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, 162,771,755.17 from the defendants on account of a finance facilities granted to defendant No,1 and default by it of its payment obligations.
2. Brief facts of the case are that the plaintiff granted demand finance (DF-I) facility of Rs,143.83 Million and demand finance (DF-H) for Rs,6.188 Million to defendant No,1 (Honda Point Private Limited) in terms of settlement agreement dated 24.09.2009. DF-I and DF-H facilities were granted as a result of restructuring of finance facilities granted earlier to M/s. Honda Point, a proprietorship concern. The previous finance facilities and the amounts due thereunder were duly acknowledged in settlement agreement dated 24.09.2009. In addition to the aforementioned agreement, the defendants also executed finance agreements, demand promissory notes, personal guarantees all dated 24.09.2009 in favour of the plaintiff bank defendant No,1 also mortgaged and hypothecated its properties with plaintiff bank and the requisite charges were also duly registered with the Securities and Exchange Commission of Pakistan. The requirements of section 9 of the Ordinance have been met with by the plaintiff in the plaint.
3. In pursuance of the summons issued by this Court, the defendants entered appearance.
Defendants Nos.1 and 3 filed their application to leave to defend bearing P.L.A. No,113/B of 2011 and defendant No,2 filed his application for leave to defend the suit bearing P.L.A. No,112-B of 2011.
4. It is stated by the defendants that the statement of account pertaining to defendant No,1 has not been appended with the suit and what has been appended is a statement of account of M/s. Honda point; that the plaintiff bank has charged mark-up for the periods 20.05.2008 to 23.08.2009 when there was no finance agreement between the parties; the suit has not been filed by a duly authorized person.
5. It is apparent from the record that defendant No, 1 through its letter dated 26.07.2009 approached the plaintiff bank for restructuring of the dues under the finance facilities obtained by M/s Honda Point as M/s. Honda Point had been converted from a proprietorship concern to a limited liability company. In this regard a board resolution of defendant No,1 dated 24.07.2009 was also submitted to the plaintiff bank. Similarly offer letter dated 17.09.2009 whereby DF-I and DF-II facilities were granted on account of restructuring was also duly accepted by defendant No,1. In the said offer letter, the change of status from M/s. Honda Point to Honda Point (Pvt.) Limited was also accepted. The repayment schedule of DF-I and DF-II facilities was also appended with the said offer letter, which was also signed by defendant No,
1. After the acceptance of the offer letter, defendant No,1 passed a resolution on 19.09.2009 wherein the grant of DF-1 and DF-II facilities was acknowledged and the chief executive was authorized to create exclusive charges on the fixed and current assets of defendant No, 1 in favour of the plaintiff bank as security for the repayment of DF-1 and DF-II facilities. In consideration for the grant of DF-I & DF-II facilities, a tripartite settlement agreement between Honda point, Honda Point (Pvt.) Limited and plaintiff bank was executed on 24.09.2009 in terms of which defendant No,1 admitted, acknowledged and accepted its liabilities and the parties also acknowledged the payment of Rs,2 Million as down payment and payment of Rs,6.188 Million towards mark-up. After the grant of DF-I and DF-II facilities and default by defendant No,1 of its payment obligations thereunder, defendant No,1 again approached the plaintiff bank through its letter dated 06.12.2010 for further rescheduling of the dues under the DF-1 and DF-I 1 facilities and for payment thereof through sale of mortgaged and other properties.
6. The precise objections taken by the defendants is that the change in the status of the account from proprietorship concern to private limited company was not brought about in the books of the banks. This objection has no valid basis in view of the acceptance of the liability by defendant No,1 as noted above. Defendant No,1 had executed settlement agreement dated 24.09.2009 whereunder it had assumed the liability of M/s Honda Point and categorically admitted its liability to pay the amounts of DF-1 and DF-II facilities. After the assumption of the liabilities, defendant No,1 mortgaged. Its properties with the plaintiff bank and also notified the said charges in the Securities and Exchange Commission of Pakistan. Having committed default in repayment of DF-1 and DF-II facilities, defendant No,1 approached the plaintiff bank with a proposal for repayment of its dues through sale of mortgaged and other properties. In the circumstances, the assumption, admission and acknowledgement of liabilities under DF-1 and DF-II facilities by defendant No,1 was complete and categorical and the fact that the name "Honda Point" is mentioned in the statement of account instead of Honda Point (Pvt.) Limited is of no importance. In the passing, it may be mentioned that offer letter dated 17.09.2009 was also addressed to M/s. Honda Point but was accepted and acknowledged by Honda Point (Pvt.) Limited, defendant No,1. The contention of learned counsel for the defendants is thus repelled.
7. The relationship of defendant No,1 together with other defendants qua the liabilities mentioned in this suit started from 24.09.2009 when a settlement agreement was executed between the parties and the liabilities stood restructured. Defendant No,1, therefore, cannot agitate any matter in regard to their liability prior to 24.09.2009 in the present suit. The objection that the plaintiff bank has charged mark-up without their being any finance agreement cannot be agitated in the present suit as defendant No,1 of its own free will and volition accepted offer letter dated 17.09.2009 and executed settlement agreement dated 24.09.2009, which documents contained the terms and conditions of restructuring and the repayment schedules thereof the claim of the plaintiff bank is, therefore, based on settlement agreement dated 24.09.2009 and the alleged dispute of liability prior to that cannot be raised in the present proceedings.
8. The last objection of the defendant that the suit has not been filed, by duly authorized person also has no basis. The suit has been instituted by Mehboob-ul-Hassan head SAMD Corporate whose power of attorney is available on the 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 is clear that the defendants have failed to raise any dispute regarding their liability that would warrant recording of evidence by granting leave to defend the suit. On the other hand, the claim of the plaintiff bank is duly substantiated by the settlement agreement dated 24.09.2009, offer letter dated 26.07.2009 and letter dated 06.12.2010 whereby further restructuring of dues was sought. In the result, the applications for leave to defend the suit filed by the defendants are dismissed and the suit of the plaintiff is decreed in its favour and against the defendants, jointly and severally, in the sum of Rs,162,771,755.17 together with costs of funds as contemplated by section 3 of the Ordinance. Costs of the suit are also granted.