' The facts leading to the filing of present suit, as stated in the plaint, are as follows.
2. The plaintiff, amongst others, had granted Foreign Currency Loan of U.S. Dollars 966,000 through agreement dated 1-11-1966 known as IBRD 382-Pak to M/s. Bawany Violin Textile Mills Limited, predecessor-in-interest of defendant No, 1 . The loan was repayable in 16 bi-annual instalments commencing from 1st July, 1968 and pending on 1st January, 1976 with interest at the rate of 8% per annum. Through a supplementary agreement, dated 29th June, 1967, the loan was made repayable in 24 semi-annual instalments commencing from the 1st day of January, 1969 and ending on the 1st day of July, 1980. On 26th August, 1974, in pursuance of a tripartite agreement between the plaintiff and defendant No,1 and M/s. Wahid Spinning Mills Limited the above-named M/s. Bawany Violin Textile Mills Limited was bifurcated into the defendant No,1 and Wahid Spinning Mills where under the entire outstanding balance of the said loan was undertaken by M/s. Wahid Spinning Mills Limited as its exclusive liability. Such understanding under-went further change through agreement, dated 6th July, 1977 and M/s. Wahid Spinning Mills Limited was burdened with liability equivalent to U.S. Dollars 493,000 whereas the remaining liability under the agreement IBRD 382-Pak amounting to U.S. Dollars 473,000 with proportionate liabilities for over-due instalments and interest was undertaken by the defendant No,1, Besides, the defendant No,1 had further availed Foreign Currency Loans through two agreements dated 31-12-1974 for the sum equivalent to U.S. Dollars 1,900,000 and D.M. 1,662,000. The limit of D.M. Loan was subsequently reduced to D.M.1,424,000 by means of supplementary agreement, dated 17th February, 1975. Both the loans granted on 31st December, 1974 were to be repaid in 24 bi-annual instalments commencing from 1st day of July, 1976 and ending on 1st January, 1988. The U.S. Dollars loan dated 31-12-1974 was assigned number IBRD/961-Pak and carried interest at the rate of 9-1/2 per annum. The D.M. Loan was referred as German Al-829 and carried interest at the rate of 9% per annum. The loan amount in relation to all the three agreements was repayable in Pak Currency calculated at the conversion rate "on the due date or on the date of actual payment whichever is the higher". The loans could be recalled in the event of default in payment of instalment. All the three loans were availed and utilised in full and various charge documents including equitable mortgage by way of deposit of Title Deeds, Letter of Hypothecation, Deed of Floating Charge, Promissory Notes and irrevocable General Power of Attorney relating to the mortgaged property were executed. The plaintiff's case is that the defendant No,1 had failed to repay the instalments of the outstanding amount despite repeated demands with the result that the entire loan was recalled through letter dated 2nd August, 1980 and the outstanding sum of Rs,60,079,468 was demanded by the plaintiff. The defendant No,1, however, has failed to make payment and, therefore, the suit has been filed for recovery. In the plaint, it is averred that the amount of loan has to be paid as per the rate of conversion existing on the date of actual repayment and the right to revise the claim has been reserved in the event of further fluctuation in the rate of exchange. The defendant No,2 has been impleaded, as per plaint, for - the reason that the defendant No,1 has created collateral mortgage on its property and in its favour. The plaintiff has, therefore, sought decree in the sum of Rs,60,079,468 with interest and further decree for sale of the mortgaged property and costs of the proceedings.
' In the written statement filed by the defendant No,1, preliminary objections have been raised with regard to maintainability of the suit on the ground that it has been filed by an unauthorised person and that the suit itself was premature for having been filed much before the instalments, under the U.S. Dollar Loan IBRAD 961 and D.M. Loan Al-829 also referred as GL-IX/16, had become due. On merits, it is urged that the rate of exchange has to be determined with reference to the date when the instalments became due for repayment and that the defendants are not liable for payment of any penal interest and other charges. It is further averred that certain payments made by the defendant No,1 towards loan in question had wrongfully been adjusted by the plaintiff towards other loans earlier availed by it and the machinery imported under the two agreements both dated 31-12-1974 had not been released to the defendant No,1 on account of non-cooperation by the plaintiff. The veracity of the statement of account filed along with the plaint has also been disputed and it is averred that the various accounts were in the custody and possession of the plaintiff and it was necessary to direct accounts being taken in the matter.
