1. The plaint of plaintiffs' suit was rejected by short order, dated 6-12-2000, these are the reasons in support thereof.
2. Aamir Fatani is owner of Aamir Impex engaged in business of import and export of garments and other goods through plaintiff No,2, whereas, plaintiff No,3 is wife of plaintiff No,2 and owner of Plot No,149, Karachi, Memon Cooperative Housing Society, Blocks Nos, 7 and 8 and a business/factory premises in rented House No,24-D, Plot No,14, P.I.B. Colony, Karachi equipped with office furniture and sewing machines of different types. The defendant is a Banking Company having a branch at Saima Trade Tower, Karachi. Plaintiff No,1 exported goods to USA and Europe worth Rs,15,000,000 and had orders for the supply to U.S. Firms, with business turnover for the last three years worth Rs,48,132,136, with profit of Rs,584,233 yearly. Schon Bank Ltd., Karachi and Habib Bank Ltd., Karachi were the bankers of the plaintiff. On persuasion of Messrs Kazi & Madraswala of defendant-Bank, they switched over to defendant-Bank on promised by them to provide the better financial facilities. The defendant-Bank granted preshipment credit facility of Rs,10 Millions. The plaintiff signed agreement of financing for short/medium/ long term on mark-up basis for Rs,10 millions for one year up to 2-10-1996, equitable mortgaged was created by deposit of title deed of Bungalow No,149, Katchi Memon Cooperative Housing Society belonging to the plaintiff No,3. It was the case of the plaintiff that the various documents were obtained in blank by the bank. According to the plaintiff, the facility of Rs,10 Millions was allowed. It is the case of the plaintiff that defendant transferred Rs, 5.6 Millions on 30-8-1995 and a sum of Rs,4.4 Millions on 2-10-1995 but the plaintiff was not allowed to utilize the entire amount. The plaintiff had to purchase yarn on credit from the market. The defendant also charged the mark-up on the entire amount. The defendant filed Suit No,256 of 1998 for the following amount:-
(I) Principal amount (Finance against Packing CreditRs.65,00,000.00 (II)Mark-up up to 31-3-1998 Rs. 5,81,812.78 (III)Mark-up up to 31-3-1998 Rs.18,67,725.84 (IV)Running finance Rs.21,29,968.29 (V)Liquidated damages Rs.22,15,901.00 Rs.13,296,407.91 The suit was decreed for a sum of Rs,8,821,718. The claim of the defendant for liquidated damages was rejected. The decree passed in favour of the defendant and against plaintiffs Nos,1 and 3 is in the following terms, vide Annexure "V" to the plaint:--- "As per judgment the plaintiffs suit is decreed against the defendants jointly and severally in sum of Rs,88,21,718 with cost and future mark-up at the agreed rate from the date of the institution of the suit till the realization of the entire decretal amount. The defendants have prayed for instalments on account of the economic crisis faced by them. I, therefore, grant the defendants' request.
3. They are permitted to pay the decretal amount in 24 equal instalments commencing from the month of October, 1998 till the entire amount is paid. In case of two consecutive default, the entire amount shall become due and payable at once and shall be recovered through the sale of the mortgaged property according to law. It is hereby ordered and decreed as follows:--
(1) It is hereby ordered and decreed that the mortgaged property in the aforesaid decree mentioned or a sufficient part thereof be sold, and that for the purposes of such sale the plaintiff shall produce before the Court or Officer as it appoints, documents in his possession or power relating to the mortgaged property.
(2) And it is hereby further ordered and decreed that the money realized by such sale shall be paid into the Court and shall be duly applied (after deduction therefrom of the expenses of the sale) in payment of the amount payable to the plaintiff under the aforesaid decree and under any further order that may have been passed in this suit and in payment of any amount which the Court may have adjudged due to the plaintiff for such costs, of the suit including the costs, charges, expenses and subsequent interest as may be payable under decree and that the balance, if any, shall be paid to the defendants or other persons entitled to receive the same."
