MUHAMMAD RAZA QURESHI, J. The Impugned Judgment and Decree dated 11.09.2018 passed by learned Judge, Banking Court-III, Multan has been challenged through instant Regular First Appeal filed under section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (hereinafter referred to as the "FIO"). The said Judgment and Decree was passed in C.O.S bearing No.357/2017, wherein the Bank sought recovery of an amount of Rs.28,246,277.66 along with mark- up, cost of funds and costs filed by the Bank of Punjab (hereinafter referred to as the "Bank") against the Appellants being-principal debtor partnership firm, the mortgagers and guarantors.
Through the Impugned Judgment and Decree the Suit by the Bank was partially decreed after adjusting the excess mark-up as well as eliminating the undue amount, in the sum of Rs.
12,078,310/- along with cost of fund and costs of the Suit.
2. As per statement under section 9(3) contained in the plaint the Suit claimed an amount of Rs.3,457,284/- towards principal amount as well as mark-up against Running Finance Facility as on 20.11.2017 and an amount of Rs.24,788,993.66 towards principal and mark-up against Cash Finance (Pledge) Facility, both amounts accumulating to Rs.28,246,227.66.
3. Pursuant to the notices issued through all modes under section 9 of the FIO, the present Appellants being Defendants entered appearance and filed' two separate Applications for leave to defend (hereinafter referred to as the "PLA"). Incidentally, the first PLA was filed on behalf of Appellants Nos.1, 2 and 4, whereas the second PLA was filed on behalf of Appellants Nos.1 and 3.
4. Learned counsel for the Appellants has argued before us that the Impugned Judgment and Decree miserably failed to appreciate that the Appellants had raised through their respective PLAs substantial questions of law and facts requiring recording of evidence and still rejected the PLAs filed by the Appellants, Learned counsel has shown from the record that initially the Bank filed its Suit which was withdrawn by it, on account of some formal defect with the permission to file fresh one. According to learned counsel the instant Suit is the second one which was barred under the provisions of law. Additionally, learned counsel has argued that the Bank committed fraud with the Appellants and amounts paid by the Appellants towards the satisfaction of finance facilities availed by the partnership concern were not adjusted and in this regard on account of embezzlement committed by the officials of the Bank, FIR bearing No. 11/2012 was lodged against the said officials and case bearing No.116/2013 is pending determination before the learned Judge, Special Court (Offences in respect of Banks), Multan. Learned counsel for the Appellants has also argued that through the grounds stated in respective PLAs, the Appellants presented a strong case for grant of PLAs but learned Banking Court illegally and unlawfully dismissed the same. Learned counsel for the Appellants submits that the learned Banking Court trusted the ipse dixit of the entries contained in the statement of accounts and decreed the Suit filed by the Bank, which as per law was liable to be dismissed. Lastly learned counsel submits that by decreeing the Suit, the learned Court below has committed illegality and caused miscarriage of justice.
5. Conversely, learned counsel representing the Bank has ably assisted this Court by referring to the statement contained in the plaint under section 9(3), of the FIO and referred to statement of accounts by rebutting that the learned Banking Court had not taken the statement of accounts filed by the Bank as a gospel truth and reduced the claim of the bank from Rs.28,246,277.66 to Rs.12,078,310/-. Learned counsel representing the Bank argued that the PLAs filed by the Appellants were defective in its form and substance and represented bald and evasive., defence and learned Banking Court lawfully decreed the Suit filed by the Bank.
6. We have heard learned counsel for the parties and have minutely examined the record with their able assistance. A close reading of PLAs filed by the Appellants reflects that it was bereft of articulating substantial questions of law and facts which may convince the learned Banking Court to identify the questions requiring evidence in the facts and circumstances of the case. The PLA filed on behalf of Appellants Nos. 1, 2 and 4 does not even meet the requirements of section 10(3)
(4) and (5) of FIO, whereas, the PLA filed on behalf of Appellants Nos.1 and 3 though attempts to fulfill those requirements through paragraph-9 of PLA, but in terms of law that challenge or disclosure of account is not only pretentious but also sham. Upon a query by the Court that how Appellant No. 1 filed two PLAs, learned counsel for the Appellants had no answer but submitted that both should be read together. In terms of law, this expectation from the Court is not tenable.
