AZIZ-UR-REHMAN, J.---The Plaintiff Bank has filed the instant Suit on 27-11-2013 under section 9 of the Financial Institutions [Recovery of Finances] Ordinance, 2001 [Ordinance XLVI of 2001] for recovery of Rs,203,132,535.04/- plus 'cost of fund' through Muhammad Adil Masood son of Muhammad Masood Sarwar being a duly Constituted Attorney of the Plaintiff's Institution with the following prayers:- i. Money Decree for Rs, 203,132,535.04/-. ii. Costs of funds as determined by the State Bank of Pakistan on the decreed amount from the date of default i.e, 15.08.2011 till realization; iii. Attachment and sale of the mortgaged immovable properties bearing: Amalgamated plots bearing No, Com-2/4 and Com-2/5 located at Block-1, KDA Scheme No,5, Clifton, Karachi fully described in Annexures BB to EE to this Plaint.
Costs of the suit.
Any other relief that this Hon'ble Court may deem fit and proper in the facts and circumstances of the case.
2. The relevant facts arising to the filing of the above suit and as gleaned from the 'plaint' in the instant suit read as follows:-
3. Plaintiff is a Financial Institution in terms of section 2(a) of F.I.O., 2001 [Ordinance XLVI of 2001], having its' Head Office at BoP Tower, 10-B, Block E/II, Main Boulevard, Gulberg HI, Lahore and having one of its' Branches known as DHA Branch at Street No,26, Khayaban-e-Shahbaz, DHA, Phase VI, Karachi and Defendant is a person residing/carrying on his business at the addresses given in the title of the suit besides a 'principal customer', is a 'Mortgagor' as such, fell within the definition of a 'customer' as per section 2(d) of F.I.O., 2001 [Ordinance XLVI of 2001].
4. The Plaintiffs Institution upon the Defendant's approach vide his letter dated 28.07.2004 [Annexure 'A' to the Plaint] for the Term Finance Facility in the sum of Rs,250,000,000/-, the Plaintiffs Institution nonetheless, offered [Demand Finance Facility - In short, 'DFF'] to the Defendant vide its'
Facility Offer Letter' dated 16.08.2005 [Annexure 'B' to the Plaint]. The 'Defendant-Customer' upon accepting the same thus agreed to the 'terms' and'conditions' of the said Facility Offer Letter of August 16, of 2005. Resultantly, the Plaintiff and Defendant executed 'inter alia' the 'AGREEMENT FOR SHORT/ MEDIUM/LONG TERM FINANCE FACILITY ON MARK-UP BASIS' dated 16.08.2005 [Annexure 'C' to the Plaint]. The amount of Demand Finance in the sum of Rs,250,000,000/- was 'designated' as the 'SALE PRICE', and the amount of Rs,401,250,000/-, payable by the 'Defendant-Customer' to the Plaintiff, was designated as the 'PURCHASE PRICE'. The Defendant, as per 'Agreement of Finance Facility' dated 16.08.2005, was required to pay the 'PURCHASE PRICE' in the sum of Rs,401,250,000/- to the Plaintiff's Institution on or before 15.08.2010. The 'SALE PRICE' in the sum of Rs,250,000,000/- was disbursed/credited in the Defendant's Bank Account bearing No,CD-000255-000-4 maintained at LI. Chundrigar Road Branch, Karachi on 16.08.2005.
5. By way of 'security' and in 'consideration' of the Facility granted to and availed by the Defendant, the Defendant-Customer 'inter alia also signed and executed a 'PROMISSORY NOTE' dated 16.08.2005 [Annexure 'F' to the Plaint] in favour of the Plaintiffs Institution for an amount of Rs,401,250,000/- i.e, the 'PURCHASE PRICE' and thus by this way, he promised to pay the same to the Plaintiffs Institution upon demand. The execution of the said 'PROMISSORY NOTE' was also 'acknowledged' vide Defendant's letter dated 16.08.2005 [Annexure 'E' to the Plaint]. Moreover, for the 'due repayment' of the amount of facility granted to and availed by Defendant, a personal letter of guarantee dated 16.08.2005 [Annexure 'F' to the Plaint] was also executed.
6. Per assertions made in the plaint, the Defendant did not abide by his 'commitments' as such a request for 'Running Finance Facility' [In short RFF] in the sum of Rs,210 million in lieu of DFF of Rs,208.33 million as then outstanding, was made by 'Defendant-Customer' vide his letter dated 12.01.2009 [Annexure 'G' to the Plaint], against the security[ies] already, available with Bank of Punjab [In short BoP]. The request so made, was 'accepted' by the Plaintiff Bank vide its' 'Office Letter' dated 18.04.2009 [Annexure 'H' to the Plaint]. Accordingly, per assertions made in the plaint, at the 'wish' and 'desire' of Defendant, the DFF was not only converted into 'Running Finance Facility'
[In short RFF] but subsequently, the RFF was got renewed until 15.08.2011 at Defendant's request/application under and through Bank's 'Facility Letter' dated 14.09.2010 [Annexure 'S to the Plaint]. Besides, the RFF was also got transferred, at the request of Defendant, to 'DFHA's Branch' of the Plaintiffs Institution.
7. Thereupon, the Plaintiff and the Defendant inter alia 'signed' and 'executed' an AGREEMENT FOR FINANCING FOR SHORT/MEDIUM/LONG TERM on MARK-UP BASIS dated 10.08.2009 [Annexure 'I' to the Plaint], wherein, the 'RUNNING FINANCE LIMIT' of Rs,210,000,000/- was 'designated' as 'SALE PRICE' and Rs,262,500,000/- was designated as the 'PURCHASE PRICE'. The said limit of RFF, it is significant to note, was for one year under the 'terms' and 'conditions' of the subsequent Finance Agreement of 1st October, 2010 [Annexure 'I' to the Plaint]. The Defendant in terms of the aforesaid Finance Agreement had to pay the 'PURCHASE PRICE' on or before 09.08.2011.
8. For and by way of 'security' and in 'consideration' of the Running Finance Facility [In short RFF], the Defendant inter alia 'signed' and 'executed' in favour of the Plaintiffs Institution, a 'Promissory Note' dated 01.10.2010 [Annexure 'U' to the Pliant], for an amount of Rs,262,500,000/- whereby, the Defendant, not only 'promised' to pay to the Plaintiff's Institution the said amount upon demand but also 'acknowledged' the execution of the said 'Promissory Note' vide 'Letter of Arrangement', 'Letter of Continuity' both dated 01.10.2010. Besides, two undertakings vis-a-vis abiding by the SBP's Prudential Regulations, appropriate utilization of the amounts of facility granted to and availed by the Defendant, were also signed and executed by Defendant No,1 on 01.10.2010. Moreover, Personal Letter of guarantee dated 01.10.2010 was signed and executed by the Defendant. All these documents are annexed with Plaint as 'V', 'W', 'X', 'Y' and 'Z' respectively.
9. The Defendant just before the 'expiry period' of 'one year' of Running Finance Facility [RFF], again approached the Plaintiff's Institution for 'renewal' of the same facility through his application dated 5th July, 2010 [Annexure 'R' to the Plaint] and the Plaintiffs Institution accordingly, offered the 'Renewal' of the limit of RFF until 15.08.2011 vide its Facility Letter dated 14.09.2010 [Annexure 'S' to the Plaint]. An Agreement for Financing on Mark-up Basis dated 01.10.2010 in this regard was also 'signed' and 'executed' between the Defendant and Plaintiffs Institution. Under this Agreement the 'SALE PRICE' is Rs,210,000,000/- and 'PURCHASE PRICE' is Rs,262,500,000/-. The 'PURCHASE PRICE' agreed under this Agreement[Annexure 'T' to the Plaint] was payable on or before 15.08.2011.
10. For and regarding the 'security' for the finances granted to and availed by the Defendant from 'time' to 'time', the Defendant herein also duly 'mortgaged' his 'immovable properties' bearing Com- 2/4 and Com-2/5 both located at Block-I, KDA Scheme :No,5, Clifton, Karachi ['Mortgaged Property'], fully 'mentioned' and 'described in the Annexure 'BB' to 'EE' to this Plaint, by firstly depositing the 'ORIGINAL TITLE DEEDS' comprising inter alia (i) Lease Deed/Indenture of Lease dated 21.05.2005, (ii) Transfer Order dated 08.09.2004 and (iii) Possession. Order dated 22.05.1996 and thereafter, executed 'MEMORANDUM OF DEPOSIT OF TITLE DEEDS' dated 10.08.2009 for Rs,262,000,000/-. [Annexure 'CC' to the Plaint].
11. For and towards' the 'continuing security' of all and any of the 'amounts, outstanding' and 'payable' in respect of the 'finance facility[ies]' extended to/to be extended to the Defendant by the Plaintiff from time to time, the Defendant also enhanced the 'mortgaged amount' of the 'Mortgaged Properties' by firstly depositing their 'ORIGINAL TITLE DEEDS' and later on by executing the Memorandum of 'Deposit of Title Deeds' dated 01.10.2010 for Rs,262,500,000/- [Annexure 'CC' to the Plaint] and 'Memorandum of Deposit of Title Deeds' dated 01.10.2010 for Rs,262,500,000/-. [Annexure 'DD' to the Plaint]. The 'various Financial' and 'Security documents' duly 'signed' and 'executed' by the 'Defendant-Customer' are annexed with 'plaint' as Annexure 'A' to 'T', 'U' to 'AA', 'BB' to IP including 'Certified Statements of Accounts' as annexures 'HH/1' to 'HH/5' and 'HH/6' to HH/7'. Needless to say, all the documents on the face of it are duly 'signed' and 'filled-up' with 'dates' and 'figures'.
12. The Defendant, nevertheless, 'failed' and/or 'avoided' to make payment of the facility's amounts on or before 15.08.2011 as agreed vide the Running Finance Agreement [Annexure 'T' to the Plaint].
As such, the Defendant committed 'default' in its' discharge of obligations towards' the Plaintiff. The Plaintiff Bank, under such compelling circumstances, served a 'Legal Notice' dated 27.05.2012 [Annexure 'FF' to the Plaint] whereby, the Defendant was 'called upon' to make payment of the 'outstanding amounts' owed to the Plaintiff, within Seven (07) days i.e, from date of receipt of the said Legal Notice. The Plaintiff, however, in absence of any 'positive response', sent another 'Legal Notice' dated 25.10.2013 [Annexure 'GG' to the Plaint] to the Defendant, through its' counsel, whereby, again the then outstanding amount was demanded. Nevertheless, the Defendant 'failed' and/or 'avoided' to pay the outstanding amount owed to the Plaintiff Bank.
