Bolan Bank Limited, statedly, a public limited company incorporated in Pakistan under the Companies Ordinance, 1984, and carrying on the business of banking (hereinafter referred to a plaintiff) and claiming to be "Banking Company", as defined in Banking Companies (Recovery of Loans, Advances. Credits and Finances) Act, 1997 (hereinafter referred to as Act XV of 1997), through Mirza Furqan Ahmad, Manager and Azhar Iqbal, Officer, holding general powers of attorney and duly authorized by the plaintiff to institute the suit, sign and verify the pleadings, on 14-6-2000, has filed the instant suit for the recovery of Rs,60,385,031, as on 31-5-2000, with future markup and liquidated damages against defendant No,1 (hereinafter referred to as defendant-Company) in the capacity of a customer, wherein defendant No,2 has been arrayed as mortgagor/guarantor/Director, defendant No,3 has been impleaded as Director/Guarantor, defendants Nos.4 to 6, the ex-Director of the defendant-Company, have been arrayed as defendants in their capacity as guarantors, while defendant No,7 has been arrayed in the suit in the capacity of mortgagor.
2. It has been stated in the plaint that the defendant-Company, which was maintaining an account with the plaintiff, approached the plaintiff for providing certain financial facilities and pursuant to its request the plaintiff provided financial facility by way of Export Refinance (Pre-shipment, Part I) up to the maximum of Rs,29,614,000 and in order to avail and secure the said financial facility, the defendant-Company executed the security documents as mentioned in para.7(b) of the plaint.
Additionally, defendants Nos.1 and 2 mortgaged their properties in favour of the plaintiff, as elaborately described in the aforenoted para. Of the plaint. Furthermore, defendants Nos.2 to 6 executed their personal guarantees, dated 20-6-1993, up to Rs,29,614,000 in favour of the plaintiff. It is the case of the plaintiff that the charge was created upon the assets of the defendant- Company, which was registered with the Office of the Registrar, Joint Stocks Companies, Lahore, and a requisite certificate was issued. The defendants availed the aforenoted facility. It has been averred in the plaint that consequent to the request of the defendant-Company, another financial facility, by way of Export Refinance (Pre-shipment, Part II) to the tune of Rs,21 Million was extended to the defendant-Company by the plaintiff and in order to secure the said financial facility, the defendant-Company executed charge/security documents favouring the plaintiff as enumerated in para.9(b) of the plaint. In this financial facility too, defendants Nos.2 to 6 also executed their personal guarantees, dated 27-7-1995, up to Rs,25,300,000, each, in favour of the plaintiff.
According to the plaintiff the said financial facility was also availed by the defendants and the prescribed form, for the modification of charge from Rs,39,600,000 to Rs,66,000,000 in favour of the plaintiff, was filed with the Office of the Registrar, Joint Stock Companies. Furthermore, the plaintiff, at the request of the defendant-Company, established a Letter of Credit, dated 21-9,1995, valuing US$ 273,440 on 300 days D.A. Basis for import of second-hand material. In this head the defendants separately executed the security documents, as well as created mortgage, the details of which have been given in para.11(b) of the plaint. It has been stated in the plaint that as the defendants failed to re-pay the financial facilities (Export Refinance Pre-shipment, Part I and Export Refinance Pre-shipment, Part II) in accordance with the terms and conditions of the agreements and other documents as well, executed by the defendants, therefore, the plaintiff was forced to pay the said amounts to the State Bank of Pakistan from its own sources and converted Export Refinance (Pre- shipment, Part I) into Finance Against Packing Credit, Part 1 (FAPC-1) and Export Refinance (Pre- shipment, Part II) into Finance Against Packing Credit, Part II (FAPC-II) against the same securities.
