ABL Sardar Revised

1
Note.
C.O.S. No.25-B/2007
ABLV/s Mr Jawad Rashid/M/s. Sardar Enterprises & others
1.
Suit Amount
Rs.87,832,118.00
Annexure & pg of Plaint
2.
3.
Authority to institute suit.
Annex-A, A/1 & A/2 pg 24-28.
i.Mr. Mohammad Arshad Khan Manager

Branch Badami Bagh, Lahore
ii. Syed Muhammad Mujtaba Ahmed Gillani ,
officer Grade-I/ Relationship Manager
Branch,199-UpperMall,Lahore.
Annex-A & A/2 pg24 & 28.

Annex-A/1 pg-26.
Facilities.
(A). Running Finance of Rs.30.0M.
Para-6 pg 2-3
I.Total Amount Payable

Rs. 42,453,120.00
(i)
Principal Amount.
Rs. 29,956,835.00
Statements of Account (Current Account)
Annex- B/7 pg 129-134
(ii)
(iii)
Markup outstanding. Rs. 12,496,285.00

Statement of Account
Annex- B/8 pg135.
Particulars as per Section 9(3)
Para 6(b)(iii) pg 3
II. Approvals/sanctions/ Facility Offer Letters etc

i. Approval dtd 22.12.2004
Annex-B pg 109
ii.Facility Offer Letter dtd 23-12-2004
Annex-B/1 pg 112
iii. Amended Sanction Advice dtd 07.02.2005
Annex-B/2 pg 116
iv. Undertaking dtd 22-02-2005
Annex-B/3 pg 120
(Defendant No.1 undertook to comply

with the terms of the above Sanction dtd 07.02.2005).
III. Documents.
Annex-B to B/6 pg109-128.
Agreement for financing dtd 08-01-2005
Annex- B/4 pg121.
(B) Demand Finance of Rs.22.0 M.
Para7-pg 3-4
I.Total Amount Payable.

Rs.11,517,003.00
(i)Principal Amount .
Rs. 9,582,880.00
Statements of Account
Annex-C/4 pg150-151.
Disbursement of Demand Finance

Statement of Accounts of Cash Finance
On 26-02-2005 (pg 348) a sum of Rs.22,010,880.00 that
was the outstanding debit balance against the principal
amount of the Cash Finance which was adjusted
on the same day by disbursement of Rs.22,010,880.00
against the Demand Finance (pg150).
(ii)Markup outstanding.
Rs. 1,934,123.00
(iii) Particulars as per Section 9(3)
Annex-F/A8 pg 344-348
Pg 348 of Plaint
Annex-C/4pg150
Annex-C/5 pg 152
Para 7c(ii) pg 4

Request Letter dtd 23-11-2004
for Demand Finance.
Mark-A to reply to PLA No.52-B/2007 at pg 40.
Above referred to Annexure
B pg 109,B/1 pg 112,-B/2 pg 116 & B/3 pg 120
III. Documents.
Annex-C- C/3b pg136-149

Annex-C pg136
(C) FIM-II of Rs.24.0M.
Para-8 pg 4-8
I.This facility arises out from Import L/c (sight)

limit of Rs. 100.0 M.
i. Sanction of L/c Limit dtd 31-12-2002
ii. Documents of L/c Limit including
shipping documents of six consignments
of imported tyres & tubes & Statements of Accounts
Para-8(a) (b) pg 4-7

Annex D pg 153-154
Annex E - E/9G pg 155-294
II. Amount Payable against FIM-II. Rs. 18,245,139.00

(i)Principal outstanding.
Rs. 11,836.795.00
309
Annex-E/13pg306-
Rs. 6,408,344.00
Annex-E/14pg 310
(iii)Particulars as per Section 9(3)
Para 8d(iii) pg 7-8
III. Approvals/sanctions/ Facility Offer Letters etc of FIM-II

B pg 109,B/1 pg 112,-B/2 pg 116 & B/3 pg 120
III. Documents of FIM-II.

Agreement for financing dtd 08-01-2005.
Annex-E/10 to E/12c pg 295-305

Annex- E/10 pg 295
(D) FATR-Limit of Rs.7.0M.
Para-9-pg 8-9
This Limit was granted for obtaining delivery

by the Defendant No.1 of the stocks pledged
with the Plaintiff against the aforesaid Demand Finance
of Rs.22.00 M and FIM-II of Rs.24.00 M. respectively.
Para-9(a)-pg 8
I.Total Amount Payable. Rs. 7,760,306.00

(i)Principal Amount
Rs. 6,620,099.00
Statements of Account for Account No. 01-540-0144-2
& for Account No. 01-540-0145-3
Annex-F/4 & F/5 pg322-323
(ii)Markup outstanding.Rs. 1,140,207.00

Annex-F/6 pg324.
Para 9d(iii) pg 9
III. Approvals/sanctions/ Facility Offer Letters.

