' SHAHID KARIM, J.---This judgment shall decide C.O.S. No,46/2002 and C.O.S. No,24/2004. C.O.S. 24/2004 has been filed by Allied Bank Limited (ABL) for the recovery of an amount of Rs,94,844,797/- under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (Ordinance, 2001). C.O.S. No,46/2002, on the other hand, has been filed by Messrs Makma Steel Crafts (Pvt.) Ltd. Against ABL and in which the plaintiffs-company has sought the following prayer: "In view of the submissions it is, therefore, respectfully prayed as under:- ' The defendants be directed through a decree to return the Stocks of 3739 M.T. Imported under the Letters of Credit opened under the agreement August 1999 as the Plaintiffs have paid the amount of all Letters of credit.
' It be declared through a decree that amount of Demand Finance of Rs,67.448 Million created under the agreement August 1999 are payable subject to release of pledge goods available at the time of entering into agreement and in case the defendants are not in a position to release the goods they are bound to pay the price' of goods amounting to Rs, 12,860,000/- after deducting the amount of demand finance of Rs,67.448. Million.
' A decree for recovery of Rs,22,785,558/- be passed against the defendants being the amount of Custom duty wrongly debited to the account of the Plaintiff.
' Costs of the suit be also awarded.
' Any other and further relief which this Hon'ble Court may deem it and proper in the circumstances of the case be also awarded."
2. In COS No,46/2002, leave was granted on 06.03.2003. On 28.03.2003 the following issues were struck by this Court out of the pleadings of the parties:
1. Whether the suit insofar as it pertains to matters that are covered in the Deed of Compromise executed in August 1999 and on the basis of which consent decree(s) were passed in the suits instituted by the Defendant Bank, is not maintainable by virtue of section 47, C.P.C. And the plaint in respect thereof is liable to be rejected? GPD.
2. Whether the relief of declaration on the terms sought in the plaint cannot be granted? GPD.
3. Whether the suit has been instituted and filed by a duly authorized person? OPP.
4. Whether an amount of Rs,22,758,558.00 paid by the Plaintiff as customs duty other duties was wrongly debited by the defendant Bank to the Plaintiff's account? OPP.
5. Whether the Plaintiffs have paid the entire amounts of the letters of credit established by the Defendant Bank after the execution of the Compromise Agreement dated August 1999. If so, what is its effect? OPP.
6. Whether the Plaintiffs are obliged to repay the amounts to the Defendant Bank mentioned in paragraph 8 of "Basic Submissions" of the petition for leave to defend/written statement? OPD.
Whether the pledged goods have been misappropriated by the Plaintiff? OPD.
3. Initially six issues were framed to arise from the pleadings of the parties. Later on the ABL (hereinafter referred to as the defendant-Bank) filed an application C.M. No,499-B/2002 seeking an amendment in the written statement filed by the defendant-Bank in C.O.S. No,46/2002, which was allowed vide order dated 03.11.2003. As a consequence thereof, an additional issue No,7 was framed and which has been brought forth above.
4. Evidence was led pro and contra by the parties in C.O.S. No,46/2002 and report of the local commission was duly filed upon recording of the entire evidence. Vide order dated 16.06.2015, an order was passed in C.O.S. No,24/2004, which is reproduced as under: "By the concurrence of the parties, it is agreed as follows: i) The defendants are granted leave to defend the suit unconditionally. Ii) This suit upon grant of leave to defend is consolidated with the Suit No,46/2002, titled "Messrs Makma Steel Crafts (Pvt.)
Ltd. v. Allied Bank Ltd., which has been filed by the defendants against the plaintiff bank. Iii) The counsel for the parties agrees that the issues framed in C.O.S. No,46/2002, shall be considered to be the issues in instant suit as well and the evidence recorded in the said suit shall also be read as evidence in the present suit.
2. This course is expedient in order to avoid conflict in judgments and multiplicity of litigation.
Since the evidence has been completed in the consolidated suit C.O.S. No,46/2002, the matter is now set down for final arguments on both the consolidated suits for 03.07.2015"
5. As is evident from the order reproduced above, the suits were consolidated and were ordered to be tried together and the parties agreed that the issues framed in C.O.S. No,46/2002 were the same issues which arise out of the pleadings of the parties in C.O.S. No,24/2004 and thus, the issues framed and the evidence led by the parties was sufficient to be considered for the decision of both the suits upon consolidation.
6. I shall now take up the issues in seriatim and my findings on the said issues are as follows: ISSUE No,1 Whether the suit insofar as it pertains to matters that are covered in the Deed of Compromise executed in August 1999 and on the basis of which consent decree(s) were passed in the suits instituted by the Defendant Bank, is not maintainable by virtue of section 47, C.P.C. And the plaint in respect thereof is liable to be rejected? GPD. i. The learned counsel for Makma Steel Crafts (Pvt.) Limited and Messrs Al-Shamsher Engineering (Pvt.) Limited (hereinafter referred to as the plaintiffs) submitted at the outset that the subject matter of the suits relates to the period between August, 1999 to the year 2002 when a number of letters of credit were opened by the defendants and is not related to the events prior thereto. This submission of the learned counsel for the defendants can be viewed in the historical perspective of these cases. Suffice to state that in a previous round of litigation between the parties; a deed of compromise was executed between the parties in August, 1999 which is Ex.P.28. By the said deed of compromise, which was made part of the decree by this Court, three finance facilities were granted by the defendant-Bank to the defendants in terms of the compromise and certain facilities were re-scheduled. As brought forth above, the defendants concede that the subject matter of these suits only relates to post-compromise issues and does not raise a dispute regarding the default committed by either of the parties in terms of the compromise agreement. It, therefore, follows that issue No,1 is to be decided in favour of the defendant-Bank and against the plaintiffs and it is held that the instant suits do not pertain to matters that are covered in the deed of compromise executed in August, 1999. I am, therefore, left to dilate upon the issues arising out of events which took place after the deed of compromise and the facilities which were extended by the defendant-Bank to the plaintiffs in the form of letters of credit. ISSUE No,2
7. This issue arises from the prayer in the plaint (C.O.S. 46/2002) to the effect that the defendant- Bank be directed through a decree to return the stocks of 3739 M.T imported under letters of credit opened under the agreement dated August, 1999 as the plaintiffs had paid the amount against all letters of credit. The learned counsel for the plaintiffs agree that this issue has become moot and such a decree can perhaps not be granted anymore in the changed circumstances of the case. In any case, the prayer is not based upon any legal proposition or a provision of law which can entitle such a prayer to be granted by way of decree to the plaintiffs. The precise submission of the learned counsel for the plaintiffs is that the pledged stock was ordered to be sold by order dated 29.11.2002. By the said order the pledged stock was auctioned and the bid was confirmed and by the consent of the learned counsel for the parties, the only issue that remained to be determined was, regarding the payment of the customs duty. It is also pertinent to mention that the entire auction of the pledged stock was done with the mutual consent of the learned counsel of the parties and the auction was conducted accordingly. Therefore, the relief of declaration of the term sought in the plaint, having become moot, cannot be granted and the issue is decided against the plaintiffs. ISSUE No,3
8. The precise submission of the plaintiffs is that the amount of customs duty was paid by the plaintiff and which was required to be paid by the bank. However, that amount has not been excluded from the claim of the bank and in case the said amount is excluded from the said claim, nothing would be due to the bank from the plaintiffs. The onus to prove the said issue was on the plaintiffs.
