' MIAN HAMID FAROOQ, J.---The appellants/ judgment-debtors, through the filing of the present appeal, under section 21 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, has called in question judgment and a decree dated 19-5-2001, whereby the learned Judge Banking Court, passed a decree for the recovery of Rs.17,24,245.
2. Necessary facts, leading to the filing of the present appeal are that the respondent-Company filed a suit for the recovery of Rs.19,74,245, against the appellants, under the provisions of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, wherein the appellant No,1 was sued as the principal-debtor, while the appellants Nos.2 and 3 were arrayed as defendants in the capacity of the guarantors. It was the case of the respondent-Company that the appellants took certain equipments on lease in three separate transactions, and executed relevant documents/agreements, inter alia, showing that monthly rental of leased equipments shall be payable on the last day of each month. It was agreed that in case of breach of any of the terms of the agreement, the respondents were entitled to take possession of the equipments and to terminate the lease agreement. The appellants, statedly, executed promissory notes, letter of guarantees and indemnities on different dates. It also appears from the record that certain dispute arose between the parties, the matter was settled in this Court vide compromise dated 18-7-1995 and consequent thereto the appellants paid an amount of Rs.2,50,000, but did not clear all the liabilities. In the above backdrop, the respondent-Company filed the aforenoted suit for the recovery before the learned Banking Court and in response to the summons, issued to the appellants, as required under the law, they filed an application for leave to defend the suit thereby raising various legal and factual controversies. Ultimately, the learned Banking Court, after finding that entry regarding an amount of Rs.2,50,000, admittedly, paid by the appellants, does not find mention in the statement of accounts, held that the appellants are entitled for the adjustment of the said amount rejected the application for leave to defend the suit, proceeded to decree the suit, after defraying the amount of Rs.2,50,000, for the recovery of Rs.17,24,245 with costs vide judgment and decree dated 19-5-2001, hence, the present appeal.
3. Learned counsel for the appellants has contended that the respondent-Company has charged a sum of Rs.10,85,724, in the statement of accounts, as additional rental for late payments, which amount cannot be recovered as the same is penalty and thus, prohibited not only under the law but also under the relevant circulars issued by the State Bank of Pakistan. He has further contended that both the statement of accounts, produced by the respondent-Company in support of their alleged claim, are incorrect, cannot be relied upon and made basis for passing the decree against the appellants inasmuch as the amount of Rs.1,64,200 has erroneously been included in the statement of accounts.
' Conversely, the learned counsel for the respondent-Company, while supporting the impugned judgment and refuting the aforesaid contentions, has submitted that the statement of accounts are correct/legal and the learned Banking Court has rightly relied upon the said statement of accounts inasmuch as the appellants were given the benefits of a sum of Rs.2,50,000 which amount was excluded from the suit amount while decreeing the suit. He has next contended that the amount of additional rentals is permissible and can be charged as liquidated damages, per force of sections 73 and 74 of the Contract Act, thus, there is no infirmity in the impugned judgment and the same is not liable to be interfered with.
4. As regards the first contention of the learned counsel, we have examined both the statements of accounts and find that no uncalled for entries have been made in the statements of accounts.
Although the learned counsel has contended that a sum of Rs.1,64,200 has illegally been debited in the account of the appellants, yet despite his best efforts, he could not pinpoint any entry in the statement of accounts, which is against the terms of the agreement executed between the parties or against the law or even circulars issued by the State Bank of Pakistan. We have also examined the statements of accounts and find that the learned Banking Court has rightly scrutinized and relied upon the statements of accounts, filed by the respondent alongwith the plaint and an entry of Rs.2,50,000 was duly defrayed from the outstanding amount. The contention of the learned counsel regarding the statements of accounts is misconceived and misdirected, thus, repelled.
5. Now coming to the contention raised by the learned counsel regarding charging of additional rentals and the defence of the respondent-Company that the same has been charged as liquidated damages. There cannot be any cavil to the proposition that when the fixed amount of damages is even incorporated in the contract itself, in case of breach of such contract, such damages are to be assessed in ordinary way. This Court while deliberating upon the issue of liquidated damages in a case reported as Allied Bank of Pakistan Ltd., Faisalabad v. Messrs Aisha Garments and others 2001 MLD 1955 has held as under:-- "In case a party alleges a breach of contract and wants to enforce a claim of damages/compensation through Court of law, then such a case is obviously covered and governed by the provisions of sections 73 and 74 of the Contract Act. Under section 74 of the Contract Act, when liquidated damages are entered in a contract itself, then in case of breach of such contract, the damages are to be assessed in the ordinary way, subject to that fixed amount as a maximum. In that case the plaintiff is under a legal obligation to prove the exact amount of damages, which he has allegedly suffered, irrespective of the specified amount mentioned in the contract, which is not at all a concrete proof and in such-like cases the plaintiff, who is complaining the breach of contract and also demanding the damages, shall have to first plead and then to prove the damages under section 74 of the Contract Act, 1872, call for the proof and the person claiming such damages is under obligation to bring sufficient material on record in order to prove that he had suffered so much of losses. Without proving the actual loss, even fixed amount stipulated as liquidated damages does not automatically become payable. In arriving the above conclusions we are supported and fortified by the principles laid down in Habib Bank Ltd. v. Messrs Farooq Composit Fertilizer Corporation Ltd. And 4 others 1993 MLD 1571; Messrs Hitec Metal Plast (Pvt.) through Chairman, Hasan Parvaiz Sindhi, Muslim Housing Society, Karachi and 3 others v.
Habib Bank Limited PLD 1997 Quetta 87 and United Bank Limited v. Messrs Novelty Enterprises Ltd.
And others PLD 1998 Karachi 199."
5. In the above perspective and in view of the said principle, we have scanned through the record of the case, but unable to find that the appellant-Bank has either pleaded in their suit or produced any evidence in order to prove that on account of the non-payment of the rentals, the respondent- Company had suffered actual losses. Even no document was produced in this regard to prima facie show that on account of the alleged breach of contract by the appellants, the respondent- Company has suffered actual loss. In view of the said legal position, we are of the view that the respondent-Company is not entitled to recover a sum of Rs.10,85,724, charged as additional rental/liquidated damages, thus, the judgment passed by the learned Banking Court calls for interference and modification. In the above backdrop, to our mind, only a decree for the recovery of Rs.6,38,521 ought to have been passed by the learned Banking Court instead of a decree for Rs.17,24,245, thus, we accordingly modify the decree so as to grant a decree for a sum of Rs.6,38,521 only instead of Rs.17,24,245, against the appellants.
6. Confronted with this, the learned counsel for the appellants has categorically admitted that if a sufficient time is allowed to the appellants, they undertake to pay the balance decretal amount.
The request is reasonable and we allowed a period of three months to the appellants to pay the decretal amount Rs.6,38,521, otherwise the same shall be recovered through the execution process.
7. In view of the above discussion and reasons, we partially accept the present appeal and on the basis of our findings recorded above, we modify the impugned decree, awarded by the learned Banking Court, and hereby pass a decree for the recovery of Rs.6,38,521 against the appellants instead of Rs.17,24,245.
8. Impugned decree stands modified in the above terms with no order as to costs.