AZIZ-UR-REHMAN, J.---This is a suit filed by the Plaintiff against Defendants for recovery of Rs.895,882,297.00 along with cost of funds, charges and costs under Section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, with the prayers as follows:- (a)Recovery of sum of Rs.894,882,297.00 from the Defendants on account of 'overdue payment along with Rs.1,000,000/- on account of Agency fee from 2007 till June 30, 2014.
(b)Recovery of cost of funds in accordance with the Financial Institution (Recovery of Finances)
Ordinance, 2001.
(c)Profit at the rate of 3 month KIBOR + 2.60 per annum from the date of the default until the actual realization of the amount.
(d)The suit may kindly be decreed with all other costs, charges and expenses incurred by the Plaintiff during the pendency of the suit.
(e)Such other or further relief that this. Hon'ble Court may consider just and proper in the circumstances.
2. Brief facts of the case leading to the above prayers are as follows:-
3. Per Plaintiff's version, the Plaintiff is a Public Limited Company incorporated under the Companies Ordinance, 1984 and has its registered office at 1500-A, Saima Trade Towers, I. I. Chundrigar Road, Karachi, wherefrom, the Plaintiff Company is carrying on its business of leasing, investment and financing. The Plaintiff, as such, is acting as a 'Financial Institution' as defined under section 2(a) of the Financial Institutions (Recovery of Finances) Ordinance, 2001. The Plaintiff as being, an Investment Agent of the below named various Financial Institutions collectively called/referred to as Certificate Holders: Sr. No.Names of the Sukuk Holders 01Pak Oman Investment Company Limited a development financial institution 02United Islamic Income Fund, a mutual fund established under the Companies Ordinance, as a non-banking financial instruction.
03MCB Dynamic Cash Fund, a mutual fund established under the Companies Ordinance, as a non-banking financial instruction.
04NAFA Multi Asset Fund, a mutual fund established under the Companies Ordinance, as a non- banking financial institutions.
05NAFA Islamic Aggressive Income Fund, a mutual fund established under the Companies Ordinance, as a non banking financial institutions.
06KASB Asset Allocation Fund, a mutual fund established under the Companies Ordinance, as a non-banking financial institutions.
07KASB IncomeOpportunity Fund,a mutual fund established under the Companies Ordinance, as a non banking financial institutions.
08AKD Income Fund, a mutual fund established under the Companies Ordinance,as a non-banking financial institutions.
09First Habib Bank Modaraba 10Trust Investment Bank Limited 11Dawood Family Takaful Limited 12BMA Chundrigar Road Saving Fund, a mutual fund established under the Companies Ordinance, as a non-banking financial instruction.
4. The above suit has been filed through Mr. Sohail Ahmed son of Sheikh Nizamuddin Ahmed, who is not only authorized attorney/representative of the Plaintiff Institution to file the above suit, but also well acquainted with the facts of the case and inter alia is authorized to sign and verify the plaint.
Besides, Plaintiff has also been authorized to file the instant suit on behalf of Certificate Holders named above, however, without prejudice to the rights of other Certificate Holders, if any. This factum is evident from Resolutions of Certificate Holders and Plaintiff's Board Resolution [Annexures 'A' to 'A-12' to the plaint].
5. Defendant No.1, who is a Private Limited Company, having its' registered office at 7, Amber Palace, SMCHS, Shahrah-e-Faisal, Karachi, has raised financing through issuance of 'Redeemable Capital' by way of 'Sukuk Certificates'. As far as, Defendant No.2 is concerned, he has guaranteed the financial obligations of Defendant No. 1. Both Defendants Nos.1 and 2, it is needless to say, are customers, as such, fall within the scope of section 2(c) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 [In short F.I.O., 2001].
6. The main and core document which governs the 'terms' and 'conditions' of Sukuk Certificates is the Declaration of Trust dated 21.07.2007 [Hereinafter referred to as 'Trust Deed']. Per said 'Trust Deed', not only Defendant No.1, was appointed as Trustee for and in respect of whole arrangements, but thereunder authority was also delegated to the plaintiff and in its' capacity as an 'Investment Agent' acting on behalf of the 'Certificate Holders'. The 'Trust Deed' and other relevant documents i.e. 'Asset Purchase Agreement', 'Payment Agreement', 'Musharika Agreement', 'Management Agreement', 'Agency Agreement', all dated 21.07.2007 are also annexed with plaint as Annexures 'B' to 'B-5' respectively.
7. For and -in consideration of the 'Sukuk Certificates' and to secure the payment obligations, Defendant No.1 herein created a mortgage by Memorandum of Confirming Deposit of Title Deeds dated 24.07.2007 [In short MCDoTD] on immovable properties i.e. all that piece and parcel of land bearing Plots Nos.C-24 to C-31, measuring 26,290 square meters or thereabout, situated at Winder Sector C, Industrial trading Estate, Winder District Lasbella, Balochistan together with building, sheds, and appurtenances affixed, constructed or to be constructed, affixed, installed or attached therewith and/or relating to the said land and building as fully described and referred to in Para 6(i) of the plaint [Annexure 'C' to the plaint].