4. The defendant No,2 has filed separate written statement wherein it is pleaded that the Annexures to the plaint had not been supplied, and therefore, the suit was liable to be dismissed. I may mention here that the defendant No,2 has not led any evidence nor was anyone present on its behalf during the proceedings. On the basis of the pleadings, the following issues, Exh.8, were settled by the Special Court Banking on 4-5-1982:--
(1) Whether suit is not maintainable in law against defendant No,1?
(2) Whether the plaint is vague and it is filed by an unauthorised person and what is its effect"
(3) At what rate of exchange the loan of foreign currency advanced to the defendant No,1 would be payable to the plaintiffs?
(4) At what rate the plaintiffs are entitled to claim interest from the defendants and whether they have charged more interest that and what is its effect.?
(5) Whether some amounts were paid by defendant towards the suit claim but the same were adjusted towards other loan, if yes, what is its effect?
(6) What amount is due and recoverable from the defendants?
(7) To what relief, the plaintiffs are entitled to?
(8) What should the decree be?
5. The plaintiff has examined one Syed Afaq Hussain as Exh.5 and Muhammad Hussain as Exh.6.
The plaintiffs witnesses have produced the various agreements and the charged documents including Memorandum of Deposit of Title Deeds as well as the Statements of Accounts. The defendant No,1 has examined its Managing Director Younus Bawani, Exh.7, as its sole witness. After evidence was closed by both the parties, the matter was heard and I have been taken through the record by both the learned counsel who have advanced their arguments. My findings on the issues are as follows: ' ISSUE NO.1:
6. Although this issue appears to have been settled on the basis of a vague averment contained in the written-statement to the effect that the suit is incompetent and not maintainable, during hearing the learned counsel for the defendant has urged that under the two Loan Agreements dated 31-12-1974, the last instalment for repayment was due on 1-1-1988. However, the present proceedings were filed on 20th September, 1980 i,e, long before the last instalment fell due. It is contended by the learned counsel that in relation to the instalment which had not fallen due at the time of filing of the proceedings, the present proceedings are premature and, therefore, liable to be dismissed. It is further urged that according to the plaintiff's case the balance instalments had been recalled through Notice of Demand, dated 2nd August, 1980. The Notice of Demand was not, however, produced in the evidence, and therefore, according to Mr. S. Mamnoonul Hassan, the plaintiff had failed to establish that the suit was maintainable in its present form. It is further urged that in relation to the first Loan Agreement, dated Ist November, 1966 (Exh.5/1), admittedly, the entire liabilities were taken over by M/s Wahid Spinning Mills' Limited through Agreements dated 26th August, 1974, Exh.5/3, and the liability was subsequently bifurcated between the defendant No,1 and the said Wahid Spinning Mills Limited through Agreement Exh.5/4, dated 26th July, 1977. It is urged that the interest accruing for the period between 26th August, 1974 and 26th July, 1977 in relation to the share of loan undertaken by the defendant No,1 could not be claimed from it for the reason that during the said intervening period, liability rested upon M/s Wahid Spinning Mills Limited. The plaintiff's claim for recovery of money is based on the various Loan Agreements and the Charge Documents. It is an admitted position on record that under the terms of Loan Agreement, the balance instalments could always be recalled by the plaintiff in the event of default on the part of the defendant No,1 in making repayments. It is true that the plaintiff has not produced the Notice of Demand which ought to have been exhibited and brought on record.
However, its non-production loses importance in view of the admission made by the sole witness of the defendant namely Younus Bawani, Exh.7, who in his cross-examination has very clearly made the following statement: "It is. Correct that the plaintiff had recalled the entire amount of loan after default in payment of certain instalments."
