MUHAMMAD SAIR ALI, J.- Bankers Equity Limited, National Bank, Habib Bank, United Bank, Muslim Commercial Bank and Allied Bank; the plaintiffs filed a suit for recovery of Rs. 183,757,756.00 alongwith other charges etc. Against Bentonite Pakistan Limited and seven others; the defendants.
Leave to defend the suit was filed by the defendants upon receipt of summons. However, upon promulgation of Financial Institutions (Recovery of Finances) Ordinance, 2001, amended PLA No. 115-B/2000 was filed by the defendants on 20.12.2001 as required under Section 10(12) of the said Ordinance. Reply thereto was filed by the plaintiff-Banks. This PLA finally came-up for hearing on13.3.2002.
2. Learned counsel for the petitioners/defendants submitted that for some of the facilities, according to the contract between the parties, only competent Court at Karachi had the jurisdiction to entertain and try the suit. Andas such, this Court had no jurisdiction to entertain and try the present suit. And that the petitioners/defendants sought the financial facilities in November- December, 1984, but the same were sanctioned with a delay of over 12/13 months i.e. In 1986, by when the rates of foreign currency had gone up and value of Pakistani currency had gone down thereby causing a loss to defendant No. 1 i.e. The company and for this loss, a suit for damages had already been filed. And that in the statements of accounts, mark-up on mark-up and future mark- up has been debited. And mark-up on undisbursed amounts has also been charged in the statements of accounts. And that number of facilities, as sanctioned, were not disbursed.
3. Learned counsel for the defendants/applicants was required by the Court to particularize his objections qua non disbursement of amounts, charging of mark-up thereupon and also to show entries of incorrect mark-up or future markup or mark-up on mark-up charged by the plaintiff- Bank. Upon examination of each and every document and after going through the said documents, learned counsel for the defendants/applicants stated that mark-up on above accounts may have been charged to exaggerate the amounts, but he was not able to particularize the same. Furthermore, learned counsel for the applicants/defendants did not at all show or specify the amount of any undisbursed facility or mark-up charged thereupon.
4. Since objection as to the wrong charging of markup and debiting of undisbursed amounts was raised by the applicants/defendants in support of their PLA, attention of the learned counsel for the applicants/defendants was drawn to the mandatory requirements of sub-sections (3),(4) , (5) and
(6) of Section 10 of"the Financial' Institution (Recovery of Finances) Ordinance, 2001 and he was asked to show any tabulation made by defendants/petitioners or pleaded by defendants/petitioners in their application for leave qua the specific mandate of Section 10(4) ibid as under:--[Vol.VIII Bankers Equity Ltd. V. Bentonite Pakistan Ltd. C.L. 887(Muhammad Sair AH, J.)(4)
"In the case of a suit for recovery instituted by a financial institution the application for leave to defend shall also specifically state the following:--(a) the amount of finance availed by the defendant from the financial institution; the amounts paid by the defendant to the financial institution and the dates of payments;(b) the amount of finance and other amounts relating to the finance payable by the defendant to the financial institution upto the date of institution of the suit;
(c) the amounts of finance and other amounts relating to the finance payable by the defendant to the financial institution upto the date of institution of the suit;(d) the amount if any which the defendant . Disputes as payable to the financial institution and facts in support thereof."
5. Learned counsel for the applicants/defendants candidly admitted that no such account or tabulation was made in the PLA. In absence of such an account and for not being in the form of a written statement, the PLA was rejectable under sub-section (6) of Section 10 of the Ordinance of 2001 for not complying with the mandatory requirements of sub-sections (3) and (4) of Section 10 ibid.The contention of the learned counsel for the petitioners/defendants thereupon was that he filed amended PLA under sub-section (12) of Section 10 ibid, as he had already filed a petition for leave, wherefor provisions prescribed in other sub-sections of Section 10 ibid were inapplicable to the amended PLA.
6. I am afraid, the express provisions of sub-section(12) of Section 10 of the Financial Institution (Recovery of Finances) Ordinance, 2001 mandate to the contrary. This sub-section provides that "an amended application for leave to defend .In accordance with the provisions of this Ordinance" shall be filed by a defendant, who has already filed a leave petition. This sub-section expressly makes all the provisions of the Ordinance including sub-sections (3),(4) , (5) and (6) of Section 10 ibid, applicable to the amended PLA Non-submission of the mandatory accounts, as provided for in sub-section (4) of Section 10 ibid, attract the penal consequences set-out in sub-section (6) of Section 10 ibid and the amended PLA becomes rejectable. Furthermore, law is well-settled that jurisdiction of a Court within whose territorial-limits cause of action or a part thereof arose, cannot be contracted out by the parties, ln the present case, defendants/applicants have not denied' accrual of part of cause of action within territorial-limits of this Court. As such, objection of learned counsel for applicants/defendants regarding absence of jurisdiction in this Court, has no substance.