8.Apart from creation of 'equitable mortgage' as above, charge by way of hypothecation over and in respect of 'assets' as per 'Schedule-I' to the 'Letter of Hypothecation' dated 21.07.2007 [Annexure 'C-1' to the plaint] was also created by Defendant No. 1 . The charge thus created was also registered in the office of Securities and Exchange Commission of Pakistan [Annexure 'C-3' to the plaint]. Defendant No.2 in his capacity as 'guarantor' has signed and executed 'Personal Guarantee dated 21.7.2007 [Annexure 'C-2' to the plaint]. The copies of the 'Memorandum of Confirming Deposit of Title Deeds', 'Letter of Hypothecation', 'Letter of Personal Guarantee' of Defendant No.2, all dated 21.07.2007 and 'Charge Registration Certificate' dated 24.07.2007 issued by Deputy Registrar of Companies, Karachi, are available on record.
9. Despite of availing of finance facility[ies] and execution of the finance documents in consideration thereof, Defendant No.1, nevertheless, not only failed to pay the rental payments, but also failed and/or neglected to purchase the 'Sukuk Units' by making buy out price. The details of total overdue amounts payable to Certificate Holders are as under:- Sr. No. Names of the Sukuk Holders 01 Pak Oman Investment Company Limited a development financial institution 02 United Islamic Income Fund, a mutual fund established under the Companies Ordinance, as a non-banking financial instruction.
03 MCB Dynamic Cash Fund, a mutual fund established under the Companies Ordinance, as a non-banking financial instruction.
04 NAFA Multi Asset Fund, a mutual fund established under the Companies Ordinance, as a non-banking financial institutions.
05 NAFA Islamic Aggressive Income Fund, a mutual fund established under the Companies Ordinance, as a non banking financial institutions.
06 KASB Asset Allocation Fund, a mutual fund established under the Companies Ordinance, as a non-banking financial institutions.
07 KASB Income Opportunity Fund, a mutual fund established under the Companies Ordinance, as a non banking financial institutions.
08 AKD Income Fund, a mutual fund established under the Companies Ordinance, as a non-banking financial institutions.
09 First Habib Bank Modaraba 10 Trust Investment Bank Limited 11Dawood Family Takaful Limited 12 BMA Chundrigar Road Saving Fund, a mutual fund established under the Companies Ordinance, as a non-banking financial instruction.
4. The above suit has been filed through Mr. Sohail Ahmed son of Sheikh Nizamuddin Ahmed, who is not only authorized attorney/representative of the Plaintiff Institution to file the above suit, but also well acquainted with the facts of the case and inter alia is authorized to sign and verify the plaint.
Besides, Plaintiff has also been authorized to file the instant suit on behalf of Certificate Holders named above, however, without prejudice to the rights of other Certificate Holders, if any. This factum is evident from Resolutions of Certificate Holders and Plaintiff's Board Resolution [Annexures 'A' to 'A-12' to the plaint].
5. Defendant No.1, who is a Private Limited Company, having its' registered office at 7, Amber Palace, SMCHS, Shahrah-e-Faisal, Karachi, has raised financing through issuance of 'Redeemable Capital' by way of 'Sukuk Certificates'. As far as, Defendant No.2 is concerned, he has guaranteed the financial obligations of Defendant No. 1. Both Defendants Nos.1 and 2, it is needless to say, are customers, as such, fall within the scope of section 2(c) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 [In short F.I.O., 2001].
6. The main and core document which governs the 'terms' and 'conditions' of Sukuk Certificates is the Declaration of Trust dated 21.07.2007 [Hereinafter referred to as 'Trust Deed']. Per said 'Trust Deed', not only Defendant No.1, was appointed as Trustee for and in respect of whole arrangements, but thereunder authority was also delegated to the plaintiff and in its' capacity as an 'Investment Agent' acting on behalf of the 'Certificate Holders'. The 'Trust Deed' and other relevant documents i.e. 'Asset Purchase Agreement', 'Payment Agreement', 'Musharika Agreement', 'Management Agreement', 'Agency Agreement', all dated 21.07.2007 are also annexed with plaint as Annexures 'B' to 'B-5' respectively.
