1. ' Plaintiff has filed the above Suit for recovery of Rs,34,359,000 _against defendant No,1 Company to which it provided finance facilities, inter alia, on the basis of mortgage security furnished by defendants Nos.2 to 4. After service of summons the defendants filed an application for leave to defend the suit under section 10 of the Banking Companies Act, 1997 in which they took several pleas in their defence; however, at the time of argument, Mr. Tasawar All Hashmi, learned Advocate for the defendants, raised only the following two objections:--
(i) Plaintiff has charged Mark-up beyond the agreed period; and
(ii) Plaintiff has claimed Liquidated Damages at the rate of 20 per cent which is contrary to law.
2. As for as predetermined liquidated damages are concerned it is an established law that the Bank cannot charge liquidated damages from its customer even though there may be a clause to this effect in the Agreement unless they adduce evidence to prove the loss suffered by them arising from the breach of contract committed by the customer by not paying the finance/loan or delaying payment of the same (section 74 of Contract Act, 1872). This has not been done. The claim of the Plaintiff is accordingly not tenable in law.
3. ' With regard to the Statement of Account, learned counsel sat down together to resolve the issue of disputed claims during the tea interval and filed a Revised Statement after deleting the Mark-up beyond the agreed period which has been signed by Mr. Imtiaz Memon, Officer of Plaintiff Bank, Mr. Zubair Qureshi, Advocate for the plaintiff and Mr. Tasawar Ali Hashmi, counsel for the defendants agreeing to the Principal Amount owed by the defendants together with Markup due thereon up to the agreed period making a total of Rs,22,980,800. The conduct of both counsel in sitting down and agreeing on correct accounts on the basis of established law is commendable. It is hoped that other counsel shall follow their example.
4. ' Mr. Hashmi, learned counsel for the defendants, however requested that the Court allow payment of the aforesaid amount in instalments as the defendants are under acute financial strain presently. The power of the Court to allow instalments for payment of the dues or show any other indulgence is provided in section 15(2) of the Banking Companies Act, 1997 which reads as under:-- 15(2) Notwithstanding anything contained in subsection (1) if the Court is satisfied that it is not feasible to make a full recovery of a loan or finance by reason of the fact that the security or assets are inadequate and with a view to facilitating recovery and in the best interest of the banking company, it may, on condition that the customer pays the principal amount and such part of the interest or mark-up as has not been remitted-
(a) remit or release part of the interest or mark-up;
(b) allow repayment in instalments. Provided that--
(i) prior to exercising the powers ..Conferred herein the Court shall obtain a detailed and reasoned opinion of the banking company in writing in relation to the above setting out the relevant facts and circumstances:
(ii) in no event shall a write off of interest or mark-up for a period in excess of one year, or the grant of instalments in excess of two years, be allowed without the written consent of the banking company, which consent shall set out in detail the relevant facts and circumstances; and
(iii) a copy of the order shall be forwarded to the State Bank."
5. ' From a bare reading of the above provision it is clear that the Court is empowered to grant the concession of instalments if it is satisfied that it is not possible for the bank to make a full recovery of the loan or finance because the assets or security provided by the customer and/or borrower are inadequate and to facilitate recovery of the bank's dues it would be to the advantage of the bank to allow the customer/ borrower to pay the decretal amount in instalments. This concession must however be granted on the condition that the customer pays the principal amount decreed and then allow payment of interest or Mark-up in instalments or remit or release part of the interest or mark-up. Before exercising such power. It is the duty of the Court to obtain from the banking company a detailed and reasoned opinion in writing stating the relevant facts and circumstances on the basis of which the indulgence may be granted by the Court. The power of the Court is further restricted by another proviso which states that the Court shall not write off any interest or Markup for a period in excess of one years or grant instalments in . Excess o1 two years without the written consent of the banking company which consent shall again specify in detail the relevant facts and circumstances for grant of such concession. Mr., Qureshi, learned Counsel for the plaintiff has pointed out that the properties mortgaged by the defendants with the bank are sufficient to recover the decretal amount and there is no risk whatsoever that the sale proceeds of the mortgaged property would in any way be less than the decretal amount. Mr. Hashmi has not contradicted the statement of Mr. Qureshi. Further, there are no facts on the record of this case which indicate that it would not be feasible for the Bank to make a full recovery of the finance for any reason mentioned in the section or otherwise. It is. Well settled that an authority must exercise its power in accordance with law., The Banking Companies Act, 1997 in section 15(2) prescribes the conditions and limits within which the. Court can exercise the power to grant repayment of finance in instalments and remit or release part of the interest or markup. The factors required to he fulfilled for exercise of this power by the Court under section 15(.22; of the Act have neither been brought on record or contended by Counsel. It is therefore not possible to exercise this power in the present circumstances to grant C the request of Mr. Hashmi to now payment of the decretal amount in instalments. Consequently, the application for leave to defend the suit filed by the defendants is rejected and the plaintiff's Suit is decreed against the defendants jointly and severally as follows:-
(i) Judgment and Decree in the sum of Rs,22,980,800 together with Markup at the rate of 18.98 per cent per annum which is the present rate of Mark-up which the Bank is charging from its customers for similar finance (as agreed by defendant ,counsel) from the date of institution of the suit till date of payment.
(ii) Final mortgage decree for sac of the mortgaged property in satisfaction of the decree
(iii) Costs of the suit
(iv) Keeping in view the present economic situation prevailing in the country, defendants request for some time for payment and, the Counsel's conduct in not wasting the time of the Court by taking frivolous. Defence, I am of the Pinion that it would be in the interest of justice to allow defendants three months time from the date hereof to pay the decretal amount. In case of failure of the defendants to pay the said sum within the period allowed to them the plaintiff shall be at liberty to sell the mortgaged property directly without notice to the defendants or through Court whichever it chooses.