' The admitted position on record, therefore, is that the plaintiff had recalled the entire amount of loan after default in payment of instalments. As regards the challenges on the ground that liabilities for the period between 1974 to 1977 had been taken over by M/s Wahid Spinning Mills Limited, suffice to observe that vide Exh.5/4 which was the agreement dated 26-7-1977 between the defendant No,1 and the above-referred M/s. Wahid Spinning Mills Limited, it was agreed that the latter was responsible only in relation to the over-due instalments as well as interest on the amount undertaken by it as its responsibility. The above-referred agreement had the approval of plaintiff and contains the following clause:- "That, Wahid Spinning Mills Limited have accepted a loan equivalent to U.S $ 493,000 Outstanding on 1-7-1975 and overdue Instalment as well as Interest thereon after 1-7-1975 shall be the liability of the Subsequent Borrower."
' The argument of Mr. S. Mamnoonul Hassan to the effect that the defendant No,1 cannot be held liable for the period during which the responsibility for repayment of the entire loan covered by Agreement dated 1-11-1966 rested upon M/s. Wahid Spinning Mills Limited, is not tenable and has to be rejected. In the circumstances, my finding on issue No,1 is in the negative.
' ISSUE NO.2:
7. As regards this issue the learned counsel for the defendant No,1 had very fairly conceded that he does not press the assertion about the plaint being vague. However, as regards the second part of 'this issue, it is urged by Mr.Mamnoonul Hassan that the plaintiff has not filed any resolution of Board of Directors authorising G.H.Y. Dayala, Deputy Managing Director of PICIC to file the suit. The learned counsel has referred to paragraph 12 of the plaint wherein it is averred that the said G.H.Y.
Dayala has been authorised to sign and verify the plaint. However, according to Mr. S.Mamnoonul Hassan, such averment does not mean that the said person had been authorised to institute the proceedings as well. The learned counsel has referred to the case of 'Khan Iftikhar Hussain Khan of Mamdot v. M/s. Ghulam Nabi Corporation Limited Lahore (PLD 1971 SC 550) wherein institution of proceedings on behalf of the company was held irregular and invalid for the simple reason that the resolution authorising the institution of proceedings was passed during the meeting of Board of Directors which had not properly been convened. However, in the present case, the plaintiff has not relied upon or produced any resolution of the Board of Directors but instead, along with the plaint, a copy of General Power of Attorney favouring the said G.H.Y. Dayala has been produced. The original of such Power of Attorney was also shown at the time of presentation which was returned by the office after comparison. The position in the present case is different and the plaintiff has filed the case through its lawfully constituted attorney whose acts can validly be ratified even if some irregularity is found in the Power of Attorney. The present case is, therefore, clearly distinguishable from the case of Khan Iftikhar Hussain Khan of Mamdot (supra) and the rule laid down in the Supreme Court case is not attracted to the present case. Mr. S.Mamnoonul Hassan has then referred to the case of Abubakar Saley Mayet v. Abbot Laboratories and another (1987 CLC 367) wherein it is held that oral authorisation in favour of a person to institute proceedings is invalid and cannot be rectified subsequently. For the reasons stated by me holding the present case distinguishable from the above Supreme Court case, the case of Abubakar Saley Mayet (supra) is also distinguishable. The plaintiff's witnesses who here appeared were not asked any question in relation to the defendant's contention about the present issue. My findings, therefore, on this issue is that the defendant has failed to prove that the plaint is vague or that it is filed by an unauthorised person.
' ISSUE NO.3:
8. Although lengthy arguments were advanced by both the sides in relation to the present issue, in my view, the controversy involved under this issue can be decided by reference to the Loan Agreements which have been produced and brought on the record. The first Agreement dated 1-11- 1966 is Exh.5/l, the next agreement dated 31-12-1974 in relation to the U.S. Dollars loan is Exh.5/5 whereas the last agreement dated 31-12-1974 of the D.M. Loan is Exh.5/6. All the three agreements contain the following clause in relation to the rate of exchange applicable to the repayments:
(b) The loan and the interest thereon shall be payable by the Borrower in rupees as hereinafter in this paragraph determined.
(i) All obligations of the Borrower falling due under this Agreement in respect of the principal of and or interest on the Loan shall be computed and stated in the same foreign currencies in which PICIC under the portion of its foreign exchange loan with the IBRD allocated for this Project, is indebted to the IBRD in respect of the principal and/or interest.