7. For and -in consideration of the 'Sukuk Certificates' and to secure the payment obligations, Defendant No.1 herein created a mortgage by Memorandum of Confirming Deposit of Title Deeds dated 24.07.2007 [In short MCDoTD] on immovable properties i.e. all that piece and parcel of land bearing Plots Nos.C-24 to C-31, measuring 26,290 square meters or thereabout, situated at Winder Sector C, Industrial trading Estate, Winder District Lasbella, Balochistan together with building, sheds, and appurtenances affixed, constructed or to be constructed, affixed, installed or attached therewith and/or relating to the said land and building as fully described and referred to in Para 6(i) of the plaint [Annexure 'C' to the plaint].
8. Apart from creation of 'equitable mortgage' as above, charge by way of hypothecation over and in respect of 'assets' as per 'Schedule-I' to the 'Letter of Hypothecation' dated 21.07.2007 [Annexure 'C-1' to the plaint] was also created by Defendant No. 1 . The charge thus created was also registered in the office of Securities and Exchange Commission of Pakistan [Annexure 'C-3' to the plaint]. Defendant No.2 in his capacity as 'guarantor' has signed and executed 'Personal Guarantee dated 21.7.2007 [Annexure 'C-2' to the plaint]. The copies of the 'Memorandum of Confirming Deposit of Title Deeds', 'Letter of Hypothecation', 'Letter of Personal Guarantee' of Defendant No.2, all dated 21.07.2007 and 'Charge Registration Certificate' dated 24.07.2007 issued by Deputy Registrar of Companies, Karachi, are available on record.
9. Despite of availing of finance facility[ies] and execution of the finance documents in consideration thereof, Defendant No.1, nevertheless, not only failed to pay the rental payments, but also failed and/or neglected to purchase the 'Sukuk Units' by making buy out price. The details of total overdue amounts payable to Certificate Holders are as under:- Sr.
No.Names of the Sukuk Holders Overdue Amount (Rs.)
01Pak Oman Investment Company Limited154, 824,287.00 02United Islamic Income Fund 111, 708,000 .00 03MCB Dynamic Cash Fund 63,751, 177.00 04NAFA Multi Asset Fund 18,214,622.00 05NAFA Islamic Aggressive Income Fund200,360,841.00 06KASB Asset Allocation Fund 91,073,110.00 07KASB Income Opportunity Fund127,502,353.00 08AKD Income Fund 54,643,866.00 09First Habib Bank Modaraba 15,041,620.00 10Trust Investment Bank Limited31, 599, 436.00 11Dawood Family Takaful Limited17, 055, 672 . 00 12BMA Chundrigar Road Saving Fund9,107,313.00 Total 895,882,297.00 10.The Plaintiff, as per terms of section 9(3) of F.I.O., 2001, has also given the 'Break-up summaries' of the outstanding amounts of each Certificate Holder in 'Para 8' of the plaint. Per Plaintiffs stand, besides, Defendants have failed and/or neglected to pay the 'Agency Fee' from the year, 2007 till filing of the instant suit, which per averment made in the plaint, comes to Rs.1,000,000.00 [Rupees One Million only]. All the outstanding amounts, as per averments made in the plaint are due and payable. Due to 'default' committed by Defendants, the Plaintiff Bank was thus constrained to call upon Defendants for making payments not only of the 'overdue installments' but also overdue 'agency fee'. Both the Defendants, however, in their own wisdom either avoided and/or neglected the requests/demands of the plaintiff so made and that too, despite of Legal Notice dated 17.07.2013 [Annexure 'F' to the plaint]. According to Plaintiffs version, 'cause of action' for filing of the suit has been accrued in favour of plaintiff on various occasions/dates as referred to and mentioned in 'Para 14' of the plaint.
11.For and on account of failure of Defendants Nos.1 and 2 to pay the outstanding amount, the Plaintiff herein, was constrained to file the instant suit inter alia for recovery of the outstanding amount, plus cost of funds, etc. 12.On filing of the suit on 18.04.2016, 'process' were issued under section 9(5) of F.I.O., 2001, against the Defendants through all requisite modes. Regarding service upon Defendants, courier receipts, registered post A/D and copies of the publications made in wide circulated Newspapers i.e. Daily "The News" English and "Daily Jang" Karachi, both dated 23.04.2016, are also available on record.
This position is also evident from the Diary of Additional Registrar (0.S) of 27.05.2016. Defendants, however, despite of service and expiry of statutory of 30 days failed/neglected and/or avoided to file application within 30 days as required in terms of subsection (2) of section 10 of F.I.O., 2001 for seeking leave to defend the above suit by raising substantial questions of law and facts as per subsection (3) of section 10 of F.I.O., 2001. Being relevant the Diary of Additional Registrar (0.S) of 27.05.2016, is reproduced herein below:- 27.05. 2016 Process under section 9(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 issued to the Defendants through all four (4) modes.
The Plaintiff has produced the receipts of Courier, Regd. Post AD and also publications in newspaper i.e. Daily 'The News' English dated 23.04.2016 and Daily 'Jang' Karachi dated 23.04.2016 respectively.
