' The plaint which starts the present litigation between the parties sets forth that Darya Khan Bangash, defendant No,1, had sold his stocks in trade in favour of plaintiff-Bank (M.C.B) for a sum of Rs,50,00,000 (Fifty lacs) and had purchased (Bought back) the same on credit basis, for a sum of Rs,65,83,000 (Sixty five lacs eighty-three thousands only) simultaneously through the Finance Agreement dated 2-8-1986 executed by him in favour of the plaintiff-Bank; that defendant No,1 had promised to return the buy back price/purchase price in 24 equal instalments, on or before 30-6- 1988; that in addition to the Finance Agreement referred to above, defendant No,1 had also executed the following documents in favour of the plaintiff-bank to secure the Finance Demand Limit:---
(a) Deed of hypothecation whereby defendant No,1 hypothecated the stocks of perfumes and cloth at his premises in favour of the plaintiff-bank.;
(b) Demand Promissory Note for Rs,65,83,000 (Sixty-five lacs eighty-three thousands only) in favour of the plaintiff-bank;
(c) Pledge of TDRs of the value of Rs,37,47,000 (Thirty-seven lacs forty seven thousands only ) standing in the names of defendants Nos.3 to 6 and M.C.B. Investment Certificate of Rs,10,00,000 (Ten lacs only).
2. The plaint further alleges that defendant No,1 himself, in his personal capacity, as the General Attorney of his wife (defendant No,2) and in his capacity as the legal guardian (duly appointed by the competent Court) of his minor children (defendants Nos.3 to 6) and with the prior permission of the Court, equitably mortgaged his/their property, fully described in the heading of the plaint, in favour of the plaintiff-bank by way of further security.
3. It has been contended that defendant No,1 utilized/availed the Finance limit from time to time but failed to honour the terms of the Finance Agreement dated 2-8-1986 as he did not liquidate the bank dues in time.
4. It is further asserted that defendant No,1 subsequently requested partial adjustment of the outstanding dues by utilizing the proceeds of TDRs (with profit as well as the proceeds of the Investment Certificate) to reduce his liability. The plaintiff-bank claims to have acceded to his request and proceeded accordingly.
5. That after due adjustment, the Books of the plaintiff-bank show a sum of Rs,26,70,400 (twenty-six lacs, seventy thousands and four hundred only) as outstanding against defendant No,1 as balance of the Finance Demand Limit.
6. That defendant No,1 has failed to re-pay his dues in terms of Finance Agreement dated 2-4-1986 (Note.---The relevant Finance Agreement is actually dated 2-8-1986). Resultantly, the plaintiff- Bank sent registered notice on 16-5-1990 through its legal advisor; that defendant No,1 has not repaid the outstanding amount and accordingly the present suit has been instituted.
7. In addition to the outstanding amount of Rs,26,70,400 the plaintiff-bank has also prayed that liquidated damages to the extent of 20% thereof amounting to Rs,5,34,000 (Five lacs, thirty-four thousands only) be also granted to it.
8. The defendants contested the suit and raised several legal as well as factual objections in their joint-written statement.
9. In the preliminary objections, raised in the written statement, the defendants have specifically alleged that the present suit is based on forged and fabricated documents and that, therefore, the plaintiff-Bank's officers are liable to be tried for the offences which they have committed in doing so.
10. In para. No,3 of the written statement it has been alleged that the defendants have neither mortgaged their property in favour of the plaintiff-bank (M.C.B.) nor defendant No,1 has executed any documents; that the documents are forged and fabricated, for which the plaintiff-Bank is liable to be prosecuted.
11. In para. No,5 of the written statement it has been alleged that the defendant has not entered into any agreement of sale and re-purchase with the plaintiff-bank.
12. Paras. Nos.6 and 7 of the written statement affirm that the contents of paras. Nos.6 and 7 of the plaint are incorrect and that the execution of documents mentioned therein is specifically denied.
