' On 2nd August, 1989, this suit was filed by M/s. Emirates Bank International, a Banking Company against M. Irfan Monnoo and Radco Enterprises through its sole proprietor, Mr. Irfan Monnoo, for recovery of Rs,10,108,709.93, equivalent to UA.E Dhs. 1,742,880.93 as on 30th June, 1989, alongwith costs and future interest.
2. It is stated in the plaint that defendant No,1 is the sole proprietor of defendant No,2 and was maintaining different accounts with the Main Branch of the plaintiff-Bank in Dubai, UA.E. According to the plaintiff, the defendants were allowed various financial facilities mentioned in para 5 of the plaint which were fully availed by them but defendant Not left UA.E. Without discharging his liability and shifted to Lahore. It has claimed that the amount in dispute is due and payable by the defendants.
3. On an application made by the defendants, they were on 30th January, 1991 granted leave to appear and defend the suit, subject to furnishing of security in the sum of Rs,35 lacs. The security was furnished by the defendants, whereafter they filed their written statement.
4. On 2nd March, 1992, during the course of hearing of the suit, it was stated by the learned counsel for the defendants that they were still ready and willing to abide by the agreement between the parties dated 4th August, 1986. This offer was accepted by the learned counsel for the plaintiff.
According to this agreement, the defendants had undertaken to pay UA.E. Dhs. 737,706 in full and final settlement of their liability.
5. However, before any decree could be passed, a dispute arose between the parties as to what should be the rate of exchange applicable while converting UA.E. Dhs. Into Pakistani rupee. The parties were, therefore, called upon to address their arguments on this question which have been heard. The learned counsel for the defendants had also raised two preliminary objections as to jursidiction and limitation on the basis of which it was contended that no decree at all can be passed against the defendants.
6. There is no dispute and it stands admitted on the record that a settlement was arrived at between the parties, terms whereof are reflected in the agreement dated 4th August, 1986, a copy of which has been placed on record. According to para. 1 of this agreement, defendants undertook to repay UA.E. Dhs. 737,706 in full and final settlement of accounts between the parties. Both the learned counsel agree and accept this agreement. The dispute, however, as already mentioned, is as regards the rate of exchange.
7. According to the learned counsel for the plaintiff, the rate of exchange while converting UA.E. Dhs.
Into Pakistani rupee should be the rate prevailing at the time of payment of the aforesaid amount by the defendants to the plaintiff. The learned counsel for the defendants, on the other hand, is of the view that the rate of conversion which should be applied should be the rate which prevailed at the time when the amount fell due i,e, in 1982.
8. After hearing the learned counsel for the parties, I am unable to agree with the learned counsel for the defendants and am of the view that the contention of the learned counsel for the plaintiff that the rate of exchange should be that prevailing at the time when the defendants pays the amount in question is correct. In the agreement dated 4th August, 1986, the defendants had clearly undertaken to pay UA.E. Dhs. 737,706, but no payment has as yet been made. The defendants, are, therefore, liable to pay either Dhs. 737,706 to the plaintiff. In case they are unable to do so, they should pay equivalent amount in Pakistani currency. It would be anomalous to hold that although defendants have not yet discharged their liability by paying the amount due yet loss suffered on account of fall of value of Pakistani rupee as against UA.E. Dhs. Should be borne by the plaintiff. I am guided by the judgment of the Supreme Court, namely, Terni S.PA. v. PECO (Pakistan Engineeeing Company Ltd) 1992 SCMR 2238. Following observations of the Supreme Court are conclusive of the controversy and may be reproduced with advantage: "Justice demands that the creditor should not suffer from fluctuations in the value of the Pakistani rupee. II his conduct is for a foreign currency and he has bargained for the same, he should get that currency and no other.
' If the crurrency of contract is a foreign currency, or where under the contract the particular amount claimed is payable in a particular foreign currency and payment is demanded in that foreign currency, that is a substantive matter and no procedural rule or regulation should, in principle, be allowed to affect the creditor's rights. If a judgment can be given 'for so much in foregin currency or the Pak rupees equivalent thereof, it is giving effect to the substantive obligation of the contract and the Civil Procedure Code would not in any case stand in the way.
Supreme Court can depart from a previous rule of interpretation if it feels that circumstances have changed and that not to do so would lead to injustice. The development of the law should not be permitted to be stifled. It should move with the time and articulate the changes coming in.
Therefore, a Pakistani Court can grant a judgment for 'so much in foreign currency or the Pak rupees equivalent thereof."
9. Now adverting to preliminary objection raised by the learned counsel for the defendants as regards the territorial jurisdiction of this Court, learned counsel submitted that as defendant No,2 was carrying on business in UA.E. Notwithstanding the residence of defendant No,1 was in Lahore, the suit could not be filed at Lahore without permission of this Court on the basis of residence of one of the defendants only.
10. This contention of the learned counsel is unfounded. As has been stated in the plaint and not disputed by the defendants, defendant No,2 is the sole proprietor of defendant No,1 which is a trade name under which he is carrying on his business. As such, defendant No,2 is not an entity separate from defendant No,1. Furthermore, defendant No,1 in this case has been arrayed through M. Irfan Monnoo, its sole proprietor with the addess at 30 Shahra-eOuaid-i-Azam, Lahore.
' It is also to be seen that according to the case of the plaintiff, an agreement was executed between the parties on 4th August, 1986, at Lahore, for discharge of liability by the defendants and as such, cause of action at least in part arose at Lahore. For this reason, this Court has jurisdiction to try this suit. Be that as it may, it is a fit case where the plaintiff should be granted permission even if same be necessary, under section 20 (b) of Code of Civil Procedure, 1908.
11. The other objection of the learned counsel for the defendants relates to limitation. It was submitted that according to the documents on record, loans were granted to the defendants many years back and with regard to overdraft amount, last payment was made on 20th May, 1989, while in time loan account the last payment was made on 19th May, 1989. On these premises, it was argued that suit filed on 2nd August, 1989 was barred by time and despite admission of liability by the defendants, the said cannot be decreed.
12. I regret my inability to agree with the learned counsel. A reading of plaint leaves no doubt that suit of the plaintiff is based upon the agreement arrived at between the parties on 4th August, 1986 whereby defendants undertook to pay UA.E. Dhs. 737,706 in full and final settlement of the accounts.
The present suit is based on this agreement and not the original debts. The law is well settled that even a time-barred debt is valid consideration of an agreement to repay the debt and suit can be based upon that agreement notwithstanding that if the suit is filed for the recovery of original debt, it would be barred by time. Reference in this connection may be made to Nathu Singh and another v. Girwar Singh and another (AIR 1929 Allahabad 657), Bharat National Bank Ltd. v. Bishan Lal and another (AIR 1932 Lahore 212), United Bank Ltd., Karachi v. K.S. Kamal (PLD 1977 Karachi 521), Messrs Hussain Corporation Ltd. v. Messrs Habib Bank Ltd. (1986 MLD 344), Shabbir Hussain etc. v.
Government of Pakistan etc. (1987 CLC 1806) and United Bank Limited v. Kurnool Muhammad Muneer (1991 CLC 1758).
' In view of what has been stated above, a decree for recovery of UA.E. Dhs. 737,706 or equivalent amount in Pakistani currency, at the rate of exchange prevailing at the time of actual payment, is passed in favour of the plaintiff and against the defendants, with costs as prayed for in the plaint.