Shams Mehmood Mirza, J:-This is a suit filed under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (the Ordinance) seeking recovery of Rs.91,600,215.12 from the defendants on account of Cash Finance, Running Finance and Demand Finance facilities granted to defendant No.1 and default by it of its payment obligations.
2. Brief facts of the case are that the defendants availed Cash Finance (CF) facility in the sum of Rs.70 Million and Running Finance (RF) facility in the sum of Rs.3 Million from the plaintiff bank, which facilities were sanctioned to it through banking arrangement letter dated 20.10.2009. The defendants executed finance agreements and other documents in respect of the CF and RF facilities as detailed in paragraph No.4 of the plaint. Furthermore, the defendants also executed their personal guarantees in favour of the plaintiff bank. In addition thereto, the defendants approached the plaintiff bank through their letter dated 09.02.2010 with the request for the grant of a Demand Finance (DF) facility in the sum of Rs.25 Million, which request was acceded to by the plaintiff bank and accordingly DF facility in the sum of Rs.25 Million was allowed by it through its banking arrangement letter dated 28.04.2010. In consideration for the grant of DF facility, the defendants executed the finance agreement as also the personal guarantees as mentioned in paragraph No.8 of the plaint. The renewal of the afore-CF and RF finance facilities took place at the request of the defendants made through letter dated 01.11.2010 and the plaintiff bank issued banking arrangement letter dated 04.12.2010 in this regard. The defendants in consideration for the renewal of the said finance facilities executed the finance agreements and other documents including the personal guarantees as detailed in paragraph No.11 of the plaint. As the defendants failed to repay the amount under the finance facilities on their expiry, the plaintiff bank was constrained to file the present suit.
3. In pursuance of the summons issued by this Court, the defendants entered appearance and filed their joint application for leave to defend bearing PLA No.156-B of 2012. (the PLA)
4. In support of the PLA, the defendants' counsel made the following submissions: a. There is no valid statement of account available on record in terms of section 2 (8) of Banker's Books Evidence Act, 1891 in as much as the certificates at the foot of such statements are deficient in necessary details. The certificates do not disclose the identity of the person signing them; the manager or the principal accountant has not put their signatures on the certificates; there is no date on the certificates. b. The plaintiff bank is not in a position to return the security of paddy and rice under the CF facility and as such the plaintiff bank cannot claim any amount under the said facility. c. The finance agreements in respect of the CF and RF facilities contain schedules of repayment wherein the date of payment of first two installments precedes the date of execution of the agreement. d. The purchase price mentioned in the finance agreement in respect of DF facility is payable in terms of schedule 2 (repayment schedule) which does not contain the amount of mark up. But the plaintiff bank has claimed mark up on DF facilities. e. The plaintiff bank has charged and recovered amounts which were not payable by the defendants as mentioned in paragraph No.11 of the PLA.
5. The counsel for the plaintiff bank, on the other hand, controverted the assertions of the counsel for the defendants and stated that the claim of the plaintiff bank as mentioned in the plaint is duly substantiated by the documents available on the record as well as the statements of accounts. He further stated that all the entries in the statement of accounts are corroborated by the vouchers which are not only appended with the suit but are duly pleaded in the plaint. It is contended that the pleadings in respect of the vouchers have gone unrebutted in the PLA.
6. This Court has heard the rival contentions of the parties and has perused the record with their able assistance.
7. In regard to the non-availability of the pledged stock, the defendants' counsel referred to the contents of the PLA wherein the circumstances were explained under which the said good were allegedly misappropriated by the plaintiff bank. It was further submitted that the plaintiff bank lodged an FIR against the defendants with the local police in regard to the alleged misappropriation of the pledged stocks in respect of which the police filed a cancellation report before the area Magistrate. It was also stated that the plaintiff bank also made an application with the Federal Investigation Agency for lodging of the FIR but the Sessions Judge, Gujjrat vide order dated 15.02.2012 recorded the statement of Inspector Federal Investigation Agency, which showed that Federal Investigation Agency had no intention for lodging FIR against the defendants as the matter was sub judice before the banking court. The attention of this Court was also drawn towards CM No.531 of 2012 through which a local commission was appointed on 16.07.2012 for preparation of the inventory report of the pledged stocks. On 17.10.2012, the local commission filed its report according to which the pledged stocks were not available at the site. The judgments reported as Ali Traders Rice Dealer v. National Bank of Pakistan 2015 CLD 01, Askari Bank Limited v.
