' KHADIM HUSSAIN M. SHAIKH, J.-Through the instant first appeal filed under section 22 of Financial Institutions (Recovery of Finances) Ordinance, XLVI of 2001, the appellants have called in question judgment and decree dated 21.10.2010, passed by the learned Banking Court-I, Hyderabad decreeing Suit No,05/2008 with costs and the cost of funds of the Financial Institution as certified by the State Bank of Pakistan, disallowing the liquidated damages.
2. Briefly the facts of the case are that on 07.02.2008 National Bank of Pakistan filed Suit No,07 of 2008 against the appellants for recovery of Rs,85,65,784/- along with 20% liquidated damages, cost, cost of funds and other expenses in the learned Banking Court-I, Hyderabad. The case of the plaintiff-bank was that at the request of the defendant No,1 the plaintiff-bank granted a finance loan of Rs,80,00,000/- on mark-up basis with buy back price of Rs,99,14,740/- to be repaid/adjusted on or before 30.06.2007 in lump sum /installments, vide sanction advice dated 04.08.2006 to the defendant No,1, and whereas the defendant No,2 stood as guarantor. The defendants executed various loan, documents which included a demand promissory note, letter of guarantee and letter of authorization coupled with security of guarantee given by the defendant No,2, mortgaging their properties in favour of the plaintiff-bank and thereby the loan facilities availed of by the defendants stood secured, as the defendants committed default in making repayment of loan and an amount of Rs,85,65,784/- fell due against the defendants as on 31.12.2007, hence the plaintiff- bank filed the above suit. The defendants in response to the summons, issued through all four modes prescribed under the Ordinance, including publication in Urdu 'daily newspaper "Jang" and English daily newspaper "The Nation" Karachi, both dated 28.2.2008, appeared in the learned Banking Court-I, Hyderabad and filed application dated 29.3.2008 under section 10 of Financial Institutions (Recovery of Finances) Ordinance (XLVI) of 2001) and sought for leave to defend the suit, which was dismissed by the learned Banking Court vide order dated 12.8.2010 and ultimately the suit was decreed in favour of the plaintiff-bank and against the defendants jointly and severally for Rs,79,80,802/- (as per fresh statement of account filed by the plaintiff-bank on 21.10.2010) with costs and the cost of funds of the Financial Institution for the period from the date of default till realization as certified by the State Bank of Pakistan, disallowing the liquidated damages vide judgment and decree dated 21.10.2010, passed by the learned Banking Court-I, Hyderabad, hence this appeal.
3. Mr. Imam Bux Baloch, the learned counsel for the appellants, has mainly contended that the respondent-bank had not complied with the mandatory requirements of section 9 of the Ordinance; the repayments made by the appellants were suppressed by the respondent-bank, per him, the same were not disclosed in the statement of account filed with the plaint and the appellants are not liable to pay the said repaid amount; he reiterating the grounds urged by the appellants in their application for leave to defend the suit filed before the Learned Banking Court, has further contended that the appellants had raised substantial questions of law and fact which required evidence for their resolution and, per him, unconditional leave to defend the suit ought to have been granted to the appellants. He, therefore, prays that the impugned-judgment and decree dated 21.10.2010, may be set-aside and the matter may be remanded to the learned Banking Court, by granting the appellants leave to defend the suit with directions to learned Banking Court to decide the suit after allowing the defendants/appellants to file their written statement and allowing the parties to adduce their evidence. He has placed his reliance on the cases of Messrs Shaz Packages and 3 others v. Messrs Bank Alfalah Limited (2011 CLD 790), Tariq Rafique Shaikh v. Citi Bank N.A. (2008 CLD 1252), Al-Hadayat Textile through Proprietor and 2 others v. Soneri Bank Limited (2003 CLD 105), Messrs Ravie Associate (Private) Limited through Director and 10 others v. Industrial Development Bank of Pakistan through Senior Vice-President (2005 CLD 393), Faysal Bank Limited v. Badin Board Mills and 6 others (2010 CLD 442), Sh. Muhammad Naeem and 3 others v. Habib Bank Limited, Karachi and 4 others (2003 CLD 606) and Z,arai Taraqiati Bank Limited through Manager v. Syed Furrakh Hussain Shah (2006 CLD 171).
4. The learned advocate for the respondent-bank has mainly contended that the plaintiff-bank had complied with the mandatory requirement of section 9 of the Ordinance and the statement of account filed with the plaint contained all the entries of aniounts in accordance with the provisions of the Bankers' Books Evidence Act, 1891; the defendants/appellants themselves had not complied with the mandatory requirements of section 10 of the Ordinance, as no requisite details regarding amount of loan availed by them, repayments made by them and the amount outstanding against them, were disclosed in their application for leave to defend the suit, per him, the learned Banking Court rightly decreed the suit vide impugned judgment and decree dated 21.10.2010, by dismissing their application for leave to defend the suit filed by the appellants/defendants, vide order dated 12.08.2010. He, therefore, prays that the appeal may be dismissed. He has placed his reliance on the cases of National Bank of Pakistan v. Messrs A.I. Brothers (Private) Limited and others (2007 CLD 1356), Industrial Development Bank of Pakistan, Karachi v. Messrs Zamco (Pvt.) Ltd. And 10 others (2007 CLD 217) and Apollo Textile Mills Ltd. And others v. Soneri Bank Ltd. (PLD 2012 Supreme Court 268).
