CH. IJAZ AHMAD, J. - This RFA is directed against the judgment and decree of the Judge Banking Court, whereby the suit of the plaintiff/respondent has been decreed in his favour vide judgment and decree dated 18.10.1999.
2. Brief facts out of which the present RFA arises are that the appellant obtained loan amounting to Rs. 12,00,000/- from the respondent bank vide agreement dated 22.4.1996. The appellant failed to discharge his liability in terms of the agreement, therefore, the respondent bank filed a suit for recovery of Rs. 15,06,070/- before the Banking Court on 2.4.1999. The appellant filed an application for leave to defend which was refused and the suit of the respondent bank was decreed vide impugned judgment and decree dated 18.10.1999; hence this appeal.
3. The learned counsel for the appellant argued that the impugned judgment and decree is not sustainable in the eyes of law as the suit was not filed by the competent person i.e. Zahid Aftab is not competent to file the suit on behalf of respondent bank, therefore, the plaint is liable to be rejected by virtue of Section 9(4) of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997; further argued that the stamp on the plaint does not reveal Zahid Aftab was branch manager at the time of the filing the suit; further argued that Shahzad Naqvi has given power-of-attorney to said Zahid Aftab, while Board of Directors have not authorized Zahid Aftab to file the suit; further argued that Clause I of the agreement reveals that appellant obtained loan from respondent bank only Rs. 12,00,000/- whereas the statements of accounts reveals otherwise amounting to Rs. 13,07,000/-; further argued that the appellant has already paid Rs.6,64,000/- to the respondent bank and the remaining principal amount is i.e. Rs.6,63,000/- while decree has been passed for an amount of Rs.15,06,070/-; further argued that earlier suit was filed by respondent bank and the plaint was returned, but its effect has not been considered in the impugned judgment and decree; further argued that appellant did not file second suit with the permission of the Banking Court and did not affix the Court-fee and utilized the Court-fee already fixed in the earlier suit but this fact was not considered by Banking Court; further submits that agreement was cancelled between the parties; as is evident by notice issued by respondent bank to the appellant on 5.5.1997; thus respondent bank is not entitled to any mark-up after 5.5.1997; further argued that the action of the respondent bank is not correct as the appellant has deposited Rs.1,00,000/- to respondent bank on 29.6.1998 but this fact was not considered by the Banking Court; further argued that by virtue of para 20 of the finance agreement the appellant has to pay mark-up for one year only which comes to Rs.2,87,000/-, therefore, the judgment of the Banking Court is result of mis-reading and non-reading of the record; further argued that judgment of the banking Court is not in accordance with law laid down by the superior Courts; reliance is placed- upon the reported judgments 1999 C.L.C. 1374 (United Bank Limited Vs. Central Cotton Mills Limited and others) PLD 1998 Karachi 199 (United Bank Limited Vs. Messrs Novelty Enterprises Ltd. And others). Further argued that Section 15 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 is against the Injunctions of Islam.
4. On the other hand the learned counsel for the respondent bank argued that the suit was filed by the competent person as is evident from the memorandum of the parties mentioned in the plaint i.e. Respondent bank has filed the suit through Zahid Aftab Branch Manager; he was duly authorized by the competent authority to file the suit; further argued that para 3 of the power-of- attorney clearly reveals that Zahid Aftab was competent person to file the suit; further argued that Banking Court was justified to grant mark-up to the respondent bank and the title of the agreement clearly reveals as such:- "Agreement for financing on mark-up basis secured by mortgaged."
Further argued that para 4 of agreement reveals that for the facility of loan amounting to Rs.
