1. Brief facts of the case are the plaintiff was sanctioned a finance of Rs,6,50,000 and was intimated about the sanction on 30-3-1991. The plaintiff was required to give undertaking as desired by the defendants to the effect that the plaintiff shall accept the Small Scale Industries credit line instead local-made machinery credit line as sanctioned if the State Bank of Pakistan does not reimburse the funds under the later credit line, without disclosing the difference between the two and the reasons for seeking such an undertaking. The plaintiff has filed this suit for declaration, permanent injunction and damages with the following reliefs:--
(i) Decree for Rs,5,52,000 against the defendant Nos.1 to 4 for damages/loss as compensation for the damages/loss suffered by the ' plaintiff.
(ii) Declaration that withdrawal for the finance demand of Rs,8,63,730 from the plaintiff and the notices issued by the defendant No,5 is illegal, mala fides, void, ab initio, without lawful authority and of no legal effect.
(iii) Permanent injunction restraining the defendants Nos.1 to 5 from recovering Rs,8,63,730 or executing and taking any further step in pursuance of notices issued by defendant No,5 under sections 81 and 82, Sindh Land Revenue Act and arresting and detaining the plaintiff or attaching and selling the properties of the plaintiff or the surety, directly or indirectly in any manner whatsoever by themselves or through their subordinate, employees, agents or any other agency whatsoever."
2. After the service the defendants had filed written statement and on 28-5-1994 CMA No,3074/94 was filed with the prayer to grant ad interim injunction restraining the defendants Nos.1 to 5 from recovering Rs,8,63,730 or executing and taking any further step in pursuance of notices issued by defendant No,5 under sections 81 and 82 of the Sindh Land Revenue Act, 1967 and arresting and detaining the plaintiff or attaching and selling the properties of the plaintiff or the surety, directly or indirectly in any manner whatsoever by themselves or through their subordinates, employees, agents or any other agency whatsoever till the disposal of the above suit. In support of this application affidavit of Muhammad Afzal son of Fazal Muhammad, the plaintiff has been filed relevant paragraphs of which are reproduced as follows:-- "(3) That I had applied with the defendant No,1 for grant of finance but the defendants Nos.2 to ^ illegally and mala fidely delayed the sanction of finance through delaying tactics in order to gain monetary benefits from me and the same was sanctioned to me after the intervention of Wafaqi Mohtasib (Ombudsman), Islamabad and in the LMM credit line of State Bank of Pakistan, made available to the said Corporation and the same was available at the time when the loan was disbursed to me though the defendants Nos.2 to 4 had delayed the disbursement of about 4 months in order to achieve their illegal and mala fide designs.
(4) That the defendant for the reasons, stated in the plaint, had become totally annoyed and antagonistic towards the plaintiff and at the very nick of time, the defendants Nos.2 to 4 illegally and mala fidely asked me to execute and undertaking which I executed under protest and the same is not binding upon me. The finance disbursed to me is under LMM credit line, hence I am liable to pay mark-up at 7% per annum and that is also, if the same is not prohibited in Islam.
(8) That the Notices issued by defendant No,5 under sections 81 and 82 Sindh Land Revenue Act are illegal, mala fide, void, ab initio, without lawful authority in the circumstances of the case and for the reasons stated in the plaint.
(10) That I am prepared to pay lawful dues/instalments commencing from March 1993 calculated on the basis of 7% mark-up without prejudice to my contention that the same is prohibited by law."
3. On behalf of the defendants Iqbal Hussain son of late Khuda Bux Kazi, defendant No,4, has filed counter-affidavit, material and relevant paragraphs of the same are reproduced as under:-- "(4) That the allegations contained in the para. No,3 are false, frivolous and baseless, and are vehemently denied. It is denied that any defendant deliberately delayed sanction of the financial assistance to the plaintiff. No delaying tactics were used at all; nor any monetary benefit was sought by any one from the plaintiff. The plaintiff's case for grant of financial assistance was considered on direction of the learned Wafaqi Mohtasib for reviewing it. It is denied that the funds were made available in LMM credit line by the State Bank of Pakistan for advancing to the plaintiff/applicant/borrower. Some delay does take place in all such cases of applicants for grant of financial assistance by the defendant No,1 Corporations (S.B.F.C). The plaintiff's allegations of mala fide designs against the defendants are totally concocted and at issue of lies.
