' SHAMS MEHMOOD MIRZA, J.---This is a suit filed under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (the Ordinance) seeking recovery of Rs,69,889,760.04 from the defendants on account of Running Finance facility granted to defendant No,1 and default by it of its payment obligations.
2. Brief facts of the case are that defendant No,1 availed a running finance facility in the sum of Rs,34.500 Million from the plaintiff bank on 04.01.2007. The tenure of the facility was one year. The said facility .Continued to be renewed on yearly basis with enhancement in its amount. Lastly the renewal of said facility took place on 10.01.2010 when it was granted for a sum of Rs,58.200 Million.
The details of the agreements and other securities executed by the defendants are mentioned in plaint. On account of the default committed by the defendants in repayment of the amounts under the said facility, a settlement agreement was executed between the parties on 21.02.2011 wherein defendant No,1 acknowledged its liability to pay a sum of Rs,48,455,866.03 as principal under the finance facility and a sum of Rs,1,400,000 as markup. Under the terms of the said agreement, defendant No,1 agreed to pay the principal amount in twenty two installments with the final installment being payable on or before 30.11.2014. It was further agreed that markup will continue to be charged on the principal amount. As security for repayment of the amounts under the settlement agreement, the defendants issued postdated cheques to the plaintiff bank. Only the cheques for the first three installments were cleared whereas the cheques for the rest of the installments when presented were dishonoured. As the defendants committed default in payment of the amounts under the aforementioned agreement, the plaintiff bank filed the present suit.
3. In pursuance of the summons issued by this Court, defendants Nos.1 to 4 entered appearance and filed their application for leave to defend bearing PLA No,220-B of 2013 whereas defendant No,5 filed PLA No,16-B of 2014.
4. It was stated that the statement of account was not certified in accordance with law; that the plaintiff could not have charged markup under agreement dated 21.02.2011; that the suit was not filed by a duly authorized person; that the personal guarantees of defendants Nos.2 to 4 have been discharged on account of rescheduling of dues through agreement dated 21.02.2011.
5. The defendants have not impugned any entry in the statement of the account for being illegal and unlawful. Be that as it may, the execution of agreement dated 21.02.2011 is admitted wherein the defendants have categorically admitted their liability and gave the time frame for its payment.
The perusal of the statement of account shows that it is a computer generated ledger in respect of which this Court has already held in C.O.S. No,41 of 2010 titled The Bank of Punjab V. Messrs Khan Unique etc. [2016 CLD 29] as under: ' In the present case, however, what the Plaintiff Bank has appended with the plaint are computer generated accounts. These accounts being the computer generated accounts/ledgers of the Plaintiff Bank, there was no need to put a certificate on the foot of such accounts as prescribed by section 2(8) of the Act and any officer of the Bank could sign the said accounts. As the original accounts have been appended with the suit, which constitute primary evidence, there is no need to file a certified copy thereof which should in turn comply with the requirements of section 2(8) of the Act. It may again be emphasized that the requirement of putting a certificate at the foot of the statement, by virtue of section 2(8) of the Act, is in regard to a copy of the accounts or an entry contained therein and not for the original accounts.
6. As regards the allegation that the plaintiff could not have charged markup under agreement dated 27.02.2011, the same has no basis in law. In this regard, the definition of "obligation" as mentioned in section 2(e)(i) of the Ordinance is relevant and clearly shows that fresh disbursement is not necessary for charging markup. Section 2(e)(i) of the Ordinance is reproduced hereunder.
(e) "obligation" includes
(i) any agreement for the repayment or extension of time in repayment of a finance or for its restructuring or renewal or for payment or extension of time in payment of any other amounts relating to a finance or liquidated damages. In Habib Bank Limited v. Service Fabrics Limited etc. 2004 CLD 1117, the scope of renewal/rescheduling/restructuring finance facilities was discussed with specific reference to section 2(e) of the Ordinance and it was held as follows.
' Renewal/rescheduling/restructuring of financial facilities only ensues upon default non-payment, delayed payment or inability, in payment of outstanding liability by a customer who normally seeks such concession upon admission and determination of liability. By soliciting rescheduling or, restructuring, as the case may be, a customer, in essence, either requests postponement of repayment of a finance on renewed terms as agreed between the parties or asks for reorganization/refurbishing of ' financial basis of a finance and its liquidation. By approving rescheduling/restructuring/renewal of a financial facility, the bank forgoes its immediate right of recovery and enforcement of securities against the customer. The effect of rescheduling, restructuring and renewal of finance facility is mutually agreed by the parties to absorb by future interest, mark-up charges or commissions till the agreed date of liquidation of liability as has been done in the present compromise decree. Rescheduling, restructuring and renewal is also thus a facility or accommodation granted by the bank to a customer. This facility has been recognized as an "Obligation" defined in section 2(e) of Financial Institutions (Recovery of Finances) Ordinance, 2001.
