Askari Bank Ltd vs M/S Fatima Enterprises etc.

PLJ 2021 Lahore 442 [Multan Bench, Multan] Present: ABID AZIZ SHEIKH, J.

ASKARI BANK LIMITED--Plaintiff versus M/s. FATIMA ENTERPRISES LIMITED and others--Dependants C.O.S. No. 2 of 2016, decided on 21.11.20219.

Financial Institutions (Recovery of Finances) Ordinance, 2001 (XLVI of 2001)-- ----S. 9--Availing of finance facilities--Application for renewal of finance facility--Extension of finance facility--Financial obligations--Failing to repayment of finance--Statement of account--Statement of account was signed by authorized officer--Challenge to--Statements of accounts are signed by Incharge Foreign Trade of plaintiff bank, who is also attorney of bank for filing of instant suit--Counsel for defendants did not dispute suit amount, however, perusal of record and statements of account show that admittedly facilities were lastly extended plaintiff bank could claim mark up only till expiry of contract period i.e. till expiry of contract period--Defendants No. 1 to 8 have not been able to raise any substantial question of law or fact requiring recording of evidence for its resolution--Appeal allowed. [Pp. 444 & 445]

A, B & C

2018 CLD 1476, 2017 CLD 552 and 2016 CLD 29 ref.

Mr. Muhammad Sohail Iqbal Bhatti, Advocate for Plaintiff.

Mr. Furqan Naveed, Advocate for Defendants No. 1 to 8.

Mian Khurram Hashmi, Advocate for Defendant No. 14.

Date of hearing: 21.11.2019.

JUDGMENT

This is suit under Section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (Ordinance), seeking recover of Rs. 238, 528, 125.13 alongwith costs and cost of fund from the date of default till final realization of the decretal amount by sale of properties and other assets of Defendants No. 1 to 8. The plaintiff bank has also impleaded various other banks as defendants No. 9 to 16 as proforma defendants on the basis of their pari passu charges on Defendant No. 1 in the record of the Securities Exchange Commission of Pakistan (SECP).

2.As per averments of the plaint, the Defendant No. 1 (company) availed different finance facilities i.e. FAPC (OS)(Pledge) for Rs. 185 Million, FAPC (OS)(Hypo) for Rs. 70 Million, Cash Finance (Pledge) for Rs. 15 Million, Running Finance (Hypo) for Rs. 10 Million and FAPC (OS) (Hypo) for Rs. 40 Million. As per claim in the plaint, the said facilities were

lastly availed, on 28.04.2014 and defendants No. 2 to 8 are the directors and shareholders of Defendant No. 1, who stood as guarantors for above said facilities. It is claimed that on 21.04.2015, the defendants 1 to 8 filed application for renewal of facility but the plaintiff bank instead of allowing fresh finance facility, extended the finance facility till 30.06.2015, which was further extended vide letter dated 09.06.2015 till 31.08.2015. The claim of the plaintiff bank is that defendants No. 1 to 8 failed to fulfill their financial obligations regarding repayment of finance facilities, hence this suit has been filed. In response to the notice, defendants No. 11 to 8 (defendants) entered appearance and filed their application for leave to defend the suit (PLA

3.The learned counsel for defendants No. 1 to 8 while arguing the PLA, submits that statements of account filed alongwith plaint, does not fulfill the mandatory requirement as contemplated under Section 9(2) of the Ordinance. He submits that neither these statements of account are certified in any manner provided under Bankers’ Books Evidence Act, 1891 (Act of 1891) nor the same are signed by the Bank Manager. The learned counsel placed reliance on National Bank of Pakistan through Manager vs. Messrs Mujahid Nawaz Cotton Ginners through Partners and 6 others (2007 CLD 678) and Askari Bank Limited vs. DCD Services Limited and 3 others (2018 CLD 799) to argue that such defect in the statement of account will entitle the defendants for grant of unconditional leave.

