Messrs YUSSRA TEXTILE CORPORATION and 2 others vs PICIC COMMERCIAL

' MIAN HAMID FAROOQ, J.---The present appeal proceeds against judgment and decree dated 22- 4-2002, whereby the learned Judge Banking Court dismissed an application for leave to defend the suit, filed by the appellants and consequent thereto passed a decree for the recovery of Rs,25,30,361 against the defendant with costs and mark-up.

2. Facts necessary for the decision of the present appeal are that the respondent filed a suit for the recovery of Rs,25,30,361, against the appellants, before the learned Judge, Banking Court, and pursuant to the receipt of summons, as prescribed under the law, the appellants filed an application for leave to appear and defend the suit, thereby although admitting the availment of facility amounting to Rs,2.2 million, yet raising certain objections, including the illegal charging of mark-up as well as future mark-up. Ultimately, the learned Judge Banking Court, after finding that the appellants failed to raise any substantial ground in their applications for leave to defend, dismissed the said application and resultantly, a decree for the recovery of Rs,25,30,361 was passed against the appellants together with costs and mark-up, vide judgment and decree dated 22-4- 2002, hence the present appeal.

3. The learned counsel for the appellants has submitted that as the principal amount has been paid, therefore, the only controversy between the parties, remains to be resolved, is regarding the mark up, charged/debited by the respondent-Bank in the account of the appellants in an illegal manner. The learned counsel for the respondent has agreed to the aforesaid submissions.

4. Upon the examination of the record, we find that the learned Banking Court, on 22-4-2002, passed a decree for the recovery of Rs,25,30,361, against the appellants, out of which they have now paid a sum of Rs,22,00,000, the receipt whereof has been acknowledged by the learned counsel for the respondent, thus leaving behind the balance of Rs,3,30,361. Obviously, this amount pertains to mark-up. According to the learned counsel, the mark-up has been charged/debited illegally, against the recognized principles of charging mark-up and in violation of the circulars issued by the State Bank of Pakistan in this regard from time to time.

' Conversely, the learned counsel has submitted that this amount has been charged as costs of fund.

5. Upon the perusal of the contents of the application for leave to defend the suit, filed by the appellants, we find that they have taken a specific plea regarding the illegal charging of mark-up, but the examination of the impugned judgment manifests that no findings on this material and crucial issue are forthcoming. We are of the view that it was the legal obligation of the learned Banking Court to have rendered some findings on the question of charging of mark-up, one way or the other. Of course, there are instructions/guidelines from the State Bank of Pakistan regarding the charging of mark-up and there is no dearth of case-law on this subject. We feel that the learned Banking Court ought to have given findings on this issue.

6. . The appellants have been able to make out a case for the grant of leave to defend the suit.

Additionally, liquidation of the principal amount has persuaded us to grant them leave to defend the suit on the limited question of the charging/debiting of mark-up in the account of the appellants. Confronted with this, learned counsel for the respondent raised no objections to the granting of leave and for the remand of the case to the learned trial Court to decide the said issue.

7. In the above perspective, the present appeal is accepted and the impugned judgment and decree is set aside with no order as to costs. The result would be that the application for leave to defend the suit, filed by the appellants, is also allowed on the limited question, as to whether the respondent-Bank could charge the mark-up in the appellants' account, if so at what rate and for which period. Consequently, now the suit filed by the respondent-Bank shall deem to be pending before the learned Banking Court, who is directed to decide the same afresh, only on the issue/question formulated above, after affording an opportunity to the parties to produce evidence and of course in accordance with law.