' NAJAM-UL-HASSAN KAZMI, J.--This is first appeal under section 21 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, against the judgment and decree, dated 24-6-1998, of Banking Court, Lahore.
2. Respondent filed a suit for recovery of Rs,16,07,725, as on 12-1-1998 through attachment of the leased machinery and equipment. It was claimed that the appellant was allowed lease of complete stitching machinery, 110 KVA/88 KW generating set and office equipment against lease amount of Rs,19,46,750 which was repayable in 36 instalments of Rs,66,969 each. The appellant executed personal letter of guarantee, demand promissory note, D.P. Trust receipt, acceptance receipt and other documents to secure the claim of the respondent-company. The respondents maintained that appellant paid 20 instalments but failed to pay 15 rentals due from 7-11-1996 to 7- 10-1998, the cheques issued by the appellants were dishonored and that the amount outstanding was not cleared despite reminders. In this back-drop the respondent claimed recovery of its dues.
3. Show-cause notices were issued to the appellant through modes prescribed in law. The appellant filed petition for leave to defend the suit. After considering the points raised, the learned Judge, Banking Court did not find any ground for allowing leave to defend as it was observed that the appellant had not denied availing of facility and had also admitted the execution of various documents securing repayment of the amount while the objections raised were found to be untenable. The learned Judge, Banking Court allowed decree to the extent of Rs,10,04,535, with costs, with the right to respondent to realize the future rentals from 21-1-1998 till the decision of the suit. The decree further provide that in case of failure on the part of appellant to reimburse the amount leased machinery within 10 days the receipts would be entitled to the agreed lease rentals till the delivery of possession of the lease machinery.
4. Feeling aggrieved by the decree, dated 24-6-1998, the appellant has filed the present appeal.
5. At the time of preliminary hearing, learned counsel for the appellant pointed out that he was not challenging the decree but his only objection was that the Court having denied' liquidated damages should have allowed adjustment of Rs,2,50,000 already received by the respondent, towards satisfaction Of the claim under the decree.
6. As the learned counsel for parties supplied copies of pleadings and also the relevant documents forming part of the record of the Trial Court, therefore, the appeal was heard on the existing record.
The case was adjourned for today, to enable learned counsel for the respondent to 'verify if any payment had been made by the appellant which was yet to be adjusted towards the decretal amount.
7. Learned counsel for the respondent, after seeking instructions from the respondent has placed on record copy of the statement of account and maintained that the amount of Rs,250,000 was paid by the appellant much before the institution of the suit which was adjusted towards partial satisfaction of the claim of respondent-company and after giving due credit to the said amount in the account of the appellant, the balance outstanding was claimed in the plaint. It was added that even in the past the appellant committed default and did not make timely payment of the monthly rental which attracted the penal clause. The respondent-company, did adjust the entire amounts received from the appellant and claimed for the balance which was outstanding at the date of the suit. Learned counsel added that though the claim of the bank in the plaint was of Rs,16,07,725 yet the learned Judge, Banking Court allowed decree for a sum of Rs,10,04,533 with a right to recover future rentals, after 21-1-1998 till the date of decision of the suit by Banking Court.
8. Learned counsel for the appellant' submitted that the previous deposit of Rs,250,000 could not have adjusted against the claim for overdue rentals, before the filing of the suit and its adjustment should have been allowed in the future liability.
9. We have given our anxious consideration to the submissions made by learned counsel for the parties.
10. The perusal of the available record makes it obvious that the initial claim of the bank was Rs,19,46,750 which was inclusive of Rs,5,36,221 as surcharge on other rentals. The Banking Court did not allow the surcharge on the overdue rental and allowed decree for a sum of Rs,10,04,535. The grant of facility was not disputed, execution of the documents were not denied, liability to reimburse 36 rentals was not in issue, the fact that only 20 rentals was paid was also not in issue and, therefore, learned Banking Court was justified in concluding that no case made for leave to appear and defend the suit. The decree was granted for the admitted claim against the remaining 15 rentals to which no exception can be. Taken. As regard the argument the alleged sum of Rs,250,000 paid before the filing of the suit should have been adjusted towards the future 15 rentals, the same is untenable. Reason being the creditor has a right to adjust the amount received against any part of the claim. In this case the appellant has been consistently committing default in payment of monthly rental which attracted penal clause. On receiving the amount of Rs,250,000 the respondent adjusted it towards partial satisfaction of the claim and after giving due adjustment, prayed for the balance outstanding against the 15 rentals. In this way, it was a past and close transaction. Unless the appellant claims to have paid any amount after the institution of the suit, he could not ask for the reimbursement of an amount which was paid before the institution of suit and had already been adjusted in the statement of account. The respondent could not be asked to release the amount already adjusted and to adjust it towards the future liability of the appellant. The submission being without substance is repelled.