SHAMS MEHMOOD MIRZA, J.---This is a suit filed by the plaintiff bank for recovery of Rs.195,314,002.16 under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (the "Ordinance") against defendants Nos.1 to 7.
2. Brief facts of the case as set up by the plaintiff bank in its plaint are that the plaintiff bank allowed various working capital finance facilities to the defendant No.1 company as detailed below through its offer letters dated 20-4-2005 and 7-7-2005.
(a) FAPC-G/ERF-I/ERF-II/FE-25 up to a limit Rs. 175.000 Million;
(b) FBP up to Rs. 75.000 Million;
(c) Demand Finance facility up to Rs.100.000 Million; and
(d) sight LC up to Rs.25.000 Million
3. Defendant No.1 company executed finance agreements and demand promissory notes in respect of the finance facilities on 20-4-2005 and 2-8-2005. Defendants Nos. 2 to 6 executed their personal guarantees in favour of the plaintiff bank. Defendant No. 1 also mortgaged/ hypothecated its properties with the plaintiff bank, the details whereof are supplied in paragraph 6 of the plaint.
Similarly, defendant No. 7 also mortgaged its properties in favour of the plaintiff bank.
4. Defendant No.1 Company availed the finance facilities mentioned above from the plaintiff Bank.
As the defendants committed default of their obligations in terms of repayment of their dues after expiry of the finance facilities, the plaintiff bank was constrained to file the present suit. It is stated in the plaint that an amount of Rs.195,314,002.16 is due against defendants Nos. 1 to 7 in the following manner: FE 25-I Principal: Rs. 12,811,850.00 Mark up: Rs. 547,955.76 FE 25-II Mark up: Rs.886,830.80 Principal: Rs.6,025,045 .86 ERF-II Principal: Rs.46,000,000.00 Mark up: Rs.5,958,512.30 ERF-II Principal: Rs.30,000,000.00 Mark up: Rs.4,032,583.57 ERF-II Principal: Rs.24,000,000.00 Mark up: Rs.3,719,907.93 FAPC Principal: Rs.10,000,000.00 Mark up: Rs. 1,566,852.06 FAPC Principal: Rs.10,000,000.00 Mark up: Rs.1,566,852.06 FAPC Principal: Rs.33,000,000.00 Mark up: Rs.5,170,611.77
5. In response to the summons issued by this Court under section 9(5) of the Ordinance, defendants Nos. 1 to 7 filed their application for leave to defend (PLA) controverting the allegations of the plaintiff bank.
6. The learned counsel for the defendants has confined his argument by making four submissions; that the statements of accounts prepared by the plaintiff bank are not in accordance with law; that the suit was filed by an unauthorized person; that additional documents were filed with the replication which warrant grant of unconditional leave to defend the suit and; that by virtue of the cross suit filed by defendant No. 1 company wherein leave to defend was granted to the plaintiff bank, defendant No. 1 is also entitled to the grant of unconditional leave to defend the suit. The learned counsel for the defendants also filed written arguments along with the relevant case-law in support of his submissions.
7. In regard to the statements of accounts relied upon by the plaintiff ;bank, it was argued that these are not statements of accounts but merely certificates on letter heads of the plaintiff bank. It was also stated that the statements of accounts do not qualify the criteria laid down in section 2(8) of the Bankers' Books Evidence Act, 1891. In order to further elucidate his point, the learned counsel for the defendants submitted that the statements of accounts do not contain any date and bank's stamp was also not affixed thereon. It was also submitted that the statement of account was signed by Muhammad Mursaleen Rao as branch manager but there is no proof annexed with the plaint that Muhammad Mursaleen Rao was the branch manager. In this regard, the learned counsel for the defendants has relied upon Mashreq Bank PSC v. Farooq Habib Textile Mills Limited 2007 CLD 320, National Bank of Pakistan v. Mujahid Nawaz Cotton Ginners 2007 CLD 678, Pakistan Kuwait Investment Co. (Pvt.) Limited v. Active Apparels International 2012 CLD 1036 and Soneri Bank Limited v. Compass Trading Corporation (Pvt.) Limited 2012 CLD 1302.
8. A cursory perusal of the statements of accounts annexed with the plaint shows that the said statements of accounts have been prepared in accordance with law. What should be the format of a statement of account is not stipulated in the Bankers' Books Evidence Act, 1891 or any other law. It is, however, clear that a statement of account must contain the details of the debits and the credits with dates and should also give the particulars of a transaction/entry, if necessary. The statements of accounts filed with the plaint contain all the relevant details of the entries of the account that are the subject matter of the present suit and appear to conform to the requirements stipulated in section 2(8) of the Banker's Books Evidence Act, 1891. The description and nature of the account(s) also appears on each statement of account. The fact that the statements of accounts are printed on the letter head of the plaintiff bank is also not fatal as there does not appear to be any law which states that a statement of account cannot be printed on the letter head of a bank.