9. In this regard, the first document which was referred to was the sanction advice at page 1623 of paper book III Ex.PW.6/40. The relevant clause in the sanction advice is reproduced as under:-- "Against FIM the goods will be in Go downs at factories premises under Bank's Lock and Key and under Bank's approved Muqaddam after payment of concessionary Custom Duty by the Bank."
10. The arrangement, according to the learned counsel for the plaintiff was that the customs duty was to be paid by the bank and it was debited in the statement of accounts relating to FIM facility and correspondingly credited in the plaintiff's current account.
11. In this regard, the primary document on which both the learned counsel relied upon is Ex.PW.3/8, which depicts a chart of the details of the customs duty paid by the company but debited by the bank to the account of company. This document can be found at page. No,1224 of paper book III.
The learned counsel for the plaintiffs does not dispute these entries as also that these depict the customs duty debited to the FIM account of the plaintiff and in turn credited to the plaintiffs current account. However, the 'entries which are disputed by the plaintiff are at serial Nos.17, 23 and 34. The learned counsel has referred to page 343 and to the statement of PW.3 in this regard to contend that the witness admitted these entries.
12. Jamil Ahmad, Manager ABL appeared as PW.6. He was called as a witness by the plaintiffs. The following extract from his cross-examination is relevant:- "It is incorrect to suggest that the plaintiffs made payment of custom duty according to Exh.PW- 3/8. Actually once of the payments were made by the party and the rest were made by the Bank.
The party also claimed refund with regard to the payments made by them towards customs duty.
The following payments were made by the party which are mentioned in the following serial Nos. In Exh.PW-3/8: Serial Nos.1, 3 to 17 and 27"
"...The following vouchers bear my signatures and were issued by rite Photo copies are compared with the originals, found correct and photo copies are allowed to be placed on the file as Exh.PW- 6/82 to 98. 1 also produce vouchers which were prepared and signed by colleague of my. They are compared with the originals..."
13. It will be seen that PW.6 was called by the plaintiffs as its witness although he was an employee of the defendant bank. In his statement, the said witness has verified the payments made by the plaintiffs reflected in the document Ex.PW.3/8. These payments are at Serial Nos.1, 3 to 17 and 27. The learned counsel for defendant bank however says that the 17 has been mentioned as a result of typographical error and in fact the witness did not mean that entry 17 was also paid by the plaintiffs. The learned counsel for the plaintiffs also relied upon the evidence of PW.4 Azhar Ali, the proprietor of Zia and Co., Clearing and Forwarding Agency. He referred to the following portion of the examination of the statement of the said witness: "I conduct business in the name of Zia and Co. I have a clearing and forwarding agency. I am on the approved panel of Allied Bank of Pakistan. I have been getting the goods of Al-Shamshair (Pvt.)
Ltd. (one of the plaintiff) cleared from Customs Department and I also handle the work of Makma Steel Crafts (Pvt.) Ltd. By forwarding the goods to Gadoon Amazai after getting them cleared from Customs Department."
"...The Bank never paid the customs duty. It was always the party which get the goods cleared...."
14. From the above statement, the learned counsel for the plaintiffs invited this Court to conclude that PW.4 was a reliable witness and since he was conducting the entire business of clearing of the goods from the Customs Department, his statement and the evidence brought forth should be given weight and is worthy of credence. However, an analysis of the statement of the said witness would show that apart from a bald assertion by the said witness, no documentary proof is forthcoming which would substantiate the evidence given by the witness. Certainly, if the customs duty was paid by the plaintiffs and not by the defendant bank then there must be unimpeachable and reliable evidence in the shape of documents to bring home the said assertion: No such documents are forthcoming and none was produced in the evidence. A mere assertion without more by the said witness will not suffice as the transaction relating to the clearance of goods and the payment of customs duty are all documented and ought to have been produced in evidence.
15. The learned counsel for the plaintiffs in order to establish that the payments of customs duty as given in Ex.PW.3/8 were made by the plaintiffs referred to the current account statement maintained by the defendant bank with regard to the plaintiff. At page 218 of Vol-1, is the entry with regard to payment of Rs,2690073.00/- by way of customs duty. The entry shows that the said amount was transferred from the current account statement of the plaintiffs. It may be stated that basically it is a two-tier transaction and the second transaction as reflected in the current account statement is merely an adjustment of the FIM liability. This is the amount (one of which is the entry referred to by the learned counsel at page 218) which is now being claimed by the plaintiff as the customs duty paid by it and which is sought to be adjusted against the claim of the bank.
16. As stated above, these amounts which are now being claimed by the plaintiff having been paid by the plaintiff itself by way of customs duty were required to be brought home and established by the plaintiffs since the onus of the said issue was placed on the plaintiff. The learned counsel for the defendant bank has taken this Court through the various documents by which it has been established that the said payment against the customs duty was made by the defendant bank and in this regard, by way of an illustration, the learned counsel has referred to the delivery order issued on 24.1.2001 which is' of the same date as the entry at page 218. The learned counsel for the defendant bank retorts that the bank paid the customs duty, debited the FIM account and credited the current account. According to the learned counsel, the plaintiffs had sought the release of the goods which goods were in fact released and the same amount was credited to the FIM account.
He has in this regard referred to Ex.PW.6/131 at page 862. Once again, it is emphasized that the onus to prove this issue was on the plaintiffs and the learned counsel for the defendant bank has rightly pointed out that these amounts are not being claimed by the defendant bank and, therefore, it was not required to file the statement of accounts with regard to these entries. Once again, the learned counsel for the defendant bank has referred to the FIM statement of account of letter of credit 2448 at page 984 of C.O.S. No,24 of 2004 to drive home the contention that the amounts were paid by the bank and the goods were released. The release of goods could only have taken place after these payments were paid by the plaintiffs and thereafter the delivery orders were issued. The delivery orders with regard to such payments have been produced in evidence by PW.6 who although an employee of the bank was a witness of the plaintiffs and was summoned as such by the plaintiffs.
