JUDGMENT G.H. MALIK, J.- The plaintiff has filed this suit for recovery of Rs.93,776/- with interest. The case of the plaintiff is that it granted to the defendant a loan of Rs. 50,000/- in December, 1965; that, as security for repayment of the said loan,, the defendant executed promissory notes from time to time dated the 13th December, 1965, 31st October, 1968, and 27th September, 1971; that the defendant failed to repay the said loan; and that, consequently, a sum of Rs.93,776/- was due and payable by the defendant to the plaintiff as on 31st March, 1974.
2. The defendant filed his written statement and, upon the pleadings of the parties, the following issues were settled:
1. Whether the plaintiff granted to defendant a loan/Over-draft of Rs.50,000/-?
2. Whether the defendant utilised the said loan/Over- draft?
3. Whether the defendant is liable to the plaintiff bank for the amount claimed?
4. Whether the alleged Promissory Notes and the, alleged acknowledgements were obtained in blank and were filled in subsequent to their execution? If so. Its effect?
5. Whether the alleged Promissory Notes are without consideration and/or legally invalid documents?
6. Whether the suit is maintainable?
7. What should the decree be?
3. The plaintiff has examined Ashraf Ali as its witness whereas the defendant has led no oral or documentary evidence. The written statement of the defendant, therefore, cannot be taken into account. That being so, it follows that the parties are no longer at issue and the issues which had been framed became redundant. However, at the insistence of Mr. Kabiruddin. The learned Counsel for the defendant. I have heard the arguments on those issues today. My findings on those issues are as follows:
4. ISSUES NOS. I & 2: Mr. Kabiruddin does not question the grant of the loan of Rs.50,000/- but submits that the amount thereof was not actually disbursed and that the loan in question was in fact a "via-media" adopted by the then Chairman of the plaintiff for obtaining the money for investment in his own company. In support of the arguments, he invites my attention to the statement of the plaintiff's witness in cross examination that he had no knowledge that the then Chairman had floated any Company by the name of Chambon Company and that it was incorrect that the loan was given to finance any such Company, and further that the loan in question was given to the defendant as personal loan. That statement, far from supporting the argument, is a refutation thereof. Mr. Kabiruddin then refers to the statement of the witness that the defendant in this suit and the defendants in the other connected suits were all brothers and had current accounts in their names apart from the loan accounts referred to by the witness. According to the learned Counsel, that statement of the witness gives rise to an inference that there was "something special". He does not specify what that "something special" would be. In any case no such inference can be drawn because the witness had explained in his examination-in-chief that after the loan facility was granted, a loan account was opened and the amount of loan was debited therein and the same was then credited to the current account of the defendant. This is a perfectly normal transaction and the statement with regard to it was not challenged in cross- examination. I.
Therefore, find that a loan of Rs.50,000/- was granted to and utilised by the defendant.
5. ISSUE NO.3: On this issue. Mr. Kabiruddin seeks to submit that in view of the events in East Pakistan the contract between the parties was frustrated and therefore the defendant is not liable to pay any amount to the plaintiff. He. However, concedes that there is nothing on the record, that the loan any connection with East Pakistan and that there is no evidence on record to support the argument. The argument is. Therefore, clearly irrelevant and the insistence of the learned Counsel on advancing it is quite unreasonable. I have, therefore, declined to hear any further argument on the question of alleged frustration and hold, on the basis of the evidence of the record that the defendant is liable to pay the plaintiff the amount claimed in the suit.
6. ISSUE NO.4: Mr. Kabiruddin submits that the date of one of the promissory notes (Ex.7/5) is the 13th December, 1965, whereas, according to the statement of account (Ex.7/27) the loan was disbursed only on the 14th December, 1965; and further that one of the blank spaces on that promissory note is still blank. According to him, that fact is sufficient to show that promissory note was blank when it was signed. The argument is clearly far fetched. I do not see how disbursement of the loan after the execution of the promissory note or the omission to fill in one of the blank spaces in it leads to the conclusion that it was blank when signed. It only remains to be noted that no argument has been advanced with regard to the remaining promissory notes and the letters of acknowledgement and that, in any case, the defendant, having led no evidence, has failed to discharge the burden of proof which was upon him.
7. ISSUE NO.5: The only argument advanced by Mr. Kabiruddin is that the Promissory Note (Ex.7/5 is invalid because one of the blank spaces therein has not been filled in and. Therefore, ii is incomplete. The space which has been left blank relates to intervals at which the interest was to be compounded. The argument is clearly devoid of any merit and deserves no further discussion. The validity of the subsequent promissory notes has not been questioned by the Counsel and no argument has been advanced on the question of consideration. The issue is, therefore, answered against the defendant.
