Industrial Development Bank of Pakistan, established under the Industrial Development Bank of Pakistan Ordinance, 1961 (XXXI of 1961) (hereinafter called the plaintiff), through M.A. Javaid, Senior Vice-President of the plaintiff-Bank, statedly, fully conversant with the facts of the case and competent to depose the same, has filed the present suit for the recovery of Rs,52,226,326.06 with compensatory charges and liquidated damages etc., against defendant No,1, a private limited company, being sued in the capacity of a customer, wherein defendants Nos.2 to 7 have been arrayed as defendants in their capacity of Directors/guarantors and mortgagors, while defendant No,8, reportedly, the owner of the property, statedly, mortgaged his property in favour of the plaintiff as collateral security. It has been stated in the plaint that pursuant to the request of defendant No,1, the plaintiff sanctioned a financial facility, known as Local Currency Financial Assistant under SBP LMM Scheme", amounting to Rs,19 Million, vide letter, dated 23-11-1993 in favour of defendant No,1 for the purchase of locally manufactured machineries for setting up a factory at Rahim Yar Khan, which financial assistance, at the request of the defendants, was subsequently enhanced to Rs,20.335 Million, vide letter dated 29-1-1994, which facility was utilized by the defendants in its entirety. Another financial facility, i,e, "Additional Local Currency Financial Assistance under BOR Scheme", for a sum of Rs,2.950 Million was, additionally, sanctioned by the plaintiff vide letter, dated 25-4-1995, for import of diesel generator, however, out of the total sanctioned facility under this head, only an amount of Rs,1.475 Million was disbursed, while the remaining sanctioned amount of Rs,1.495 Million was, later on, withdrawn by the plaintiff vide letter, dated 6-6-1997. It has been averred in the plaint that the defendants secured the said financial facilities by executing/handing over charges/securities documents in favour of the plaintiff elaborately described in para. 7 of the plaint. It is the case of the plaintiff that the said financial facilities were utilized by defendant No,1 as mentioned above, and the re-payment of the financial facilities, under LMM Scheme, was started w,e,f, 30-9-1995, whereas the re-payment of financial facility, under B.O.R. Scheme, was started w,e,f, 31-3-1997, but the defendants could not pay three instalments due against them during September, 1995, September, 1996 and December, 1997, where after the company requested the plaintiff for rescheduling the over dues and for changing the Directors of the Company, which request, although was acceded to 'by the plaintiff, yet despite that the outstanding amount remained unpaid. The charge on the assets of the Company was duly registered with the Registrar, Joint Stock Companies, who issued requisite certificate of the registration of charge, which has been placed on record. In the above backdrop the plaintiff has contended in the plaint that the defendants failed to adhere to the terms and conditions of sanctioned letters, to make due payment in time despite repeated promises and, thus, they became defaulters, with the result that a sum of Rs,52,226,326.06 fell due against the defendants in the following manner:-- 1.Account No,05796-A4-0 Rs,48,078,784.79 2.Account No,05796-BI-0 Additional Local Currency Financial Assistance under B.O.R. SchemeRs,700,503.44 3.Account No,05796-CB-0 Rs,3,447,039.80 Total Amount Rs,52,226,326.06 According to the plaintiff, on account of persistent defaults on the part of the defendants and failure to liquidate the outstanding liabilities, despite various demands made by the plaintiff and its functionaries from time to time, necessitated the filing of the suit in hand, on 23-12-1999, under the provisions of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1- 997 (hereinafter referred to as Act (XV of 1997).
2. In response to the summons issued by this Court, through all the modes of service provided under the law, all the defendants on 12-2-2000, filed an application for leave to defend the suit (PLA No,23-B of 2000). It was contended in the aforesaid application that the suit has not been filed by duly authorized person and in this regard the plaintiff has failed to produce any document on record; that dual rates of instalments had been provided in the agreement; that at the time of introduction of Circular No,19, issued by the State Bank of Pakistan, although defendant No,1 applied to the plaintiff-Bank for the revival package, yet the same was illegally refused; that the amounts being claimed by the plaintiff are illegally claimed, grossly inflated and erroneously calculated; that the statement of accounts is inadmissible in evidence; that the blank printed forms were got signed from the defendants with intention to subsequently entrap them and that no cause of action has accrued to the plaintiff. In view of the above pleas, it was prayed therein that the application be accepted and the applicants be granted leave to appear and defend the suit and allowed to file written statement. This application was replied by the plaintiff thereby controverting the contents of the application with the prayer that the afore noted application be dismissed and the suit be decreed with special costs.
