DUBAI ISLAMIC BANK PAKISTAN LIMITED Versus MOHAMMAD IBRAHIM

1. IRFAN SAADAT KHAN, J.--- The instant appeal has been filed against the judgment and decree dated 14.07.2014 and 22.07.2014 respectively passed in Suit. No.48 of 2013 (the "Suit") by the Banking Court No. II at Karachi.

2. Briefly stated that facts of the case are that the appellant is a Banking Company, which granted a Home Finance Facility of Rs.1,85,00,000.00 to the respondent, vide Sanction Advice dated 28.07.2009, which was repayable in 168 monthly installments along with lease rent/profit and other charges. The property mortgaged for obtaining the Finance was Bungalow No.77, Lane No.9, Phase-VI, measuring 600 square yards double storey, DHA, Karachi. The respondent apparently paid monthly installments only upto 11.09.2012, amounting to Rs.10,726,400/-, and defaulted thereafter. The Bank then filed the Suit for recovery of Rs.18,462,013/-. The matter proceeded before the Banking Court, where the respondent entered appearance through counsel and filed an application for leave to defend, which was dismissed vide order dated 10.05.2014, with both the parties being directed to file their detailed statement of accounts/breakups. Thereafter, following a hearing as to the extent of the liability, the Banking Court decreed the Suit in favour of the bank vide the impugned judgment in the sum of Rs.7,773,600/-, along with cost of funds, from the date of default (i.e. 11.09.2012) till realization of the entire decretal amount. Nonetheless, being aggrieved, the Bank has filed the present appeal.

3. Mr. Suleman Hudda, advocate has appeared on behalf of the Appellant and stated that the judgment and decree dated 17.07.2014 and 22.07.2014. passed by the Banking Court is not based on proper appreciation of facts and the law, as such are not sustainable in law. According to him, Banking Court, has failed to consider that the appellant provided finance facilities to the respondent and claimed charges/mark up/rent/profit, which could neither be termed as illegal nor unlawful. He stated that the Banking Court has failed to properly consider the statement of account furnished by the Bank wherein actual amount of mark-up has been calculated from the date of default onwards. According co learned counsel, the order of the Banking Court is based on non-reading and misreading of the evidence. Learned counsel stated that no doubt the decree has been passed in the favour of the Bank but the amount due, as worked out by the Banking Court, was incorrect as the learned Judge simply deducted the amount paid by the respondent from the principal amount without properly apportioning payments rateably toward the instalments of principal and mark-up and thus has erroneously worked out a. sum of only Rs.77,73,600/- as being payable, which was not the actual amount outstanding against the respondent, for which the correct calculation had been submitted through the statement of account provided by the appellant, which was ignored. The Banking Court has thus decreed the Suit in sum of Rs.77,73,600.00 only, instead of the due amount of Rs.1,84,62,013.00. He submitted that the manner in which the Banking Court had rendered the impugned judgment was not in accordance with settled norms as no reason had been assigned as to how the defaulted amount has been worked out. Learned counsel then invited attention to various other judgments made by the Banking Court to show that under analogous circumstances, the Banking Court had bifurcated the total amount repaid by the Customer into fixed rent (i.e. principal) and variable rent (i.e. mark-up) and the suits were decreed accordingly. The learned counsel submitted that since the judgment passed by the Banking Court is erroneous to the extent of the computed liability, therefore, the same may be set aside and the learned Judge may be directed to recalculate the amount due in accordance with law.

4. Whilst counsel had earlier entered appearance on behalf of the respondent, representation was found wanting on the date of hearing. We have therefore heard the arguments of learned counsel for the appellant and have also perused the record and the documents referred to by him.

5. We have observed that the treatment of the amount adjusted by the Banking Court proceeds in a mechanical fashion, without any reasoning for not considering the overall claim of the appellant. Therefore, under the circumstances without indulging into other aspects of the matter we deem it appropriate to remand this matter to the learned Banking Court for recalculating the outstanding amount payable by the respondent in accordance with law, after providing the Bark and the respondent opportunity of being heard, and to make a reasoned order as to the treatment of the amount recovered from the respondent to date. In view of the circumstances, the instant appeal is allowed and the impugned judgment and decree of the Banking Court are set aside with the matter, being remanded, in the terms mentioned above.

6. KMZ/D-13/Sindh Order accordingly.