' NIR A. SHAIKH, J.---This is plaintiff's appeal directed against the judgment and decree dated 25-11- 1984 passed by the Special Judge. Banking Court, Lahore, through which the suit filed by the appellant has been partly decreed to the extent of principal amount only and qua the claim of interest pendente lite and also future interest the same has been dismissed. In this appeal the appellant has prayed for grant of decree for the recovery of interest pendente lite and future interest.
2. The facts giving rise to this appeal are that the appellant filed a suit for the recovery of an amount of Rs,6,34,514.00 with interest at the contracted rate from 22-6-1982 to the date of suit, interest during the pendency of the suit and also the future interest at the said rate till the full realization of the suit amount by sale of mortgaged property. According to the facts disclosed in the plaint on the request of the respondents the appellant granted them loan facility in the name of firm i.e. respondent No,1 for negotiating foreign bills in respect of carpets'.exported ex-Pakistan. A sum of Rs,1,62,000.00 was allowed to the respondents by way of loan on 25-6-1979. A further sum of Rs, 2,50,000.00 was allowed to them by way of loan. It was alleged that the respondents were jointly and severally liable to the appellant and their liability as on 21-6-1982 stood at Rs,6,34,514.00. The appellant went on stating in the plaint that with a view to acknowledge and secure repayment of loan the respondents executed various documents including Memorandum of Deposit of Title Deeds by defendant No,2 in respect of her property No,106/C/2, near Commercial Zone, Liberty Market, Gulberg-III, Lahore. The details of this mortgage were given in the plaint which need not be repeated. According to the appellant, despite various reminders issued from time to time, the respondents failed to liquidate the loan. According to the appellant through letter dated 9-12-1979 the respondents acknowledged their liability and assured to liquidate the same within the month of December, 1979. Earlier to that also on 19-8-1979 the respondents acknowledged their liability by way of seeking discount of documents and payment of additional amount of loan. The respondents did not, however, repay the loan or any part thereof. It was also alleged that in May 1982 respondent No,5 brother of deceased Syed Israr Asghar a partner of the firm wrote letters dated 22-5-82 and 26-5-1982 to the appellant acknowledging therein the liability of respondent No,1 and offered to liquidate the same within specified schedules whereby the total loan was to be repaid up to 30-9-1982. According to the appellant defendant No, 5 also undertook to pay off the liability of the deceased partner whose assets and liabilities had been reportedly taken over by him. He also executed Demand Promissory Note dated 27-5-1982, letter of continuity acknowledging liability in the sum of Rs, 5,95,267.00, letter of hypothecation (Bills) dated 27-5-1982, letter of arrangement of Bills Purchase Limited dated 27-5-1982 and letter dated 27-5-1982 acknowledging liability in the sum of Rs 5,95,267.00. It was also averred that respondent No,5 also personally guaranteed the repayment of the loan to the appellant and executed a letter of guarantee dated 27-5-1982. The respondents according to the appellant again confirmed their liability of Rs,6,34,534.00 as on 21-6-1982 but failed to discharge the same till to date.
3. Respondents Nos.1 to 3 jointly filed written statement whereas respondent No,4 (i) to (iii) also jointly filed a separate written statement. In these written statements the facts narrated in Paragraphs 4 and 5 of the plaint. in which the appellant alleged acknow ledgement of liability through various documents and letters were denied. Defendants Nos.1 to 3 stated in the written statement that in spite of repeated demands/requests the copy of agreement and other documents were not supplied to them. They also alleged that the documents allegedly procured from respondents Nos.4 and 5 as alleged in Para 4 of the plaint were procured without the knowledge of the said defendants i.e. defendants Nos.1 to 3. It was specifically denied that there was any liability of payment of Rs,6,34,514. It was alleged by defendants Nos.1 to 3 that the appellant committed fraud in connivance with defendants Nos.4 and 5 by interpolating in the documents. In spite of repeated requests the copy of statement of account was not delivered to the said defendants. The learned trial Court reflected the controversies arising from the pleadings of the parties in the following issues framed by it:---
(1) Whether the suit is within time? OPP ' Whether the suit has been instituted through properly authorized person and what is its effect?
OPP ' Whether the defendants offered to pay off the debt in July, 1980? OPD ' If the above issue is in the affirmative whether the bank refused to hayed the payment? OPD ' Whether the bank can recover interest after July, 1980, if the above issue is in favour of the defendants? OPP ' Relief.