3. 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 along with afore noted application, which were 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, were deemed to be pending for disposal before this Court, established under section 5 of Ordinance XLVI of 2001. As an application for the grant of leave to defend the suit (PLA No,23-B of 2000), filed by the defendants, was 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 first time, this Court on 27-9-2001, per force of section 10(12) of latest Ordinance of 2001, allowed the defendants a period of 21 days for filing the amended petition for leave to defend the suit. Pursuant thereto the defendants filed an amended application for leave to appear and defend the suit, however, it appears from the record that the plaintiff, despite affording an opportunity to file the reply, chose not to file the same.
4. In support of the application for the grant of leave to defend, the learned counsel for the defendants has raised the following contentions:--
(1) That the plaintiff has combined distinct causes of action in one suit, which cannot be clamped together, as the cause of action is different, documents/evidence in all the cases is different and the court-fee is to be paid for each claim, therefore, the present suit cannot proceed;
(2) that the suit has been filed by the plaintiff on the basis of fabricated and forged documents and they have not come to this Court with clean hands, as such not entitled to any relief;
(3) that M.A. Javaid, Senior Vice-President, has no lawful authority to file the present suit and no document of authorization has been placed on record;
(4) that all the documents, which have been made basis for the filing of the suit are not attested by two witnesses, therefore, the said documents have got no legal value and the same cannot be considered at the time of deciding of the suit; and
(5) that most of the documents said to have been executed on 6-2-1994 and 12-7-1995 while the suit was filed on 23-12-1999, therefore, the same is barred by time; ' Conversely, the learned counsel for the plaintiff, while controverting the contentions raised by the learned counsel for the defendants has submitted that the suit is maintainable that the documents are neither forged or fabricated and that the suit has been filed through a duly authorized person.
5. As regards the first contention raised by the learned counsel regarding the misjoinder of causes of action in one suit, suffice it to say that Order II, rule 3, C.P.C. Is complete answer to that contention which empowers a plaintiff to combine several causes of action against the defendants in one suit, when these causes involve joint interest. In the present case two financial facilities were granted in favour of defendant No,1 by the plaintiff, the parties are the same the interest is joint, therefore, I am of the view that these causes of action can be amalgamated in one suit and there is no illegality committed by the plaintiff in filing one suit thereby combining two causes of action. I am fortified in my views by a judgment reported as The Directorate of Industries and Mineral Development, Government of the Punjab, through its Director, Lahore and 3 others v. Messrs Masood Auto Stores through Masood Ahmad Malik, Partner, Lahore (PLD 1991 Lahore 174) whereby a learned Division Bench of this Court decided the said proposition of law and held that the plaintiff having several causes of action against the same defendant jointly is entitled to amalgamate them in one suit. In view of this, the contention of the learned counsel has no force and is hereby repelled.
6. Pursuant to the objection of the learned counsel viz. That the plaint is insufficiently stamped, I have examined the original record and find that the plaintiff has paid a sum of Rs,15,000 (being the maximum court-fee payable at the relevant point of time) on the plaint. According to section 17 of Court Fees Act, 1870, where a suit embraces two or more distinct subjects, the plaint or memorandum of appeal shall be chargeable with the aggregate amount of the fees to which the plaints or memorandum of appeal in suits embracing separately each of such subjects would be liable. Section 17 of the Court Fees Act, 1870, is reproduced below:- "17. Multifarious suits.---Where a suit embraces two or more distinct subjects, the plaint or memorandum of appeal shall be chargeable with the aggregate amount of the fees to which the plaints or memoranda of appeal in suits embracing separately each of such subjects would be liable under this Act.