The statutory period for filing application for Leave to Defendant the suit has expired but no such application has been filed.
Fix in Court for final disposal. [Underlining is mine] Sd/- Additional Registrar (0. S)
13. Evidently, in the case in hand, Defendants have failed to file application[s] under section 10(2) of F.I.O. , 2001, for seeking leave to defend the above suit or otherwise, obtain leave from the Court in terms of section 10(1) of F.I.O., 2001, as such, in terms of section 10(1) of F.I.O., 2001 the allegations of facts in the plaint be deemed as admitted. Banking Court consequently, may pass a decree in favour of the Plaintiff Bank. Being relevant subsections (1) and (2) of section 10 of F.I.O., 2001, for convenience purpose are reproduced herein below:-
10. Leave to defend.---(1) In any case in which the summons has been served on the defendant as provided for in subsection (5) of section 9, the defendant shall not be entitled to defend the suit unless he obtains leave from the Banking Court as hereinafter provided to defend the same; and in default of his doing so, the allegations of fact in the plaint shall be deemed to be admitted and the Banking Court may pass a decree in favour of the plaintiff on the basis thereof or such other material as the Banking Court may require in the interest of justice.
(2) The defendant shall file the application for leave to defend within thirty days of the date of first service by any one of the modes laid down in subsection (5) of section 9.
Provided that where service has been validly effected only through publication in the newspaper, the Banking Court may extend the time for filing an application for leave to defend if satisfied that the defendant did not have knowledge thereof. [Underlining is mine]
14. Manifestly, as per subsection (5) of section 9 of F.I.O., 2001, service effected in any one of the prescribed modes be deemed as valid service under F.I.O., 2001. In the case in hand, no doubt, summons/process as required under the law have been issued. This position is quite clear from the Diary of Additional Registrar (0.S) of 27.05.2016, as such, under circumstances, service upon the Defendants, be deemed and considered as 'valid service'. In this regard, reliance can be placed on the case of Messrs Ahmad Autos and another v. Allied Bank of Pakistan Limited [PLD 1990 SC 497].
The relevant observations therefrom read as follows:
9. ... ... It is a matter of common knowledge that defaulter borrowers in suits brought against them particularly by the financial institutions used to delay the disposal of the suits by avoiding the service of the summons. In order to expedite the disposal of the suits to be brought by the Banking Companies the Ordinance was promulgated, which contains special provisions and which inter alia provide that a suit brought by a Banking Company for the recovery of loan is to be tried in summary manner under Order XXXVII. Section 15 of the Ordinance empowers the Federal Government by a notification in the official Gazette to make rules for carrying out the purposes of The Ordinance. In pursuance whereof the rules have been framed. The underlined object of Rule 8 is to avoid the, delay in the service of the summons and, therefore, it has been provided that the summons are to be issued simultaneously in three different modes referred to herein above, which is the requirement of the above rule. Obviously for the reason that if the summons is not served through a bailiff or by a registered post acknowledgement due, it would be served in any case by publication. In other words', the service is to be held good if a defendant is served by any of the above three modes of service provided for in Rule 8. The unamended Rule 8 was silent on the question, whether in order to hold service of summons good, it should be effected by all the three prescribed modes or whether service of the summons by one of the modes was sufficient. In the case of M/s. Allied Bank of Pakistan Limited v. MA, Tahir Traders and 8 others reported in PLD 1986 Kar. 369 a learned Single Judge of the Sindh High Court had taken the view that mere publication of summons under Rule 8 would not be a proper service unless it was proved that defendant was avoiding the service of summons issued through bailiff and registered post or his whereabouts were not known. A contrary view was taken in a subsequent case referred to herein above namely in the case of M/s. Union Bank of Middle East Limited v. M/s. Zubna Limited and 3 others PLD 1987 Kar. 206, relevant portion of which has been quoted here in above. The framers of the Rules by amending Rule 8 by SRO No. 71(1)/88 dated 31-1-1988 have resolved the above controversy. It may be advantageous to reproduce the original rule and the addition made by the above S.R.O. dated 31-1-1988 which- read as follows:-- (original Rule 8 as framed)
"8. Mode of service of summons and notice.---The Reader shall, on receipt of a plaint, order immediate issue of summons and notices to the defendant simultaneously through the Bailiff of the Court, by registered of the post acknowledgement due and by publication, "an service in any aforesaid modes shall be deemed proper and valid service for the purposes of the Ordinance."
(Underlining is ours and is the addition made by SRO No.71(I)/88 dated, 31-1-1988)
10.... ... However, we may point out that there was no need to amend the above Rule 8 as the correct legal position was that the service was to be held to be good service if it was effected by any one or more modes of service provided for in the above-quoted Rule 8. If we were to take a contrary view, it would be in conflict with the object of the Ordinance and the Rules framed thereunder, as it would make the service more difficult. It would instead of suppressing the mischief which prompted the framing of above Rule 8, would encourage the mischief as a defendant may successfully avoid service by one of the above three modes of service for considerable period by maneouvring.
