JAWAD HASSAN, J.---This consolidated judgment shall dispose of R.F.A. No,956/2013 and R.F.A.
No,771/2013 as both have emanated out of same judgment and decree and involve identical question of facts and law.
2. Through this appeal, the Appellants have assailed the judgment and decree dated 28.05.2013 passed by Judge Banking Court-IV, Lahore, in the suit filed by the Respondent.
3. Brief facts for the disposal of this appeal are that the. Respondent/Plaintiff Bank, filed a suit against Messrs Naeem Zafar Industries and six others for recovery of a sum of Rs,1,25,67,653/- with cost of funds and suit both against the Appellants/Defendants from the date of institution of the suit, till final realization under section 9 of the Financial Institutions (Recovery of Finances)
Ordinance, 2001 (the "2001 Ordinance"). The Appellants/Defendants had availed a Running Finance Facility of Rs,6.00 Million under "Karobar Barho" Scheme which was sanctioned vide facility offer letter dated 24.02.2007 and in order to secure the facility the Appellants/Defendants executed certain documents mentioned in paras Nos.5 and 6 of the plaint. It is alleged in the plaint that before expiry of the agreement the defendants requested to the Plaintiff Bank/Respondent to enhance the amount of running finance facility from Rs,6.00 Million to 11.00 Million vide letter dated 03.08.2007, which subsequently was accepted by the Respondent Bank and enhanced facility offer letter bearing No,MB/ADV/CBG/LHR dated 10.10.2007 under certain terms and conditions were issued. It is alleged in the plaint that enhanced amount was disbursed after fulfillment of the conditions of the facility offer dated 10.10.2007, which was utilized by the Appellants/Defendants and to secure the facility, the defendants executed certain documents mentioned in paras Nos.8 and 9 of the plaint. Before the expiry of extended finance facility, the Appellants/Defendants approached the Respondent/Plaintiff Bank requesting for renewal of facility, which ultimately was renewed by the Respondent/Plaintiff Bank under certain terms and conditions vide letter dated 13.03.2008. In order to secure the facility so renewed the Appellants/Defendants executed certain documents. According to the plaint the amount outstanding and payable under the running finance facility on 31.03.2009 are as under:-
(i) Principal amount outstandingRs,1,10,29,982/-
(ii) Mark up outstanding Rs,15,37,671/-
(iii) Total amount, payable Rs,1,25,67,653/- The Appellants failed to liquidate their liability despite number of reminders for repayment of outstanding amount were issued to them by the Respondent Bank and consequently the Respondent Bank filed the above said suit.
4. After service of summons, the Appellants/Defendants filed application under section 10 of the 2001 Ordinance, (the "PLA"). In the PLA application, the Appellants/Defendants raised certain preliminary objections regarding maintainability of suit as the suit has not been filed by an authorized person; that the Appellants/Defendants have already filed suit for recovery of Rs,5,92,80,842/- which is under adjudication before this Court as such the instant suit filed by the Bank regarding the same subject matter, directly and substantially in issue cannot proceed and is liable to be stayed under section 10 of Code of Civil Procedure, 1908 ("C.P.C."); the requirements of Section 9 of the 2001 Ordinance have not been complied with. It was also alleged in the PLA that statements of accounts annexed with the plaint is not in accordance with the law as only computer generated statement of accounts was attached with the plant, which is not permissible under the law; that the amounts deposited by the Appellants/Defendants have not been reflected in the statement of accounts although whole liability of the Appellants/ Defendants has been liquidated; that the facility was only for an amount of Rs,6.00 Million, which was liquidated but the alleged enhancement in the plaint is neither approved, nor any such amount was disbursed to the Appellants/Defendants and that exorbitant mark up has been charged in violation of the terms and conditions of the finance agreement. Consequently, after considering all the points raised by the parties, the learned Judge Banking Court-II, Lahore vide Judgment and Decree dated 28.05.2013, decreed the suit entitling the Respondent Bank in the sum of Rs,7,895,597/- in favour of the Respondent Bank and against the Appellants/Defendants with costs of funds jointly and severally from the date of decree. In case of failure of Appellants/Defendants to satisfy the decree within the stipulated period of thirty (30) days, the suit was automatically directed to be converted into execution petition as contemplated in Section 9 of the 2001 Ordinance. The Decree was to be executed by sale of pledged/mortgaged/hypothecated property and other assets of the judgment debtors.