(ii) Whenever the Loan shall be computed and stated in more than one foreign currency as provided above, PICIC shall have the right to specify what portion of the foreign currency or currencies repayable by PICIC to the IBRD shall be retired in any instalment of the principal set forth in the repayment schedule to be prepared in accordance with the provisions of sub-para. (a) above.
(iii) The amount of rupees payable by the Borrower to PICIC on the due date of any instalment of the principal and/or interest shall be calculated at the highest effective selling rate of the foreign currencies then specified to be due quoted by Authorised Dealers in Foreign Exchange in Pakistan on the date of payment."
' Likewise in the U.S. ,dollar Loan Agreement dated 31-12-1974 Exh.5/5 to the relevant clause is as follows:
(b) The loan and the interest thereon shall be payable by the Borrower in rupees as hereinafter in this paragraph determined:
(i) All obligations of the Borrower falling due under this Agreement in respect of the principal of and/or interest on the Loan shall be computed and stated in the same foreign currencies in which the Government under the portion of the Bank Loan allocated for this Project is indebted to the Bank in respect of the principal and/or interest.
(ii) Whenever the Loan shall be computed and stated in more than one foreign currency as provided above, PICIC shall have the right to specify what portion of the foreign currency or currencies repayable by the Government to the Bank shall be retired in any instalment of the principal set forth in the repayment schedule to be prepared in accordance with the provisions of sub-para. (a) above read with schedule I hereto.
(iii) The amount of rupees payable by the Borrower to PICIC on the due date of any instalment of the principal and/or interest shall be calculated dat the highest effective selling rate of the foreign currencies (highest amount of rupees for the foreign currencies concerned) then specified to be due quoted by Authorised Dealers in Foreign Exchange in Pakistan on the due date or on the date of actual payment, whichever is the higher."
' The third agreement contains similar agreement which is contained in its clause 8(b) and is as follows: "8.--(a)...
(b) All obligations of the Borrower falling due under this Agreement in respect of the principal of and/or interest on the Loan shall be computed and stated in Deutsche Marks, and such obligation of the Borrower shall be discharged by paying to PICIC in legal tender currency of Pakistan an amount equivalent to the amount of the Deutsche Mark obligation of the Borrower, calculated at the highest effect selling rate of the Deutsche Marks then specified to be due quoted by Authorised dealers in Foreign Exchange in Pakistan on the due date or on the date of actual payment, whichever is higher."
' The learned counsel for the plaintiff has relied on the above referred clauses contained in the three Loan Agreements and submits that in view of the clear understanding between the parties that the rate of exchange applicable at the time of actual repayment would determine the amount payable by the defendant No,1, the departure therefrom is not permissible. It is urged by Mr. Nizam Ali Khan that the plaintiff had lent money after borrowing it from the Foreign Agencies. The repayment to the' Foreign Aid Giving Agencies has to be made in foreign currency and therefore the current rate of exchange has to be taken as the determining factor. The learned counsel for the defendant, also, has referred to the above clauses and contends that the parties had agreed to repayment of loan applying the rate of conversion as was existing on the dates when the repayment had become due. The reading of the above-referred clauses from the Agreements makes it clear that the higher of the two rates has to be applied. Surely, the present rate of exchange is higher than the one which had existed at the time when payment had become due.
