' JAWWAD S. KHAWAJA, J.---This appeal, filed by Messrs Pak Duck Textile Industries Ltd.
(defendant No,1), impugns the judgment and decree dated 3-11-1993 passed by a learned Bench of this Court in exercise of jurisdiction vested in it under the Banking Companies (Recovery of Loans)
Ordinance, 1979.
2. The facts of this case for the purpose of deciding the present appeal are relatively straightforward. The respondent-Bank filed a suit against the appellant Company and others for the recovery of a sum of Rs,1,99,05,244.34 together with future interest at the rate of 3% above the bank rate with the minimum of 13% per annum till full and final realization of the said amount. It was averred in the plaint that four facilities, as set out in paragraph 5 thereof, had been granted to the appellant Company. In view of its relevance paragraph 5 of the suit is reproduced as under:-- "That at the request of defendant No,1, the Bank authorities sanctioned the following credit facilities under different heads for the use of defendant No,1 vide their Sanction Advice No,LHR/79-80/ 147, dated 31-3-1982, and Letter No,ADV: MAK:IDA-28/4039-N, dated 23rd of May, 1983:--
(i) CC (HYP)
Rs.0.308(M)
(ii) CC (HYP) Rs.1.692 (M) under export Refinance Scheme Part-II
(ii) LAPC Rs.3.000 (M)
(iv) IDA (Sub-loan) Rs.0.775 (M) Total: Rs.5.775 (M)"
3. The appellant Company applied for leave to appear and defend the suit. The said application, however, was dismissed and, as a consequence, the suit of the respondent-Bank was decreed as prayed for.
4. Learned counsel for the appellant has admitted that the facility at Serial No,(ii) CC (HYP) for a sum of Rs,1,692,000 was granted by the Bank and availed by the appellant Company. He, however, denied the availing of the facility at Serial No,(i) of paragraph 5 i.e. CC (HYP) for Rs,3,08,000. As for the facility at Serial No,(iii) of paragraph 5 i.e. LAPC, it was contended that although the limit of the said facility was Rs,3,000,000 only a sum of Rs,2,300,000 was availed by the appellant Company.
The availing of IDA (Sub-loan), mentioned at Serial No,(iv) of paragraph 5 of the plaint, was not seriously disputed even though it was contended that there was no sanction advice in respect of the said sub-loan.
5. The total amount of the facilities, even as per contents of the plaint, comes to Rs,5,775,000.
Learned counsel has taken us through the statements of account appended with the plaint. We first of all take up the statement of account in respect of the cash credit facility. The said statement, which appears at Page 94 of the paper book, is grossly inadequate. On 29-4-1982 a disbursement of Rs,1,692,000 has been shown. Thereafter a number of debit entries appear in the statement showing transfers of amount from the cash credit account. No particulars of the transfers, however, are mentioned in the statement of account nor is there any indication that the tnsfers were pursuant to any instructions issued by the appellant Company. However, it is clear from the statement of account that the transfers were not effected on the basis of any cheques issued by the appellant Company. This much can be deduced from the third column of the statement of account which is meant to specify cheque numbers. This column in blank throughout the statement of account.
6. Learned counsel for the appellant also referred to a debit entry of Rs,4,000,000 dated 27-7-1982 made in the cash credit account of the appellant Company. This debit has also been shown as a transfer but without indicating either , the authorization for the transfer or the account to which the transfer was made. Furthermore, learned counsel for the appellant argued that cash credit limits at Serials Nos.(i) and (ii) of paragraph 5 of the plaint, provided an aggregate limit of Rs,2,000,000. As such, a debit of Rs,4,000,000 in the said account, was clearly unauthorized and had not even been explained in the plaint. Learned counsel for the respondent-Bank was asked to justify the debit of Rs,4,000,000 in the cash credit account when, admittedly the cash credit limit, sanctioned in favour of the appellant Company, was Rs,2,000,000. He was also asked to explain the nature of the aforesaid transfer of Rs,4,000,000. He was unable to do so. He conceded that a withdrawal in excess of the limit sanctioned to the appellant Company, was not permissible.
7. It was next contended by learned counsel for the appellant that interest had been debited to the appellant's cash credit account in a random and unexplained manner. To support this contention, learned counsel referred to the entries dated 29-6-1991, 30-9-1991, 16-10-1991 and fourth entry dated 14-9-1992. These entries cumulatively amount to. Rs,2,500,000 approximately. No agreement is available on record to justify the date and charging of interest in the above manner.
8. Likewise, learned counsel referred to the statement of account relating to the LAPC facility specified at Serial No, (iii) of paragraph 5 of the plaint. As noted above, although the facility was for Rs,3,000,000, disbursement of Rs,2,000,000 only has been made as is apparent from the statement of account itself. This clearly shows that a claim for the principal sum of Rs,3,000,000, on the basis of the LAPC facility, is not borne out from the record. Furthermore; there is nothing on record to justify the interest amounts which have been debited to the LAPC account of the appellant Company. Learned counsel, in particular, drew our attention to a debit entry dated 20-9-1992 whereby an amount of Rs, 3,022,735 and an entry dated 21-9-1991 whereby another amount of Rs,2,05,985 have been charged to the appellant by way of interest. Again no supporting agreement or other document to justify the amount and rate of interest charged to the appellant Company, has been referred to by learned counsel for the respondent-Bank.
9. In >the foregoing circumstances, we are not in any doubt that the record available before us and the statements of account filed by the respondent-Bank, are not sufficient to support the claim asserted, against the appellant Company by the respondent-Bank. The Bank, as such, must be put to proof of its claim. We note that the learned Single Bench has not taken the above circumstances into account while dismissing the application filed by the appellant seeking leave to appear and defend. In the circumstances, we accept this appeal. However, considering that even according to the appellant Company the principal sum of Rs,13,81,686 has not been repaid to the respondent- Bank and further taking note of the fact that the facilities were availed by the said Company as far back as 1982, we would grant leave to appear and defend to the appellant Company subject to the payment of Rs,20,00,000 to the respondent-Bank within 45 days from today. Failing such payment, the application of the appellant Company seeking leave to appear and defend, shall be deemed to have been dismissed and the appellant Company shall be liable for all consequences flowing from such dismissal.