8. ISSUE NO.6: This issue is not pressed.
8. ISSUE NO.7: Mr. Kabiruddin states that the plaintiff has charged compound interest whereas the promissory note (Ex.7/5) does not provide for charging of such compound interest. The argument overlooks the fact that the promissory note (Ex.7/5) was only the first of the promissory notes executed by the defendant, and was replaced, subsequently, by the promissory note dated 31st October, 1965, which in turn, was replaced by the promissory note dated the 27th September, 1971, so that the only promissory note in the field now is the latest one, dated 27th September, 1971. That promissory note is Ex.7/12 and provides for payment of interest at 4% above bank rate with minimum of 9% per annum with quarterly rests. The plaintiff has therefore charged interest correctly. It may be further observed that the defendant has from time to time acknowledged its liability for the amount claimed and has at no time questioned the right of the plaintiff to charge interest which it has done. In the circumstances, the plaintiff is entitled to decree for the amount claimed in the suit.
The suit is therefore decreed for Rs.93.776/- with interest thereon at 14% per annum from the date of the suit till payment with quarterly rests.
With regard to the costs of the suit, Mr. Mamoon Hasan claims compensatory costs under Section 35-A, C.P.C, in addition to the usual costs because the defence set up by the defendant was false and vexatious to his knowledge and was subsequently abandoned by him. He is right. The defendant, in his written statement, set up various defences. It was alleged that the "defendant did not obtain the loan for himself"; that the plaintiff desired Arag, Ltd. To purchase shares of substantial value of the newly floated Chambon (Pakistan) Ltd. And offered to finance the purchase of those shares and because it was not possible to grant an unsecured loan in excess of Rs.50,000/-, the plaintiff granted loans of Rs.50,000/- each to the defendants in this suit and the connected suits for the purchase of shares by Arag, Ltd; and that Arag, Ltd. Had repaid the loan. It was further alleged that the promissory notes were blank when signed and were otherwise invalid and without consideration. Issues were framed on the basis of these pleadings; and it is evident that the burden of proving the allegations was on the defendant. Yet, he led no evidence and, thus, abandoned his defence without even attempting to furnish any explanation for so doing. It is, in the circumstances, reasonable to infer that there was no evidence to substantiate the defences which were set up and that those defences were, to the knowledge of the defendant, false and vexations.
With regard to the costs of the suit, Mr. Mamoon Hasan claims compensatory costs under Section 35-A, C.P.C, in addition to the usual costs because the defence set up by the defendant was false and vexatious to his knowledge and was subsequently abandoned by him. He is right. The defendant, in his written statement, set up various defences. It was alleged that the "defendant did not obtain the loan for himself"; that the plaintiff desired Arag, Ltd. To purchase shares of substantial value of the newly floated Chambon (Pakistan) Ltd. And offered to finance the purchase of those shares and because it was not possible to grant an unsecured loan in excess of Rs.50,000/-, the plaintiff granted loans of Rs.50,000/- each to the defendants in this suit and the connected suits for the purchase of shares by Arag, Ltd; and that Arag, Ltd. Had repaid the loan. It was further alleged that the promissory notes were blank when signed and were otherwise invalid and without consideration. Issues were framed on the basis of these pleadings; and it is evident that the burden of proving the allegations was on the defendant. Yet, he led no evidence and, thus, abandoned his defence without even attempting to furnish any explanation for so doing. It is, in the circumstances, reasonable to infer that there was no evidence to substantiate the defences which were set up and that those defences were, to the knowledge of the defendant, false and vexations.
The plaintiff was, of course, required to object to the defences at the earliest opportunity in order to be able to claim compensatory costs; and, in the circumstances of this case it has done so, for it could not have objected to the defence until after it was shown by the defendant's own action in abandoning it that it was false or vexatious.
The conduct of the defendant, regrettably, has been aggravated by the insistence of his Counsel on advancing lengthy and unnecessary, and even irrelevant, arguments which were not supported by anything on record. It may be that in so doing he was acting on instructions, express or implied, of his client but if that be so then the latter must bear the consequences.
In the circumstances. I am entirely satisfied that the plaintiff's claim for compensatory costs is fair and just. The defendant shall, therefore, pay the plaintiff, in addition to the usual costs, Rs. 10.000/- by way of compensatory costs.