AZIZ-UR-REHMAN, J.---The plaintiff Bank has filed the present suit under section 9 of the F.I.O., 2001 [XLVI of 2001] for Recovery of Rs.92,597,989.67 along with 'cost of suit' and 'cost of funds' from filing of the suit till realization of the suit amount. Besides, a prayer for sale of the 'pledged shares', other relief[s] have also been sought. The reliefs sought by the plaintiff Bank read as follows:-
(a) A decree be passed in favour of the plaintiff and against the defendants Nos. 1, 2, 3 and 4 for a sum of Rs.92,597,989.67 [Rupees Ninety Two Million Five Hundred Ninety Seven Thousand Nine Hundred Eight Nine and Paisas Sixty Seven Only].
(b) A decree be passed for the sale of the pledged shares and the proceeds be adjusted towards the decretal amount. The detail of pledge shares as under:- S #PledgorCompany's NameNo. of Shares
1. Defendant No.1Summit Bank 635,680
2. Defendant No.3Summit Bank 1,659,600 3.Defendant No.4Summit Bank 786,400
(c) The decretal amount be ordered to be realized both by execution of personal decrees against the defendants.
(d) Cost of funds as prescribed under sections 3, 17, Ordinance, 2001, may also be allowed from the date of filing the instant suit in favour of the plaintiff bank till satisfaction of the decretal amount;
(e) Cost of the suit may also be awarded.
(f) Any other better and consequential relief that this Hon'ble Court deems fit and proper in the circumstances of the case may also kindly be granted.
2. Upon filing of the suit on 31st January; 2012, process under section 9 of F.I.O., 2001 was issued to the defendants Nos.1 to 4 by all modes including publication in two Newspapers i.e. Daily 'Dawn'
English and Daily 'Jang' Karachi, both dated 14th February, 2012.
3. On service, the defendants filed their 'Leave to Defend Application' bearing C.M.A. No.3007 of 2012 being an application under section 10 of F.I.O., 2001 [Ordinance No.XLVI of 2001]. In answer thereto, the plaintiff's Bank had also filed their 'Replication' under section 10[7] of FIO, 2001, Nonetheless, the aforesaid 'Leave to Defend Application' was dismissed for 'non-prosecution' on 11-12-2012. Order passed on 11-12-2012 whereby the 'Leave to Defend Application' [C.M.A. No.3007 of 2012] was dismissed reads as follows:- 'On last date of hearing the counsel for the defendant requested for a copy of replication, which was supplied to him and matter was by consent adjourned for today. The case was called in the morning, but the counsel for the defendant was called absent and it was kept aside. Again after break the matter is taken up at 11-40 a.m. Neither the counsel for the defendant is present, nor any intimation has been received. The leave to defend application is dismissed for non prosecution.'
4. Upon dismissal of the 'Leave to Defend Application' bearing C.M.A. 3007 of 2012, the defendants thereafter, it appears had filed C.M.A. 5332 of 2013 being an application under Order D , Rule IX, read with section 151, C.P.C. On 27-4-2013. The plaintiff, in opposition thereof had also filed its 'counter affidavit'.
5. Lastly, on 31st March, 2015 the application bearing C.M.A. No.5332/2013 for restoration of 'Leave to Defend Application' [C.M.A. No.3007 of 2012], filed by the Defendants was also dismissed for 'non- prosecution'. Order passed on 31.03.2015 reads as follows:- 'On 11-12-2012, when this case was taken up even in the second round, neither defendants nor defendants' counsel was present nor any intimation was then received. Under circumstances, the L/D application bearing C.M.A. No.3007 of 2012 was dismissed at 11-40 a.m. For non-prosecution.
Upon dismissal of leave to defend application (C. M.A. No.3007 of 2012) the defendants have thereafter filed the instant application bearing C.M.A. No.5332 of 2013 under Order IX, Rule Nil, read with section 151, C.P. C. On 27-4-2013. Ex facie such application, on the face of it is hopelessly time barred as the same has been filed beyond statutory period of 30 days. In view of this position the application for re-call of order dated 11-12-2012, merits no consideration. Even today, neither defendants nor their counsel is in attendance nor any intimation received. Consequently C.M.A.
No.5332 of 2013 stands dismissed.
Learned counsel for the plaintiff today seeks time to call plaintiff's witness Haider Aziz a son of Muhammad Yasin Aziz, whose affidavit-in-ex parte proof has already been filed on 22-5-2013, let the witness be called on 10-4-2015, positively.'