Waleed Junaid Industries and 2 others 2012 CLD 1681, and A. M. Burq and another v. Central Exchange Bank Limited and others PLD 1996 (WP) Lahore 1 were relied upon to argue that where the bailee is unable to return the pledged goods, he cannot seek the return of money. It was stated that the missing pledged stocks were valued at Rs.117,812,500/- at the prevalent market rate. The counsel for the plaintiff bank, on the contrary, relied upon judgments reported as Habib Bank Limited v. Orient Rice Mills Limited etc 2004 CLD 1289, M/s Crystal Enterprises etc v. Platinum Commercial Bank Limited etc 2002 CLD 868, Messrs Muhammad Siddique Muhammad Umar etc v.
The Australasia Bank Limited PLD 1966 SC 684 and an unreported judgment rendered by a learned Division Bench of this Court on 20.09.2014 in RFA No.95 of 2009.
8. After going through the judgments cited by the learned counsels for the parties, it appears that there are two separate and distinct strands running through these judgments. On the one hand, the judgments cited by the learned counsel for the defendants lay down the absolute rule that whenever the bailee is unable to return the goods, he is precluded from demanding money from the bailor. A. M. Burq's case was the first judgment wherein while referring to the decision of House of Lords in Ellis & Company's Trustees v. Dixon-Johnson [1925] AC 489, it was held that where the creditor holding a security seeks recovery of debt, he is obliged on payment of the debt to return the security and in case he is unable to do so he cannot secure the judgment in his favour. In Waleed Junaid's case it was held that in case of theft or loss of pledged goods, the bailee has to prove that he had taken as much care of the goods as a prudent and ordinary man would take care of his own goods. Similarly, a learned Division bench of this Court in Ali Traders case placing reliance upon A. M. Burq's case held that the pawnee is bound to return the goods pawned in case he wants to recover the debt. Notwithstanding the ratio of the said judgments, there is a chain of authorities to the effect that security of pledged stocks can be traced and accounted for in the execution proceedings and that in a recovery suit the availability or otherwise of pledged stocks is no ground for grant of leave to defend the suit particularly when the plaintiff/bailor is treating the pledged goods as security in terms of Section 176 of the Contract Act. The judgments supporting this proposition are the ones relied upon by the plaintiff bank's counsel. While relying upon the said judgments, the learned counsel for the plaintiff bank argued that the question of liability with regard to the loss of pledged goods cannot be decided in a banking suit and should be adjudicated at the stage of execution of the decree when the security is to be accounted for. He further stressed that the plaintiff bank did not sue upon the security of pledged stocks in the suit.
9. In Orient Rice Mills case, while dealing with the question of loss of pledged goods, it was held by this Court that Section 176 of the Contract act empowers the plaintiff-Bank to file its suit without selling the pledged rice and to treat the pledge as a collateral security only. Clearly this option has been exercised by the plaintiff-Bank. The matter relating to any shortfall in the pledged stock of rice and the responsibility therefore can be determined in execution proceedings at the time the collateral security is required to be accounted for and brought to sale. The rights and obligations of the plaintiff-Bank as pledge and those of the defendant-Company under sections 151 and 152 of the Contract Act, which were referred to by the learned counsel for the defendant-Company, can also be determined at the time of realization of the collateral security.
Furthermore, in Messrs Muhammad Siddique Muhammad Umar v. The Australasia Bank Limited PLD 1966 SC 684, it was held that loss of pledged goods does not absolve the debtor from his liability and that a debtor can only claim an adjustment once the sale of the pledged goods is actually held. Along similar lines is the judgment reported as Siddique Wollen Mills etc v. Allied Bank of Pakistan 2003 CLD 1033, wherein the Hon'ble Supreme Court held that in a suit filed by the bank only the liability of the debtor has to be adjudicated and the dispute regarding pledged goods does not constitute a bona fide dispute. This position has recently been reinforced and accepted by a learned division bench of this Court in a judgment passed in RFA No.274 of 2010 titled M/s Ibrahim Oil Mills etc v. MCB Bank Limited.
10. The rationale of Orient Mills Rice case is based upon the provisions of the Contract Act. In terms of Section 176 of the Contract Act, 1872, the bailor has a right either to sell the pledged goods and sue for the balance, if any, or he may treat the pledged goods as security and file the recovery suit.