11.As regards the second submission of Sh. Shaukat Ali, we may observe that we are unable to subscribe to his submission that Rule 8 is violative of Order XXXVII, C.P.C. The above Rule 8 has been competently framed by the E competent authority. It does not violate in any way Order XXXVII or any other Provision of the C.P.C. It may be pertinent to point out that section 129 of the C.P.C. itself contemplates that the orders and the rules provided in the C.P.C. can be amended by the chartered High Courts by framing rules relating to their original civil jurisdiction. Framing of Rule 8 in pursuance of the statutory powers contained in section 15 of the Ordinance seems to be in consonance with the above section 129. The object of the above Rule 8 as pointed out herein above is to avert delay in effecting service of the summons, which object is in consonance with the proviso 2 to Rule 13 of Order IX, C.P.C. incorporated by the Law Reforms Ordinance, 1972, providing (Ordinance XXII of 1972) which provides that:-- "Provided further that no decree passed ex parte shall be set aside merely on the ground of any irregularity in the service of summons, if the Court is satisfied, for reasons, to be recorded, that the defendant had knowledge of the date of bearing in sufficient time to appear on that date and answer the claim." [Underlining is mine] 15.On 12.03.2017, the above suit when came-up before this Court for 'FINAL DISPOSAL' then, it was adjourned at the request for Plaintiff s counsel for 12.04.2017. On 12.04.2017, when again the above suit came-up before me for 'FINAL DISPOSAL' I heard Mr. Waqar Ahmed, learned counsel for the plaintiff, and perused the available record before me with his assistance.
16.Mr. Waqar Ahmed, learned counsel for the plaintiff, argued that in absence of an Application for Leave to Defend the suit filed within the statutory period of 30 days, the averments/allegations of facts made in the plaint under law be deemed as admitted and consequently, the Plaintiff's suit in view of subsection (1) of section 10 of F.I.O., 2001, needs to be decreed in favour of the Plaintiff as prayed. Per Mr. Waqar Ahmed, Defendants herein, in consideration and acknowledgment of availability of financial facilities inter alia have signed and executed various financial documents i.e. 'Purchase Agreement', 'Payment Agreement', 'Trust Deed', 'Musharaka Agreement', 'Management Agreement' and 'Agency Agreement', all dated July 21, 2007, of which copies are available on record. Apart from the above documents, Defendant No.1, has also signed 'Memorandum of Confirming Deposit of Title Deed', 'Letter of Hypothecation' creating thereby/thereunder equitable mortgage and charge on the immovable properties/assets etc. belonging to Defendant No.l. For and to secure the financial obligations of Defendant No.1, Defendant No.2 herein, was stood as guarantor by way of executing 'Personal Guarantee' dated 21.07.2007. The mortgage/charge so created by Defendant No.1, on its' properties/assets, has also been registered with concerned authority.
17.Moreover, all the documents referred to and mentioned in the plaint have been executed by Defendants 'voluntarily' and, of-course, without any force and/or coercion. According to Mr. Waqar Ahmed, learned counsel for the plaintiff, under law and in view of the aforesaid documents, both the defendants besides, being under legal obligations to fulfill all their commitments/duties/promises, are liable to pay the outstanding liabilities due against them. Mr. Waqar Ahmed, next contended that the 'statement of accounts' duly certified under section 4 of Bankers' Books Evidence Act, 1891 are core documents, but in rebuttal thereof and/or entries made therein, there is no any challenge/rebuttal or denials. In view of this position, per learned counsel, it be presumed that entries made therein are correct. While, concluding his arguments, learned counsel vehemently submitted that the suit in hand be decreed in favour of the Plaintiff as prayed.
18. Heard.
19. Before proceeding further, at this juncture I would like to refer to clause (e) of section 2 of F.I.O., 2001, which reads.as follows:- (a)
(b)
(c)
(d)
(e)"obligation" includes--',
(1) any agreement for the repayment or extension of time in repayment of a finance or for its restructuring or renewal or for payment or extension of time in payment of any other amounts relating to a finance or liquidated damages; and (ii)any and all representations, warranties and covenants made or on behalf of the customer to a financial institution at any stage, including representations, warranties and covenants with regard to the ownership, mortgage, pledge, hypothecation or assignment of, or other charge on, assets or properties or repayment of a finance or payment of any other amounts relating to a finance or performance of an undertaking or fulfillment of a promise; and [Underlining is mine] (iii)all duties imposed on the customer under this Ordinance.