According to the plaint, in acknowledgement of the conversion in FAPC-II as noted above, the defendants executed an agreement for finance on mark-up basis, dated 14-7-1996, demand promissory note of even date for Rs,28,245,000, an agreement for finance, dated 1-7-1997 and demand promissory note of even date for Rs,10,343,000 in FAPC-I. It has been asserted in the plaint that similarly the defendant-Company failed to discharge its obligations under the Letter of Credit facility, therefore, the plaintiff was compelled to make the payment on behalf of the defendant- Company to the negotiating Bank equivalent to Pak. Rs,9.725 Million by way of payment against documents. In this head, the defendant-Company was able to make only partial payments of Rs,2.250 Million, on 24-7-1996, and Rs,1.750 Million, on 25-7-1996, thus, the Bank created a Forced Demand Finance Facility (DF, Part I) to the tune of Rs,17,008,000 Million. In acknowledgement and consideration of the aforesaid creation of Demand Finance, Part I, the defendant-Company executed an agreement for Financing on Mark-up Basis, dated 1-3-1997 and Demand Promissory Note for Rs,17,008,000, dated 1-3-1997, favouring the plaintiff, while the mortgage already created continued to remain as security in this count too. Furthermore, in order to secure the said facility, defendants Nos.2 to 6 executed their personal guarantees, dated 1-3-1997, up to Rs,17,008,000, each, in favour of the plaintiff. It is further the case of the plaintiff that the defendants failed to liquidate their liabilities in FAPC-I and FAPC-II to the plaintiff and consequent to the request of the defendants, the . Plaintiff, while acceding to the aforesaid request, amalgamated the liabilities of the defendants company, i,e, FAPC-I and FAPC-II into Demand Finance Facility, Part II, on 2-3-1998, and in acknowledgement thereof the defendants company executed an agreement for financing, dated 2-3-1998 and Demand Promissory Note of Rs, 47,022,495, dated 2-3-1998, while defendants Nos.2 and 3 executed personal guarantees up to Rs,47,022,495, each, dated 2-3-1998, in favour of the Bank. According to the plaintiff, the defendants failed to discharge their liabilities and neglected to liquidate the amounts falling due against them in Demand Finance Facility, Part I and Demand Finance Facility, Part II, despite various demands made by the plaintiff from time to time through issuance of letters and legal notice, however, the defendants company sent a reply, dated 29-5-2000, wherein although the liabilities were admitted, yet it offered an indefinite schedule of payment. The case of the plaintiff is that on account of acts and omissions of the defendants, they have become defaulters with the result that a sum of Rs,60,385,031 fell due against the defendants in the following manner:--- Demand Finance Part IRs,14,096,231 Demand Finance Part IIRs,46,288,800 Total Rs,60,385,031 According to the plaintiff persistent defaults and failure to liquidate the outstanding liabilities by the defendants, despite various demands made by the plaintiff and its functionaries, necessitated the filing of the present suit under the provisions of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997.
3. In response to the summons issued by this Court through all the modes of services, provided under the law, defendants Nos.1 to 4 and 7, filed PLA No,148-B of 2000, defendant No,5, filed PLA No, 147-B of 2000, and defendant No,6, filed PLA No,149-B of 2000, seeking .Leave to defend the suit, which applications are pending awaiting decision.
4. On 30-8-2001, the Financial Institutions (Recovery of Finances) Ordinance, 2001, was promulgated and per force of section 29 of Ordinance, 2001, repealed Act XV of 1997. However, according to section 7(6) of the latest Ordinance of 2001, all proceedings pending in any Banking Court, including suit for recovery, shall stand transferred or deemed to be transferred and heard by the Banking Court established under the latest Ordinance of 2001. The present suit, which was pending before the Banking Court constituted under Act XV of 1997, after the promulgation of latest Ordinance and per force of section 7(6) of the latest Ordinance, was deemed to be pending for decision before this Court, established under section 5 of Ordinance XLVI of 2001. As aforenoted applications for the grant of leave to defend, filed by the defendants, were pending in this Court before coming into force of Ordinance XLVI of 2001, promulgated on August 30, 2001, therefore, when the case came up for hearing, before this Court, for the first time, this Court, on 10-9-2001, per force of section 10(12) of latest Ordinance, 2001, allowed the defendants a period of 21 days for filing the amended petitions for leave to defend the suit. Pursuant thereto the aforementioned defendants filed amended applications for leave to defend the suit, which applications I propose to decide one by one.