13. Per assertions made in the paint, on 10.10.2013, the Defendant owed an amount of Rs,203,132,535.04/- [Rupees Two Hundred Three Million One Hundred Thirty Two Thousand Five Hundred Thirty Five and Paisas Four only] payable to the 'Plaintiff Bank on account of 'RUNNING FINANCE FACILITY'. A 'break-up' of the aforementioned 'outstanding amount' in' terms of section 9[3] of the Financial Institutions (Recovery of Finances) Ordinance, 2001 [In short F.I.O., 20011, is given as follows: Running Finance Facility [RFF] Total finance availed by the Defendant from the PlaintiffRs,209,986,168.98(a)
The amounts paid by the Defendant to the Plaintiff PrincipalRs,24,981,500.00(b)
Mark-up Paid (from 08.09.2009 toRs,103,438,860.80 30.09.2013)
Amount of finance and other charges payable by Defendant to the Plaintiff. Rs, 185,004,668.98 Principal: (a) --(b) -- Markup payable (till 30.09.2013) and other charges dueRs, 18,127,866.06 TOTAL Rs,203,132,535.04
14. Hence the above suit for recovery of Rs,203,132,535/04 after accruing of the 'causes of action' in favour of the Plaintiff and against the Defendant as referred to and mentioned in 'Para 23' of the Plaint.
15. Upon service, the Defendant, filed Application for Leave to Defend the suit under section 10 of F.I.O., 2001 [XLVI of 2001] wherein, all the allegations pleaded by the Plaintiffs Institution were denied 'save' and 'except' those which were admitted expressly. According to the Defendant's version, there exists serious disputes as being based on 'mixed questions' of 'law' and 'facts' between the Defendant and Plaintiffs Institution, which per stand taken in the Leaveto-Defend Application [C.M.A. No,116 of 2014], cannot be decided much-less without recording of evidence. The Defendant, in view of this position, has prayed as being deserved for grant of 'un-conditional' leave to defend the above suit. Besides, certain 'PRELIMINARY OBJECTIONS' to the effect of non-maintainability, of the above suit for want of 'proper Resolution', filing of the above suit through incompetent person, charging of 'mark-up' over 'mark-up', invalidity/unenforceability of the documents annexed with plaint, non-approach of the Plaintiff's Institution to this Court with clean hands, inter alia by concealing the material facts, non-filing of the proper statement of account, obtaining of the 'blanks documents by the Plaintiff's Institution, non-maintainability of the suit for want of any 'cause of action' and 'non-compliance' of the mandatory requirement of sections 9(2) and 9(3) of F.I.O., 2001 [XLVI of 2001].
16. In response to the aforesaid Leave-to-Defend Application [C.M.A. No,116 of 2014], the Plaintiffs Institution also filed its' 'REPLICATION' under section 10[7] of F.I.O., 2001, wherein, all the 'adverse assertions' and 'allegations' leveled by the Defendant in his 'Leave to Defend Application', were vehemently denied and controverted. In the 'Replication' the Plaintiff also raised some 'PRELIMINARY OBJECTIONS' to the effect that the Defendant has not only failed to comply with the 'mandatory requirements' of section 10(4)(5) of F.I.O., 2001 but has also failed and/or avoided to raise any 'substantial questions' of 'law' and 'fact' which may need any recording of evidence in support thereof.
17. On 03-11-2015, when the above suit came-up before me for hearing of C.M.A. No,116 of 2014 being an Application under section 10 of F.I.O., 2001, filed by Defendant, then I heard Syed Wasih Hyder, learned counsel for the Defendant and Mr. M. Jamshed Malik, learned counsel for the Plaintiff and with their valuable assistance, I have also gone through the record available before me minutely.
18. Syed Wasih Hyder, learned counsel for the Defendant vehemently argued that the above suit is not maintainable in law as the same has been filed without a 'proper resolution' passed by the competent authority of the Plaintiff. The purported 'Special Power of Attorney', per learned counsel, on the basis of which, the above suit has been filed, is neither properly executed document according to law nor otherwise, it is a valid and proper 'Power of Attorney' hence, the Plaint in the above suit is ab initio nullity in law and thus the above suit is liable to be dismissed on this legal ground alone. Apart from this, according to Syed Wasih Hyder, learned counsel for the Defendant, the said purported 'Special Power of Attorney' has been granted in favour of the signatory to the Plaint by a person who is not authorized to constitute or appoint any 'Special Attorney' or Sub- Attorney. Moreover, per Syed Wasih Hyder, the said purported 'Special Power of Attorney' has not been signed by the 'Board of Directors' or otherwise, any 'Board Resolution' is attached with the said purported 'Special Power of Attorney'. In view of these circumstances, Syed Wasih Hyder, submitted that the above suit has been filed through an unauthorized person, and not by a 'competent person' as required by law, hence, the same is a fit case to be 'dismissed summarily' with cost.
19. Syed Wasih Hyder, learned counsel for the Defendant further argued that the plaintiff's claim is unlawful, fraudulent, exaggerated, arbitrary and based on mis-representation, concocted pleas as such not maintainable in law. In fact, the plaintiffs claim besides being based on mala fide intention, the Plaintiff's Institution has charged 'mark-up' upon 'mark-up' which is not only against the 'injunction of Islam' but also the same is not permissible under the law of land as well.
According to Syed Wasih Hyder, all the 'documents' attached with the Plaint are legally not enforceable against the Defendant, as in fact, they have lost their value. Moreover, the Plaintiff's Institution deliberately, malafidely, and with ulterior motive has concealed, suppressed the material facts and 'important documents' as such, the Plaintiff has seemingly not approached this Court with clean hands. In this manner, per learned counsel for the Defendant, the Plaintiff has also committed fraud upon this Court. Hence, the Plaintiff's Institution, per Mr. Syed Wasih Hyder, is not entitled to have any relief whatsoever, in its' favour from this Court. The 'present suit' thus in fact needs to be dismissed with cost.
20. Syed Wasih Hyder, learned counsel for the Defendant while, arguing his case further forcefully submitted that the Plaintiff has also failed to file proper, fair, just, honest and correct 'statements of accounts' [See Annexures 'HH/1' to 'HH/7'] to the Plaint as required under the law. The contents of alleged 'statement of accounts' attached with the suit are vague, false, fraudulent and baseless.
According to Syed Wasih Hyder, from perusal of 'statement of account[s]' [Annexure 'HH/1' to 'HH/6' to 'HH/7' to the Plaint], it appears, that the Plaintiff has also charged 'mark-up' upon 'mark-up' which act of the Plaintiff Bank, is not only against the 'injunction of Islam' but also against the prevailing laws. Per learned counsel, this exercise in fact negates the whole claim of the Plaintiff and consequently, on this score as well, the instant suit is liable to be dismissed. Besides, the Plaintiff has also failed to disclose any 'cause of action' in its' favour against the Defendant. The 'unlawful', 'dishonest' and 'fraudulent' statement of account[s]' attached with the instant suit are nothing but only meant to harass the Defendant by forwarding a false 'statement of account[s]' against him. Per learned counsel, it is well established law, that the 'statement of account[s]' is/are not 'conclusive evidence' of the 'entries' made therein and it is/are always rebuttable under the law.
The Plaintiffs Institution, in view of challenge of 'statement of account[s]', is legally bound to prove the entries made in the Statement of Accounts in its' evidence. And by mere production of certified copy[ies] of 'statement of accounts' and/or any entry made in the books of accounts of the Plaintiff Bank. Nevertheless, the Plaintiff in case of denials is not absolved to prove the entries made in the 'statement of account[s]' through supporting documents.
21. Syed Wasih Hyder, learned counsel for the Defendant next argued that the Plaintiff's claim in the above suit is actually based on 'various documents' which, in fact, were obtained through misrepresentation, suppression of facts, on the basis of false written and oral promises. Given by the concerned competent/authorized agents and employees of Plaintiff Bank. As such, all these documents, per learned counsel, cannot be treated as legally valid and binding documents.
Moreover, the 'documents attached with the suit are 'inconsistent', 'self-contradictory' and 'self- conflicting'. These documents by no means even otherwise, support the various entries made in the 'statements of accounts. Per learned counsel for the Defendant, all the said 'documents are neither binding on the Defendant or otherwise, the Plaintiff Bank under the facts and circumstances of the case is entitled to obtain any decree against the Defendant on the basis of the annexed documents with plaint. Full and complete evidence, thus according to Syed Wasih Hyder, learned counsel for the Defendant is required to be produced in the above suit for proper and genuine determination of the claim of the Plaintiff Bank.
22. Moreover, according to Syed Wasih Hyder, learned counsel for the Defendant, the Plaintiff Bank, has no cause of action' in its' favour against the Defendant regarding the alleged claim as pleaded and asserted on behalf of the Plaintiff Bank in the above suit. Merely, on the basis of the statements of accounts and the 'documents annexed with the 'Plaint which are being challenged by the Defendant, the Plaintiff's suit cannot be decreed on the basis thereof. Rather, the above suit is liable to be dismissed against the Defendant with cost inter alia for the reason that the Plaintiff has intentionally concealed the 'material facts' from this Court, that is to say, the 'Restructuring Agreement' signed and executed between the parties to the suit. According to the learned counsel for the Defendant, in view of mutually agreed terms and 'conditions of 'Restructuring Agreement of 3rd August, 2012, all the previous 'documents'/'agreements' have become superseded and unenforceable. Per Syed Wasih Hyder, learned counsel for the Defendant, the said 'Restructuring Agreement' of August 3, 2012 is neither attached nor otherwise, it finds any mention in the 'Plaint', which ex facie reflects the 'mala fide intentions' of the Plaintiff Bank. In view of this position as well, this Court cannot decree the Plaintiff's suit even on the basis of the said 'Restructuring Agreement' of 3rd August, 2012. Apart from this, the Plaintiff Bank has badly failed to fulfill the 'mandatory requirements' of section 9(2) and (3) of the Financial Institutions [Recovery of Finances) Ordinance, 2001 [XLVI of 2001]. For all the above, the Defendant is not only entitled but also deserves for grant of 'unconditional leave to defend' the above suit, otherwise, the Defendant shall be seriously prejudiced.