13. Para. No,8 of the written statement asserts that the contents of the para. No,8 of the plaint are not only incorrect but are self-contradictory and based on falsehood. It has been alleged further that Guardianship Certificate referred to in para. No,3 of the plaint, was granted on 15-7-1987, where* mortgage deed was allegedly executed on 2-8-1986 (with the prior permission of the Court); that the said deed of equitable mortgage is fabricated and that the plaintiff-bank has not only committed an offence of fabrication of documents, but has also tampered with the Court (Judicial) record; that the T.D.Rs, and the original deed of title were kept with the plaintiff-bank as a trust, because the plaintiff was out of the country at that time.
14. The contents of paras. 9 and 10 have also been denied by the defendant in para. No,9/10 of their written statement.
15. Para. No,11 of the written statement alleges that the statement of account does not correspond with the contents of the plaint and therefore the plaintiffs suit is absolutely wrong. Since the defendant does not own any stocks, therefore, the same could not be insured at all.
16. Para. No,12 of the written statement states that the defendant was perturbed to have received the notice. Thus he not only sent a reply of the notice to the plaintiff, but also instituted a suit for recovery of his money against the plaintiff-bank.
17. Para. No,13 of written statement alleges that contents of para. No,13 of plaint are mere repetition of earlier paragraph of the plaint and the dates of Finance Agreement, given therein, are different from those entered in the earlier paragraphs.
18. Contents of paras. Nos.14 and 15 of plaint have been denied respectively in paras. Nos.14 and 15 of written statement.
19. Para. No,16 of the written statement terms the word "collusively " used in para. No,16 of the plaint as highly objectionable. It asserts that the factual position is that Master Khalid Rehman (defendant No,3) had instituted a suit for recovery of proceeds of his T.D.Rs,; that that suit was dismissed; however the Honourable Peshawar High Court, Peshawar, has admitted the appeal against the said order, for full hearing.
20. The then Presiding Officer of this Court, Mr. Justice (Retd.) Faiz Muhammad Khan, was of the view (as is apparent from order sheet No,10 dated 25-7-1992) that since the execution of documents and the factum of mortgage of property etc. Have been denied by the defendants, so factual controversy has arisen between the parties which can only be resolved after affording the parties opportunity of producing evidence for and against their respective claims. He, therefore, reduced the pleadings of the parties to the following issues:--- No.1 Whether defendant No,1 had obtained from the plaintiff-bank finance facility of the amount of Rs,50,00,000 and had also agreed to sell the stock and re-purchase the same for a sum of Rs,65,83,000 and in that connection had executed agreement dated 2-8-1986? OPP No.2 Whether the defendants had in connection with the said finance facility, executed in favour of the plaintiff- bank, other agreements/documents by way of security/guarantee and had also mortgaged property in favour of the plaintiff-bank? OPP No.3 To what relief is the plaintiff-bank entitled against whom? OPP
21. In order to prove its case, against the defendants, the plaintiff-bank produced the following witnesses:--- P.W.1. Khair Muhammad, Assistant Vice President, M.C.B.. Peshawar Cantt.
P.W.2. Amjad Jamal, Manager, Muslim Commercial Bank, Khyber Bazar Branch. Peshawar.
P.W.3. Iqbal Javed, Assistant Vice-President, M.C.B.. Circle Office. Peshawar.
P.W.4. Qaisar Ali, Wealth Tax Officer, Mardan Circle, Mardan.
' The plaintiff's evidence was closed on 16-6-1993.
22. In support of their contention, the defendants produced the following witnesses:--- D.W.1. Malik Muhammad Nawaz s/o Malik Abdul Ghaffar, Ex-Manager, M.C.B. Branch, Chowk Yadgar Branch, Peshawar.
D.W.2. Mr. Darya Khan Bangash, defendant No,1 s/o Gul Khanan Khan.
