SHEZADA MAZHAR, J.---All the matters mentioned in Schedule A to the present judgment were fixed today for hearing the arguments on the maintainability of the said suits as all these suits were filed by the customer against a financial institution on different grounds. Learned counsel for the parties were asked to argue the maintainability of suits keeping in view section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (hereinafter referred as F.I.O.).
2. It is claimed by the learned counsel for the plaintiffs that this court is required to consider the contents of plaint only when considering the issue of maintainability of the suit at initial stage. It is also submitted that contents of the plaint would be read as a whole and presumption of correctness would be attached to averments made in the plaint. Plaintiff might not be able to succeed in establishing the allegations raised in the plaint but this could not be a ground for rejecting the plaint. In this regard learned counsel for the plaintiffs have relied upon Owais Ahmed Idris v. Syed Muhammad Waqar ud Din (PLD 2014 Sindh 465),Muhammad Nawaz v. Zarai Taraqiati Bank Limited through Manager and 2 others (2013 CLD 1390), Media Max (Pvt.) Ltd. Through Chief Executive v. ARY Communication (Pvt.) Ltd. Through Chief Executive and another (PLD 2013 Sindh 555), Mst. Bano alias Gul Bano and others v. Begum Dilshad Alam and 4 others (2011 CLC 88), Muhammad Altaf and others v. Abdur Rehman Khan and others (2001 SCMR 953) and Haji Allah Bakhsh v. Abdul Rehman and others (1995 SCMR 459). It is also claimed by the plaintiff counsel that after grant of leave to defend the suit banking court is bound to frame issues under subsection (10) of section 10 of F.I.O. And cannot decide the matter on the maintainability of the suit. In this regard relied upon The Bank of Punjab through General Attorney v. Malik Umer Farooq (2014 CLD 198), Rustam Khan v. Zarai Tariqiati Bank Limited through Manager (2008 CLD 427), Zarai Taraqiati Bank Limited through Branch Manager v. Messrs A-One Chicks and Feeds Pvt. Limited through Chief Executive and 6 others (2006 CLD 950), Zarai Taraqiati Bank Limited through Manager v. Syed Furrakh Hussain Shah (2006 CLD 171), Shabbir Ahmed Malik v. Small Busiess Finance Corporation, Okara, through Manager (2005 CLD 1471), Lt. Col. (Retd.) Mahmood Akhtar v. Bank of Punjab through Manager (2004 CLD 821) and National Bank of Pakistan through Senior Vice-President v. Messrs Yaqoob Rice Mills through Partners 2 to 5 others (2002 CLD 1306). It is also submitted by the learned counsel for the plaintiffs that banking court is required to decide the leave application and if leave is granted then it has to follow the procedure as contained in section 10(10) of the F.I.O. And referred to Rustam Khan v. Zarai Tariqiati Bank Limited through Manager (2008 CLD 427), TheBank of Punjab through General Attorney v. Malik Umer Farooq (2014 CLD 198), Zarai Taraqiati Bank Limited through Manager v. Syed Furrakh Hussain Shah (2006 CLD 171) and Zarai Taraqiati Bank Limited through Branch Manager v. Messrs A-One Chicks and Feeds Pvt. Limited through Chief Executive and 6 others (2006 CLD 950). It is also claimed that Banking Court being a special court is required to follow Code of Civil Procedure, 1908 except where contrary provision is available in special law.
Reliance is placed on Farrukh Abbas v. Agricultural Development Bank of Pakistan, Mandi Bahauddin Branch (2006 CLD 970), Ghulam Rasool Bhatti vs. Judge Banking Court-II, Lahore and 4 others (2007 CLD 1578), The State v. Mst. Fazeelat Bibi (PLD 2010 Lahore 498) and Hudaybia Textile Mills Ltd. And others v. Allied Bank of Pakistan Ltd. And others (PLD 1987 SC 512). Learned counsel for the plaintiffs further submitted that where recovery suit of a financial institution as well as suit for cancellation of documents, declaration or damages filed by the customer are pending then it is required that both the suits are to be consolidated for evidence. Referred to Zeeshan Energy Ltd.
And others v. Faysal Bank Ltd. (2014 SCMR 1048), Muhammad Nawaz v. Zarai Taraqiati Bank Limited through Manager and 2 others (2013 CLD 1390), Shahbaz A. Khokhar v. Habib Bank Limited (2013 CLD 1802). It is further submitted that lack of proof or weakness of proof is not fatal for the suit filed by customer and relied upon Saleem Malik v. Pakistan Cricket Board (PCB) and 2 others (PLD 2008 SC 650) and Mst. Bano alias Gul Bano and others v. Begum Dilshad Alam and 4 others (2011 CLC 88).