23. In support of his contentions, Syed Wasih Hyder, learned counsel for the Defendant on the aspects of 'Resolution' and its' 'validity', 'verification' of the plaint and 'institution of the suit', 'suppression of concealment of facts', 'pleas' and 'alleged blank documents' and the 'doctrine of promissory estoppel' has placed reliance on the following case-laws. The relevant portions respectively therefrom read as below:- "In the case of H. M. Ebrahim Sait v. South India Industrials Ltd. (AIR 1938 Mad. 962) it was held that in law a meeting of directors is not duly convened unless due notice has been given to all the directors. On the facts of the present case, I am satisfied that due notice of the meeting was not given to the, deceased appellant and, therefore, the resolution passed in the meeting of 28th September 1951, cannot be said to be a valid one. In my opinion, no valid authority was conferred on Mr. Khurshid Mahmood and, therefore, he was not competent to institute the suit. I would, therefore, hold that the learned trial Judge was prefectly justified in dismissing the suit on this ground." [Underlining is mine].
[a] Messrs Muhammad Siddiq Muhammad Umar and another v. The Australasia Bank Ltd. [PLD 1966 SC rel. Page 684] "It was apparent from the pleadings that the suit was being instituted by a constituted attorney of a public limited company. He could only do so if he was duly authorised in that behalf and occupied one or other of the offices mentioned in Rule 1 of Order XXIX of the Civil Procedure Code. A copy of the powerof-attorney had been produced which showed that Muhammad Khan had been empowered in that behalf but the question still remained to be ascertained as to whether those who gave him that power were competent to do so, as the authority was on behalf of a public limited company. For this purpose a reference to the Articles of Association of the company was certainly necessary see whether the Directors were competent to delegate such power. It was not necessary to see whether the Directors; had in fact approved of the giving of such power- ofattorney to the person who presented the plaint. This was, however, proved by the production of the resolution of the Board of Directors as a matter of abundant caution. The additional evidence was to that extent, therefore, in our opinion, rightly admitted. This was all that was required. It was not necessary, to call the Managing Director as the Court calling for the additional evidence itself realized subsequently. Even the production of the resolution could have been dispensed with, as it was not strictly necessary.
This brings us to the next question as to whether the suit had been competently filed. As already stated, one of the learned Judges of the High Court had taken the view that since the power-of- attorney had affixed to it the common seal of the company, there was a presumption that the power-of-attorney was lawfully, executed, and then the onus was on the other side which challenged the validity of the power-of-attorney to show that it was ultra vires the powers of the company. The third learned Judge evidently did not agree with this view, for, if he had done so he would not have called for the additional evidence.
We are unable to uphold the view that the production of the power-of-attorney bearing the common seal of the company was by itself sufficient. In saying this the learned Judge has evidently overlooked that as a rule the Articles of Association of a company contain special provisions prescribing for the manner in which the seal of the company may be affixed and that those who deal with a company are bound to see that the document on the face of it accords with those provisions of the Articles. It is only when it does so and the instrument is ,on the face of it regular, persons dealing with a company have a right to presume that the seal so affixed has been duly affixed, that the Directors were duly appointed and their signatures duly made. The burden only then shifts to prove the contrary on those who allege it. Again, the law requires that, prima facie, those who deal with a person acting' under or purporting to act under a power-of-attorney are put upon enquiry and are bound to satisfy themselves as to the authenticity of that power. It is only when such a person acts or purports to act under a properly executed power that the principal cannot repudiate his action. [Underlining is mine].
[c] Abdul Rahim and 2 others v. Messrs United Bank Ltd. Of Pakistan [PLD 1997 Karachi 62 re. Pages 99, 100] [if ... "Also where a particular procedure is provided for in the 1984 Ordinance, the Banking Tribunal has to follow the same, however, where such procedure is lacking the Banking Tribunal has to follow the procedure as laid down in the C.P.C. Once a suit is filed and the claim therein is denied by the other side the only manner in which a Civil Court can proceed adjudication is to first frame issues. In this respect Order XIV of C.P.C. Is relevant which provides for framing of issues where material propositions of fact and laws are affirmed by one party and denied by the other.
Subsequently, once the issues are framed the parties may have to lead oral or documentary evidence, as the case may, be and the Court has to examine witnesses and record evidence to decide the issues before it. Since the 1984 Ordinance does not specify the manner or procedure to deal with claims which are in dispute, by virtue of section 5(1)(d) the procedure contained in the C.P.C. Becomes applicable to suits filed in the Banking Tribunal. "... [Underlining is mine]. ...Section 10 of the Contract Act, inter alia, prescribed the elements of free consent as an essential ingredient for a valid contract. Thereafter section 14 of the Contract Act defines the words 'free consent" to include, inter alia, consent not caused by undue influence. Section 16 of the Contract Act in turn provides a definition of the term "undue influence", which we reproduce as under:-- "16.---(1) A contract is said to be induced by 'undue influence' where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other.
(2) In particular and without prejudice to the generality of the foregoing principle, a person is deemed to be in a position to dominate the will of another--
(a) Where he holds a real or apparent authority over the other, or where he stands in a fiduciary relation to the other; or
(b) where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress.
(3) Where a person who is in a position to dominate the will of another, enters into a contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be unconscionable, the burden of proving that such contract was not induced by undue influence shall lie upon the person in a position to dominate the will of the other.
Nothing in this subsection shall affect the provisions of section 111 of the Evidence Act, 1872.
Illustrations
(a) A having advanced money to his son, B, during his minority, upon B's coming of age obtains, by misuse of parental influence, a bond from B for a greater amount than the sum due in respect of the advance. A employs undue influence.
(b) A, a man enfeebled by disease or age, is induced, by B's influence over him as his medical attendant, to agree to pay B an unreasonable sum for his professional services. B employs undue influence.
(c) A being in debt to B, the money-lender of his village, contracts a fresh loan on terms which appear to be unconscionable. It lies on B to prove that the contract was not induced by undue influence.
(d) A, applies to a banker for a loan at a time when there is stringency in the money market. The banker declines to make the loan except at an unusually high rate of interest. A accepts the loan on these terms. This is a transaction in the ordinary course of business, and the contract is not induced by undue influence."
A bare reading of section 16, in particular, section 16(3) would reveal that the equitable doctrines of unconscionability, inequality of bargaining power, economic duress and like principles to ensure substantive fairness in the outcome of a contract can well be invoked by the Courts in Pakistan, as instances and illustrations of the wider concept of undue influence.
[iii] 37. From the analysis of the above decisions the following principles can be extracted:--
(1) 0.29, R.1, C.P.C. Only deals with signature and verification of pleadings by the persons mentioned therein. The said rule is completely irrelevant to gauge a person's competence or authority to institute a suit on behalf of a company;
(ii) for a suit to be valid it had to be shown that firstly, it was verified and signed by the proper person in terms of 0.29, R.1, C. P. C. And secondly, it was instituted by a competent person having the power and, authority to do so:
(iii) in case there is default in compliance of 0.29. R.1 the same is not a fatal defect and can be cured even after the suit has been instituted (See All India Reporter Limited v. Ram Chandar Dhondo Datar, AIR 1961 Born. 292);
(iv) however, in case there is any defect in institution of the suit i.e, it is instituted unauthorisedly and incompetently the said defect remains incurable even by a subsequent ratification (See Punjab Livestock and Saleh Hayat, referred supra):
(v) there appears to be some inconsistency as to how competence/authority of a person to institute a suit has to be determined. In Muhammad Siddiq a Full Bench of the Supreme Court clearly stated that it is the articles of the company which have to be seen to assess as to whether a person filing the suit was properly authorized, while the requirement to produce a resolution of the Board of Directors could be dispensed with. In Iftikhar Mamdot, the earlier case of Muhammad Siddiq was not referred therein, a Full Bench of the Supreme Court took the view that in case a resolution from the Board of Directors is not passed and proved after a duly convened meeting, a suit filed even by a director incharge is to be taken as an incompetently instituted suit. In the subsequent case of Central Bank of India the learned Judge of a Division Bench of the Supreme Court followed Muhammad Siddiq, however, no reference was made to Iftikhar Mamdot. In Central Bank of India it was emphatically stated that there was no requirement of law to prove resolution passed by the Board of Directors. In Green Garments a learned Single Judge of this Court made an attempt to reconcile Muhammad Siddiq and Iftikhar Mamdot by holding that in case a suit is filed in consequence of a power of attorney no resolution of Board of Directors is required. With due respect we cannot subscribe to this distinction or reconciliation as the same is not borne out from the principles of law extracted in the two decisions of the Supreme Court (referred supra). We would reconcile the two decisions of the Supreme Court on another plane. It is settled that the business and affairs of a company are to be conducted strictly in consonance with the articles of association subject of course to the operative laws. The business and affairs of a company include the power, competence and authority to institute legal action (See H.M. Ebrahim Saith v. South India Industries Ltd, AIR 1938 Mad. 962). By deduction, the factum of competence and authority to institute legal proceedings would also have to be determined strictly in consonance with the articles of the company. Such interpretation would also be in consonance with Muhammad Siddiq and Central Bank of India wherein it has been categorically stated that where the competence to institute legal action is challenged reference has to be necessarily envisaged to the articles. Where articles of the Company confer power on a particular person or director to institute legal action and that person or director institutes the suit there can be no additional requirement of a resolution of the Board of directors for the simple reason that such power is to be exercisable by a real person. However, where the power to institute the suit is conferred upon an artificial person or body e.g. The Board of Directors or a Committee (as in Premier Sugar Mills supra) the requirement to produce and prove the resolution passed by that artificial person or body cannot be dispensed with since such a person can only take a decision as a body through a resolution passed in a duly convened meeting and not otherwise. The above principles would also become applicable in the case of delegation or sub-delegation of powers i.e, in case the delegator is a real person (when articles confer the powers to institute legal action on a real person) all that would be required would be to scrutinize the articles and then the power of attorney to see whether it has been properly executed and confers the power so claimed. There would be no requirement to produce or prove the resolution from the Board of Directors in this regard. If on the other hand, the delegator is an artificial person/body (when the articles confer the power to institute legal action on e.g. The Board of Directors or some committee) the resolution passed by that artificial person/body i.e, the Board/Committee shall become indispensable. However, there would be no requirement to produce or prove a separate power of attorney. In this backdrop we would venture to reconcile Muhammad Siddiq, Ifiikhar Mamdot and Central Bank of India by presuming that in Muhammad Siddiq and Central Bank of India the articles conferred the power to institute or defend legal proceedings to a real person i.e, a director. Thus the requirement to produce or prove a resolution from the Board of Directors was dispensed with. However, in Iftikhar Mamdot the articles conferred the power to institute or defend legal proceedings upon an artificial person/body i.e, the Board of Directors in view whereof the requirement to produce and prove the resolution thereof authorising institution of the suit was found to be indispensable;
(vi) it is not only the principal who can challenge the agent's power and competence to institute/defend legal action. Khayam Films in Muhammad Siddiq the Supreme Court has taken the view that a person dealing with a company must know that any action by the company is consonance with the articles; (Underlining is mine].