PLA No,148-B of 2000 5. Mr. Zahid Malik, Advocate, the learned counsel representing defendants Nos.1 to 4 and 7, in support of the aforenoted application for the grant of leave to defend the suit, while admitting the signatures of the said defendants on all the documents placed on record by the plaintiff in support of its claim, has submitted that the finances, alleged in paras.7, 9 and 11 of _the plaint, in particular conversion of the said finances, are not sustainable on the basis of the documents filed alongwith the plaint by the plaintiff; that the alleged claim is not substantiated by the statement of accounts; that all the documents furnished by the plaintiff are irrelevant for the purpose of financial facilities, as highlighted in the plaint; that the documents which are necessary to be obtained by the Banking institutions, in such-like cases, were neither obtained nor filed alongwith the plaint and mark-up has been charged illegally on all the accounts. As regards the facility in Letter of Credit account is concerned, he has submitted that the said claim is also not supported by the statement of accounts and documents on record. In the above perspective, he has submitted that the said defendants have been able to make out a case for the grant of unconditional leave to defend the siXt.
Conversely, the learned counsel for the plaintiff has raised preliminary objections to the maintainability of the amended applications, filed by all the defendants, seeking leave to defend the suit. In the said backdrop, he has submitted that as all the amended applications failed to fulfil the requirements of subsections (3), (4) and (5) of section 10 of Financial Institutions (Recovery of Loans) Ordinance, 2001, therefore, said applications are liable to be summarily rejected under section 10(6) of the said Ordinance of 2001. He has further contended that the said application is neither entertainable nor maintainable on behalf of defendant No,1, which is a Private Limited Company, as no resolution of the Board of Directors, authorizing the person, who has signed, verified and filed the amended leave application, was either passed or placed on record, thus, the said application has unauthorizedly been filed, which deserves to be dismissed outrightly. In this, context he has further submitted that no affidavit has been filed by any of the defendants supporting the contents of the leave application. As regards the merits of the case, the learned counsel for the plaintiff has contended that the said defendants failed to show that how the documents, mentioned in paras.7(b), 9(b) and 11(b) are illegal or invalid, moreso when the signatures of the said defendants are admitted on all the documents and thus, at this stage, the validity or/and the legality of the said documents cannot be called in question by the defendants.
He has further submitted that no regulation, issued by the State Bank of Pakistan, prohibits the obtaining of such document by a scheduled bank from the customer, which have been filed alongwith the plaint. He has further asserted that on each and every stage, the defendants executed fresh, separate and additional security/charged documents including the numerous personal 'guarantees. He added that the documents were executed in the years ranging from 1992 to 1997, but till the filing of the leave application, the defendants did not raise any objection either regard to the financial facilities or about the validity and legality of the said documents, therefore, the doctrine of waiver will be fully attracted in this case. As regards Letter of Credit facility, learned counsel for the plaintiff has contended that L.C. Was extended for U.S. $ 273,440, the rate of exchange and date of lodgment was given and when the L.C. Was matured, the defendants failed to generate funds, thus, the plaintiff had to pay amounts, and the Letter of Credit facility was created into force demand finance. Lastly it has been submitted that the defendants have failed to make out a case for bona fide dispute or the case for the grant of leave to defend the suit, in which the evidence needs to be recorded.
6. As regards the first preliminary objection, raised by the learned counsel for the plaintiff to the maintainability of the application under discussion, the contention of the learned counsel of the plaintiff has substance. Upon the examination of the leave application, I find that the said defendants failed to give amount of finance availed by the defendants; the amount paid by them; the dates of payment; amount of finance and other amounts relating to the finance payable by the defendants to the financial institutions; the amount of finance and other amounts, which the defendants dispute as payable to the financial institutions, thus, the said defendants have comprehensively failed to adhere to the provisions of section 10(4) of Ordinance of 2001. In the above backdrop, now the pivotal question, which has arisen for determination by this Court is as to whether the latest amended application, filed by the said set of defendants, is a sufficient compliance of the provisions of section 10(12) of Ordinance, 2001 and if not as to whether the said application is liable to be rejected summarily. Perusal of section 10(12) of Ordinance, 2001, manifests that where an application for leave to defend has been filed before coming into force of the aforenoted Ordinance of 2001, the defendants shall be allowed a period of 21 days for filing an amended application for leave to defend in accordance with the provisions of this Ordinance (period of 21 days was allowed to the defendants in the present case). It flows from the perusal of section 10(12) of Ordinance, 2001, that the defendants are required, through the filing of an amended petition, to sufficiently comply with the provisions of section 10(3), (4) and (5) of Ordinance XLVI of 2001. These provisions of law, inter alia, provide that the amended application for leave to defend shall be in the form of a written statement, containing summary of substantial questions of law and facts, and also giving certain particulars to be furnished by the defendants regarding the finance, i,e, finance availed, amount paid by the defendants etc. And that such an application must be accompanied by all the documents in support of substantial questions of law and facts raised by the defendants. If the aforenoted provisions of law are placed in juxtaposition with the contents of the application, filed by the aforementioned set of defendants, the only irresistible conclusion, which can be drawn is that the said defendants did not comply with the aforesaid provisions of law. In the above perspective, I am constrained to hold that the said defendants have comprehensively failed to file an amended application within the parameters of section 10(12) of Ordinance, 2001 and they have not complied with the requirements of section 10(3), (4) and (5) of Ordinance XLVI of 2001, thus, the defendants failed to file an amended application in accordance with the provisions of the said Ordinance.