Further claimed that plaint cannot be rejected in piecemeal as held in Mst. Nishat Ishaq v. Amjad Khan and 2 others (2014 CLC 71) and order dated 3-10-2014 passed in C.M. No.477-B of 2014 in C.O.S. No. 179 of 2009. It is also claimed that once notice is issued in the suit and application for leave to defend the suit (PLA) has been filed by the defendants then the matter can only be decided in accordance with the defence taken in the PLA. Referred to Mian Mehmood Ahmad v. Hong Kong and Shanghai Banking Corporation Ltd. Through Manager and 6 others (2010 CLD 293). Further argued that issue of maintainability cannot be decided without recording of evidence and reliance is placed on Abdul Sattar Rana v. Manager, National Bank of Pakistan and 3 others (2005 CLD 1481).
Learned counsel further submit that suit for damages arising out of breach of contract in respect of finance is maintainable and suit for declaration as to the legality, validity or otherwise of a document which creates finance is also maintainable before the banking court. Similarly a Suit for mandatory injunction as well as redemption and cancellation of documents are also maintainable before banking court. It is also claimed that a suit for rendition of accounts is filed to ascertain the true accounts and therefore, also maintainable before the banking court. Learned counsel for the plaintiffs also referred to the State Bank of Pakistan's circular No.2 dated 5-1-2010 in support of their claim while maintaining that suit for rendition of accounts is maintainable.
3. On the other hand learned counsel for the defendants financial institutions have repelled the contentions of learned counsel for plaintiffs/customer and submitted that there is no cavil to this legal principal that for examining the applicability of Order VII, rules 10/11, C.P.C. Averments made in the plaint are to be taken as correct and at the same time reading of plaint for this purpose should not be formal in nature but it should be meaningful, practical and realistic. In this regard referred to Ahmed Nawaz and 4 others v. Abdul Khalique and 13 others (2002 ML D 1783). It is also submitted that while deciding the issue of maintainability of the plaint, Court can go beyond the plaint and material produced in defense can also be looked into and relied on S.M. Shafi Ahmad Zaidi through Legal Hiers v. Malik Hassan Ali Khan Moin through Legal Heirs (2002 SCMR 338) and Messrs Al-Riaz Agencies v. Chambers of Commerce and Industries, Karachi and others (2001 CLC 1966). Learned counsel for the defendants further submit that plaint can also be returned in part while relying upon Messrs Asmar Textile Mills (Pvt.)Ltd. Through Chief Executive v. Askari Commercial Bank Ltd.Through Manager and another (2007 CLD 457). It is also claimed by the defendants that every suit filed under section 9 of the F.I.O. Is required to be accompanied with a statement of accounts and referred to Muhammad Yousaf v. A.D.B.P. (2002 CLD 1270) Bakers Equity Limited through Principal Law Officer and 5 others v. Messrs Bentonite Pakistan Limed and 7 others (2003 CLD 931), Bankers Equity Limited through its Principal Law Officer in Lahore Muhammad Yasin, duly authorized and others v. Messrs Bentonite Pakistan Limited through its Chief Executive and others (2003 CLD 931) and Messrs KLB-e-Hyder and Company (Pvt.) Ltd. Through Chief Executive v. National Bank of Pakistan through President and 3 others (2008 CLD 576). While relying upon Gulistan Textile Mills Ltd. v. Askari Bank Ltd. And others (2013 CLD 2005) it is submitted by the learned counsel for the defendants that court has the power to examine the plaint at any stage of the proceeding and can apply Order VII, Rule 11, Code of Civil Procedure, 1908. It is also submitted on behalf of the learned counsel for the defendants that the power of the court under Order VII, Rule 11, C.P.C. Read with section 7(2) of F.I.O. Precedes and prevails over the power of court under section 10(8) of the F.I.O.
And referred to Haji Abdul Karim and others v. Messrs Florida Builders (Pvt.) Limited (PLD 2012 SC 247), Jewan and 7 others v. Federation of Pakistan through Secretary, Revenue, Islamabad and 2 others (1994 SCMR 826), Bank Alfalah Limited v. Iftikhar A. Malik (2003 CLD 363), Asghar All v. P.K.
