MUHAMMAD RAZA QURESHI, J: This Regular First Appeal under Section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (hereinafter referred to as the "FIO, 2001 ") is preferred against the Judgment and Decree dated 29.07.2015 passed by the learned Judge, Banking Court III, Multan through which, the Suit for recovery of Rs.1,456,197/- against the Appellants was decreed with costs along with cost of funds.
2. The proceedings before the learned Banking Court culminating into Impugned Judgment and Decree emanate from a Suit bearing No.467/2013 filed by House Building Finance Corporation Ltd. (hereinafter referred to as "HBFC ") against the Appellants, inter alia, seeking recovery of Rs.1,456,197/-. Upon receipt of notices, the Appellants entered appearance and filed their Application for leave to defend the Suit (hereinafter referred to as the "PLA") on 28.03.2014 which was dismissed by the learned Banking Court.
3. Learned counsel for the Appellants has argued before us that the Impugned Judgment and Decree suffers from illegality and has been passed against the law and facts as the Suit filed by HBFC was false, frivolous and illegal and was not maintainable in its form and substance. Learned counsel for the Appellants argued that HBFC failed to substantiate the disbursement of amount as claimed in the Suit. Learned counsel also contends that it is a fit case for grant of Appellants' PLA, hence, the learned Banking Court unlawfully dismissed the same. Additionally , learned counsel has argued before us that the learned Banking Court failed to attend the defence of the Appellants that they had paid a substantial sum towards the claimed amounts. The said repaid amounts were cogently pleaded in paragraph 1 of the 'Preliminary Objectio ns' of the PLA. According to learned counsel the failure of the learned Banking Court to permit parties to adduce evidence tantamount to miscarriage of justice. Conversely , learned counsel representing HBFC has fully supported the Impugned Judgment and Decree.
4. We have heard the arguments of learned counsel for the respective parties and have examined the record of the case minutely .
5. The FIO, 2001 is a special law which, inter alia, provides its own procedure for determination of a banking suit.
The certain provisions of this law expect and require a strict adherence as non-compliance thereof entails penal consequences such as rejection of plaint, dismissal of the suit or as the case may be, the rejection of PLA filed by the defendant.
6. One of those provisions contained in FIO, 2001 is section 10, which mandates the defendant to strictly adhere its compliance in the following manner: 10(3) The application for leave to defend shall be in the form of a written statement, and shall contain a summary of the substantial questions of laws as well as fact in respect of which, in the opinion of the Defendant, evidence needs to be recorded.
10(4) In the case of a suit for recovery instituted by a financial institution the application for leave to defend shall also specifically state the following--
(a) the amount of finance availed by the Defendant from the financial institution; the amounts paid by the Defendant to the financial institution and the dates of payments;
(b) the amount of finance and other amounts relating to the finance payable by the Defendant to the financial institution up to the date of institution of the suit;
(c) the amounts of finance and other amounts relating to the finance payable by the Defendant to the financial institution up to the date of institution of the suit;
(d) the amount if any which the, Defendant disputes as payable to the financial institution and facts in support thereof.
(5) Where application for leave to defend submitted under the preceding sub-section is found to be materially incorrect at any stage of the proceedings, the Defendant shall lose the right to defence and shall also be liable to pay penalty of not less than five percen t of the amount of the claim, unless the Defendant can establish that incorrect information was submitted as a result of a bona fide mistake."
Keeping in view the crucial and mandatory provisions it is imperative to identify whether the PLA in the instant case meets the requirements of section 10(3) and (4) of the FIO, 2001 as the non-obse rvance thereto is fatal leading to its dismissal under section 10(5) and (7) and disentitling the defendant for a permission to contest the suit.
