' MUHAMMAD SAJID MEHMOOD SETHI, J.---Brief facts for disposal of this appeal are that respondent No.1/Allied Bank Limited filed a suit for recovery of Rs. 13,818,524/- against the appellants on 22.02.2003, with the averments contained therein that appellant No.1 is a sole proprietorship engaged in the business of ginning and pressing of cotton; the account of the appellant No. 1 through appellant No. 2 was opened with the respondent bank at Jehanian Branch on 27-10-1994 vide Account No. CD-1156. The appellant No. 1 through appellant No. 2 started business with respondent bank and availed different finance facilities from time to time, and lastly availed finance facilities of Cash Finance (Cotton) in the sum of Rs. 12.5 Million, Cash Finance (Oil) in the sum of Rs. 2.5 Million and Demand Finance in the sum of Rs. 4.016 Million which were sanctioned vide Sanction Advice dated 31-12-2001. Date of expiry for the two Cash Finance limits was 30-06-2002 and for Demand Finance was 30-09-2002, and the rate of markup for both the facilities was agreed at 18% per annum against the securities of pledge of seed cotton, ginned cotton and registered/equitable mortgages of properties owned by appellants Nos. 2 to 4 and respondents Nos. 2 and 3. On request of the appellants, the amount of Case Finance (Oil) to the tune of Rs. 2.5 Million was converted into letter of guarantee to the tune of Rs. 2 Million vide Sanction Advice dated 26-04-2002. To avail and secure the aforesaid facilities/obligations defendants executed various documents annexed with the suit including Finance Agreements, Demand Promissory Notes, Letters of Pledge, Personal Guarantees, Counter Guarantee, Mortgage Deed, General Power of Attorney, Memorandum of Deposit of Title Deeds. It is claimed that the appellants and respondents Nos. 2 and 3/defendants duly availed the facilities so sanctioned but upon expiry of the same defaulted in payment of the suit amount the detail of which is as under:-
(i) Cash Finance Rs.
7,816,027/- (ii)Demand Finance Rs.
4,012,785/- (iii)Recoverable Mark Up for cash finance for the year 2001Rs. 509,714/-
(iv) Guarantee Rs.
1,480,000/- TotalRs.
13,818,526/-
2. The appellants were served with summons/notices, who in response, filed application for leave to defend the suit. The learned Judge Banking Court-III, Multan, after seeking reply of the said application from respondent No. 1, heard the arguments on the application for grant of leave to defend the suit filed by the appellants and proceeded to dismiss the application and passed the decree in the sum of Rs.13,301,412/- in favour of respondent bank and against the appellants vide judgment and decree dated 18-04-2001 which has been assailed by the appellants through this appeal.
3. Learned counsel for the appellants argued that only an amount of Rs. 4,981,769/- in cash finance account was due, which was illegally inflated up to Rs. 7,816;027/- by the respondent bank; demand finance of Rs.4,012,785/- claimed to be outstanding against the appellants was never disbursed, nor any detail in the statement of account was provided, availing of this finance was denied, as that finance had been created with debit of unauthorized amounts and mark up not related to finance. He further argued that statement of account submitted by the respondent bank along with the plaint was incorrect and heavy amounts deposited in the account were missing; receipts for deposit of the amounts brought on record by the appellants were ignored. He further submitted that the learned Judge Banking Court No. III, Multan erred in law by accepting fresh statement of account on 28-9-2006, from the respondent-bank, after hearing the arguments despite the fact that respondent bank had no right to do so as no opportunity was afforded to the appellants to rebut it, which was required under the law for a just decision; right to produce statement of account or any other documents like vouchers, at the time of arguments, was not available under the law an the learned Judge had wrongly based his findings on those documents which were subsequently produced, without providing any opportunity to rebut them or to lead evidence regarding those documents after granting leave to defend the suit. Learned counsel submitted that despite findings of the learned Judge "statement of account relating to letter of guarantee reveals that amount of Rs. 1,480,000/- has been adjusted, therefore, nil balance is shown", amount of Rs.1,480,000/- had not been debited/reduced from the amount decreed. He lastly contended that stock lying in the factory caught fire and was destroyed completely, while it was in the custody of the respondent bank, which was insured in favour of the respondent bank which failed to pursue the matter and only an amount of Rs. 1.00 million was paid by the Insurance Company, which was too meager as compared to the loss occurred, and due to that reason, the balance amount of claim could not be obtained for the loss of which respondent bank was responsible. Learned counsel for the appellants placed reliance on the following judgments in support of his above contentions:
(i) Messrs Dhrala Oil Mills and others v. The Bank of Punjab through Branch Manager (2014 CLD 153).
