HABIBURREHMAN and anothers vs JUDGE BANKING COURT No,4, LAHORE and another

' SHEIKH AZMAT SAEED, J.---This appeal under section 22 of the Financial Institutions (Recovery of Finances), Ordinance, 2001 is directed against the judgment and decree dated 25-10-2001 passed by the Banking Court, Lahore against the appellants.

2. Brief facts leading to the filing of this appeal are that the respondent-Bank filed a suit for recovery of Rs,17,48,214.18 together with mark-up against the appellants. Pursuant to a notice issued by the Court present appellants entered appearance and filed an application for leave to defend the suit. The Banking Court dismissed the said application and decreed the suit vide impugned judgment and decree dated 25-10-2001 as prayed for. However, the claim of liquidated damages was disallowed. Aggrieved the appellants have now filed the instant appeal.

3. The learned counsel for the parties have been heard and the record requisitioned from the Banking Court has been examined.

4. It is contended by the learned counsel for the appellants that in the facts and circumstances of the case substantial questions of law and facts were involved entitling the appellants to unconditional leave to defend the suit. The learned counsel contended that the claim of the respondent-Bank consists of mark-up on mark-up and mark-up charged after the expiry date of the finance agreement(s). It is further contended that the statement of accounts relied upon by the respondent-Bank is deficient in material particulars and does not support the claim of the respondent-Bank.

5. The learned counsel for the respondent-Bank has controverted the arguments raised on behalf of the appellants.

6. A perusal of the record reveals that even as per the case of the respondent-Bank as disclosed in the plaint and the documents appended therewith a finance agreement was executed inter se the parties on 15-6-1986 in terms whereof the sale price was shown as Rs,7,00,000. There are two other finance agreements appended with the plaint dated 2-1-1996 and 27-8-1997 of a higher amount.

The statement of accounts appended with the plaint commences from 2-1-1996 with an opening debit entry of Rs, 11,99,753.78 which is identified only as "to advance". It is not clear how this money was disbursed to the appellants as no cheque number is mentioned nor the mode of such disbursement is specified or identified. The learned counsel for the respondent-Bank has been unable to explain the mode of such disbursement. The said statement of accounts if also replete with various debit entries of substantial amounts which are merely identified as "to transfer". No explanation as to where and on what authority these amounts were transferred can be gleaned from the record or has been supplied by the learned counsel for the respondent-Bank on being confronted A with the same. It is also apparent from the said statement of accounts that the appellants have admittedly deposited Rs, 13,68,406.67. The debit entries of mark-up have also riot been explained by the respondents with reference to the documents sued and relied upon. The contentions of the learned counsel for the appellants that the claim in fact consists of illegal mark- up charged under the various finances agreements rather than the amount actually disbursed to the appellants or mark-up due thereupon in accordance with the terms of the finance agreement(s) must necessarily be examined in the context of the aforesaid statement of accounts and the infirmities therein which are floating on the surface. In the facts and circumstances referred to above, there were serious disputed questions of facts and law which could only be adjudicated upon after the recording of evidence as the claim of the respondent-Bank needed to be proved. In this view of the matter, the application for leave to defend the suit could not have been dismissed outright and the appellants were entitled to unconditional leave to defend the suit.

Thus, the impugned judgment and decree is not sustainable in law.

7. In view of the above, the impugned judgment and decree dated 25-10-2001 is set aside, the appellants are granted unconditional 'leave to appear and defend the suit and the case is remanded to the Banking Court to decide the matter afresh after framing issues and recording of evidence.

8. We are informed that pursuance to an order of this Court dated 10-4-2003 the decretal amount has been deposited by one of the appellants who in view of the above is e titled to withdraw the same in accordance with law.

' This appeal is allowed in the above terms.