IN THE HIGH COURT OF SINDH AT KARACHI
Suit No.B-16 of 2015
Askari Bank Limited
Versus
Sajid Textile Industries (Pvt.) Limited
BEFORE:
Mr. Justice Muhammad Shafi Siddiqui
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Date of Hearing: |
19.01.2017 |
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Plaintiff: |
Through Mr. Behzad Haider Advocate. |
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Defendants: |
Through Mr. Asghar Bangash Advocate. |
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On service of notice the defendants put an appearance by filing application under section 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001 seeking leave to defend the suit wherein he has refuted the claim of the plaintiff. Learned counsel for the defendants however during the course of his arguments could not point out any basis to deny the claim of the plaintiffs. Learned counsel has mainly agitated that the in terms of clause 2.10 of the agreement the subject properties could have been sold on equivalent or better offer as brought by the defendants within a year with six months period with the consent of the plaintiff. Hence, per learned counsel the leave is liable to be granted in the circumstances of the case.
On the other hand counsel for the plaintiff submitted that defendant No.1 is a company of which defendants No.2 to 6 are guarantors who used to avail the financial facilities from the plaintiff bank in order to run its routine business and in pursuance thereto a joint hypothecation charge of certain assets were created by executing certain documents such as pari passu letter of hypothecation, memorandum of deposit of title deeds, finance agreements, DP notes of different amounts etc. The defendants however failed to repay the finance facilities availed and as on 30.04.2012 the total outstanding came to RS.439,770,968.05.
Consequently, on persisting demand of the plaintiff, the defendants on 07.06.2012 entered into an a Settlement/Restructuring Agreement admitting the aforesaid outstanding amount. However, defendants again defaulted and/or did not fulfill the commitments as made in the Settlement/Restructuring Agreement thus making the total outstanding amount to be at Rs.406,161,804.65 as on 31.10.2014. Hence, the plaintiff has filed this suit for recovery of the subject amount.
Learned counsel for the plaintiff submitted that it is a settled principle of law that a restructuring/rescheduling agreement is an admission on the part of the borrower/defendants and hence on this score alone the suit is liable to be decreed.
I have heard the learned counsel for the parties and perused the material available on record.
At the very outset, learned counsel for the defendants could not give plausible and lawful explanation to escape from the liabilities arising out of the documents annexed with the plaint, particularly the statement of account and the restructuring agreement. The Settlement/Restructuring Agreement is an admitted document, which goes to show that the amount outstanding is in fact admitted by the defendants.
The only explanation that has been agitated by learned counsel for the defendants is that in terms of clause 2.10 the subject properties acquired by the plaintiff could be sold on equivalent or better offer brought by defendants within a year from the date of the agreement, or with six months more after consent of the plaintiff. There is no cavil to this proposition and/or stand taken by the defendants but in order to come to a just conclusion the dates are very material. The agreement was executed on 07.06.2012 while the suit has been filed on 25.02.2015. The period provided to the defendants if counted for one year expires on 05.06.2013 and the grace period of six months on 04.12.2013. Thus, the suit has been filed after lapse of more than one year of the expire of the option/facility given to the defendants. The defendants cannot be allowed to avail an indefinite period for clearing the outstanding dues and/or disposing of the subject properties on the pretext of this clause. If this was the option with the Bank there is nothing to prevent the borrower to bring a buyer in pursuance of same clause 2.10 which, for the sake of convenience, is reproduced as under:-
“2.10) The Bank shall be at liberty to sell the acquired property if it gets an offer equivalent or better to the acquisition value and/or on an offer in consultation with the Company. Likewise, the company can bring in any better offer, which shall be subject to the approval of the party of the first part. This arrangement shall not exceed for an initial period of one year from the date hereof and may be extended for another six months at the sole discretion of the Bank depending on the market conditions.”
Hence, I am of the view that the only ground taken by the defendants is not sustainable and does not entitled him to have leave to defend and consequently in view of the above the leave application is dismissed and the suit is decreed as prayed.
Dated: Judge