If the bailor adopts the latter course, the question then arises as at what stage should the security be accounted for? The answer on the touchstone of Orient Rice Mills case is that it is when the execution process is set in motion by the bailor/decree holder and money under the decree is demanded from the bailee. It is only when the bailor has been granted a decree and he is enforcing the same in execution that the question can be asked whether the bailor is in a position to return the security of pledged goods to the bailee or not. This determination would of course be subject to the terms and conditions settled between the parties in the pledge instrument particularly the liability exemption clauses commonly found in such instruments. It is, therefore, clear that where the Financial Institution is treating the pledge of goods as collateral security, leave to defend the suit cannot be granted on the basis of status, condition and availability or otherwise of the pledged goods.
11. The following passage from a case reported as Messrs Muhammad Siddique Muhammad Umar v. The Australasia Bank Limited PLD 1966 SC 684 (recently cited with approval by the Hon'ble Supreme Court in a case reported as Apollo Textile Mills Limited etc v. Soneri Bank Limited 2012 CLD 337) may also advantageously be reproduced, which further reinforces the proposition stated above.
Even assuming that some goods were pledged with the bank as security for the advance this does not, in our opinion, absolve the defendant from his liability to clear his dues. The banker only acquires a lien over such pledged goods for the recovery of his dues and has a right, after notice to the debtor, to sell those goods to reimburse himself. But it is only where such a sale is actually held that the debtor can claim an adjustment of the sale proceeds of the goods against the amount claimed by the bank. There is no evidence in the present case that any goods were, in fact, sold by the bank or that the bank still retains any goods as such security.
The provisions of Section 47 of the Code of Civil Procedure, 1908 also lend support to the proposition as under the said provision the executing court is fully empowered and competent to decide all questions regarding execution, discharge or satisfaction of the decree. The proceedings under section 47 of the Code of Civil Procedure, 1908 are akin to that of a suit and the court has the jurisdiction to determine all questions between the parties regarding the executability of the decree. It is, therefore, clear that objections of the defendants regarding the loss of the pledged goods can be adjudicated at the time of execution of the decree by the executing court. Similarly, the questions relating to accounting for and tracing of the security of pledged stocks can also be adjudicated by the executing court.
12. The banking laws under which suits are filed by the financial institutions and their customers and the procedures provided therein for the conduct of the cases have undergone considerable changes since the first special law was promulgated in the year 1979. I do not which to burden this judgment with the history of the laws dealing with banking suits. Suffice it to state that the Ordinance is a substantial departure from the previous laws in which, apart from others, the particulars to be supplied in the pleadings as well as the parameters regarding the subject matter of the suit have been laid down. The controversy regarding loss of pledged goods as a defence by the customer in his application for leave to defend can also be looked at and resolved by having recourse to the provisions of the Ordinance. In the suits filed by financial institutions against their customers under Section 9 of the Ordinance, the jurisdictional fact is the default by the customer in fulfillment of any obligation with regard to any finance. "Obligation" is a defined term under section 2 (e) of the Ordinance, which reads as under.
(e) "obligation" includes
(i) any agreement for the repayment or extension of time in repayment of a finance or for its restructuring or renewal or for payment or extension of time in payment of any other amounts relating to a finance or liquidated damages
(ii) any and all representations, warranties and covenants made by or on behalf of the customer to a financial institution at any stage, including representations, warranties and covenants with regard to the ownership, mortgage, pledge, hypothecation or assignment of, or other charge on assets or properties or repayment of a finance or payment of any other amount relating to a finance or performance of an undertaking or fulfillment of a promise; and all duties imposed on the customer under this Ordinance; Similarly, section 3 (1) of the Ordinance commands that it shall be the duty of a customer to fulfill his obligations towards the financial institution. Now a plain reading of the aforesaid provisions (as also of other sections of the Ordinance) would pointedly show that a suit can be instituted by a financial institution against a customer if the customer defaults in his obligations towards the financial institution in respect of the payment of the finance. Furthermore, the suit can also contain averments in regard to the security of pledge provided the representation, warranties and covenants made by a customer to the financial institutions qua the security of pledge have not been fulfilled. In the present case, the plaintiff bank has leveled serious allegations against the defendants in paragraph 18 of the plaint for denying access to the plaintiff bank to the pledged stocks and has also detailed the measures taken by it to remedy the situation. However, the plaintiff bank has not included the security of pledge as part of its suit as is apparent from the prayers made in the suit. It is, therefore, clear that the plaintiff bank has filed a suit for recovery of money simpliciter in terms of the provisions of the Ordinance in which the issues to be determined by this Court are (a) the default by the defendants of their obligation to pay the amount of the finance; and (b) the quantum of liability. This view is further strengthened by the requirements that are imposed under sections 9 and 10 of the Ordinance on both the financial institution and the customer for incorporating certain requirements in their pleadings relating to the disbursal of amounts and their repayment together with dates thereof. It would be of some relevance furthermore to point out that the finance and its underlying securities have different connotations and the term "finance" as defined in the Ordinance does not include the securities thereof. The suit filed under the Ordinance in substance is only concerned with the default in fulfillment of any obligation with regard to the finance either by the customer or the financial institution. The definition of the terms "finance" and "obligation" as occurring in section 2 read with section 9 of the Ordinance, therefore, circumscribe the scope of adjudication under a suit and restrict it to the determination of liability of the parties qua the finance.