(vii)objection regarding competence to institute/defend legal action can only be entertained where such a plea is taken in the pleadings or where request is made to frame additional issues or any evidence or additional evidence is led in respect thereof or where the Court suo motu raises an objection in this regard:
(viii) a plaint can be rejected on grounds of incompetence to institute the same;
38. The learned Banking Tribunal accordingly when deciding the entire case afresh must call for the articles of the respondent and decide this issue in terms of the guidelines mentioned above.
[d] Major (Retd.) Ahmed Nadeem Sadal and 3 others v. Federation of Pakistan through Secretary Sports, Islamabad and 3 others [2015 CLC Page 34 rel. Page 45]
27. Suppression or concealment of relevant facts is a kind of fraud and has been rightly termed as a "jugglery which has no place in the equitable and prerogative jurisdiction". Frivolous, vexatious litigation based on suppression of facts has serious consequences for administration of justice. It subverts the course of justice for other bona fide litigants by clogging the judicial system and gives rise to mistrust of the legal system. It causes delay for others by wasting public time and loss to the exchequer. It is, therefore, an abuse of the process of the Court. In the words of Lord Denning MR, in Allen v. Sir Alfred Mc ALPINE & Sons (1968) 1 All. E.R 543, "...Law's delays have been intolerable. They have lasted so long as to turn justico sour". Courts, therefore, have the duty to protect its process from being abused. This is in the nature of a fiduciary duty which the Courts owe towards the public and bona fide litigants. Obstinate litigants causing abuse of the process of the Court undermine the public confidence in the administration of justice and the courts. Being conscious of this onerous duty, Courts cannot show leniency when its process is abused, despite the fact that grace and magnanimity are its essential attributes. [Underlining is mine].
[e] Saiyed Ali Amir v. Messrs Dalmia Cement Ltd. [PLD 1961 (W. P.) Karachi Page 255 rel. Page 262] ' It is plain to me that if the plaintiff was relying for his claim on rule 31 supplemented by the alleged understandings he would have certainly stated earlier when his claim based upon that rule was categorically denied by the defendants. I must further point out that in the absence of any pleadings on that point this evidence could not be looked into, a principle which was clearly laid down in the judgment of their Lordships of the Privy Council in the case of Pir Siddiq Mohammad Shah v. Mst. Saran (24 Sind L R 138). For all these reasons I reject the story of the agreement or understanding between the plaintiff and Mr. Dalmia as alleged by the former. Upon the conclusions reached by me my finding on Issues Nos. I and 2 is that the terms and conditions, on which the plaintiff was employed, were those as contained in Exh. 5 and the General Rules of Service, 1945 and Employment Rules of 1954. [Underlining is mine].
[f] Amin Yousuf Nizami v. Rashid Rayon Mills, Karachi [PLD 1971 Karachi rel. Page 505 rel. Page 507] "...Again, the case, set up by the defendants in the course of the trial was not at all pleaded by his contention that it is not open to the defendants to prove at the trial a case which was not pleaded by them at all in their pleadings."...
[g]. Abdul Hafiz and another v. Muzaffar Karim [PLD 1973 Karachi 253 rel. Page 256]
5. Mr. Nasiruddin Shahmir, learned counsel for the appellants,. Contended in the main that the Court below had fallen into error by basing their judgments on pleas, which were never raised in the plaint. In support of his contention he cited the cases of ' Amin Yousuf Nizami v. Rashid Rayon Mills, Karachi (1). Budho and others v. Ghulam Shah (2). The Chief Administrator of Auqaf, West Pakistan, Lahore V. Pir.. Rashid-ud-Daula and others (3). And M/s. Karim Commercial Co. Ltd. v. The United Oriental Streamship Co. And 2 others (4). There can be no quarrel with the proposition advanced. However, it has to be seen that in Amin Yousuf Nizami v. Rashid Rayon Mills' case, the pleas raised in defence were totally inconsistent. It appears that during the exchange of the correspondence it was denied that the injuries received by the appellant were in the factory and if in the factory, the same were aggravated by the employee's negligence. However, at the trial they confined to the latter pleas. These were found to be totally inconsistent pleas." [Underlining is mine].
[h] Government of West Pakistan (Now Punjab) through Collector, Bahawalpur v. Haji Muhammad [PLD 1976 SC 469 rel. Page 473] ... "It is a well established rule that if a plea of fact is not pleaded no case can be founded on it This being so, the plea that he was being paid from the contingency has to be ignored and all that is established on the record is that his tenure was temporary but as to what were the terms and conditions of his service, the appellant failed to establish. Therefore, having regard to the period he had served before his removal it cannot be denied that his service though temporary, was for an indefinite period." [Underlining is mine].
[i] Pakistan through Ministry of Finance Economic Affairs and another v. Fecto Belarus Tractors Limited [PLD 2002 SC 208 rel. Page 221] "23. It will be necessary to Coach the true concept of the doctrine of promissory estoppel. Before proceeding further this doctrine has been variously called 'promissory estoppel' 'requisite estoppel', 'quasi estoppel' and 'new estoppel'. It is a principle evolved by equity to avoid injustice and though commonly named 'promissory estoppel'. It is neither in the realm of contract nor in the realm of estoppel. The true principle of promissory estoppel seems to be that where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or effect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties and this would be so irrespective of whether there is any pre-existing relationship between the parties or not. The doctrine of promissory estoppel need not be inhibited by the same limitation as estoppel in the strict sense of the term. It is an equitable principle evolved by the Courts for doing justice and there is no reason why it should be given only, a limited application by way of defence. There is no reason in logic or principle why promissory estoppel should also not be available as a cause of action. "[Underlining is mine].
[i] Muhammad and 2 others v. Mst. Banuk Naz Khatoon [1989 CLC 1819 re. Page 822] ... "It merely confirms and ratifies the factual position. In the circumstances objection regarding non-registration of Ex.P/1-A is misconceived. Besides petitioner by his conduct is estopped from taking any somersault from the stand already taken by him. Furthermore this fact is not even contradicted by him in the statement recorded in the trial Court." ... [Underlining is mine].
24. Conversely, Mr. Jamshed Malik, learned counsel for the Plaintiff Bank argued that the Defendant has failed to comply with the mandatory requirements of provision of section 10(4) and (5) of F.I.O., 2001 [Ordinance XLVI of 2001]. Moreover, the Defendant has also failed to raise any substantial question of law or fact which may require the recording of evidence. Per Mr. Jamshed Malik, the Defendant, has also failed to deny the execution of the documents annexed with the Plaint. Per learned counsel on this score alone, the instant Application for leave to defend the suit bearing C.M.A. No,116 of 2014 merits dismissal and the Plaintiffs suit as prayed needs to be decreed.
25. Mr. Jamshed Malik, learned counsel for the Plaintiff Bank further contended that 'Legal Objections'/Defence Pleas' are false and frivolous. The 'Special Power of Attorney' is a validly executed document empowering the 'attorney' of the Plaintiff viz. Muhammad Adil Masood son of Muhammad Masood Sarwar to carry out all such acts, as those were mentioned in the said 'Special Power of Attorney' dated May 18, 2012 [Annexure IP to the Plaint]. The Plaintiff Bank, per Mr. Jamshed Malik, had/has duly authorized its' President/Chief Executive Officer viz. Mr. Naeemuddin Khan son of Sardar Nizamuddin Khan, through a registered 'General Power of Attorney' dated 25th August, 2011 [Annexure 'gg' to the Plaint], to delegate special power to any officer of the plaintiff Bank/Company. According to Mr. M. Jamshed Malik, the said President/Chief Executive Officer as such and, of course, has validly and properly delegated his powers through 'Special Power of Attorney' in favour of inter alia to file/initiate recovery proceedings in the Courts of law. Thus, a lawfully 'constituted' and 'authorized attorney' of the Plaintiff's Institution has not only instituted the above suit but has also lawfully and validly verified the 'plaint' in the present suit.
26. Mr. Jamshed Malik, learned counsel for the Plaintiff Bank next argued that the claim of the Plaintiffs Bank as alleged by the Defendant is not 'unlawful', 'fraudulent', 'exaggerated', 'arbitrary' based on 'misrepresentation', 'concocted pleas' or otherwise, the Plaintiff has charged and/or claimed any 'mark-up' upon 'mark-up'. Per learned counsel by taking such groundless stance/pleas the Defendant, in fact has attempted to wriggle out of his commitments. By raising such false and frivolous pleas, the Defendant, in fact, is accepting the claim of the Plaintiff Bank.
Moreover, all the 'documents' attached with the plaint are not only the sufficient proofs of the 'finances' granted to and availed by the Defendant from the Plaintiff's Bank but also clearly depict the breach of the 'contractual obligations' on the part of the Defendant. The documents attached with the plaint, per Mr. M. Jamshed Malik, are valid and binding upon the Defendant and in no manner as alleged, have lost any value. All the 'documents' besides 'genuine' are lawfully enforceable against the Defendant. Per Mr. Jamshed Malik, learned counsel for the Plaintiff Bank, the Defendant instead of paying the 'outstanding dues' owed to the Plaintiff has approached this Court with un-clean hands. The Defendant vis-a-vis repayment of the dues has not only breached its' obligations but also failed to pay the same to the Plaintiff Bank and that too despite its repeated commitments.