(ii) Messrs Muzamil Brothers and another v. Saudi Pak Commercial Bank Ltd. through Manager (2006 CLD 1546)
(iii) Soneri Bank Ltd. v. Classic Denim Mills (Pvt.) Ltd. and others (2011 CLD 408)
4. On the other hand, learned counsel for respondent bank submitted that the suit of the respondent bank was rightly decreed by the learned Judge Banking Court. The claim of the respondent was based on agreement for financing and allied charge documents, and all the amounts paid by the appellants were duly reflected in the statement of account, and the appellants had failed to show any discrepancy in it. He fortified his above arguments by relying upon the following case law:
(i) Muhammad Ars had and another v. Citibank N.A. through Attorney (2005 CLD 1237)
(ii) Tariq Javed and another v. National Bank of Pakistan (2004 CLD 838)
(iii) Bank of Khyber v. Messrs Spencer Distribution Ltd. and others (2003 CLD 1406)
(iv) Allied Bank of Pakistan Ltd. v. Mohib Fabric Industries Ltd. through Chief Executive (2004 CLD 716)
5. Heard. Record perused with the assistance of learned counsel for the parties.
6. It is evident from record that appellants availed the following facilities vide application for credit facility dated 13-11-2001:- i. C/F (Cotton)i. Rs, 12.500 Million i. C/F (Oil)i. Rs, 2.500 Million i. D/F i. Rs, 4.016 Million ' As per sanction advice, the above finance facilities were sanctioned by the respondent bank in favour of the appellants and respondents Nos. 2 and 3. As far as Demand Finance is concerned, the appellants duly availed the Demand Finance facility and executed all the charge documents which have been appended with the plaint to secure and avail the facility. Moreover the appellants and respondents Nos. 2 and 3 also executed and delivered to the respondent bank Memorandum of deposit of title deeds in respect of the facility availed. The application form submitted by the appellants is attached with the plaint wherein the appellants applied for demand finance facility which was duly sanctioned thereto through sanction advice dated 31-12-2001 and in pursuance of the said sanction advice the appellants and respondents Nos. 2 and 3 admitted their liability and executed all the charge documents in favour of the respondent bank including their personal guarantees. An amount of Rs. 4,016,000/- had been shown as opening balance in the statement of Demand Finance. In terms of agreement for financing and sanction advice, the expiry period of Demand Finance was 30-9-2002 and the rate of mark-up was fixed at 18% per annum. Markup till 30-9-2002 was charged as Rs.496,785/- and only Rs. 500,000/- was deposited against Demand Finance, therefore remaining amount of Rs. 4,012,785/- is payable to the respondent bank. Duly certified statement of account annexed with the plaint also clearly shows that an amount of Rs.7,816,027/- is payable against the Cash Finance (Cotton). Finance facility of Cash Finance (Oil) was converted to letter of guarantee facility of Rs. 2.00/- Million through sanction advice dated 26- 04-2002. Copy of application filed by the appellants dated 27-02-2002 is also annexed with the plaint. An agreement in this regard was entered between the parties on 26-4-2002 and the appellants also executed Demand Promissory Note, Memorandum of Deposit of Title Deed and counter guarantee in favour of the respondent bank. The letter of guarantee was issued on behalf of the appellants in favour of M/s. Fauji Fertilizers Company to the tune of Rs. 1,980,000/- with the margin of Rs. 500,000/- and the appellants after payment of the said guarantee by the respondent bank failed to liquidate their liability and pay the said amount. Lend of guarantee, claim letter, notice/paid guarantee and the statement of account appended with the plaint corroborate and fortifies the claim of the respondent bank. An amount of Rs. 1,480,000/- is outstanding against the appellants in letter of guarantee facility.
7. The appellants have given the work sheets and have only attached a few receipts, which are duly incorporated in the statement of accounts. The mark up has not been added in by the appellants.
The amounts deposited through receipts from A-2 to A-27 have been credited in the CD Account No. 1156-8 from where these amount have been transferred towards the loan account. Statement of account attached with the plaint clearly shows the liability of the appellants and the same is certified as per Bankers' Book Evidence Act, 1891, having the presumption of truth attached to the same. The cases relied on by the learned counsel for the appellants are of no help to him. In Messrs Dhrala Oil Mills Case (supra), particulars of the transactions were not given in most of the entries of statement of accounts filed by the bank and, therefore, this Court held that no presumption of truth could be attached to such incomplete statement of accounts which was not sufficient to decree the suit unless supported with corroborative documents. In the instant case respondent bank has submitted statement of accounts along with plaint which duly shows debit and credit and the entries shown in the said statements of accounts duly corroborate the claim of the respondent bank. In Messrs Muzamil Brothers Case (supra), customers were held entitled to grant of leave simply on the ground that no document was attached with the plaint in support thereof; even the statement of account was not filed. In the instant case, the claim of the bank is duly supported by all the documents including statement of account which have been appended with the plaint by the respondent bank, and on the basis of which the learned Banking Court has passed the impugned judgment and decree.
8. The contents of application for leave to defend the suit are self sufficient to establish that the appellants have admitted the fact of availing the finance facilities and execution of charge documents and the only dispute they have raised relate of charging of markup after expiry A period. It is now established law that dispute of markup is not a dispute in respect of which leave to defend can be granted as the same can be easily worked out. Even otherwise, the appellants have failed to point out any excessive markup charged by the respondent bank. Respondent bank charged the markup as agreed between the parties and markup was not charged after the expiry period. It is noted that statement of account has been duly verified under the law.
