AYESHA A. MALIK, J. --- This is an appeal against order dated 18.04.2012 passed by the learned Single Judge.
2. The order-sheet shows that this is an old appeal pending since 2012 with repeated adjournments on behalf of the Appellants' counsel. Today again no one is present on behalf of the Appellants. A request has been made on behalf of the Appellants' counsel for adjournment, however since the case is pending since 2012 and the counsel for the Respondent is present we have decided to proceed with the matter on the basis of available record.
3. The impugned order dated 18.04.2012 has been passed in COS No, 205/2010. The Appellants filed a suit for declaration and recovery of Rs. 85 million as damages under Section 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001 ("Ordinance"). The Respondent Bank filed Petition for Leave to Appeal which was granted vide order dated 14.09.2011, entitling the Appellants to record evidence for the purpose of determining the issue of damages. Before the issues could be framed an application under Order VII, Rule 11, Civil Procedure Code ("CPC") was. filed by the Respondent Bank wherein it alleged that no cause of action is available since the suit was filed on the basis of a proposal for finance dated 11.06.2009 offered by the Bank. It is their case that there was no commitment to extend finance to the Appellants nor was there any finance agreement executed between the parties on the basis of which a TV obligation to disburse finance could be alleged. The Court while considering the factual position concluded that letter dated 11.06.2009 was a proposal prepared by the Bank and that on the basis of such proposal no agreement was executed between the parties. Meaning thereby that the basic relationship of customer as defined under Section 2(c) of the Ordinance did not exist. Further that there is no obligation of the Bank as defined under Section 2(e)(i) of the Ordinance as there is no finance agreement exists between the parties. The Appeal was allowed and the plaint was returned. The Court further held that since time was wasted by burdening the Court with a suit which the Appellants were aware could not proceed, costs of Rs. 25,000/- was imposed.
4. The grounds of appeal shows that the Appellants grievance is that there was an agreement with the Respondent Bank on the basis of which amounts to be disbursed to the Appellants for working capital. That a running finance facility was sanctioned by the Bank and the property mortgaged for the running finance was offered for the proposed facility. Therefore there was an obligation on the Bank to disburse the working capital facility. Further that the suit was maintainable and evidence had to be recorded. That the law vests exclusive jurisdiction with the Banking Court and that returning the plaint and imposing cost was illegal.
5. As per the record a suit for declaration and recovery of Rs. 85,000,000/- as damages was filed by the Appellants against the Bank in which it claimed that there is non-performance of the terms of the agreement for finance dated 11.06.2009 by the Respondent Bank. Consequently the Appellants suffered huge losses. The letter of 11.06.2009 is available on the file. As per the letter certain finance facility were proposed alongwith securities for the poultry farm project of the Appellants. The Appellants filed the suit against the Bank for non-performance of letter dated 11.06.2009 which is a proposal letter. In the plaint the Appellants have called letter dated 11.06.2009 as the Sanction letter wherein the Bank has committed to sanction certain facilities in favour of the Appellants. As per the plaint two instalments were disbursed on 28.08.2009 and 17.10.2009. A demand for 50% of the facility was made in September, 2009 which was never made. As per the PLA the Appellants requested for finance for their poultry farm project vide letter dated 23.04.2009 for which proposal letter dated 11.06.2009 was issued. Subsequently Finance Agreement dated 30.06.2009 was executed and the facilities were fully availed by the Appellants. The Appellants are in default of their obligation under the Agreement of 30.06.2009 but consequently filed the suit for damages.
The Appellants also requested for further working capital on the basis of the security provided for the running finance which request was denied. In the replication the Appellants do not deny the facts asserted in the PLA however it is aggrieved by the non-disbursement of the working capital sought for.
6. The impugned order has considered these facts and rightly concluded that there is no agreement for the working finance facility, hence no obligation to disburse such amounts. Further that the suit is filed on the basis of a proposal letter which does not create any obligation nor can any damages be awarded on the basis of it. The record shows that the Appellants were clearly informed that the working capital facility cannot be granted on the basis of the existing security as the collaterals were insufficient for further finance.
7. Under the circumstances, the instant appeal is dismissed and the impugned judgment dated 18.04.2012 passed by the learned Single Judge in COS No, 205/2010 is maintained.