27. Mr. Jamshed Malik, learned counsel for the Plaintiff Bank further contended that the ' Statement of Accounts', annexed with the Plaint [Annexure 'HH/1' to 'HH/7], no doubt, are proper, fair, just and based on honest and correct entries made therein. The Defendant, of course, has failed to 'pin- point' any entry in the 'statement of accounts' as being wrong and/or otherwise, incorrect. It was also specifically rebutted/denied that any of the statements of account is/are vague, false, fraudulent and/or otherwise, baseless. The Defendant; it is significant to note, has not objected to any single entry in the 'Statements of Accounts', which is/are duly certified under the Bankers' Books Evidence Act, 1891 [Act No,XVIII of 1891], and the presumption of truth is also attached to the entries made therein. Non-challenge of any entry by the Defendant specifically in fact amounts to admission thereof. Even otherwise, the stance of the Defendant is belied by the document relied upon by the Defendant himself i.e, 'Restructuring Agreement' of 3rd August, 2012 [Annexed with Leave-to-Defend Application]. Moreover, it is also worth to note, that the contents of the 'Statement of Accounts' have been made part and parcel of the contents of 'paragraph 21' of the 'plaint' but the same has not been denied by the Defendant much-less specifically. The 'evasive denials' in law are no denials, Mr. M. Jamshid Malik next contended.
28. Per Mr. Jamshed Malik, learned counsel for the Plaintiff Bank, all the 'legal Objections'/'Defence please' are frivolous, vague and unsubstantiated. All the pleas raised by the Defendant are selves- contradictory, if read in juxtaposition of the document i.e, 'Restructuring Agreement' of 3rd August, 2012 upon which the Defendant himself is relying. Besides, the Defendant has not raised any 'substantial question' of 'law' or' fact' which may require any evidence. The Defendant, it is needless to say, has 'defaulted' in fulfillment of 'contractual obligations' regarding the repayment of the outstanding amounts of finances extended to the Defendant by the Plaintiff. In view of this position, the Plaintiff is well entitled and also within its' right to recover the same through the instant suit for recovery of Rs,203,132,535.04 plus cost of funds etc.
29. As far as the 'Restructuring Agreement' of 3rd August, 2012, is concerned, the same has under the facts and circumstances of the instant case is irrelevant as the same has never become 'effective' for the reasons that the Defendant has failed to fulfill the requisite 'terms' and 'conditions' of 'Restructuring Agreement' of 3rd August, 2012 especially of clauses 4(e)(f)(g) and (i). The so- called 'Restructuring Agreement', even otherwise, has no bearing whatsoever on the present suit if, the same is read in juxtaposition of the 'OFFER LETTER' dated 18.06.2012 as 'defined' under clause '1.1' under the heading of 'INTERPRETATION'. The Defendant inter alia has also defaulted in fulfilling of his 'contractual obligations' towards the Plaintiff by not repaying the outstanding amounts of finance facility granted to and availed by the Defendant by the Plaintiff. Plaintiff Bank, thus is entitled to recover the same through the instant proceedings which proceedings are not only valid but also proper and based on genuine and enforceable 'documents' annexed with the plaint. Per Mr. Jamshed Malik, learned counsel for the Plaintiff Bank, the Plaintiff, indeed, has duly and fully complied with the 'mandatory requirements' of section 9(2) and (3) of the Ordinance, 2001. Rather, it is the Defendant himself, who has badly failed and/or avoided to comply with the 'mandatory requirements of section 10(4) and (5) of the Ordinance, 2001. For ready reference section 10[4], [5] and [6] is reproduced as under:-
10. Leave to defend. - (1) ...
(2) . . . (3)
(4) In the case of a suit for recovery instituted by a financial institution the application for leave to defend shall also specifically state the following -
(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: Explanation.- For the purposes of clause (b) any payment made to a financial institution by a customer in respect of a finance shall be appropriated first against other amounts relating to the finance and the balance, if any, against the principal amount of the finance.
(5) The application for leave to defend shall be accompanied by all the documents which, in the opinion of the defendant, support the substantial questions of law or fact raised by him.
(6) An application for leave to defend which does not comply with the requirements of subsections (3), (4) where applicable and (5) shall be rejected, unless the defendant discloses therein sufficient cause for his inability to comply with any such requirement.
(7) ................
(8) ............
(9) ...................
(10) .......................
(11) ..................
(12) ........................
30. As far as the 'Preliminary Objections/ contentions' of Mr. Syed Wasih Hyder, learned counsel for the Defendant vis-a-vis the non-maintainability of the instant suit i.e, for want of 'Proper Resolution' and/or due to non-competency of the person through whom the above suit has been filed is concerned, I would like to refer to subsection (1) of section 9 of F.I.O., 2001 [XLVI of 2001] which reads as follows:- "9. Procedure of Banking Courts.---(I) Where a customer or a financial institution commits a default in fulfilment of any obligation with regard to any finance, the financial institution or, as the case may be, the customer, may institute a suit in the Banking Court by presenting a plaint which shall be verified on oath, in the case of a financial institution by the Branch Manager or such other officer of the financial institution as may be duly authorised in this behalf by power of attorney or otherwise." [Underlining is mine].
31. From perusal of above provision of law, it is quite evident that 'plaint' in case of a 'Financial Institution' is to be 'verified on oath' by the 'Branch Manager' or such other officer of the Financial Institution as may be duly authorized by 'Power of Attorney' or 'otherwise'. Needless to say, the word 'otherwise' used in subsection (1) of section 9 of F.I.O., 2001 [Ordinance No,XLVI of 2001], in my view, needs not to be given 'restrictive meanings'. The word 'otherwise', not only enlarges the authority of an officer of a financial institution but also embraces within its' ambit, apart from, the 'Power-of- Attorneys' any other documents i.e, 'Special Power of Attorney', Letter of Authority and/or Board's Resolution, on the basis and strength whereof, a person/officer including Manager of the Financial Institution becomes competent not only to 'verify' the 'plaint on oath' but also becomes competent to institute a suit in Banking Court inter alia for recovery of the outstanding amounts. In the present case, besides, instituting of the suit the 'verification' of the 'plaint' has also been done by Mr. Muhammad Adil Masood son of Muhammad Masood Sarwar who is a duly 'constituted attorney' of the Plaintiff's Institution. For convenience purposes 'para 26' and 'verification clause' of the 'plaint' respectively are reproduced as follows: PLAINT PARA-26 A. "26. That Mr. Muhammad Adil Masood son of Muhammad Masood Sarwar is the duly constituted Attorneys of the Plaintiff, duly authorized to file the instant suit, is well conversant with the facts of the case and has signed the plaint on behalf of the Plaintiff.
VERIFICATION CLAUSE B. I, Mr. Muhammad Adil Masood son of Muhammad Masood Sarwar, Muslim, adult, resident of Karachi, do hereby verify on solemn oath, on this 27th day of Nov. 2013, that I am the Attorney of the Plaintiff duly authorised to file this suit and that whatever has been said herein above is true to my own knowledge and belief and the 3 legal pleas have been taken upon advice received from Counsel which I verify believe to be true." SD!- DEPONENT 32. Being also relevant, I would like to reproduce herein some of the 'relevant clauses' i.e, clauses 7, 13, 18 and 25 from the 'General Power of Attorney' [In short GPA] dated 27th May, 2011 having been duly 'signed and 'executed' by the Board of Directors [In short BoD] of the Plaintiff Bank's Resolution passed in its 167th meeting held on May, 14, 2011 in favour of Mr. Naeemuddin Khan son of Nizamuddin Khan which read as follows:- GENERAL POWER OF ATTORNEY
7. Certain powers which find mention in this' power of attorney not exercisable at this moment, shall be operative and effective after the Bank is authorized to function with regard to above mentioned powers. The attorney shall not exercise any or all powers(s) which are not primarily exercisable by the Bank for the time being till the Bank attains the said powers to be exercised under any law for the time being in force.
13. The said Attorney shall have the power to do generally everything requisite for general Banking Business and purposes usually and customarily done by the Banks in the above area on behalf and in the name of the Bank.
18. The said Attorney shall have power to institute and file petitions, suits, appeals, applications of all nature, commence other legal proceedings, civil or criminal or other cases, on behalf of the Bank and to prosecute the same and to sign, execute or attest plaints, petitions, appeals, applications of all nature, written statements, reply, replications and other documents that may be necessary therefor and to verify the same, to swear affidavits and to compromise, refer to arbitration binding himself on oath of a party or witness, to accept service and defend suits or other proceedings that may be filed against the Bank and to prosecute the claims or defence in the original court or the appellate court or before any officer whether in Civil, Criminal, Revenue Courts or other courts or offices and for such purpose to appoint an advocate or counsel on behalf of the Bank or to authorize any officer of the Bank in this behalf.
25. To delegate special power of attorney to any officer of bank and to revoke or vary any such appointment.
33. The 'GENERAL ATTORNEY' viz. Mr. Naeemuddin Khan son of Sardar M. Nizam ud Din Khan has thus duly 'signed' and 'executed' a 'SPECIAL POWER OF ATTORNEY' dated 18th May, 2012 in favour of Mr. Muhammad Adil Masood son of Muhammad Masood Sarwar whereby, he has duly authorized the 'Special Attorney' inter alia to initiate recovery proceedings. For convenience and ready reference the same is reproduced as under:- SPECIAL POWER OF ATTORNEY BY THIS SPECIAL POWER OF ATTORNEY given at this 18th day of May,.
2012. The Bank of Punjab, constituted under the Bank of Punjab Act, 1989, Head Officer BOP TOWER, Main Boulevard, Gulberg-III, Lahore (hereinafter referred as "the Bank") acting through Mr. Naeemuddin Khan, the resident/CEO, who is duly authorized lawful attorney of the Bank vide Registered General Power of Attorney document No,341, Book No,4, Volume No,29 registered with the Sub-Registrar, Gulberg Town, Lahore on 25.08.2011, do hereby nominate, appoint and constitute Mr. Muhammad Adil Masood son of Muhammad Masood Sarwar, CNIC #42501-6417426-9, Assistant Vice President presently in service of the Bank posted at the Bank of Punjab, SAM (Corporate), DHA, Karachi (hereinafter called "the Attorney") its true and lawful Special Attorney in its name or otherwise on its behalf to do all lawful acts, deeds and things on behalf of the Bank of Punjab with regards to proceedings for recovering the debts and advances in Bank's cases and to give evidence, statement, to file petitions, suits, appeals, applications of all nature or to initiate commence other legal proceedings, Civil or Criminal, or other cases relating to Bank's loan cases, on behalf of the Bank and to prosecute the same and to sign, execute or attest plaints, petitions, appeals, revisions affidavits, applications of all nature, replied Vakalat Namas, written statements and other documents that may be necessary thereof and to verify the same, to swear affidavits, give evidence and to accept service and defend the suits, writ petitions, appeals etc that may be filed against the Bank and to initiate proceedings before any officer whether in Civil, criminal, revenue courts or other courts or offices or other proceedings of Bank's cases and for such purpose to appoint an Advocate or Counsel, approved by the Bank, on behalf of the Bank. The Attorney shall also have authority to file, sign, depose and pursue criminal complaints on behalf of the Bank in Bank's cases.