(5) That the allegations contained in the paras. Nos.4 and 5 of the plaintiffs' said affidavit are also false and baseless. It is denied that any defendant became annoyed and antagonistic towards the plaintiff. It was necessary for the plaintiff/applicant to execute an undertaking, before payment of the .Sanctioned financial assistance to him. Hence with his eyes open he did execute an undertaking at Hyderabad where he resides, on 20-6-1991, got it attested by an Oath Comissioner of Hyderabad, and he produced it alongwith his application dated 20-6-1991 before me the Manager of the S.B.F.C., Branch Office, M.A. Jinnah Road, Karachi. The plaintiff has filed photostat copies of his said undertaking and his said application as Annexures 'I' & 'J' respectively. He has not mentioned therein at all that he was submitting his said undertaking under any protest. Now mala fide he has tried to wriggle out from his said undertaking belatedly for ulterior motives to avoid repayment of the said financial assistance/loan as per S.S.I. Credit line terms, under which he has to pay the mark-up at rate of 11%. Now mala fide he wants to pay it at only 7% under LMM credit line, which does not apply to his case. The said financial assistance/loan was advanced to the plaintiff on the said S.S.I. Credit terms to which he had agreed in his said undertaking. Now under the law he cannot resile from the said terms. Hence the present suit is clearly without any cause of action, and is barred under the law. Hence the plaint deserves to be rejected under Order 7, Rule 11 read with section 151, C.P.C. As under the law the still born suit deserves to be nipped in the bud in the interest of justice. It is denied that the plaintiff has suffered any loss or damage due to any delay illegally or mala fide caused by any defendant.. In the said para. No,4 of his affidavit the plaintiff has made the allegations against the defendant, without specifying which defendant. Hence his allegations contained in the said para. Are clearly vague and frivolous.
(6) That the allegations contained in the para. No,6 of the plaintiff's said affidavit are false and frivolous. It is denied that the defendants want to take any revenge from the plaintiff, and that the defendants have illegally and mala fide cancelled the said financial assistance advanced to the plaintiff. In fact the plaintiff has recently joined police service as an Assistant Sub-Inspector (A.S.I), and hence he has closed his Ice Factory, situated in Korangi, Karachi, and it is no more operating.
The defendant Corporation (S.B.F.C.) had advanced the said financial assistance and to the plaintiff in sum of Rs,650,000 as per sanction advice letter dated 30-3-1991, whose photostat copy he has filed alongwith his plaint as Annexure 'H'. Hence, I, the defendant No,4, issued notice to the plaintiff to clear his total outstanding dues payable to our said Corporation, as his said project/Ice Factory has been wound up by him, is no more running, and he has joined the police service as A.S.I., and under the law he cannot run any factory at all."
4. I have heard Mr. Hakim Ali Siddiqui who has contended that rate of mark-up at 7% LMM credit line was agreed and not 11% per annum for foreign made machinery; ' That plaintiff has filed sanction letter regarding financial assistance of Rs,6,50,000 vide defendant's letter dated 30-3-1991, contents of para. Vii of the letter read as follows:-- "All documentation regarding L.M.M. Should be completed before disbursement of loan as per attached."
' That the undertaking date 20-6-1991 was obtained from the plaintiff under coercion; that the plaintiff is prepared to deposit the amount alongwith mark-up at the rate of 7% per annum that notice as required under section 20 of the Small Business Corporation Act No, XXIX of 1972 is not issued by the defendants and that the defendants have not initiated the proceedings in the Court of District Judge as required.