17. It would bear repetition that the plaintiffs are asking for the refund or adjustment/set off of the customs duties purportedly paid by the plaintiff company with regard to the entries at Serial Nos.1, 17, 23 and 24 reflected in Ex.PW.3/8. However, as explicated above, these transaction have been explained in paragraph 10(a) of C.O.S. No,24 of 2004 which is the suit of the bank and with regard to which no denial has been made by the plaintiffs. The vouchers as also the call deposits have all been, produced and exhibited as Ex.PW.6/82 to Ex.PW.6/98 and therefore, nothing turns on the claim that these payments of customs duty were made by the plaintiffs. The learned counsel for the defendant bank has referred to a series of documents produced in evidence which are vouchers showing that the payments were paid by the bank and the goods were got released by the plaintiffs. The learned counsel for the plaintiffs takes serious issue with the fact that these entries of the payments made by the bank are not shown as debit entries in the statement of accounts and, therefore, they cannot be claimed. The simple answer to this argument of the learned counsel is that the bank in fact admits that there is no statement of account and the plausible reason which has been put forth is that these amounts are not being claimed by the bank as these were adjusted by the plaintiffs and the goods were duly released. The evidence is woefully lacking in reliability and cogency and the plaintiffs have failed to establish or discharge the onus which was placed on the plaintiffs with regard to issue No,4.
18. With regard to entry at 17 in Ex.PW.3/8 and which to is being claimed by the plaintiffs, the learned counsel for the defendant has invited this Court to discard the said assertion as a typographical error. He has referred to the following portion of the statement of the evidence of PW.3:-- "...I did not personally deposit the amount of customs duty mentioned in Exh. PW.3/8. The entries of customs duty mentioned in Exh.PW-3/8 were paid to the customs Department through Demand Draft/Pay Order. The documentary evidence showing the deposit of customs duty mentioned in Exh. PW-3/8 are in possession of both the companies. It is correct that the amount of Rs,26,90,073/- appearing as transfer entry dated 27.1.2001 in Exh. PW-3/3 corresponds with the amount of customs duty mentioned against LC No,2448 in Exh. PW-3/8.
"...It is correct that the amounts mentioned against entries Nos.], 3 to 13 and 27 in PW3/8 were refunded back to the company as illustrated by the transfer entries mentioned in Exh.PW-3/3. 1 have not gone through the loan statements of both the plaintiff Companies. I am not aware of the details of litigation going on in the present case."
19. Once again, a reading of the portion of the statement of PW.3, reproduced above, would show that firstly the amount of customs duty was not deposited by the said witness. He has stated that the customs duty was paid through demand draft/pay order and which documents were in possession of the company. This shows that there were allegedly documents which ought to have been produced in order to substantiate the claim of the plaintiffs which were not, in fact, produced and the inference can only be drawn against the plaintiffs that there were, in fact, no such documents and the amount of customs duty was not paid by the plaintiffs. Secondly, it is evident that the said PW.3 does not mention the entry No,17 as the amount which had to be refunded to the companies. In fact, he has stated that the amounts at entries Nos.1, 3 to 13 and 27 were refunded to the company. The issue No,4 is, therefore, decided against the plaintiffs and in favour of the defendant bank.
20. The issues Nos.5 and 6 are inextricably linked with issue No,7 and these are thus dealt with together.
ISSUES Nos.5 and 6
5. Whether the Plaintiffs have paid the entire amounts of the letters of credit established by the Defendant Bank after the execution of the Compromise Agreement dated August 1999. If so, what is its effect? OPP.
6 Whether the Plaintiffs are obliged to repay the amounts to the Defendant Bank mentioned in paragraph 8 of "Basic Submissions" of the petition for leave to defend/written statement? OPD. i) These issues together with issue No,7 are the pivotal issues between the parties and a finding thereupon should be sufficient to determine the respective liabilities of the parties. In a nub, the defendant-Bank alleges certain amounts to be outstanding against the plaintiffs on the ground that the plaintiffs have defaulted on the terms of the finance facilities which were extended to the plaintiffs and are thus liable to make over the said amounts and the defendant-Bank is entitled to a decree for the recovery of the said amount. On the contrary, the plaintiffs deny any amount to be due to the defendant-Bank and it has been averred without equivocation by the plaintiffs that no amount is due to the defendant-Bank as the plaintiffs have not fallen in default of the terms of the finance facilities. The controversy, therefore, narrows down and revolves around the true construction of statement of accounts as the availing of the facilities is not denied by the defendants. Ii) As brought forth above, the subject matter of these suits 'plates to 89 letters of credit at site which was established by the defendant-Bank on behalf of the plaintiffs commencing in the year 1999 and ending in the year 2001 for the import of raw material. It is the case of the defendant-Bank that upon the arrival of the goods under the letters of credit and after debiting the bank charges, the amount was debited to Payment Against Documents (PAD) account and the defendants were intimated about it. Further that the amount due under the letters of credit/PADs were adjusted through FATR (Finance Against Trust Receipts) and FIM (Finance Against Imported Merchandize) and in some cases through cash payment by the plaintiffs. The amounts of FIM, FATR and PAD were paid by the plaintiffs through their current accounts. It is the case set up in the plaint (C.O.S. 24/2004) by the defendant-Bank that the goods imported under the letters of credits were subject to concessionary customs duties by virtue of S.R.O. No,357(I)/2002 dated 15.6.2002 and in terms of which the plaintiffs were obliged to consume the imported goods within a period of one year. It has been mentioned in the suit by the defendant-Bank that there are a number of letters of credit which were adjusted through FIM and FATR facilities and which are the subject matter of the suits. The details of these letters of credits have been given in the body of the plaint, In order to secure the finance facilities, certain properties were mortgaged by the plaintiffs as well as other charge documents were executed such as DP personal guarantees and letters of pledge. Two finance agreements dated 27.10.2000 and 19.9.2001 were executed between the parties and memorandum of deposit of title deeds were also executed as a security for the finance facilities. The route which the transaction took, has been explicated in paragraph 9(a) of the plaint in C.O.S. 24/2004. A chart depicting the amount disbursed, the principle (and mark-up) repaid and the respective dates have been brought forth in the above suit. This has been done in respect of both the plaintiffs separately, and in respect of each facility availed by them. Iii) During the pendency of C.O.S. No,46/2002 filed by, the plaintiffs, legal notices were sent on 17.5.2002 by the defendant Bank to the plaintiffs for the repayment of the dues of the defendant-Bank. Upon the failure of plaintiffs to make the payment of dues demanded by the defendant-Bank, an advertisement was issued by the defendant-Bank for the sale of the pledged stocks in the newspapers. This constrained the plaintiffs to file an application in C.O.S. No,46/2002 for the stay of the sale of pledged stocks but this Court refused to grant that stay to the defendants. In short, the sale of the pledged stocks took place and M/s. Muhammad Waheed and Company and Messrs A. D. Services were declared the highest bidders on 4.11.2002 for having offered the highest bids for the pledged stocks of the plaintiffs. As a result of the proclamation, pledged stocks weighing 427.680 M. Tons was auctioned and an amount of Rs,11,034,144.00 was paid to the defendant-Bank by Messrs A.D. Services. Similarly, M/s. Muhammad Waheed and Co. Lifted the pledged stocks weighing 482.185 M. Tons and paid an amount of Rs,10,253,443.00 as the auction price for the pledged stocks. The case of the defendant-Bank is that the following facilities were granted to the plaintiffs with a date of expiry as 30.06.2000: a) LC facility for Rs,50.000 (M). b) FIM for Rs,25.000 (M) c) FATR facility for Rs,10.000 (M.)