7. Now the next question, which arises for determination is as to whether the provisions of section 10(12) are mandatory or directory. The basic principle for the interpretation of statutes is that when a provision of law is couched with the penal consequences then the said provision of law could be considered as a mandatory provisions of law and where no penal consequences entail to the non- compliance of a provision of law, in that case the said provision of law would be taken as directory.
Applying the said yardstick, now if any of the provisions of this Ordinance of 2001, provides a penal consequence for the non-compliance of the provisions of section 10(12) of the Ordinance, 2001, then the said provision would be considered as mandatory provision of law otherwise the same will be treated as directory. To solve this question one has to go to subsection (6) of section 10 of latest Ordinance, which is reproduced below:-- "10(6). An application for leave to defend which does not comply with the requirements of subsections (3), (4) where applicable and (5) shall be rejected, unless the defendant discloses therein sufficient cause for his inability to comply with any such requirement."
Undoubtedly it has been provided in section 10(6) of latest Ordinance (ibid) that an application for the grant of leave, which does not comply with the requirements of subsections (3), (4) and (5) of section 10, of Ordinance, 2001 the same shall be rejected, unless the defendant able to show sufficient cause for his inability to comply with any such requirement. In this case although defendants Nos.1 to 4 and 7 have filed an amended application, the same does not fulfil the requirements of subsections (3), (4) and (5) of section 10 of Ordinance, 2001. Additionally, they have not been able to show any cause, what to talk of sufficient cause, for their inability to comply with such requirements.
8. In the above perspective, having gone through section 10(12) and section 10(6) of Ordinance, 2001, I am of the considered view that the former provision of law is mandatory in nature, as the non-compliance of said provision of law entails the penal consequences as provided under section 10(6) of Ordinance, 2001. In the present case, despite the grant of period of 21 days, which is statutorily fixed, the defendants failed to file the amended application thereby failing to comply with the requirements of sections 10(3), (4) and (5) of the Ordinance, 2001, therefore, presumption would be that no application for grant of leave. To defend the suit is deemed to be pending and the present application for leave to defend is liable to be rejected per force of section 10 (6) of Ordinance, 2001.
9. As regards the next contentions of the learned counsel for the plaintiff, I find from the record that no resolution passed by defendant No,1, thereby authorizing Mirza Abid Baig, defendant No,2, to file the amended application seeking leave to defend the suit on behalf of defendant No,1, has been placed on record. It is pertinent to mention here that when originally PLA No,148-B of 2000, was filed, on 27-7-2000, even with that application no such resolution was filed. Admittedly, there is neither any resolution nor authorization, on record, which would go to show that before filing either the original leave application or the amended leave application, any resolution was passed by the Board of Directors of the defendant-Company, thereby authorizing defendant No,2, either to file such applications or to defend defendant No, 1 . Under the law in case of companies/corporate bodies, such a resolution is necessary before initiating or defending any proceedings by or against the defendant-Company. In this respect following case-law can be referred:-- Khan Iftikhar Hussain Khan of Mamdot (represented by 6 heirs) v. Messrs Ghulam Nabi Corporation Ltd., Lahore (PLD 1971 SC 55); Abubakar Saley Mayet v. Abbot Laboratories and another (1987 CLC 367); Bankers Equity Ltd. Through Attorney and 5 others v. Sunflo CIT-Russ Ltd. (formerly known as Sunflo Juices Ltd.) through Managing Director (PLD 1999 Lahore 450); Government of Pakistan v. Premier Sugar Mills and others (PLD 1991 Lahore 381), and Messrs Standard Hotels (Private) Ltd. v. Messrs Rio Centre and others (1994 CLC 2413).