Shahani and 2 others (1992 CLC 2282). Further submit that in a suit by a customer it is required that the plaint must bring to the banking court a 'dispute between the financial institution and the Customer only It must arise out of the contractual relationship indicating default in fulfillment of any "obligation of finance". It must indicate the contractual breach which is to be reflected in the statement of accounts which has to accompany the plaint. The plaint can carry a claim for damages if it arises out of the finance agreement between the parties but not tortuous claims simpliciter. It is further submitted that the cause of action to be pleaded in a plaint must be exact and narration of general allegations of breach without reference to the finance agreement or allegation of damages without any monetized quantification of the damage, cause or absence of reference to precise violation of the finance agreement does not constitute a plaint that meets the standard prescribed in section 9 of the F.I.O., 2001. A non-actionable plaint is a non-starter and in this regard relied upon Nasimuddin Siddiqui and others v. United Bank Limited and others (1998 CLC 1718), Apollo Textile Mills Ltd. And others v. Soneri Bank Ltd. (2012 CLD 337) and Messrs United Bank Ltd., Karachi v. Messrs Mohibali Tanvery Ltd., Karachi and 8 others (PLD 1994 Kar. 275). It is also claimed that a customer cannot file a suit on the basis of allegation that documents were obtained in blank when he admits the signatures on the documents and referred to Muhammad Arshad and another v. Citibank N.A., Al-Falah Building, Lahore (2006 CLD 1011), Smooth Pharmaceuticals Pvt. And others v. Bank of Khyber (2008 SCMR 385) and Smooth Pharmaceuticals Pvt. And others v. Bank of Khyber (2005 CLD 120). While relying on Chiragh Bibi and another v. Mst.
Rashida Begum and others (PLD 1958 SC 209), Messrs United Bank Limited v. Messrs Sindh Tech Industries Ltd. And others (2003 CLD 1331), Kaloo and 3 others v. Hassan Bakhsh and 3 others (2000 YLR 2473) and Tayabali v. Abdul Hai (PLD 1959 Kar. 79) defendants claimed that a plaint which is in contravention of Order VI, Rule 4 is liable to be rejected.
4. I have heard the learned counsel for the parties and have gone through the law as well as the case-law relied upon by the learned counsel for the parties.
5. It is an admitted fact that all the suits referred in Schedule A to the present judgment were filed by the customers of a financial institution defendants herein. In all the cases admittedly finance facility(s) were obtained by the customer/plaintiff-company from the defendant/financial institution and plaintiffs have filed the suit against the bank either for recovery of damages, cancellation of document(s), declaration, rendition of accounts, redemption or permanent injunction. In all these matters, except C.O.S. No.63 of 2014 titled "Messrs Haris Steel Industries (Pvt.)
Ltd. v. The Bank of Punjab, this Court issued notices to the defendants/financial institutions, who entered appearance and filed application for leave to defend the suits under section 10 of the F.I.O.
In number of the matters issues were framed and the issue of maintainability was treated as preliminary issue and parties were invited to make arguments on the said issue. In certain matters this court on its own motion directed the parties to address the issue of maintainability before proceeding further in the matter. In this way all these cases came up for hearing today on the issue of maintainability of the suits filed by customers.
6. This court have already held in Gulistan Textile Mills Ltd. v. Askari Bank Ltd. And others (2013 CLD 2005) as under; Court enjoys an independent, suo motu and sua spone power to examine the plaint at any stage of the suit under Order VII, Rule 11, C.P.C. The wisdom is that a Court can always, nip a frivolous suit in the bud, by rejecting the plaint in order to retain its docket and time for more serious claims. In the first place it contemplates that a still-born suit should be properly buried, at its inception, so that no further time is consumed on a fruitless litigation. Secondly, it gives plaintiff a chance to retrace his steps, at the earliest possible moment, so that, if permissible under law, he may found a properly constituted case. This power is grounded in good public policy. The court enjoys an insular power under Order VII, Rule 11 to examine the plaint, primarily on the basis of the contents of the plaint. "The averments in the plaint are germane" and it does not matter to the Court if the defendants have been issued summons or applications for leave to defend or written statements have been filed by the defendants or even if the defendants are in Court to defend their positions.
The Court can proceed unilaterally against the plaintiff alone without engaging the other party (defendants) if the Court is of the view that the plaint is liable to be rejected. This is inherent power of the Court which precedes the statutory obligation of the Court under section 10(8) of the Ordinance. This nuance(sic.) is fundamental to this case.
It was also held in the said judgment that:- The Court has a primary obligation to examine the plaint and reject it, inter alia, if it does not disclose, a cause of action. This power can be exercised at any stage of the suit. It matters little, if application for leave to defend or written statement, have been filed by the defendant. It cannot be over-emphasized that the power of the Court under Order VII, Rule 11, C.P.C. Read with section 7(2) of the Ordinance, proceeds and prevails over the power of the Court under section 10(8) of the Ordinance.
7. From the judgment referred supra it is clear that this court had power to apply Order VII, Rules 10/11, Code of Civil Procedure, 1908 at any stage of the proceedings and therefore, the claim of the defendants that after grant of leave order it is necessary to record evidence, is of no consideration.
The case-law relied upon by the learned counsel for the plaintiffs are also of no help to them after the judgment of this Court referred supra.
8. There is no second view to the fact that under section 9 of the F.I.O. a customer can file a suit against the financial institution for declaration, cancellation of document and recovery of damages, however, every such suit is required to fulfill the requirements of section 9, F.I.O.
