1. ' This is an application for leave under section 9(4) and section 10 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997. The claim in the present suit is based on two finances namely the Running Finance Account which was granted through agreement, dated 22nd February. 1994 in the sum of Rs,5 million. The purchase price under the agreement was settled at Rs,6.552.500. The Plaintiff had, however, agreed to pay back to the 'defendant No, 1 a sum of Rs,567,000 by way of incentive in the event of repayment on time. It is the case of the plaintiff that the amount of finance was actually disbursed on 1st January, 1994 and the repayment of the purchase price was due on 31-12-1994. The other transaction between the parties is based on 14 Trust Receipts and the total amount availed thereunder is Rs,8,958,539. The mark-up in relation to the amount of Trust Receipts was agreed to be paid for 45 days. Under such account, admittedly, a sum of Rs,815,736 has been repaid. The learned counsel for the plaintiff, at the very outset, under instructions, has stated that he claims the principal amount under the two accounts with mark-up for the agreed period at the agreed rate subject to adjustment of the amount repaid by the defendant No, 1 .
2. ' Mr. A. Aziz Khan, in support of the application, has argued that the plaintiff has inflated its claim merely in order to bring the matter within pecuniary jurisdiction of this Court; the defendant No,1 had filed Suit No, 1090 of 1997 on the original side of this Court seeking, amongst others, declaration that the defendant No, 1 was entitled to continue availing the finance and for injunction to restrain the plaintiff-bank from making incorrect entries in the accounts of defendant No, 1 besides claim for rendition of accounts; on an application for interim injunction, in the above-referred suit, the parties had been directed to maintain status quo; the five documents mentioned in para. 6 of the application had been obtained blank and were unauthorisedly filled up; and, the defendant No,8 had died on 25-8-1993 and the proceedings against him were incompetent.
3. ' Elaborating his submissions, Mr. A. Aziz Khan has pointed out that the total principal amount allegedly outstanding against the defendant No,1 comes to Rs,14,011,322.59 and even by adding mark-up thereto for the agreed period, the total claim amount falls far below the pecuniary jurisdiction of this Court. The objection raised by Mr. Aziz Khan in relation to the pecuniary jurisdiction of this Court, in my view, is not tenable. The plaintiff has made a claim of Rs,30,015,102.61 in the plaint and has given break-up of the figure also. The plaintiff is a banking company and had preferred claim on the basis of outstanding amount shown in the Books of Account and Ledgers.
4. The refusal by the Court to allow portion of the claim cannot take the matter out of the'' pecuniary jurisdiction and the statement made by the learned counsel for the plaintiff, today in Court, giving up portion of the claim is due to the observation consistently made by this Court, disallowing grant of liquidated damages and mark-up for the cushion period. Moreover, it is the prerogative of the plaintiff to value his or its claim. What is to be seen, in the circumstances, is if any prejudice has been caused to the other side on account of institution of the present proceeding before this Court.
5. The proceedings under the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 instituted before this Court or before the Banking Courts are tried in accordance with the procedure prescribed under the said Act and no prejudice is caused to any party if a case is instituted before this Court or the Banking Courts. It is merely for the purpose of convenience that pecuniary jurisdiction is prescribed. 'Mr. A. Aziz Khan has not been able to show as to what prejudice has been caused to the defendant on account of entertainment of the present proceedings by this Court in exercise of jurisdiction under Act XV of '1997. The said objection, therefore, is repelled. As regards the proceedings filed by the defendant No,1, being Suit No,1090 of 1997, suffice to observe that the parties in the two suits are different and the principle of res subjudice cannot be attracted to the present case. In any event, the provisions of section 10, C.P.C. Have specifically been made inapplicable to the proceedings filed under Act XV of 1997. In the circumstances, filing of Suit No, 1090 of 1997 can in no way, bar proceedings in the present matter. As regards. The ad interim order passed in Suit No, 1090 of 1997, such order has to be read in the context of prayer made in the application for interim injunction. I have been shown the application for interim injunction, filed in Suit No, 1Q90 of 1997 by the plaintiff, which is as follows:- ' "It is humbly prayed on behalf of the plaintiff herein abovenamed that for the reasons stated in the accompanying affidavit, this Hon'ble Court may graciously be pleased to grant interim injunction restraining the defendant bank from interpolating and manipulating the FATR/RF(OD) accounts of the plaintiff with the defendant bank by making illegal, mala fide and incorrect debit entries therein arbitrarily and without lawful authority both regarding principal amount as well as the mark-up and liquidated damages etc. Contrary to law, till disposal of the present suit to meet the ends of justice and prevent abuse of process of the Court."