In view of the above, I am of the considered view that the original application as well as the amended application, purported to have been filed on behalf of defendant No,1, was unauthorizedly filed, which does not deserve any consideration in view of the enormous case-law, thus, on legal plane there is no application for leave to defend the suit on behalf of defendant No,1, which can be said to be pending before this Court.
10. So far as another aspect of the case, which cannot be ignored at this juncture, is that from the perusal of the amended application, purportedly filed on behalf of defendants Nos.1 to 4 and 7, I find that the amended application has only been signed by defendants Nos.2, 3 and 7, whereas rest of the defendants, i,e, defendants Nos. I and 4, have not even signed the amended petition.
Furthermore, the said set of defendants have failed to file any affidavit in support of the contents of their purported leave application. The defendants, while filing their erstwhile application, have although filed separate affidavits of each defendant, yet the present application has neither been signed by the said defendants nor the amended application is supported by any affidavit.
11. Now coming to the merits of the case, so far as the contentions raised by the learned counsel for the said defendants are concerned, suffice it to say that they have not denied either the sanctioning of the financial facilities of their availment, inasmuch as the said set of defendants have not even denied their signatures on all the documents, annexed with the plaint by the plaintiff in support of their claim. It is evident from the record that when initially the financial facility of Export re-finance (Pre-shipment, Part I) was sanctioned by the plaintiff, the defendant-Company not only executed the charge documents, but also mortgaged the properties and additionally defendants Nos.2 to 6 executed their personal guarantees favouring the plaintiff. When another financial facility by way of Export Re-finance (Pre-shipment, Part II), to the tune of Rs,21 Million, was extended to the defendant-Company, all the defendants executed fresh documents, as mentioned in para.9(b) of the plaint, the signatures of which have not been denied by the defendants, inasmuch as certain properties were mortgaged and in addition to the earlier executed documents/guarantees, fresh/further personal guarantees were executed. Subsequently when a letter of credit facility was allowed, the defendants faithfully repeated their performances by way of executing different documents and also mortgaged properties, as discernible from para.11(b) of the plaint. Matter does not end here as I find from the record that when aforementioned two Export Re-finance pre-shipment facilities were converted into FAPC-I and FAPC-II, the defendants, while acknowledging the said conversion, executed agreements for finance and also demand promissory notes separately in two accounts. Similarly when letter of credit facility was not liquidated and the plaintiff-bank created a forced demand finance facility, the defendants also acknowledged the said action, while executing the charge documents, including the execution of the personal guarantees. Subsequently when FAPC-I and FAPC-II were converted into demand finance facility, the same were amalgamated into demand finance facility part-II, that amalgamation too was recognized by the defendant-Company and other defendants by way of executing the documents at the appropriate stage and also furnished the personal guarantees. It is apparent from the aforesaid narrative that at every stage, when there was a crucial turn either by way of sanctioning of financial facilities, mentioned hereinbefore or there was any renewal, amalgamation or conversion of these facilities, the defendants appeared to have played an active role and they had not only been recognizing and acknowledging the said steps/ transactions, which were said to have been taken at their instance, but they had also been executing the relevant/ requisite documents, mortgaging additional properties and also creating the charge and additional charge over the assets of the company, which were duly registered, at their behest, with the Registrar Joint Stock Companies, and the certification issued by the said department are on record. It is discernible from the record that apart from the execution of voluminous documents on behalf of the company by the authorized Chief Executive/ Director of the company, rest of the defendants had also been executing the requisite documents from time to time thereby securing the said financial facilities. The defendants have baldly denied the execution of the documents without any legal foundation and basis, completely forgetting that they have admitted their signatures on all the documents. It appears to be a crude attempt on the part of the defendants in order to wriggle out of their contractual obligations and a desperate attempt to save themselves from liquidating the financial liabilities incurred by them through the execution of the documents.
