Abid Aziz Sheikh, J.--Through this execution first appeal u/Sa 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ("Ordinance"), the appellant has assailed the order dated 15.01.2015 passed by learned Judge Banking Court-II, Multan whereby the applications filed by the appellant under Section 47, Order XXXIX Rules 1 and 2 Code of Civil Procedure, 1908 ("CPC") and application for redemption of mortgaged property have been dismissed.
2. Brief facts are that respondent-bank (Respondent No, 1) filed a suit for recovery of Rs,2,76,91,334/- on 11.05.2000 before Banking Court. The appellant filed application for leave to appear and defend the suit, however, the appellant and respondent bank entered into settlement agreement, resultantly the suit was decreed on 16.09.2004 for the amount of Rs,66, 42,000/- in terms of Ex.C-1. In the settlement agreement, it was provided that in case the amount is not paid in 12 equal quarterly installments, the judgment debtor will be liable to pay full amount of Rs,27.691 million, claimed in the recovery suit. The appellant failed to pay the decretal amount in 12 quarterly installments, however, the decree holder bank vide a letter dated 16.05.2007 allowed the petitioner to pay the remaining decretal amount by 30.10.2007 but again the amount was not paid, hence the execution was filed for recovery of amount claimed in the suit on 22.01.2008. The appellant being aggrieved filed applications u./S. 47, under Order XXXIX Rules 1 and 2, CPC and application for redemption of mortgaged property which were dismissed vide impugned order dated 15.01.2015, hence this appeal.
3. Pre-admission notice was issued to respondent bank while the remaining respondents were proforma respondents.
4. Learned counsel for the appellant argued that the appellant has paid the entire decretal/settlement amount of Rs,66,42,000/- to the respondent bank, therefore, the execution petition was liable to be dismissed. He further submits that as per statement of account filed by the respondent bank itself, the only outstanding amount against the appellant was cost of fund of Rs,54,56,333.22, hence there was no occasion to proceed with the execution petition. Learned counsel further submits that consent decree based on the settlement agreement is not executable and in case of breach, only separate suit could be filed. He further submits that respondent bank itself accepted the payments of settled/decretal amount beyond settled period without any objection, therefore, the consent decree was novated u/S. 62 of the Contract Act, 1872. Reliance is placed on Peer Dil and others vs. Dad Muhammad (2009 SCMR 1268), Fakir Abdullah .And others vs. Government of Sindh through Secretary to Government of Sindh, Revenue Department, Sindh Secretariat, Karachi and others (PLD 2001 Supreme Court 131), Asghar Ali vs. Additional Sessions Judge, Kasur and others (2015 MLD 353), Industrial Development Bank of Pakistan through Vice President LD.B.P. Vs. Messrs Crystal Chemicals Limited through Director/Guarantor Crystal Chemical Ltd. And 9 others (PLD 2009 Lahore 176) and Water and Power Development Authority through Chairman, WAPDA, Lahore vs. Mian Abdul Rauf (PLD 2002 Lahore 268).
5. Conversely learned counsel for the contested Respondent No, 1 argued that as per consent decree dated 16.09.2004, which was based on settlement agreement Ex.C-1, the decretal amount of Rs,66,42,000/- was to be paid in 12 equal quarterly installments and in case of any default, the appellant was liable to pay full amount of Rs,27.691 million claimed by the bank in the recovery suit.
He submits that appellant failed to pay the decretal amount in 12 equal quarterly installments. The appellant was also given an opportunity to pay the balance decretal amount by 30.10.2007, however, the decretal amount was not paid even within extended period, resultantly application for execution of the decree was filed before the Executing Court for recovery of full suit amount of Rs,27.691 million. He submits that respondent-bank has filed statement of account with execution petition in which the total suit amount is claimed alongwith the cost of fund and after deduction of amounts 'already paid, the outstanding amount against the appellant is of Rs,30,28,571.1827, hence the appeal is liable to be dismissed.