5. We have heard the .Learned counsel for the parties and have gone through the material available on the record.
6. From the perusal of the plaint, it would be seen that in paragraph 15 thereof, the respondent- bank had clearly disclosed the details of finances, re-payments matte by the defendants and amount outstanding against the defendants and etc. As required under the provisions of section 9 of the Ordinance. Record further reveals that relevant documents were also filed by the respondent-bank along with the plaint in support of its claim. Thus, there was no default on the part of the respondent-bank in complying with the requirements of section 9 of the Ordinance. The objection raised by the learned advocate for the appellants in this context being mis-conceived is rejected.
7. A perusal of the defendants' application for leave to defend the Suit reveals that they have not complied with the mandatory requirements of subsections (4) and (5) of section 10 of the Ordinance. Under subsection (4) ibid, the defendants were required to disclose (a) the amount of finance availed by them from the plaintiff-bank, (b) the amounts paid by them to the plaintiff- bank and the dates of payments, (c) the amount of finance and other amounts relating to the finance payable by them to the plaintiff-bank up to the date of institution of the Suit, and (d) the amount, if any, which they dispute as payable to the plaintiff-bank; and the facts in support thereof. None of the above particulars have been disclosed by the defendants in their application for leave to defend. Under subsection (5) ibid, the defendants were required to file all such documents along with their application which, in their opinion, support the purported substantial questions of law and fact allegedly raised by them. The implications for not complying with the mandatory requirements of subsections (4) and (5) ibid, are specifically provided in subsection (6) of section 10 of the Ordinance, which provides that an application for leave to defend which does not comply with the requirements of any of subsections (3), (4) and/or (5) of section 10 ibid, shall be rejected unless the defendant discloses therein sufficient cause for his inability to comply with any such requirement. The defendants have not only failed in fulfilling the mandatory requirements of subsections (4) and (5) ibid, but they have also failed to disclose any sufficient cause for their inability in complying with the same. The effect and implications for not complying with the mandatory provision of subsections (4) and (5) ibid, have been discussed in detail by the honourable Supreme Court in the most recent authoritative pronouncement in the case of Apollo Textile Mills Ltd. And others v. Soneri Bank Ltd., (PLD 2012 Supreme Court 268 = 2012 CLD 337). Some of the paragraphs of the cited authority, which are relevant for the purposes of deciding the instant appeal, are reproduced here for convenience and ready reference:- "14. The plaintiff institution and the defending 'customer' have identical statutory responsibility respectively under sections 9(3) and 10(4) to plead and state clearly and particularly the finances availed by a defendant, repayments made by him, the dates thereof and the amounts of finance repayable by such defendant who has also been saddled with the additional responsibility to also specify the amounts disputed by him.
'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 lead in answer in the leave petition his accounts as well as the acts and amount disputed by him as repayable to the plaintiff.
15. The rationale of the schematic discipline of Ordinance of 2001 is evident. A banking suit is normally as suit on Accounts which are duly ledgered and maintained compulsorily in the books of Accounts under the prescribed principles/standards of Accounting in terms of the laws, rules and Banking practices. As such instead of leaving it to the option of the parties to make general assertions on Accounts, the Ordinance binds both the sides to be absolutely specific on accounts.
The parties to a suit have been obliged equally to definitely plead and to specifically state their respective accounts.
16. To scope of the suit thus becomes well defined. The controversies are confined to the claimed and/or the disputed numbers, facts and reasons thereof. Unnecessary controversial details, the evidence thereto and the time of the trial, are curtailed. The trial would remain within the laid out parametrical scope of the claimed and the disputed accounts.
17..............
18. The Financial Institutions (Recovery of Finances) Ordinance, 2001 i.e, is a special law. It provides a special procedure for the banking suits. The provisions of the Ordinance, 2001 under section 4 thereof override all other laws. The provisions contained in the said Sections require strict compliance. Noncompliance therewith attract as above referred, consequences of rejection of leave petition along with decree etc. Etc.