' These facilities were renewed twice and the expiry was extended to 30.06.2001 and 30.06.2002. It has been averred by the defendant Bank that the plaintiffs did not make any payment under the FIM and FATR facilities and, therefore, the following amounts have become overdue against the plaintiffs, a part of which is reproduced as under: "Makma Steel Crafts (Pvt.) Limited FIM (Principal): Rs, 22, 325,019.00 ' FIM (Mark up): Rs,5,653,373.00 ' Al-Shamsher Engineering (Pvt.) Limited ' FIM (Principal) Rs,42,988,456.00 ' FIM (Mark up) Rs, I 1, 110,117.00 ' FATR (Principal) Rs,9,964,834.00 ' FATR (Mark up) Rs,2,610,438.00 ' Grand Total: Rs,94,652,237,00 ' (Paragraph 8 of the Basic Submissions) Sale Proceeds: Rs,21,287,587.00 ' (If decided in favour of the Bank, as per order dated 06.12.2007)
' Total Outstanding Rs,73,364,650.00" iv) The learned counsel for the plaintiffs has referred to the affidavit of Mr. Muhammad Ashfaque (PW.3) and the relevant contents of the affidavit submitted by the said witness are reproduced as follows: "Affidavit of Mr. Muhammad Ashfaq son of Noor Muhammad, resident of Street No,22, House No,5, Karam Nagar; Misri Shah, Lahore.
' I, the above named deponent do hereby solemnly affirm and declare as under:- ' That deponent is the Chief Accountant of Messrs Makma Steel Craft (Pvt.) Limited and Al- Shamsher Engineering (Pvt.) Limited. 1 prepared statement of Account of Makma Steel Craft (Pvt.)
Limited and Al-Shamsher Engineering (Pvt.) Limited, these statements are according to the books of company and further the amounts mentioned in these statements of Accounts are also shown in the statement of Account of the Company provided by the bank, these entries are available in the Current Accounts of both the companies maintained with the bank. 1 can point out each and every entry in the statement of Account of Constitutional jurisdiction Account of the Company provided by the bank. Statement of Account submitted to this Honorable Court was provided by the bank. According to statement of Account of Makma Steel Craft (Pvt.) Limited given by the bank the amounts shown credit are Rs,84,422,920/- and in AlShamsher Engineering (Pvt.) Limited are Rs,286,408,938/-."
21. The precise submission- of the learned counsel for the plaintiffs by reference to the statement made by PW.3 as also the statement of account of Makma Steel Crafts (Pvt.) Ltd. Ex.P.6/6 was that the amounts which have been paid for the adjustment of the liability of the plaintiffs have been credited in the current account of the plaintiffs. Correspondingly, these amounts have been debited from the current account of the defendants and it is thus these debit entries that have to be explained by the defendant-Bank to have been adjusted against letters of credit. According to the learned counsel, Ex.P.6/6 and Ex.P.6/7 which are current account statements of the plaintiffs, are admitted documents and the transfer entries in these statements of account are the obligation of the defendant-Bank to explain. He submitted that as per the statement of PW.3, the amounts that have been shown to have been credited against Makma Steel Crafts (Pvt.) Ltd. Are Rs,84,422,920 and in the case of Al-Shamsher Engineering (Pvt.) Ltd. Are Rs,286,408,938/-. These amounts, as per learned counsel, are admitted amounts and it lies upon the defendant-Bank to explain these transfer entries which were debited from the current account of the plaintiffs and in respect of which no explanation is forthcoming. He has, in this regard pointed out certain entries from Ex.P.6/6 to bring home his submission where simply the word 'transfer' has been mentioned against certain entries without any, explanation as to what caused these transfers unlike other entries which do offer an explanation when a transfer is made and the accounts are debited.
22. The, stance of the plaintiffs is lacking in clarity and material particulars. In the plaint filed in C.O.S. 2412002, the primary focus is on the return of stocks on the pretext that these related to compromise agreement and cannot be retained as security for LCs after the year 1999. In the same vein the plaintiffs claim to have repaid the entire amount due under the finance facilities. It identifiably follows that the ailment art disbursal of facilities is a forgone conclusion and the claim is of the entire repayment having been made. Thus the onus was on the plaintiffs to bring home this fact through cogent evidence. During the course of these proceedings, and after the auction of the pledged goods by this Court, the plaintiffs realigned their stance and restated it thus; that the pledged goods had been misappropriated in connivance with the bank officials and not on account of the plaintiffs' fault, and thus the price that those goods were likely to fetch must be set off against the plaintiffs' alleged liability. This represents a substantial shift in the plaintiffs' stance.
Thus the plaintiffs are now putting forth a case beyond their pleadings.
23. Again, in the application for leave to defend filed by the plaintiffs in C.O.S. No,24/2004, a claim has been made of the adjustment of facilities, yet no proof is forthcoming in the evidence in order to prove that claim. The plaintiffs admit to the opening of 82 LCs and the creation of a FATR facility.
However, the assertion is that that facility stands adjusted. No evidence has been produced in this regard and the assertion remains unsubstantiated. In paragraph II of the application, allegations of misappropriation have been made and corresponding threats of legal action too yet no steps have been taken to follow up on these words. This reflects adversely on the bona fide of the plaintiffs to say the least. Likewise with regard to FIM facility, the plaintiffs lay a claim to having repaid the entire amount standing against the said facility. A perusal of the entire evidence is bereft of any proof to support that claim. From the above, it becomes evident that the dispute narrows down to a dispute regarding accounts and no more and the quality of the evidence produced with regard thereto.
24. As a prefatory, it may be mentioned that it is now settled by the respectable authority that a mere denial of the availing of the amount by the plaintiffs is not sufficient to entitle the plaintiffs to the grant of leave to defend. Apart from a healthy body of case law on the subject, this has been stated authoritatively by the Supreme Court 'of Pakistan in Apollo Textile Mills Ltd. And others v.
