' SHEZADA MAZHAR, J.---The present appeal has been filed against the order dated 7-5-2013 passed by the learned Banking Court No,1, Multan whereby objection petition filed by the appellants was dismissed.
2. The facts necessary for disposal of the present F.A.O. Are that respondents/Bank filed a suit for recovery of Rs,56,68,890.45 against the appellants claiming that respondents allowed finance on 22-4-1990 to appellants for installation of a project. The said finance was payable up to 31-12-1998 and in addition to the project finance a sum of Rs,1.5 million was also allowed in the shape of L.M.M.
Facility. The appellants failed to repay the finance in terms of agreement. The said suit was decreed ex parte, execution petition was filed and during its pendency, the parties entered into compromise vide Exh.C.1 and learned trial Court modified the ex parte decree vide judgment and decree dated 16-11-1999. According to compromise Exh.C.1 the total liability of appellants was fixed as Rs,7.290 million out of which the appellants have to pay Rs,1.790 million as down payment and remaining liability amounting to Rs,5.50 million was converted into F.A.F. Facility agreed to be repaid in 10 half yearly installments up to 31-1-2004. According to respondents, appellants failed to pay the decretal amount in terms of decree. The appellants filed an application for issuance of clearance certificate as according to them they have adjusted the entire agreed liability. The respondents opposed the said application and learned trial Court vide order dated 30-6-2005 dismissed the said application and mortgaged property was ordered to be auctioned.
3. In the execution petition, the learned Judge Banking Court No,1, Multan issued warrant of possession of the mortgaged property auctioned under section 19(3) of F.1.0., 2001. The said order was assailed before this Court through F.A.O. No,169 of 2010 which was accepted vide order dated 22-11-2010 in the following terms:- "In view of above the impugned order is set aside and the case is remanded to the learned trial Court for deciding appellant's application afresh after recording evidence if needed be. The appeal is allowed".
4. The learned Judge Banking Court-I, Multan once again dismissed the appellants' objection petition without recording evidence vide order dated 8-8-2012. Against the said order, the appellants again approached this Court through F.A.O. No,131 of 2012. The F.A.O. Once again was allowed by this Court and the matter was once again remanded vide order dated 5-11-2012 in the following terms:- "In view of the above, we allow this appeal and remand the case to the learned Banking court who will record the evidence and will decide the appellant's objection petition afresh. As it is an old case and is lingering on for one reason or the other, the learned Banking court will decide the same within one month on receipt of certified copy of order".
5. After remand of the case, the learned Judge Banking Court No,1 vide order dated 20-2-2013 framed the following issues on the basis of divergent pleadings of the parties.
ISSUES.
(1) Whether petitioners/judgment debtors have no cause of action and locus standi to file the petition? OPR
(2) Whether the petition is not maintainable in its present form? OPR
(3) Whether the petitioners/judgment debtors have not come to the Court with clean hands? OPR
(4) Whether the petitioners/judgment debtors are stopped by their words and conduct to file petition? OPR
(5) Whether total finance liabilities of petitioners/judgment debtors stood adjusted on 23-9-1999?
OPP
(6) Whether decree holder/bank created after settlement between the parties new internal entries finance i.e, F.A.F. Amounting to Rs,5.500 Millions which was adjusted by the transfer entries for the adjustment of previous four loans liabilities to fulfill the settlement and thereafter compromise decree was passed on 16-11-1999?
(7) Whether rescheduling or restructuring was in accordance with law? OPR
(8) Whether decree holder/bank has charged markup over markup after rescheduling? OPP
(9) Whether the decree holder/bank cannot debit the cash finance of petitioners/judgment debtors without their consent? OPP
(10) Relief.
' Both the parties led their oral as well as documentary evidence in support of their respective claims. The appellants/objectors produced Syed Zil-e-Hussain Jillani as A.W.1 and also called record of the respondent/decree holder Bank which was produced by Ghias Ahmad, Regional Assistant General Manager, Habib Bank Ltd. Regional Office, Multan whose statement was recorded as C.W.1. Respondent/Bank produced only documentary evidence in the shape of Exh.R.1 to Exh.R.6.
Learned Judge Banking Court after hearing the arguments of the parties once again dismissed the objection petition of the appellants being devoid of any substance. Hence the present F.A.O.
