AZIZ-UR-REHMAN, J.---The Plaintiff Financial Institution has filed the present suit under section 9 of F.I.O., 2001 [Ordinance No,XLVI of 2001] inter alia for recovery of Rs,64,483,436/- along with cost of funds, charges and cost till realization of the whole amount with the following prayers:- "1. For payment and recovery of sum Rs, 64,483,436/- together with future mark-up at the applicable rate.
2. For permanent injunction restraining the Defendants jointly and severally, their employees, agents or any other person acting for and on their behalf, directly and/or indirectly from selling, alienating, disposing of or creating third party rights in any manner whatsoever in respect of the Mortgaged Properties and Hypothecated Assets charged in favour of the Plaintiff.
3. For sale of the Mortgaged Properties as mentioned in paragraphs 5(i) to 5 (iii) above.
4. For sale of the Hypothecated Assets as mentioned in paragraph 5(iv) above.
5. For sale all movable and immovable assets and properties of the guarantors who have executed their personal guarantees as mentioned in paragraph 5(iv) above.
6. For payment of cost of funds in terms of section 3 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 on the aforesaid suit amount from the date of default till the date of realization.
7. The suit may kindly be decreed with all other costs, charges and expenses incurred by the Plaintiff during the pendency of the suit?
8. To grant any other relief(s) which the Hon'ble Court may deem fit and proper in the circumstances of the case."
2. On 30.10.2013, when the above suit came-up before the Court for hearing of 'leave to defend application' bearing C.M.A. No,4379/2013 being an application under section 10 of the F.I.O., 2001, then an 'interim decree for expressly admitted amount in the sum of Rs,48,000,000/- was passed.
The relevant operative part of order dated 30.10.2013 reads as follows:- "The learned counsel for the Plaintiff has invited my attention to paragraph 41 of this application, wherein the defendants have categorically admitted an amount of Rs, 48,000,000/- as the amount of finance payable by the defendants to the plaintiff He submits that, in view of this admission in clear and unequivocal terms, the claim of the plaintiff to the extent of the admitted amount does not require any inquiry. He prays that the Suit may be decreed to the extent of the said admitted amount. In view of the aforementioned admission by the defendants in clear and unequivocal terms, an interim decree is hereby passed against the defendants under section 11 of the Ordinance of 2001, read with section 7(1)(a) of the said Ordinance and Order XII, Rule 6, C.P.C.
For the remaining/disputed amount, this application will be heard on the next date of hearing."
[Underlining is mine].
3. On 21.4.2015, when the aforesaid 'leave to defend application' [C.M.A. 4379/2013] filed by the Defendants came-up before me, then I heard learned counsel for the parties and with their valuable assistance also gone through the available record before me minutely.
4. Mr. Behzad Haider, learned counsel for the Defendants contended in vehemence that under section 11 of the F.I.O., 2001 [Ordinance No,XLVI of 2001], the Banking Court at the time of passing an 'interim decree' is required to grant not only the Defendants' leave to defend the suit' but also to frame issues.
5. Besides, Mr. Behzad Haider learned counsel for the Defendants contended that since, the Plaintiff Financial Institution is claiming liquidated damages in the sum of Rs,8,471,024/- as such recording of evidence regarding liquidated damages is must, otherwise, the Bank would not be entitled for any liquidated damages as claimed in the suit. Under such circumstances, learned counsel for the Defendants contended that leave to defend the suit needs to be granted to the Defendants.
6. Conversely, learned counsel for the Plaintiff Financial Institution contended that upon the representation, guarantees of the Defendants Nos.2 and 3, the Plaintiff Financial Institution, admittedly, at the request of Defendant No,1 had extended finance facility in the sum of Rs,50 million for 'long term export oriented projects' [In short LTF-EOP] to the Defendant No,1 Company. In respect of such financial facility granted to and availed by the Defendant No,1, various documents including an agreement for Financing for short/medium/long term on mark-up basis dated 6th August, 2007 were voluntarily signed and executed by the Defendants.
7. Per the aforesaid agreement of financing, according to Mr. Aijaz Hussain Shirazi, learned counsel for the Plaintiff Financial Institution, the, 'sale price' and 'purchase price' have mutually been fixed/settled at Rs .50.000,00/- and Rs .65,321,075/- respectively, The Defendants, however, failed and/or avoided to repay the agreed 'purchase price' as per 'repayment schedule' annexed to the aforesaid agreement, as such they committed default.