The defendant No,1 has, admittedly, failed to repay the money and in case the contention of learned counsel, Mr. S.Mamnoonul Hassan, is accepted, such will result in giving undue premium to the defendant No,1 for its own fault in not making repayment in time. Mr. S. Mamnoonul Hassan, however, has raised yet another argument to the effect that the plaintiff has made its claim in Pakistan currency and has not revised the same on account of fluctuation in the rate of foreign currency. According to Mr. S. Mamnoonul Hassan, the plaintiff cannot make claim for any amount in excess of what has been claimed in the suit and even if it is found that the repayment can be claimed on the basis of rate of exchange prevalent at the time of actual payment, such claim of the plaintiff is barred under the provisions of Order II, Rule 2, C.P.C. The last mentioned argument of Mr. S. Mamnoonul Hassan is not without force. The plaintiff, although could have made claim for repayment on the basis of rate of conversion prevailing at the time of payment/decree has chosen to prefer its claim in Pakistan currency and has confined it to that. The mere reservation made in the plaint to make further claim, loses its value since no attempt has been made at any stage of the proceedings for review or amendment of the claim amount. It is quite surprising to note that through the prayer clause, decree has been sought for lesser amount than what is mentioned in the title of the proceedings. The title of the plaint shows that the plaintiff has filed the proceedings for recovery of Rs,60,860,991.50. However, in the prayer clause, the decree is sought in the sum of Rs,60,079,468 only. In my view, the plaintiff having chose to limit its claim to Rs,60,079,468 cannot seek decree for a larger amount. The plaintiff could have lawfully made larger claim or seek decree for amount calculated in Pakistan rupees equivalent to the foreign currency which is claimed by the plaintiff. However, since portion of the claim has consciously been given up, the plaintiff is not entitled thereto. Mr. S. Mamnoonul Hassan, in this behalf, has rightly referred to the case of Secretary Government (West Pakistan) N.-W.F.P. Department of Agricultural and Forests Peshawar and 4 others v. Kazi Abdul Kafil PLD 1978 SC 242. My finding, therefore, on this issue is that the plaintiff was entitled to claim repayment of loan at the rate of exchange prevalent on the date of repayment. This issue has now become academic for the reason that the plaintiff has already quantified its claim in terms of Pakistan currency in. The plaint and has clearly indicated the date of demand notice as the relevant date.
' ISSUE NO.4:
9. As regards this issue the learned counsel for the plaintiff has mainly referred to paragraph 5 of Article I contained in the three loan agreements which are Exhs.5/1, 5/5 and 5/6. It is pointed out that except for the variance in the rates of interest payable under the three agreements, the language used in the Loan agreements is identical and the defendant No,1 in all the three cases had agreed to make payment of interest bi-annually. Under the first agreement, Exh.5/1, the rate of interest was settled at 8% per 'annum; under Exh.5/5, the rate of interest was settled at 9-1/2% per annum; and under Exh.5/6 the rate was settled at 9% per annum. The interest was to be calculated on simple basis. All the three agreements contained provisions for payment of commitment charges which were stipulated to be paid every three months on the principal amount of loan not withdrawn by the defendant No,1 from time to time. The obligation to make payment of commitment charges in respect of the loan was also agreed to . Be computed and stated in the foreign currency and in turn had to be calculated at the highest effective selling rate of conversion on the date of payment. The question which arises next is as to whether the plaintiff can claim any penal interest on commitment charges and/or interest on penal interest. The defendant's sole witness in his affidavit-in-evidence, Exh.7/1, para.18, has stated as follows: "I say that the Plaintiff has made false and exaggerated claims by way of interest and penal interest in the suit. Further, the Plaintiff is claiming interest on penal interest and claiming interest as well as penal interest on commitment charges and even charged penal interest on interest. These claims, apart from being unconscionable, are illegal and against the terms of the Loan Agreements."
Mr. S. Mamnoonul Hassan has pointed out that the defendant`_ witness was not cross-examined in relation to the above-quoted averment contained in his affidavit, and therefore, such statement should be considered to have been admitted by the plaintiff. In my view, for the reasons stated in my discussion of issue No,4, the effective date for conversion of amount of commitment charges can again be the notice of demand. No interest or penal interest can be charged on the amount of commitment charges for such would amount to compounding the interest. It may be noted that the learned counsel for the plaintiff while taking me through the detailed Statement of Account, Exh.5/15, has shown certain entries which appear to be those of interest and penal interest. Indeed, despite the agreements between the parties for payment of penal interest at the rate of 2% per annum in addition to the agreed rate of interest on the unpaid amount, the levy cannot be justified in view of the provisions contained in section 73 of the Contract Act. The plaintiff is required to prove that it has suffered any further or additional damages which ought to be compensated. The amount lent to the defendant No,1 carries interest agreed between the parties and any additional levy or charge in the form of liquidated damages or penalty cannot be claimed unless actual damages are shown to have been sustained. In the present case, however, on behalf of the plaintiff not has even a bare assertion been made about any loss or damages sustained by the plaintiff.