6. Learned counsel for the appellants submits that the learned trial Court failed to consider that F.A.F. Was created on 21-9-1999 while the decree was passed on 16-11-1999. Further submits that the F.A.F. Was created for adjustment of existing liability, therefore, after adjustment of existing liability, the bank should have filed fresh suit for recovery; that as per order dated 8-8-2012, the learned Court below observed that the counterfoils which were in possession of the appellants clearly indicate that the appellants have paid Rs,29,12,663.08 through cash; that the assertions raised in the evidence and pointed out have been totally ignored and the objection petition has been decided on the same source which was not accepted by this Court in F.A.O. Nos.169 of 2010 and 131 of 2012; that the learned Court below has totally ignored the evidence produced by the Bank and only relied upon the statement recorded on 16-11-1999 and the F.A.O. No,253 of 2005 but did not discuss F.A.O. Nos. 169 of 2010 and 131 of 2012; that the learned Court below has committed the error while passing the impugned order; that the learned trial Court has not discussed the specimen of vouchers produced in evidence used for the purposes of internal entries and concept of the learned Court below regarding cash deposit and cash transfer is totally incorrect because in no case the counterfoils of internal entries are issued to the parties; that the learned trial Court has not applied its judicious mind; that the onus to prove the issues was upon the respondent/bank which they have failed to discharge; that the impugned order dated 7-5-2013 is based on surmises and conjectures; that the Bank totally failed to establish the claim through any document; that the order dated 7-5-2013 is illegal, unjust, uncalled, ultra vires and based on misreading and non- reading of evidence and as such is liable to be set aside. Further adds that the Court below has not considered/discussed the vouchers produced in evidence by the appellants and were termed as internal vouchers used for internal entries. Submits that the respondent/Bank admitted that no other voucher/document is available with it except what have already been furnished; that the respondent/Bank failed to establish through cogent and reliable evidence the creation of F.A.F.
Facility on 16-11-1999 as well as the alleged internal transfer entries in the statement of account; that order impugned is liable to be set aside.
7. On the other hand, learned counsel appearing on behalf of the respondent/Bank vehemently supported the impugned order passed by the learned Banking Court. Submits that the appellants have failed to discharge their onus to prove the payment of the decretal amount; that the appellants' claimed payment of the decretal amount for 21-9-1999 to 23-9-1999 but the statement regarding consent decree was made on 16-11-1999. Regarding deposit receipts placed on record as Exh.A.2 to Exh.A.10, learned counsel for the Bank specifically claimed that these are internal transfer vouchers, whereas the learned counsel appearing on behalf of the auction purchaser submitted that these are not internal vouchers/documents of the Bank. Learned counsel for the auction purchaser further stated that most of these deposit receipts are of "cash transfer" and therefore, it was the duty of the appellants to place on record the supporting documents in shape of either the authority letter or cheque of account from where these amounts were got transferred.
Submits that no such document has been placed on record by the appellants. Learned counsel for the respondents also referred to the objection petition of the appellants to state that they have admitted the fact that these payments were made from other account but failed to prove the same by cogent and reliable evidence.
' Submits that the order passed by the learned Banking Court is a accordance with law and facts of the matter and does not require interference by this Court.
8. We have heard the learned counsel for the parties and have also gone through the record of the case with the able assistance of the counsel for the parties.
9. It is an admitted fact that appellants and the respondent/Bank entered into a compromise and according to the said compromise payment was to be made in terms of the said compromise. An initial payment of Rs, 1.790 million was to be paid in cash and the balance 5.5 million up to 30-3- 2005 in terms of the memorandum dated 16-8-1999. The case of the appellants is that after the said memorandum they had made the payment of the total agreed amount through Exhs.A/2 to A/10 during the period 20-9-1999 to 23-9-1999, whereas the case of the respondent/Bank is that the internal adjustments were made by the respondent/Bank in the appellants' account by creating Finance Against Facility (F.A.F.) facility as per the memorandum dated 16-8-1999. Further the case of the respondent/Bank is that had the appellant made the payments through Exhs.A/2 to A/10, then they should not have made the statement on 16-11-1999 and got the suit decreed.
10. It is also an admitted fact that earlier to the present order, appellants' objection petition was twice dismissed by the learned Banking Court and this court twice remanded the case to the Banking Court for framing of issues and recording evidence of the parties to prove their respective claims.
11. Now the moot point in this case is whether the payment of Rs,5.5 million shown to have been made for the adjustments of the earlier facilities as per the memorandum dated 16-8-1999 were made by the Bank through internal transfer from the F.A.F. Facility allegedly created by the Bank or the said payments were made by the appellants?
