ALLIED BANK OF PAKISTAN LIMITED Versus SAFETY SEALERS (EASTERN)LTD
1. This suit as been filed by the plaintiffs for recovery of Rs.79,245.03 with costs and interest at 15% with monthly rests. Briefly the facts are that the plaintiffs, formerly known as Australasia Bank Ltd., are a banking company while the defendant No.1 is a private limited company who had an account with the plaintiffs Plaza Square Branch, at Karachi, being Current Account No.807, It is the case of the plaintiffs that on or about 15‑7‑1967 the defendants requested the plaintiffs for financial accommodation in the nature of continuing cash‑credit/overdraft limit which was allowed to them on deposit of property documents relating to Bungalow No.115‑L, Block 2, P.E.C.H.S., Karachi. The defendants continued to operate the said account and had been drawing and depositing the various amounts on various dates till 30‑6‑1972 when the outstanding balance against the defendants was Rs.30,118.92 which on 29‑12‑1973 was Rs.33,893.92. It is also the case of the plaintiffs that: at the request of the defendants 2 PAD accounts No.28874 and 28918 were opened on 1‑1‑1970 and 7‑3‑1970 respectively. In the said two PAD accounts they opened letters of credit with the plaintiffs for import of building material from U.K. The goods were received but instead of due information, the defendant No.1 failed/refused/neglected to retire the documents but requested the plaintiffs to acquire the goods at any costs and expenses and to retain them under pledge for realization of its dues. Consequently the plaintiffs debited the defendants' account with the amount paid under letters of credit and all local expenses etc. However, ultimately on 17‑8‑1972 the defendants acknowledged a total outstanding amount of Rs.59,467.23 for which they executed typed pronote, printed pronote, letter of hypothecation and guarantee and also letter of acknowledgement. It is further the case of the plaintiffs that thereafter also the defendants acknowledged their liability through letters written by them on 4‑5‑1973. However, the defendants having failed to make payment, the plaintiffs then, exercising the bankers lien closed the two PAD accounts of the defendants and debited the outstanding balance to their account No.807. The plaintiffs then after giving legal notice instituted the present suit on 6‑2‑1975. The defendants Nos.1 to 3 filed their written statements wherein they admitted the opening of the said 3 accounts and letters of credit. The defendants did not deny the execution of the Promissory Note and acknowledgements. However, a plea was taken that the suit is time‑barred and that the PAD accounts of the defendants had stood fully adjusted and that the plaintiffs had no authority to, close their PAD accounts and debit the balance to their current account. On the above pleadings of the parties the following consent issues were framed:‑‑
(1) Whether the suit is barred by time?
(2) Whether claim on account of A/c No. C/A No.807 is barred by time?
(3) Whether the plaintiffs had any right and/or authority to transfer 2 PAD accounts to C/A No.807, as alleged?
(4) Whether any mortgage was created in favour of plaintiffs in respect of property bearing No.115‑L Block 2, PECHS, Karachi?
(5) Whether the defendants are liable to pay the amount due, if any, under 2 PAD accounts?
(6) Whether the defendant No.1 can be treated as a partnership firm and its directors as partners?
(7) Whether the amounts due under 2 PAD accounts are deemed to have been adjusted from sale proceeds of goods lying with the plaintiffs?
(8) Whether the interest is being charged at exorbitant rate?
(9) What is the extent of liability of each defendant?
(10) What should the decree be?
2. The plaintiffs examined one of their officers Mr. Asghar Ali Colombowala who produced a‑number of documents as mentioned above. The defendants did not lead any evidence and their advocate reported no instructions and their side was closed. Today only Mr. S. Irtaza H. Zaidi, Advocate for the plaintiffs is present and none is present for the defendants, have heard Mr. S. Irtaza H. Zaidi, Advocate.