Consequently, the plaintiff is entitled to claim interest from the defendant at the rate specified in clause 5 Article I of the respective Loan Agreements. The plaintiff's own witness Muhammad Hussain, Exh.6, in his cross-examination has stated "the plaintiff is entitled to charge interest at the rate of 8% per annum as per the Agreement." It is well-settled that no oral statement for the purpose of contradicting or varying terms of a written contract can be admitted by virtue of Article 103 of the Qanun-e-Shahadat. The plaintiff is entitled to charge interest at the rate of 8% per annum for the loan amount granted under agreement dated 1-11-1966 Exh.5/1; in relation to the Loan Agreement dated 31-12-1974 (Exh.5/5) the plaintiff is entitled to charge interest at the rate of 9-1/2% per annum; and, for the loan amount granted under agreement dated 31-12-1974 (Exh.5/6), the plaintiff is entitled to charge mark-up at the rate of 9% per annum. The plaintiff is also entitled to commitment charges the specified rate mentioned in the three agreements. However, no further interest or penal interest can be charged on the said amount or on the commitment charges.
ISSUE NO.5:
10. As regards this issue, the parties do not appear to be at much variance. In the written- statement, the defendant No,1 has claimed repayment of the sum of Rs,2,716,131.34. Such repayment has been admitted by the witnesses of the plaintiff in their cross-examination. Indeed, in the Statements of Account the plaintiff has acknowledged repayment of U.S. Dollars 177,477.17 in relation to the Loan agreement of the year 1966. The defendant No,1, however, has not led any evidence to show if the said amounts were adjusted towards any other loan. The learned counsel for the plaintiff has made a statement at bar that his client has given credit to defendant No,1 for the above-referred amount of repayment and in case accounts are taken such benefit may be given to. The defendant No:1. In the circumstances, my findings on this issue is that the defendant No,1 has paid a sum of US dollars 177,477.17 by way of repayment towards the loan amount granted under agreement dated 1-11-1966 (Exh.5/1).
ISSUES NOS. 6 AND 7: ' According to the learned counsel for the plaintiff, the claim in the suit is for a sum far below the amount which is due and outstanding. The learned counsel has taken me through the Statement of Account, Exh.5/15, and referred to the various entries therein. Reference has also been made to summary of claim filed as Exh.6/8 which shows the principal amount under the three .Loan Agreements separately besides interest, penal interest, prepayment premium and commitment charges. The total amount of claim shown in Exh.6/8 is Rs,60,860,991.50. However, in the prayer clause, the plaintiff has claimed still lesser amount and decree has been sought in the sum of Rs,60,079,468. The statement of account Exh.5/15, shows that commitment charges, interest and penal interest have been subjected to further interest. In view of my findings, however, on issue No,4, the plaintiff is not entitled to charge any penal interest or interest, over interest upon the commitment charges. No interest could be charged on the amount of pre-payment premium either. In order to ascertain as to what amount .Is consequently due and recoverable from the defendants, it is necessary to require both the parties to submit accounts supported by the vouchers and other documents in their possession. Such exercise can be undertaken before a Commissioner who may examine the accounts and submit report. . The Commissioner shall receive the Statements of Account filed by both the parties and upon examining the credit/debit vouchers supporting entries contained in the respective statements of Account, shall submit report about the amount found due. It is pertinent to note here that the learned counsel for defendant No,1 has made statement at bar that his client is willing to make payment of the principal amount shown in Exh.6/8 with 5% interest thereon in terms of the State Bank of Pakistan Incentive Scheme.
