2011 C L D 1 2 6 3
[Quetta]
Before Naeem Akhtar Afghan and Muhammad Noor Meskanzai, JJ
Messrs NOOR FLOUR MILLS through Sole Proprietor and a nother ---Appellants
Versus
JUDGE BANKING COURT BALOCHISTAN, QUETTA and another ---Respondents
High Court Appeal No. 16 of 2007, decided on 30th May, 2011.
(a) Civil Procedure Code (V of 1908) ---
----O. XX, R. 5 --- Judgment --- Necessary ingredient s---Judgment must contain reasons that
justify conclusion arrived at and those reasons should be convincing ---Judgment should contain
concise statement of the case, points for determination, decision thereon and reasons for each
decision, manifesting appli cation of mind by the judge to resolve issues involved ---Judgment
should be speaking, well reasoned and reflecting due consideration of facts, law and contention
of parties.
(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001) ---
----S. 10---Application for leave to defend ---Questions of fact and law ---Non-speaking order ---
Effect ---Banking Court without discussing/ dilating upon points of fact and law agitated in
application for leave to defend and without considering documents a vailable on record dismissed
the application resultantly the suit was decreed in favour of bank ---Validity ---Matters relating to
commercial transactions and issues were to be decided in speedy way for which specific
procedure and system had been provided w ithin the provisions of Financial Institutions
(Recovery of Finances) Ordinance, 2001 ---In matters relating to commercial transactions,
documents were executed between parties towards their rights and liabilities which were to be
given weight/ discussed --Judgment and decree passed by Banking Court could not be termed
as a speaking judgment as Banking Court failed to give any decision on points of facts and law
agitated by defendant nor had discussed the documents filed by parties on record ---High Court
set aside the judgment and decree passed by Banking Court and remanded the case to Banking
Court for deciding application filed by defendant under S. 10 of Financial Institutions (Recovery
of .Finances) Ordinance, 2001 ---Appeal was allowed according.
Syed Ayaz Zahoor for Appellants.
Ayaz Sawati for Respondents.
Date of hearing: 17th May, 2011.
JUDGMENT
NAEEM AKHTAR AFGHAN, J .---This appeal has been filed by the appellants challenging
the judgment and decree dated 31 -7-2007 passed by the Judge Ba nking Balochistan Quetta in
Suit No.145 of 2006 filed by the respondent/ plaintiff bank, whereby while refusing the
appellants' leave to defend the suit, the same has been decreed in favour of respondent/plaintiff
bank against the appellants/defendants sev erally and jointly for an amount of Rs.48,81,695 along
with cost of funds at the rate of Rs.5.89 per annum w.e.f. 31 -12-2005 till realization of the
decreetal amount with cost of the suit.
2. Facts of the case are that the respondent/plaintiff bank filed a suit before the Judge Banking
Court Balochistan Quetta against the appellants/defendants for recovery of Rs.37,81,695 as
principle amount under the Financial Institution (Recovery of Finance) Ordinance 2001 with.
mark -up of Rs.23,27,615.85 at the rate o f 9.50% with costs of funds and costs of suit. It was the
case of the respondent/ plaintiff bank that the appellant/defendant No.1 was sanctioned, loan
facility for the sum of Rs.30 Million (the learned counsel for the appellants/defendants stated that
the appellant No.1 availed loan facility of (Rs.22 Million), which was repayable till 31 -12-2005
with agreed mark -up and the appellant/defendant No.2 stood as personal guarantor for repayment
of the loan availed by the appellant/defendant No.1 and both the ap pellants/defendants jointly
and severally executed the relevant documents pertaining to the approval/sanction of the loan. It
was contended in the plaint that the appellants/defendants committed persistent default in
payment of the agreed mode of adjustmen t, principle and mark -up amount from 1 -1-2006 and a
final legal notice for the adjustment of the defaulted amount was issued by the
respondent/plaintiff bank, but no response was paid by the appellants/defendants and it was
mentioned in the plaint that tot al sum of Rs.61,09,310.86 exclusive of mark -up is due from the
appellants/defendants to the respondent/ plaintiff bank. Due to non payment of advance within
due dates and as per terms and conditions of the finance agreement by the appellants/defendants,
huge amount was struck up and was not utilized by the respondent/plaintiff Bank which has
caused loss to the bank. The bank claimed cost of funds at the rate of 5.89% per annum for the
period from the date of first default i.e., 31 -12-2005 till realization o f the decretal amount. It is
further mentioned in the plaint that the appellants/defendants informed the bank authorities that
the machinery and hypothecation stock was destroyed due to fire and the mill was already
insured, when the bank authorities along with representative of Insurance Company reached at
the site it revealed that the appellant/ defendant No.1 has misappropriated the hypothecation
stock, which was pledged and the Insurance Company calculated the same at Rs.18.50 Million
without any object ion. Under protest the above said amount was adjusted by the
respondent/plaintiff bank towards the principle amount. The hank made the following prayer:
(i) Decree for Principal amount of Rs.37,816,95.00 plus mark -up Rs.23, 27, 615.86,
total Rs. 61, 093, 10.86.