6. Arguments heard. Record perused.
7. It is admitted position between the parties that the suit of respondent bank was decreed on 16.09.2004 in terms of settlement agreement Ex.C-1 for Rs,66,42,000/-. Out of the decretal amount, 10% down payment of Rs,6,64,200/- was paid forthwith whereas remaining balance amount of Rs,59,77,800/- was to be paid by the judgment debtor/appellant in 12 equal quarterly installments each of Rs,4,98,150/- commencing from 10.04.2004 till 10.01.2007. The appellant paid 3 quarterly installments, however, failed to pay remaining installments. As per Para 4 of the settlement' agreement Ex.C-1, it was agreed between the parties that in case of default in payment of installments due to any reason, the judgment debtor/appellant will be liable to pay the suit amount of Rs,27.691 million. For facility, Para 4 is reproduced hereunder:- "That in case of Company's/Guarantors failure to pay any one of the above mentioned 12 equal quarterly installments within due date for any reason whatsoever, or fail to comply with any condition listed in this Deed 9f Settlement, the same shall constitute willful default and in that event this settlement/agreement shall stand revoked and the Company's eligibility to enjoy concessions/relaxations under the aforementioned SBP Circular shall also seize to exist forthwith and the same will be treated as withdrawn/cancelled and consequently Company will be liable to pay the full amount of Rs,27.691M claimed by the bank in its recovery suit referred to above alongwith the mark-up from the date of default till realization of full outstanding amount, cost and other charges as provided by Law and in the event of said default the Company/Guarantors admit and acknowledge to pay the aforesaid suit amount alongwith future mark-up, charges and cost to the bank and will have no objection on bank's selling the mortgaged properties alongwith personal properties of Defendants No, 2, 3, 4, 5, 6 and 7 in accordance with law on the subject, with or without the intervention of Court.
8. Record shows that on failure to pay the decretal amount within 12 quarterly installments, the respondent bank vide letter dated 16.05.2007 as a special case allowed the appellant for the payment of remaining installments of decretal amount by 30.10.2007. However, the appellant has failed to pay the balance amount of Rs,11,94,450/- even by 30.10.2007. The respondent bank in the circumstances filed execution application for the recovery of suit amount alongwith cost of fund as per settlement agreement dated 16.09.2004. It is not disputed that only after the filing of execution application on 22.01.2008, the appellant paid amount of Rs,4,00,000/- vide cheque dated 20.02.2008 and Rs,3,15,000/- vide cheque dated 10.03.2008. Further the amount of Rs,4,79,450/- was deposited with the Banking Court which is still in the account of the Banking Court as per its report dated 13.11.2008.
9. From the facts narrated above, it is evident that the appellant has failed to pay the decretal amount of Rs,66,42,000/- in 12 equal quarterly installments and therefore, the respondent bank was legally justified to recover the suit amount of Rs,27.691 million through execution in terms of Para 4 of the settlement agreement Ex.C-1 based on which the consent decree was passed on 16.09.2004.
10. The argument of appellant that as time has been extended by the decree holder bank for payment-of decretal amount, therefore, the consent decree has been novated and only separate suit could be filed by the bank, has not impressed us. No doubt vide letter dated 16.05.2007, the appellant was allowed one last opportunity to pay the balance decretal amount by 30.10.2007, however, it .Was made clear that in case of default, the amount claimed in the recovery suit will be payable. For ready reference relevant part of the letter dated 16.05.2007 is reproduced hereunder:- "Please note that as advised earlier due to your persistent default, the settlement reached under subject SBP Circular stands revoked and you have become liable to pay the amount claimed in our recovery suit, however, the bank's competent authority while acceding to your request, as a very special case has allowed you to pay the aforesaid amount of Rs,11, 94,450/- by 30.10.2007 subject to your submitting a post dated cheque of the said amount Please be advised that this is the Last and Final Opportunity being afforded to you to discharge your obligation under the subject settlement and under no circumstances, further extensions in time shall be granted and in the event of your default all the waivers/concessions afforded under the instant settlement shall stand withdrawn and we will be constrained to move the Court to recover the amount claimed in our recovery suit without any further reference to you."
11. There is no dispute that the decretal amount was not paid even within the extended period till 30.10.2007. In our view, the mere fact that respondent bank vide letter dated 16.05.2007 allowed the appellant to pay the decretal amount by 30.10.2007 will not automatically novate the consent decree dated 16.09.2004 based on Ex.C-1. The consent decree could only be novated if through subsequent agreement, the consent decree was adjusted in the manner that the terms of the consent decree altered to perform something else than provided in the consent decree or consent decree itself becomes un-executable by the executing Court in view of the changed circumstances in the consent decree. There is no such condition incorporated in the letter dated 16.05.2007, which goes beyond the scope of the suit or the consent decree rather letter dated 16.05.2007 reiterated the condition of consent decree and specifically stated that if decretal amount is not paid in extended period, the suit amount shall be recovered. In our opinion, in absence of any material change in the compromise decree through subsequent compromise, the executing Court would be in a position to execute the consent decree under Section 47, CPC and no separate suit is required to be filed for breach or execution of such consent decree. The change in the schedule of payment of decretal amount which was also defaulted by the appellant is not a new contract or it rescinds and alters the original contract, hence by no mean novates the compromise decree under Section 62 of the Contract Act, 1872. Reliance is placed on Barkat Ullah vs. Wali Muhammad (1994 SCMR 1737), Musarrat Shaukat vs. Sufia Khatoon (1994 SCMR 2189), SAMBA Bank Ltd. Vs. Syed Bhais (2013 CLD 2080) and Messrs M. Amin M. Bashir Limited Karachi vs. Messrs Star Oil and Ice Mills (PLD 1973 Karachi 409).