7. In view thereof, this PLA is rejected for:-(i) Non-compliance with the mandatory provisions of sub- sections (3) and (4) of Section 10 ibid;(ii) Non-disclosure of any plausible, reasonable and serious ground to defend the suit; and(iii) Non-substantiating the accounts stated above.
MAIN CASE Upon rejection of amended PLA filed bydefendants/applicants, learned counsel for the plaintiff requested for passing of a decree forthwith in favour of the plaintiff-Bank and against the defendants in terms of the plaint and the prayer made therein.
2. Examination of the plaint shows that theplaintiff/Banks have in paras Nos. 5, 6 and 10 of the plaint, pleaded that a number of facilities in the nature of TFC financing, TFC local currency financing, LFM and TFC [Vol.VIII Bankers Equity Ltd. V. Bentonite Pakistan Ltd. C.L. 889(Muhammad SairAli, J.)financial accommodation (in terms of paras 5 and 6 of the plaint) and long term financing (para 10) of various amounts were advanced by the syndicate of plaintiff Banks to the defendant company. And that the financing agreements and other documents filed with the plaint and relied upon by the plaintiff were executed. And as per para 8, the said finances were secured through security documents and creation of mortgages, hypothecation, floating charges and trust receipts and joint personal guarantee of defendants Nos. 2 to 8. Lt was further pleaded that defendant company availed and utilized the finances but failed to re-pay the same. And that on the request of the defendant No. 1, the entire finances and loan liabilities of the defendant company were reviewed by the Syndicate of Banks and in order to make the project of the company feasible, Banks agreed to reschedule and restructure the financial facilities and also to allow further capitalization of financing facilities and offered Rehabilitation Package per sanction dated 16th of October, 1995. Defendants, despite fresh documentation in September, 1998 thereto, failed to meet all essential preconditions including deposit of agreed equity and completion of civil works to entitle them to the release of facilities. Owing to this breach and violation of the pre-conditions of re-scheduling and restructuring etc., the plaintiff-banks recalled rehabilitation package. And that all efforts at recovery failed and despite repeated undertakings, defendants failed to settle the outstanding liability of Rs. 183,757,756.00 as on 30.4.2000. The break-up of the above-said due amount was pleaded by the plaintiff Banks in para 18 of the plaint as under:-- "The amounts due as reflected in the duly certified Statements of Accounts filed with the plaint, are given hereunder:-- Bankers Equity................................................... ....Rs. 141,969,335.00 National Bank....................................................... .Rs. 9,814,082.00 Habib Bank ........................................................... Rs. 10,204,414.00 United Bank.......................................................... .Rs. 11,118,229.00 Muslim Commercial Bank........................................... Rs. 6,504,462.00 Allied Bank............................................................ Rs. 4,147,234.00 Rs. 183,757,756.00 In view thereof, plaintiff-Bank prayed for a decree for a sum of Rs. 183,757,756.00 with mark-up, costs, service charges- and liquidated damages against the defendants jointly and severally.4. In support of their claim, plaintiff Banks have filed and relied upon the Statements of Accounts at pages 821 to 841 of the suit to prove the break-up of 'amounts due1 as per above reproduced para 18 of the plaint. Learned counsel for the plaintiff stated that these Statements of Accounts unquestionably prove the contents of the plaint and plaintiffs claim against the defendants for the unliquidated finances advanced to them, lt was also contended that the same are duly certified Account Statements under the provisions of Bankers Books Evidence, 1891 as per requirements of Section 9(2) of the Financial Institution (Recovery of Finances) Ordinance, 2001.Sub-section (2) of Section 9 ibid provides as under:--"The plaint shall be supported by a statement of account which in the case of a financial institution shall be duly certified under the Bankers Book Evidence Act, 1891 (XVII of 1891) and all other relevant documents relating to the grant of finance. Copies of the plaint, statement of account and other relevant documents shall be filed with the Banking Court in sufficient numbers so that there is one set of copies for each defendant and one extra copy."