Section 9(1) states as under:- "Where a customer or a financial institution commits a default in fulfillment of any obligation with regard to any finance, the financial institution or, as the case may, the customer, may institute a suit in the Banking Court by presenting a plaint which,shall be verified on oath, in the case of a financial institution by the Branch Manager or such other officer of the financial institution as may be duly authorized in this behalf by power of attorney or otherwise.
9. Therefore every suit filed by the customer has to fulfill the above condition. Even in case of a suit by a customer the above conditions are necessary and therefore for a suit to be maintainable before banking court:-
(i) It should be between financial institution and customer.
(ii) It should arises out of a finance facility(s) and
(iii) It should be on the basis of a breach of obligation.
10. In order to meet the conditions the plaint must state in clear words the relationship of customer and banker. It should also state the obligation of the financial institution and the default of said obligation with reference to the finance facility. Therefore, for a plaint to fulfill the conditions of section 9, F.I.O. It must clearly state the obligation of the financial institution along with reference to the law or the agreement of finance which have been violated by the financial institution. In absence of this crucial information (the violation of law or the agreement violated by the financial institution) in the plaint, the same will not be a plaint which fulfills the requirement of section 9(1) of the F.I.O. And therefore liable to be rejected under Order VII, Rule. 11, C.P.C.
11. Even otherwise, it is the fundamental requirement of law that parties shall set out their case in pleadings. This is also required under D Order II, Rule 1, C.P.C. The Hon'ble. Supreme Court in Muhammad Tariq and others v. Mst. Shamsa Tanveer and others (PLD 2011 Supreme Court 151) has held as under:- It is settled law that in civil litigation, a party thereto has to set out its/his case in the pleadings especially which relates to the facts and in the absence thereof no plea can be allowed to be raised, agitated and set forth at a later stage, as such shall be beyond the scope thereto and impermissible as per the law; this case is an apt example of the said principles.
12. In Azizullah Sheikh and another v. Standard Chartered Bank Ltd. (2009 SCMR 276), the Hon'ble Supreme Court of Pakistan has held as under:- Undoubtedly, the petitioners filed the suit claiming damages while relying on the provisions of section 73 of the Contract Act. Under section 73 of the Contract Act, the party claiming damages has to firstly plead and then prove by sufficient, trustworthy, independent and cogent evidence that the concluded agreement existed between the parties, the other party committed breach of contract, such breach entitles the first party to damages and the foremost factor is quantum of damages.
In Nasimuddin Siddiqui and others v. United Bank Limited and others (1998 CLC 1718) while dealing with the Banking Companies (Recovery of Loans, Advances, Credits and Finance) Act, 1997 it was held as under:- The first requirement is that the parties should be either a borrower or a customer or a banking company which has been defined in section 2 of the Act, 1997. According to subsection (c) of section 2 a borrower means a person who has obtained a loan under a system based on interest from a banking company and includes a surety or an indemnifier. This definition is same as of Ordinance, 1979 except to the extent that the loan must be based on the system of interest (For detailed discussion on the term `borrower', see United Bank Ltd. v. Adamjee Insurance Co. Ltd.
(1988 CLC 1660). The 'customer' has been defined in subsection (d) to section 2 which means a person who has obtained finance under a system which is not based on interest from a banking company or is the real beneficiary of such finance including a surety or indemnifier. Again, this definition is the same as of `customer' in the Ordinance, 1984, except that the finance should not be based on system of interest. Subsection (a) to section 2 also defines the Banking Company and the names of such Banking Companies have been disclosed in the Schedule to the Act, 1997.
(13) The second condition precedent for bringing a suit within the scope of Banking Court is that such suit must arise from a commission of default in fulfilling any obligation touching the business of loan or finance.
Same view was taken in Messrs United Bank Ltd., Karachi v. Messrs Mohibali Tanvery Ltd., Karachi and 8 others (PLD 1994 Karachi 275). Similarly in Citi Bank N.A. v. Syed Shahnasha Hussian (2009 CLD 1564) while dealing with section 9 of the F.1.0., 2001 it was held as under:- No doubt, the scope of section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 is limited only to such suits where a default in the fulfillment of any obligation in relation to a finance has been committed but this does not mean that no claim at all for damages which is based on personal injury could be agitated before a Banking Court. A personal injury could arise on account of default in fulfillment of any obligation in relation to finance and an aggrieved party may claim damages as well. As claim for damages i.e. a claim for seeking pecuniary compensation is a relative term. Such a claim may arise on account of inquiry or loss caused by one to the other by commission of tort or by breach of a contractual obligation. The claim for damages caused on account of commission of tort or by breach of contract which has nothing to do with the default in the the fulfillment of an obligation arising from a financial facility and covered under the definition of 'finance' as provided in section 2(d) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 obviously cannot be agitated before a Banking Court.