' The ratio of above judgment clearly shows that a financial Institution while granting extension in time for payment of finance can charge markup for the said period.
7. The examination of the PLA shows that the defendants have not complied with the requirements of section 10 of the Ordinance. Section 10 of the Ordinance by its terms imposes a mandatory requirement on the defendant to state all the particulars mentioned in its subsection (4) and to append all the necessary documents as mentioned in its subsection (5). Failure to meet the requirements of section 10(4) and (5) of the Ordinance by a defendant results in dismissal of his PLA (see Appollo Textile Mills Limited v. Soneri Bank Limited 2012 CLD 337). It was also held in the said judgment that ' A defending customer is thus obliged to put in a definite response to the banks accounting and has under sections 10(3) and (4) to compulsorily plead in answer in the leave petition his accounts as well as the facts and amounts disputed by him as repayable to the plaintiff.
' The PLA filed by defendant No,5 is time barred and is liable to be dismissed on this score alone.
The PLA filed by defendants Nos.1 to 4 is not at all compliant of section 10(4) of the Ordinance and as such in terms of section 10(6) of the Ordinance is liable to be rejected. The consequence of such rejection of PLA is also spelt out in section 10(11) of the Ordinance, which clearly states that on such rejection the Banking Court shall forthwith pass judgment and decree in favour of the plaintiff. A similar consequence is also provided in section 10(1) of the Ordinance which states that dismissal of the PLA means that all the allegations made in the plaint shall be deemed to be accepted and the banking court is obliged to pass a decree thereon.
8. The suit has been filed by the plaintiff bank through Muhammad Khuram Shahzad Assistant Vice President whose power of attorney is available on record. Section 9 of the Ordinance empowers three categories of persons to file a suit (a) the branch manager (b) an officer authorized by a power of attorney and (c) an officer who is otherwise authorized by a financial institution. It is quite clear that an officer of a financial institution who holds a power of attorney in his favour need not append anything else other than the said power of attorney to demonstrate his authority to institute the suit under section 9 of the Ordinance. Had it not been so, section 9 of the Ordinance would have required production of further documents other than the power of attorney by the attorney holder to demonstrate the authorization of the person executing the power of attorney.
The suit of the plaintiff bank has, thus, competently been filed.
9. It was also contended that the guarantees executed by defendants Nos.2 to 4 have been discharged on account of rescheduling of the dues through agreement dated 21.02.2011. The plaintiff bank has relied upon the guarantees executed by the defendants Nos .2 to 5 from time to time. The perusal of the said guarantees show that these are by their terms continuing guarantees.
The nature and scope of such continuing guarantees was exhaustively dealt by a learned Division Bench judgment of this Court reported as Mian Aftab A. Sheikh etc. v. Messrs Trust Leasing Corporation Limited and another 2003 CLD 702 where in it was held as under: .... If variation or composition of the loan or time etc. As to its repayment was allowed by the creditor to the borrower and consent/assent in advance thereto was given by the guarantor in the letter of guarantee, subsequent to the date of guarantee, such variation, composition, extension, charge or indulgence being within the contemplation of the parties at the time of execution of guarantee did not effect discharge of the surety/guarantee from obligations under the guarantee.
And as such surety continued to be bound by the terms of the guarantee despite moratorium, enlargement of time, composition and variations between the creditor and principal borrower.
' The contention of the learned counsel for the defendants, in view of the ratio of the above judgment, has no force.
10. The defendants have failed to raise any dispute with regard to their liability. As the defendants have unequivocally admitted execution of agreement dated 21.02.2011 which contains their admission of liability, they are estopped from challenging any of the amounts prior to the execution of the said agreement. Having failed to raise any dispute on facts, the applications for leave to defend filed by the defendants are dismissed. The suit of the plaintiff is decreed in its favour and against the defendants, jointly and severely, in the sum of Rs,69,889,760.04 together with costs of funds as contemplated by section 3 of the Ordinance. The costs of the suit are also granted.