12. Before dealing with the case in hand, it is necessary to explain the law on the issue. Under the Financial Institutions (Recovery of Finances) Ordinance, 2001 read with different judgments of the High Courts and Hon'ble Supreme Court of Pakistan, it is the responsibility of the respondent/Bank to prove not only the disbursement but also utilization of the finance facility by the appellants/borrower. It was held in National Bank of Pakistan v. Messrs Trend Hosiery (Pvt.) Ltd. And others 2012 CLD 1078 (Lahore), that the Bank is under duty to demonstrate by reference to documents, the sanction of finance and its disbursement.
13. Similarly in Ghulam Nazak v. Zarai Taraqiati Bank of Pakistan through Manager and another 2007 CLD 667 (Lahore) while dealing with the suit for declaration filed by the borrower, it was held that "the onus to prove that the respondent Bank gave finance of Rs,1,00,000 to the appellant has not been discharged by it. It is the case of the Bank that the record pertaining to the loan No,182855 has been lost. In the absence of any record of the loan in question,- the plaintiff/appellant cannot be burdened with the same".
14. In another case reported as National Bank of Pakistan through Manager v. Messrs Mujahid Nawaz Cotton Ginners through Partners and 6 others 2007 CLD 678 (Lahore) while dealing with the debited entries made by the Bank in the account of borrower with regard to insurance premium, it was held that the "bank did not file any supporting documents in order to show that such and such amount was paid by the Bank, to the insurance company as premium, on behalf of the respondents/mortgagors and that such and such amount was paid as salary. We are unable to find any document on record even to prima facie show that the amount was, in fact, paid to the insurance company/concerned persons. The appellant bank should have filed the vouchers, receipts or some other documents manifesting that the said amount was, in fact, paid to the insurance company. In the absence of any supporting documents, the Bank is not entitled to recover the said amount merely on the ground that the same finds mention in the statement of accounts, which is not authenticated by documents/receipts".
15. In another case reported as MCB Bank Limited v. Eastern Capital Ltd. And 7 others 2011 CLD 938 (Karachi), it was held that "according to law, a plaintiff in a suit can only succeed when the case is proved through cogent and reliable evidence in its favour. Burden to prove is also on the plaintiff Once the claim in the suit is established on the record, then comes the turn- of defendant to rebut the same. When the plaintiff fails to discharge its burden, the only way, in normal course, before the Court is to dismiss the claim of the plaintiff
16. From the above case-law, it is clear that in order to prove its claim Bank was required to provide not only the statement of account of the F.A.F. Facility but also all supporting documents like internal vouchers etc in order to prove its claim. Similarly the appellants were also required to prove payment of 5.5 millions.
17. Here in this case appellant's in order to prove their claim have placed on record apart from other evidence Exhs.A/2 to A/10 which are deposit slips showing an amount of Rs,1.790 million as cash and the balance amount of Rs,5.5 million as Cash Transfer. Further appellants have also called record of the Bank which was produced by C.W.1 who presented all the record relating to the appellants finance facilities which were exhibited as CI to C29/12. C.W.1 Ghias Ahmad, Regional Assistant General Manager, Habib Bank Ltd. Specifically stated in his examination in chief that:-- "Besides these documents, the bank has no other document." During cross-examination C.W.1 also admitted that:-- "The vouchers of entry of 1997 and 1999 are not available due to old record. Then said there was no voucher of entry of 1997 as register was maintained at that time. All the entries were internal entries but the vouchers are not traceable. It is incorrect to suggest that internal entries were made without vouchers."
' He further stated in his cross-examination that;-- 'According to EX-C24 on 21-9-1999 amount of Rs,11,32,048 was shown as cash transfer and this cash was transferred from F.A.F. Through transfer voucher reflected in EX-C28. On Ex-C24 the amount of Rs,11,32,048 is mentioned but there is no word showing the transfer from F.A.F. It is correct that on 20-9-1999 through Exh.A13 it is mentioned that cash was paid through making the statement as "NIL" reflected in Ex-C27. It is correct that there is no mention, from where amount of Rs,2,94,998.51 were transferred. It is correct that after adjustment of the entire liability ^n 22-9-1999 we again debited an amount of Rs,2,12.950 in lieu of markup. It is correct that on 23-9-1999 this amount was recovered from the customer making statement as "NIL". Ex-C24/2 starts from 1994 till 1998. This was obtained with the documents which is schedule of old F.A.F. Finance installments of Rs,1.100 Million. I cannot produce original documents regarding entries mentioned in Ex-C24/2. Ex- C25 is showing the entry of new F.A.F. Dated 21-9-1999. It is the single entry over the page. There is no detail of transfer to other liabilities in Ex-C25. (emphasis added)
18. Apart from C.W.1, Syed Zil-e-Hussain Jillani, Managing Director of the appellant company appeared as A.W.1 to support his case. The said witness also supported the claim of the appellant company and during cross-examination specifically stated that:- "The bank promised to disburse F.A.F. But it was not disbursed. The guarantee was not executed for F.A.F. It pertains to previous loan. The bank agreed to disburse F.A.F. Which was not disbursed so the question of installments does not arise".