Nothing in the former part of this section shall be deemed to affect the power conferred by the Code of Civil Procedure, section 9."
It has been held in the case of Directorate of Industries and Mineral Development (supra), that the provisions of section 17 applies to suits which embraces two or more distinct causes of action and when a suit is filed combining multifarious causes of action, then each claim on the basis of causes of action is to be valued separately and requisite court-fee is to be paid on it. In this case, as the plaintiff has paid the maximum court-fee, therefore, it cannot be argued that the plaint is insufficiently stamped. The said contention is devoid of any force.
7. So far as the next contention of the learned counsel is concerned, he has reinforced his arguments, by referring to the memorandum of deposit of title deed (page 187) and agreement of hypothecation (page 443), by saying that in these two documents, the dates of execution of the documents and purchase of stamp-paper are different, therefore, these documents are fabricated. I have examined the memorandum of deposit of title deed, which has been notarized by the Notary Public on 1-8-1994, whereas the date of the purchase of the stamp-paper is 19-6- 1994. This document is unilaterally signed by defendant No,1 confirming therein that said defendant has already deposited all the documents specified in the Schedule with the plaintiff. Obviously, the plaintiff is not party to this document. It is evident from the back portion of this document that the stamp-paper was purchased by defendant No,1 itself, the same was signed and executed by defendant No,1 and the plaintiff figures nowhere. The next document is the agreement of hypothecation said to be executed on 27-4-1995, yet the date of purchase has been shown as 10- 7-1995. However, it is not legible from the back of this document that who purchased the stamp- paper, but one thing is apparent that the same has been signed on behalf of defendant No,
1. This document has also been signed on behalf of I.D.B.P. And has also been attested by two witnesses.
Apart from this minor discrepancy, the learned counsel for the defendants could not be able to point out any other legal infirmity in this document going to the root of the matter. Furthermore, the defendants have not taken this plea in their application for the grant of leave to appear and defend the suit. Under the law, they are precluded from pleading and raising the plea at the time of the arguments, which has neither been pleaded nor raised in the application for the grant of leave.
Reliance is placed on City Bank v. Tariq Mohsin Siddiqui and others (PLD 1999 Karachi 196). In view of this, the argument of the learned counsel is without any legal foundation and is hereby repelled, moreso, when other voluminous documents to which no objection is raised by defendants, are on record.
8. As regards the objection of filing the suit by unauthorized person, upon the examination of the record I find that the plaint has been signed and verified in accordance with law by M.A. Javaid, Senior Vice-President of the plaintiff-Bank. Now the question arises as to whether said M.A. Javaid has been authorized by the plaintiff to sign, verify and institute the present suit or not. Under section 42 of the Industrial Development Bank of Pakistan Ordinance, 1961, the Board is empowered to delegate all or any of the rights, powers and duties vested, under this Ordinance, in the Board to the Managing Director or any other officer of the Bank. I find from the record a Gazette notification dated 13-9-1974, whereby in exercise of powers under section 42 of I.D.B.P. Ordinance, 1961, the Board has delegated certain powers to its officers, where under in clause 10(1) those officers have been authorized, in the name and on behalf of the Bank, to do and transact alone and singly without joining other attorney or officer of the Bank, to commence, prosecute or continue and defend all actions, suits or legal proceedings, whether civil, criminal or revenue. Admittedly, under clause (10) of the said notification certain other ancillary powers have also been conferred upon the persons, who can institute suits on behalf of the plaintiff. In view of the above, it cannot be said that the instant suit has not been filed by a duly authorized person, thus, the argument of the learned counsel for the defendants is devoid of any force and in hereby repelled.