4. The plaintiffs' case is that the judgment passed by the Banking Court No,1 was not in consonance of the judgment of the superior Court. The plaintiff moved an application under section 12(2) read with section 151, C.P.C. The same was dismissed by order, dated 2-7-1999. The Constitutional Petition D-No,1857 of 1998 against the judgment was also dismissed. The plaintiffs' case for damages is based on omission, negligence and commission on the part of the defendant, the plaintiffs suffered the loss due to non-release of Rs,3.5 Millions, as thus has filed the suit with following prayer:-- "(a) to decree that the impugned Additional Security mortgaged by deposit of title documents was fraudulently, void, illegal and of no legal effect:
(b) to pass a decree in sum of Rs,42,959.119.50 on account of losses suffered by the plaintiffs;
(c) pass a preliminary decree in Form No,7A in Appendix 'D' to the Code of Civil Procedure under Order XXXIV, rule 7 ordering that an amount be taken, declaring the amount, if any, due on the mortgage and giving such directions as deemed appropriate;
(d) pass a final decree for the redemption under Order XXIV, rule 8 of the Civil Procedure Code;
(e) issue directions to the defendant under Order XXXIV, rule 9, C.P.C. If it is found that the defendant is not entitled to sum;
(f) pass a permanent injunction restraining the defendant from recovering any amount allegedly due from the plaintiff No,1 or from any of the plaintiffs;
(g) costs of the suit; and
(h) any other relief which this Hon'ble Court may deem fit and proper in the circumstances of this case."
5. The defendant through C.M.A. No,3486 of 2000 has prayed for rejection of the plaint, wherein it was pleaded that the plaintiffs were the customers of the defendant in respect of a facility of Rs,10 Millions availed by the plaintiffs from the defendant. The plaintiffs failed to adjust their liability. The defendant filed the suit in the Banking Court, which was decreed in favour of the defendant in the sum of Rs,8,821,718 with costs and future mark-up. The plaintiff at the time of passing of the decree voluntarily requested for payment of decretal amount in 24 instalments, which was allowed by the Court but the plaintiffs again defaulted in payment of agreed instalments. The execution application was filed. The plaintiffs tried to delay the execution of the decree by filing the application under section 12(2), C.P.C. As well as petition, which was declined on the ground that decree was a consent decree. The plaintiff failed to avail the remedy available under the Act, 1997.
6. The suit was disposed of by consent, therefore, the present suit is barred under sections 9 and 11 of the C.P.C. As no cause of action has accrued to the plaintiff for filing the suit for damages. The detailed counter-affidavit has been filed on behalf of the plaintiffs, rejoinder was also filed.
7. I have heard the learned counsel for the parties.
8. The plaintiffs' own case is that the defendant credited Rs,10 Millions to the account of the plaintiff but they were not allowed to avail the released amount in full. The facts admitted by the plaintiffs are that the defendant filed the suit for recovery against the facility of Rs,10 Millions. The plaintiff availed the financial facility of Rs,5.6 Millions on 13-8-1995 and on Rs,4.4 Millions on 2-10-1995 for a period of five months. The plaintiffs failed to fulfil the commitment except the realization of Rs,3.5 Millions, through TDR reducing the liability to the extent of Rs,6.5 Millions further facility was allowed for a period of six months which was utilized by hypothecation of cotton yarn and other machinery.
9. The judgment has been filed by the plaintiffs themselves, the entire facility of Rs,10 Millions was availed by the plaintiff, the liability was also reduced by the plaintiff, through TDR as evident by judgment in Suit No,256 of 1998, by the competent Court. The plaintiff instead of filing appeal, filed application under section 12(2), C.P.C. As well as petition before this Court challenging the decree and ultimately the present suit for reliefs as stated above including the damages. The plaintiffs themselves are the defaulter not in repayment of the loan but in payment of the decretal amount after obtaining the concession of instalments for payment of the decretal amount from the Banking Court.
10. In such circumstances, the plaintiff No,1, a defaulter/borrower and plaintiff No,3 a guarantor, have no cause of action to bring the suit for above reliefs when. They themselves are the defaulter after availing the full facility, therefore, no cause of action has accrued to the plaintiff for filing the present suit against the Bank. The suit of the plaintiff is also barred under section 11 of the C.P.C. In view of the decree for foreclosure against the plaintiffs in Suit No,258 of 1998, filed by defendant.
11. The plaintiff No,2 has no privity of contract with bank as such, he has no cause of action as well to bring the suit. Therefore, the plaint of the suit is rejected with special costs of Rs,25,000.