SABIHUDDIN AHMED, J.- This appeal is directed against the judgment and decree of the learned IIIrd Banking Court, Karachi dated 22.11.1997 decreeing the appellants' suit for Rs. 196,560 as against their claim of Rs.1,147,072.46. The admitted facts appear to be that the respondent No. 1 was granted a non-interest cash finance (N.I.C.F.).Credit facility to the limit of Rs.600,000 and were required vide sanction advice dated 9.4.1990 to pay markup of 45 paisas per day per 1000 rupees up to 30.12.1990. As security for the aforesaid credit the respondent No. 2 who guaranteed repayment of the debt crated a mortgage on certain immovable properties. According to the appellants an amount of Rs.1,147,072.46 was due and payable by the respondents on 31.12.1995 who filed a suit before the Banking Court for recovery of the aforesaid amount. Though a copy of the plaint or any statement indicating how this amount was calculated has not been placed on record it appears that in addition to the principal amount advanced, appellants had claimed Rs.383,831.36 by way of mark-up charged on six different occasions Rs.229,414.49 as the liquidated damages and Rs.11,814 by way of Central Excise Duty.
2. Upon service of summons the respondents filed their written statement and applied for leave to defend within the prescribed time, It was inter alia alleged that an amount of Rs.246,165 was repaid by the respondents before the filing of the suit and the finance facility had been availed only to the extent of Rs.570,000. However, before the written statement could be considered there was a further effort on the part of the parties to settle the dispute and pursuant thereto a further amount of (Rs.200,000 was paid by the respondents in July, 1997. When the matter came up before the learned Banking Court for consideration of the written statement the respondents agreed to pay any amount that was legally due after deducting the payment already made. The learned Trial Court held that the appellants were only entitled to claim mark-up for the agreed period (267 days) from 9.4.1990 to 31.12.1990 at the rate of Re.0.45 per day per 1000 rupees which worked out to Rs.68,486 along with the principal amount of Rs.570,000 after deducting the amount already paid before the filing of the suit and adding mark-up for the cushion period of 210 days. The Court found the appellants lawful claim to be Rs.396,560. Thereafter, upon adjusting Rs.200,000 paid during the pendency of the suit and disallowing the claim for liquidated damages and central excise duty, the claim was decreed for Rs. 196,560 with costs. The respondents paid Rs.212,844 i.e. The decretal amount together with costs and by an order of the Court little documents were returned to them.
3. The appellants appear to be aggrieved by the aforesaid judgment and have inter alia contended that a settlement had been reached between the parties after the filing of the suit whereby the respondents had agreed to pay a lump sum amount of Rs.600,000 towards the liquidation of their liability, but after paying Rs.200,000 in July, 1997 backed out of their agreement, It is contended that the learned Banking Court "miserably failed to consider the fact that an agreement for settlement of dispute had been reached and proceeded with the matter without giving any weight to the said settlement". Surprising however, nothing has been placed on record to indicate that any effort was made on the part of the appellants Bank to obtain a decree on the basis of the aforesaid settlement nor has the amount payable under the settlement been claimed, moreover, on the contrary, they have prayed for a decree in the amount of Rs.734,228.40 i.e. After deducting Rs.412,844 admittedly paid by the respondents in July, 1997 and subsequent to the decree from their original claim. We are also astonished to notice that though the explicit finding of the Trial Court to the effect Rs.246,165 had been paid by the respondents towards liquidation of their liability before filing of the suit has not been questioned, the appellants suppressed this fact while submitting their claim both before the Trial Court and in the memorandum of appeal before us. No statement of accounts or even a break-up of different claim was placed before the Court.
4. The respondents filed a counter-affidavit allegation that the respondents had utilized the loan facility only to the extent of Rs.570,000 and that they were liable to pay markup only for agreed period from 9.4.1990 to 21.12.1990. It was further alleged that the appellants' claim of Rs. 1,147,072 was highly exaggerated and not admissible under the law. Furthermore, it was contended that there was no voluntary agreement between the parties requiring the respondents to pay Rs.400,000 within four months from 14.7.1997.
5. The appellants filed their affidavits in rejoinder wherein it was disclosed that pursuant to the respondents approaching the Appeals for amicable settlement, the appellants had agreed to give up their claim for liquidated damages and mark-up beyond 31.12.1991 and their claim worked out to Rs.546,046.62. It was alleged that as against this the respondents agreed to settle the appellants' claim for a lump sum amount of Rs.600,000 and make payment of Rs.200,000 immediately and the remainder within four months from 14.7.1997. The respondents, however, backed out of the commitment and declined to sign a compromise application before the Banking Court.
6. It may be pertinent to mention that the factum of repayment of an amount prior to the filing of the suit was suppressed by the appellants both in their claim before the Trial Court as well as the memo, of appeal and was, for the first time acknowledged in the above-mentioned affidavit-in rejoinder. We cannot help observing that such suppression of facts does not speak much of the credibility of public sector, Banking institutions entrusted with the funds of depositions and required to maintain proper accounts. Be that as it may Mr. Saleem Thapewala, learned counsel for the respondents relied upon a Division Bench judgment of this Court in Habib Bank Limited v. Farooque Compost Fertilizer Corporation Limited and others (1993 MLD 1571) wherein it is laid that no liquidated damages could be awarded for a period prior to the decree. He further argued that mark-up could only be awarded to the extent of the agreed period and there is no evidence to show that the facility was extended beyond 31.12.1990. He relied upon two judgments of our learned brother Mushtaq Ahmed Memon, J., in National Bank Limited v. Muhammad Tahir Paracha (1998 CLC 1436) and I.C.P. And others v. Chiniot Textile Mills (PLD 1998 Karachi 316).
7. Mr. Masood Sheheryar learned counsel for the appellants was unable to assail the findings of fact recorded by the Trial Court that the facility was not renewed after 31.12.1990 or the principles of law laid down in the above- mentioned judgments. We, therefore, requested him to submit recalculation of the appellant's claim if any. Consequently, Mr. Sheheryar filed a statement in Court on 6.12.1999 confining the appellant's claim to Rs.104,457.57 in terms of the following:- (a)Central Excise Duty not allowed by Trial Court.Rs. 11,814.00 (b)Mark-up pendente lite Rs. 41,472.65 Net payable as admitted by the respondents.Rs. 38,596.00 (d)Mark-up between 23.11.1997 to 6.12.1990.Rs. 12,574.66 Total Rs.
104,457.00
8. Mr. Thapewala has expressed his willingness to pay the amount mentioned under item (c) above. With regard to item (a), however, Mr. Sheheryar has not been able to satisfy us as to how the aforesaid amount was payable by the respondents and, therefore, this claim must be rejected.
As regards item (b) it may be observed that the concept of mark-up under the Islamic Banking System is founded upon agreement between the parties and we are doubtful whether the same can be equated with interest pendente lite. In any event such interest even otherwise, could be granted only in the discretion of the Court and it has not been shown that such discretion was perversely exercised particularly when the appellants' claim was found to be highly exaggerated.
The same principle would apply in the context of item (d) particularly when we find no substantial merit in the appeal. For the foregoing reasons we modified the decree to Rs.235,016.26 and subject to the above modification dismiss the appeal vide our short order dated 6.12.1999.