However, a claim for damages, on account of any injury or loss caused by a Financial Institution to its customer, which has resulted from any default committed by the. Financial Institution in the fulfillment of its obligation in relation to finance, can certainly be taken to the Banking Court for adjudication. Hence, a claim for pecuniary, compensating could either arise from a tortuous act, i.e. Not based on any contract or a breach of a contractual obligation not pertaining to a accommodation or facility of finance as defined under section 2(d) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and for these two categories of claims obviously the Banking Court is not the appropriate forum. However, a claim for pecuniary compensation could also arise on account of the failure of a Financial Institution to fulfill its obligation in relation to any financial accommodation or facility. It is this category of claim which certainly comes within the scope of section 9 of the Ordinance and a suit relating thereto is always maintainable before a Banking Court.
13. Recently this Court in Gulistan Textile Mills Ltd. v. Askari Bank Ltd. And others (2013 CLD 2005) held:- 'Plaint filed in a regular suit has to meet the standards of "pleadings" and "plaint" given under Orders VI and VII of the Civil Procedure Code, 1908. Plaint under the Ordinance, however has a special format, requiring a higher standard of precision. The plaint under the special law has to be tailored strictly in accordance with the statutory standers set-out given in section 9 of the Ordinance i.e., the plaint must bring to the Banking Court a dispute between the "financial institution" and the "customer" only. It must arise out of the contractual relationship indicating default in fulfillment of any "obligations" of "Finance". It must indicate the contractual breach which is to be monetized and reflected in the Statement of Account (certified in case of a financial institution) which has to accompany the plaint. In addition, the plaint can carry a claim for damages if it arises out of the Finance Agreement between the parties but not tortious claims simpliciter. Such is the standard required of a plaint in a banking suit under section 9(1) and (2) of the Ordinance.
14. In view of above, discussion of case-law, it is clear that in order to meet the requirement of section 9(1) of F.I.O., 2001 every plaint has to mention the facts of agreement as well as the default of obligation/agreement.
15. The other requirement as mentioned in section 9(2) of the F.I.O. Which narrates that the plaint should be supported by a statement of accounts and copies of all other relevant documents should be attached with the plaint. Section 9(2) states as under; The plaint shall be supported by a statement of account which in the case of a financial institution shall be duly certified under the Bankers' Books Evidence Act, 1891 (XVII of 1891), and all other relevant documents relating to the grant of finance. Copies of the plaint, statement of account and other relevant documents shall be filed with the Banking Court in sufficient numbers so that there is one set of copies for each defendant and one extra copy.
16. Bare reading of the above clause clears that statement of accounts is a necessary document for a suit to be maintainable before the banking court and this has also been held in Muhammad Yousaf v. A.D.B.P. (2002 CLD 1270) as well as in Messrs KLB-e-Hyder and Company (Pvt.) Ltd. Through Chief Executive v. National Bank of Pakistan through President and 3 others (2008 CLD 576). In Bela Automotive Limited v. Habib Bank Limited (2005 CLD 893) it was held as under:- I am of the view that a statement even embodied in the body of the plaint filed by the Borrower or Customer would meet the requirement of section 9(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 as the purpose of section 9(2) ibid in my opinion would be substantially served where the plaintiff with sufficient detail gives such break-up in the body of the paint. The purpose is to inform the defendant either by way of incorporating the statement of account in the body of plaint or in a conventional manner by filing along with the plaint. The statement of the Borrower/Customer is not to be authenticated in terms of Banker's Book of Evidence as in the case of Financial Institution.
17. Therefore, it is clear from that a statement of accounts is necessary to support the claim of the customer either it is attached with the plaint or embodied in the body of the plaint for a suit by a customer to be maintainable before the banking court.
18. Now the question arises what is the statement of accounts as the same has not been defined in the F.I.O., 2001.
19. In Bankers Equity Limited through Principal Law Officer and 5 others v. Messrs Bentonite Pakistan Limited and 7 others (2003 CLD 931) this court has held that a statement of accounts must contained each debit and credit entry. Whereas in Messrs C.M. Textile Mills Pvt. Limited through Chairman and 5 others v. Investment Corporation of Pakistan (2004 CLD 587) it was held that statement of account means a continue daily posted record showing in detail all debit and credit and balance as of the closing of the period, usually one month. It was also held that the details need to be given either in the body of the plaint or the same may be attached with the plaint.
20. The requirement of statement of accounts with plaint under section 9(2) of the F.I.O., 2001 was held to be mandatory by the Hon'ble Supreme Court even in Apollo Textile Mills Ltd and others v.
Soneri Bank Ltd. (2012 CLD 337) 'and customer accounts were considered to be necessary to support its claim.
