' MUHAMMAD BASHIR KHAN JEHANGIRI, J.---This Regular First Appeal is directed against the judgment and the decree dated 17-12-1989 for recovery of Rs,41,611 with further interest accruing thereon till payment of the decretal amount passed by the learned Special Judge (Banking Companies) N.-.W.F.P., in favour of M/s. Allied Bank of Pakistan Ltd., I.I. Chundrigar Road, Karachi (hereinafter called as the respondent-Bank) against Shah Nawaz, ex-Manager, Allied Bank of Pakistan, Chowk Yadgar Branch, Peshawar City.
2. The facts relevant for the disposal of this appeal are that the appellant, while employed as Manager of the Bank in the Board of Intermediate and Secondary Education Branch, Peshawar, was allegedly granted on 5-7-1977 the facility of "house purchase loan" amounting to Rs,40,000. This loan was to be deducted from the pay of the appellant in equal instalments of Rs,225 per mensum.
It appears that the services of the appellant were terminated somewhere on 20-1-1980. The respondent-Bank filed on 5-7-1980 a suit against the appellant for recovery of Rs,41,611 representing the aforesaid loan under the Banking Companies (Recoveries of Loans) Ordinance, 1979 on the allegations that after termination of the appellant's services the 'house purchase loan' was converted into a commercial loan and was thus liable to pay interest @ 14% per annum. On 9- 11-1980 the process fee was not deposited and so was the case on 21-1-1981 when there was none in attendance on behalf of the respondent-Bank. In consequence, the suit was dismissed on the last mentioned date. On the same day, an application for restoration of the suit was filed which was accepted ex parte on 15-11-1981. The defendant contested the suit by filing his written statement on 23-1-1982 wherein he denied to have ever obtained the disputed 'house purchase loan' or was liable to pay any amount to the respondent-Bank. A few legal objections were also raised. The parties ultimately went to trial on the following issues:---
(a) Whether the plaintiff has got a cause of action?
(b) Whether the plaintiff is estopped to sue?
(c) Whether the suit is competent?
(d) Whether the suit has been properly valued for the purposes of court-fee and jurisdiction?
(e) Whether the suit is maintainable?
(I) Whether the defendant owes a sum of Rs,41,611 to the plaintiff?
(g) Whether the plaintiff is entitled to the recovery of Rs,41,611 with future interest @ 14% per annum against the defendant as prayed in the plaint?
(h) Relief.
' The respondent-Bank in order to prove its claim examined before the learned trial Judge, Shaukat Zaman, Manager as P.W.1, Abdul Hafiz, Manager as P.W.2 and Habibur Rehman, Accountant, as P.W.3. The appellant's attorney, Mirza Khan appeared as D.W.1 and closed the evidence.
3. The learned trial Judge took up issues Nos. 6 and 7 together and held that the defendant's stand that the disputed facility was availed of by one Muhammad Nawaz and not by the defendant- appellant had neither been specifically pleaded in the written statement nor substantiated by any evidence. As against this, according to the learned trial Court, the respondent-Bank, in order to prove their claim, besides oral evidence, have led sufficient documentary evidence and decided both the issues in favour of the respondent-Bank. In the light of this finding, it was held on issue No,1 that the respondent-Bank was possessed of cause of action to claim the suit money. The plea of estoppel was answered in the negative. The suit was held to be in proper form and further that it had been properly valued for the purposes of court-fee and jurisdiction. As a result of these findings, the learned trial Court granted a "decree in favour of the plaintiff-Bank against the defendant with interest at the contracted rate or 2% above the Bank rate whichever is higher from the date of institution (5-7-1980) till final recovery with costs." Hence this appeal.