12. We have carefully gone through the case law relied upon by learned counsel for the appellant which is distinguishable. In Peer Dil and others vs. Dad Muhammad (2009 SCMR 1268), it is held that whether subsequent suit is barred by reason of Section 47, CPC depend upon the existence of decree and whether earlier contract superceded by a later contract. In this case no such agreement was executed between the parties which superceded the earlier contract/consent decree, rather letter dated 16.05.2007 is based on the consent decree and only time was extended for payment of decretal amount. In case of Water and Power Development Authority through Chairman, WAPDA, Lahore vs. Mian Abdul Rauf (PLD 2002 Lah. 268) relied upon by the appellant, it was held that parties have power to amend compromise decree. However in this case, no such amendment is made in compromise decree, therefore this citation is not applicable to the, facts and circumstances of this case.
13. There is no cavil with the argument of the learned counsel for the appellant that executing Court under Section 47, CPC can look into the events subsequent to the passing of the decree as held by august Supreme Court in Fakir Abdullah vs. Govt. Of Sindh (PLD 2001 SC 131) and this Court in IDBP, through Vice President IDBP vs. Crystal Chemicals Limited through Director/Guarantor Crystal Chemical Ltd. And 9 others (PLD 2009 Lah. 176). However, in this case, there is no such event occurred which render the decree non-executable before executing Court. It is admitted on all hands that decretal amount was not paid in 12 quarterly installments under consent decree dated 16.09.2004 and even under the extended time vide letter dated 16.05.2007 till 30.10.2007. The partial payment against remaining decretal amount was paid on 20.02.2008 for Rs,4, 00,000/- and on 10.03.2008 for Rs,3,15,000/- , which was after the filing of execution application on 22.01.2008. It is also evident from record that till date the balance decretal amount of Rs,4,79,450/- is not paid as same is deposited with Banking Court and not received by the respondent bank. Even subsequent letters dated 12.02.2008 and 01.03.2008 for novation of agreement by the appellant are unilateral and there is no mutuality attached to same as the respondent bank has responded to the said letters in writing. In such circumstances, it cannot be said that due to subsequent events, executing Court could not proceed with the execution petition.
14. The contention of the appellant that executing Court should have framed issues and recorded evidence before deciding his applications has no force. As the consent decree, outstanding amounts, date of payments and defaults and subsequent correspondence are admitted, .There are no disputed facts for which issues were required to be framed by the learned Banking Court before deciding appellant's applications. The case of Asghar Ali vs. Additional Sessions Judge, Kasur and others (2015 MLD 353) relied upon by the appellant is not applicable here.
15. The next, argument of learned counsel for the appellant that decree has been satisfied as according to statement of account for cost of fund filed by the respondent bank, only cost of fund is payable and no other amount is recoverable, is misconceived. The said statement of account dated 13.07.2009 for cost of fund was filed as per direction of the Banking Court dated 06.02.2009, whereas the complete statement of account showing the outstanding suit amount as decretal amount along with cost of fund is already filed with the execution petition and copy of same has also been placed before us by the learned counsel for the Respondent No,
1. Therefore, it cannot be said that according to bank's own statement of account the decree has been satisfied.
16. We have however noticed that in the consent decree dated 16.09.2004 and settlement agreement Ex.C-1, the date of default for the purpose of cost of fund has not been determined by the Banking Court. In such eventuality the executing Court will be empowered to determine the date of default under Section 47, CPC to calculate the cost of fund payable by the appellant.
Reliance in this behalf is placed on Habib Bank Ltd. Vs. Pak Poly Products Pvt Ltd. (2013 CLD 1661).
17. In view of above discussion, we are not persuaded to interfere in the impugned order, which is well reasoned, based on record and grounded in correct principle of law relevant to the facts of the case. Accordingly this appeal is dismissed.