' JAWWAD S. KHAWAJA. J.---This appeal impugns the judgment and decree dated 15-2-2002 passed by the learned Banking Court No,II, Lahore.
2. The facts of the case are straightforward. The respondent-Bank filed a suit against the appellants-defendants seeking recovery of a sum of Rs,1,683,526.15. The appellants-defendants filed an application seeking leave to appear and defend. They acknowledged their liability to pay a sum of Rs,5,00,000 together with service charges and denied the balance amount claimed by the respondent-Bank. Their case briefly stated was that they had obtained running finance from the respondent-Bank for a period of one year vide finance agreement dated 9-3-1991. The period of finance was extended from time to time. The last extension was allowed by the respondent-Bank on 8-12-1994 and was for the period ending on 31-12-1995. On this basis it was asserted on behalf of the appellants-defendants that no amount by way of mark-up could have been charged by the respondent-Bank after 31-12-1995. The learned Banking Court after considering the contents of the application for leave to appear and defend filed by the appellants-defendants and after going through the statement of account proceeded to pass a decree for Rs,1,683,526.15 together with costs and markup accruing till realization of the decretal amount.
3. Learned counsel for the appellants-defendants reiterated before us the stance adopted before the learned Banking Court and argued that the respondent-Bank had no right to charge mark-up on the outstanding finance after 31-12-1995. This argument was based on the fact noted above that the last extension of finance was up to 31-12-1995. Learned counsel for the appellants did not advert to the dealings between the appellants and the respondent-Bank subsequent to 31-12-1995 nor did he refer to the terms agreed upon between the parties in correspondence exchanged between them. In this behalf learned counsel for the respondent-Bank drew our attention to such correspondence including the respondent-Bank's letter dated 16-7-1998, which in relevant part reads as under:-- "This has reference to your letter No, Nil dated 18-6-1998 in the matter of referenced account containing proposal for payment of overdue amount.
' The proposal has been considered by the competent authority of the Bank. It is observed as follows:--
(1) That we are ready to accept Rs,500,000 in cash in lump sum which amount shall clear the overdue legitimate mark-up amounting to Rs,9,267 (m) and balance of Rs,0,233 (m) shall be adjusted towards the liability. As a consequence of this, the principal shall stand reduced to Rs,1,744 (m);
(2) that the customer shall be allowed maximum period of two years from the date of this letter to reply the remaining liability with mark-up at the prevalent rate;
(3) that mark-up charged after 28-7-1996 todate shall be waived of provided payment in terms of clause (1) above is made, forthwith; ' This is however, without prejudice to the claim of the Bank if the above repayment schedule is not adhered to by the customer."
4. After hearing learned counsel for the parties and going through the record of the learned Banking Court, it is clear to us that the contention between the parties can easily be resolved by reference to the above letter dated 16-7-1998 addressed to the appellants by the respondent-Bank in response to a letter dated 18-6-1998 received from the appellants. We are not in any doubt that the aforesaid two letters constitute a fresh agreement between the parties crystallizing the liability of the appellants-defendants and set out a repayment schedule in respect thereof. At this point it may be noted that the appellants did make an attempt to back out of the said agreement. For this purpose a writ petition was filed in the High Court which was dismissed. I.C.A. No,633 of 1998 was filed to challenge the said dismissal. However, the ICA was also dismissed by judgment dated 5-8- 1998. The appellants thereupon filed C.P.S.L.A. No,1465-L of 1998. This petition was also dismissed vide order dated 13-4-2000.
5. Para. Six of the said order of the Honourable Supreme Court which is relevant for the purpose of deciding the present appeal is as under:-- "6. The argument of the learned counsel for the respondents has force. The petitioners are bound under the law to abide by their own offer and the transaction in question being a transaction entered long before the said declaration of law becomes operative, therefore, the petitioners are bound to abide by the same and there is no justification that after having made an offer as argued through letter dated 16-7-1998, the issuance of which has not been denied by the ,learned counsel for the petitioners, the petitioners should pay the amounts as calculated and determined accordingly."
6. Here we also need to note that the appellants-defendants acted upon the terms set out in the respondent-Bank's letter dated 16-7-1998 by making an initial payment of Rs,5,00,000 as envisaged in the said letter. In these circumstances, learned counsel for the parties were directed to calculate the amount which was due and payable by the appellants in accordance with the terms of the aforesaid letter. This was necessitated because the respondent-Bank had asserted a claim in disregard of the terms set out in the letter dated 16-7-1998. Learned counsel for the respondent- Bank justified this by asserting that the appellants-defendants had not in fact, made the initial payment of Rs,5,00,000 forthwith as required by the terms of the aforesaid letter. On the previous date of hearing we had considered this contention of learned counsel for respondent-Bank and found it to be without force. The payment of a sum of Rs,5,00,000 was made on 24-8-1998. The amount was accepted by the respondent-Bank and credited towards payment of mark-up and principal in accordance with the terms set out in the letter dated 16-7-1998. Having accepted the said payment and appropriated the same towards mark-up and principal according to the aforesaid terms, we are clear that the respondent-Bank was estopped from denying the existence of the agreement which stood created and acted upon as aforesaid.
7. It was in the above circumstances that the learned counsel for the appellants and the respondent-Bank respectively were directed on 29-10-2002 to calculate the amount of the respondent-Bank's claim based on the terms set out in the letter dated 16-7-1998. Learned counsel have done the needful as directed. Learned counsel for the respondent-Bank has, as a consequence, excluded the amount of Rs,6,82,473 from its claim as set out in the plaint. This amount constitutes mark-up for the period 28-7-1996 to 16-7-1998 and had been included in the statement of account annexed by the Bank with its plaint. Considering that the letter of 16-7-1998 had provided for the waiver of mark-up for the aforesaid period between 28-7-1996 and 16-7-1998, we are clear that the said amount could not have been included in the claim asserted by the Bank.
8. Learned counsel for the appellants, however, argued that in addition to the aforesaid sum of Rs,6,82,473 two other amounts of Rs,1,20,000 and Rs,20,000 had been paid by the appellants to the respondent-Bank on 11-11-1996 and 21-12-1996 respectively which amounts have been adjusted towards outstanding mark-up. It was argued that the said amounts also represented mark-up for the period between 28-7-1996 to 16-7-1998. This contention is withbut merit because the said amount of Rs,1,40,000 which was paid in November-December, 1996 could not possibly constitute mark-up on the outstanding balance for the short period between 28-7-1996 and 11-11-1996 when Rs,1,20,000 out of the aforesaid amount was paid. It is true that the aforesaid amount of Rs,1,40,000 was credited to the mark-up amount.
9. However, based on the reasons discussed above, we are not in any doubt that the said amount of Rs,1,40,000 was paid towards mark-up which had already accrued up to 31-12-1995 when the last extension of the facilities advanced to the appellants-defendants expired. In the circumstances, the appellants-defendants are not entitled to claim adjustment of the said amount of Rs,1,40,000 towards the above noted period for which mark-up was agreed to be waived as per terms of letter dated 16-7-1998.
10. In view of the above discussion, this appeal is partially allowed. The decree of the learned Banking Court is modified and the amount of Rs,16,83,526.15 mentioned in the decree is reduced to Rs,10,01,053. In all other particulars the decree of the learned Banking Court dated 15-2-2002 shall remain in full force and effect.
11. In view of the partial success of this appeal, there shall be no order as to costs.