Soneri Bank Ltd. (2012 CLD 337). The relevant portions of the judgment of the Supreme Court of Pakistan are reproduced for facility as under:-- "15. The rationale of the schematic discipline of Ordinance of 2001 is evident. A banking suit is normally a suit on Accounts which are duly ledge red and maintained compulsorily in the books of Accounts under the prescribed principles/standards of Accounting in terms of the laws, rules and Banking practices. As such instead of leaving it to the option of the parties to make general assertions on Accounts the Ordinance binds both the sides to be absolutely specific on accounts.
The parties to a suit have been obligated equally to definitively plead and to specifically state their respective accounts."
25. The ratio of the judgment of the Supreme Court of Pakistan is that a banking suit is, in essence, a suit upon accounts. Therefore, the parties are to put forth their respective accounts in order to rebut and stunt the pleas raised by the opposite party. In the case of a suit filed by a bank, the bank is obliged to support and rely upon the statement of account as also all other documents upon which the bank relies for the support of its claim. These documents may include the agreement, the security documents etc. Relating to the grant of finance. Conversely, in order to respond to the claim of the defendant-Bank, the plaintiffs are under a corresponding obligation to attach all documents relating to accounts, ledgers and balance sheets upon which the plaintiffs rely in order to rebut the claim of the defendant-Bank. In other words, a simple denial will not do as necessary documents which are essential, to raise a substantial question of law and fact have to be filed and relied upon so as to entitle the defendants to grant of leave to defend and for the suit to proceed for regular trial. The onus to prove the issues Nos.5 and 6 was on the defendant- Bank which has been successfully discharged. The issues are thus decided in favour of the defendant-Bank and against the plaintiffs.
ISSUE No,7
26. It would be useful to refer once again to the summary of the facts which form the cause of action for the instant suits. That summary has been provided by the learned counsel for the Bank and the broad facts narrated in the summary are not denied. These are reproduced as under: SUMMARY OF FACTS OF THE CASE:
1. Defendant Bank in the years 1995-1996 established various letters of credit on behalf of Plaintiff No,1 and its sister concerns, details whereof are given in Clause 1 of the recitals of the Deed of Compromise executed in August 1999.
2. Plaintiff No,1 and its sister concerns did not make the payment of the letters of credit and the same was paid by, the Defendant Bank in terms of its contractual obligations. At the request of Plaintiff No,1 and its sister concerns and as per standard practice, the Defendant Bank put the goods, that were the subject matter of the said letters of credits, in Shahid Bonded Warehouse to save the cost of demurrage.
' The goods that were stored in Shahid Bonded Warehouse for the sake of clarity and convenience shall hereinafter be referred to as "Pledged Goods No,1". The prefix "Pledged" has been added for clarification purposes only because legally and by definition the goods stored in a Customs Bonded Warehouse cannot be termed as goods under the pledge of the Bank.
3. Plaintiff No,1 and its sister concerns did not make the payments therefore Defendant Bank filed suits for the recovery of its amounts, inter alia, under the above letters of credits. The detail of the recovery suits filed by the Defendant Bank is given in the Deed of Compromise.
' Plaintiff No,1 and one of its sister concerns namely M/s G.A. Trades also filed suits (C.O.S. No, 99/98 and C.O.S. No, 98/98 respectively) against the Defendant Bank, inter alia, for the release of Pledged Goods No,l.
4. In August 1999, the parties arrived at a compromise package settling all their disputes. The terms of settlement were reduced in writing in the Deed of Compromise that was filed in all the suits pending between the parties. Resultantly, the suits filed by the Defendant Bank were decreed and the suits filed by Plaintiff No,1 and the said M/s. G. A. Traders were unconditionally withdrawn in terms of the Deed of Compromise.
' Rights and obligations of the respective parties with regard to Pledged Goods No,1 and all the issues with reference thereto were comprehensively spelt out and settled in the said Deed of Compromise.
' Clause 5 (ii) of the Deed of Compromise, since it directly touches the matter in issue, is therefore, reproduced in extensor.
' 5(ii) Customer No,1 undertakes that if it succeeds in getting condonation from CBR regarding remission of penal surcharge, it will pay a further sum of Rs,20.000 million through sale of stocks comprising hot rolled cold steel sheets which are presently lying in Shahid Bonded Warehouse situated at Lahore. The Bank will release all pledged goods against payment by Customer No,1 of all dues including customs duties and warehouse charges, etc. The Bank will not be responsible for any damage to, or shortage or deterioration in value, of the said pledged goods. However, it is ultimately agreed between Customer No,1 and the Bank that in case of any short fall in the goods lying in the Customs Bonded Warehouse, the Bank will extend all co-operation to Customer No,1 and both will lodge joint claim against the Bonded Warehouse for this shortfall in accordance with law." (emphasis supplied)
' From a bare perusal of the above clause it becomes clear that the Defendant Bank was assuming no responsibility either for Pledge Goods No,1 or deterioration and short fall in their value, if any. As stated earlier, the goods in the first place were brought to the Custom Bonded Warehouse because no custom duty was paid on them and to save the demurrage that would have been levied on them for lying on the Dry Port. The only responsibility assumed by the Defendant Bank under the Deed of Compromise was to provide to Plaintiff No, I the Delivery Orders for the release of the goods lying in Shahid Bonded Warehouse and that too on the fulfillment of the condition precedent viz., payment of custom duties and warehouse charges etc. Again, though no time frame was given in the Deed of Compromise, by virtue of section 98 of the Customs Bonded Warehouse, the goods lying in the Customs Bonded Warehouses had to be released within a period of three months. Obviously, the Customs Department was well within its rights to auction Pledged Goods No,1 lying in Shahid Bonded Warehouse. The goods were auctioned and at the time of their weightiest on 27.06.2000, there was detected a short fall. The successful bidder lifted goods weighing only 742 M. Tons. In this regard, reference may be made to Writ Petition No, 14996/2000 and the parawise comments filed thereto by the Customs Department. Pledged Goods No,1 lying in Shahid Bonded Warehouse were auctioned on account of the inordinate delay by Plaintiff' No,1 in getting the same released by paying the customs duties and warehouse charges etc.
6. Plaintiff No,1 also wrote to the Defendant Bank categorically committing to make the payment of the Demand Finance regardless of release of the goods from Shahid Bonded Warehouse.
7. In pursuance of the Deed of Compromise, the Defendant Bank granted the following fresh finances facilities to the Plaintiff: a) Letter of Credit (LC) facility for Rs,50.000(M) b) Finance against Imported Merchandise (FIM) Rs,25.000(M) c) Finance against Trust Receipt (FATR) facility for Rs,10.000(M)
' The expiry of the above facilities was 30.06.2000. The said facilities were twice renewed with expiry on 30.06.2001 and 30.06.2002. It was a condition of the grant of the said facilities that the margin of the letters of credit would be appropriated towards adjustment of the Demand Finance facility for Rs,67448 (M).