13. In consonance with the definition of "obligation", the Hon'ble Supreme Court in Siddique Woolen Mills case has laid down the law that in a suit filed by the financial institution only the liability of the debtor has to be adjudicated and that the dispute with regard to the pledged stock does not constitute a bonafide dispute. The relevant portion of the judgment is reproduced hereunder In the course of arguments we have perused the written statement filed by the petitioners before the Banking Court which was in fact treated as an application for leave to appear and defend wherein liability towards outstanding amount of the respondent-bank was not denied except raising the plea that the bank has retained the goods of the petitioners unauthorizedly. In our opinion it does not constitute a defence in favour of the petitioners independently nor it give rise to a bona fide dispute between the parties because in such like cases the Court is required to examine the liability and its acceptance by the borrower. As far as the question of sustaining losses by the borrower on account of the conduct of the Bank is concerned it can be sorted out in some other forum instead of claim relief on such basis from the Banking Court. A Banking Court in exercise of its jurisdiction under section 10 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 can only entertain defence of the borrower if prima facie bona fide dispute has been disclosed. (Emphasis supplied)
The above passage in no uncertain terms makes it apparent that disputes in regard to the underlying securities of a finance facility cannot form subject matter of a valid and bona fide defence on the part of a customer and that the suit in respect thereof also cannot be filed under the Ordinance before a banking court. In the circumstances, the defendants are precluded from raising a defense based on the default of an alleged obligation on the part of the plaintiff bank in respect of the security of pledge.
14. The definition of "obligation" in section 2 (e) of the Ordinance by using the word "includes" has given it an enlarged meaning for the purposes of the Ordinance. In the opinion of this Court, the word "includes" as used in section 2 (e) of the Ordinance implies an extended meaning by including to the generic meaning of "obligation" all those things that the definition declares that it should include. In the famous case of Dilworth v. Commissioner of Stamps 1899 AC 99, Lord Watson thus held The word 'include' is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statute and when it is so used these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import, but also those things which the interpretation clause declares that they shall include. But the word "include" is susceptible of another construction, which may become imperative, if the context of the Act is sufficient to show that it was not merely employed for the purpose of adding to the natural significance of the words or expressions defined. It may be equivalent to "mean and include" and in that case it may afford an exhaustive explanation of the meaning which, for the purposes of the Act, must invariably be attached to these words or expressions.
Section 2 (e) of the Ordinance by its terms does not cast a duty or imposes any obligation on a financial institution with regard to the security of pledge. What is contemplated by section 2 (e) of the Ordinance is, inter alia, the representation, warranties and covenants made by or on behalf of a customer with regard to the ownership of the pledge. In the absence of any obligation on the financial institution under the Ordinance encompassing the kind of duty that is cast on a bailee under Section 151 of the Contract Act, the dispute with regard to the security of pledged stocks cannot be raised in a suit before a banking court either as a defence in the application for leave to defend or by way of an independent suit. It would, therefore, not be a valid premise to hold that the standard of duty cast on a bailee under section 151 of the Contract Act can somehow control and be imported in section 2 (e) of the Ordinance for making any dispute with regard to the underlying security of pledge a valid question of fact requiring determination by the banking court at the leave stage.
15. The judgments rendered in Orient Rice Mills case and Siddique Woolen Mills case were not mentioned or discussed in the judgments relied upon by the learned counsel for the defendants.