8. Nonetheless, at the request of the Defendant No,1 the agreement of finance dated 06.8.2007 was amended mutually by First Supplemental to Agreement for Financing for short/medium/long term on Mark-up basis of 30th June, 2011 [in short FSAF]. According to the learned counsel, as per the aforesaid First Supplemental to the Agreement for Financing the 'sale price' is Rs,50,000,000/- and 'purchase price' mutually agreed is Rs,57,579,699/-. According to Mr. Aijaz Hussain Shirazi, the Defendants, in their own wisdom failed and/or avoided to adhere to their commitments and pay the agreed amount in terms of FSAF of 30.6.2011. In view of this position, learned counsel forcefully contended that the Plaintiff Financial Institution, is within its' lawful rights to seek recovery of all the outstanding amounts in terms of finance agreement dated 6.8.2007.
9. Heard.
10. In so far, as the contention of the learned counsel for the Defendants regarding grant of leave to defend the suit and framing of issues is concerned, the same besides mis-conceived, seems without any force as the 'interim decree' of 30.10.2013, was passed in the presence of learned counsel for the Defendants obviously with the observation that 'for remaining/disputed amount, this application will be heard on the next date of hearing'.
11. Moreover, on the face of available record including Finance Agreement of 6.8.2009 there seems no need of framing any issue (s) and leading of evidence in 'pro' and 'contra' thereof, as the so- called 'disputed amount of mark-up' can conveniently be sorted out without framing of any issues and recording of any evidence.
12. It is admitted position that out of the 'purchase price' of Rs,65,321,075/- the Defendant No,1, has repaid only Rs,11,848,993/-. Upon deducting the repaid amount of Rs,11,848,993/- from the 'purchase price of Rs,65,321,075/-, the balance outstanding amount comes to Rs,53,472,082/- only. In view of this position, there is no need of framing of any issue and leading evidence in support thereof.
13. It is also significant to note, that in the above suit an 'interim decree' has already been passed for Rs,48,000,000/- and for the remaining amount of mark-up, no leave to defend the suit, needs to be granted as the excess amount/charged on account of mark-up as seen can easily be determined/calculated in juxta-position of the agreement of finance dated 6.8.2007.
14. As far as the contention of Mr. Behzad Haider, learned counsel for the Defendants regarding the claim of liquidated damages in the sum of Rs,8,471,024/- and leading of evidence in support thereof is concerned, the same merits no consideration, as the claim of liquidated damages has been given-up by the Plaintiff Institution. Indeed, otherwise, the learned counsel for Defendants would have been right in saying that liquidated damages cannot be granted without proving it through sufficient evidence.
15. The finance agreement dated 6.8.2007, it is worth to mention herein, is coupled with a 'promissory note' of 06.8.2007 for Rs,65,321,075/-. Being a negotiable instrument, attaches itself the presumption of truth. At this stage it would be appropriate to refer to section 118 of the Negotiable Instruments Act, 1881 [XXVI of 18811, which reads as follows:- "118. Presumption as to negotiable instruments of consideration---Until the contrary is proved, the following presumptions shall be made:--
(a) of consideration; that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred, for consideration; [Underlining is mine].
(b) as to date; that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance; that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer; that every transfer of a negotiable instrument was made before its maturity;
(e) as to order of endorsement; that the endorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stamp; that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course; that the holder of a negotiable instrument is a holder in due course; provided that, where instrument has been obtained from its lawful owner, or from any person in lawful custody thereof by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him."
16. A promissory note, it is worth to mention, is regulated under section 118 of the Negotiable Instruments Act, 1881 [XXVI of 1881] and as such being a Negotiable Instrument Special Rules of Evidence in terms of section 118 of Negotiable Instruments Act, 1881 [XXVI of 1881] are applicable i.e,:- - "Until the contrary is proved, the following presumption shall be made:--
(a) Of consideration.---that every Negotiable Instrument was made or drawn for consideration and that every such instrument when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration; (b)
17. The presumption attached to a Negotiable Instrument besides statutory is mandatory and any person who wishes to dispel it then, of course, he would be required to furnish proof/cogent evidence to the contrary. On this aspect of the matter, I would like to refer to the case of Muhammad Sabir v. Khalil-ur-Rehman [2002 CLD 1543]. The Court while, dilating upon the statutory presumption of truth, attached to a Negotiable Instrument under Section 118 of the Negotiable Instruments Act, 1881 [XXVI of 1881] has observed as follows:- 'The contention of the learned counsel for the appellant that the Promissory Note, was not executed on 24-5-1982 but on a date 6-10-1981. Such contentions cannot be sustained for more than one reason, firstly under section 118 of the Negotiable Instruments Act, presumption is attached to a Negotiable Instrument, as to receipt of consideration, date of execution, time of receipt of consideration, date of execution, time of acceptance, time of transfer, order of endorsement, as to stamp and holder in due course are presumed unless, contrary is proved. It is settled position in law, where statutory presumption is attached as to existence of any fact, then any person setting up a plea in rebuttal, takes upon himself to prove such plea in rebuttal.