6. Mr. Ghulam Ali Khokhar has contended that the plaintiff has not filed rejoinder application to the counter-affidavit filed by the, defendants dated 27-5-1995 so far; that the plaintiff is a chronic defaulter and has himself violated the terms of the agreement as such the entire amount alongwith mark-up- is recoverable from him now; that recovery notices were issued to the plaintiff as per rule and regulations; that instalments have fallen due from him and he has paid the same; that financial assistance was sanctioned by the defendants at the request of the plaintiff; that the undertaking was furnished by the plaintiff at his own freewill and without any compulsion and coercion whatsoever; that the application under the circumstances is liable to be rejected. Mr. Khokhar has further contended that the plaintiff has since joined the service of police as A.S.I., as such he is not running the Ice Factory.
7. Before release of the financial assistance the plaintiff entered into an agreement for registered mortgaged property with the defendants. According to the Annexure D-8 the schedule of the mortgaged property is mentioned as follows:-- "SCHEDULE OF MORTGAGED PROPERTY ' Registered Mortgage of H.No,285 C.S.No,31/9. Block '36' situated at Liaquat Colony, Hyderabad owned by Mr. Safdar Ali son of Khairuddin (Guarantor).
' On North By Plot No,306 On East By Road ' On South By Road On West By Plot No,285/A ' And the Schedule of hypothecated property is as under:-- "SCHEDULE OF HYPOTHECATED PROPERTY
(1) Hypothecation of Proposed Machinery valued Rs,9,59,000
(2) Hypothecation of Raw Material (Proposed) valued Rs,50,000 ' And according to Annexure D-8 (a) the schedule of the mortgaged property in favour of the defendants through registered deed is as follows:-- "Registered Mortgage of Ice Factory plot bearing No, 2/6, Sector 21, Korangi Industrial Area, Karachi owned by Mr. Muhammad Afzal son of Fazal Muhammad ' On the North by Plot No,2/5 ' On the South by Plot No,2/7 ' On the East by Plot No,2/15 ' On the West by 30-00 wide road.
' And the Schedule of hypothecated property is as under:--
(1) Hypothecation of proposed Ice Factory Machinery valued Rs,9,59,000
(2) Hypothecation of proposed Raw Material valued Rs,50,000
8. I would like to reproduce the undertaking executed by the plaintiff which is Annexure ' I' to the plaint, as under:-- "I, Muhammad Afzal son of Fazal Muhammad, Muslim, Adult, Prop. Afzal Ice Factory, resident of House No,285/A, Block 36, Liaquat Colony, Hyderabad undertake that if the State Bank of Pakistan does not reimburse funds, under L.M.M. Credit to Small Business Finance Corporation up to 30-6- 1991, then I agree in accepting S.S.I. Credit's terms and conditions from 1-7-1991, till adjustment of account."
' The contention of Mr. Hakim Ali Siddiqui, that notice as required under section 20 was not issued to the plaintiff, is belied by the record. The plaintiff was issued notice dated 12-12-1993 by the defendants, which is as follows:-- "Reference to your above-stated loan A/C, it is hereby stated that as you have joined a Government service i,e, as A.S.I. Police, this may divert your abilities/capabilities from the business unit finance by the S.B.F.C. Which can create problem. You already stand a cronic defaulter..
' You are, therefore, advised to deposit the total outstanding amount with uptodate profit in lump- sum and thereby close your loan account with the S.B.F.C. Without any further delay. Failing which legal action will be initiated. Please note."
' After that on 10-4-1994 and 17-5-1995 notices of demand were issued to the plaintiff by the defendants, which are Annexures 'R' and ' S'.
9. I would like to reproduce sections 20, 21 and 22 of the People's Finance Corporation Act, 1972 which are as under:-- "20. Notwithstanding any agreement to the contrary, the Corporation may, by notice, require any borrower to whom it has granted any loan, or any person liable for payment of such loan, forthwith to repay the loan in full, if--
(a) it appears to the Board that in the application for such loan false or misleading information in any material particular has been given; or
(b) the borrower has failed to comply with the terms of any agreement with the Corporation in the matter of the loan; or
(c) for any other reason, it is necessary, in the opinion of the Board, to protect the interest of the Corporation.
21. Where the Corporation becomes entitled to require the immediate repayment of any loan before the due date and the loan is not repaid in compliance with the notice under section 20, the Corporation may initiate proceedings in the Court of the District Judge within the local limits of whose jurisdiction the debtor carries on the whole or substantial part of his business, for recovery of the whole of the outstanding loan.