19. Appellants provided sufficient evidence in support of their claim that the payments were made by them through deposit slips and by the admission of the respondent/Bank employee C.W.1 that F.A.F. Statement of account is a single entry statement which means no adjustments were made for the said account. Now the burden shifted to the respondent Bank to prove that the said payments were infact made through internal transfers.
20. In order to prove its case decree holder Bank only produced documentary evidence viz Exh.R/1 to R/6 which does not include any internal vouchers for the creation of the F.A.F. Facility or the transfer of different entries from the said F.A.F. Facility to different accounts of the appellants for the adjustment of the earlier facilities as per the compromise between the parties.
21. Learned Banking Judge while dealing with issues Nos. 5 and 6, which relates to the adjustment of the liability as well as creation of new F.A.F., observed that:-- "From the close scrutiny of the evidence of the present petitioner/judgment-debtor and C.W.1, it is clear that new F.A.F. Of Rs,5.500 Million was created just only to adjust the defaulted amount which was, admittedly, Rs,7.290 Millions and before recording the statement of the petitioner/judgment debtor in the court, he deposited Rs, 17,90,000 in cash as down payment out of the defaulted amount and remaining amount of Rs,5.500 Millions were outstanding against him for which the new F.A.F. Was created and the pervious loans were shown "NIL" but showing of "NIL" of the previous liabilities does not mean that the petitioner/judgment-debtor deposited the whole amount to the tune of 14.7.290 Millions in cash".
22. Learned Judge Banking Court was wrong to hold that the F.A.F. Was created to adjust the defaulted amount. In fact according to Exh.A/2 to A/10 an amount of Rs,1.790 million was paid in cash whereas the balance amount was paid through cash transfer. It 'was the claim of the respondent Bank that the said adjustments were made through F.A.F. Facility, however no proof of such transfer was placed on record. Learned Judge Banking Court, while holding the above, completely ignored the statement of C.W.1 who has not only admitted that no internal vouchers are available creating the transfer entries in the F.A.F. Account but also admitted that Exh.C-25, statement of account of F.A.F. Facility, does not contain any entry showing transfer of the amounts from F.A.F. To other facilities of the appellants. In presence of such admission on the part of decree holder Bank the order of the learned Banking Judge was against the facts/evidence available on the record.
23. Learned counsel appearing on behalf of the Bank as well as the auction purchaser have laid much emphasis that it was the judgment debtors who were required to prove the fact of adjustment of the amount and not the respondent Bank.
24. We are afraid that the view taken by the learned counsel for the respondents is not correct as the judgment debtors have placed on record Exhs.A/2 to A/10 which are admittedly deposit/pay in slips used by the customers of the Banks for the deposit of amount at the counter of a Bank. These deposit slips are produced by the appellants in original which itself is sufficient to prove that the payments were made by appellants over the counter. It was the respondent bank's counsel who have claimed that these deposit/pay in slips are actually internal vouchers showing transfer from the F.A.F. To the different facilities of the appellants. However, the claim of the respondent/Bank was negated by the learned counsel for respondent No,2 who has candidly admitted that these are external documents used by the customers of the banks for the payment at the counters of the banks.
25. In presence of these deposit/pay in slips no other proof was required from the appellants. By placing Exhs.A/2 to A/10 external deposit/pay in slips, judgment debtors discharged there onus to prove the payment by cash as well as adjustment through transfer.
26. It was the responsibility of the decree holder Bank to prove their claim that these are internal vouchers and that the adjustments were made from F.A.F. Facility created in view of the compromises vide memorandum dated 16-8-1999. Decree holder Bank has miserably failed in discharging its duty to prove the internal transfer/adjustment by placing on record cogent and reliable evidence.
27. Any statement made by the appellants which is contrary to the facts of the case is of no consequence and cannot be relied upon for creating liability of the appellants, specially when respondent/Bank has failed to establish on record creation as well as disbursement of the F.A.F.
Facility.
28. In absence of any internal vouchers for the creation of F.A.F. Facility, adjustment of different facilities from the said F.A.F. Facility and absence of any entry in the F.A.F. Statement of account (Exh.C-25) the creation as well as disbursement of the FA F facility is not proved.
29. In view of the above discussion, the present appeal is allowed, the order dated 7-5-2013 is set aside and the objection petition is allowed with no order as to costs.