The learned counsel for the defendants has not disputed a single entry in the said statements of accounts but has challenged the form thereof. The precedents relied upon by the learned counsel for the defendants in regard to the statements of accounts are distinguishable. In Mashreq Bank's case, leave to defend the suit was granted and evidence was recorded but the statement of account was not produced in evidence. It was, therefore, held in the said case that the statement of account had no evidentiary value and also that the statement of account was merely certificate of balance on the letter head of the bank and did not contain the element of debit and credit or balance. As stated earlier, in the present case, the statements of accounts duly contain the debit and credit entries and also the balances. In Mujahid Nawaz Cotton Ginners case, a Division Bench of this Court on examination of the certificate at the foot of the statement of account found out that it did not comply with the requirements of section 2(8) of the Bankers' Books Evidence Act, 1891 and as such held that the statement of account could not be treated as prima facie evidence of the entries contained therein. The ratio of this case is also not applicable to the present case as the certificate available at the foot of each statement of account is compliant with section 2(8) of the Bankers' Books Evidence Act, 1891. In Active Apparels International as well as Compass Trading Corporation cases (both decided by the same learned Judge), the objection was with regard to the designation of the officer who signed the statement of account and it was held that the statement of account was filed by a person, who did not fit the designations mentioned in section 2(8) of the Bankers' Books Evidence Act, 1891. However, in the present suit, the statements of accounts have been signed by Muhammad Mursaleen Rao who is stated to be the branch manager. The learned counsel for, the defendants has objected that there is no document available on the record to show that Muhammad Mursaleen Rao was the branch manager. This objection is misconceived and it also does not constitute a denial that Muhammad Mursaleen Rao is the branch manager. Moreover, this objection cannot be termed as a substantial question of fact warranting grant of leave to defend the suit more so when the defendants have not disputed a single entry of the statements of accounts. The objections of the defendants on the statements of accounts have no substance and are accordingly repelled.
9. The learned counsel for the defendants also argued that the suit has not competently been filed on behalf of the plaintiff bank. It is submitted by the learned counsel for the defendants that suit is filed by two attorneys of the plaintiff bank namely Iftikhar-ud-Din and Waseem Jawaid having power of attorneys executed in their favour by the plaintiff bank. It is argued that in the absence of the board resolution and the memorandum and articles of association of the plaintiff bank, it cannot be determined that the two power of attorneys were validly executed in favour of the afore- mentioned persons. Section 9 of the Ordinance empowers three categories of persons to file a suit
(a) the branch manager (b) any other officer authorized by a power of attorney and (c) any other officer who is otherwise authorized by a financial institution. In the present case, one of the signatories of the plaint (Waseem Jawaid) is the relationship manager and thus the requirement of section 9 of the Ordinance for a valid institution of suit stands satisfied. Even otherwise, section 9 of the Ordinance, itself prescribes that an attorney holder can file a suit on behalf of the financial institution. It does not stipulate any other document to be appended with the plaint for demonstrating the attorney's authority to institute the suit and if such were the case, section 9 of the Ordinance would have required production of further documents other than the power of attorney to demonstrate the authorization of the person executing the power of attorney. The Ordinance being a special law, governs the competence of a person who can file a suit on behalf of Financial Institution. Section 9 of the Ordinance stipulates the description of the instrument (power of attorney) whereby authorization by a Financial Institution can be given to file a suit.
Therefore, any officer on behalf of Financial Institution who holds a power of attorney can file a suit on its behalf provided the power to file a suit is contained in the power of attorney. If, the attorney holder were to show the competency of the person executing the power of attorney in his favour, there would be no difference between the officers placed in categories (b) and (c) noted above. By the same token, there would not have been any need to create two categories of authorized persons other than the branch manager in section 9 of the Ordinance. It is only the officer placed in category (c) above, who is neither a branch manager nor the attorney holder, who needs to show due authorization on behalf of the financial institution to institute the recovery suit against a customer. The objection raised by the learned counsel for the defendants regarding invalid institution of the suit thus has no substance.