5. Learned counsel for the Appellants has argued that Banking Court while accepting certain entries in the statement of account to be contrary to the record and while accepting the claim of the Appellants deleting entries from the claim of Respondent has failed to take note of the entry dated 7.8.2007 for Rs,1,460,580/-, which was shown in the statement of account as markup recovered from the principal amount. The corresponding mark-up statement shows that this amount of. Rs,1,460,580/- million having been credited in the markup statement the entries stand reversed and the same statement but in the account statement such reverse amount do not reflect which clearly establish that the Respondent Bank has misappropriated this amount of Rs,1,460,588/-, which is sufficient for the learned Banking Court to grant unconditional leave to appeal, but the learned Banking Court has erred in law in decreeing the suit; that the learned Banking Court has erred in law in decreeing the markup of the renewal period i,e, 1.1.2008 till 31.12.2008 whereas the statement of account shows that there was no disbursement rather the sanction letter for renewal of this facility is dated 13.03.2008 and IB-6, and 1B-12, have been filled in 1.1.2008. No amount has been shown disbursed during this renewal period rather from December 2007 till April 2008, there is no entry in the statement of account as such the levy of the markup for this period of Rs,13,64,314/- has been erroneously included, whereas it was a fit case in which leave to defend should have directed to produce evidence. The summary procedure adopted by the learned Banking Court has resulted in miscarriage of justice and while deducting the other entries in Para-7 of the impugned judgment the learned Banking Court should have deleted markup of this renewal period, in which there was no disbursement. Learned counsel for the Appellants have further argued that there is no move between markup with no entries and statement of account shows that three cheques were issued on 16.04.2007 which were not from their cheque book, which were debited from his Account. He further stated that Bank sent blank documents, on which the Respondent Bank cannot file this suit. To support the above contentions and arguments, learned counsel for the Appellants has placed reliance upon Crescent Commercial Bank Now Samba Bank Ltd. v. General tech Pakistan Ltd. (2011 CLD 37), Messrs Soneri. Bank Limited v. Messrs Compass Trading Corporation (Pvt). Limited through Director/Chief Executive and 3 others (2012 CLD 1302), and Messrs C.M. Textile Mills (Pvt.) Limited, through Chairman and 5 others v. Investment Corporation of Pakistan (2004 CLD 587). He lastly objected to the statement of accounts being incorrect and had wrong entries, which were ignored by the Banking Court while decreeing the suit.
6. Learned counsel for the Respondent has submitted that Appellant's case of cheque which was rightly discussed by the Banking Court in paragraph-7 of the impugned judgment. The counsel further submitted that movement between mark-up is internal matter of the Bank, where deals mark-up with the system. Hence no over mark-up is charged. With regards to where debit and credit of Rs,1,460,580/- entry is concerned, it was done by mistake, hence it was corrected. Further it was credited on 16.07.2007 and debited on 7.8.2007, hence it was a clerical mistake. Learned counsel also explained that all documents were executed and had never been denied. Counsel stated that Appellant had made all payments through cheques which are affected in the statement of account. Since they have denied execution of documents and nature of their signature, this ground was rightly rejected by the learned Banking Court. The counsel further contended that the Appellants committed default and thereby it acted upon the renewal documents etc., and 'therefore, it is estopped to challenge the said documents; the Appellants did not deny execution of the financing documents etc. In their PLA, but they attempted to defraud the lawful claim of the Respondent-Bank by falsely contending that their signatures were obtained on the blank documents; it had failed' to make out their case for grant of their application for leave to defend the suit, which was rightly dismissed by the learned Banking Court and ultimately decreeing the suit accordingly. Lastly counsel for the Bank prays that that the appeal may be dismissed. He has placed his reliance on the cases of Apollo Textile Mills Ltd. And others v. Soneri Bank Ltd. (2012 CLD 337) and Muhammad Arshad and another v. Citi Bank N.A., Lahore (2006 SCM R 1347).
7 . We have heard the arguments of both the counsel and have examined the record.
8. From the facts stated above, the parties have raised issues, (i) whether entry of Rs,1,460,580/- was by the mistake of the Respondent Bank; (ii) whether the Appellants can challenge entries in the statement of account after filing of the suit, while they had all the statements of accounts since the account was opened and when the statements were sent to them on a monthly basis and; (iii) what is the consequence of signing the blank documents by the Appellant, when the signatures are not denied at all.
' Debit/Credit Entry of Rs,1,460,580
9. We have examined the statement of accounts and observed that the aforementioned amount of Rs,1,460,580 was credited into the account on ,6.07.2007 and then it was reversed on 7.8.2007. As explained by the counsel of the Bank, it was a mistake and after being credited, it was debited. The Banking Court has rightly dealt with these issues in detail and the Court finds no reason to discuss the same in detail.