4.Learned counsel for the plaintiff bank on the other hand submits that the statements of account are electronic computer generated statements, therefore, same are admissible in evidence. Further submits that said statements of account are duly signed by the authorized officer who is also attorney of the plaintiff bank. He further submits that plaintiff only seeking decree to the extent of defendants No. 1 to 8 and no decree is claimed against the proforma defendants No. 9 to 16.

5.Arguments heard. During course of arguments on PLA, learned counsel for the defendants did not deny the availing of facility or execution of the charged documents. However, the only argument of learned counsel for defendants is that statements of account being not certified and signed by authorized persons, the defendants are entitled for grant of leave. In this context, the perusal of statements of account attached with the plaint shows that same are electronic computer generated statements. Learned Divisional Bench of this Court in United Bank Limited vs. Riaz Hussain and others (2018 CLD 1476) held that since the promulgation of the Electronic Transaction Ordinance, 2002 (Ordinance of 2002), such statements are admissible in evidence as per Section 4 of the Ordinance of 2002 Relevant observations in said judgment are reproduced hereunder:

“In modern banking mostly the statements of account are generated through information system and such statement generated through the information system being

electronic document does not require signature. Since the promulgation of the Electronic Transaction Ordinance, 2002, all electrical modes are recognized as evidence as per Section 4 of the said Ordinance.”

The learned Division Bench of this Court in afore-noted judgment also relied upon Mst. Tasleem Fatima and others vs. Bank of Punjab and others (2017 CLD 552), where it is held as under: “If statement of accounts did not bear signatures, the same would still have been admissible in evidence as it was electronically computer generated statement and there was no need to put a certificate on such accounts as prescribed by Section 2(8) of the Bankers’ Books Evidence Act, 1891 and Section 3 of Electronic Transactions Ordinance,

6.The next argument of learned counsel for the defendants that the statements of account are not signed by the authorized person has also no basis. The perusal of record shows that statements of accounts are signed by Naveed Ahmad, Incharge Foreign Trade of plaintiff bank, who is also the attorney of the bank for filing of the instant suit. This Court in The Bank of Punjab through Branch/Chief Manager vs. Messrs Khan Unique Developers Pvt. Ltd. through Chief Executive Officer and 9 others (2016 CLD 29) held that computer generated accounts can be signed by any officer of the bank. The relevant observation is reproduced hereunder: “In the present case, however, what the plaintiff bank has appended with the plaint are computer generated accounts. These accounts being the computer generated accounts/ledgers of the plaintiff bank, there was no need to put a certificate .on the foot of such accounts as prescribed by Section 2(8) of the Act and any officer of the Bank could sign the said accounts. As the original accounts have been appended with the suit, which constitute primary evidence, there is no need to file a certified copy thereof which should in turn comply with the requirements of Section 2(8) of the Act. It may again be emphasized that the requirement of putting a certificate at the foot of the statement, by virtue of Section 2(8) of the Act, is in regard to a copy of the accounts for any entry contained therein and not for the original accounts. This issue has been touched upon in a judgment reported as Habib Metropolitan Bank Limited vs. Mian Abdul Jabbar Gihlin 2013 CLD 88.”

(emphasis supplied).

7.The case law relied upon by the learned counsel for the defendants cannot be given preference over the law settled by Division Bench of this Court, specifically regarding effect of Ordinance 2002 on statement of Accounts. Though the learned counsel for the defendants did not dispute the suit amount, however, the perusal of the record and statements of account show that admittedly facilities were lastly extended till 31.08.2015, therefore, the plaintiff bank could claim

mark up only till the expiry of the contract period i.e. till 31.08.2015. In the circumstances, the excess mark up amount of Rs. 84,40,423/- after 31.08.2015, is not recoverable.

8.In view of above discussion, the Defendants No. 1 to 8 have not been able to raise any substantial question of law or fact requiring recording of evidence for its resolution. Consequently the PLA is dismissed and suit of the plaintiff bank is decreed in favour of the plaintiff bank against Defendants No. 1 to 8 jointly and severally for amount of Rs. 23,00,87,702.63 together with costs and cost of fund as contemplated by Section 3 of the Ordinance.

(Y.A.) Appeal allowed