21. It has been held time and again by this court as well as other courts that only those claims of damages can be filed which arise from breach of obligation with regard to the finance facilities. All claims of tortuous damages are out of the jurisdiction of the Banking Court. A fine distinction has been drawn between a contract and a tort in "The Law of Torts" by Ratanlal and Dhiraj edited by Justice (R) G.P.Singh, 23rd Edition in the following manner:- "A contract is founded upon consent: a tort is inflicted against or without consent. A contract necessitates privity between the parties: in tort no privily is needed. A tort must also be distinguished from a pure breach of contract. First, a tort is a violation of right in rem, i.e., of a night vested in some determinate person, either personally or as a member of the community, and available against the world at large: whereas a breach of contract is an infringement of a right in personam, i.e. Of a right available only against some determinate person or body, and in which the community at large has no concern. The distinction between the two lies in the nature of the duty that is violated. In case of a tort the duty is one imposed by the law and is owned to the community at large. In the case of a contract, the duty is fixed by the will and consent of the parties, and it is owed to a definite person or persons".
22. Therefore, any negligence or carelessness on the part of the financial institution will not entitle a customer to file a suit before the banking court for damages. In this regard reference is made to the Nasimuddin Siddiqui and others v. United Bank Limited and others (1998 CLC 1718) wherein it has been held that only suits for damages arising out of the breach of contract executed in respect of loan or finance between the financial institution on the one hand and the borrower or customer on the other are maintainable. However, section 73 of the Contract Act, 1872 states that:-
73. Compensation for loss or damage caused by breach of contract. --- When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby which naturally arose in the usual course of things from such breach of which the parties knew, when they made the contract, to be likely to result from the breach of it.
Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach.
Compensation for failure to discharge obligations resembling those created by contract. When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by failure to discharge it is entitled to receive the same, compensation from the party in default, as if such person had contacted to discharge it and had broken his contract.
Explanation:- In estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account.
23. Therefore any breach of contract will not allow the plaintiff/customer to claim remote and indirect loss or damages alleged to be sustained due to the alleged breach of financial institution.
The citation gets further clarity when we read illustration "n" to section 73 which states as under:-
(n) A contracts to pay a sum of money to B on a day specified. A does not pay the money on that day; B, in consequence of not receiving the money on that day, is unable to pay his debts, and is totally ruined. A is not liable to make good to B anything except the principal sum he contracted to pay, together with interest up to the day of payment.
24. Therefore, the plaintiffs/customers are not entitled to claim any amount over and above the amount allegedly covered under the agreement. Further even for a suit of damages the plaint must fulfill the requirement of section 9 of the F.I.O., 2001 by incorporating the detail of the agreement as well as the default in the plaint.
25. At this stage, the issue arises whether plaint can be rejected in part. In this regard reliance is made on the judgment of this Court reported as Messrs Shazim International (Pvt.) Ltd. And 6 others v. Messrs First Women Bank Ltd. (2009 CLD 432) and Army Welfare Trust Trading as Nizampur Cement Plant through acting Management Director v. Soneri Bank Limited and 2 others (2014 CLD 440). In all these cases plaint was rejected in parts by the courts. Therefore this Court has the power to reject the plaint in part and delete the claims which does not fall within the ambit of the jurisdiction of this Court.
26. From the above discussion it is clear as under:-
(i) This Court had ample power to apply Order VII, Rules 10/11 of Code of Civil Procedure, 1908 at any stage of the proceeding,
(ii) a customer can file a suit for declaration, cancellation, redemption, permanent injunction and damages against a financial institution only against breach of an obligation arising out of law or an agreement,
(iii) the plaint must contain the detail of law or the agreement and also the breach of such law or the agreement,
(iv) The plaint must also be supported by customer's accounts or the statement of account as well as all documents which are necessary for establishing the claim of the customer.
(v) Only these damages can be claimed are arise out of the agreement of finance.
(vi) The remote and indirect damages cannot be claimed by the plaintiff customer on the basis of breach of obligation of not granting the finance facility.
(vii) This Court can reject the plaint in part.
27. I have also taken up the plaint of each case individually, heard he learned counsel for the parties to ascertain whether the same fulfills the requirement of section 9 of the F.I.O. Or not?
28. In the case in hand, perusal of the plaint reveals that plaintiff has sought for redemption, cancellation of document, declaration, rendition of accounts, permanent and perpetual injunction and recovery with profit till realization of amount and costs. It is the claim of the plaintiff that on account of failure of defendant bank to fulfill its contractual obligation towards plaintiff/customer to provide the requisite finance facilities to the plaintiff which had to be utilized for the purchase of paddy and for the export of Rice to foreign clients. It is also asserted that after the year 2008 no fresh facilities were provided to the plaintiff despite repeated requests and assurances. It is further added that although the plaintiff had never defaulted in the fulfillment of its contractual obligations, the defendant mishandled the matters/affairs with the plaintiff in sheer breach of its contractual obligations resulting in deterioration of its business and good reputation, therefore, the plaintiff suffered huge financial losses, lost reputation and good will, details whereof finds mention in the body of plaint. Further adds that defendant was requested time and again to refrain themselves from misusing the blank documents and to treat the said documents as cancelled and to return the amount received by the bank in excess than their entitlement but no positive response has been given by the defendant. Plaintiff claims total amount of damages/losses as mentioned in the plaint as to Rs.228,490,500 in toto on various counts.