(Emphasis added)[Vol.VIII Bankers Equity Ltd. V. Bentonite Pakistan Ltd.#tbsC.L 891#the(Muhammad SairAli, J.)5. This Section thus compulsorily requires a plaintiff to support the plaint by a statement of account containing certification in accordance with Bankers Books Evidence Act, 1891. The wisdom of the words 'shall' and 'support' in this provision becomes evident by reading of various provisions together that:-"Where a customer......Commits a defaultinfulfilment of any obligation with regard to any finance", the financial institution may institute a suit in the Banking Court under Section 9(1) of the Ordinance, 2001.'Finance' is an accommodation or facility as inter alia defined in Section 2(d) ibid and 'customer' under Section 2(c) ibid is a person to whom or on wfidse behalf finance has been extended............................................................................. ".Similarly 'obligation' under Section 2(c) ibid includes 'agreement for the repayment' of finance either reviewed, rescheduled or restructured etc. A suit for recovery of defaulted finance or obligation filed by a financial institution under Section 9(1) exclusively lies before a Banking Court under sub- section (4) of Section 7 of the Financial Institution (Recovery of Finances) Ordinance, 2001. The pre- requisite for the assumption of jurisdiction by a Banking Court over the suit by a Banking institution against a customer, is the 'default' of the 'customer' in fulfilling 'obligation' with regard to any 'finance', which obviously involves accounting.6. As per settled 'Banking Practices', every amount/sum advanced or paid to a customer or sum expended/incurred for and on behalf of a customer by a banking company is entered as 'debit' in the books of the Bank and the money received from or on behalf of the customer is entered in these books as customer's 'credit' to arrive at a credit or debit balance. On the basis of the entries in these books, a Statement of Account truly, faithfully and duly reflecting the entries, is prepared by the Bank for eachaccount for all practical purposes. These Statements of Accounts, bearing true account profile, are to be regularly conveyed to the customers to apprise them of their 'obligations' towards the Bank or vice-versa.
These 'Statements of Accounts' containing copies of entries in the books of a bank, when certified as per Section 2(8) of the Bankers' Books Evidence Act, 1891 (Act No. XVIH of -1891), attain the status of prime facie evidence of the existence of such entries in the banker's books under Section 4 ibid and become admissible in evidence, in all legal proceedings, of the matters, transactions and accounts therein recorded like the original entry.7. In view of the above, sub-section (2) of Section 9 of the Financial Institution (Recovery of Finances) Ordinance, 2001 makes it mandatory for a Banking institution to support its plaint in a suit against the customer by a Statement of Account duly certified under the Banker's Books Evidence Act, 1891 and also by all other relevant documents relating to grant of finance. Without such a 'Statement of Account' filed alongwith the plaint, a customer will obviously remain totally unaware of the amount advanced, mark-up charged and the basis, break-up, premise, mode of calculation of account, nature of default and the actual amount of Bank's claim against the defendant customer. He will thus be unable to frame his defence within the limited period prescribed by law, to show reasonable, serious and plausible grounds of contest to be able to seek and obtain leave to defend the suit. Absence of filing the requisite Statements of Account alongwith the plaint, will essentially amount to absence of providing adequate, proper and reasonable opportunity of defence to the defending customer.
Being thus unable to file a proper leave petition within thirty days under Section 12(2) of the Ordinance of 2001 or within twenty-one days under Section 10(12) ibid, such a customer may or.
May not later be able to amend his leave petition. His defence shall thus be rendered illusory, [Vol.VIII Bankers Equity Ltd. V. Bentonite Pakistan Ltd. C.L. 893(Muhammad Sair AH, J.)hence denied.
