1. NAZIM HUSSAIN SIDDIQUI, J.---This appeal is directed against the Judgment and Decree, dated 13th January, 1998 of learned Judge Banking Court No,II, Karachi, whereby the Suit bearing No,2153/1995 filed by the appellant against the respondent, was dismissed. The facts relevant for decision of this appeal are as follows: The appellant on 8-11-1987 at the request of respondent, had granted FBPD limit of Rs,15 Million against security of Export documentary bills covering consignment of cloth and Textile goods. The appellant allowed a shipment advance of Rs,13.48,000 against the respondent's two export bills (i)
2. FBPD 6/89 for US$,9861 and (ii) FBPD 7/89 for US$60, 139, totalling US$70,000, equivalent to Pak Rs,14,72,000. It is alleged that on 23-9-1989 the appellant received a tested telex dated 22-9-1989 for US$70,000 from BCCI, Hong Kong, and consequent upon getting it confirmed that said proceed of US$70,000 pertained to the bills numbers mentioned earlier, adjusted said amount on 24-9-1989 towards said bills. The appellant received another tested telex for US$69,971 through its I.I.
3. Chundrigar Road Branch, Karachi from its New York Branch, favouring the respondent that FTT No,225.89 was issued to the foreign remittance department of appellant City Branch for onward payment to the respondent, who made a false statement that the payment pertained to advance payment of its future export bills and requested the appellant to credit the equivalent Pak Rupees in its account, while the same, in fact, related to said FBPDs. The foreign remittance department of the appellant City Branch made payment of US$69,971 equivalent to the then Pak Rs,14,76,311.13 to the respondent by crediting it in Current Account No,6901 on 22-10-1989 and in this way the payment relating to said FBPDs was made and received by the respondent twice, and this fact of double payment was detected by the reconciliation department of appellant's Head Office and was admitted by the respondent.
4. It is alleged that the appellant, vide its letter dated 24-9-J992, requested the respondent to arrange immediate deposit of equivalent Pak. Rupees against US$70, 000 with upto date mark-up.
5. The respondent, vide its letter dated 5-10-1992, acknowledged the credit of double payment and promised to make payment of said amount to the appellant. The respondent, however, made certain part payments, amounting to Rs,3,50,000 but failed to pay the balance of Rs,11,26,311.13 and mark-up thereon. Under these circumstances, the appellant filed the suit which was dismissed by the Judgment and Decree, which have been impugned in this appeal.
6. The respondent in written statement resisted the claim of the appellant and, inter alia, stated that the suit was instituted unauthorisedly without any authority/power of attorney, it did not relate to finance, and that it was not maintainable in law.
7. Learned trial Judge held that the institution of the suit was valid and it was filed by a person, who was duly authorised in that regard. Learned trial Judge also held that the suit was not covered by the definition of "Finance" as given in the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997. Consequently, the suit was dismissed.
8. For appreciating the points involved in this matter it would be advantageous to reproduce definition of "Finance" which is as follows:--
(e) "finance' includes an accommodation or facility under a system which is not based on interest but provided on the basis of participation in profit and loss, mark-up or mark-down in price, hire- purchase, equity support, lease, rent-sharing, licensing, charge or fee of any kind, purchase and sale of any property, including commodities, patents, designs, trademarks and copy-rights, bills of exchange, promissory notes or other instruments with or without buy-back arrangement by a seller, participation term certificate, musharika or modaraba certificate, term finance certificate or any other mode other than an accommodation or facility based on interest and also includes credit or charge cards, guarantees, indemnities, letters of credit and any other obligation, whether fund based or non-fund based, and any accommodation or facility the real beneficiary whereof is a person other than the person to whom or in whose name it was provided."
9. It is contended on behalf of the appellant that learned trial Judge dismissed the suit of appellant on the basis of incorrect interpretation of definition of "Finance". Learned counsel also argued that the claim of appellant related to facility/accommodation granted to and availed by respondent and falls within the purview of "Finance".
10. The respondent, in its letter dated 5-10-1992, admitted about double payment and even promised the repayment of Rs,14,76, 311,
13. The only plea of respondent was that mark-up/interest shall not be charged on said amount. During the course of arguments, learned counsel for the respondent conceded that said letter was written by the respondent and also admitted its contents. It is not disputed that the limit of Rs,15 million was granted initially to the respondent within the scope of definition of "Finance" which not only covers accommodation or facility, hire-purchase, equity support, lease, rent-sharing. Licensing etc. but also includes guarantees, indemnities, letters of credit and any other obligation. Double payment of the amount, therefore, would also fall within the scope of "Finance" as said amount emanated from the limit granted to the respondent. It was not from any independent transaction. Accordingly, we hold that the claim of the appellant is covered by the definition of "Finance". Under the circumstances, the rate of mark-up would have to be decided by the Trial Court as per clause (b) of subsection (1) of section 15 of the Act, which is as follows:
(b) in the case of finance under a system not based on interest, for mark-up at the contracted rate or at the latest rate of the banking company for similar finance whichever is higher.
11. Accordingly, the appeal is allowed with costs, impugned judgment and decree are set aside and the case is remanded to the trial Court for deciding afresh the claim of the appellant including mark-up. Both the parties would be at liberty to lead further evidence, if they so desire.
12. Above are the reasons for short order announced on 26-5-1998.