6. ' The above prayer, in no manner whatsoever, prohibits the plaintiff from proceeding with the present matter. The order of status quo passed on the said application. In any event, cannot be termed as an injunction restraining/staying the present proceedings. The learned counsel for the 'defendants contends that on account of the status quo order passed on 5-9-1997 in Suit No,1090 of 1997, the plaintiff-bank cannot add to or interpolate entries in the statement of account after what was stated by it in the letter, dated 31st July, 1997. The defendants have, however, failed to point out if the plaintiff has committed any interpolation, as alleged. In the circumstances, the objection based on the order of status quo, passed in Suit No, 1090/1997, is also without substance, hence rejected.
7. ' The next objection raised by Mr. Aziz Khan to the effect that the five documents mentioned in para.6 of the application, namely, Promissory Note, Agreement for Financing, Letter of Hypothecation, Facility Letter and Power of Attorney show the outstanding amount against the defendant No,1 as Rs,65,52,500. According to the learned counsel for the defendant such documents are all dated 22nd February, 1994. Mr. A. Aziz Khan contends that the sale price between the parties having been agreed as Rs,5 million on 22-2-1994 could not have turned into a liability for repayment of Rs,6,552,500 immediately upon disbursement. The argument of the learned counsel is negative by the basic principles of grant of finance under the mark-up system. Under the mark-up based transactions, a customer agrees to sell its stock or goods to the banking company for the amount of finance which is termed as sale price and immediately agrees to purchase the same stocks/goods for a price which is determined upon addition of mark-up to the sale price for the agreed period. The marked-up price is normally referred as the purchase price. In the present case. Too, upon grant of finance in the sum of Rs,5 million, the purchase price was settled between the parties at Rs, 6,552,500 and the various documents including the Promissory Note, Letter of Hypothecation, Facility Letter and Power of Attorney were executed for repayment of the abovementioned purchase price. Such procedure adopted in the present case, was quite lawful and the defendants, cannot object thereto.
8. ' As to the last contention of Mr. A. Aziz Khan that the proceedings against Defendant No,8, who had expired on 25-8-1993, are incompetent, the present suit having been filed on 24-1-1998, Mr. Zubair Qureshi, appearing on behalf of the plaintiff, in view of the said position which he has not been able to rebut, submits that he does not press his claim against defendant No,8 who may be deleted from the array of the defendants. In view of the plaintiff having given up claim against defendant No,8. As above, the last objection urged by Mr. A. Aziz Khan also loses force.
9. The application for leave to defend, thus, has not raised any serious or bona fide dispute and is accordingly dismissed.
10. ' As a consequence of the dismissal of application for leave to defend, the contents of plaint are to be deemed to have been admitted. I have proceeded to examine the plaint and the documents filed in support thereof. The signatures on the various documents filed alongwith the plaint have not been disputed or I denied. The claim to mark-up for the cushion period, the liquidated damages and mark-up for the period beyond contract, having been given up. The plaintiff's suit is decreed against defendants Nos.1 to 7 and 9 jointly as well as severally in the sum of Rs, 14,422,966.59 with mark-up at the rate of 20% per annum from the date of institution of suit till its payment. The plaintiff's suit is also decreed for sale of the property mortgaged by defendant No,9 being land with building bearing Survey No,28/II-E, Survey. Sheet No, P.2 (Old Survey No, P.0.35, Survey Sheet A-21), Sarafa Bazar, Napier Quarters, Karachi, measuring 161. 8 Sq. Yards or thereabout for recovery of the said decretal amount or such portion thereof as may be necessary. The plaintiff's suit is also decreed -for sale of hypothecated goods of defendant No,1 with costs of the proceedings.