' In pursuance of the Finance facilities in total eighty-seven (87) letters of credit were established of the Defendant-Bank on behalf of the Plaintiffs starting from the year 1999 till the year 2001. The amounts of these letters of credits were adjusted through FATR and FIM facilities.
8. Plaintiffs did not make the payments of the letters of credits on due dates with the result that the Defendant Bank had to make the payments in terrors of its contractual obligations by debiting the FIM account. After payment of the customs duties etc. The goods that were the subject matter of the letters of credit were brought under the pledge of the Defendant Bank and are stored in the go downs situated at the factory sites of the Plaintiffs. The goods that are stored in the go downs of the Plaintiffs for the sake of clarity and convenience shall hereinafter be referred to as 'Pledged Goods No,2".
9. Defendant Bank also released goods under the FATR facility to Plaintiff No,2. The payment against the said goods was to be made by the Plaintiffs within a period of 45 days. Plaintiff No,2, however contumaciously failed, refused and neglected to make the payment thereof. This conduct, apart from others, makes Plaintiff No,2 and its sponsors/directors liable to criminal action in terms of section 20 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. The Defendant Bank has filed a criminal complaint against Plaintiff No,2 and its sponsors/directors in this regard.
10. Plaintiff No,1 failed to make the payments of Demand Finance facility for Rs,67.448 (M) in accordance with the terms of the said Deed of Compromise, the Defendant Bank instituted Execution Petitions against Plaintiff No,1 and its sister concerns before the Banking Court No, IV, Lahore.
11. Plaintiffs failed to deposit the amounts of the FIM facility therefore the Defendant Bank in accordance with its rights under the law decided to sell the pledged stocks and to that end issued Legal Notices dated 17.05.2002 to the Plaintiffs for repayment of their dues. In reply to the said Notices, the Plaintiffs took an inexplicable and spurious plea that they are ready to adjust the outstanding amount of the FIM and FATR provided the Defendant Bank hand over to them "Pledged Goods No,1". It may pertinently be mentioned here that the Plaintiffs did not dispute the amounts due under the FIM and FATR facilities and the Defendant Bank's right to recover them.
12. The Defendant Bank had to advertise the sale of pledged stocks "Pledged Goods No,2" in the newspapers. The Plaintiffs in order to cover up its default, filed a totally false and frivolous present suit, C.O.S. No, 46/2002. The Plaintiffs approached the Hon'ble Court for stay of the sale proceedings regarding the pledged stocks by filing C.M. No,740/B/2002 in C.O.S. No,46/2002 (page 2516 of book V). The sale of the pledged stocks was allowed by the Hon'ble Lahore High Court. M/s. A.D. Services and M/s. Muhammad Waheed and Co. Were declared to be the successful bidders.
27. The following events would lead to the filing of a suit, by the defendant-Bank which is being jointly dealt with in this judgment. It also led to the framing of the issue No,7, which for facility is reproduced as under: "Whether the pledged goods have been misappropriated by the Plaintiff? OPD.
28. Issue No,7 was framed vide order dated 03.11.2003 after it was found that there was a shortfall in the pledged stock and which necessitated the amended written statement to be filed by the defendant-Bank through C.M. No,499-B of 2002, which was allowed vide order dated 03.11.2003. It is the case of the defendant-Bank that at the time when the pledged stock was permitted to be auctioned by this Court, and as a result of the auction M/s. A.D. Services and M/s. Muhammad Waheed and Co. Were declared as the successful bidders, it came to light that the stocks, which were proposed to be auctioned, were deficient in weightage and thus there was a misappropriation of the pledged stock. According to the defendant-Bank, the misappropriation had taken place by the plaintiffs who had been guilty of pilferage in connivance with the Muqaddam appointed by the defendant-Bank. It was found that M/s. A.D. Services lifted a pledged stock weighing 427.680 M. Tons from 8-Din Road, Badami Bagh, Lahore whereas as per the record of the defendant-Bank raw material weighing, 2654.787 M. Tons was pledged with the Bank and the same quantity of stock ought to have been present and available at the Go down at the time when it was auctioned. Likewise, M/s. Muhammad Waheed and Co. Lifted the pledged stock weighing 482.183 M. Tons from 270-Industrial Estate, Gadoon Amazai, Distt. Swabi whereas in the record of the defendant-Bank, raw material weighing 1292.80 M. Tons was pledged with it. The successful bidders paid an amount of Rs,11,034,144.00 and Rs,10,253,443.00 as price of the pledged stock weighing 427.680 M. Tons and 482.185 M. Tons respectively. As stated above, the defendant- Bank was constrained to file its own recovery suit C.O.S. No,24 of 2004 which has been consolidated to be decided together with the suit (C.O.S. No,46 of 2002) filed by the plaintiffs.
29. The parties produced their evidence, pro and contra, the detail of which is annexed with this judgment as Annexure 'A'.
30. As a prefatory, it may be stated that the onus and burden of proof of the issue No,7 has been cast upon the defendant-Bank. It may be reiterated that the normal standard of proof in civil cases is proof on the balance of probabilities. Another term which is used is the preponderance of probabilities. The basic rule with regard to the standard of proof in civil cases has been explained and is oft-quoted in Miller v. Minister of Pensions (1947) 2 All ER 372 in the following words: "The degree in cogency required to discharge a burden in a civil case is well settled. It must carry a reasonable degree of probability, not so high as is required a criminal case. If the evidence is such that the Tribunal can say: "We think it more probable than not" the burden is discharged but, if the probabilities are equal, it is not."
31. It is this standard of burden of proof which will be required to be kept in mind while determining the issue No,7. At first blush, it be seen that the onus or the burden of proof to be discharged has been placed on the defendant-Bank. Therefore, what the defendant-Bank has to prove is that the, pledged goods have been misappropriated by the plaintiffs. Conversely, there is no onus on the plaintiffs to prove that the pledged goods have been pilfered by the defendant-Bank or any of its officers. Therefore, the inevitable inference is that the defendant-Bank or any of its officer is not charged with misappropriation or pilferage nor has the plaintiffs raised a finger in this regard or have made any effort to attempt to fix the liability in this regard on the defendant-Bank.. It has chosen to watch as a bystander and let the defendant- Bank prove that the misappropriation was done by the plaintiffs and in case the onus is not discharged on a balance of probabilities, the question of the misappropriation of the pledged goods too would lose significance. This would mean effectively that firstly the pledged goods will have been misappropriated in any case and secondly the plaintiffs will not be burdened with the liability as a consequence thereof. This question assumes importance in view of the significance of a holding by this Court with regard to the misappropriation of the pledged stock. According to the learned counsel for the plaintiffs, the pledged stock was sufficient to set off any liability of the plaintiffs and thus in case the misappropriation is not proved to have been done by the plaintiffs, a set off will automatically follow. This argument of the learned counsel is based on a fallacy and the automatic consequence which is alleged to follow will not be the consequence which, in my opinion, will inevitably follow.