22. Without prejudice to the provisions of sections 20 and 21 all sums due to the Corporation shall be recoverable as arrears of land revenue: ' Provided that no sum shall be recovered unless fifteen days' notice has first been given by the Corporation to the debtor that the sum will be so recovered: ' Provided further that in so giving notice the Corporation shall inform the debtor that he may pay such instalments as may be fixed in the notice and that upon his so paying every instalment on or before the due date the recovery will be suspended but that it will otherwise proceed as to the entire sum outstanding in case of any default in any instalment including the first."
10. The defendants have issued the required notices as required under the Act and have taken steps for the recovery of the dues ,as arrears of land revenue as required under section 22 of the Act, referred above. Therefore, the contention of Mr.. Hakim Ali Siddiqui that compliance of sections 20 and 22 is not made, is not sustainable.
11. Mr. Hakim Ali Siddiqui has cited the following authorities:--
(1) PLD 1965 SC 671--Case of Abdul Rauf v. Abdul Hamid Khan.
' The Hon'ble Supreme Court in this authority has held as under:-- "The decision of the question whether the Civil Court had jurisdiction in the present case would depend on whether the impugned orders and proceedings were without jurisdiction. There is in this case an attack on the proceedings on the ground of mala fide too. A mala fide act is by its nature an act without jurisdiction. No Legislature when it grants power to take action or pass an order contemplates a mala fide exercise of power. A mala fide order is a fraud on the statute. It may be explained that a mala fide order means one which is passed not for the purpose contemplated by the enactment granting the power to pass the order, but for some other collateral or ulterior purposes."
' There is no applicability in this authority to the facts of the case in hand.
(2) PLD 1988 SC 67--Case of Agricultural Development Bank of Pakistan v. Sanaullah Khan and other-- ' The Hon'ble Supreme Court has held as under:-- "It is important to note that the recovery can be effected under subsection (1) of section 25 from an "agriculturalist" or defaulter in the payment of any liability to the Bank and such sums which are due to the Bank are recoverable as arrears of land revenue. It is an admitted position that demand was made on respondent No,1 by means of notice by the Naib-Tehsildar, D.I. Khan, for recovery of Rs,3,399.78 as arrears of land revenue, being the due outstanding against Saadullah Khan deceased (vide judgment of the trial paragraph 1). Now section 29(c) defines the 'agriculturalist' inter alia to mean any individual engaged in agriculture or in the development of agriculture or agricultural products, who satisfies the bank that the loan to be taken shall be spent on agriculture or the development of agriculture of agricultural products etc. Section 19 of the Ordinance provides for providing credit in cash or in kind and credit ' facilities, to agriculturalists for the purpose of agriculture etc. Reading these provisions of law together it is plain that the powers conferred under section 25 to recover the sums due to the bank as arrears of land revenue are exercisable against the agriculturalist who had secured the loan or credit facilities from the bank. This is the foundational basis of the jurisdiction to exercise the extraordinary powers of recovering the dues of the bank. It, therefore, follows that the power of coercive recovery cannot be invoked against a person who did not secure the loan as an agriculturalist himself. Admittedly respondent No,1 did not obtain the credit facilities or secure the loan which is being recovered from him. The proceedings for the recovery of the dues from him, therefore, by the means adopted was illegal."
' In my humble view this authority is also totally different and distinguishable from the facts of the case in hand and is not helpful to the plaintiff.
The plaintiff has himself obtained financial assistance from the defendants and had mortgaged the immovable property and hypothecated the machinery and other valuable goods and on his own accord, he has miserably failed to pay the due instalments as agreed upon between the parties.
(3) PLD 1970 SC 180--Case of Mian Muhammad Latif v. Province of West Pakistan-- ' The Hon'ble Supreme Court has held as under:- "It is needless to mention that in a case where temporary injunction is claimed, the plaintiff has only to make out that he has a good prima facie case meaning thereby that a serious question is to be tried in the suit and that in the event of success if the injunction is not issued he will suffer irreparable injury. The appellant, has, in the present case, fulfilled all these conditions. Even the learned Additional Advocate-General and Mr. Nathu Lal, learned counsel for respondent No,2 have not opposed the issue of injunction."
