HABIB BANK AG ZURICH through Manager vs MUSTAFA SHAMSUDDIN

ORDER

' The admitted facts of this case are that the appellant filed a suit against the respondents for recovery of Rs,2,715,234.72. This suit was filed on 25-10-2000 and in para. 6 of the plaint it was stated that the said amount is outstanding against the respondents on 30-6-2000. The respondents upon being served filed an application for leave to defend and they stated that they have paid the entire amount as detailed in ground (I) of their application. The repayment started on 28-2-2001 and the last payment was made on 19-5-2001 and the total amount deposited was Rs,2,740,400. This plea of the .Respondents was admitted by the appellant in its reply. However, it was stated that notwithstanding the said payment the appellant-Bank is entitled for the grant of costs of funds and costs of suit. The matter came up before the learned trial Court on 3-9-2002 when a copy of statement of account was presented before the learned trial Court according to which there was a credit balance of Rs,65.28. This fact was noted by the learned trial Court. It was, however, further ordered that the court-fee affixed on the plaint of the value of Rs,15,000 and the professional fee of the learned counsel for the appellant Bank amounting to Rs,27,152 be paid before 18-9-2002.. The appellant was directed to issue a clearance certificate.

2. Learned counsel contends that the learned trial Court has acted against the law inasmuch as it was incumbent upon the learned trial Court to have granted all costs of funds.

3. The said contention of the learned counsel is based on section 3 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. This section details the duties of a customer. Subsection

(2) provides that in case of a default in the discharge of obligation, the customer shall oe liable to pay from the period from the date of his default till realization of the costs of funds of the financial institution as certified by the State Bank of Pakistan. Subsection (3) narrates that for purposes of section 3 a judgment against a customer under this Ordinance shall mean that he is in default of his duty and the ensuing decree shall provide for payment of the cost of funds.

4. Now examining the case proceedings in the light of the said section 3 we find that the appellant is not at all entitled to claim the said cost of funds. A plain reading of the said section shows that default within the meaning of subsection (1) and subsection (2) will occur when a judgment has been rendered against the customer and it is upon the said judgment that a decree to be passed has to provide for payment of the cost of funds. Now admittedly a judgment has not been passed under the said Ordinance against the respondents, the reason being that there is no occasion for passing of a judgment as admittedly the entire amount stands paid. There is thus no question of default under the said Ordinance, in the said circumstances of the case. This F.A.O. Is frivolous and is accordingly dismissed in limine.