However, such offer is not acceptable to the plaintiff. The learned counsel for defendant No,1 has further urged that the statement of account, Exh.5/15, is not certified and therefore is inadmissible in evidence. Reliance for such assertion has been placed on the case of Jawaid Rice Mills and others v. National Bank of Pakistan 1991 CLC Note 190 - page 148. I had called for the file pertaining to the above-cited case to appreciate the detailed judgment passed therein. I have found that the Statement of Account in the cited case was discarded out of consideration not for the reason that it was not verified in accordance with the Bankers" Book of Evidence Act but for the reason that only a photo stat copy had been produced and exhibited. The original statement of account had been placed on record without examining any witness. Such course was held to be illegal and the matter was, therefore, remanded for allowing the parties to produce further evidence including the Statement of Accounts. The contention of Mr. S. Mamnoonul Hassan to the effect that non- verification of statement of account renders it inadmissible, therefore, is not correct. Moreover, in the present case Exh.5/15 which is photo stat copy of the statement of account was admitted in evidence without any objection, and therefore, the learned counsel for the defendant cannot object to its admissibility at this stage. The above-referred statement of account, Exh.5/15, can, therefore, be considered by the Commissioner proposed to be appointed for taking accounts. Mr. S. Mamnoonul Hassan, has further urged that the defendant No,1 is not liable for the money claimed in relation to the two Agreements dated 31-12-1974 for the reason that both the loans had been granted for import of machinery which was not released to the defendant No,1 on account of embargo placed by the plaintiff itself. It is urged that the defendant No,1, on account of the unauthorised action on the part of the plaintiff, had suffered loss, and therefore, was not liable for making payment of the loan amount. Reference in this behalf has been made to letter dated 28- 10-1976, Exh.6/6, sent to the defendant No,1 by the plaintiff intimating that the delivery of the goods could be taken by the defendant No, l. Even so the plaintiff had released loan for import of machinery in terms of agreement between the parties and in case the defendant No,1 had suffered any loss on account of the allegedly unauthorised or illegal action of the plaintiff, proceedings could always be filed for damages against PICIC. The plaintiff, therefore, can lawfully claim recovery of the amount released by it under the two loan agreements. It is next contended by Mr. S. Mamnoonul Hassan that M/s. Wahid Spinning Mills Limited and the defendant No,1 had been sued.
For the portion of loan undertaken to be paid by the said M/s. Wahid Spinning Mills Limited.
Admittedly, M/s. Wahid Spinning Mills Limited had undertaken responsibility to the extent of US dollars 493,000 and such claim was settled for Rs,5.4 million. The defendant No,1, according to Mr. S. Mamnoonul Hassan, is entitled to similar treatment. The plaintiff has claimed Rs,9,629,297.61 as the total amount outstanding in respect of loan agreement dated 1-11-1966. I am. Afraid, the argument of Mr. S. Mamnoonul Hassan is totally misconceived since this Court cannot require a party to settle its claim for a particular sum. It is finally urged by Mr. S. Mamnoonul Hassan that the plaintiff is not entitled to mortgage decree since the Memorandum of deposit of Title Deeds had not been registered nor had any title documents been submitted. The learned counsel, on the basis of section 58(f) of Transfer of Property Act, has urged that an equitable mortgage cannot be inferred unless the title documents are shown to have been deposited. The learned counsel, in this behalf, has further urged that the mortgage suit is barred by limitation by virtue of Article 132 of the Limitation Act and the time would start running from the date of creation of mortgage. It may be observed that the defendant No,1 has not raised any of the abovementioned objections in its pleadings and therefore cannot be allowed to raise the same during arguments. In any event, as regards the question of limitation, suffice to observe that the mortgage suit can be filed under Article 132 of the Limitation Act within 12 years from the date when money becomes due. It is an admitted position between the parties that the last instalment under the first agreement had become due in the year 1980 and the limitation, therefore, would start running from such date. The objections taken by the learned counsel for the defendant No,1, are, therefore, repelled. The plaintiff's claim for mortgage decree is within time and final mortgage decree can be passed subject to the accounts.
ISSUE NO.8:
11. In view of my findings on issues Nos.6 and 7, preliminary decree for accounts in the above stated terms is passed. Mr. Khawaja Muhammad Zahir, Advocate, 223-Al-Abdal, Maneckjee Street, Garden. East, Karachi, is appointed as Commissioner for taking accounts to the extent and in the terms specified hereinabove. The said Commissioner is directed to submit his report within one month from today. The Commissioner's fee is tentatively fixed at Rs,25,000 which shall be paid to him directly by the plaintiff to be accounted towards the bill of costs.
12. No relief is claimed in the proceedings against the defendant No,2 nor has any case been made out there against. Consequently, the suit against defendant No,2 is dismissed.