' It may be stated here that on 3-10-1983 attorney of respondent No,2 appeared and stated that there was no dispute as regards the principal amount but he wanted to negotiate with the Bank regarding the interest from which it is clear that the dispute between the parties was regarding the entitlement of the appellant to recover interest in the facts and circumstances of this case.
4. In affirmative evidence the appellant examined Tallat Mahmood Ghuman, Officer of the appellant-Bank. According to his evidence the total amount of Rs,4,12,000 was advanced to the respondents as loan in the year 1979. He also produced documents from Exh.P.1 to P.12.
5. The respondents examined Muhammad Anwar Mughal as D.W.1 According to his evidence in July 1980 he alongwith one Ahmad Iqbal went to the appellant-Bank. Ahmad Iqbal held talks with the authorities of the Bank with reference to his earlier letters addressed to them and demanded from them consolidated uptodate statement of accounts showing as to what amount was due so that the same might be paid. He also deposed that he had been going from time to time and Ahmad Iqbal had been pressing that some forgery had been committed in relation to the relevant documents. Ahmad Iqbal attorney of respondent No,2 was examined as D.W.2. According to his evidence he had been approaching the Bank authorities and had been asking from them the copy of agreement and other relevant documents so that the liability could be discharged according to the settled terms. From his evidence it is evident that the respondents were urging throughout that there was some forgery or interpolation committed in relation to the documents. Respondent No,2 was sued as one of the partners of respondent No,1/firm which was sued through her, and she was also impleaded as defendant No,2 because she secured the re-payment of loan by mortgaging her property.
6. After appraisal of evidence the learned trial Court held under issue No,1 that the suit was within time, therefore, the said issue was answered in favour of the plaintiff. Issue No,2 was also decided in favour of the plaintiff because the respondents withdrew the objection which was subject-matter of this issue. Under issue No,3, after careful and elaborate appraisal of evidence, documentary as well as oral, the learned trial Court held that defendant No,2 offered to pay off the debt in July 1980.
This finding was rested on the document Exh.P.10 which was produced from the record of the appellant-Bank through which respondent No,2 had demanded copy of agreement from the Bank which was not delivered to her though Mr.Khurshid a Bank Officer had passed an order that copy of Memorandum of Deposit of Title Deed-be supplied to her which was not complied with. It has also been held that the apprehension of respondent No,2 had been conveyed to the Bank through Exh.D.1 which was produced in cross-examination From the Bank's record that the accounts in question had been interpolated. The learned trial Court held that this letter was replied through Exh.D.2 but the questions raised in Exh.P.2 were side tracked. The finding recorded by the learned trial Court was that when the accounts were looked into by the Bank Officer Mr. Khurshid D.W.2 approached him it was found that the loan of some other firm had also been accounted for unjustifiably in the account of this firm. After taking into consideration all these facts the learned trial Court held that the fault did not lie with the respondent No,2 for non-payment of the loan amount. Issue No,3, was, therefore, answered against the plaintiff, as such, issue No,4 was also answered against it. Under issue No,5 it was held that since it was the fault of the Bank that Mrs. Sughra Nazir was not provided with the copy of the contract in July, 1980 due to which she could not make payment, therefore, the Bank was not entitled to any interest after June 1980. In consequence of the said finding the suit was decreed for an amount of Rs,4,55,886 and the claim regarding interest after June 1980 was declined and the suit qua the same dismissed.
7. Learned counsel for the appellant has taken us through documentary and oral evidence produced in this case. He argued that there was no evidence that respondent No,2 was ready and willing to pay the principal amount in June 1980 and that for the non-payment of the same the Bank was at fault, as such, the Bank was illegally deprived of the right to recover interest at the contracted rate from the the respondents. He also maintained that under Section 8(2) of the Banking Companies (Recovery of Loans) Ordinance, 1979, the learned trial Court was bound to grant interest to the appellant and the said provision being mandatory, no power was vested with the Court to dismiss the suit for the recovery of interest.