10. The next objection of the learned counsel for the defendants is that the plaintiff bank has appended additional documents including statements of accounts with its replication to support its case. According to the learned counsel for the defendants, a financial institution is bound to file all the relevant documents along with the plaint. It is stated that at the time of filing of the suit, these documents were not appended with the plaint and, therefore, the defendants did not get a chance to respond to the same in their PLA. In this regard, the learned counsel for the defendants has relied upon the judgments reported as Nusrat Textile Mills Limited v. United Bank Limited 2005 CLD 1421 and Soneri Bank Limited v. Classic Denim Mills (Pvt.) Limited and 3 others 2011 CLD 408 and order dated 4-6-2013 passed in C.O.S. No. 2 of 2011 and order dated 20-5-2013 passed in C.O.S. No. 3 of 2009. The precedents cited by the learned counsel for the defendants are again distinguishable from the facts of the present case. In Nusrat Textile Mills case, the respondent bank had submitted' additional documents for the first time in the appeal through an application, which is not the case in the present suit. Classic Denim Mills case was concerned with the bank filing an incomplete statement of account with the plaint and subsequently filing the complete statement of account, which again is not the case in the present proceedings. Order dated 4-6-2013 passed in C.O.S. No. 2 of 2011 and order dated 20-5-2013 passed in C.O.S. No. 3 of 2009 relied upon by the counsel for the defendants are short on detail and even otherwise do not qualify for a binding precedent having absolutely no discussion on the law relating to the subject matter of filing of additional documents.
The learned counsel for the plaintiff bank, on the other hand, submits that there is no bar in law for allowing filing of additional documents with the replication. It is further submitted that leave to defend is to be granted on the terms mentioned in section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and that those conditions are not rendered nugatory on the pretext of filing of additional documents by the plaintiff bank. The learned counsel for the plaintiff bank also argued that if some additional documents are subsequently filed by the plaintiff bank with its replication, the defendant can at best file an amended PLA as the leave proceedings are a pre-trial proceedings and that there is no bar in law in filing of the additional/amended PLA by a defendant.
The learned counsel for the plaintiff bank, however, also stressed that she does not press into service the documents so filed with the replication as according to her the statements of accounts originally filed with the plaint fulfill the requirements of law and that the amended statements of accounts were filed with the replication by way of abundant caution. Prima facie there is force in the arguments put forward by the learned counsel for the plaintiff bank regarding filing of the additional documents with the PLA and giving an opportunity to the defendant to file amended PLA.
However, as the learned counsel for the plaintiff has herself made a statement that she would not rely upon the documents submitted with the replication in support of her case, there is no need to give any definitive finding on this issue. As held earlier, the statements of accounts filed by the plaintiff bank with the suit fulfill the requirements of law.
11. The learned counsel for the defendants lastly argued that defendant No. 1 company has also instituted a suit against the plaintiff bank wherein unconditional leave to defend the suit was granted and evidence is in progress and that on the ratio of Zeeshan Energy Limited and others v.
Faysal Bank Limited 2014 CLD 696 defendant No.1 was entitled to the grant of unconditional leave to defend the present suit. The above judgment does not lay down an absolute rule that every time a customer files a suit against a financial institution and obtains leave to defend the suit therein, leave to defend the suit has to be granted to the customer in a suit instituted by a financial institution. In fact, the above judgment in paragraph 11 clearly stipulates "We may agree that mere filing of a suit by a borrower will not be sufficient as a general rule, for grant of leave to defend to a customer in a case filed by a Bank or financial institution." This statement was reiterated in paragraph 14 of the above judgment when, while referring to the judgment reported as Muhammad Khalid Butt v. United Bank Limited 2003 CLD 911 wherein it was held that in cross suits when leave to defend is granted in one suit, it ought to be granted in the other suit, it was stated "We may, however, state that this is not an absolute rule to be followed in all cases regardless of the specific facts of the case." The case of Zeeshan Energy Limited was decided by the Hon'ble Supreme Court on its own peculiar facts and leave to defend the suit was granted specifically in view of the substantial questions of fact which, in the opinion of the Hon'ble Supreme Court, the appellant had raised. There is, in the opinion of this Court, no force in the last submission made by the learned Counsel for the defendants.
12. The upshot of the above discussion is that defendants Nos.1 to 7 have been unable to raise any factual dispute qua their liability requiring recording of evidence. Their PLA is, therefore, dismissed.
The claim of the plaintiff is fully established from the documents and the statements of account available on the record. The suit of the plaintiff bank is, therefore, decreed against defendants Nos.1 to 7, jointly and severally, for a sum of Rs.1,95,314,002.16 together with the costs of funds in terms of section 3 of the Ordinance. The costs of the suit are also granted.