4. Mian Shaukat Hussain, learned counsel for the appellant, contends that the disputed amount was sanctioned for and paid to one Muhammad Nawaz and invited our attention to the pay order photo copy Exh.P.W.1/1 which is actually shown to have been issued in the name of one Muhammad Nawaz Khan. Except for this document, all other documents, such as application dated 14-9-1976 photo copy filed by the appellant for the grant of house purchase loan, the photo copy Exh.P.W.1/1 of order granting loan aforesaid, the Demand Promissory Note Exh.P.W.2/2, the acknowledgment notes photo copies Exh.P.W.2/3 and Exh.P.W.2/4 under the signatures of the appellant, another note photo copy Exh.P.W.2/5 waiving his right to take advantage of any default in presentment for payment of the said Promissory Note. Apart from this, the photo copies Exh.P.W.3/1 and Exh.P.W.4/1 to Exh.P.W.4/9 and photo copy Exh. P.W.4/10 of the specimen signatures of the appellant have been produced. A bare perusal of all these documents leaves no room for doubt that the defendant- appellant had applied for and received the `house purchase loan' amounting to Rs,40,000 from the respondent-Bank on the terms and conditions laid down in the sanctioning letter photo copy placed on the file No,231/1 S at page 16.
5. It was next contended by Mian Shaukat Hussain, learned counsel for the appellant, that the appellant was not liable to pay the interest at the commercial rate of 14% per annum. In support of his arguments reliance was placed on an unreported judgment of a Division Bench of this Court in R.F.A. No,29/1988 titled Habib Bank Limited v. Jehanzeb delivered on 24-4-1990 wherein Wall Muhammad Khan, J., as his Lordship then was, speaking for the Bench, repelled the contention of the appellant-Bank that on the termination of the service of the defendant/respondent therein "the suit amount immediately becomes due and recoverable as per conditions of the mortgage deed referred to above and, therefore, the defendant/respondent was legally bound to pay interest at the prescribed rates and held as under:- "We have perused the mortgage deed but could not find any such stipulation therein and confronted with this situation the learned counsel for the appellant submitted that he is entitled to interest according to the general provisions of the Civil Procedure Code regarding money decree.
The relationship of creditor and debtor was created between the parties through written deed whereby the property of the defendant/respondent was mortgaged with the plaintiff/appellant as security for the payment of the interest free loan on account of his being an employee of the Bank, a special privilege to which he was entitled under the rules of the Bank. No doubt, according to the conditions enumerated in the deed, the Bank was empowered to recover the balance of the loan immediately on the respondent ceasing to be the employee of the Bank but no condition is inserted in the deed penalising the defendant/respondent with interest after termination of his service. Consequently we do not find any flaw in the impugned judgment of the Special Judge (Banking Companies) N.-.W.F.P.. Peshawar."
6. We find substance in the submission of the learned counsel appearing on behalf of the appellant. The learned counsel for the respondent-Bank has not been able to satisfy us that in case of termination of services of the Bank's employee during the relevant period the borrower- employee was liable to pay commercial interest. There is not an iota of evidence on the file to reach the conclusion or it can be said by implication that in the absence of any undertaking by the borrower-employee on this score or any rule meeting such an eventuality, an employee falling in the said category can be legally burdened with commercial rate of interest. It may be added that by virtue of amendment through letter photo copy placed at page 17 of the file the entire sanctioning order in respect of house purchase loan was converted into one of free of interest. The appellant had received the loan on 5-7-1977. He had paid nine instalments up to 25-10-1978 @ Rs,250 per mensum which totals as Rs,2,250. After deducting this amount a sum of Rs,37,250 remained unpaid. Had the appellant paid all the due instalments the loan in its entirety would have been paid in one hundred and forty-nine monthly instalments which comes to 12 years and 5 months with effect from November, 1978. Thus the loan would have been paid by the end of April, 1990. Since the appellant had not paid the amount by the stipulated period as aforesaid, he would be liable to pay interest at the commercial rate with effect from May, 1991 till the satisfaction of his entire liability.
7. In this view of the matter, we would modify the impugned judgment and the decree to the extent that the appellant would be liable to pay the principal amount of Rs,37,250 in lump sum along with interest thereon on commercial rate with effect from May, 1991 till he finally satisfies his liability. The appellant shall also pay the court-fee incurred by the respondent-Bank in both the Courts. With this modification this appeal stands dismissed.