20. Evidently, per the above provision of law, a 'customer' of a Bank/Financial Institution, indeed, is not only under legal obligation to fulfill its'/his promises strictly in terms of clause (e) of section 2 of F.I.O., 2001, but also duty bound to perform his undertakings made in respect of repayment of the outstanding dues and other amounts that pertain to finance facilities granted to and availed by the customer[s]. In the case in hand, it is significant to note that all the documents and entries made in the statement of accounts annexed with the plaint have gone un-challenged/un-rebuttal.
21. No doubt, presumption vis-a-vis correctness of entries made in statement of accounts duly certified under section 4 of Bankers' Books Evidence Act, 1891, in absence of any opposition/challenge/denials is not only attached to it, but the amounts due as per statement of accounts B be deemed as correct liability of customer[s]. Reliance in this regard, can be placed on the case of Habib Bank Limited through Authorized Attorney v. Haidri Homes through Partners and 3 others [2012 CLD 2016] . The relevant extracts therefrom, read as follows:-
5. ... The plaintiff has placed on record certified copy of statement of account having a certificate under section 4 of Bankers' Books Evidence Act 1891. There is no rebuttal of the statement of account and as such the argument of learned counsel for defendants that court has to examine the maintainability of suit is not sustainable in the eye of law. Under section 9 of the Financial Institutions (Recovery of Finances) Ordinance 2001 certified statement of accounts is the core document under section 4 of Bankers' Books Act, 1891. The statement of account is available on record and no entry of the same is challenged and as such it will be presumed that account prepared and maintained by the plaintiff/bank are correct. [Underlining is mine]
6. ... The judgment referred by learned counsel or defendants has distinguished facts as in that suit the plaintiff has claimed damages which could only be ascertained after recording of evidence and as such Hon'ble Supreme Court of Pakistan has held that even if defendants failed to file application Jor permission to defend the suit or their application is dismissed the court should examine the averments of plaint and documents annexed there with. Whereas in the present case statement of account having a certificate under section 4 of the Act ibid is admissible per se specially when there is no opposition and there is no objection against any debit entry, thus in the absence of any rebuttal, the amount due as per statement of account will be deemed to be the correct liability of defendants. [Underlining is mine]
22. Besides, in the case of United Bank Ltd. v. Messrs Sartaj Industries through Qaisar Iqbal, Managing Partner and 6 others [PLD 1990 Lahore 99], it was held as under:- "20.... The statement of account annexed with the plaint which has been certified under the Bankers' Books Evidence Act, shows these deposits as having been made by the defendants and thus presumption of correctness has to be attached thereto when the entries have not in any manner whatsoever bees rebutted by the defendants. The aforesaid deposits shall have to be therefore taken as having been made by the defendants on the dates on which these are shown to have been made in the books of accounts of the plaintiff Bank " [Underlining is mine].
23. It is worth to mention, the liability of Defendant No.2 in his capacity as a 'guarantor' is co- extensive with that of 'principal debtor' [Defendant No.1 herein]. Unless, in the 'Letter of Guarantee'
[Annexure 'C-2' to the plaint], it is provided otherwise which, however, is not the case in hand. It is needless to say, that any promise made, thing done for the .benefit of principal debtor, under law, is sufficient consideration as far as surety is concerned for giving the guarantee. The contract of guarantee it is significant to note, is a contract for to perform a promise and/or to discharge the liability of a 3rd person in case of occurrence of default by the principal debtor. In this regard, reference can be made to sections 126, 127 and 128 of the Contract Act, 1872 [Act. IX of 1872]. For ready reference the same are reproduced herein below:- 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. 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."
24. Keeping in view the terms and conditions of letter of guarantee [Annexure 'C-2' to the plaint], duly signed and executed by Defendant No.2 and the above provisions of law I am of the view that Defendant No.2 in his capacity as being a guarantor is also liable to pay the outstanding dues against Defendant No.1. The liability of the principal and a guarantor is co-extensive in terms of section 128 of the Contract Act, 1872 [Act IX of 1872]. Moreover, in an action initiated by the creditors against the principal borrower/customer and guarantor the creditor under law is 'only required to establish the occurrence of default and liability of the principal debtor. In the case of Bank of Baroda [AIR 1992 Karnataka 108], the rule pronounced vis-a-vis liability of a guarantor reads as follows:- (1). "10.1. In City-bank NA., New Delhi v. Jugilal Kamalapat Jute Mills Co. Limited, Kanpur, AIR 1982 Delhi 487, differing from the view expressed in the aforesaid Pearl Hosiery Mills; case (AIR 1961 Punj.
281), it has been held that it was not necessary for the Legislature to provide the words in the absence of any contract in section 133 or 135 or 141, because the sections themselves speak of consent of the surety regarding variance in the terms of the contract between the principal debtor and the creditor and composition with the principal etc. It has also been further held that in the presence of the words 'without the surety's consent', the words 'in the absence of any contract to the contrary, would have been surplus. Therefore, following a decision of the Privy Council in Hodges v. Delhi and London Bank Ltd. (1900) 27 Ind. App. 168 and A.R. Krishnaswami Ayyer v.