6. Thereafter, on 10-4-2015 'examination-in-chief of 'P.W.1' viz: Haider Aziz was recorded. The 'P.W.I' besides producing 'affidavit-in-ex parte proof, produced other documents as well i.e. Exh.P.W.1/`6' to 'P.W.1/18'. For want of 'cross-examination' of the 'P.W.1' the evidence side of plaintiff was thus closed.
7. On 23-4-2015, when the above suit came-up before me, then I heard, Mr. Jam Asif Mahmood along with Mr. Abid Naseem learned counsel for the plaintiff Bank and Barrister Mr. Habib-ur- Rehman, learned counsel for defendants and with their valuable assistance also gone through the record available before me.
8. Learned counsel for the plaintiff Bank, at the very outset focused the attention of this Court to words ' Para 7' of the 'Leave to Defend Application of the defendants [C.M.A. No.3007 of 2012] and forcefully contended that averments contained in 'Para 7' of the Plaint besides being not challenged have gone un-denied/un-rebutted. At this point of time, it would be absolutely appropriate to reproduce herein 'Para 7' of both the Plaint and 'Leave to Defend Application' [C.M.A.
No.3007 of 2012] respectively, as under:-
(a) Para 7 of the Plaint "7. That on 1-3-2007, based on the terms and- conditions of Facility Acceptance Letter, plaintiff Bank and defendant No.1 entered into an Agreement for Financing on Short/Medium/Long Term on Mark up Basis for Rs.40,000,000 (Rupees Forty Million Only) defined in the Agreement as 'Sale Price'.
Under the terms of this Agreement, defendant agreed to pay back to the plaintiff Bank a sum of Rs.50,936,000 (Rupees Fifty Million Nine Hundred Thirty Six Thousand Only) defined in the Agreement as 'Purchase Price.'"
(b) Para 7 of 'Parawise reply' of 'Leave to Defend Application'
"7. That the content of para 7 are not denied as it is the admission by the plaintiff that the amount of finance payable by the defendant after expiry of the Agreement dated 1-3-2007 is Rs.50,936,000 against Principal Amount of Rs.40,000,000, which includes total Mark-up of Rs.10,936,000 and the amount of Mark-up as mentioned by the plaintiff in Para 17, Sub-Para C.2, which is mark-up charged as per Agreement is Rs.21,608,112.34 against the Principal Amount. Now it is crystal clear proved that the plaintiff is violating the terms and conditions of the said Agreement and charging Mark-up more-than the Mark-up as agreed/mentioned in the said Agreement for Finance dated 1- 3-2007. Now the plaintiff is put to strict proof regarding his claim against the defendants."
9. From bare perusal of the above, it is crystal clear that defendants have not denied the terms and conditions of the 'FACILITY ACCEPTANCE LETTER' dated 24th February, 2007 and AGREEMENT FOR FINANCE for Short/Medium/Long terms on markup basis. Per this Finance Agreement, the 'sale price' and 'purchase price' mutually fixed by the parties is Rs.40,000,000 and Rs.50,936,000 respectively.
The expiry date as mentioned in the Finance Agreement of 1st March, 2007, is 28th February, 2008.
10. Needless to say, that the above 'Finance Agreement' is also coupled with a 'Promissory Note' dated 1st March, 2007. The Promissory Note as being a Negotiable Instrument, under section 118 of the Negotiable Instruments Act, 1881 [XXVI of 1881] attaches itself the presumption of truth. Being relevant in this regard section 118 of the Negotiable Instruments Act, 1881 [XXVI of 1881] is reproduced as under:- "118. Presumption as to negotiable instruments of consideration.---Until the contrary is proved, the following presumptions shall be made:--
(a) of consideration; that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred, for consideration;
(b) as to date; that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance; that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer; that every transfer of a negotiable instrument was made before its maturity;
(e) as to order of endorsement; that the endorsements appearing upon a negotiable instrument were made in the order in which they appear thereon; U) as to stamp; that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course; that the holder of a negotiable instrument is a holder in due course; provided that, where instrument has been obtained from its lawful owner, or from any person in lawful custody thereof by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him."
Since, the amount of 'sale price' and purchase price mutually agreed between the parties have not been denied by the defendants as the mark-up amount in the sum of Rs.10,936,000 [i.e. Rs.50,936,000 (-) Rs.40,000,000] also remained un-disputed.