32. To reiterate, the learned counsel for the defendant-Bank submits that the pledged stock was misappropriated in connivance with the Muqaddam appointed by the Bank. In this regard, the learned counsel has produced a Chart which summarizes the letters of credit, the bills of entry and the date, the description of the goods and the weight, the delivery order and the consumption certificates in this order with regard to Al-Shamsher Engineering Pvt. Lid. And Makma Steel Craft Pvt. Ltd. It is common ground between the parties that all of these documents have been duly exhibited and can be traced to the Annex 'B' with this judgment. With regard to Al-Shamsher Engineering Pvt. Ltd. The learned counsel for the defendant-Bank has drawn the attention of this Court to the consumption certificates which were issued by the Customs Department and which demonstrate beyond reasonable doubt that the goods mentioned in the consumption certificates have been taken by the plaintiffs and have, been consumed yet no payment has been made to the Bank in respect thereof. The learned counsel for the plaintiffs does not dispute the fact that consumption certificates were issued and also does not seriously deny the evidential value of these consumption certificates. The learned counsel for the defendant-Bank referred to the statement of PW.6, Jamil Ahmad, Manager Allied Bank who was a witness called by the plaintiffs and the following part of his statement: "... The goods released under the orders of the court belonging to Al-Shamshair were less in quantity. On weighment 2027 M/tons was fond less. 810 M/tons goods were found short in the godown at Gadoon Amazai..."
33. According to the portion of the statement of PW.6, reproduced above, it has been brought forth that the goods released under the orders of this Court were far less in quantity than what should have been in the Godown at Gadoon Amazai. He next referred to the statement of PW.10, Manzoor Ali Khan who is the Chief Executive of Makma Steel Craft Pvt. Ltd. The following portion of his statement is pertinent for the purposes of the point in issue: "...The raw material which we used to import, the government used to charge concessionary customs duty. We used to give indemnity bond to the Bank. Guarantee Section of Customs Department. After converting the raw material into finished goods we used to inform the customs authority with a request to release our indemnity bond. We used to apply to the Sales Tax Department for the grant of consumption certificate after the raw material was converted into finished goods..."
34. From the above portion of PW.10, the learned counsel for the defendant-Bank wants this Court to draw the Conclusion that the consumption certificates were only issued by the Sales Tax department after the raw material was converted into finished goods. There is no doubt that PW.10 was called by the plaintiffs and was the Chief Executive of one of the companies and he states in his cross-examination that the consumption certificates were only issued after the raw material was converted into finished goods add which statement is ample proof that the pledged goods were, in fact, consumed by the plaintiffs. By a necessary corollary, this statement also leads to the conclusion that the consumption certificates were procured without there being any delivery order issued by the Bank and thus the consumption of the pledged goods was done without the express permission of the defendant-Bank. The learned counsel for the defendant-Bank has also referred to the statement made by PW.13 Manzoor Ali Khan who is one of the Directors of plaintiff No,1 and the following part of his statement: "...The plaintiff companies had paid the entire amount due to the defendant bank yet their goods have not been released in Lahore. The defendant Bank is withholding release of 753 M/tons of Al- Shamshir Engineering and 1293 M/tons belonging to Makma Steel in Gadoon Amazai..."
35. Two inferences can be drawn from the statement made by PW.13. One, that there is an admission with regard to the shortfall in the pledged goods and second, that no delivery orders have been issued and those delivery orders are still with the Bank.
36. The learned counsel for the defendant-Bank also referred to other documentary evidence brought on record in order to bring home the issue No,7 and the fact that the pledged goods were misappropriated by the plaintiffs. The first document to which a reference was made by the learned counsel is a letter of pledge executed by Makma Steel Craft Pvt. Ltd., Ex.PW.6/1. By clause 4 of this letter of pledge, the defendant-Bank has been held harmless and has been indemnified by the plaintiffs against all damage, injury, deterioration etc. That may be caused to the pledged goods as a consequence or result of any cause what included inter alia theft, misappropriation or embezzlement. By this letter of pledge and clause 4, the plaintiff No,1 undertook to deposit further securities in the manner and to the extent of shortfall in the value of the same. The learned counsel for the defendant-Bank next referred to Ex.PW.6/146, which is a sample of the delivery order in order to show that three copies of the delivery order were issued, one was retained by the Bank, one for the customer and one was for the Muqaddam. Further, he made a reference to Ex.PW.10/66 which is a show cause notice issued by the Customs department to one of the plaintiffs company and also to Ex,PW.10/67 which is a final order passed by the Customs department against the plaintiff-company. These documents have been brought on record in evidence in order to show the conduct of the plaintiffs although these orders by the Customs department are with regard to separate raw material.
37. Coming back to the table, which was produced by the learned counsel for the defendant-Bank and which was also relied upon by the learned counsel for the plaintiffs (annexed with this judgment as Annexure `B'). The learned counsel for the defendant-Bank referred to the misappropriation with regard to Al-Shamsher Engineering Pvt. Ltd. As illustration, the learned counsel referred to the letter of credit at serial No,1, which is Ex.DW.9/6 (at page 2483 of Paper "Book-V) and the corresponding bill of entry which is Ex. P.1 at page 461 of the paper Book-I as also the description of goods which is given in the bill of entry. With regard to material and goods in this letter of credit, the learned counsel submits that the consumption certificates have duly been issued by the relevant department although no delivery orders have been issued by the Bank. The ineluctable conclusion is that the goods were ' consumed by the plaintiffs without a delivery order from the Bank and, therefore, misappropriation and pilferage was done by the plaintiffs. The learned counsel for the plaintiffs was not in a position to rebut this proposition. From the scheme of the transaction which too is not denied by the learned counsel for the plaintiffs, for the goods to be taken out of the Go down and consumed for the purposes of manufacturing, a delivery order from the defendant-Bank was the basic document and without that document no goods could be taken out of the Go down, the goods were consumed and consumption certificate was procured, it is not difficult to draw the inference that the plaintiffs in connivance with the Muqaddam consumed the goods and did not make good the shortfall nor was any permission of the Bank procured. The consumption certificates which have been issued with regard to the letters of credit and the bill of entry have been exhibited and brought on record, one of which is Ex.PW.10/48 at page 2013 at Paper Book IV.
