SHEZADA MAZHAR, J.---C.O.S. 129 of 2010 has been filed by plaintiff bank against defendants Nos. 1 to 8 under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, (Ordinance) for recover of Rs,78,719,271/10. Plaintiff/bank sanctioned and disbursed three finance facilities to Defendant No,1 company in the year 2004; Running Finance - I Rs,20.00 Million, Running Finance - II Rs,25.00 Million and Cash Finance Rs,20 Million.
2. The said facilities were renewed/extended again in the year 2005. In order to secure the finance facilities defendant company executed number of documents as mentioned in the plaint including agreements for finance facility, promissory note, letter of continuity and letter of hypothecation etc. Whereas Defendants Nos.2 to 8 executed personal guarantees to secure the finance facilities extended/disbursed to defendant No,1 .
3. Pursuant to Notices issued to defendants, defendants Nos. 1 to 4 entered appearance and filed PLA No, 188-B of 2010. None entered appearance on behalf of Defendants Nos.5 to 8 and therefore the said defendants were proceeded ex parte vide order dated 19.04.2011. However, later defendant No,5 filed C.M. No, 341-B of 2011 for setting aside ex parte proceeding order dated 19.04.2011 under Order IX, Rule 13, C.P.C. The said application was allowed on the statement of the plaintiff bank counsel vide order dated 19.12.2011. Even after the setting aside ex parte order neither any application for leave to defend was filed on behalf of the defendant No,5 nor any counsel appeared on his behalf therefore he was again proceeded ex parte vide order dated 19.09.2013.
4. On 11.03.2014 arguments on the PLA filed by the defendants Nos. 1 to 4 were heard and with the consent of the learned counsel for the parties the matter was referred to amicus curiae for determination of outstanding amount after deduction of mark-up charged beyond period of agreement. The said report was filed by the amicus curiae on 27.05.2014 however no objections were filed in writing by any of the parties. At the time of arguments learned counsel for the defendants have raised objection that the amount outstanding have not been calculated properly by the amicus curiae. Perusal of the report of the learned amicus curiae revels that an amount of Rs, 37,278,555/- have been charged by the plaintiff bank beyond the contract period and the same was deducted from each of the facility. The detail of mark-up charged beyond expiry period of relevant agreements and the. Total outstanding amount in each of the facility is given in the executive summary of the report of learned amicus curiae which is reproduced hereunder:-- Executive Summary I. Mark-up charged beyond expiry period of relevant agreements and not covered by any agreement is Rs, 37,278,555. Financing facility wise detail is as follows: Nature of Facility Mark-up Charged beyond expiry period and without agreement (Rs,)
Running Finance-I 01,660,227 Cash Finance 10,940,321 Running Finance-II 15,678,007 Total 37,278,555/-
2. Total outstanding amount after deduction of mark-up charged beyond expiry period of relevant agreements and not covered by any agreement is Rs, 41,440,716/-. Outstanding amount against each finance facility availed by the defendant company is as under: Running Finance-I (Rs,)Cash Finance (Rs,)Running Finance-IITotal (Rs,)
Principal Outstanding (A)19,656,95314,035,00025,000,00058,691,953 Outstanding Mark-up (B)6,361,9805,502,4158,162,92320,027,318 Total Amount (as per suit filed)
C = (A + B)26,018,93319,537,41533,162,92378,-719,271 Mark-up Charged beyond Expiry period Agreement (D)and without 10,660,22710,940,32115,678,00737,278,555 Total Outstanding (C - D)15,358,7068,597,09417,484,91641,440,716 .
5. Perusal of the above chart reveals that amounts have been calculated as per the direction of this Court contained in order dated 11.03.2014. Further no objections were raised in writing by any of the parties, therefore, the objection of the defendants on the report is of no consideration. Learned counsel for the defendants also raised certain other objection on the institution of suit as well as change of name of the bank. Although in presence of admission of the defendants with regard to availing of the finance facilities and the report of amicus curiae regarding the outstanding amount any objection raised by the defendants in their application for leave to defend is of no consideration, however, as the learned counsel for the defendants is of the view that these objections go to the root of the suit therefore they are required to be dealt with by this court.
6. With regard to the different objections as raised, by the learned counsel for the defendants, it is observed that in the title of the plaint, plaintiff name has been mentioned as Silk Bank Limited (formally Saudi Pak Commercial Bank Limited). Further under section 40(3) of the Companies Ordnance 1984 change of name of a company has no effect on the rights or obligations of the said company or render defective any legal proceedings by or against the said company. Therefore the claim of the plaintiff bank can be entertained on the basis of documents executed by the defendants in favour of the Saudi Pak Commercial Bank Limited and placed on record being the successor company of the said bank. The objection is of no significance.
7. With regard to the objection of defective mortgage by way of entries in the revenue record, suffice it to say that the deposit of title deed has been created along with the token registered mortgage which has not been objected too by the defendants. Further, under section 58(f) of the Transfer of Property Act 1882 a mortgage in favour of a banking company can be created through entries in the revenue record. Even otherwise against the mortgaged security defendant Company has admittedly obtained finance without raising any objection to the validity of the mortgage before filing of the suit for recovery. Therefore this objection is of no consideration.
8. In view of above mentioned facts and reasons, no case of grant of leave to defend the suit is made out and therefore the application for leave to defend the suit filed by the defendants Nos.1 to 4 is hereby dismissed and the suit of the plaintiff bank is hereby decreed in favour of the plaintiff bank and against defendants 1 to 8 for the recovery of Rs,41,440,716/- including mark-up. The plaintiff/bank is also entitled to recover cost of suit as well as cost of funds as determined by the State Bank of Pakistan under section 3 of the Financial Institutions (Recovery of Finances)
Ordinance, 2001 from the date of default and till its realization. Decretal amount is liable to be recovered through sale of mortgage/charged properties as well as the properties owned by defendants Nos.1 to 8 as well as from the persons of defendants Nos.1 to 8.