After examination of the judgments cited at the bar, this Court is of the opinion that the defence of loss of pledged goods raised by a customer on its own cannot form basis for grant of leave to defend. The controversy thus stands resolved in favour of the plaintiff and it is held that question of loss of pledged goods is not a dispute requiring recording of evidence if the liability is otherwise not disputed or a serious and bona fide dispute in regard thereto is not raised by a defending customer. It may, however, be clarified that if leave to defend is granted to a defending customer on account of a substantial dispute qua the liability claim of the plaintiff bank, the trial apart from determining the liability of the parties shall also be held in respect of the loss of the pledged goods.
16. Having held that the dispute regarding the alleged loss of goods would not on its own furnish a good ground for the grant of leave to defend and that liability being not disputed, such a question can very well be raised and decided in execution proceedings, it needs to be seen whether in the present case any substantial and bona fide dispute has been raised by the defendants qua their liability.
17. The ground of defense regarding the deficient particulars of the certificate in terms of section 2
(8) Banker's Books Evidence Act, 1891 is of no avail to the defendants. It may be noted that what has been appended with the suit are computer generated accounts and not the certified copies of the entries as contemplated by section 2 (8) of the Banker's Books Evidence Act, 1891. These computer generated accounts by their very nature are the primary/original documents and as such do not require any certification at their foot in terms of section 2 (8) of the Banker's Books Evidence Act, 1891. This aspect of the matter has exhaustively been dealt with by this Court in a judgment rendered in COS No.41 of 2010 titled The Bank of Punjab v. M/s Khan Unique etc wherein it was held as under: In the present case, however, what the Plaintiff Bank has appended with the plaint are computer generated accounts. These accounts being the computer generated accounts/ledgers of the Plaintiff Bank, there was no need to put a certificate on the foot of such accounts as prescribed by Section 2 (8) of the Act and any officer of the Bank could sign the said accounts. As the original accounts have been appended with the suit, which constitute primary evidence, there is no need to file a certified copy thereof which should in turn comply with the requirements of Section 2 (8) of the Act. It may again be emphasized that the requirement of putting a certificate at the foot of the statement, by virtue of Section 2 (8) of the Act, is in regard to a copy of the accounts or an entry contained therein and not for the original accounts.
18. The defendants have impugned certain amounts, the details whereof are given in paragraph 11 of the PLA. It was stated that amounts of Rs.3,583,826/- and Rs.262,220/- were charged as mark up for the unsanctioned period of the RF and CF facilities. Similarly, in respect to mark up charged on DF facility, it was stated that an amount of Rs.9,788,151/- was charged as mark up whereas only the purchase price of Rs.25,000,000/- under the agreement was payable. Again, an amount of Rs.11,132,160/- was impugned being charged under the head "interest" and "penalty interest". In regard to RF facility, it was stated that the limit of RF facility was breached and that amounts over and above the said limit were allowed. An amount of Rs.1,128,692/- was impugned having been recovered from the current account of defendant No.1 company as mark up. Likewise, an amount of Rs.393,965/- was impugned being mark up recovered from the principal account of RF. The defendants also referred to the discrepancy in the amounts stated to be due under DF facility as mentioned in paragraph 16 of the plaint and in the statement of account.
19. In the present case, the plaintiff bank has taken an unusual step by appending the debit/credit vouchers with the suit, which are also pleaded in the plaint. These vouchers are the documents underlying the entries. In respect of these vouchers, the defendants have taken a classical evasive reply in their PLA by stating that "The veracity of the same is subject to the production in evidence in accordance with law." This reply does not constitute a valid denial of the amounts reflected in the vouchers. The law of the pleadings is very clear that every allegation of fact in the plaint, if not denied specifically or by necessary implication, or stated to be not admitted in the pleadings of the defendant, shall be taken to be admitted against him. Be that as it may, the learned counsel for the plaintiff refuted the challenge of the defendants to the entries in the statement of account. This Court will take up each claim raised by the defendants' counsel at the time of arguments to support some of the assertions made in paragraph 11 of the PLA.
(a) In regard to the amounts of Rs.3,583,826/- and Rs.262,220/- claimed to have been charged as mark up for the unsanctioned period of the RF and CF facilities, it is apparent from the statement of account available at pages 275 and 288 of the plaint that the said entries were reversed and as such the claim made by the defendants is baseless.