No evidence in rebuttal has been brought on record by the plaintiffs to deny or off-set the unimpeachable evidence that these goods were consumed without a delivery order having been issued by the defendant-Bank.
38. Learned counsel for the defendant-Bank has also relied upon Ex.PW.10/69, which is a stock report issued by the Muqaddam and signed by the plaintiffs as on 24.7.2002. It may be emphasized that the pledged goods are in the form of coils and bundles, however, the number of coils and bundles is not important but the weight of the coils and bundles has to conform to a certain weight at which the goods were imported and which finds mention in the bill of entry corresponding to each import. Thus, the factor of weightage is all important factor in the instant matter around which the entire case and the determination of issue No,7 revolves. In the case of Makma Steel Craft Pvt. Ltd. The learned counsel for the defendant-Bank submits that the consumption certificates could not be procured as the goods were at Go down Amazai and it was not possible for the consumption certificates to be issued. However, according to the learned counsel, in the case of Makma Steel Craft, the entire reliance of the defendant-Bank is on the issuance or otherwise of delivery orders.
39. The learned counsel for the defendant-Bank next referred to the statements of accounts of both the companies i,e, Al-Shamsher Engineering Pvt. Ltd. And Makma Steel Craft: Pvt. Ltd, which are at pages 984 and 1100 of the plaint. These statements of accounts are in respect of FATR and FIM facilities. The corresponding current account statements of Makma Steel Craft are at page 1018 and that of Al-Shamsher Engineering Pvt. Ltd. At page 1823. The requirements of section 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001 have been duly fulfilled and in this regard a reference has been made to paragraphs 14, 15 and 16 of C.O.S. No,24 of 2004. According to the learned counsel, the mark up beyond the period claimed in the suit was Rs,5,453,122/- which has been deleted from the amount claimed in the suit. Also the pledged stock sold during the course of these proceedings for Rs,21,287 million have also been deducted from the total amount claimed in the suit and the remaining outstanding amount in the suit is Rs,68,104,675/- for which a decree is prayed for along with cost of funds and the cost of the suit.
40. Mr. Asim Hafeez, Advocate learned counsel for the plaintiffs, in rebuttal, also relied upon the Chart at Annexure 'B'. In a nub, he has not denied that consumption certificates were issued as also that the quantity in the consumption certificates tallies with the bill of lading of the corresponding goods. He, however, submits that the allegation regarding the consumption certificates is not with regard to all the entries in the Chart submitted by the learned counsel for the defendant-Bank. He contends that the delivery order does not mention the weight and likewise the documents which have been relied upon issued by the Customs department regarding the release of bill of entry do not mention the quantity as well. From this, the learned counsel seeks to establish that it cannot be established from these document as to what was the quantity actually consumed by the plaintiffs. This arguments has no legal legs to stands upon..
The preponderance of evidence leads to the conclusion that the goods were in the Go down of the plaintiffs and quite a few consumption certificates have, in fact, been issued. The inference would be that the consumption certificates with regard to the reference given in those certificates would also tally with the weight of the goods in the corresponding bill of entry.
41. The learned counsel for the plaintiffs with regard to Makma Steel Craft pleads that no consumption certificates have been brought on record or exhibited by the defendant-Bank. This is not denied by the learned counsel for the defendant-Bank who submits that the entire reliance with regard to Makma Steel Craft is on the delivery orders. According to the learned counsel for the defendant-Bank and this seems to be the position from a reading of the evidence brought on record that the real document is the delivery order to be issued by the Bank. If there is no delivery order and the ultimate goods are less in weight or do. Not conform to the specification, then a presumption would arise that they have been misappropriated or pilfered. Referring to two transactions as an illustration, the learned counsel for the defendant-Bank referred to Ex.DW.7/4 (page 2383, Paper Book V) which relates to the letter of credit No,239,2 in respect of which a delivery order was issued for lesser quantity of goods and thus the rest of the quantity of the coils/goods ought to have been present in the Go down as the goods comprised in the bill of entry were much more the delivery order which was issued. In most of the bills of entry of Makma Steel Craft, no delivery orders were issued by the defendant-Bank. It was once again sought to be emphasized by the learned counsel that weight of the pledged goods is an important factor and not the number of coils. The weight is given in the bill of entry only and is conducted at Karachi at the time of import. This is a common thread running through the different bills of entry and the corresponding delivery orders. The weight of the pledged goods in the bill of entry is on the higher side whereas the delivery orders have been issued for a lesser weight and quantity. The only inference to be drawn from this is that the remainder of the quantity in terms of weight ought to be present in the Go down but ultimately, as stated above, pledged goods with far less weight were found at the time when the goods were ultimately ordered to be auctioned by this Court.
42. The learned counsel for the plaintiffs referred to the statement of DW.4, DW.5 and DW.6 in order to drive home his point that from the release of the goods from the Godown to the weighing station, no one accompanied the goods and, therefore, the goods could have been pilfered on the way and, therefore, the plaintiffs cannot be burdened with the liability. This argument of the learned counsel is flawed and does not take into consideration the basic premise that the goods cannot be taken out of the Godown without the delivery order having been issued by the defendant-Bank and thus the misappropriation took place in a different manner from the one which is sought to be alleged by the learned counsel for the plaintiffs. It is case of misappropriation of goods for its consumption by the plaintiffs and has to be contrasted from the goods having been taken out of the Godown and taken for the purposes of weighing. Quite obviously, if the goods were misappropriated there is no question of those goods being weighed at the weighing station. Another fact which lends credence to this aspect is that the Godown is situated in the premises of the plaintiffs-company. The plaintiffs have not at any stage raised any objection with regard to the auction of the pledged goods or their diminution in weight. No tangible steps have been taken by the plaintiffs to allege the misappropriation to have been perpetrated by the defendant-Bank or any of its officers. On the other hand, the defendant-Bank has approached the National Accountability Bureau for the registration of the case and the initiation of investigation against the plaintiffs which investigation and proceedings are at an advance stage pending with the NAB in which the Muqaddam is also an accused. This fact has not been denied by the plaintiffs and can be taken into consideration as a stance in support of the allegation made by the defendant-Bank with regard to misappropriation.
43. As a result, the defendant-Bank has discharged the onus of issue No,7 which is decided in favour of the defendant-Bank and against the plaintiffs.
' Relief
44. In view of the findings on the issues above and in particular the issues Nos.5, 6 and 7 the suit filed by the plaintiffs C.O.S. No,46 of 2002 is hereby dismissed with costs all along.
45. The suit C.O.S. No,24 of 2004, filed by the defendant-Bank is decreed in favour of the defendant-Bank and against the plaintiffs, jointly and severally for an amount of Rs,68,104,675/- along with costs of funds and the costs of the suit.