Mrs. ASMA HASSAN and another vs ASKARI BANK LIMITED
This matter arises from a petition filed against the concurrent findings of the lower courts in a recovery suit instituted by a financial institution for a markup-based running finance facility. The core legal question concerned the entitlement of the bank to markup beyond the stipulated date of repayment and the liability of the borrower based on admitted financial facilities and statements of accounts. The Supreme Court held that where the financial facility agreement specified a repayment date, the Banking Court and the High Court rightly limited the grant of contractual markup up to that date, awarding only the cost of funds for the subsequent period during which the amount remained outstanding. The key principle laid down is that where the availment of a financial facility is admitted and no calculation errors or specific objections to the statement of accounts are raised, concurrent findings regarding financial liability will not be interfered with, and cost of funds is appropriately awarded for the period beyond the contractual maturity date.
- Whether a financial institution is entitled to contractual markup beyond the date stipulated in the running finance facility agreement?
- Can a borrower challenge a recovery suit based on alleged forged documents when there is a clear admission of availing the financial facility and no specific denial of the quantum?
- Whether the Supreme Court will interfere with concurrent findings of the lower courts regarding financial liability where no calculation errors in the statement of accounts are pointed out?
FAISAL ARAB, J.---For a mark up based running finance facility availed by the petitioner, the respondent filed recovery suit. The suit was decreed for the principal amount along with markup that was chargeable under the agreement upto 31.12.2010. Markup beyond this period though was claimed in the suit but was not granted. Only cost of funds was allowed to be recovered beyond this period.
2. We have noted that the contract on the basis of which financial facility was lastly availed was executed on 03.03.2010 under which the amount was repayable by 31.12.2010, hence the learned Judge of the Banking Court rightly allowed claim of markup only upto 31.12.2010 and beyond this period only cost of funds was awarded. The decision of Banking Court was upheld by the High Court vide impugned judgment. Before this Court, learned counsel for the petitioner has contended that based on forged documents banking suit has been filed. We pointed out to the counsel for the petitioner that there is an admission with regard to availing the financial facility in question and there is no specific denial as to the quantum of financial facility nor any calculation error in the statement of accounts has been pointed nor any entry in the statement of accounts was questioned to which he had no answer. Even the markup was allowed only upto 31.12.2010 whereas the amount was utilized well beyond this period and is still outstanding against the petitioner. In these circumstances, we find no reason to upset the findings of both the courts below. This petition is, therefore, dismissed and leave is declined.
Petition dismissed