UNITED BANK LTD. Versus FASKA INDUSTRIES LTD.
1. This is a Suit filed by the plaintiffs, M/s. United Bank Ltd., Karachi, for the recovery of Rs.41,53.601.76 against the Defendants Nos.l to 6. The suit was filed under the provisions of the Banking Companies (Recovery of Loans) Ordinance, 1979.
2. The case of the plaintiff is that it had advanced various amounts as L.A.P.C. (i.e. Loan Against Packing Credit) to the defendant from time to time between 28-3-1979 and 20-3-1980, the details of which are as follows:--
3. "That the plaintiff has granted following amounts as LAPC (i.e. Loan Against Packing Credit) to defendant No.l from time to time during the period from 28-3-1979 upto date:--
(i) Rs.3,50,000 on 28-3-1979
(ii) Rs.50,000 on 29-3-1979
(iii) Rs.70,000 on 28-4-1979
(iv) Rs.1,30,000 on 2-5-1979
(v) Rs.3,00,000 on 4-6-1979
(vi) Rs.82,916 on 10-6-1979
(vii) Rs.3,92,000 on 19-7-1979
(viii) Rs.2,92,000 on 23-8-1979
(ix) Rs.69,172 on 20-3-1980
4. The plaintiff also granted loan under L.A.F.B. Account (Loan Against Foreign Bills) to the defendant No.l under different bills from time to time. Different amounts received by the defendant were as follows:--
(i) For O FDBC/612/80 Rs.13,00,000 on 9-8-1980
(ii) For O FDBC/681/80 Rs. 3,00,000 on 7-9-1980
(iii) For O FDBC/681/80 Rs. 2,00,000 on 9-9-1980
5. The plaintiffs at the request of the defendants also granted Rs.2,00,000 to them on cash credit on 16-2-1976, which was consequently enhanced to Rs.4,00,000 on 24-11-1979.
6. The defendants used the above facility granted to them and they partly adjusted the various credits received by them but failed to adjust them fully, leaving the amount of Rs.4,15,360.76 as still due and payable to the plaintiffs.
7. On 27-6-1981 the defendants executed a Packing Credit Agreement in favour of the plaintiffs in the sum of Rs.4,50,000 and also executed a promissory note in the said amount.
8. Again on 4-6-1984, the defendants executed another promissory note in the sum of Rs.6,50,000 in favour of the plaintiffs.
9. The defendants, however, failed to clear their outstandings and on the date of filing of the Suit their outstandings against different accounts were Rs.41,53,601.76. In order to further secure the repayment of the plaintiffs' dues, the defendant No.2 created an equitable mortgage by depositing the title deeds of his property being Bungalow No.8/B, situated at Korangi Road, Defence Housing Society, Karachi. Only the defendant Nos.l and 2 have tiled their written statements but the rest of the defendants did not file any written statement. In their written statements although the defendants did not deny their liability completely but they averred that the promissory notes executed by them were without consideration as the loan was already secured by a mortgage. A plea was also raised that the suit had become time-barred since the loan was granted to the defendants on 28-3-1979 and the Suit was filed by the plaintiff in December, 1984.
10. On the pleadings of the parties, the following issues were framed by the Court:--
(1) Whether the suit is barred by time?
(2) Whether the promissory notes executed by defendants are without consideration and forged, If so, its effect?
(3) Whether the defendants had endorsed the letter of hypothecation in favour of the plaintiff for collection of the sale proceeds of goods exported and that there was lapse on the part of the plaintiffs in not collecting the sale proceeds?
(4) What should be the decree?
11. As far as the case of the plaintiffs is concerned, they have examined their Assistant Vice-President, Qudratullah Khan as their witness. He has fully supported the case of the plaintiffs and also relied upon documentary evidence consisting of the promissory notes, letters of hypothecation, letters of guarantee and various statements of accounts etc.
12. The defendants after filing the written statements, for which leave had earlier been granted to them by the Court under Order 37 Rule 3 CPC, did not A lead any evidence. They even failed to cross-examine the plaintiff's witness, Qudratullah Khan.
13. Turning to the case of the plaintiffs, according to the oral and documentary evidence produced by them, various credit facilities were allowed to the defendants by them as pointed out above. The claim of the plaintiffs is supported by various statements of account, Ex-5/18, 5/41 and 5/60, showing the total outstandings against the defendants as Rs.41,53,601.76. The case of the defendants in the written statement is that this amount has become time barred but Mr. Arif Hussain, learned Advocate for the plaintiff, in this respect has drawn my attention to Ex-5/37 & Ex-5/38 which are letters of Packing Credit and a Promissory Note respectively, which were executed by the defendants on 27-6-1981. In both the documents, the defendants have acknowledged their liability in LA.P.C. Account to the extent of Rs.4,50,000. The learned counsel for g the plaintiffs has also invited my attention to Ex-5/16, which is a promissory note executed by the Managing Director and other Directors of the plaintiffs on 4-6-1984 acknowledging their liability to the extent of Rs.6,50,000 in the same account. Since Exhibits 5/37, 5/38 and 5/60 were executed within the period of limitation, I agree with Mr. Arif Hussain that the same would constitute acknowledgement as contemplated by section 19 of the Limitation Act. The issue No.l is, therefore, decided in favour of the plaintiffs as their claim as such has not become time-barred.
14. As far as the issue No.2 is concerned, no objection has been raised in the written statements regarding the promissory notes. being without consideration. The promissory notes were executed by the defendants against the various loans received by them from time to time, which are not denied by them, therefore, there appears to be no basis for the plea. The mere fact that the defendant No.2 had also executed a mortgage in respect of his property to secure the C outstandings of the defendants cannot render the promissory notes without consideration. This issue is, therefore, also decided in favour of the plaintiff.
15. As far as the issue No.3 is concerned, no evidence has been led by the defendants thereon. There being nothing before the Court to support the plea of the defendants taken in their written statement, this issue is also decided against the defendants.
16. As pointed out above the case of the plaintiff is fully supported by various statements of accounts, Ex-5/18, 5/41 and 5/60, which is further supported by other documentary evidence. No evidence has been produced by the defendants in rebuttal. The defendant No.l is a limited company to which loans had been advanced by the plaintiff from time to time. The defendant No.2 executed the aforesaid mortgage to secure the liabilities of the defendant No.l. The defendants 3 to 6 are the guarantors of the payment of the aforesaid loan. Consequently the liability of each one of the defendants is established.
17. Consequently a preliminary decree is passed against the defendant No .2 under Order 34 Rules 4 and 5 CPC read with form V-A of Appendix `D' in the first schedule of CPC for the payment of Rs.41,53,601.76 with interest at the rate of 13% per annum from the date of the suit till payment of the amount within two months and in case of default, by sale of the mortgage property being Bungalow No.8/B situated on the main Korangi Road, Defence Housing Society, Karachi.
18. The suit against the rest of the defendants is decreed jointly and severally Mom the sum of Rs.41,53,601.76 with interest at the rate of 13% per annum from the date of the filing of the suit, till the realization of the aforesaid amount with costs.
19. MYH/U-59/K
20. Suit decreed.