1. This case has come up for consideration of written-statement filed by the defendants Nos.1 and 2.
2. The defendants Nos.1 and 2 while do not dispute availing facilities, have disputed the correctness of the amount claimed by the plaintiff. Such contentions are duly recorded in the last order, dated 9- 3-1998. The plaintiffs have filed detailed statement of accounts which shows that the grievance urged by the defendants Nos.1 and 2 can properly be considered at this stage and it will not be necessary to record evidence in the matter after settlement of the issues. Since no serious questions have been raised on behalf of the defendants Nos.1 and 2, the pleas urged by them in the reply-statement are rejected. As a result of rejection of the pleas, the contents of the plaint are deemed to have been admitted and the plaintiff's suit is to be decreed. However, I have proceeded to consider the merits of the claim. Preferred by the plaintiff The claim in this suit is based on Financing Agreements, dated 4-9-1985 and 24-7-1986 whereby the plaintiff had agreed to grant financing to the extent of Rs,40 million to the defendant No,
1. The agreements are based on Sanction Advice, dated 22nd August, 1985, whereby various facilities to the extent of Rs,80 million were granted. The plaintiff's further case is that the Finance Agreement, dated 4-9-1985 related to the facilities of FABP /FBP on Account Import L/C and Local L/C. The facilities were renewed through Financing Agreement, dated 24-7-1986, whereby the renewal of the same limit as contained in the agreement, dated 4-9-1985 was maintained. The buy-back price was agreed between the parties as Rs,48 million. As security for repayment, the defendants Nos.2, 3 and 4 had executed Letters of Guarantee besides execution of Memorandum of Deposit of Title Deeds, Promissory Note and the Letter of Hypothecation by the defendant No,1 . It is an agreed position between the parties that the NICF facility granted by the plaintiff is subject-matter of Suit No,1426 of 1997 pending before this Court. The claim in this suit is based on three Foreign Bills for a sum equivalent to Rs,9,906,169 and mark. up on various instalments of PADs for the period from 12-2-1987 to 25-7-1987. Besides, the plaintiff has also claimed recovery of instalments relating to NIDF facility amounting to Rs,3,647,344. The further claim of plaintiff is for Rs,1,561 as Central Excise Duty and mark-up for the post-contract period inclusive of the cushion period. The plaintiff also claimed 20% of the amount claimed, as above, on account of liquidated damages. The prayer contained in the plaint is as follows:-- "(a) in the sum of Rs,50,868,512.95 against the defendants Nos.1, 2, 3 and 4 jointly and severally with mark-up at the rate of 20% per annum from the date of suit till payment;
(b) decree for sale of hypothecated goods, with an order that the sale proceeds thereof be adjusted against the decretal amount;
(c) a decree for sale of the mortgaged property with the order for adjustment of decretal amount from sale proceeds thereof which remains as balance on payment to the defendant No,5;
(d) costs of the suit, and on any other relief/s which this Honourable Court might deem meet proper under circumstances of the case."
3. After the hearing on 9-3-1998, the plaintiff has filed detailed statement of accounts alongwith copy of Sanction Advice, dated 22nd August, 1985. On the basis of contentions urged by Mr. Muhammad Saleem and after going through the record, I have found that a sum of Rs,9,906,169 is outstanding against the defendants being the amount of three foreign bills. The plaintiff has not claimed any mark-up on the amount of foreign bills and it is stated by Mr. Muhammad Sadiq Khan that the amount of mark-up on the foreign bills was transferred to HICF account which is subject-matter of Suit No,1426 of 1997.
4. As regards the claim for mark-up on PADs for the period from 12-2-1987 to 25-7-1987, it is contended by the learned counsel for the defendants Nos.1 and 2 that there is no agreement between the parties for levy of mark-up and, therefore, the same cannot be charged. Mr. Muhammad Sadiq Khan has pointed out that the mark-up in relation to PADs has been charged on the basis of the Financing Agreements, dated 24-7-1986, which had substituted the earlier agreement, dated 4-9-1985. It is further explained that the principal amount under the PADs was repaid by the defendant No,1 and the amount of mark-up is covered by the abovereferred agreement, dated 24-7-1986 which relates to the facilities of FABP, Import L/C and Local L/C. It is, however, conceded that there is no specific agreement between the plaintiff and defendant No,1 for charging mark-up in relation to PADs. In view of such position, the plaintiff is not entitled to charge mark-up on the PADS and the claim is disallowed.
5. As regards the NIDF instalments, it is pointed out by Mr. Muhammad Saleem that the plaintiff had filed Civil Suit No,100 of 1993 before the Banking Tribunal No,II at Karachi for recovery of a sum of Rs,43,846,275 in relation to the NIDF account. It is urged that the NIDF facility was regulated under agreement, dated 30th December, 1986, between the parties and the buy-back price was agreed at Rs,37,485,012 thereunder. The plaintiff's claim in the abovereferred suit was in excess of the above-referred buy-back price and was, therefore, decreed on 27-11-1993 for the entire buy-back price with costs. The buy-back price included the entire amount disbursed under the agreement, dated 30-12-1986 and the mark-up thereon settled between the parties. According to the learned counsel, the grant of claim in relation to the NIDF instalments, besides being barred by Order II, Rule 2, C.P.C. shall result in awarding markup in excess of the purchase price stipulated under the agreement, dated 30-12-1986. Mr. Muhammad Sadiq Khan submits that the amount claimed as arrears of NIDF instalments, though forming part of agreement, dated 20-12-1986, had been transferred by the plaintiff to the NICF account, and therefore, was not included in the claim preferred in Suit No,100 of 1993. It is urged the inclusion of the sum of Rs,3,647,344 in the amount claimed in Suit No,100 of 1993 would have further increased the claim therein. I am afraid the explanation offered by the plaintiff is not tenable. Even by including the NIDF instalments, now claimed, in Suit No,100 of 1993, the plaintiff could not have got a decree in excess of the purchase price settled through agreement, dated 30-12-1986. The plaintiff has merely sought to circumvent the judgment and decree passed in Suit No,100 of 1993 by including the NIDF installments in the present case. The plaintiff, therefore, is not entitled to the amount of Rs,3,647,344 claimed by way of arrears of NIDF instalments. As regards claim of mark-up for the period beyond contract period and for the cushion period, suffice to observe that the Islamic System of Banking visualizes charging markup only for the period of contract and nothing more. The mark-up for cushion period is granted to compensate the Financing Institution for the period consumed in litigation.
6. However, by virtue of section 15 of Act XV of 1997, mark-up is to be granted from the date of institution of the suit, and therefore, grant of mark-up for cushion period shall result in allowing mark-up in duplicate. As regards claim for liquidated damages, the same, too, cannot be granted in view of the dictum laid down in Habib Bank. Limited v. Messrs Farooq Compost Fertilizer Corporation Limited and 4 others 1993 M LD 1571. The defendants Nos.3 and 4 have not defended the suit whereas the defendant No,5 is a pro forma defendant being holder of pari passu charge over the mortgaged property. Resultantly, the plaintiff's suit is decreed against the defendants Nos.1 to 4, jointly as well as severally, for a sum of Rs,9,906,169 with mark-up at the rate of 20% from the date of institution of suit i,e, 15-2-1995 till payment. The plaintiff shall also be entitled to decree for sale of the hypothecated goods and the mortgaged property subject to the rights of defendant No,5, besides the costs of the proceedings.