1. ' This is an application under section 10 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997.
2. ' It is the case of the plaintiff that a sum of Rs,8,35,12,87,450 is due and payable by the defendant No,1. Defendants Nos.2 to 8 have been stated to be guarantors of the finance availed by the defendant No,1. The plaintiffs in their suit claimed that the defendant No,1 requested the plaintiff- bank for a sanction of running finance and export finance amounting to Rs,100 million, which was granted earlier in time but was renewed from time to time. The last renewal was by a letter of sanction approved by the Credit Committee on 3-1-1995 vide Memorandum dated 24-11-1994. The grant sanction was in respect of renewal with reduction of existing finance. The total amount, therefore, approved limit granted was Rs,100 million. According to Mr. Rizwan Ahmed Siddiqui this facility was utilized as a running finance which also includes export finance. The mark-up allowed was Re.0.48 per thousand per day and for export refinance 13% per annum.
3. ' This application had been argued more than once. The questions that had arisen were:
(a) Whether a renewal is valid in law?
(b) Whether the rate of mark-up charged on the export finance was proper and could have been charged in law?
(c) Whether mark-up in respect of running finance could be charged?
(d) Whether the export proceeds against bills under collection once received amounting to repayment of the liability? And
(e) Whether such amount was utilized and if so, to what extent?
4. ' Today, a statement has been filed by the plaintiff-bank stating that the bills that were allowed for collection were duly realized and the amount credited into the account. According to Mr. Rizwan Ahmed Siddiqui these amounts were, therefore, reutilized by the defendants. The question is that an agreement entered into being agreement dated 19-12-1995, even if it is deemed not to have been the renewal of the loan amount, paid/disbursed being Rs,100 million only, can interest be charged. This amount of Rs,100 million was in fact, the property of the defendant, on account of. It being the purchase price paid by the plaintiff-bank to the defendant. It is clear from the agreement that the goods that were purchased by the bank were resold to the defendant at a marked-up price of Rs,127.600 million, which was the only amount payable. This stated, notwithstanding the objections raised by the defendant that this agreement has not actually been acted upon as no physical disbursement has been made. According to Ms. Sadaf Yousuf this agreement is only a renewal of the existing facility and a debt, therefore, any mark-up charged on an existing debt is unlawful. The amounts have to be determined and without determination of the amounts which were actually due no decision in the case can be made. According to her in fact, if the amounts are determined it will be seen that the defendant No,1 had overpaid the bank and it is the bank which has to in fact return the money/credit the account.
5. ' It is also important to note that if the defendant had utilized its own money and bills have been sent for collection in respect of hypothecated goods and if the monies have been received this ought to have been utilized by the bank for adjustment of their dues and not for repayment to the defendant No, 1 . If they have allowed repayment to the defendant such amount would not be under any circumstances covered by the agreement on which otherwise also no mark-up can be claimed or charged.
6. 'All these need a detailed investigation and cannot be merely determined from the accounts, ex facie. Vouchers, bills and other similar documents would be required to be produced and detail investigated. For this purpose, and which seems to be a genuine dispute, the application for leave to defend is granted.
7. ' Written statement to be filed within 21 days from today. No further time shall be granted for filing of written statement.
8. ' C.M.A. 2281 of 2000 stands disposed of accordingly.