9. In view of the above, the appellants are estopped to challenge the validity of finance facilities and charge documents in terms of section 20 read with section 118 of Negotiable Instrument Act, 1881. In this regard, reference can be made to Muhammad Arshad and another v. Citibank N.A. through Attorney (2005 CLD 1237).
10. Mere assertion of incorrectness of statement of account, as pleaded by the learned counsel for the appellants before us, is no ground to allow the leave to defend the suit. Reference in this regard can be made to Tariq Javed and another v. National Bank of Pakistan (2004 CLD 838).
12. From perusal of order sheet of the learned Banking Court, it becomes clear that production of the statement of account by the respondent bank before the Banking Court on 28-9-2006, was in compliance of order dated 29-06-2005 of the learned Banking Court and that statement of account was only regarding claim of the respondent bank for the amount of Rs. 509,714/- as markup for the period starting from 01-07-2001 to 31-12-2001. Record also indicates that counsel for the respondent bank recorded his statement before the learned Banking Court on 13-12-2006 and got the amount of Rs. 509,714/- (mark-up from 1-7-2001 to 31-12-2001 and amount of cheque book charges, telephone bill, photo copy bill, wetting fee and bank charges which come to Rs.7,398/-) excluded from the claim of the respondent bank as above amount was not mentioned in the sanction letter dated 31-12-2001. Under section 9(2) of the Ordinance, 2001, it is the duty of the financial institution to file with plaint the statement of account, duly certified under the Bankers'
Books Evidence Act, 1891, and all other relevant documents relating to the grant of finance, so as to provide fair opportunity to the defendant to come up with cogent ground for leave to defend. The plaintiff cannot be allowed to file statement of accounts in piecemeal but in the instant case filing of statement of account by respondent bank on 28-09-2006 regarding amount of Rs. 509,714/- has caused no prejudice to the cause of the appellants as, on the statement of the counsel for respondent bank, an amount of Rs. 509,714/- + Rs.7,398/- = Rs. 517,112/- was deducted from respondent bank's claim. The suit was rightly decreed for an amount of Rs.13,818,524 - Rs.517,112 = Rs. 13,301,412/- on the basis of documents appended with the plaint. In view of the above discussion, reliance placed on Classic Denim Mills Case (supra) by the learned counsel for the appellants is of no help to him.
13. Record shows that the Insurance Company surveyed the spot and did not accept to the claim of the appellants and awarded only Rs.1.00 million and the appellants filed civil suit against the award of Rs.1.00 million. The respondent bank cannot be blamed for that, as asserted by the learned counsel for the appellants before us.
14. The appellants were under obligation in terms of section 10(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 to specifically state the following in the application for leave to defend the suit: "(a) the amount of finance availed by the defendant from the financial institution; the amounts paid by the defendant to the financial institution and the dates of payments;
(b) the amount of finance and other amounts relating to the finance payable by the defendant to the financial institution upto the date of institution of the suit:
(c) the amount if any which the defendant disputes as payable to the financial institution and facts in support thereof:"
' Section 10(5) of the Ordinance, 2001 requires that the application for leave to defend is to be accompanied by all the documents which, in the opinion of the defendant, support the substantial questions of law or fact raised by him. The appellants have failed to comply with the said mandatory provisions of law without furnishing sufficient cause for non -compliance of the above requirements of law. Keeping in view the aforesaid, the learned Judge Banking Court has rightly dismissed the application filed by the appellants for grant of leave to defend the suit. Reference can be made to the following judgments:
(i) Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd., PLD 2012 Supreme Court 268 = 2012 CLD 337.
(ii) Messrs Sadia Industries and others v. Soneri Bank Ltd., 2014 CLD 1458.
(iii) Allied Bank of Pakistan Ltd. v. Mohib Fabric Industries Ltd. through Chief Executive (2004 CLD 716).
(iv) Shahid Farooq Sheikh v. Allied Bank of Pakistan Limited (2005 CLD 1489)
(v) Silkbank Limited v. Messrs AZM Chemical Company through Proprietor and others (2014 CLD 1526).
KASB Bank Limited v. Muhammad Ahmed Ansari (2014 CLD 1518).
Habib Metropolitan Bank Limited v. Century 21 Textile and Sportswear (Pvt.) Limited and others (2014 CLD 729)
Habib Metropolitan Bank Ltd. v. Mian Abdul Jabbar Gihllin and another (PLD 2013 Sindh 104)
Royal Bank of Scotland Ltd. v. Saeed Abbas (2011 CLD 976)
Faysal Bank Limited v. Generate Pakistan Ltd. and others (2009 CLD 856).
15. In the case of Apollo Textile (Supra) the Hon,ble Supreme Court enunciated the following principles of law: "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 fulfill 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 (11) ibid."
16. In view of the aforesaid, this appeal has no force and is, therefore, dismissed.