7. A careful perusal of PLA exhibits that it lacks framing of questions of law as well as facts, which may require recording of evidence and therefore, is bereft of mandatory requirements contained in Section 10(3) of the FIO, 2001 and failure of the Appellants to comply with such mandatory provisions entails legal consequences such as rejection of their PLA and non-entitlement under Section 10(1) to claim a permission to defend the suit. Reliance in this regard is placed on Messers Visiontex, Partnership Firm through Partner etc. v. Habib Bank Limited (2016 CLD 62 ); Naveed Masood Malik Vs. Bank Alfalah Limited and others (R.F .A. 338 of 2015).
8. In the instant case the PLA filed by the Appellants canvassed just vague assertions, unsupported and unsubstantiated claims of repayments. Since in a banking Suit, which in its nature and scope is a suit for accounts the grant of PLA is not a rule, therefore, to curb a possibility of a flimsy defence, the defendant is under an obligation to comprehensively tabulate and satisfy the provisions of section 10(4) (a) to (d). The failure to fulfill the said requirement is mandatory as section 10(5) and (7) provides its consequence. The PLA filed by the Appellants fails to plead the counter version of accou nts in terms of section 10(4) of the FIO, 2001, therefore, is repugnant to the mandatory requirement of law, disenti tling the Appellants to a right to defend the Suit. Since the subject matter PLA was not compliant of section 10(3) and (4) of the FIO, 2001, therefore, the consequence was mandatorily to be followed. Such a fundamental defect as held by august Supreme Court of Pakistan in case titled "APOLLO TEXTILE MILLS L TD and others vs. SONERI BANK L TD" ( 2012 CLD 337 ) leads to dismissal of Appellants' PLA.
9. The Appellants' PLA could not present a credit worthy defence rather a pretentious challenge made the Appellants' PLA non serious. With this sham defence, the Appellants were rightly not considered entitled to the grant of permission to defend the Suit. Reliance is placed on case titled National Bank of Pakistan v. M/s Kohinoor Spinning Mills and others (2021 CLD 1 112).
10. There is another aspect in the matter i.e. in fact the PLA with vehemence alleges repayments to HBFC and consequently concedes the availing of subject matter finance facility and execution of security documents. Instead of throwing a potent challenge through relying upon counter accounts, not even a single entry contained in the statement of accounts annexed with the Suit has been challenged. The said statement of accounts even otherwise, is in conformity with the requirement of Section 9(2) of the FIO, 2001, bearing certification at the foot under the Bankers' Books Evidence Act, 1891. The PLA fails to identify a challenge to the principal amount or that the mark- up has been exaggeratedly charged or has been charged beyond contractual period. In such a situation the learned Banking Court was left with no other option but to decree the Suit.
11. On the contrary , the examination of the Suit as well as documents annexed therewith demonstrates that the Suit filed by HBFC complies with the provisions of Section 9 of the FIO, 2001 and the statement of account annexed therewith comprehensively identifies the debit and credit entries and transparently reflects the repayments by the Appellants along with dates. The subject matter Loan Agreement was executed on 08.06.1999 and was aimed for repayments in 240 instalment s in next 20 years. However , on account of consistent default by the Appellants, HBFC was constrained to file the Suit in the year 2013 against the Appellants. The statement of account duly reflected the disbursement of the principal amount as well. The repayments by or on behalf of Appellants as claimed in their PLA in the sum of Rs.25,000/- on 28.08.2001, Rs.80,000/- on 26.02.2002, Rs.80,000/- on 18.04.2003 and Rs.50,000/- on 18.11.2004 are duly reflected in the statement of accounts annexed with the Suit. Rather the statement of accounts reflected more entries towards repayments, which the Appellants have not even mentioned in their PLA. In such a situation posing the statement of accounts not creditworthy is a sham defence.
12. In these circumstances, the learned Banking Court under the provisions of FIO, 2001 had no option but to decree the Suit. Therefore, despite able assistance and hectic efforts by the worthy counsel for the Appellant, we do not agree with his arguments.
13. For what has been observed and held here-in-above, we do not see any legal infirmity in the Impugned Judgment and Decree, which accordingly is maintained. Therefore, instant Appeal is dismissed. No order as to cost.