Travancore National Bank Ltd. (AIR 1940 Mad. 437), it has been held that the rights conferred on the surety under section 133, 135 or 141 of the Act could be waived by specific agreement in the deed of guarantee, that as a matter of fact, such an agreement would amount to consent within the meaning of the aforesaid sections of the Act. [Underlining is mine].
11. ... The words 'unless it is otherwise provided in the contract' occurring in section. 128 of the Act will also govern the other provisions contained in the Chapter VIII of the Act and enable the surety to give up the rights available to him under sections 133, 134, 135 and 141 of the Act. It is a settled legal position of law that a legal right can be given up provided such giving up of a legal right under any contract is not hit by section 23 of the Act. Section 133 of the Act makes it clear that any variance made in the contract between the principal debtor and the creditor without the consent of the surety, discharges the surety as to transactions subsequent to variance. This consent of the surety can be obtained either at the time of the contract is made between the principal debtor and the creditor to which the surety gives the guarantee, for making any change or alteration in the contract to be made or not to claim any right or benefit under Chapter VIII of the Act. In other words, in the suretybond/guarantee-bond itself the surety can agree to waive his rights available to him under the various provisions contained in Chanter VIII of the Act. Such waiving of his right by the surety is permissible under section 133 read with section 128 of the Act.
11.1 ... The rights available to the surety under Chapter VIII of the Act, as already pointed out, can be waived by the surety. Therefore, such waiving of right by the surety is neither intended to defeat nor does it defeat any provisions of law. Therefore it is also not possible to hold that the consideration and the object of the agreement of guarantee have the effect of defeating any provisions of law. A recital in the surety bond in question that surety will not be entitled to any of the rights conferred by sections 133, 134, 135, 139 and 141 of the Act cannot be held to defeat the provisions of Chapter VIII of the Act. The rights conferred on the surety under Chapter VIII are not inalienable rights nor those rights have anything to do with the public policy as such. Those rights relate to the contracts entered into by individuals. It is not the case of defendant-3 that the aforesaid recital in the surety bond has been obtained either fraudulently or it involves or implies injury to the person or property of another. It is also not possible to view such a recital as immoral or opposed to pubic policy. Public policy is not to defeat the debt of the creditor, it is to ensure that the money of the creditor, is secured and is recoverable in accordance with law; and the debtor or the surety is not absolved from his liability to discharge the debt except in accordance with law. Therefore, we are of the view that it is not possible to agree with the view as extracted above, expressed in Pearl Hosiery Mills' case AIR 1961 Punj. 281 by the High Court of Punjab. We agree with the aforesaid view expressed in City-bank's case AIR 1982 Delhi 487 by the High Court of Delhi and also approve the view expressed by Kulkarni, J in R. Lilavati's case AIR 1987 Kant. 2."
[Underlining is mine].
25. As far as, the creation of mortgage is concerned, I would, like to refer to section 58 (f) of the Transfer of Property Act, 1882 [V of 1882]. Under section 58(f) of Transfer of Property Act, 1882 [V of 1882], delivery of 'title documents' of immoveable properties to a creditor or his agent, with an intent to create security thereon; is called 'mortgage' by deposit of 'title deeds'. From reading of section 58(f) of Transfer of Property Act, 1882, [V of 1882], it comes quite clear, that Memorandum of Deposit of Title Deeds is not a requirement of law. Nevertheless, keeping in view the execution of MDoTD [Annexure 'C' to the plaint], Plaintiff in the present case has fully established the creation of valid mortgage in respect of immovable properties i.e. all that piece and parcel of land bearing Plots Nos.C-24 to C-31, measuring 26,290 square meters or thereabout, situated at Winder Sector C, Industrial trading, Estate, Winder District Lasbella, Balochistan, together with building, sheds, and appurtenances affixed, constructed or to be constructed, affixed, installed or attached therewith and/or relating to the said land and building as fully described and referred to in Para 6(i) of the plaint. The plaintiff, as such, is entitled to have a 'final decree' for sale of immovable properties and hypothecated goods well described and mentioned in Paras 6(i) and (ii) of the plaint.
26.In the case in hand, though the Defendants have failed to obtain Leave for to Defend the suit but still the Court on its' own can scrutinize the 'statement of accounts'/'break-up' of liability[ies], placed on record by Plaintiff in juxtaposition of banking documents/financial documents. The Plaintiff herein, as required under sdction 9(3) of F.I.O., 2001, has given 'summaries' of the outstanding amounts of each 'Certificate Holders', due against the Defendants in Para 8 of the Plaint. Per 'summaries' break-up' of liabilities, the total outstanding overdue amount comes to Rs.895,882,297.00 [Rupees Eight Hundred Ninety Five Million, Eight Hundred Eighty Two Thousand and Two Hundred Ninety Seven only].