3. Issues Nos. 1 an d 2.
4. The suit has been instituted on 6‑2‑1975 whereas the statement of account pertaining to Current Account No.807 shows that the same was being operated upto the year 1972. The last amount drawn by the plaintiffs through a cheque is on 4‑2‑1972 amounting to Rs.1,900 while on the same date the amount of Rs:2,000 was credited to their account. Thereafter on 20‑5‑1972 and 22‑5‑1972 and again on 7th, 12th of June and 7th July of the same year various amounts were credited in the account. Under these circumstances these transactions would show to extend the period of limitation of 3 years from the last date on which the amounts were deposited i.e. 7‑7‑1972 and on `this account the suit is within time. It may also be observed that on 17‑8‑1972 the plaintiffs had executed a typed Promissory Note and also a printed Promissory Note for the outstanding amount of Rs.59,467.23 which are on record as Exh.6 and Exh.9. On the same date he has also executed letter of Hypothecation (Exh.8), letter of confirmation (Exh.10) and letter of guarantee (Exh.11). He has also further written a letter on the same date wherein he has informed the plaintiffs that they shall be liquidating the out standings against them from the next week (Exh.18). Two other letters Exhs.15 and 17 have also been brought on record wherein also similar assurance has been given. These letters are dated 4‑5‑1973. It may also be pointed out that again on 30‑6‑1972 and on 29‑12‑1973 the defendants have endorsed their confirmation on the bank letter with regard to outstanding balance which are produced as Exhs.12 and 13I respectively. In view of the above discussion, I am of the view that the abovesaid letters of payment in the defendants' account would amount to~ acknowledgement as provided under section 20 of the Limitation Act and the present suit having been filed within a period of 3 years wherefrom is within time. These issues are answered accordingly in negative.
5. Issues Nos. 3 and 5.
6. These are connected issues. There is evidence from the plaintiffs side which would show that the outstanding amounts in these two PAD accounts were acknowledged by the defendants on 17‑8‑1972 and also through their letters Exhs.15 and 17 which are dated 4‑5‑1973. There is no evidence in rebuttal thereto. In view of the above facts it can safely be concluded that the defendants are liable to pay the said amount to the plaintiffs who had transferred the same to the defendants' Current Account in exercise of bankers' lien.
7. Issue No.4.
8. The plaintiffs claim that the defendants had mortgaged the Bungalow No.115‑L, Block 2, P.E.C.H.S., Karachi, by depositing of property documents. The plaintiffs' witness has not said a single word in his deposition in respect of the said mortgage nor the said property documents have been produced in the said evidence. It is contended by the plaintiff in paragraph 4 of the plaint that an agreement of sale dated 11‑2‑1959 between Chaudhry Muhammad Bilal and defendant No.3 was deposited with the plaintiffs. It may be observed that the agreement of sale is not a title document. However, as stated above even this document had not been produced by the plaintiffs in evidence. Accordingly I answer this issue in negative, holding that no such mortgage was created.
9. Issue No.6.
10. This issue was raised by the defendants and is accordingly answered as, not pressed.
11. Issue No.7.
12. There is no evidence on record from the defendants side to show that the amount outstanding in the two PAD accounts had been adjusted. On the other hand the plaintiffs' evidence has come on record with regard to outstanding balance in these two PAD accounts which was subsequently merged in the Current Account No.807. This issue is accordingly answered in negative.
13. Issue No.8. .
14. The Promissory Note Exh.6 shows that the defendants had undertaking to pay the interest @ 6% above the State Bank of Pakistan rate subject to minimum 11% per annum. The printed Promissory Note Exh.9 shows that interest agreed to be paid by the defendants was at 11% only with no mention of any rests. The letter written by the defendants on the same date to the plaintiffs' Manager (Exh.10) also shows that rate of interest agreed was C 11%. Accordingly it is concluded that the plaintiffs are entitled to interest @ 11% per annum and not 15% per annum with monthly rests as claimed in the plaint.
15. Issue No.9.
16. The defendants being partnership firm the partners are jointly and severally liable for the suit amount.
17. Issue No.10.
18. In view of the above discussion the suit of the plaintiffs is decreed for sum of Rs.79,245.03 with costs and interest @ 11% per annum.
19. A.A./A‑1096/K Suit decreed.