' The defendant's evidence was closed on 10-3-1994.
23. Mr. Nisar Ahmad Khan, Advocate for plaintiff-bank. Mr. Hidayatullah Khan, Advocate assisted by Major (Retd.) Farooq Adam Khan, Advocate for defendants present and heard at length on 10-4-1994 and 11-4-1994.
24. I have gone through the record of the case and proceed to decide the issues as under:---
25. .Issue No,1: ' Since defendant No,1 Darya Khan Bangash had specifically denied the execution of the documents mentioned in the plaint, therefore, the pleadings of the parties gave rise to this issue framed by the then Presiding Officer, Banking Tribunal Mr. Justice (Retd.) Faiz Muhammad Khan. The onus of proving the execution of the Finance Agreement dated 2-8-1986 was placed on the plaintiff-bank.
26. In order to prove this issue the plaintiff-bank produced Mr.Khair Muhammad, Assistant Vice- President, M.C.B., Peshawar Cantt. (P.W.1) and Mr. Amjad Jamal, Assistant Vice President, M.C.B., Peshawar City (P.W.2).
27. Mr. Khair Muhammad (P.W.1) while in the witness-box, in his examination-in-chief, stated:--- "I produce the original Finance Agreement which was signed by the defendant in my presence and I also verified the signature thereon .I verified the signature of the defendant on the said agreement, copy of which is Exh.P.W.1/3 (Original perused and returned)."
28. Mr. Amjad limal, Assistant Vice-President, M.C.B., while appearing as P.W.2, stated in his examination-in-chief: "I know the defendant Darya Khan Bangash. The defendant is maintaining P.L.S. Account No,45 as well as a loan account in my branch. He has been coming to the branch frequently during my posting for encashment of cheques etc. I am fully conversant with his signatures I have seen the signatures of defendant on the original of Exh.P.W.1/3 and Exh.P.W.1/4 and identify them as the signatures of Darya Khan Bangash."
29. The learned counsel for the plaintiff-bank, Mr. Nisar Ahmad Khan, Advocate, submitted that the execution of Finance Agreement (Exh. P.W.1/3) therefore stands proved because it was signed by defendant Darya Khan Bangash in the presence of Mr. Khair Muhammad, Assistant Vice-President (P.W.1), and that his signatures were also identified by Mr. Amjad Jamal, Assistant Vice-President (P.W.2). The onus of proving the execution of Finance Agreement dated 2-8-1986 had therefore been discharged satisfactorily.
30. On the other hand, Mr. Hidayatullah Khan, Advocate the learned counsel of the defendant, submitted that the plaintiff-bank had utterly failed to prove the execution of the Finance Agreement (copy Exh. P.W.1/3). He pointed out that there was a statement (P.W.1) as against the statement (defendant No,1), regarding the execution/non-execution of the said Finance Agreement. According to him, in the circumstances of this case, the plaintiff was duty bound to have produced some independent witness in whose presence the Finance Agreement (dated 2-8- 1986) was allegedly signed by defendant No,1. He drew the Court's attention to the statement of Amjad Jamal, Assistant Vice-President (P.W.2) who, in his examination-in-chief, stated:--- "Although the defendant did not sign these documents in my presence, as I was not posted in the branch at the relevant time the original of Exh.P.W.1/3 bears the signatures of two witnesses, Muhammad Afzal and Mr. Meer Saddat Hussain as witnesses who are account holders of our bank and I can identify their signatures thereon."
31. Counsel for the defendant then drew attention to the statement of Khair Muhammad (P.W.1) who, in his examination-in-chief, had stated:--- "The said agreement was also signed by two witnesses who were our account holders and were present in the bank at that time."
32. This witness, in his examination-in-chief further stated:- "The original of Exh. P.W.1/3 was also signed in my presence by the witnesses, Muhammad Afzal and Saadat Hussain who were known to me and were present in the bank at the relevant time and I also identified their signatures on the original of Exh. P.W.1/3."
