1. ' This is a suit for recovery of Rs,17,62,712.05 filed by United Bank Limited, Karachi.
2. ' Plaintiff's case is that the defendant No,1 had an account with the plaintiff's Branch at Saleh Muhammad Street Karachi. At the request of the defendants the plaintiff granted to defendant No,1 an O.D. Facility/Loan which was fully utilized by defendant No,1 as described in the statement of account and confirmed by the defendant No,1 by letter dated 15-5-1972. The defendant No,1 executed and delivered to the plaintiffs a demand pro-note dated 17-10-1972 for Rs,15,26,189.54 alongwith 2 letters each dated 17-10-1972. Defendant also executed an agreement of hypothecation/pledge of goods belonging to him and furnished a statement of stock/goods and the last statement submitted by defendant No,1 on 27-3-1975 confirmed that goods worth Rs,22,32,310.51 were held by him in the name and for the account of the plaintiffs. Defendants Nos.2 to 5 in their individual/personal capacities guaranteed repayment of the amount of O.D.
3. Facility/loan advanced by the plaintiffs to defendant No,1 including interest and charges. On 22-4- 1975 a balance of Rs,17,62,712.05 was outstanding against the defendants which they have failed to pay in spite of repeated demands, hence this suit.
4. ' The defendants filed written statement wherein they have given evasive reply though they have admitted that they had an account with the plaintiffs and had availed of O.D. Facility. They have not denied the execution of pro-notes and letters. They have, however, alleged.That they have repaid a sum of Rs,10,00,000.
5. On the pleadings of the parties following issues were framed:--
(1) Whether the suit is maintainable in law, as framed?
(2) Whether the defendant No,1 executed a promissory note for an amount of Rs,15,26,189.54 in favour of the plaintiff? If so, did the defendant No,1 agree to pay interest @ 10% p.m. On the said amount?
(3) Whether the defendants re-paid any amount to plaintiff?
(4) Whether the defendant No,1, executed an agreement of hypothecation for an amount of Rs,14,62,474 and paisas 75, in favour of the plaintiff?
(5) Did the defendants Nos.2,3,4 and 5 execute any letter of guarantee for re-payment of amount due against the defendant No,1?
(6) Whether the plaintiff is entitled to get decree in the sum of Rs,17,62,712.05 against the defendants?
(7) Is the plaintiff entitled to interest on the balance amount after November, 1973?
(8) Whether any cause of action has accrued to the plaintiff in the matter?
(9) What should the decree be?
6. ' The plaintiffs examined their Manager, Advances, S. Suleman Jafferi as Exh.
5. He has produced the statement of account Exh. 5/1, Pro-note dated 17-10-1972 Exh 5/2, letter of confirmation dated 15-5-1972 as Exh. 5/3, letter dated 17-10-1972 as Exh. 5/4, another letter of the same date as Exhibit 5/5, Agreement of hypothecation Exhi. 5/6, stock statement Exh. 5/7, letter of guarantee Exh. 5/8, notice Exh. 5/9 and 5/10. The defendants counsel did not cross-examine the witnesses and did not lead any evidence. The suit was decreed by my brother Syed Abdul Rahman, J. On 15-3-1988.
7. ' The defendants thereafter made an application under Order 9, Rule 13, C.P.C. Being CMA No,2663/88 which was allowed subject to payment of costs of Rs,5,000 by the order dated 16-10- 1988. In spite of the said order the defendants have not cross-examined the witnesses nor have led any evidence in defence and as such their side was closed on 15-8-1989 and the suit was adjourned for arguments to 29-8-1989 from which date it has been adjourned to today. I have heard Mr. A.S. Pingar, learned counsel for the plaintiffs and Mr. Abdul Mujeeb Pirzada, learned counsel for the defendants and my findings on the above issues are as under:- Issues Nos. 1 to 9: ' At the very outset Mr. Abdul Mujeeb Pirzada appearing, for the defendants admitted the principal amount of Rs,14,62,474.75 as outstanding against them as mentioned in the paragraph 6 of the plaint but he submitted that the plaintiffs could not claim interest as it is un-Islamic. It was alternately submitted by the learned counsel for the defendants that if the interest is chargeable then the plaintiff would be entitled to simple interest at the rate of 10% as mentioned in the Promissory Note Exh 5/2. He has placed reliance on the case of Habib Bank Limited v. Muhammad Hussain and others (PLD 1987 Kar. 612).
8. ' Repelling the above-said contention of the defendants, Mr. A.S. Pingar, learned counsel for the plaintiff has submitted that the Promissory Note Exh. 5/2 shows that the interest chargeable is at the rate of 4% over the published State Bank of Pakistan rate with a minimum of 10% per annum with quarterly rests. From this the learned counsel has submitted that 10% is the minimum chargeable rate but factually what could be charged is to be charged at the rate of 4% over the published State Bank of Pakistan rate and, therefore, the rate if interest claimed by them is in accordance with the Promissory Note and other documents produced by the Plaintiffs.
9. ' I have given anxious consideration to the above-said submission of the learned counsel. I have also examined the evidence given by the plaintiff's witness S. Suleman Jaffri (Exh. 5). It may be pertinent to point out this witness has nowhere in his deposition stated as to what was the State Bank of Pakistan's published rate of interest during the relevant period nor any document has been produced by the said witness in this respect. In these circumstances I am of the opinion that the plaintiffs have failed to prove the rate of interest chargeable to be 13% as claimed by them in the prayer clause of the suit and that it would appear proper in the circumstances to charge the rate on interest at the rate of 10% as mentioned in the promissory note Exh. 5/2. I am supported in this respect by a decision of a D.B. Of Lahore High Court in the case of Messrs United Bank Limited v.
10. Messrs Manbrow Industries and others (1987 MLD 3038) wherein their Lordships have held:-- "2. The learned counsel for the appellant says that since the respondents defaulted in paying two instalments during a year the entire decretal amount has become payable in lump sum. His only grievance is that the pendente litc interest should be at the rate of Rs,14.00 per cent. The learned trial Court was not obliged to order pendente lite interest at the contracted rate; it had the discretion to allow interest at the rate of 5 per cent per annum and even it could have gone to the extent of disallowing pendente lite interest. The exercise of discretion used by the learned Court in matter of fixing the pendente lite interest at 5 per cent. Per annum is not shown to be in any manner arbitrary. Therefore, its order of fixing payment of pendente the interest at 5 per cent per annum does not demand any interference. The appeal is left with no force and is dismissed leaving the appellant to bear its own costs."
11. ' In another case also a D.B. Of Lahore High Court in Grindlays Bank Ltd. v. Delite House Ltd. And 4 others (PLD 1987 Lah. 51) their Lordships have held:-- "(ii) The learned trial Judge in the impugned decree allowed simple interest at the rate of 14% per annum to the plaintiff on the decreed. Amount from the date of decree to the date till final payment. It was contented on behalf of the appellant that the simple interest at the rate of 6% pendente lite per annum was meagre and it should also have been 14% per annum. It will be noticed that the suit was decided within two months of its institution. The rate of interest was within the discretion of the trial Court and there was nothing illegal if interest at the rate of 6% only was allowed for two months period during which the suit remained pending in Court. This contention on behalf of the appellant is, therefore, repelled."
12. For the above reasons I decree the present suit for the principal amount of Rs,14,62,474.75 with costs and simple interest at the rate of 10% from the date of filing of the suit viz. 14-5-75 till recovery.