9. So far as the next contention of the learned counsel is concerned, I have examined the document and find that of course some of the documents are not attested by two witnesses, yet majority of the documents bear the signatures of two witnesses thereby testifying the execution of documents. Even otherwise the documents were executed during the period ranging from 6-2- 1994 to 12-7-1995 and, thus, all the documents were admittedly, executed prior to 31-5-1997, the date of the enforcement of Act XV of 1997. Section 17(2) of the said Act, provides that all Banking agreements executed by or on behalf of the Bank and a borrower or customer shall be duly attested in the manner laid down in Article 17 of Oanun-eShahadat Order, 1984. Subsection (3) of section 17 provides that nothing contained in subsections (1) and (2) shall invalidate any document executed prior to the coming into force of this Act". As all the documents relied upon by the plaintiff-Bank in support of its claim were signed and executed before coming into force of Act XV of 1997, therefore, simply on account of the fact that some of the documents are not attested by two witnesses, will not invalidate those documents. The said proposition has been discussed in a judgment reported as Messrs United Bank Ltd. v. Messrs Redco Textiles Ltd. And 7 others (2000 CLC 968) wherein while dealing with this aspect of the case and adverting to section 17(3) of Act XV of 1997, this Court has held as under:-- "In view of subsection (3) of the aforesaid section, the documents even if obtained blank and not attested in the manner laid down in Article 17 of the Qanun-eShahadat Order, 1984 are not invalid, if this documents were executed prior to coming into force of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997...."
In view of the discussion on the subject, this contention of the learned counsel has also no force.
10. Regarding the next contention of the learned counsel for the defendants viz., the suit is barred by time, suffice it to say that upon the examination of the leave application, it is discernible that the defendants have not taken this plea in the said application, therefore, under the law they are precluded from raising the said plea at the time of argument. Be that as it may, all the documents were executed during the period ranging from 6-2-1994 to 12-7-1995, whereas the present suit was filed on 23-12-1999. Proviso to subsection (2) of section 22 of the Act XV of 1997, provides that in revision to past transaction a fresh cause of action will be deemed to arise, for the purposes of limitation only, on the date when this Act comes into force". Act XV of 1997, was promulgated on 31- 5-1997, as such per force of the aforesaid provision of law, a fresh cause of action arose in favour of the plaintiff on the date of promulgation of the said Act, i,e, 31-5-1997, therefore, the suit filed on 23- 12-1999, for a cause of action accrued on 31-5-1997, cannot be said to be barred by time. The contention of the learned counsel has no force.
11. In view of the above discussion and reasons, the defendants have comprehensively failed to raise substantial question of law and facts to be tried by this Court in respect of which evidence needs to be recorded. Present application (P.L.A. No,23-B of 2000), filed, on behalf of the defendants being devoid of any merits, is hereby dismissed.
12. With the dismissal of the said application for leave to defend the suit, under the law, the allegations made in the plaint shall be deemed to be admitted. The plaintiff has produced photocopies of all the documents on the basis of which it had filed the present suit, execution whereof has vaguely and feebly been denied by the defendants in their application for leave to defend the suit. Moreover, the plaintiff has produced certified/verified copies of the statement of accounts pertaining to the account of defendant No,1 to which presumption of correctness is attached. Apart from this recovery certificate, showing the outstanding amount of Rs,52,226,326.06, has also been placed on record, to which no objection was raised by the defendants. Additionally, there is no rebuttal of the aforementioned documents on record, and the statement of accounts.
13. Although the amount of liquidated damages has not been included in the statement of account, yet upon the examination of the plaint, especially prayer clause of it, it is evident that the plaintiff has claimed 20% as liquidated damages. Suffice it to say that in such-like cases the plaintiff is not entitled to claim liquidated damages as per the law laid down in Allied Bank of Pakistan Ltd., Faisalabad v. Messrs Aisha Garments and others (2001 MLD 1955) wherein it has been held that the plaintiff is not entitled to recover the amount of liquidated damages, thus, the claim of the plaintiff qua the liquidated damages is hereby rejected.
14. For the foregoing reasons and findings, a decree for the recovery of Rs,52,226,326.06 with costs is passed in favour of the plaintiff and against all the defendants jointly and severally. Additionally, the plaintiff shall also be entitled for the costs of funds to be determined under section 3(2) of Ordinance No,XLVI of 2001.