Upon the compliance by a Banking company with the provisions of Section 9(2) of the Ordinance of 200I, depends the right of defence of a defendant in the summary suits as visualized under the Ordinance,' wherefor, the filing of duly certified Statements of Account by. a Banking company alongwith its plaint, cannot be taken to be a mere formality or a technicality. This provision can only be held to be mandatory. Without strict compliance wherewith, the plaint is incomplete and cannot become basis of a suit under this law.8. Another word employed in sub-section (2) of Section 9 ibid, requires deeper consideration as this word has a direct bearing and impact on the essential mandate contained in this provision of law. This sub-section provides that "plaint shall be supported by a Statement of Account" duly certified under the Bankers Books Evidence Act, 1891 and all other relevant documents relating to the grant of finance.In my opinion, the word 'support1 read in the mandatory perspective of word 'shall', makes the plaint filed by a Banking institution, as totally dependent upon duly certified Statement of Account; on the 'support' of which can a plaint stand and sustain as per Section 9(1) and (2) ibid. Plaint is subservient to or upon the Statement of Account for its life, sustainability, security and maintenance. Without support of such Statement of Account (and documents) a plaint by itself cannot be presumed to stand independently. No building can be raised, constructed or erected without the support of a foundation, columns and walls. Likewise, as per provisions of law, a plaint cannot be structured, constructed, built, or raised without the foundation of a duly certified Statement of Account dnd the requisite documents.
Infact, the three i.e. Plaint, Statement of Account and the documents,-though distinct, do not enjoy independence of existence in terms of sub-section (2) of Section 9 ibid. They are inseparable, indivisible and interdependent. Under sub-sections (1) and (2) of Section 9 ibid, no suit in the Banking Court can be instituted by a Banking company through a plaint without the requisite Statement of Account and documents.9. I am duly supported in my above opinion by discussion on the word 'support' at pages 153 and 154 of Second Edition, Words and Phrases, Legally Defined, by John B. Saunders, Volume 5, 1970 Butterworths publication, which is as under:-(i) "What is support? The force of gravity causes the super-incumbent land or building to press downward upon what is below it, whether artificial or natural; and it has also a tendency to thrust outwards, laterally, any loose or yielding substance, such as earth or clay, until it meets with adequate resistance. Using the language of the law of easements, I say that, in the case alike of vertical and of lateral support, both to land and to buildings, the dominant tenement imposes upon the servient a positive and a constant burden, the sustenance of which, by the servient tenement is necessary for the safety and stability of the dominant. Dalton v. Angus (1881), 6 App. Cas. 740, per Lord Selborne, L.C., at p. 793."(ii) "ln my opinion, the general right which a man prima facie has at common law to the support of his land, either subjacent or adjacent, is a natural right analogous to the right to flowing water, and not an easement. Row-botham v. Wilson (1857), 8E. & B 123. Per Martin, B. At p. 151."(iii) "ln the natural state of land one part of it services support from another, upper from lower strata, and soil from adjacent soil; and therefore, if one point of title from another continuous to it, or (as in the case of mines) below it, the right to support passes[Vol.VIII Bankers Equity Ltd. V. Bentonite Pakistan Ltd. C.L. 895(Muhammad SairAli, J.)with the land, not as an easement held by a distinct title, but as an incident to the land itself, sine quo resipsa haberi non debet.(iv) The most common easement of support may be defined as the right of an owner of buildings to receive for them such support from the land or buildings of his neighbour as is sufficient to resist the effect of the law of gravitation and to maintain them in their existing state and position. This right involves the correlative right to prevent the owner of the servient tenement from using his land or the buildings upon it in such a manner as to deprive of such support the buildings upon the land of the dominant tenement (12 Halsbury's Laws (3rd Ed.) 604,606,607).The right of support is a right to have the surfape, kept at its ancient and natural level, lt is not an easement but a natural right incident to the ownership of the soil."The word 'support' has been discussed and referred to in Black's Law Dictionary, 5th Edition of 1979 at page 1291 as under:- "Furnishing funds or means for maintenance; to maintain; to provide for; to enable to continue; to carry on. To provide a means of livelihood. To vindicate, to maintain, to defence, to uphold'with aid or countenance."The word 'support' has been definecfby Chambers 21st Century Dictionary at page 1420 as under;- *"To keep something upright of in place; to keep from falling; to bear the weight of someone or something."The Concise Oxford Dictionary 7th Edition at page 1072 gives the meaning of word 'support' as under:-Carry (part of) weight of, hold-up, keep from falling or sinking, (foundation), butress, supports house, wall; supported by a lifebelt; had to be supported home); enable to last out. Keep from failing, give strength to, encourage, (what supported him or his strength was a good conscience, hope, your approval; too little food to support life; endure, tolerate."10. In view of the above meaning, definition and nature of term 'support', sub-sections (1) and (2) of Section 9 of the Ordinance, 2001, can safely and logically be interpreted by holding that suit of a Banking company cannot hold endure, sustain, stand and be instituted without life support and foundation