(ii) Cost of funds @ 5.89% per annum w.e.f. 31 -12-2005 tilt realization of decree
amount.
(iii) Cost of suit and other expenses may also be awarded to the Plaintiff/Bank.
(iv) Any other relief, which this Hon'ble Court may deem fit and proper in the
circumstances of the case, may also be awarded in favour of the plaintiff/Bank, in
the interest of justice.
3. After filing of the suit, in pursuance of publication dated 12 -12-2006 the appellants/defendants
within time filed application under Sec tion 10 of the Financial Institutions (Recovery of
Finances) Ordinance 2001 for leave to defend agitating number of legal objections as well as
contesting the claim of the respondent/ plaintiff bank upon merits and also filed certain
documents.
4. The le arned Judge Banking Court Balochistan, Quetta has passed the impugned judgment and
decree in the following words/terms: --
"I have heard the arguments of the counsel for the parties and also gone through the
record. It may be observed that the defendants instead of Rs.30 Million availed an
amount of Rs.22, 000, 000 from plaintiff Bank along with agreed mark -up which
comes to Rs.11, 00, 000 instead of Rs.23,10,000 and now the total outstanding
amount against the defendants in Rs.48, 81, 695 along with mark -up.
Under these circumstances the suit is decreed in favour of plaintiff and against the
defendants severalty and jointly for an amount of Rs. 48, 81, 695 along with cost of
funds at the rate of Rs. 5.89 per annum w.e.f. 31 -12-2005 till the realization o f
decretal amount with cost of suit. The decree sheet be drawn accordingly ".
5. After hearing the learned counsel for both the parties and after careful perusal of the record
with the assistance of learned counsel for both the parties it is noted that in the application filed
by the appellants/defendants under section 10 of Financial Institutions (Recovery of Finances)
Ordinance, 2001 seeking leave to defend, questions of facts and law were raised and certain
documents were also filed and same were also c ontested by the respondent/plaintiff bank through
rejoinder, but perusal of the impugned judgment reveals that the learned Judge Banking Court
Balochistan Quetta without discussing/ dilating upon the points of fact and law agitated in the
application for l eave to defend and without considering the documents available on record has
decreed the suit in a slipshod manner without applying judicial mind to the facts and
circumstances of the case and has failed to deliver a speaking judgment. The learned judge ha s
failed to give any decision of the points of facts and law agitated by the appellants/defendants in
the application for leave to defend which has been contested by the respondent/plaintiff through
rejoinder.
Under the law a judgment must contain reason s that justify the conclusion arrived at and those
reasons should be convincing. Moreso a judgment should contain concise statement of the case,
points for determination, decision thereon and reasons for each decision, manifesting application
of mind by th e judge ,,to resolve the issues involved and same should be a speaking, well
reasoned judgment reflecting due consideration of facts, law and contention of the parties.
We are conscious of the fact that under Financial Institutions (Recovery of Finances) Ordinance,
2001 the matters relating to commercial transaction and issues are to be decided in speedy way
for which specific procedure and system has been provided within the provision of Ordinance of
2001 but at the same time it is to be observed that in the matters relating to commercial
transactions, documents are executed between the parties towards their rights and liabilities
which are to be given weight/discussed.
In the instant case the judgment and decree impugned passed, by learned Judge Bankin g
Court Balochistan, Quetta cannot be termed as a speaking judgment as the learned Judge
Banking Court Balochistan, Quetta has failed to give any decision on points of facts and law
agitated by the appellant/defendants nor has discussed the documents filed by the parties on
record.
In view of above discussion, the instant appeal is accepted, the impugned judgment and decree
dated 31 -7-2007 passed by learned Judge, Banking Court Balochistan Quetta is set aside,
consequently; the matter is remanded to the l earned Judge, Banking Court Balochistan, Quetta,
the application filed by the appellant/defendant under section 10 of Financial Institutions
(Recovery of Finances) Ordinance, 2001 for leave to defend would be deemed to be pending
before the learned Judge B anking Court Balochistan, Quetta and same should be decided on
merits through a speaking judgment after hearing both the parties, in accordance with law and
merits of the case.
Appeal is allowed with no order as to costs.
M.H./45/Q Case remande d.This judgment is reproduced from a publicly available source for informational purposes and does not constitute legal advice. If you believe this listing contains an error,
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