLD 1655), Hall Fazal Elahi and sons through Muhammad Tarig v. Bank of Punjab and another (2004 CLD 162), MCB Bank Limited, Peshawar v. Messrs Tila Frontier Fruit and others (2011 CLD 938), Messrs C.M. Textile Mills (Pvt.)
Limited through Chairman and 5 others v. Investment Corporation of Pakistan (2004 CLD 587), Messrs Multimed Marketers through Managing Partner and 7 others v. United Bank Limited through Manager (2007 CLD 344), Messrs Muhammad Siddiq Muhammad Umar and another v. The Australasia Bank Limited (PLD 1966 Supreme Court 684), Habib Bank Limited (Successor to Standard Bank of Pakistan Limited) Nazir Ali Awan (NLD 1981 SCJ 281), Bankers Equitti Limited through Principal Law Officer and 5 others v. Messrs Bentonite Pakistan Limited and 7 others (2003 CLD 931), Bankers Eguitu Limited and 5 others v. Messrs Bentonite Pakistan Limited through Chief Executive and 7 others (2010 CLD 651) and Messrs Soneri Bank Limited v. Messrs Compass Trading Corporation (Private) Limited through Director/Chief Executive and 3 others (2012 CLD 1302).
5. Conversely, the learned counsel for the respondent-Bank argued that the availing of finance facility is not denied by the appellants. Further submits that the suit of the bank is duly supported with the documents executed by the appellants. Adds that statement of accounts gives the complete details of the amount outstanding against the appellants, therefore, the impugned judgment and decree is lawfully passed. In this regard reliance is placed on the case of Habib Bank Limited v. Tai Textile Mills Limited through Chief Executive and 5 others (2009 CLD 1143).
6. We have given our anxious consideration to the arguments of the learned counsel for the parties and have gone through the record.
7. The perusal of the record reveals that in the petition for leave to defend, the appellants have specifically challenged the amounts claimed in three finance facilities i,e, CF.4, CF.6 and DF.13. It is claimed in the petition for leave to defend that in respect of CF.4 only Rs,54,35,436 were received, whereas an amount of Rs,61,40,676 was charged by the Bank. The details of payment are also given in the petition for leave to defend. Regarding CF.6 it is claimed that Rs,1,22,66,269.50 was received by the appellants whereas Rs,1,35,87,292.50 was paid to the Bank, therefore, an excess amount of Rs,1321023 was paid in CF.6 Account. Further claimed that as already an excess amount of Rs,23,86,743 was paid in CF.4 and CF.6, therefore, there was no occasion to charge any amount under DF.13. With the assistance of the learned counsel for the parties we have seen the documents regarding three outstanding finance facilities. As per Bank's document, CF.4 was sanctioned vide sanction advice dated 21-11-1998 for Rs,1.5 millions which was valid up to 30-9-1999, however, vide sanction advice dated 12-12-1998, the limit of CF.4 was enhanced to Rs, 1.8 millions, but its validity period was reduced to 31-5-1999 whereas in the statement of accounts markup was charged beyond 31-5-1999. The statement of accounts of CF.4 appended with the plaint shows that on 31-5- 1999 the outstanding markup was of Rs,1,51,261 only and not Rs,360480 as claimed by the Bank. The arguments of the learned counsel for the respondent bank are that there is another sanction advice dated 25-2-1999 in respect of CF.4 whereby the limit was enhanced to Rs,2.00 millions and the validity period was also extended up to 30-9-1999, however, the said sanction advice is neither mentioned in the plaint nor the bank is claiming the outstanding amount of CF.4 on the basis of the said sanction advice dated 25-2-1999 in the suit, therefore, the bank's claim of markup under CF.4 is seriously disputed. Regarding CF.6 facility of Rs,2.00 million the same was approved vide sanction advice dated 16-10-1999 and its validity period was up to 31-5-2000. Even under the finance agreement dated 20-10-1999, the expiry period of the said facility was up to 31-5-2000. In the statement of accounts of CF.6 on 31-5-2000 the outstanding amount was shown as Rs,1,59,772 whereas the respondent-bank is claiming Rs,3,22,648 which is also a disputed claim. The learned counsel for the respondent-bank has no explanation to these figures. It is settled law that bank cannot charge mark-up beyond the expiry date of the facility. In this regard reliance is placed on case of Hail Fazal Elahi and Sons through Muhammad Tariq v. Bank of Punjab and another (2004 CLD 162). It is settled law that where the documents and rate of markup is disputed, it is a ground for leave to defend the suit. In this context reliance is placed on the case of Allied Bank of Pakistan Limited v. Mrs. Fahmida and 2 others (2004 CLD 110).
8. In respect of demand finance (DF.13) according to the sanction advice dated 6-1-2001, DF.13 facility for an amount of Rs,0.5.00 million was a fresh facility valid up to 30-6-2001, however, as per the statement of accounts of DF.13 there is only one drawn/transfer entry without giving any particulars, and it does not show how and where the amount is disbursed.
9. We have also noted that in the statement of accounts filed by the respondent bank regarding CF.4 and CF.6 in most of the entries, the particulars of the transactions are not given. In our view no presumption of truth can be B attached to this incomplete statement of accounts and it is not sufficient to decree the suit unless supported with corroborative documents. In this regard reliance is placed on the case of Muhammad Agub Khan u. Husssain Khan and others (NLD 1981 SCJ 281), Bankers Limited and 5 others v. Messrs Bentonite Pakistan Limited through Chief Executive and 7 others (2010 CLD 651) and Bankers Ewa Limited through Principal Law Officer and 5 others v. Messrs Bentonite Pakistan Limited and 7 others (2003 CLD 931), Apollo Textile Mills Limited and others v.
Soneri Bank Limited (2012 CLD 337).
10. We have also gone through the judgment passed by the Named Banking Court and found that none of the grounds raised in the petition for leave to defend were discussed and adjudicated while decreeing the suit of the respondent bank.
11. As discussed above, we are of the view, that the appellants have raised substantial questions of law and facts in the petition for leave to defend and such question cannot be decided without framing of issues and recording of evidence. Accordingly, this appeal is allowed, the impugned judgment and decree dated 22-2-2007 passed by the learned Banking Court is set aside. The appellants' application for leave to defend the suit is granted subject to furnishing surety to the satisfaction of the learned Judge Banking Court and the matter is remitted back to the learned Banking Court to decide the case after framing of issues and recording of the evidence of the parties in according with law. No order as to costs. Requisitioned record be remitted back to the concerned Court forthwith. Parties are directed to appear before the Banking Court on 14-10-2013.