12,00,000/- the appellant has to pay mark-up to the respondent bank at the rate of 60 paisas per thousand per day for the period during which the re-purchase price or any part thereof remains unpaid except that in the event the State Bank of Pakistan raises the maximum rate of mark-up chargeable for provision of such financing facilities, the bank reserves the right upon seven days written notice to the customer to correspondingly increase the aforesaid rate of mark-up payable on the respective re-purchase of assets by the customer and such revised rate of mark-up shall applicable on a daily product basis; further argued that by virtue para 20 of the finance agreement the agreement automatically stands renewed after one year for further successive terms; further argued that appellant did not deny qua availing of loan facility and the property of the appellant is still mortgaged and original documents of the property of the appellant are with the respondent bank; further argued that the respondent bank sent notice to the appellant on 5.5.1997 and appellant in response thereof deposited Rs.2,78,000/- on 22.11.1997; this fact clearly reveals that the relationship of the appellant and bank remains governed by the finance agreement executed between the parties; further argued that the judgment of the Banking Court is in accordance with law as the principle laid down by the superior Courts in the reported judgment P.L.D. 1998 Kar. 302 (National Bank of Pakistan Vs. Punjab Building Products Ltd.) Further argued that the judgments cited by the learned counsel for the appellant are distinguishable from the facts and law as para 20 of the agreement clearly authorized the respondent bank to charge mark-up from the appellant, as after the expiry of one year the agreement automatically stands renewed for the.
Further successive year.
5. The learned counsel for the appellant exercising his right of rebuttal argued that respondent bank fixed the stamp on the plaint which does not reveal that Zahid Aftab is manager and Shahzad Naqvi could not authorize Zahid Aftab to file a suit as delegatee cannot delegate further; further argued that the appellant did not receive any penny from the respondent bank after 5.5.1997 and the appellant has deposited the part of the balance amount to the respondent bank on 22.11.1997.
6. We have given our anxious consideration to the arguments of the learned counsel for the parties and have perused the record ourselves; the first objection by the learned counsel for the appellant that the suit was filed by the incompetent person as Zahid Aftab was not authorized by Board of Directors of respondent bank, It is better and appropriate to reproduce the memorandum of parties of the suit to resolve the controversy between the parties:- "Citi Bank N.A., a banking company within the meaning and scope of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 having one of its office at 14 Kashmir (Egerton)) Road, Lahore acting through Mr. Zahid Aftab, Manager and duly authorized Attorney of the Bank Vs. Muhammad Ramzan s/o Fazal Din, H.N. 673, Sector A-l, Lhr.
Mere reading the aforesaid memorandum of parties which clearly reveals that respondent bank filed suit through Zahid Aftab Manager which is in accordance to Section 9(4) of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997. It is pertinent to mention that legislature has specifically mentioned branch manager in Section 9(1) of the aforesaid Act. Mere the respondent bank affixed the stamp of suit banker does not reveal at all Zahid Aftab is not branch manager, while it has so specifically mentioned in the memorandum of parties by the respondent bank that Zahid Aftab is bank manager who filed the suit as such, In this view the suit was properly instituted by the competent person, the other contention qua the .Same proposition of law that Shahzad Naqvi was not competent to appoint Zahid Aftab as attorney has no relevancy as mentioned above. According to Section 9(1) of the Banking Companies Act the suit can be filed by Manager or by any officer authorized by Board of Directors.
7. The second contention of the learned counsel for the appellant that respondent bank is not entitled for markup after one year is not sustainable in the eyes of law as is evident from para 20 of the agreement executed between the parties. To resolve this controversy it is better and appropriate to reproduce the relevant clauses of agreement executed between the parties i.e. Clauses 4 and 20 of the agreement and title of the agreement.
"Agreement for financing on mark-up basis secured by mortgage."
Clause 4 The mark-up payable on respective repurchase of the assets by the customer shall be calculated at the rate of paisas 60.00 per Rs.1000/- (Rupees one thousand) or part thereof per Diem on the amount of the price remaining to be paid by the customer to the bank and shall be determined on a daily produce basis for the period during which the repurchase price or any part thereof remains unpaid except that in the event the State Bank of Pakistan raises the maximum rate of mark-up chargeable for provision of such Financing facilities the Bank reserves the right upon seven (7) days written notice to the customer, to correspondingly increase the aforesaid late of mark-up payable on the respective repurchase of assets by the customer and such revised rate of mark up shall be app. Compute on a daily produce basis as aforesaid commencing from date of expiry of such seven (7) days notice period, the amount of the repurchase price remaining to be paid by the customer to the bank for the Un-expired term of this agreement provided that in the event the customer fails to pay to the bank the re-purchase price by the expiry of the term of this agreement or earlier on demand being made by the bank for payment of the repurchase, the mark-up payable by the customer shall be calculated at the rate of 54.75 paisas (fifty- four point seventy- five paisas) per Rs.1000/- (Rupees one thousand) or part thereof per Diem or such higher maximum rate as may be specified by the State Bank of Pakistan from time to time for provision of finance on the basis of mark-up on price."