' Notwithstanding the above, the Appellants have no foundation, based on the doctrine of approbation and reprobation, to now contest the Statement of Account. The concept is derived from the maxim; "qui approbate non reprobate" (one who approbates cannot reprobate). Needless to say, under law one cannot approbate and reprobate at the same time. The reliance is placed on the case of Mirza Nasir and 2 others v. Mirza Hakim-ud-Din, Managing Director Jahangir Engineering Company, Gujranwala 2001 M LD 431, wherein it was held which is as follows: "It is settled principle of law that a person who himself participates before said forum cannot be allowed to challenge competency of proceedings before the said forum on the well-known principle of estoppels and waiver and acquiescence meaning thereby he cannot be allowed to reprobate and approbate and would not be heard to contend that forum, did not have jurisdiction..."
' In view of the above, on the basis of established principles of estoppel and by failing to raise an objection on the clerical error made and admitted by the Bank, the Appellants can't place reliance on the argument that the already explained error was the mistake of the Respondent Bank.
' Financial Estoppel: Cannot challenge the Statement of Account;
10. In order to find out the liability of the Appellants/Defendants, we have gone through the statement of accounts, which reflects each and every transaction between the parties. All statement of accounts are in order and the Respondent Bank has explained all the objected entries, which in fact were the cheques issued by the Appellant to its customers. The statements of accounts are correct and do not suffer from any irregularity. Hence, the Appellants are estopped to challenge the statement of accounts, it had since the account was opened, when it used to regularly receive it from the Respondent Bank. Recently, this Court in Standard Chartered Bank v.
Needle Point, 2016 CLD 2066 held the learned counsel for the defendants made a flanking rather than frontal attack to the statement of account and no specific objection has been taken to the entries in the statement of account. Be that as it may, the statement of account is verified in accordance with law and complied with the requirements of a valid statement of account.
Moreover, in Wazir Khan Store v. UBL, 2015 CLD 1729 the Court held that we are of the considered view that in an application for leave to defend filed by the appellants there is no rebuttal of the Statement of Account and as such the argument of the learned counsel for the appellants that the suit is not maintainable is misconceived. Certified Statement of Accounts is available on record and no entry of the same is challenged and as such it will be presumed that the Statement of Accounts appended with the plaint is correct. As we have observed that the plaint was accompanied by certified Statement of Account and no entry of the Statement of Account was challenged in the application for leave to defend the suit and as such the Statement of Account shall be presumed to be correct. The Statement of Account having certificate under Section 4 of the Bankers' Books Evidence Act, 1891 was admissible especially when there was no opposition and there was no objection against any debit entry. In absence of any rebuttal the amount due according to the Statement of Account would be deemed to be the correct liability of defendant.
(emphasize added) It has been noted that the Appellants in the Facility Offer Letter, filled in the Application Form with the Address "Mr. Zafar Mahmood Messrs Naeem Zafar Industries 8-KM Sheikhupur Road Lahore". As per requirement of State Bank Circular, the Respondent Bank started sending statement of accounts to the Appellants regularly and all entries were mentioned in the statement of account which has never been disputed by the Appellants till the filing of the Banking Suit. The Appellants had the knowledge of the entries throughout, because they had all the statement of accounts, which were never objected to before, hence the Appellants are financially estopped to object the same. Under the Banking practice, statement of accounts is mandatory for customers to receive and examine and if there is any discrepancy and objection should inform the Bank because the Banks have fiduciary relationship with the customers in maintaining the accounts. Under the Banker's Book Evidence Act, 1891 the statements of accounts have presumption of truth because it shows all debit and credit and all entries of the day-to-day business of the customer with the Bank. It is settled law that statement of accounts are presumed to be correct, if not challenged by the customer after receiving them regularly. If they were challenged with the Bank at the proper time with cogent reasons, then it is duty of the Bank to correct the entries in the statement of accounts. If the entries in the statements of accounts are not denied specifically and while receiving statement of accounts and due to lack of knowledge under the doctrine of financial estoppel, the customers are estopped to rigor out the liability and challenge the same. It is a settled law that minor discrepancies in statement of accounts should not disentitle the Bank to claim the such amount. In Pakistan, all banks do the business of banking under the Banking Companies Ordinance, 1962. Under the said Ordinance the. State Bank of Pakistan issues directions and circulars to the Banks from time to time regarding the sending of statement of accounts to the customers regularly as given in BPRD Circular No,02 of 2010 dated 5th January, 2010 titled "Issuance of Statement of Account (SOA) To Account Holders" where it is specifically stated that: "i. The banks shall dispatch, free of charge, statements of accounts to their account-holders having a closing balance equal to or exceeding Rs,10,000/= at least twice in a year on six monthly basis within one month from the close of. Half-year, i,e,, June 30 and December 31."