AND the Bank do hereby agree to ratify and confirm all and whatsoever the said attorney shall lawfully do or cause to be done by virtue of this Special Power of Attorney. It being' declared that all acts, deeds and transactions made by the Attorney shall be binding on the Bank, if taken in pursuance of these presents in good faith and for the purpose and cause hereof till the time the authority herein is terminated/withdrawn and/or cancelled.
IN WITNESSES whereof the Bank hereby execute this Special Power of Attorney on the day, month and year hereinabove mentioned.
SD/- THE SPECIAL ATTORNEY MUHAMMAD ADIL MASOODGRANTOR THE BANK OP PUNJAB Through Sd/- Naeemuddin Khan President The Bank of Punjab Head Office Lahore WITNESSES SD!-
1. Anwar ul Hague Law Officer THE BANK OF PUNJAB UC, KHAYABAN E SHAHBAZ, PHASE VI NIC 42301-0809402-0 SD!-
2. MANAGER THE BANK OF PUNJAB DHA PHASE VI, KARACHI 45205 4815068-3
34. Evidently, the suit has been filed and the 'plaint' verified through and by Muhammad Adil Masood son of Muhammad Masood Sarwar, who is the 'special attorney' of the Plaintiff Bank. It is also significant to note, that under sections 196 and 197 of the Contract Act [Act No,IX of 1872], where acts are done by one person on behalf of another, but without his 'knowledge' or 'authority', he may elect to 'ratify' or to disown such acts. If, he ratifies then, in such like situation same effects will follow as if, all that acts had been 'performed' by his authority. Such 'ratification' it is needless to say, may be 'expressed' or 'implied' in the conduct of the person on whose behalf the acts have been done. Being this is a legal position, even if a suit is filed by a person having 'no authority'
[which is not a case in hand] then too, the 'principal' can at later stage can validly ratify the defect, if any. In view of the above, I am of the view that above suit has not only been competently filed through Muhammad Adil Masood son of Muhammad Masood Sarwar but the plaint has also been verified properly and validly by him.
35. From the record, it also appears that in the year, 2009, the Defendant had approached the Plaintiff Bank for the purpose of obtaining a 'Running Finance Facility' in the sum of Rs,210,000,000/- [Rupees Two Hundred Ten Million Only] which facility was extended by the Bank to the Customer under the 'Finance Agreements: dated 10.08.2009 and 01.10.2010 respectively. The Defendant, however, due to certain problems, was unable to.Meet his repayment obligations in respect of the 'RF Facility' under the above said Finance Agreements. Resultantly, as on June 01, 2012, the Defendant stood liable to pay an amount of Rs,204,986,168/- [Rupees Two Hundred Four Million Nine Hundred Eighty Six Thousand One Hundred Sixty Eight Only]as being the outstanding amount in respect of the aforesaid RF Facility.
36. Under the above scenario, the Defendant, approached the Plaintiff Bank with a request for restructuring his 'outstanding liability' as on 01.06.2012 in the following manner:- The Bank to restructure the outstanding principal amount and convert the same into a demand finance facility for an amount of Rs,204,986,000/- (Rupees Two Hundred and Four Million Nine Hundred and Eighty Six Thousand only) ("DF Facility") for a period of three years five months starting from 01.07.2012 and ending on 01.11.2015.
The outstanding principal amount of Rs,204,986,000/- (Rupees Two Hundred and Four Million Nine Hundred and Eighty Six Thousand only) shall be paid by the Customer in 41 equal monthly installments starting from 01.07.2012 (as more particularly described in the Repayment Schedule attached as Schedule-H hereto). iii. The outstanding mark-up amount on the previous RF Facility has been paid by the Customer.
37. In view of the above, Mr. Syed Wasih Hyder, learned counsel for the Defendant forcefully argued that the Plaintiff Bank with mala fide intention has concealed the material fact i.e, the execution of the 'Restructuring Agreement' of 3rd August, 2012 from this Court while, filing the above suit for recovery of the outstanding amount in the sum of Rs,203,132,535.04 plus cost of funds etc. In response, Mr. Jamshed Malik, learned counsel for the Plaintiff Bank argued that as far as, the execution of 'Restructuring Agreement' of 3rd August, 2012 [available on record] is concerned, the same, no doubt, was executed between the Plaintiff and Defendant but it is the Defendant who in his wisdom 'avoided' and/or 'failed' to strictly comply with the 'terms' and 'conditions' of the 'Restructuring Agreement' of 3rd August, 2012 inter alia as contained in Clauses 4(e), (f) and (g) of the said Agreement. As such, the said Agreement on account of Defendant's failure did not become 'effective' and 'enforceable'. The said 'Restructuring Agreement' of 3rd August, 2012, as such has no bearing whatsoever on the present proceedings/suit as the same beside :competent in law are/is based on 'valid' and 'enforceable' documents.
38. To properly understand and appreciate the contentions raised by both the learned counsel for the parties in its' true perspective, I would like to refer to and reproduce herein some of the 'relevant clauses' of the 'Restructuring Agreement' of 3rd August, 2012 and Offer Letter dated 18.06.2012 [Annexure 'A' to the Restructuring Agreement], respectively as follows:- RESTRUCTURING AGREEMENT
1. A. In the year 2009 the Customer had approached the Bank for the purpose of obtaining a Running Finance Facility for an amount of Rs, 210,000,000/- (Rupees Two Hundred Ten Million Only)
("RF Facility') which was extended by the Bank to the Customer under the Finance Agreements dated 10.08.2009 and 01.10.2010 ("Finance Agreement') respectively. B. Due to certain flow and other problems, the Customer was unable to meet its repayment obligation in respect of the RF Facility under the Finance Agreement.
C. As on June 01, 2012, the Customer is liable to pay an amount of Rs, 204,986,168/- (Rupees Two Hundred and Four Million Nine Hundred and Eighty Six Thousand One Hundred and Sixty Eight Only) as principal outstanding amount in respect of the RF Facility under the Finance Agreement; D. It is in the above background that the Customer has now approached the Bank with a request to restructure its outstanding liabilities in respect of the RF Facility as follows: The Bank to restructure the outstanding principal amount and convert the same into a demand finance facility for an amount of Rs, 204,986,000/- (Rupees Two Hundred and Four Million Nine Hundred and Eighty Six Thousand only) ("DF Facility") for a period of three years five months starting from 01.07.2012 and ending on 01.11.2015.
The outstanding principal amount of Rs, 204,986,000/- (Rupees Two Hundred and Four Million Nine Hundred and Eighty Six Thousand only) shall be paid by the Customer in 41 equal monthly installments starting from 01.07.2012 (as more particularly described in the Repayment Schedule attached as Schedule-II hereto). iii. The outstanding mark-up amount on the previous RF Facility has been paid by the Customer.
E. .........
F. ..................
G. This Agreement, from the day that it comes into effect in terms of this Agreement, shall be deemed to have superseded and overridden all and any other earlier agreements, whether written or verbal, and any kind of communication, whether written or verbal, that may have been exchanged between the Customer and the Bank, or any kind of previous dealings between the Customer and Bank, including though not limited to, any facility offer letter that may have been issued by the Bank to the Customer, except the Offer Letter dated 18.06.2012 and the extent of any charges on the Customer's assets that may have been created in favour of the Bank will continue to be in place and shall be fully available to secure any obligation of the Customer towards the Bank either under this Agreement or otherwise. [Underlining is mine].
I. INTERPRETATION 1.1 Definitions "Outstanding Principal Amount" shall an amount of Rs, 204,986,00/- (Rupees Two Hundred and Four Million Nine Hundred and Eighty Six Thousand only) being the principal portion of the outstanding amount that the Customer is liable to pay to the Bank under the Finance Agreement.
"Offer Letter" shall mean the offer letter dated 18.06.2012 which is attached as an Annexure "A" hereto;
2. RESTRUCTURING 2.1 On the specific request of the Customer, the Bank has agreed to restructure the Outstanding Principal Amount as follows: i. The Bank shall restructure the Outstanding Principal Amount and convert the same into a DF Facility for an amount of Rs, 204,986,000/- (Rupees Two Hundred and Four Million Nine Hundred and Eighty Six Thousand only) for a period of three years ,five months starting from 01.07.2012 and ending on 01 . 11 .2015 ; ii. The Outstanding Principal Amount of Rs, 204,986,000/- (Rupees Two Hundred and Four Million Nine Hundred and Eighty Six Thousand only) shall be paid by the Customer in 41 equal monthly installments starting from 01.07.2012 (as more particularly described in the Repayment Schedule; iii. The outstanding mark-up amount on the previous RF facility has been paid by the Customer; 2.2 That the markup amount to be accrued on the DF Facility with effect from 01.06.2012 shall be payable by the Customer on monthly basis at the rate of 1 month KIBOR + 200 bps as mentioned in the Repayment Schedule. [Underlining is mine].
4. REPRESENTATIONS AND WARRANTIES The Customer represents and confirms that:-
(a) The Customer is not aware of any reason, which, if known to the Bank would have discouraged the Bank from entering into this Agreement.
(b) The Customer will be bound to pay all the amounts that it may be required to pay under this Agreement on the due dates as specified in the repayment schedule attached as Schedule-II hereto or on demand by the Bank, failing which the Bank shall be entitled, without having to seek approval from any court, to sell and transfer the securities/charged properties (charged by the Customer in favour of the Bank in terms of the instruments mentioned in Schedule-I hereto) to any person, through any mode and at any price that it deems appropriate in the given circumstances.
(c) That the Customer is not indebted for any amount to any financial institution other than those already disclosed to the Bank.
(d) That the Customer shall not request for any further restructuring from the Bank and shall fulfill all its obligations under this Agreement.
(e) The Customer shall till the currency of this Agreement provide financial details to the Bank on the Borrower's Basic Fact Sheet format prescribed by the Bank.
(f) For facilities secured against hypothecations of stocks and/or receivables on Pari Passu basis, the Customer shall provide the Bank a bank-wise break up of outstanding amounts with total value of stocks and receivables there against.