33. Counsel for the defendant then invited attention to the last few lines of the cross-examination of P.W.1 and submitted that Mr. Khair Muhammad had refuted the suggestion that the loan documents were not signed in his presence by defendant No,1. Consequently these were forged.
34. Defendant's counsel, therefore, contended that since the very execution of the Finance Agreement dated 2-8-1986 had been denied by defendant No,1 in his written statement at the first available opportunity, therefore, it was incumbent upon the plaintiff-bank to have produced at least one of the two marginal witnesses i,e,, Muhammad Afzal and Saadat Hussain, who had allegedly signed the Finance Agreement, as marginal witness. He further stated that since it had been specifically alleged that defendant No,1 had not signed the Finance Agreement dated 2-8- 1986 and that the Finance Agreement was a forged document, therefore, it was imperative on the plaintiff-bank to have requested this Court to obtain the signatures of the defendant No,1 and to have sent the same for comparison with the signatures on the documents in dispute i,e,, Exh.
P.W.1/3 etc. Etc. The councel further stated that no effort, whatsoever, was made by the plaintiff in this respect. The Court was never requested to have the signatures of defendant No,1, for comparison sent to the Hand Writing Expert. Similarly, none of the marginal witnesses, who had signed the Finance Agreement (Exh.P.W.1/3), was produced in Court as plaintiff's witness, in spite of the fact that both the witnesses were known to the bank authorities, being their account holders.
The plaintiff-bank also did not make any effort to summon any of these witnesses through the process of this Court, for reasons best known to them. The counsel further stated that since both the marginal witnesses were not produced by the plaintiff to prove the execution of Exh.P.W.1/3, therefore, it shall be presumed that if any of these marginal witnesses had been produced in the Court to stand the test of cross-examination on oath, they would not have supported the case of the plaintiff-bank.
35. Defendants further contended that mere denial of the execution of Finance Agreement dated 2-8-1986 by the defendant No,1 was enough, inasmuch as a "negative" cannot be proved by evidence. On the other hand it was for the plaintiff to have positively proved the execution of the Finance Agreement which is the subject-matter of the present suit. Counsel further stated that defendant No,1 when examined on oath as D.W.2, stated in his examination-inchief as under:--- {{URDU TEXT}}
36. When defendant No,1 Darya Khan, was cross-examined he stated in cross-examination as under:--- {{URDU TEXT}}
37. After going through the evidence produced by the parties and after hearing the arguments advanced by the learned counsel for the parties regarding this issue, I am of the considered view that the contention of the learned counsel for defendants is correct. I, therefore, hold that the plaintiff-bank has failed to establish the fact that defendant No,1 had, in fact, signed/executed the Finance Agreement dated 2-8-1986 (Exh.P.W.1/3). Accordingly this issue stands decided against the plaintiff.
38. Issue No,2: ' The onus of proving the alleged execution of other agreements/documents by way of security/guarantee by defendant No,1, in connection with the said Finance facility, was also placed on the plaintiff-bank. It was also for the plaintiff-bank to have proved, through cogent evidence, that defendant No,1/defendants had mortgaged his/their property in favour of the plaintiff-Bank. To prove this fact the plaintiff-bank has, mainly, relied on the statement of Khair Muhammad (P.W.1).
39. Before proceeding further in the matter it must be stated that the fate of the present case hinges, mainly, on the fact as to whether defendant No,1 had executed the following documents:---