27.Apart from the above overdue amount, Plaintiff has also claimed Rs.1,000,000/- [Rupees One Million only], towards 'Agency Fee' from the year, 2007 till date, in terms of 'Clause 3.4' of 'Trust Deed' dated , 21.7.2007 ['Annexure 'B' to the plaint]. The said 'Clause 3.4' reads as follows:- 3.4. Remuneration of Trustee and the Agents The Issuer shall pay to the Investment Agent in respect of its acting as Investment Agent under the Transaction Documents agency fee of Rs.200,000 (Rupees two hundred thousand only) per annum payable in advance for the first year on the signing of this Trust Deed and subsequently on each anniversary of such date until the trust is wound-up.
28.Upon scrutinizing the 'statement of accounts' and 'breakup'/' stimmaries' the liabilities of the Defendants towards 'Certificate Holders', as given under section 9(3) of F.I.O., 2001 and referred to in 'Para 8' of the plaint, some amounts were found nob permissible under law to be allowed.
29.Mr. Waqar Ahmed, learned counsel for the plaintiff also candidly conceded such position and thus placed on record a 'fresh break-up'I'summary' of the outstanding amounts due and payable by the Defendants. The 'summary'/'break-up' of liabilities so filed and taken on record, for ready reference is reproduced herein below:- 1Pak Oman85,000,000 81,148,14111,623,85469.824,28749,261,180134.261,180375 2UBL Fund Manager60,000,000 - 51,708.419 51,708.41937.387,56297.387.562383 3MCB Cask Fund35,000,000 - 33,537,4704,786,293 ,28.751,17820,284,01695.284,016397 4Nafa Multi10,000,000 9,582,1361,367,5138,214,6235,795,43415.795,434405 5NAFA Islamic110,000,000 '-. --L., 105.403,48015,042,63790,360,84363,749,763173,749.763411 6KASB Fund, , 50,000,000 47,931,6716,837,56141,073,11028,977,16478,977,164423 7 KASB Income Fund70,000,000 - 67,074.9389,572,5859,572,58557.502,35140,568,029429 8AKD Aggressive30,000,000 - 29.653.6615,009,79524,643.86517,386.29847.386,298441 91st Habib Modaraba9,375,000625,0005.666.621 5.666,6215,666.62115.041,621449 10Trust Invest20,000,000 - 15,7917.,9414,196.50511,599,43611,599,43631,599,436455 11Dawood Family Ta'fitful9,375,000625,0009,048,1851,367,5137,680.6725,432,74514.807.745465 12BMA 5.000,000 4,791.069683,7564,107,3133,081.0888,081,088471 493,750,0001,250,000461,341,73260,488,012401,132,718289,189,336782,939,336 (A)(F)
Grant Total 493,750,000289,189,336 782,939,336 Agency Fee1,00,000 Para 9 of Plaint] page 23 783,939,336 [Trust Deed] page 77 relevant 99 Para 3.4 Date of Default :25.10.2008 Under the aforesaid break-up/surnmary, the actual payable amount against the Defendants come to Rs.783,939,336.00 [Rupees Seven Hundred Eighty Three Million, Nine Hundred Thirty Nine Thousand and Three Hundred Thirty Six only].
30. With regard to the averments made in the plaint to the extent and effect that if, Defendants had paid the outstanding amounts on the dates when they were called upon to make payments to the Certificate Holders, the Plaintiff then would have made profit on the outstanding amounts and thus had not suffered loss of profit/income on the outstanding amount, it is enough to say that merely on the basis of the 'assertions' and that too. without leading any .evidence' in respect of so-called loss of profit/income the P1aintiff; in my view, is not entitled for any such amount to claim on the basis of general assertions because such kind of loss of profit/income in its proof requires positive evidence vis-a-vis loss if suffered.
31.Upon hearing Mr. Waqar Ahmed, learned counsel for the Plaintiff, and perusal of the record, I have reached the conclusion that the Plaintiff's suit deserves to be decreed. In view of this position, the Plaintiff's suit is decreed for Rs.783,393,36,00 [Rupees Seven Hundred Eighty Three Million, Nine Hundred Thirty Nine Thousand and Three Hundred Thirty Six only], against the Defendants jointly and severally along with 'cost of fund' in terms of section 3(2) of F.I.O., 2001, till realization of the decretal amount. Besides, a 'Final Decree' for sale of the 'mortgaged properties' and 'hypothecated assets', as referred to and mentioned in 'Para 6(i) and (ii) of the plaint', is also passed for recovery of the decreetal amount including 'cost of funds' and 'cost of the suit'.
32.Suit stands decreed accordingly.