Defendant/appellant challenged such presumption, placing reliance that the Promissory Note, was executed along with alleged agreement executed between the parties on 6-10-1981.
Contention of the learned counsel for the appellant that once the consideration has been denied by him, burden was shifted on the plaintiff/respondent to have proved the consideration. Such arguments are fallacious in relation to inchoate instrument. Section 118(a) of the Act lays down a special rule of evidence contrary to the general rule of burden of proof as already discussed above. Burden to dispel statutory presumption is always on a party seeking to negotiate or rebut the presumption as to existence of consideration. Once the execution is admitted then it was for the defendant/appellant to disprove consideration. For reference see Mst. Sughran Begum and 11 others v. Haji Mir Qadir Bukhsh and 2 others (PLD 1986 Quetta 232 DB), United Bank Ltd. v. Mrs. Bilquees Begum and 3 others (1988 CLC 1613) and S.K. Abdul Aziz v. Mahmoodul Hassan and 3 others (1988 CLC 337)." [Underlining is mine].
18. Moreover, the 'promissory estoppel' is also applicable to the facts and circumstances of the case. At this juncture, I would also like to refer to Article 114 of the Qanun-e-Shahadat Order, 1984, [Order 10 of 1984] which reads as follows:--
114. Estoppel.---When one person has, by his declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief neither he nor his representative shall be allowed, in any suit or proceedings between himself and such person or his representative, to deny the truth of that thing.
19. Evidently to the case in hand the 'Doctrine of PromissoryiE Estoppel' is also applicable. To understand the true meaning and effect] of the 'Doctrine of Promissory Estoppel', one can refer to the following portion from the case of Mst. Nur Jehan Begum through Legal Representatives v. Syed Mujtaba Ali Naqvi [1991 SCMR 2300]:- 'in Halsbury's Laws of England, 3rd Edition, principles of promissory estoppel have been summed up in the following manner: 'Promissory estoppel---When one party has, by hiss words or conduct made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly then once the other party has taken him at his words and acted on it, the one who gave the promise or assurance cannot afterwards be allowed to revert to their previous legal relations as if no such promise or assurance had been made by him, but he must accept their legal relations subject to the qualification which he himself has so introduced (e). This doctrine, which is derived from a principle of equity enunciated in 1877 (ft, has been the subject of considerable recent development (g). It differs from estoppel properly so-called in that the presentation relied upon need not be one of present fact (h).
The doctrine 'may have been too widely stated in recent cases (i) and its limits are not yet finally settled (k). The doctrine cannot create any new cause of action where none existed before (I) and it would seem that the person who has made the representation may once again enforce his legal rights after the other party has had an opportunity of regaining the position he held before the representation was made, if that is possible. The doctrine is known variously as 'equitable' or 'promissory' (m) or 'quasi-estoppel. "
20. Manifestly, the Defendants in the present case, out of their own 'free-will' and 'wish' duly signed and executed various documents including the 'Agreement of Financing' and 'Promissory Note', both dated 6th August, 2007, for repayment of the 'purchase price' in the sum of Rs,65,321,075/- as such, now they are surely estopped from challenging the same by making/advancing lame excuses. Needless to say, under law one cannot approbate and reprobate at the same time. In this regard, reliance can be placed on the case of Mirza Nasir and 2 others v. Mirza Hakim-ud-Din, Managing Director, Jahangir Engineering Company, Gujranwala and 2 others [2001 MLD 431], wherein it was held as under:- ..." It is settled principle of law that a person who himself participates before said forum cannot be allowed to challenge competency of proceedings before the said forum on the well-known principle of estoppel and waiver and acquiescence meaning thereby he cannot be allowed to reprobate and approbate and would not be heard to contend that forum did not have jurisdiction."...