Clause 20 The term of this Agreement shall be for a period of twelve months from the date hereof and unless the Bank gives written notice to the customer (by serving such notice at the address of the first named customer here above) to the . Contrary or otherwise demands payments of any outstanding repurchase price hereunder prior to the expiry of the term thereof, such term will be automatically renewed for further successive terms of 12 months or such period as the bank may specified unless earlier terminated by the bank."
Mere reading the aforesaid paragraphs of the finance agreement clearly reveal that agreement is automatically renewed by virtue of para 20 of the finance agreement unless and until the same is terminated by the respondent bank. The appellant failed to bring on record any document to show that Finance agreement was terminated between the parties. The learned counsel for the appellant has relied upon the notice dated 5.5.1997 sent by the respondent bank to the appellant for discharge of liability; hence this cannot be treated as termination of Finance agreement; even otherwise the contention of the learned counsel for the appellant has no force as the appellant has deposited Rs.2,78,000/- after the notice on 22.11.1997, this fact brings the case in the area that the agreement was not terminated between the parties. The appellant is estopped to resile from the terms of the agreement by virtue of his conduct on the well-known principle of approbate and reprobate; in arriving to this conclusion we are fortified by the rules contained in the reported judgment of Ghulam Rasool's case (PLD 1971 S.C. 376). The judgments cited by the learned counsel of the appellant is distinguished on facts and law as the judgments related to the L.C. In which there is no provision of the agreement as in the present case in view of para 20 of the agreement which clearly reveals that the agreement automatically renewed until and unless the same was terminated by respondent bank. Similarly the contention of the learned counsel of the appellant that Section 15 is against the Injunction of Islam has no force by virtue of Article 203-G of Constitution qua the same relief. The appellant has alternate remedy to agitate the matter before the. Federal Shariat Court. The Hon'ble Supreme Court of Pakistan has held that no doubt interest/Ribaa is un-islamic but past and closed transaction are not to be opened; it is admitted fact that agreement was executed between the parties before the judgment of the Supreme Court of Pakistan, It is settled proposition of law that judgment has prospective effect and not retrospective effect. The respondent bank claimed Rs.12,82,765/- from the appellant vide legal notice dated 5.5.1997 and the suit was filed by the respondent bank on 2.4.1999, wherein the respondent bank claimed amount Rs.15,00670/-, which automatically stood increase by adding mark-up between the intervening period from 5.5.1997 to 2.4.1999. The appellant accepted the liabilities as per grounds of leave to appeal and memorandum of appeal before this Court; the finance agreement was executed amounting to Rs.12,000,00/- facility on loan was utilized by appellant and statement of account. The respondent bank filed suit for recovery of loan on 2.4.1999 which was on the basis of the statement of accounts and the statements of accounts was attached with the plaint which was duly verified by bank authorities in accordance with Bankers'
Books Evidence Act, 1981. The statement of accounts of the bank has presumption of truth by virtue of Section 4 of the aforesaid Act and the same was not rebutted by appellant with cogent reasons orally or through document. The appellant failed to deny the other documents executed between the appellant and respondent bank. The Banking Court has rightly come to the conclusion that the appellant has failed to make out any plausible case for the grant of leave to defend and the suit of the respondent bank was rightly accepted/decreed by the Banking Court and the Banking Court was justified to reject the application for leave to defend and consequently decreed the suit of the respondent bank in terms of the principle of the Hon'bles laid in the reported judgment P.L.D. 1990 S.C. 497 (Munir Ahmad Autos Vs. Allied Bank of Pakistan).
8. In view of what has been discussed above we find no merit in this appeal; hence the same is hereby dismissed with costs.