After the execution of these documents and availment of different financial facilities, now it does not lie in the mouth of the said defendants to assert that the plaintiff did not produce the documents, which are necessary in such type of finances. However, the plaintiff has produced copies of those documents, which according to the learned counsel for the defendants are compulsorily required to be executed by a customer at the time of the availment of such type of facility and have not been furnished alongwith reply to the leave application. In view of the above, the contention of the learned counsel that the documents furnished by the plaintiff are irrelevant, is devoid of any force and do not help the said defendants in any. Way.
12. So far as the execution of the documents is concerned, it has been noted in the preceding paras., time and again, that the defendants have admitted their signatures on all the documents, which are being relied upon by the plaintiff in support of its claim. The only defence taken by the said defendants in this regard is that although the documents were signed by the defendants, but they were not meant to be used in the transactions/financial facilities, which have been made subject-matter of the present suit and they were not meant to be used in the manner in which they have been used by the plaintiff. This assertion on the face of it is unbelievable and does not appeal to reasons, moreso when the learned counsel for the defendants has not been able to show that which are the other alleged transactions, wherein the said documents were meant to be used and which were those financial facilities, regarding which the said set of defendants delivered those documents to the plaintiff. Admittedly, apart from these financial facilities, which have been highlighted in the suit, there were no other accounts/facilities/transactions between the parties about which it could be said that these documents were delivered to the plaintiff.
13. I have also examined the statement of accounts, pertaining to the different accounts maintained by the defendant-Company with the plaintiff, with the assistance of the learned counsel of both the parties. The main emphasis of the learned counsel, while dissecting the statement of accounts, is that in certain statement of accounts as outstanding balance has been shown nil, therefore, according to the learned counsel nothing is due against the defendants in the said account. This argument of the learned counsel is equally without any force. If the statement of accounts are read together, it would amply manifest that where it has been shown in the statement of accounts as nil, then the said amount has been transferred/carried over to another account. For example in the statement of accounts (page 310), on 30-12-1993, after making the entry of Rs,26,300,000 the balance has been shown as nil and on the next page (page 311) the balance has been shown the same amount, i,e, Rs,26,300,000. Similarly at page 311 in the bottom, the balance has been shown as nil and this entry has been transferred on the next page as the balance payable. Apart from the minor discrepancies, the learned counsel for the defendants was not able to show any illegality or legal infirmity in the statement of accounts going to the root of the case, so as to disentitle the plaintiff-Bank from claiming the colossal suit amount. It is not the case of the defendants that they have not availed the financial facilities and that nothing is due from them. Their stance appears to be that although the financial facilities were availed, but the amount shown as outstanding against them is not the amount which is actually due against the defendants as the same has not been calculated in accordance with law. Although the learned counsel for the defendants has pointed out certain discrepancies in the statement of accounts, yet they are not of much magnitude, which could demolish the case of the plaintiff, which has been cemented in view of the voluminous documents on record. The statement of accounts have been verified/certified by the plaintiff-Bank in accordance with the provisions of BankersBook Evidence Act, 1894, and presumption of correctness is attached to such entries maintained by the Bank in the normal course of business, moreso when there is no rebuttal to these statements of accounts.
On the other hand, the defendants have failed to show either in their leave application or through the arguments of the learned counsel that how much amount of finance was availed by them, how much amount has been repaid, what amount is still payable by the defendants and which amounts are disputed. This omission on the part of the defendants, on the one hand is contrary to the provisions of section 10(4) of Ordinance, 2001, and on the other hand shows that hollowness of the case of the defendants. In the absence of any rebuttable presumptions, I am not inclined to disbelieve the statement of account submitted by the plaintiff-Bank, wherein I have not found any unauthorized entry debited in the accounts of the defendants. The plaintiff has not charged any penal interest or liquidated damages in any of the statements of accounts, which would also go to show the varacity of the statement of accounts and bona fides of the plaintiff.
14. So far as other defendants are concerned, they have been arrayed as defendants in the suit in the capacity of Directors/ Guarantors/Mortgagors. It is discernible from the documents on record that the said defendants signed and executed the documents and undertook, as per the terms of the said personal guarantees, to liquidate the outstanding amount is case the principal debtor, i,e, the defendants company, fails to liquidate the amount. In view of the execution of the personal guarantees, the said defendants cannot now shirk from liquidating their liabilities and they are jointly and severally liable to liquidate the liabilities of defendant No,1 under the provisions of the Contract Act.