1. Exh.P.W.1/3 Agreement for Financing for short/medium/long term on mark-up basis.
2. Exh.P.W.1/4 Letter of Hypothecation.
3. Exh.P.W.1/5 Promissory Note.
4. Exh.P.W.2/5 Memorandum of deposit of title deed.
NOTE: It is pointed out that the original of this document (Exh. D.W.2/5) which was in the possession of the plaintiff-bank was not exhibited in the plaintiff,s evidence. Instead it was brought on record by defendant No,1
40. Mr.Khair Muhammad, when examined as P.W.1, stated in the witness-box, that the defendant had applied for the finance facility of Rupees Five Millions (Rs,05.00 Million) in his own name on 30- 7-1986; that the facility had been sanctioned by the higher authorities; that since the sanction was conveyed to him through "Telephonic approval" by the General Manager, therefore, he got the necessary documents filled and signed by defendant No,1 in his presence. In this respect he referred to Exh. P.W.1/2 (the application form), Exh. P.W.1/3 (the Finance Agreement), Exh. P.W.1/4.
(Letter of Hypothecation) and Exh. P.W.1/5 (Promissory Note). He also stated that the defendant had pledged by way of security 5 Term Deposit Certificates (T.D.R) of the value of Rs,37,47,000 (Rupees thirty-seven lacs, forty-seven thousands only), alongwith Investment Certificate for Rs,10,00,000 (Rupees ten lacs) with the bank.
41. It may be mentioned here that while copies of the TDRs (Exhs. P.Ws.1/6 to 1/9) and the copy of the Investment Certificate (Exh. P.W.1/10) were produced in the Court, the Memorandum of Deposit of title deed (Exh. D.W.2/5) vide which these TDRs and Investment Certificate were allegedly pledged was withheld by the plaintiff. P.W.1 (Mr. Khair Muhammad) did not utter a single word about this document (Exh. D.W.2/5) which was in the possession of the plaintiff-bank. Mr.Khair.
Muhammad (P.W.1), in his cross-examination, however, refuted the suggestion that the defendant had not obtained any loan from the bank and that the documents which were produced by him were forged documents.
42. Counsel for the plaintiff-bank submitted further that P.W.1, Mr. Khair Muhammad is an independent disinterested witness and has stated (on oath) that these documents were executed by defendant No,1 in his presence, and the fact that he was fully supported by PW.2, who had identified the signatures of defendant No,1, on all these documents, therefore, it should be taken for granted that all these documents were duly signed/executed by defendant No,1.
43. Counsel for the defendant, however, contended that the execution of all the documents had been specifically denied by the defendants in their "Written Statement". Therefore the contention of counsel for the plaintiff-bank that the plaintiff-bank has been taken by surprise, inasmuch as defendant No,1 has denied executing these documents, while appearing as his own witness as D.W.2 is baseless. This was not the first occasion on which D.W.1 had denied such documents.
44. He stated that the other contention of the plaintiff's counsel that the defendant had no right whatsoever to make out a new case, which was not referred to in his written statement, is also groundless and without any reason justification. Counsel for the defendants insisted that in the circumstances of this case, where the defendants had specifically challenged the documents at the first available opportunity i,e,, at the time of filing written statement, it was incumbent upon the plaintiff-Bank to have got the defendant's signature compared with the signatures on the documents in question by a Hand Writing Expert or by producing the marginal witnesses in whose presence defendant No,1 had allegedly signed these documents. He stated that since all these documents had been forged/fabricated, therefore, ' this fact had been specifically mentioned in the written statement. He drew the Court's attention to para. No,4 of the preliminary objection taken in the written statement which is to the following effect:--- "That the suit is based on forged/fabricated documents. The plaintiffs Officers are liable to be tried for the offences they have committed."
45. He further stated that it had been specifically mentioned in paragraph 5 of the written statement (on factual side) that the defendant had not entered into any agreement of sale and purchase; that in paragraph No,7 it had been clearly mentioned as under:--- "The contents of the para. No,7 of the plaint are incorrect and execution of documents mentioned therein is hereby denied specifically."
' The learned counsel for the defendants further contended that the plaintiff's case is false and fabricated because no document was executed by the defendants in the first instance.