11. As far as the defendants Nos.2 to 4 are concerned, they being guarantors are also jointly and severally liable. It is significant to note, that the liability of the guarantors is co-extensive with that of the Principal Debtor, unless it is otherwise provided by the contract of guarantee itself. Moreover, anything done or promise made for the benefit of the principal debtor is sufficient consideration as far as the surety is concerned. Manifestly a contract of guarantee is a contract to perform the promise or discharge the liability of third person in case of default. Being relevant, I would like to reproduce herein, sections 126, 127 and 128 of the Contract Act, 1872 [Act No.IX of 1872] respectively, which read as under:- "(a)
126. "Contract of guarantee", "surety", "principal debtor" and "creditor". A "contract of guarantee" is a contract to perform the promise, or discharge the liability, of a third person in case of his default. The person who gives the guarantee is called the "surety"; the persons in respect of whose default the guarantee is given is called the "principal debtor" and the person to whom the guarantee is given is called the "creditor". A guarantee may be either oral or written.
(b)
127. Consideration for guarantee. Anything done, or any promise made, for the benefit of the principal debtor may be a sufficient consideration to the surety for giving the guarantee.
(a) B requests A to sell and deliver to him goods on credit. A agrees to do so, provided C will guarantee the payment of the price of the goods. C promises to guarantee the payment to consideration A's promise to deliver the goods. This is a sufficient consideration for C's promise.
(b) A sells and delivers goods to B. C afterwards requests A to forbear to sue B for the debt for a year, and promises that if he does so. C will pay for them in default of payment by B. A agrees to forbear as requested. This is a sufficient consideration for C's promise.
(c) A sells and delivers goods to B. C afterwards, without consideration, agrees to pay for them in default of B. The agreement is void.
(c)
128. Surety's liability. The liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract."
12. On the guarantors' liability[ies], reliance can be placed on the case of Messrs Huffaz Seamlen Pipe Industries Ltd. And 2 others v. Messrs Security Leasing Corporation Ltd. [2002 SCM R 1419], wherein while, dilating upon the liability[ies] of the guarantors it has been observed as follows:- "17. As regards contract of guarantee, rights and liabilities of the parties are to be determined with reference to terms and conditions of the guarantees. The guarantors cannot take advantage of any condition incorporated in the principal agreement, unless the same is reflected in a contract of guarantee executed by the guarantors, as liabilities of the principal and of guarantors though arising from the same transaction, are distinct. In an action by a creditor against a guarantor the former is only required to establish the liability of the principal debtor and occurrence of default or breach of the terms leading to the liability. The guarantor cannot resort to technicalities to defeat the claim of the creditor. Even where the contract becomes unenforceable against the principal debtor, yet, the guarantor would still be liable for the surety he had executed, unless there was any covenant to the contrary."
13. In the case in hand, the certified statement of account has been produced by 'P.W.1' in his evidence in 'Ex parte proof' as Exh. 'P.W.1/18'. In view of such production of statement of account and non-cross-examination of 'P.W.1', the objection of Barrister Habibur Rehman loses its importance, if any. Regarding this aspect of the matter, I would like to refer some of the relevant observations from the case of Bela Automotives Ltd. v. Habib Bank Ltd. [2008 CLD 778], which runs as follows:- ... "In the present case, the legislature, itself has made a distinction between the provision of section 9 and section 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001. Under section 9, no consequences have been provided in case of non-filing of statement of account along with the memo. Of plaint but in section 10 consequences have been provided in case of failure the strict compliances thereof. There is no clear indication as to the manner in which such a statement of account is to be filed. The manner or mode of filing of statement of account is a matter of procedural formality as no consequences have been provided for failure of strict compliance of section 9(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001"...
14. Under section 2[c] of F.I.O., 2001 the defendants Nos.2 to 4 in their capacities as guarantors fall within the meaning of customers as such they are also liable to pay the outstanding dues of defendant No.1, on whose behalf they stood guarantors. Moreover, inter alia performance of an undertaking or fulfillment of a promise relating to repayment of finance or payment of any other amounts regarding finance is an obligation in terms of section 2[c] of F.I.O., 2001.
15. For the foregoing discussion, the instant suit is decreed against the defendants jointly and severally in the sum of Rs.50.936 million plus cost of funds from the institution of suit i.e. Dated 31-1- 2012. Besides, the suit is also decreed for sale of pledged shares, as prayed, with cost.
16. In view of the above, while taking the statement dated 20-4-2015 on record, C.M.A. No.6320 of 2015 stands dismissed as having become infructuous.