1. ' The two applications have been filed seeking leave to defend the proceedings which are filed for recovery of lease rental amounting to Rs,34,364,400.00 along with Late Payment Charges and for possession of three diesel power generating sets referred as the leased property. The facts leading to filing of present proceedings, briefly stated, are that the defendant No,2, a banking company, had undertaken to extend financial facility to the defendant No,1 for putting up textile manufacturing unit. Since the defendant No,2 could not, in law, grant financial facility directly to the defendant No,1 for import of the power generating sets, by way of tripartite arrangement, it was agreed that the plaintiff would receive finance from defendant No,2 for acquiring the power generating' sets for being leased out to the defendant No,l. A lease agreement, dated 30th December, 1992 was, accordingly, executed between the plaintiff and the defendant No,1 wherein it was acknowledged that the cost of the leased property was Rs,27,287,982.00. The parties further agreed to pay lease rentals in 20 instalments, in all amounting to Rs,47,219,984.00. Out of the said amount, the defendant No,1 paid the 1st eight instalments amounting to Rs,12,855,584.00. The lease was to continue for five years and according to the plaintiff, the defendant No,1 has failed to pay the balance amount of rentals which comes to Rs,34,364,400.00. On account of the default, as above, the plaintiff served legal notice, dated 22nd September, 1996 on defendants Nos.1, 3 and 4 demanding payment of the lease rentals which had fallen due till before service of notice. After expiry of the period of lease on 30th December, 1997, the present proceedings are filed for recovery of the unpaid lease rentals and for possession of the lease property.
2. ' On behalf of the defendant No,2, Mr. M. Issa Sheikh submits that no relief is claimed against it in the proceedings and the plaintiff has rather acknowledged its liability to make payment of the amount of finance granted by the defendant No,2. The averments contained in the plaint show that the plaintiff while acknowledging its liability to make payment to the defendant No,2, has referred to Suit No,589 of 1997 filed against it by the defendant No,2. The rights and liabilities of the plaintiff and defendant No,2, inter se, are thus subject-matter of another proceedings and can, more appropriately, be examined therein. The learned counsel for the plaintiff concedes that no relief has been sought in the proceedings against defendant No,2. The application for leave, filed by the defendant No,2 is therefore, disposed of in the afore-stated terms.
3. ' As regards defendant No,1, Mr. Mirza Rafiq Baig submits that his client has been paying Rs,600,000 per month to the plaintiff towards the arrears of lease, rentals. It is further urged that the lease rentals could not be paid in time on account of law and order situation which had caused heavy losses to the defendant No, 1 . The grounds urged by the learned counsel for defendants Nos.1, 3 and 4 hardly make out a case for grant of leave. Indeed, the liability to make payment of the arrears of lease rentals has not been disputed.
4. ' Next the claim for penalty and _liquidated damages has been disputed. I have considered the plaintiffs claim for penalty and liquidated damages in later part of this order and find the plaintiff disentitled to either claim. Hence, no case for grant of leave on this ground, can be maintained. It is further the contention of the learned counsel for defendants Nos.1, 3 and 4 that the plaintiff had availed financing facility from the defendant No,2. For extending the leasing facility to the plaintiff.
5. The plaintiff had to pay mark-up at the rate of 17.16% to the defendant No,2 whereas it had claimed markup from the, defendant No,1 at the rate of 21.52%. The last-mentioned contention, again, hardly justifies grant of leave since the amount of rental was specifically settled under the lease agreement, dated 30th December, 1992 and in the absence of any allegation, affecting the validity of contract itself, no cavil can be had against what is agreed between the parties. The application for grant of leave filed by the defendants Nos.1, 3 and 4, in the circumstances, dismissed.
6. ' I have taken up consideration of the plaintiffs case as a result of dismissal of the application for grant of leave. Under schedule to the lease agreement, the amount of rental payable by the defendant No,1 is specified. The total amount of rental, as already observed, was agreed at Rs,47,219,984.00. Out of the said amount, the defendant No,1 had admittedly paid a sum of Rs,12,855,584.00. The balance amount of Rs,34,364,400.00 has to be paid by the defendant No,1 to the plaintiff. The defendants Nos.3 and 4 had executed personal guarantee to secure payment of lease rental by the defendant No,1 in accordance with the agreement, dated 30th December, 1992.
7. The defendants Nos.1, 3 and 4 are, therefore, liable to pay the balance amount of lease rentals which comes to Rs,34,364,400.00.
8. ' The plaintiff has further claimed Late Payment Charges in the sum of Rs,12,501,510.00. Mr. Arshad Mohsin, appearing for the plaintiff, has referred to Clause 2.02 of the agreement to substantiate the claim for Late Payment Charges. The above-referred Clause 2.02 contained in the lease agreement is as follows:-- "2.02. LESSEE agrees to pay the MODARABA a penalty of Rs,100.00 per day on all sums not paid by the LESSEE to the MODARABA when due and payable under the provisions of this agreement. The amount recovered as penalty shall not form part of the income of the MODARABA but shall be maintained in a separate account by the MODARABA to be utilized for charitable and religious purposes recognized by 'Sharia'. The said amount and the disbursement thereof shall be specifically audited and certified by the Auditors of the MODARABA along with other accounts of the MODARABA."
9. ' The Late Payment Charges have been levied by way of penalty for _nonpayment of the lease money on due dates. The claim for any penalqror damages cannot be C upheld in the absence of specific averment about the loss suffered by the plaintiff by virtue-of section -73 of the Contract Act. The plaintiff has not even made an assertion about any loss suffered by it on account of delayed payment of lease money and therefore the claim for Late Payment Charges is declined.
10. The plaintiff further sought decree for possession of the leased property. Under the provisions- of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, a banking company can file proceedings against a borrower or a customer if default is committed in fulfilment of any obligation with regard to any loan or fiance. The plaintiff is a banking company in terms of the definition contained in section 2(a) of the said Act. The learned counsel for the plaintiff was, therefore, asked if an obligation is created under the lease agreement, dated 30th December, 1992 for redelivery of the leased property to the plaintiff upon expiry of the lease period. The answer is in the negative. It seems that in the given circumstances of the case, the provision for return of the leased property was intentionally omitted from the lease agreement. This Court therefore, cannot grant any relief which does not flow out of the financing agreement. Mr. Arshad Mohsin, alternatively, submits that by virtue of Article XI of the lease agreement, upon termination of lease by the plaintiff, the defendant No,1 was obliged to return the leased property. Under the said Article of the lease agreement, termination was visualized on account of specified eventualities alone. The termination contemplated under Article XI of the lease Agreement does not include expiry ef-the lease by efflux of time. The plaintiff, therefore, not entitled to return of the leased property under Article XI of the -lease agreement upon expiry of the term of lease. The plaintiff's remedy evidently, lies elsewhere. Similarly, the contention of Mr. Arshad Mohsin that lease was terminated through legal notice, dated 22-9-1996 is misconceived since the notice had merely contained demand for past lease rental,' In any event, the plaintiff's this contention, if accepted, would displace its case for recovery of any rental beyond the date of said notice.
11. ' In the circumstances, the plaintiff has not been able to make out a case for restoration of the leased property in the present proceedings. The plaintiff's suit, therefore, , is decreed against the defendants Nos.1, 3 and 4 jointly as well as severally in the sum of Rs,34,364,400.00 with mark-up at the rate of 21.5% per annum from the date of institution of suit till payment. The plaintiff shall also be entitled to proportionate costs. No relief having been sought against defendant No,2, the suit in.
12. Relation to it, however, is dismissed.