ASIM HAFEEZ, J.:- This appeal is against judgment and decree dated 04.12.2013, by learned Judge Banking Court No. IV, Lahore, whereby the suit filed by the respondent bank was decreed for a sum of Rs.404,155/- with Cost of Funds in terms of sections 3 & 17 of the Financial Institutions (Recovery of Finances)
Ordinance, 2001 ("Ordinance 2001").
2. Briefly, the facts necessary for the adjudication of the lis at hand are that respondent bank sanctioned and extended Finance of Rs.450,000/- under the Prime Minister's self-employment scheme. Upon default the bank filed suit for recovering outstanding claim of Rs.721,725/- against the present appellant and another, i.e. Rana Qurban Ali (deceased) - Mortgagor / Guarantor. The suit was initially decreed ex-parte against appellant on 17.08.2006, no decree was passed against deceased, who allegedly died prior to the filing of the suit. Permission was granted to the appellant to file petition for leave to defend the suit in terms of order dated 26.04.2008, upon accepting application under section 12 of the Ordinance 2001. The petition for leave to defend filed was adjudicated upon and same was dismissed on 04.12.2013 and consequently suit was decreed. Hence this appeal.
3. At the outset, learned counsel for the appellant contended that suit, to the extent of appellant, was barred by limitation; learned Banking Court erroneously placed reliance on Article 132 of the Limitation Act, 1908, which period of limitation cannot be directed against the appellant, who had not mortgaged its property. Per learned counsel, in terms of Article 57 of the Limitation Act 1908, which was applicable, the claim has to be filed within three years of the date of extending finance, i.e. on 04.05.1999 but suit was filed on 23.06.2006, hence, it was beyond the prescribed period of limitation. The appellant has not executed any personal guarantee, hence, there is no question of commencement of limitation from the date of demand. Learned counsel for the appellant has referred to case laws reported as "MUHAMMAD SULLEMAN v. HABIB BANK LIMITED" (NLR 1989 UC 146) and "Messrs INTERNATIONAL BUSINESS CENTRE, through Managing Director and another v. HABIB CREDIT AND EXCHANGE BANK LTD" (2004 CLD 1552).
4. Record is perused.
5. The facts of the case are straightforward. The fundamental issue is that whether suit is beyond the prescribed period of limitation against the appellant. In order to adjudicate upon the matter, it is expedient to examine the terms and conditions of finance and dates of execution of various documents. Record revealed that finance was approved in terms of sanction letter dated 06.04.199 9, wherein besides other conditions, the conditions regarding period of finance and repayment therefore were provided, which conditions read as; Period. Seven Years including a maximum grace period of six months Repayment. By 78 equal monthly instalments.
[Emphasis underlined]
6. Appellant executed Agreement for financing for Short / Medium / Long Term on Mark-up basis on 04.05.1999, Promissory Note - undated but payable on demand - and Letter of Hypothecation dated 04.05.1999. The finance was repayable by or before 03.05.2006, seven years from the date of grant of finance, which was evident in view of the documents available on record. Learned counsel emphasized that Article 57, ibid, would apply, suit was filed after lapse of three years from the date of loan, hence, beyond limitation. We have examined Article 57 of the Limitation Act 1908, which is reproduced hereunder;
57. For money payable for money lent.Three years When the loan is made.
7. A simple reading of this Article would show that it covers the suits for recovery of loan without effecting any writing and without fixing any due date for its repayment. In view of peculiar terms and conditions of finance under reference, Article 57-ibid, would not apply. The appellant had executed Agreement for Finance, Promissory note and Letter of hypothecation, which finance documents when read with the period of repayment of finance facility, brings the cause of the respondent bank within Article 80 and Article 115 of the Limitation Act 1908. Article 80, ibid, reads as;
80. Suit on a bill of exchange, promissory note or bond not herein expressly provided for .Three years When the bill, note or bond becomes payable.
8. In view of the terms of sanction letter , promissory note was payable by 03.05.2 006, non-payment by such date would constitute default, to be reckoned from said date. The suit was filed on 23.06.2006, which is within limitation in terms of Article 80, ibid. The case laws referred by the learned counsel for the appellant was not applicable to the case at hand. The suit against the appellant was also within limitation in terms of Article 115 of the Limitation Act 1908, as the appellant has signed Agreement for Finance dated 04.05.1999, breach whereof was continuing and ceased on 03.05.2006. Article 1 15, ibid, reads as;
115. For compensation for the breach of any contract, express or implied, not in writing registered and nor herein specifically provided forThree Years When the contract is broken, or (where there are successive breaches) when the breach in respect of which suit is instituted occurs, or (where the breach is continuing) when it ceases.
9. Learned counsel argued that legal heirs of deceased Rana Qurban Ali, i.e. guarantor / mortgagor were not impleaded, which was an illegality. Record showed that no decree was passed against the deceased, who alleged to have been died before the filling of the suit. Appellant is one of the legal-heirs of the deceased, who had filed petition for leave to defend on 02.05.2008. Another petition for leave to defend the suit, filed on behalf of the legal heirs of the deceased on 11.01.2013, is available on the record, wherein it was alleged that deceased died on 18.07.2000.
Consequently , upon death of the dece ased, appellant alongwith other legal-heirs became entitled to their inheritance in the estate of the deceased - which inter-alia comprised of the property under mortgage charge, created through registered Mortgage deed, wherein repeatedly reference was made to the obligation of the appellant, being the Customer .
10. The question of enforcement of claim on the basis of mortgage charge upon the property of the deceased, which is inherited by the legal heirs of the deceased including the appellant, is not before us, therefore, and we do not express any opinion in this behalf. The suit of the respondent bank against appellant is within limitation in terms of Articles 80 and 115 of the Limitation Act, 1908. In wake of the determinat ion of this question, no further discussion is required to adjudge the sustainability of the suit under Article 132 of the Limitation Act, 1908. No information is provided to confirm that whether the respondent bank or other legal-heirs of the deceased have filed appeal(s) against the judgment and decree.
11. No substantial question of law and fact has been raised to make out a case for grant of leave to defend. No case made out to set-aside the judgment and decree dated 04.12.2013.
12. In the circumstances, we, in the exercise of appellate jurisdiction, hold and declare that suit filed by the respondent bank is within the period of limitation against the appellant.
13. In view of the above, the appeal is hereby dismissed and the judgment and decree dated 04.12.2013 against appellant is upheld.
14. No order as to the costs.