21. As far as, the claim of liquidated damages is concerned, of course, a very heavy burden lies on the shoulder of the plaintiff to prove the same, indeed, through 'cogent' and 'sufficient evidence'.
Merely, on the basis of assertions without evidence, liquidated damages cannot be granted. No doubt, a party claiming liquidated damages firstly to plead and then to lead positive and sufficient evidence in proof thereof. On this aspect of the matter, reliance can be placed on the case of Saudi Pak Industrial and Agricultural Co. [Pvt.] Ltd. Islamabad v. M/s. Allied Bank of Pakistan and another [2003 CLD 596] [Supreme Court case], wherein it was observed as follows:- "11. ... Liquidated damages, as a rule, require the positive evidence to show the actual loss was suffered by the party claiming the damages. Even fixed amount stipulated for liquidated damages cannot be recovered if the quantum of actual loss is not proved."
22. At this juncture being relevant it would be appropriate to reproduce herein clause (e) of section 2 of F.I.O., 2001:--
(a) ............................
(b) ............................
(c) ............................
(d) .....................................
(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; and
(ii) any and all representations, warranties and covenants made by or on behalf of the customer to a financial institution at any stage, including representation, warranties and covenants with regard to the ownership, mortgage, pledge, hy pothecation or assignment of or other charge on assets or properties or repayment of a finance or payment: of any other amounts relating to a finance or performance of an undertaking or fulfillment of a promise; and [Underlining is mine].
(iii) all duties imposed on the customer under this Ordinance; and
(t) "rules" means rules made under this Ordinance.
23. A bare perusal of the above would show that besides performance of undertakings and/or of promises, it is the bounden duty of the defendants to fulfill their obligations strictly inter alia in accordance with clause (e) of section 2 of F.I.O., 2001 and/or under the terms and conditions of the documents executed by the customers regarding and in connection with finance facility[ies] granted to and availed by a customer.
24. In the case in hand, it is important to note, that the learned counsel for the Plaintiff Financial Institution with a view to immaterialize, and dilute the objection, raised by Mr. Behzad Haider, learned counsel for the Defendants regarding leading of evidence in proof of liquidated damages Mr. Aijaz Hussain Shirazi, learned counsel for the Plaintiff swiftly given-up the claim of liquidated damages i.e, in the sum of Rs,8,471,024/-. In view of this position, no evidence otherwise, also is required to be led by the Plaintiff Financial Institution as argued by Mr. Behzad Haider, learned counsel for the Defendants.
25. As far as, the contentions of Mr. Behzad Haider regarding framing of issues is concerned, of course, it depends upon the facts and circumstances of each case and as a routine issues are not required to be framed. Needless to say, issue arises out of the pleadings of parties but regarding that dispute which cannot be easily resolved without putting the parties to lead evidence in 'pro' and 'contra' of the issue(s). In this regard, reference can be made to the case of Messrs Dadabhoy Cement Industries Ltd. And 6 others v. National Development Finance Corporation, Karachi [PLD 2002 SC 500], wherein, it was observed as below:-
7. ... Where the Court finds that further inquiry is required, it would frame issues and record evidence of the parties and if it is of the opinion that no inquiry is required, it can dispense with the same and proceed to decide the application. So, it is not incumbent on the trial Court to frame issues in each and every case but it depends upon the facts and circumstances of each case "
[Underlining is mine].
26. In view of the above, while, dismissing the leave to defend application under section 10 of F.I.O., 2001 bearing C.M.A. No,4379 of 2013 filed by the Defendants, the 'interim decree' passed on 30.10.2013 stands modified by enhancing it further, by Rs,5,472,082/- only. Resultantly, the Plaintiff's suit stands decreed against the Defendants jointly and severally in the sum of Rs,53,472,082/- plus cost of funds in terms of section 3 of F.I.O., 2001, [Ordinance No,XLVI of 2001] on the aforesaid amount of Rs,53,472,082/- from the date of default till the date of realization. Besides, granting prayer clause 2, a final decree regarding sale of the mortgaged properties as mentioned in paragraphs 5(i)(ii) and (iii) and of hypothecated assets as mentioned in paragraph 5(iv) of the plaint is also passed.
Suit stands decreed.