' MIAN HAMID FAROOQ, J.---This single judgment shall decide the present appeal (R.F.A No,581 of 2002) and the connected appeal (R.F.A. No,604 of 2002), as common questions of law and facts are involved in both the appeals and they have arisen out of a single judgment.
2. Messrs Associated Construction Engineer etc, through the filing of the present appeal, have called in question judgment and decree dated 3-6-2002, whereby the learned Banking Court decreed respondent-Bank's suit for the recovery of Rs.24,53,096 against them, and the plaint was rejected qua respondent No,2, while the Bank of Punjab has filed the connected appeal, thereby challenging the same judgment and decree, so far as it relates to the rejection of the plaint against respondent No,2.
3. Briefly stated the facts of the case are that Bank of Punjab filed a suit for the recovery of Rs.24,53,096, against Messrs Associated Construction Engineer etc, hereinafter referred to as appellants, and respondent No,2, before the learned Banking Court asserting therein the bank furnished certain bank guarantees on behalf of appellant No,1, favouring C&W Department, which were, later on, encashed by the beneficiaries and the respondent-Bank, pursuant to the terms of the bank guarantees had to pay a sum of Rs.21,08,925 to the said department. Thereafter, the bank created forced demand facility for the said amount, the appellants and respondent No,2 executed certain documents and upon the failure of the defendants to liquidate the outstanding amount, the bank instituted the suit for recovery. Pursuant to the issuance of summons, the appellants jointly filed an application seeking leave to defend the suit, thereby taking certain objections including the one about the correctness of entries in the statement of accounts. Respondent No,2 filed a separate leave application, thereby pleading that a decree of redemption of mortgaged property, passed in his favour, has attained finality, therefore, no suit shall lie against him. The learned Banking Court, after hearing the parties, proceeded to reject the plaint qua respondent No,2, while appellant's application for leave to defend the suit was dismissed and consequently the suit for recovery of Rs.24,53,096 was decreed against the appellants, vide composite judgment dated 3-6-2002, hence the present two appeals.
4. Learned counsel for the appellants has submitted that the rejection of the plaint against respondent No,2, who was mortgagor/guarantor, was sufficient to dismiss the suit as against the appellants, as well. According to the learned counsel, the Bank has reportedly paid a sum of Rs.21,08,925 to the department and the said amount has been paid by the appellants, therefore, nothing was outstanding against the appellants at the time of the filing of the suit. The learned counsel for the respondent-Bank has supported the impugned judgment, except a portion of the judgment, whereby the plaint qua respondent No,2 was rejected, however, the learned counsel for respondent No,2 has completely supported the impugned judgment. So far as, the other appeal is concerned, the stance of the bank is that the plaint against respondent No,2 has erroneously been rejected, therefore, the decree may also be passed against him.
5. We have examined the contents of the plaint of the suit, filed by the respondent-Bank, against the appellants and respondent No,2. It has been narrated in para 5 of the plaint that in accordance with the terms of the guarantees, the bank made payment, to C&W Department, to the tune of Rs.21,08,925 and it consequently created forced demand facility of Rs.21,08,925. It has nowhere been mentioned in the plaint that a sum of Rs.32,23,238 was paid to the said department, as held by the learned Banking Court in the impugned judgment. It is, however, not discernible from the available record that on the basis of which record/documents, the learned Banking Court came to the conclusion that the amount of Rs.32,23,238 was paid by the bank, while the basic documents, from which the plaintiff cannot back out, did not even mention that a sum of Rs.32,23,238 was paid to the said department. When according to the own showings of the bank, a sum of Rs.21,08,925 was paid on behalf of the appellant No,1, how it can be held by the learned Banking Court or argued by the respondent-Bank that sum of Rs.32,23,238 was paid. It appears that the learned Banking Court has not even gone through the contents of the plaint in the suit and only after taking into consideration letter dated 8-6-2000, from the said department, has erroneously held that an amount of Rs.32,23,238 was paid. It is true that the department, through the said letter, demanded for the payment of Rs.32,23,238, yet it does not show that in fact the respondent-Bank paid the said sum to the department.
6. According to the findings of the learned Banking Court, after deducting a sum of Rs.11,14,313, i.e. 20% of cash margin, from the amount of Rs.32,23,238, the balance comes to Rs.21,08,925 which sum was increased, to the suit amount of Rs.24,53,096, with the application of mark-up. To say the least, the said findings of the learned Banking Court are also contrary even to the statement of accounts, filed by the bank, as we find from the statement of accounts that certain amounts have been charged as legal charges and evaluation of the property, inasmuch as an amount of Rs.1,81,116 has been debited to the account of the appellants as liquidated damages. Same statement of accounts also shows that the appellant No,1 has deposited a sum of Rs.2,51,020.28 on 7-8-2000, 10- 11-2000 and 21-6-2001 and after crediting the said amount, the suit amount, was worked out. Thus, it can safely be gathered that the learned\Banking Court did not even advert to the entries in the statement of accounts and mechanically held that only the mark-up amount has been included in the original finance facility. Impugned judgment suffers from misreading of record of the case.
7. Now adverting to the statement of accounts. It is an admitted fact that the cash margin of 20%, amounting to Rs.11,14,313, was deposited by the appellant No,1, with the respondent-Bank, at the time of the issuance of bank guarantees. The said amount throughout stood deposited with the respondent-Bank, who is under an obligation to deduct the said amount from the outstanding amount. Existing statement of accounts does not -show that the said amount of cash margin was deducted from the financial facility. To Our mind, in view of the existing statement of accounts, it cannot be held that the amount of 20% cash margin was defrayed from the outstanding liability against appellant No,
1. The findings of the learned Banking Court to this affect are also not borne out from the record of the case.
8. Another aspect of the case is that in existing statement of accounts, the respondent-Bank has included an amount of Rs.1,81,116, as liquidated damages to which amount the respondent-Bank is not entitled to recover in view of the principle laid down in a case reported as Allied Bank of Pakistan Ltd. Faisalabad v. Messrs Aisha Garments etc. PLJ 2001 M LD 1955. It is also questionable as to whether the respondent-Bank is entitled to recover the legal charges, the costs incurred on the evaluation of the property and the amount of mark-up of Rs.3,93,075 debited by the respondent- Bank in the account of the appellant No1.
9. Now coming to the other appeal. We have examined the record and find that Javed Islam, the respondent, against whom the plaint was rejected, not only mortgaged his property but he also stood as one of the guarantors by executing letter of guarantee dated 20-7-2000 for a sum of Rs.26,66,925. The learned Banking Court did not take notice of this fact and while taking cursory look of an ex parte decree favouring the said respondent, proceeded to reject the plaint qua the said _respondent,
10. In the above perspective, we are of the firm view that the impugned judgment and decree has been passed by the learned Banking Court in complete oblivion of the record of the case and the same definitely suffers from misreading and non-reading of the record of the case, thereby, justifying upsetting the impugned judgment and decree, thus, we have no hesitation in setting the same aside.
11. Upshot of the above discussion is that both the appeals are allowed and judgment and decree dated 3-6-2002 is set aside with no order as costs. The result would be that the suit for the recovery of Rs.24,53,096 and the leave applications, filed by the respondent-Bank, the appellants and respondent No,2, respectively, shall be deemed to be pending before the learned Banking Court, who shall decide the said applications, afresh after hearing the parties, taking into consideration the record of the case and of course in accordance with law.