19. In this case, the application for leave to defend the suit filed by the petitioners did not fulfill the requirements of section 10(3), (4) and (5) of the Financial Institutions (Recovery of Finances)
Ordinance XLVI of 2001. It was admittedly not in conformity with the said mandatory provisions. No cause or the reason for inability to comply with said requirements was shown. Instead it was expressly admitted by the learned Senior Advocate Supreme Court for the petitioners before the High Court and also before us that the petitioners failed to fulfil the mandates of the said provisions and did not plead the required Accounts. The petitioners/defendants thus attracted the prescribed legal consequences of:-
(i) rejection of their leave petition under section 10(6);
(ii) non-entitlement under section 10(1) to defend the suit for not obtaining leave to defend the suit in terms provided for in section 10;
(iii) the allegations of fact in the plaint were deemed under section 10(1) to have been admitted by them; and
(iv) a judgment and decree against them and. In favour of the plaintiff bank under section 10(1) and (II) ibid"
(Emphasis added)
8. We have noticed that no proof whatsoever was filed by the appellants along with their application for leave to defend in support of their assertions that some repayments allegedly made by them had been "suppressed by the respondent-bank, or that they were not liable to pay the amount claimed in the Suit by the respondent-bank, therefore, there was no material before the learned Banking Court that could create any doubt with regard to the claim of the respondent- bank, and as such there was no question of recording evidence. Before us also, there is nothing on record to support the above assertions of the learned advocate for the appellants. In the absence of any proof of the alleged repayments, the contention of the learned counsel for the appellants .Regarding suppressing the purported repayments by the respondent-bank, having no basis, is untenable.
9. On a query it was frankly conceded by the learned counsel for the appellants that the appellants did not comply with the mandatory requirements of section 10 of ibid in their application for leave to defend the suit and non-compliance therewith could attract consequences of rejection of the application for leave to defend along with decree etc. Etc. In view of the law by the honourable Supreme Court in the case of Apollo Textile Mills Ltd. (supra).
10. Record further reflects that the categorical admissions were made by the appellants-that the loan facilities were availed by them and their liability towards the outstanding amount of the respondent-bank has also not been denied. Moreover, no specific entry in the statement of account was pointed out by the appellants in their application for leave to defend in order to make the respondent's claim doubtful. Therefore, no substantial question of law or fact existed before the Banking Court requiring evidence, and as such there was no occasion for granting leave to defend the suit to the appellants. It is well-settled that if the defendant-admits availing of the facility and liability to pay is not denied, the defendants would be deemed to have failed to make out a case for the grant of leave to defend.
11. The views expressed by us hereinabove are also supported by the decisions of the .Superior Courts. Reference may be made to case of Siddique Woolen Mills and others v. Allied Bank of Pakistan, (2003 CLD 1033), wherein the honourable Supreme Court was pleased to hold that ' since the petitioners in the said case had not denied their liability towards the respondent, therefore, the trial court had rightly passed the impugned order; in case of Messrs Aima Industries (Pvt.) Ltd. And others v. Allied Bank of Pakistan Ltd., (2003 CLD 1770), a learned Division Bench of Peshawar High Court has held that the defendant was not able to point out any wrong or bogus entry in the statement of account creating doubt in one's mind regarding its authenticity and the appeal filed against the judgment of the trial Court, decreeing the suit of plaintiff-bank, was dismissed; in case of Travel Kings (Pvt.) Limited through Chief Executive and 4 others v. Union Bank Limited and 2 others, (2004 CLD 460), the decree passed by the Banking Court was upheld by a learned Division Bench of Lahore High Court as the defendants had admitted the availing of loan facilities; in case of Tariq Javed and another v. National Bank of Pakistan (2004 CLD 838), a learned Division Bench of Lahore High Court has held that bare assertion of incorrectness of statement of accounts can in no way be, given any weight or made basis for grant of leave to defend the suit; and, in case of National Bank of Pakistan through Zonal Chief and others v. Messrs Power Textile Industries Ltd. Through Chief Executive and others (2004 CLD 1239) a learned Division Bench of Lahore High Court, has held that:- "5.....the allegations that the documents ore fabricated and manufactured, are bald allegations and also contradict the case of the appellant, because on the one hand, they have not denied the availing of the facilities and also claim to have paid certain amounts towards the discharge of their liability, but on the other hand, have denied the documents in vague and general terms by not raising any specific plea qua the fabrication or forgery of the particular documents. They have also not denied to the execution of the guarantees and the mortgage documents, executed in favour of the plaintiff-Bank."
12. The case laws relied upon by the learned counsel for the appellants being distinguishable on facts and circumstances of the case in hand, are not attracted to this case and all of them are also prior to the law laid down by the honourable Supreme Court in case of Apollo Textile Mills Ltd.
(supra).
13. In view of what has been discussed above and the law laid down by the honourable Supreme Court and the decisions of the Superior Courts discussed above, it is our considered view that the appellants had failed in raising any substantial question of law, or fact, and, therefore, the Banking Court was fully justified in dismissing their application for leave to defend and decreeing the Suit against them, and as such, the impugned judgment and decree do not require any interference by this Court and the instant appeal filed by the appellants is liable to be dismissed.
14. Foregoing are the reasons of the short order announced by us on 24.02.2016, whereby this appeal and the listed application were dismissed with no order as to costs.