' This authority of the Supreme Court is not helpful to the case of the plaintiff at all, as the application for injunction was allowed when the learned A.-G. And the learned cot. Mei for the respondent raised no objection. Whereas in this case the learned counsel for the defendant has vehemently opposed the prayer of the plaintiff for grant of the application.
12. Mr. Ghulam Ali Khokhar has cited the following case law:--
(1) 1971 SCM R 569--Case of Province of West Pakistan v. Malir Asghar Khan-- ' The Hon'ble Full Bench held in this authority as under:-- "Issuance of temporary injunction to the Government Departments in respect of service matters is bound to disturb their working, and they should not ordinarily be issued unless there are compelling reasons to do so because balance of convenience ordinarily would not lie in disturbing the administrative arrangements of a Department."
' In the case in hand service matter is not involved at all. On the contrary the plaintiff has approached this Court for issuance of injunction for non-recovery of the instalments and other dues by the defendants. This authority is not, applicable so far the facts of this case are concerned.
(2) 1973 SCM R 184--Case of Muhammad Yakoob v. Health Officer, Municipal Committee, Hyderabad:-- ' The rule laid down in this authority is as follows:-- "So far as the present petition is concerned, it must, in our opinion, fail, because, after the licence had expired by efflux of time, there could be no further question of continuing them or restraining the Municipal Committee from cancelling the same. If the petitioner succeeds in his suit, he will be entitled to recover all damages suffered as a consequence of the cancellation and also to the renewal of his. Licensee. No irreparable injury will thus be suffered by him which cannot be compensated in terms of money."
' This authority is also quite different and distinguishable from the facts of this case and as such is not applicable to this case.
(3) PLD 1969 Dacca 832--Case of, East Pakistan Inland Water Transport Authority v. Abdul Jalit Beparti-- ' In this authority the learned Judge has observed as under:-- "When it is apparent from the plaint itself that the damages, if any, can be compensated, then in that event, temporary injunction should not be issued creating a deadlock in the internal administration of the statutory body. Considering that the period for which the contract was given to the opposite-parties Nos.2 and 3. Was for a year, I do not consider it necessary to send this matter back to the learned. Munsiff for consideration of the matter of issuance of ad interim injunction and more so when the parties plead their respective cases before this Court and advanced the arguments accordingly. In my view, the suit should be disposed of as expeditiously as possible."
' This authority is also not .Applicable so far the facts of the present case are concerned.
13. I have gone through the material placed with the matter so also the case law cited by the parties. It is an admitted fact that the plaintiff got the sanction of financial assistance from the defendant for an amount of Rs,6,50,000 and before the release of the amount necessary documentation' was carried over between the parties, which is referred hereinabove and the plaintiff on his own accord furnished the undertaking before the release of the financial assistance and the plaintiff has agreed for the mark-up at the rate of 11% per annum. The plaintiff is defaulter so far the payment of instalments and other dues are concerned. The plaintiff was issued notices as required under section 20 of the Act referred above but of no avail and the plaintiff had not paid the instalments to the defendant. The defendants are entitled under section 22 of the Act referred to here to take coercive measures for the recovery of the sums due to the Corporation. It is also an admitted fact that after sanction and disbursement of the loan the plaintiff has joined the service of Government of Sindh as A.S.I. Which is also borne out from the record. This fact is not denied by the plaintiff himself.
14. It has become a tendency nowadays that after getting financial assistance from the Financial Institutions at their request on the agreed terms and conditions of payment and refund with mark- up, the parties are not willing to repay the amount so due to the Financial Institutions with the.
Result that Financial Institutions are suffering and the economy of the country, as a whole is at stake.
15. From the facts of the case neither the balance of convenience is in favour of the plaintiff nor he will suffer any irreparable loss or injury if injunction is allowed. On the contrary the defendants will suffer a lot because after the sanction and 'disbursement of financial assistance the plaintiff has miserably failed to pay a single instalment towards the amount received by him. As such there is no substance in the application, which under the circumstances is dismissed with costs.