In view of the above discussion and reasons, defendants Nos.1 to 4 and 7 failed to raise substantial questions of law and facts to be tried by this Court in respect of which evidence needs to be recorded. Furthermore, the said defendants have also failed to file an amended application under section 10(12) of Ordinance, 2001, thus, on both the counts the present application, i,e, P.L.A. No,148-B of 2000, filed on behalf of the aforenoted defendants, is devoid of any merits and is hereby dismissed. P.L.A. No,147-B of 2000 and P.L.A. No,149-B of 2000 15. P.L.A. No,147-B of 2000, has been filed on behalf of defendant No,5, namely, Mirza Imran Baig, while P.L.A. No,149-B of 2000, has been filed by defendant No,6, namely, Mrs. Naveeda Pasha. Both the learned counsel representing the said defendants have contended that they never executed the personal guarantees as such, they never stood as guarantors. The main stance of the said defendants is that defendant No,2 ousted defendants Nos.5 and 6 from the management of the defendant-Company by fraudulent means and the finance was procured by defendant No,2 by forging documents. As regards the said defendants, although they have vaguely denied the execution of the guarantees, yet the record of the case shows that the said defendants executed letters of guarantees and also stood guarantors. At the relevant time they were the Directors of the defendant-Company and in the said capacity executed the personal guarantees. The said defendants failed to bring on record any material to show that either the guarantees were forged by the plaintiff or they were forced by defendant No,2 or the plaintiff to execute the guarantees. The plea of the said defendants that the documents have been forged by defendant No,2 has no bearing on the case, because it has not even been alleged by them that the plaintiff-Bank has forged the documents. The matter, as highlighted in their leave applications, is between the private persons and the dispute is regarding their alleged ouster from the management of the defendant-Company and alleged grabbing of the properties by defendant No,2. Be that as it may, the said dispute is not the subject-matter of the present proceedings and this is not the forum for determination of the said dispute inter se the defendants. The said defendants executed the guarantees and did not deny the statement of accounts. They have never denied the availment of the financial facilities by defendant No,
1. It is also hot disputed that they were not the Directors of the defendant-Company at the relevant time.
Mere vague denial of the execution of the documents would not absolve the said defendants from liquidating the liabilities incurred by them through the execution of personal guarantees and other documents.
16. Another grave legal infirmity in the amended leave petitions, filed by defendants Nos.5 and 6, is that the said defendants failed to comply with the provision section 10(3), (4) and (5) of the Financial Institution (Recovery of Finances) Ordinance, 2001, thus, their applications cannot be considered under the law, because the same have not been filed under this Ordinance and deserve summary rejection. In the above perspective, on both the counts, both the applications are devoid of any merits, thus, the same are dismissed.
17. With the dismissal of the aforenoted three applications, filed by the defendants, for the grant leave to defend the suit, under the law, the allegation made in the plaint shall be deemed to be admitted. The plaintiff has produced photo-copies of all the documents alongwith the plaint as well as alongwith the replies to the applications for leave to defend the suit, on the basis of which it had filed the suit, the signatures whereof have not been denied by the defendants, meaning thereby that the execution of these documents deemed to be admitted by the defendants.
Furthermore, the statement of accounts are duly verified/certified by the BankersBook Evidence Act, 1894, to which no such infirmity has been alleged, the presumption of correctness is attached to such statement of accounts. Additionally, there is no rebuttal of the aforementioned documents on record.
18. I find from the perusal of the plaint, especially the prayer portion of it, that the plaintiff has prayed for awarding of liquidated damages to the extent of 20%. The plaintiff is not entitled to recover the amount of liquidated damages as per the principle laid down in a judgment reported as Allied Bank of Pakistan Ltd., Faisalabad v. Messrs Aisha Garments etc. (2001 MLD 1955) wherein it has been held that the plaintiff is not entitled to recover the amount of liquidated damages, thus, the plaintiff in the instant case is also not entitled to claim liquidated damages, as such, they said portion of the prayer is rejected.
In view of the above discussion and findings, a decree for the recovery of Rs,60,385,031 with costs is passed in favour of the plaintiff and against all the defendants jointly and severally. The plaintiff shall also be entitled for the costs of funds to be determined under section 3(2) of Ordinance XLVI of 2001.