(g) The Customer shall submit its audited accounts and/or other financial information to the Bank within four (4) months from the date of financial year end.
(h) The Customer shall not pay any amount to the directors towards the repayment of their loans unless all the amounts payable by the Customer towards the Bank under this Agreement are paid.
(i) The Customer shall comply with the terms and conditions of the Offer Letter.
13. ENTIRE AGREEMENT This Agreement and the Offer Letter represent and constitute the entire agreement and understanding between the Parties in relation to the subject matter hereof and shall supersede all previous agreements and/or understandings between the Parties in relation thereto. In case of any contradiction between the terms of the Offer Letter shall prevail. [Underlining is mine].
B. BANKING FACILITY 3.7 The utilization of facility shall be subject to prior completion of necessary formalities including fresh documentation and securities in consultation with the legal advisor of the bank to its satisfaction; and shall contain the requisite representations, warranties, covenants, etc. As may be required by the Bank.
3.8 In the event of default in payment of principal amount or markup or commission on the relevant due dates, the Bank shall have the right, power and authority to charge liquidated damages @ of 2% p.a. On the principal amount during the delayed period and other amounts, costs, charges and expenses, etc as may be agreed or specified in any agreement, instrument, or document governing the facilities and the Bank will also have the option to revise mark up/commission/charges rate upwards only, at any moment if market conditions change.
3.9 Subject to the furnishing/execution of fresh agreements and documents and any necessary amendments which the Bank may in its sole discretion decided to incorporate, all the terms and conditions of the agreements/arrangements governing the facility previously granted to the Client will continue hereto, and the Client will be liable to pay the total outstanding amounts(s) together with all applicable mark-up, costs, commissions, charges, and expenses and any other levies that the Bank may impose from time to time. [Underlining is mine].
3.13 The Client will furnish all such information, as the Bank may require at any time and from time to time, relating to the position of the security, collateral, credit support, goods and pecuniary liabilities.
3.16 The client to reduce principal amount by Rs, 5.0 Million monthly for first 6 months.
39. Evidently, per 'clause 3.7' of the 'Restructuring Agreement' of 3rd August, 2012, the utilization of facility was subject to Prior completion of the necessary formalities including fresh documentation and securities in consultation with legal advisor of the Bank to its' satisfaction and inter alia to contain the requisite 'representations', 'warranties', covenants, etc. As being required by the Plaintiff Bank. It is no body's case, that the aforesaid requisite formalities were ever complied with/fulfilled.
The Plaintiff Bank, however, has specifically asserted in its' reply that the Defendant has failed to fulfill the 'terms' and 'conditions' of the 'Restructuring Agreement' of 3rd August, 2012 satisfactorily.
Moreover, as per 'clause 13' under the heading of 'Entire Agreement of Restructuring of 3rd August, 2012 in case of any contradiction between the 'terms' and 'conditions' of the 'Restructuring Agreement' and 'Offer Letter' dated 18.06.2012, the 'terms' and 'conditions' of the 'Offer Letter' dated 18.06.2012 [Annexure 'A' to the Agreement] are to prevail. In view of this position, since the Defendant has failed and/or avoided to fulfill the 'terms' and 'conditions' of the 'Restructuring Agreement' of 3rd August, 2012 as such, the instant suit filed by the Plaintiff Bank on the basis of 'documents' executed earlier to the 'Restructuring Agreement' of 3rd August, 2012, is not only proper but also enforceable.
40. With regard to the contention of Syed Wasih Hyder, learned counsel for the Defendant to the effect that the Plaintiff Bank, has failed to comply with the requisite 'mandatory requirements' of subsections 3(2) and (3) of section 9 of F.1.0., 2001 [Ordinance XLVI of 2001]. In this regard, I would like to refer to Para 21 of the 'plaint' which, of course, belies the Defendant in its' stand so taken.
Moreover, requisite 'dates', no doubt, can conveniently be seen and checked from the 'Certified Statement of Accounts' annexed with plaint [Annexures 'gg' and 'Jr to the Plaint]. Both the 'Statement of Accounts, not only contain the 'dates' but also the 'Debit', 'Credit' and 'Balance Entries'.
Besides, both the 'certified Statement of Accounts' [Annexure 'E' to the Plaint] also bear the requisite 'Certificates' duly 'signed' by Branch Manager of the Plaintiffs Institution. On the 'certified Statement of Accounts' rubber stamp of the Plaintiff Bank has been duly affixed. It is also significant to note that the Defendant has not 'pin-pointed out' any 'specific entry' in the 'Statement of Accounts' as being wrong and/or pertains to 'mark-up' over 'mark-up' as alleged by the Defendant. In view of this position the arguments of Syed Wasih Hyder, learned counsel for the Defendant stands repelled.
41. Likewise, the arguments of Syed Wasih Hyder, learned counsel. For the Defendant vis-a-vis non- accrual of 'cause of action' against the Defendant is concerned, the same is also belied by the contents of the plaint wherein on various dates the 'cause of action' has been asserted as arisen in favour of the Plaintiff and against the 'Defendant-Customer'. Being relevant 'Para 23' of the Plaint is reproduced herein as below:- "23. That the cause of action arose in favour of the Plaintiff and against the Defendant on 15.8.2011 when the Defendant had to return the amounts availed in respect of the Running Finance Facility and the Defendant failed to pay the same to the Plaintiff; when on 27.5.2012 the Defendant was served upon a Legal Notice to return all the outstanding borrowed amounts within seven (7) days of the receipt of the said demand and upon expiry of the said seven (7) days when the Defendant defaulted to repay the outstanding and due Running Finance Facility, when on 25.10.2013 the Defendant was again reminded and required to pay the outstanding amounts, along with the amounts due as per Promissory Notes, and the Defendant failed to pay the same to the Plaintiff despite being asked to do so, and when the Defendant failed to discharge his liabilities in respect of mortgages created in favour of the Plaintiff as fully described in paragraphs Nos.16 and 17 above, hence this suit. "
' In view of above, the arguments of Syed Wasih Hyder, learned counsel for the Defendant regarding non-accrual of 'cause of action' in favour of the Plaintiff Bank and against the Defendant is not only 'mis-conceived' but also 'mis-leading' as such merits no consideration.
42. With regard to the liability of Defendant as guarantors is concerned, under law the 'liability' of the guarantor is 'co-extensive' with that of the 'Principal Debtor' [Defendant herein], unless, in the letter of guarantee, it is provided otherwise. Under law, anything 'done' or 'promise made' that is to say for the benefit of the 'principal debtor' is, no doubt, a 'sufficient consideration', as far as, the surety is concerned. It is significant to note a letter of guarantee is actually a 'contract' to perform a 'promise' or 'discharge' the liability of a 3rd person, as and when a ' default' occurs. In the instant case, the Defendant is a 'principal customer', therefore, for himself he could not stand as a guarantor. The argument of Mr. M. Jamshid Malik to the extent thus seem 'mis-conceived. In this regard, Sections 126, 127 and 128 of the Contract Act, 1872 [Act No,IX of 1872] besides, being helpful are self-explanatory, therefore, the same are respectively reproduced as follows:- a. ................
126. "Contract of guarantee", "surety", "principal debtor" and "creditor". A "contract of guarantee" is a contract to perform the promise, or discharge the liability, of a third person in case of his default. The person who gives the guarantee is called the "surety"; the persons in respect of whose default the guarantee is given is called the 'Principal debtor" and the person to whom the guarantee is given is called the "creditor". A guarantee may be either oral or written. [Underlining is mine]. b. ................
127. Consideration for guarantee. Anything done, or any promise made, for the benefit of the principal debtor may be a sufficient consideration to the surety for giving the guarantee. c.
128. Surety's liability. The liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract."
43 Syed Wasih Hyder, learned counsel for the Defendant is right in arguing that any 'lacuna' if, left at the time of filing of 'plaint' cannot be cured and/or rectified at the later stage i.e, at the time of filing of replication as in such like eventuality a Defendant would have no opportunity to rebut the same. Since, F.I.O., 2001 is special law, therefore, the requirements as per sections 9 and 10 of F.I.O., 2001 in my view cannot be postponed and/or cured subsequently, much-less, at the time of filing of the replication. The opportunity of reply provided in terms of subsection (7) of section 10 of F.I.O., 2001 [XLVI of 2001] to a financial institution is a 'limited opportunity' that is say to the extent of 'reply' in answer to the 'Leave to Defend Application[s].. In this regard reliance can be placed on the case of Habib Metropolitan Bank Limited V. Abid Nisar [2014 CLD 1367], wherein on the aforesaid aspect of the matter it was observed as below:- "... Compliance of mandatory provision of law is more important than wisdom of individual which negates such compliance. The scheme of sections 9 and 10 of Ordinance 2001 is such that once a suit is filed and leave application is preferred the consequences must follow as the scheme of Ordinance 2001 does not provide filling up of lacuna at later stage and hence not curable."
[Underlining is mine].
44. Mr. Jamshid Malik, learned counsel for the Plaintiff Bank further argued that the Defendant has not only badly failed to perform their 'contractual obligations' in terms of the various finance agreements including the last Agreement for financing on 'mark-up basis' dated 16.10.2010 [Annexure 'T' to the Plaint] but also violated the 'terms' and 'conditions' of the so-called 'Restructuring Agreement' of 3rd August, 2012 [Annexed with Leave-to-Defend Application bearing C.M.A. No,116 of 2014]. The Plaintiff Bank under such circumstances needless to say was compelled to file the instant suit, inter alia, for the recovery of its' outstanding dues/amount in the sum of Rs,203,132,535.04 [Rupees Two Hundred Three Million, One Hundred Thirty Two Thousand, Five Hundred Thirty Five and Paisas Four only]. Mr. Jamshid Malik next argued that the Defendant in his 'APPLICATION FOR LEAVE TO DEFEND' bearing C.M.A. No,116 of 2014 has not only expressly admitted the 'relationship' of a 'Financial Institution' and 'Customer' but also the signing and execution of 'financial and 'security documents'. In the Leave-to-Defend Application the Defendant besides admitting the availment of the subject 'finance facility' has also admitted the outstanding amount as referred to and mentioned in the 'Restructuring Agreement' of 3rd August, 2012, on which the Defendant himself has placed reliance. The 'break-up' of the amounts paid by the Defendant w.e.f, 01.06.2012 upto 01.02.2013 reads as follows:- {{TABLE}} Principal Payment 209,890,000 S. No,DATE PAID INSTALMENT AMOUNTCHEQUE NO.BALANCE 209,990,000,00 1 1.6.20125,000,000.0033503478(Faysal)204,890,000.00 2 29.6.20125,000,000.0090047348 (Askari)199,890,000.00 3 27,7.2012 5,000,000.006180932 (Kasb)194,890,000.00 4 10.9.20125,000,000.006180946 (Kasb)189,890,000.00 5 1.10.20125,000,000.006674177 (Kasb)184,890,000.00 6 6.11.20125,000,000.006674183 (Kasb)179,890,000.00 7 12.12.20125,000,000.000033512683 (Faysal)174,890,000.00 8 1.1.2013 5,000,000.000033512717 (Faysal)169,890,000.00 9 1.2.20135,000,000.0090095562 (Askari)164,890000.00 45,000,000.00
45. Quite significant to note, that all the 'FINANCE AGREEMENTS' are COUPLED WITH 'PROMISSORY NOTES'. All the documents annexed with the plaint are duly filled-up with 'dates' and 'figures' which, no doubt, belie the Defendant in his version that any of such document as alleged was obtained 'in blank'. Needless to say, the Defendant before this kind of denial has never 'denied' and/or 'challenged' his signatures on any of the documents annexed with plaint, Besides, no any sort of protest at the time of signing of the documents was recorded which means all the documents annexed with plaint etc. Were duly filled-in with 'dates' and 'figures' otherwise, these 'documents' would have not been signed by the Defendant. In the case of Muhammad Arshad and another v.