' This means that customers receive the statement of accounts and they have the knowledge of the entries, which they are estopped to challenge in the suits filed by the Bank in case of default.
Furthermore, the honorable Supreme Court in Apollo Textile Mills Ltd. And others v. Soneri Bank Ltd., (PLD 2012 Supreme Court 268) and (2012 CLD 337) held that the Petitioners had not shown the prejudice caused to them purportedly by alleged incomplete statements of accounts, which in fact were complete on considering the effect of rollovers. The Separate statement of accounts was filed by the Plaintiff Bank in each separate/independent account which commenced without a debit from its respective date of commencement. Hence, the Petitioners had failed to distinguish the particulars of one account from the other, lending non-credibility of their objection as raised, Therefore in the absence of denial of availing of the finance facilities, execution of the charge/security documents and admission of the outstanding liability or the statement of accounts, there existed no substantial question of law or fact requiring evidence.
Hence, the Appellant's argument that there are discrepancies in the statement of account hold no legal nexus. Since they held no merit whatsoever and the same has already been rightfully decreed by the Banking Court.
' Blank Documents
11. The Banking Court has rightly decided by holding that the Appellant, at the most, have denied enhancement of the' facility contending that the facility/limit was for Rs,6.00 Million only, which has been liquidated but the documents of loan available on record reflect that the documents of enhancement contain signatures of the Appellants. No valid explanation in this regard has been furnished by the Appellants. At the most it has been said that signatures of the Appellants were procured on the blank documents, such assertion cannot be believed unless cogent proof in this regard is produced. When Appellant availed the finance and has not denied the signature, they cannot deny the blank document. As for the matter of signature on the blank documents, as stated above, recently, in Standard Chartered Bank v. Needlepoint supra this Court held that it is not denied by the learned counsel for the Plaintiff-Bank that the agreements have not been signed on behalf of the bank yet the learned counsel submits that the defendants do not deny the signatures of these agreements by and on behalf of the defendants. Moreover, the defendants have admitted the repayments to have been made in terms of the agreements by the defendants and, therefore,, it does not lie in the mouth of the defendants to deny the execution of the agreements. The proposition put forth by the learned counsel for the defendants would only hold well in case the agreements or their execution is denied by either of the parties when the onus would fall upon the other party to prove its execution. The Plaintiff clearly does not deny that the agreements were executed and the Defendants also have not denied the execution by the defendants in the application for leave to defend. Therefore, nothing really turns on this objection raised by the learned counsel for the Defendants. In view of the above, the Appellants are estopped to challenge the validity of finance facilities and charge documents in terms of section 20 read with section 118 of Negotiable Instruments Act, 1881. In this regard, reference can be made to Muhammad Arshad and another v. Citibank N.A. Through Attorney 2005 CLD 1237 and Tariq Javed and another v.
National Bank of Pakistan (2004 CLD 838).
12. Keeping in view the aforesaid, the learned Judge Banking Court has rightly dismissed the application filed by the Appellants for grant of leave to defend the suit. Reference can be made to the judgment of the Honorable Supreme Court, Apollo Textile Mills Ltd. And others v. Soneri Bank Ltd., PLD 2012 Supreme Court 268 = 2012 CLD 337.
R.F.A. No,956/2013
13. Learned counsel for the Appellants has failed to point out any illegality or irregularity in the impugned judgment and decree, hence, the same is sustained.
14. In view of the above, the appeal (R.F.A. No,956/2013) being bereft of merit is dismissed. No order as to costs.
R.F.A. No,771/2013
15. The claim made by the Appellant Bank in the suit for recovery was of Rs,12,567,653/- with costs of suit and funds, but the Banking Court decreed the suit only to the extent of Rs,78,95,597/- in favour of the Appellant bank. It is case of the Bank that the Banking Court has failed to give reasons excluding its claim of Rs,4,672,056/- from the claim made in the suit, therefore, the judgment and decree is liable to be modified.
16. By examining the record, we feel that the Banking Court fell in error in concluding in paragraph- 9 of. The impugned judgment by decreeing the suit only for Rs,78,95,597/- and without any cogent reason it disallowed the amount of Rs,4,672,056/-. We accept this appeal to the extent that the bank shall be entitled to the entire amount claimed in the suit to be decreed. Hence the impugned judgment and decree is modified to the extent of allowing Rs,4,672,056/- with cost of suit and cost of fund and a decree be passed in favour of the Appellant Bank and against the Respondent jointly and severally for Rs,12,567,653/-. The decree sheet be modified accordingly.