' MAULVI ANWARUL HAQ, J.---Respondent No,1 filed a suit against the appellants and respondent No,2 for recovery of a sum of Rs,18,045,987 with mark-up and liquidated damages. In the plaint it was stated that appellant No,1 is a private limited Company while appellant No,2 and respondent No,2 are its Directors while appellant No,3 had mortgaged its property to secure the repayment of the liability and also executed a letter of guarantee in favour of respondent No,1. It was also stated that appellant No,2 and the respondent No,2 are the guarantees. It was then stated that machinery of the value of Rs,75.00,000 was leased out to the appellant No,1 for a period of 48 months subject to payment of monthly rental of Rs,2,15,750 to respondent No,1 which machinery was duly delivered up to appellant No,1 at its premises. The execution of lease agreement, acceptance receipt of the offer -letter, D.P. Note and letter of guarantee by the defendants in the suit was pleaded. Reference was also made to registered mortgage deed, dated 12-7-1997 by appellant No,3. It was then stated that only lease money at the said rate was paid for seven months up to January, 1998: that respondent No,1, was informed on behalf of appellant No,1 that as a result of fire the machinery stood destroyed. A claim for damage was lodged with the Insurance Company but the same has not been settled as it has been reported that the fire was deliberate. Reference was then made to the terms of the agreement where under appellant No,1 had agreed to pay the "agreed loss value".
With these averments a decree in the suit amount was prayed for. Leave to defend the suit was applied for by the appellants. The application was resisted by respondent No,1. It was heard on 27- 5-2000. The learned trial Court dismissed the said application. However, at the same time refused the claim of respondent No,1 to the tune of Rs,45,30.750 on account of termination charges and the liquidated damages. Accordingly a decree was passed in the sum of Rs,1.35,15,237 with mark-up till the realization of the decretal amount.
2. Mr. Ijaz Feroze, learned counsel for the appellants contends that the mortgage deed as well as letter of guarantee have not been executed in accordance with Article 17 of Qanun-e-Shahadat Order, 1984 and as such are invalid and cannot be acted upon. It has further been contended that it was stated on behalf of respondent No,2 that he had not executed any guarantee letter. Further contends that a decree has been passed for in excess of the amount actually due in terms of the conditions of the agreement between the parties. Mr. Asim Hafeez, Advocate for respondent No, 1 on the other hand, argues that the execution of the documents were admitted by the appellants and there was no denial that the facility was availed. According to the learned counsel there was no need of proving the said admitted facts. Further contends that appellant No,2 never applied for leave. Supports the impugned judgment and decree with reference to the terms of the agreement between the parties.
3. We have gone through the trial Court's records. A perusal of the application filed by the appellants for leave to defend the suit would show that there is no denial of the fact that the machinery of the value of Rs, 7,500,000 was delivered to appellant No, 1 by respondent No,
1. There is no denial that the lease agreement was not executed. There is no denial that appellant No,3 had not mortgaged its property to repay the said liability and there is no denial that appellant No,2 had not executed the letter of guarantee. In this view of the matter, the absence of the second witness on the said document which is requirement of Article 17 of Qanun-e-Shahadat Order, 1984 which in this turn is based on the injunctions of Islam as contained in the Holy Qur'an, would not come into play as the appellants like good Muslims have not denied the execution of the said documents and the arrangement contained therein or the contents thereof. Thus, no doubts have arisen and as such the matter is just a technicality and rightly ignored by the learned trial Court. We may note here that so far as the mortgage deed is concerned, it is duly witnessed by two persons i,e, Muhammad Atif and Nadeem Saeed. So far as the denial on the part of respondent No,2 is concerned, we are afraid the same cannot be considered as he never appeared before the trial Court nor sought leave to defend. We also find that appellant No,2 as well as respondent No,2 are brothers. Appellant No,2 is a Director and a Chief Executive while respondent No,2 is a Director of appellant No,1.
4. We. However, do find force in the said third contention of the learned counsel for the appellants.
We find that there is no dispute that a fire took place on 6-6-1998 and the machinery was destroyed. According to Article 13 of the lease agreement (at pages 67 to 75 of the paper book), in case of a total loss for any reason that lessee is to pay to the lessor the "agreed loss value" described in item No,9 of the Schedule to the said document. It is also an admitted fact that in accordance with the said Article 13, the agreed loss value comes to Rs,7,875,000. Learned counsel for respondent No,1 was called upon to explain as to how the suit amount, apart from the said termination charges refused by the learned trial Court, has been worked out. Learned counsel explains that the decretal amount of Rs, 1,35,015,237 comprised of lease rental for 20 months, the delay charges under Article 18 read with item No,11 of the Schedule and the said agreed loss value.
Going by the said statement of the learned counsel for respondent No,1 in the admitted position that machinery was wholly destroyed coupled with the fact that respondent No,1 has claimed the said agreed loss value we are of the opinion that the rental could have been claimed only up to 6- 6-1998 and not beyond that. Now it is admitted that rental up to January, 1998 at the agreed rate stands paid. Appellant No,1 would, therefore, be liable to pay rent only for four months thereafter.
This amount comes to Rs, 8,63.000. The delayed charges at the rate of 0.1-1/2 per day on the monthly rental (in terms of Article 18 read with item No,11 of the Schedule) comes to Rs,25.890.
5. Thus, in the admitted facts and circumstances of the case respondent No,1 would be entitled to recover a sum of Rs, 8,763,890 from the defendants in the suit.
6. The R.F.A. Is accordingly partly allowed and the impugned judgment and decree passed by the learned Special Judge Banking Court No,II, Lahore is modified so that now the suit filed by respondent No,1/plaintiff against the appellants and respondent No,2 (defendants) shall stand decreed in the sum of Rs, 8,763,890 with mark-up till the realization of the decretal amount. No orders as to costs in this R.F.A.