Citibank N.A., Lahore [2006 SCMR 1347], the Hon'ble apex Court while, dilating upon somewhat a similar situation, has observed as follows:- "... We are not at all impressed by the contention raised on behalf of the petitioners that the genuineness and authenticity of the agreement, dated 26-6-1999 is not above board as the relevant columns were left blank and filled in subsequently by the Bank. For the sake of argument even if it is admitted then why the agreement dated 26-6-1999 was acted upon and pursuant whereof ten installments had been paid and the outstanding liability was reduced from Rs, 21,05,280 (mark-up price) to Rs,17,95,176. In fact the above installments were made as per repayment schedule which was inseparable part of the agreement dated 26-6-1999. It must not be lost sight of that the main object to get the renewed agreement was restructuring of the finance facility and not liquidation of the liability. We have no hesitation in our mind to hold that agreement dated 26-6-1999 was authentic, genuine and executed between the parties and acted upon. A careful perusal of the agreement dated 26-6-1999 would reveal that mark-up was charged in accordance with the terms and conditions and stipulated therein. It is to be noted that in the agreement dated 26-6-1999 it has been stipulated in a categoric manner that the petitioners had also entered into mark-up agreement which was executed on 21-6-1995 and thus, it stood admitted by the petitioners. It would not be out of place to mention here that an amount of Rs, 21,05,280 was mentioned as mark-up in the last agreement. It would be too late in the day to challenge its authenticity on the pretext of certain blank columns. The question which arises here at this juncture would be that as to why certain columns were left blank and if it was so done why the incomplete agreement was signed by the petitioners? No answer could be given by the learned Advocate Supreme Court on behalf of the petitioners. In our considered view the plea of "blank columns" would hardly renders any assistance to the case of petitioners. In view of the provisions as contained in section 20 read with section 118 of the Negotiable Instruments Act, 1881 no benefit could be given to the petitioner on the ground that the agreement was not completely filled in when executed as it would have no substantial bearing on the validity of the agreement. In this regard reference can be made to case Muhammad Sarfraz Khan Rana v. Government of the Punjab PLD 1990 Lah.
88. It is well-settled by now that "Negotiable Instruments Act provides that where one person signs and delivers to another paper stamped in accordance with law, either wholly blank or having written thereon incomplete negotiable instrument, in order that it may be made, or completed into negotiable instrument, he thereby gives prima facie authority to person who receives that paper to make or complete if as case may be into negotiable instrument for any amount.
Furthermore section 118 of Negotiable Instruments Act provides that presumptions are attached to negotiable instruments which, inter alia includes that negotiable instrument was made or drawn for consideration and that every instrument bearing date was made or drawn on such date. Held: Documents were given blank as canvassed by appellants even then appellants are estopped to challenge legality, validity and genuineness of said documents. " [Underlining is mine].
46.. In the last Agreement for financing for Short/Medium/Long Term on 'Markup basis' dated 01.10.2010 [Annexure 'T' to the Plaint], the 'SALE PRICE' mutually fixed is Rs,210.00 Million and the 'PURCHASE PRICE' mutually fixed is Rs,262.00 Million. The 'PURCHASE PRICE under the aforesaid Finance Agreement is payable on or before 15.08.2011. Besides, the Finance Agreement of 10th October, 2009, a Demand 'PROMISSORY NOTE' dated 10th October, 2010, has also been 'signed' and 'executed' by the Defendant for the 'PURCHASE PRICE' of Rs,262.00 Million. Out of the mutually agreed 'PURCHASED PRICE' of Rs,262.00 Million, upto 3rd August, 2012 the Defendant has paid only a sum of Rs,57,013,832/-. The 'balance outstanding' against the Defendant as on 3rd August, 2012 comes to Rs,204,986,168/- which outstanding amount, no doubt, has also been acknowledged by the Defendant in 'Restructuring Agreement' of 3rd August, 2012. Out of the outstanding amount of Rs, 204,986,168/- as on 03.08.2012, the Defendant has further paid towards' the outstanding of the principal amount a sum of Rs,24,625,242..00 [Rupees Twenty Four Million, Six Hundred Twenty Five Thousand, Two Hundred Forty Two only] to the Plaintiff Bank upto 27.01.2013 [i.e, upto the filing of the suit]. Upon deducting the paid amount of Rs,24,625,242.00 [Rupees Twenty Four Million, Six Hundred Twenty Five Thousand, Two Hundred Forty Two only] w.e.f, 3rd August, 2012 upto 27.11.2013 from Rs,204,986,168/- [Rupees Two Hundred Four Million Nine Hundred Eighty Six Thousand One Hundred Sixty Eight Only] [duly acknowledged amount in the 'Restructuring Agreement' of 3rd August, 2012], the balance outstanding amount thus comes to Rs,180,360,926.00 [Rupees One Hundred Eighty Million Three Hundred Sixty Thousand Nine Hundred Twenty Six only].
47. A 'customer' of a Financial Institutions, under section 2[e][ii] of F.I.O., 2001 [XLVI of 2001] is under obligation to fulfill its'/his/their commitments made with financial institution regarding repayments of finance and/or any other amounts relating to finance, fulfillment of an 'UNDERTAKING' and 'PERFORMANCE OF A PROMISE'. Rescheduling, restructuring and renewal of finance facility[ies], indeed, is a 'facility' or 'accommodation' which under the prevailing practice is usually extended to the 'customer' on their requests. It is worth mentioning, that in rescheduling etc., the 'balance outstanding amounts' in the 'Certified Statements of Accounts' is not required to be disbursed. The 'outstanding amount' however, is brought forward in the statement of account[s]. The statement of account[s], much prior to the last Finance Agreement i.e, of 'rescheduling' /'restructuring' and 'renewals' also usually need not to be filed as in restructuring/rescheduling etc. The 'balance outstanding amount' is always 'acknowledged' through execution of a 'FRESH FINANCE AGREEMENT'.
On this aspect of the matter, from the case of [A]. Citibank N.A. Through Branch Manager v. Ameer Alam [2015 CLD 429 DB] and [B], Habib Bank Ltd. v. Taj Textile Mill through Chief Executive and others [2009 CLD 1143], the relevant observations, pertaining to the concept of 'Renewal'/'restructuring' and 'rescheduling', 'disbursement of the amount' and 'acknowledgment' of the outstanding liability respectively read as follows:- A. "8. The concept behind Renewal/Restructuring/Rescheduling is that the renewal rescheduling/restructuring of financial facility only ensues upon default, non-payment or inability in payment of outstanding liability by the customer who normally seeks such concession and upon admission of liability. By soliciting rescheduling or restructuring, a customer in a sense requests postponement of repayment of finance on renewed terms as agreed between the parties. By approving rescheduling/ restructuring of a financial facility the bank (as in the present case) foregoes its immediate right of recovery and enforcement of securities against the customer. The effect of rescheduling or restructuring of finance facility is mutually agreed by the parties to be absorbed by future interest or mark up till the agreed date of liquidation of liability Thus, we are of the opinion that rescheduling, restructuring and renewal is also a facility or accommodation granted by bank to the customer. This facility has been recognized as "obligation" defined in section 2(e) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, Reliance is placed on Habib Bank Limited v. Service Fabrics Ltd. And others (2004 CLD 1117) {Lahore).
9. As far as the observation by Judge Banking Court No, I, Faisalabad that the appellant-bank had not attached the statement of accounts w.e.f, 1995; it is suffice to observe that in the cases pertaining to restructuring the amount is not disbursed, it is brought forwarded in case of restructuring/ rescheduling of previous finance; bank is not obliged to have brought on record the statement of accounts prior to the agreement through which restructuring has been made as this is an admitted amount duly acknowledged by the borrower. " [Underlining is mine].
B. "7. ... Obviously, in the cases pertaining to restructuring the amount is not disbursed, rather is brought forward envisaging as liability of the customer, and therefore, to argue that as no physical disbursement of the amount was made, resultantly, the claim of the Bank is false or unfounded, is a submission which is misconceived and without merit" ... .[Underlining is mine].
48. The case-laws cited by the learned counsel for Defendant with profound respect are distinguishable under the facts and circumstances of the present case.
49. In the light of the above, I am of the clear view that the Defendant has not only failed to fulfill the 'mandatory requirements' of section 10(3)(4)(5) of F.I.O., 2001 but has also failed to raise any 'substantial question' of 'law' and 'fact' which may require recording of evidence. In view of this position while, rejecting the application for leave to defend the above suit [C.M.A. No,116 of 2014] filed by the Defendant, I decree the above suit in favour of the Plaintiff and against the Defendant in the sum of Rs,180,360,926/- [One Hundred Eighty Million Three Hundred Sixty Thousand Nine Hundred Twenty Six only] plus cost of fund from the date of default i.e, 15.08.2011 till realization of the decretal amount. A. Final decree for sale of the mortgaged properties and attachment thereof as per clause (iii) of the prayer clause is also passed along with cost of the suit.
Suit stands decreed in the above terms.