8. From the evidence of D.W.1 and D.W.2 it is clear that respondent No,2, time and again, approached the Bank for obtaining the copies of the relevant documents and statement of accounts so as to know the exact amount which was payable against the loan in dispute. It is also clear from documents Ex.P.10 and Ex.D.1 that she apprehended some foul play and forgery having been committed with regard to account in question. It is in the evidence that at one occasion when Mr. Khurshid Officer of the Bank checked the record it was found that the loan of another firm had also been accounted for in this account which means that two different loans were joined and the respondents were being asked to discharge the liability of the total amount which became due for both the loans. This finds support from Exh.P.8 which is Memorandum of Deposit of Title Deed through which respondent No,2 secured the loan in dispute of respondent No,1/firm. In this document there is addition of the words "carpet & crescent" over the name of respondent No,1/firm from which the Bank wanted to show that the loan given to M/s. Pak Crescent Carpets was also secured through the said mortgage which admittedly was a separate loan and Pak Crescent was an independent firm. This being so it can safely be inferred that whenever respondent No,1 approached to pay off the loan in dispute the Bank must have pressed for clearance, of the total amount due against the loans given to both the Firms due to which Bank was not ready to accept any payment in respect of loan obtained by respondent No,1/firm. The Bank had made interpolation in the agreement, therefore, it was reluctant to issue copy of statement of accounts as also the agreement and this Memo. to respondent No,2 so that they may not come to know about the interpolation made by the Bank. Respondent No,2 had throughout been making efforts on her own account being the mortgagor/guarantor, as also the partner of respondent No,1/firm, in good faith, to discharge the liability and liquidate the loan but the same could not be done on account of the fault of the Bank. We endorse the finding recorded by the learned trial Court that in June 1980 respondent No,2 was ready to pay off the loan, therefore, the Bank was entitled to recover interest on the principal amount till the said date as against respondents No,1 to 4, as such, it was rightly refused interest as against the said defendants for the period subsequent to the said date.##TE
9. The argument that under Section 8(2) of the Banking Companies (Recovery of Loans) Ordinance, 1979, the learned trial Court had no discretion in the matter of grant of interest has not impressed us. In this case, the question of exercise of discretion in the matter of grant of interest was not involved. It was a case where respondents No,1 to 4 had disputed the right of the Bank to recover interest and in such a case where Bank was found to be not entitled to the interest the same could be declined. Provisions of section 8(2) are applicable only in those cases where the defendants had not raised the dispute regarding entitlement of the Bank to recover interest.##TE#
10. Before closing this part of the judgment we may observe that the bona fides of the respondent No,2 is also manifest from the fact that before the issues were framed attorney of respondent No,2 made statement that so far as principal amount was concerned there was no dispute which shows that respondent Not had the intention to pay off the loan. We, however, find that there was no' legal justification for not passing decree against respondent No,5 though he did not enter appearance and contest the suit. It was pleaded in Paras 4 and 5 of the plaint that he independently guaranteed through documents to pay of the loan in dispute. He did not appear before the learned trial Court and has also not entered appearance in this appeal to contest it. The liability was joint and several and in order to get exemption from the payment of interest respondent No,5 was required to satisfy the Court that he was also ready and willing to pay the loan as was proved by respondent No,2 through evidence. Since respondent No,2 had not secured the loan through mortgage but otherwise undertook to pay off the same therefore, vis-a-vis him there was no dispute with the Bank that he had to discharge the loan granted to both the Firms as was being demanded from respondent No,2 on account of interpolation in the Memorandum of Deposit of Title Deed. We are persuaded to hold that the bank was entitled to claim interest from respondent No,5 independently as guarantor.
11. It has been brought to our notice that respondents Nos.1 to 4 were granted leave to appear and defend the suit subject to the payment of the impugned amount. An amount of Rs,1,60,000 was deposited on 16-5-1984 whereas further amount of Rs,2,40,000 was deposited on 5-5-1984. The amount due on account of interest upto June 1980 was also admittedly deposited by respondents Nos.1 to 4 on 15-12-1984, therefore, the appellant/Bank is found to be entitled to recover interest on the principal amount i.e. Rs,4,12,000 from July 1980 to 5-5-1984 on the total amount at the contracted rate and for the period thereafter upto 16-5-1984 on the amount of Rs,1,60,000.
12. For the foregoing reasons this appeal is dismissed as against respondents Nos.1 to 4. It is partly accepted and an ex parte decree for the recovery of interest as stated is passed against respondent No,5. There will be no order as to costs.