29. Pursuant to summons issued by this Court through all permissible modes, defendant entered appearance and filed application for leave to appear and defend the suit (PLA No.47-B/2013) controverted the assertions of plaintiff both on factual as well as legal plane besides raising multifarious preliminary objections inter alia including maintainability of the present suit. It was specifically pleaded that plaintiff committed contumacious, intentional and willful default towards discharge of its financial obligation. It was also enumerated in the PLA that plaintiff has filed vexatious suit without any locus standi and cause of action in absence and without annexing any copy of essential and requisite documents including ledger and statement of accounts etc in consonance with the provisions of F.I.O., 2001.
30. In the case in hand, perusal of the plaint reveals that plaintiff has committed default in fulfillment of its obligations. Record also reveals that only vague and general allegations have been attempted to be raised without substantiating the same through credible documentary evidence.
Only notional and hypothetical assertions have been raised without furnishing requisite and necessary details of agreement where under defendant was under obligation to extend the required finance facility to the plaintiff/customer. The plaintiff in course of availing finance facilities has several times admitted its outstanding liabilities through requests made and execution of the finance documents. The disbursement of finance facilities pursuant to the execution of the documents and availing thereof by the plaintiff company renders sufficient proof that they were in line with the requests made by the customer, otherwise, the plaintiff would have refused to avail these facilities, therefore, there was no contractual breach on part of the defendant bank. Further the allegation of execution of blank document is vague as no specific documents have been objected by the plaintiff which were got signed blank. Record also shows that it is the plaintiff who has violated the terms of the offer letter and the finance agreements and defaulted in the repayment of its financial obligations.
Furthermore, no detail of accounts has been given in the body of the plaint or the statement of accounts has been attached with the plaint to substantiate the losses claimed in the plaint.
31. The claims as raised in the plaint are on account of damages suffered by the customer due to non-disbursal of sanctioned finance. However, nowhere in the plaint any reference has been given with regard to the sanctioned letter whose violation was committed by the defendant bank. It is specifically mentioned that finance facility was only sanctioned in 2008 and thereafter no finance was granted. It is not mentioned in the plaint that under which agreement or law it was necessary upon the defendant bank to grant further finance to the plaintiff.
32. In absence of such requirements in the plaint, the same is liable to be rejecte. Upon rejection of plaint the present suit is here dismissed, with no order as to costs.
SCHEDULE-A Sr. No. Case No. Title Represented by 1 C.O.S. No.82 of 2012 Messrs Shafique Supreme Rice Indust. v. Bank Alflah Ltd.Mr. Shahid Ikram Siddiqui, Advocate for plaintiff. Mr. Ashar Elahi, Advocate for defendant.
2 C.O.S. No.76 of 2013 Acro Developers Ltd. v. BOP, etc.Mr. Shahid Ikram Siddiqui, Advocate for plaintiff. Mr. Aamir Wakeel Butt, Advocate for defendant.
3 C.O.S. No.60 of 2012 Messrs Ali and Sameer Intl. v. HBLMr. Shahid Ikram Siddiqui, Advocate for plaintiff.
Mr. Mushtaq Ahmad Khan, Advocate for defendant.
4 C.O.S. No.20 of 2014 Messrs Talon Supports Ltd. v.
Standard Chartered Bank Ltd.Mr. Shahid Ikram Siddiqui, Advocate for plaintiff. Mr. Ashtar Ausaf Ali, Advocate for defendant.
5 C.O.S. No.33 of 2014 Pak Hero Industries Ltd. Etc. v. Bank of PunjabMr. Shahid Ikram Siddiqui, Advocate for plaintiff. Mr. Muhammad Akram Pasha, Advocate for defendant.
6 C.O.S. No.131 of 2009Messrs Bilal Textile Mills Ltd. v. BOPMr. Shahid Ikram Siddiqui, Advocate for plaintiff. Mr. A.W.
Butt, Advocate for defendant.
7 C.O.S. No.79 of 2012 Ahmad Waheed Malik v. BOPMr. Asad Javed, Advocate for plaintiff. Mr. Hafeez Saeed Akhtar, Advocate for defendant.
8 C.O.S. No.162 of 2011Messrs Shehzad and Co. v. Summit Bank Ltd.Mr. Shahid Ikram Siddiuqi, Advocate for plaintiff. Ms. Raeesa Sarwat, Advocate for defendant.
9 C.O.S. No.49 of 2012 Messrs Sidra Rice Mills etc. v. Bank of KhayberMr. Shahid Ikram Siddiqui, Advocate for plaintiff. Mr. Akhtar Javed, Advocate for defendant.