(b) The learned counsel for the defendants also stated that the repayment schedule to finance agreement in respect of DF facility did not contain mark up but consisted simply of installments, of principal amount. It was, however, rightly pointed out by the learned counsel for the plaintiff bank that since mark up was pegged on KIBOR the rate whereof was variable, a definitive amount of mark up could not have been given in the repayment schedule. In Banking Arrangement Letter dated 28.04.2010, duly acknowledged and accepted by the defendants by putting their signatures thereon, it was specifically mentioned that the mark up will be charged "Avg. 3MK (Ask Side) + 2.50% PA with a floor of 11% to be reset/charged quarterly". Since the mark up rate was to reset on quarterly basis, its amount could not be built in the purchase price at the time of exception of finance agreement. The amount of Rs.9,788,151/- charged as mark up by the plaintiff bank is thus payable by the defendants.
(c) The challenge to the amount of Rs.11,132,160/- by the defendants being "interest" and "penalty interest" is also without any force. The entry of Rs.5,826,235/- dated 17.11.2011 mentioned in the PLA is nonexistent of the statement of account. Similarly, Rs.2,977,336/- is not an entry but is the sum total of credits of the end of statement of account available at page 243 of the plaint. The rest of the entries are simply mark up charged by the plaintiff bank.
(d) In regard to RF facility, it was stated that the limit of RF facility was breached and that amounts over and above the sale price were disbursed. The RF facility was being maintained in the current account of the defendants. RF facility is in the nature of revolving credit and the examination of the said account shows that the amounts were consistently being withdrawn and deposited by the defendants. As the amounts were withdrawn through cheques, the claim of the defendants does not appear to be bona fide.
(e) As total amount of Rs.1,128,692/- was impugned having been recovered from the current account of defendant No.1 as mark up. The entries mentioned in paragraph 11 (e) of the PLA are not available in the current account.
(f) Likewise, an amount of Rs.393,965/- was impugned being interest recovered from the principal account of RF. The plaintiff bank granted the RF facility on mark up basis. There is no assertion in the PLA that mark up has been charged at excessive rates or charged illegally. The nomenclature of an entry does not make it illegal.
(g) The defendants also referred to the discrepancy in the amounts stated to be due under DF facility as mentioned in paragraph 16 of the plaint and in the statement of account. This assertion is not substantiated by the record. The statements of account available with the plaint shows the amounts due that correspond with the liability mentioned in paragraph 16 of the plaint.
20. It is clear from the above that defendants have raised a sham and illusory defence with regard to their liability in their PLA. On the other hand, there is sufficient material available on the record to show that the defendants requested for the grant of finance facilities and after the plaintiff bank allowed the same, executed the documents thereof and availed the amounts thereunder. The request letter dated 01.11.2010 of the defendants and banking arrangement letter dated 04.12.2010, acknowledged by the defendants by putting their signatures thereon, have been relied upon by the plaintiff bank. The defendants have also not complied with all the requirements of section 10 of the Ordinance in that the amounts availed and repaid with dates thereof have not been mentioned in the PLA. Section 10 of the Ordinance by its terms imposes a mandatory requirement on the defendant to state all the particulars mentioned in its sub section (4) and to append all the necessary documents as mentioned in its sub-section (5). Failure to meet the requirements of Section 10 (4) and (5) of the Ordinance by a defendant results in dismissal of his PLA (see Appollo Textile Mills Limited v. Soneri Bank Limited 2012 CLD 337). It was held in the said judgment that A defending customer is thus obliged to put in a definite response to the banks accounting and has under sections 10 (3) and (4) to compulsorily plead in answer in the leave petition his accounts as well as the facts and amounts disputed by him as repayable to the plaintiff. (emphasis supplied)
The application for leave to defend filed by the defendants is not at all in compliance of section 10
(4) of the Ordinance and as such in terms of section 10 (6) it is liable to be rejected. The consequence of such rejection is also spelt out in Section 10 (11) of the Ordinance, which clearly states that on such rejection the banking court shall forthwith pass judgment and decree in favour of the plaintiff. A similar consequence is also provided in Section 10 (1) of the Ordinance which states that dismissal of the application for leave to defend means that all the allegations made in the plaint shall be deemed to be accepted and the banking court is obliged to pass a decree thereon.
21. The defendants have failed to raise any ground in their PLA qua the liability claim set up by the plaintiff bank under the CF, RF and DF facilities warranting recording of evidence. As such, the dispute regarding the alleged loss of goods would not furnish a ground for the grant of leave to defend, which can very well be decided in execution proceedings. In the circumstances, the PLA is dismissed. The suit of the plaintiff is accordingly decreed in its favour and against the defendants, jointly and severally, in the sum of Rs.91,600,215.12 together with costs of funds in terms of section 3 of the Ordinance. Costs of the suit are also granted.