7. Since the Impugned Judgment rightly justified the reasons for dismissal of the PLA as non- compliance of mandatory requirements of section 10(3)(4)(5) of the FIO has a consequence and we have also verified from the PLAs on record that such mandatory requirements were not complied with. Hence in absence of meeting mandatory requirement of section 10(3)(4)(5) of FIO i.e. disclosing summary of substantial questions of law as well as facts in respect of which in the opinion of the Appellants' evidence needed to be recorded; failure to tabulate the honest disclosure about the amount of finance availed by the Appellants; failure to allege the amount of finance and other amounts relating to finance payable by the Appellants; and not disclosing the amount of finances disputed by the Appellants, has a consequence in law. It was imperative for the Appellants to fulfill all these mandatory requirements and a combined reading of section 10 of FIO discloses that failure of compliance of mandatory subsections entail penal consequences, therefore, the PLAs filed by the Appellants were repugnant to the provisions of section 10 of FIO and the Appellants under the law were rightly held disentitled to the grant of a right to defend the Suit filed by the Bank. Reliance in this regard is placed on "Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd." (2012 CLD 337), "Faysal Bank Limited v. Genertech Pakistan Ltd. and 6 others" (2009 CLD 856) and "National Bank of Pakistan v. Messrs Kohinoor Spinning Mills and others" (2021 CLD 1112).
8. We also observe from the record that in their PLAs, the Appellants conceded the banker- customer relationship, the availing of finance facilities and executing the security documents to secure the repayments of amounts availed by the Appellants. On account of admissions in these respects, the only option under the law remained with the Appellants to potently dispel the contentions of the Bank duly pleaded in its Suit, as without dislodging the claim of the Bank, the PLAs filed by the Appellants did not fall in the exceptions justifying the grounds for grant of Appellants' PLAs. The form and substance of the PLAs reflect that the Appellants simply attempted to raise a plausible defence without adverting to the legal position, that raising a plausible defence is a test for grant of leave in a Suit under Order XXXVII, C.P.C. as grant of leave is a rule under the said law, whereas under the FIO, the grant of PLA is an exception. Now adverting to the plea raised by the Appellants that they were actually defrauded and amounts deposited by them towards satisfaction of their availed finance facilities were embezzled, we notice that the FIR bearing No.11/2012 was lodged against the individuals, who were employees of the Bank and proceedings before Special Court (Offences in respect of Banks), Punjab were not even initiated against the Bank. Therefore, there is inherent fallacy in the arguments of the Appellants that pendency of those proceedings constituted a ground for grant of Appellants' PLAs. As far as the argument of learned counsel for the Appellants that upon withdrawal of the Suit the second Suit in which the Impugned Judgment and Decree was passed was barred by law and not maintainable, is foundationally flawed as in the terms of Order XXIII, C.P.C. the Bank while withdrawing the Suit had protected its rights and interests and learned Banking Court had allowed the Bank to file fresh Suit. In view of clear legal position, the argument of the Appellants is meritless and ill founded. It is needless to mention that the Appellants conceded before this Court that the Suit filed by them was abandoned and never pursued, which got dismissed for non-prosecution.
9. Analyzing all these facts and circumstances and taking account of serious legal defects and failure of the Appellants to fulfill the mandatory requirements of law, rightly led the learned Banking Court to irresistible conclusion by dismissing the Appellants PLA. We, however, appreciate that learned Banking Court still applied its judicious mind and substantially reduced the claim of the Bank to an amount reflecting in the Impugned Judgment and Decree.
10. Therefore, we see no legal infirmity in the Impugned Judgment and Decree passed by learned Banking Court against the Appellants and we hold that it does not suffer from any illegality and accordingly we uphold the Impugned Judgment and Decree. Consequently, we declare that this Appeal is devoid of merits and dismiss the same accordingly, with no order as to costs.