10 C.O.S. No.87 of 2012 Messrs Acro Spinning and Weaving Mills Ltd. v.
Citi Bank Mr. Moiz Tariq, Advocate for plaintiff. Mr. Muhammad Akram Pasha, Advocate for defendant.
11 C.O.S. No.88 of 2012 Messrs Acro Spinning and Weaving Mills Ltd. v.
BOP Mr. Shahid Ikram Siddiqui, Advocate for plaintiff. Mr. A.W.
Butt, Advocate for defendant.
12 C.O.S. No.117 of 2012 Messrs T&N Pakistan Ltd. v. BOPMr. Haq Nawaz Chattha, Advocate for plaintiff. Mr. A.W.
Butt, Advocate for defendant.
13 C.O.S. No.139 of 2012Ghausia Traders Intl.
(Pvt.) Ltd. v. Silk Bank Ltd. Mr. Muhammad Imran Malik, Advocate for Plaintiff.
Ch. Mushtaq Ahmad, Advocate for defendant.
14 C.O.S. No.148 of 2012Jeea Textile Ltd. v.
Askari Bank Ltd.Mr. Shahid Ikram Siddiqui, Advocate for plaintiff. Mr. Muhammad Akram Pasha, Advocate for defendant.
15 C.O.S. No.25 of 2013 Messrs Tanveer Cotton Mills Ltd. v.
Askari Bank Ltd.Mr. Shahid Ikram Siddiqui, Advocate for plaintiff. Mr. Muhammad Akram Pasha, Advocate for defendant.
16 C.O.S. No.26 of 2013 Acro Textile Mills Ltd. v. BOPMr. Shahid Ikram Siddiqui, Advocate for plaintiff. Mr. A.W.
Butt, Advocate for the defendant.
17 C.O.S. No.34 of 2013 Gulistan Spinning Mills Ltd. v. MCB Bank Ltd.Mr. Shahid Ikram Siddiqui, Advocate for plaintiff. Mr. Muhammad Akram Pasha, Advocate for defendant.
18 C.O.S. No.38 of 2013 Messrs Gulistan Textile Mills Ltd. v.
MCB Bank Ltd.Mr. Shahid Ikram Siddiqui, Advocate for plaintiff. Mr. Muhammad Akram Pasha, Advocate for defendant.
19 C.O.S. No.41 of 2013 Afzal Bari Cheema etc. v. Askari BankMr. Shahid Ikram Siddiqui, Advocate for plaintiff. Ch. Hasham Hayat, Advocate for defendant.
20 C.O.S. No.53 of 2013 Gulshan Weaving Mills Ltd. v. MCB BankLtd.Mr. Shahid Ikram Siddiqui, Advocate for plaintiff. Mr. M.
Akram Pasha, Advocate for defendant.
21 C.O.S. No.69 of 2013 Messrs Wind Mills Restaurant etc. v.
BOPMr. Shahid Ikram Siddiqui, Advocate for plaintiff. Mr. A.W.
Butt, Advocate for defendant.
22 C.O.S. No.73 of 2013 Haji Jamshed Abbas Thaheem v.
MCB Bank Ltd.Miss Khalida Abid Advocate for plaintiff. Mr. 'Hassan Iqbal Warriach, Advocate for defendant.
23 C.O.S. No.102 of 2013Messrs Paramount Spinning Mills Ltd. v.
MCB Bank Ltd. Mr. Shahid Ikram Siddiqui, Advocate for plaintiff. Mr. Fahad Malik, Advocate for defendant.
24 C.O.S. No.109 of 2013Messrs MSC Textile Ltd. v. UBLMr. Shahid Ikram Siddiqui, Advocate for plaintiff. M/s. Asim Nazir and Ch. Muhammad Javed Arshad, Advocate for defendant.
25 C.O.S. No.112 of 2013 Messrs Tanveer Cotton Mills Ltd. v.
UBLMr. Shahid Ikram Siddiqui, Advocate for plaintiff. Mr. Muhammad Asif ur Rehman, Advocate for defendant.
26 C.O.S. No.115 of 2013 Messrs Tanveer Cotton Mills Ltd. v.
Summit Bank Ltd. Mr. Shahid Ikram Siddiqui, Advocate for plaintiff. Mr. Husnain Ali Ramzan, Advocate for defendant.
27 C.O.S. No.9 of 2014 Messrs Rehman Steel Furnace Ltd. v.
ABLMr. Shahid Ikram Siddiqui, Advocate for plaintiff. Mr. Majid Ali Wajid, Advocate for defendant.
28 C.O.S. No.63 of 2014 Messrs Haris Steel Indust. Pvt. Ltd. v.
BOPMr. Shafqat Mehmood Chohan, Advocate for plaintiff.