46. He stated that it was very strange that the amount of Rs,50,00,000 was allegedly disbursed on 2-8-1986, in this case, whereas at that time this amount had not been sanctioned by the competent authority. Therefore the Manager had no authority, whatsoever, to disburse the amount on his own. He further stated that according to the plaintiff's record the loan was sanctioned on 11- 11-1986 vide Sanction Advice Exh. P.W.1/D-I.
47. Defendant's counsel stated further that the Memorandum of Deposit of Title Deed (Copy Exh.D.W.2/5) which was a very important document, was purposely withheld by the plaintiff-Bank for the simple reason that this was also a forged document. In this context he drew the attention of the Court to Exh. D.W.2/6, which is also the copy of Memorandum of Deposit of Title Deed (Exh. C.1).
According to him this document was also produced in the Court of Civil Judge by the plaintiff-bank in another case. A perusal of the certified copy of this document (Exh. D.W.2/6) would show that in Schedule I only 4 TDRs have been mentioned whereas the column under Schedule II has been left blank. Similarly in the body of this document the space after the word "from" and the space after the word "rupees" in the 8th line is blank. Whereas a perusal of Exh. D.W.2/5 would show that under Schedule I, Sl.No,5 has been added and under Schedule II description of the property has also been added with a ball point pen. Counsel for the defendants stated that it is therefore quite clear that this document has since been tampered with and is not worthy of any reliance. He stated that it was for this reason that the original of Exh. D.W.2/5 (and Exh.D.W.2/6) was obtained from the plaintiff-bank by this honourable Court and was placed on file as Exh. C.I for record.
48. After going through the original Memorandum of Deposit of Title Deed (Exh. C.I) I am in complete agreement with the contention of the learned counsel for the defendants that this document has in fact been tampered with and that it cannot be relied upon.
49. Thereafter the learned counsel for the defendant drew attention of this Court to the few lines of the cross-examination of Iqbal Javed, Assistant Vice-President, Circle Office, Peshawar (P.W. 3) wherein he admitted:--- "The Branch Manager has no discretion/power to advance any sum to any client without the permission of the competent authority."
50. The learned counsel for the defendant asked as to how was it possible for the Manager of the bank to have advanced a huge loan of Rs,50,00,000 (Rupees fifty lacs) to defendant No,1 on 2-8- 1986, when there was nothing on the file to suggest that the loan had been sanctioned by that date. He pointed out that the plaintiff's record showed that the loan was sanctioned on 11-11-1986 vide Sanction Advice Exh.P.W.1/DI.
51. Counsel for defence drew attention to the fact that the plaintiffs case was that defendant No,1 had mortgaged his property and that of his minor children in his capacity as their guardian, with the prior permission of the Court. He took me through the record and pointed out that the property was allegedly mortgaged much earlier than the date on which defendant No,1 was appointed as the guardian of the person of the minors and the date on which the Court had granted him (defendant No,1) permission to mortgage the property belonging to his minor children. Counsel for the plaintiff-bank frankly conceded this point, at-the-Bar, and stated that defendant No,1 was bound only by the alleged mortgage deed to the extent of his share, as he had not been appointed as the guardian of the minors by that date by a competent Court.
52. After going through the record of the case and keeping in view the arguments advanced by the counsel for the parties I have come to the conclusion that the execution of the documents, mentioned above, has not been proved by the plaintiff-bank. This issue is decided in the negative.
53. Issue No,3: Vide my findings on issues Nos.1 and 2 I have already held that the plaintiff-bank has miserably failed to establish the execution of the relevant documents, therefore, all actions taken by the plaintiff-bank, after 2-8-1986 (the date of execution of the alleged Finance Agreement Exh. P.W.1/3) are C illegal and without lawful authority/jurisdiction and that in the circumstances of this case, the plaintiff-Bank, which has not come to this Court with clean hands, is not entitled to any relief. This issue is decided in the negative.
54. Relief.
' The result is that the suit of the plaintiff fails and is dismissed with costs.