B pg 109, B/1 pg 112,-B/2 pg 116 & B/3 pg 120
IV. Documents.
Annex-F to F/3 pg 311-321
i.Agreement for financing dtd 08-01-2005.
Annex- F pg 311
ii.Trust Receipt dtd 28-10-2005

318
(Defendant No.1 took delivery of the stocks
of the value of Rs.2,950,099.00 pledged against
the aforesaid FIM-II
Annex-F/2 pg 316-
iii.Trust Receipt dated 28-10-2005

the Demand Finance above.
Annex-F/3 pg 319
(E) Cash Finance of Rs.25.0M.
Para-10 pg 9-10
I.Amount Payable
Rs.7,856,550.00
(i)Principal Amount outstanding. Nil
(ii)Markup outstanding.Rs.7,856,550.00
(iii) Particulars as per Section 9(3).
i.Sanction Advice dtd 30.6.2001
ii.Amended sanction dtd10-7-2001
iii.Approval dtd 31.12.2002
Annex- F/A/8 pg 344-348

Annex-F/A/9 pg 349.
Para10b (iii) pg 10
Annex-F/A pg 325
Annex-F/A/1 pg 327
Annex-D pg 153
III.Documents.
Last Agreement for Financing dated 31-12-2002
Annex-F/A/2 to F/A/7 pg 328-343.

Annex- F/A/5 336
4.
Annex-G to -J/6 pg 350-446
Mortgages. Para-11 of Plaint by Defendant 1 to 4.
5.
Guarantees.
Annex-K to K /11-pg 447-502.
6.
Acknowledgment Letters.
Annex- L to L/2 pg 503-506
IN THE LAHORE HIGH COURT, LAHORE
P.L.A. No.51-B/ 2007

In
C.O.S. No.25 of 2007
Allied Bank Limited V/s Jawad Rasheed & others
Reply by the Plaintiff to the Petition for Leave to Defend the Suit under Section 10
of the Financial Institutions (Recovery of Finances) Ordinance, 2001 filed by and on
behalf of Defendants No.1 to 4.
Respectfully Sheweth:
LEGAL OBJECTIONS:
1.
Application for leave for leave to defend the suit (PLA) under reply has not been filed
within stipulated period of 30 days from the date of effectiveness of service of summons.
Service of summons was affected on Applicants on 07-07-2007 through publications in
the daily The News & daily Nawai-Waqt and PLA should have been filed latest by
06-08-2007 but the same was filed on 03-09-2007. Therefore, PLA is hopelessly time
barred and for that reason it is liable to be dismissed out rightly.
2.
PLA under reply completely fails to comply with the mandatory provisions of section 10
of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (hereinafter referred
to as the Ordinance of 2001). Particulars of the facilities such as amounts of finance
availed, amounts paid by the defendant and the dates of such payments, amounts of
finance and other amounts relating to the finance payable by the defendant and the
amounts which the defendant disputes as payable to the Plaintiff and facts in support
thereof have not been given strictly in accordance with the mandatory requirements of
section 10(4) of the Ordinance of 2001.
Similarly, under section 10(3) of the Ordinance of 2001, Applicants were

required to give in PLA a summary of the substantial questions of law as well as facts in
respect of which, in the opinion of the defendant, evidence needs to be recorded.
However, in the lengthy PLA neither any question of law or fact has been formulated or
stated nor any summary of substantial questions of law or fact qua the claim of the
Plaintiff has been given.
It is submitted that sub-section 6 of section 10 reproduced below lays down that
the Application for leave to defend shall be rejected if it fails to comply with the
mandatory requirements of sub-sections 3, 4 and 5:
(6)
An application for leave to defend which does not comply with the requirements
of sub-section (3), (4) where applicable and (5) shall be rejected, unless the
defendant discloses therein sufficient cause for his inability to comply with any
such requirement.
It may be submitted that, throughout PLA under reply no, sufficient cause has been
disclosed by the Applicants for their inability to comply with the afore referred to
mandatory requirements of law. Therefore, as PLA under reply has not complied with the
mandatory requirements of sub-sections 3 & 4 of section 10 of the Ordinance of 2001, the
same is liable to be rejected and Plaintiff is entitled for passing of an outright decree in its
favour.
REPLY TO THE PRELIMINARY OBJECTIONS
1.
Denied vehemently. Denied that the plaint or the documents appended therewith do not
make out any case against the Applicants. Denied that any fictitious or false claim has
been raised against the Applicants. Denied that any of the documents, made basis of the
claim made in the suit are without consideration, were never acted upon or that no
finance was extended to the Applicants on the basis thereof. Denied that either the said
documents cannot be made basis of the liability of the Applicants claimed in the Plaint or
that the Plaint is liable to be rejected as alleged.
2.
Denied vehemently. Denied that the Plaintiff Bank has forged, fabricated or interpolated
any document. Denied that the documents and Sanction Advices appended with the Plaint
establish that the claim of Plaintiff is frivolous or non-existent as alleged. Denied that the
disbursement of the facilities after execution of the Agreements dated 8-01-2005 is
tantamount to any illegality. It is submitted that agreements for financing are executed
first and thereafter disbursements are made thereunder. Denied that any facility that was
not sanctioned or considered for approval has been shown to have been extended. All of
the facilities, which are the subject matter of the suit, were approved and disbursed.
Denied that the perusal of the documents attached with the Plaint establishes that Plaintiff
manufactured the said documents to set up claim against the Applicants. Denied that the
claim made through the titled suit is hit by the provisions of the Limitation Act, 1908. It
is merely a bald allegation without mentioning any specific instance, reason or ground on
the basis whereof the claim of Plaintiff is alleged to be hit by the provisions of the
Limitation Act, 1908.
3.
Denied vehemently. Denied that the documents sued and relied upon by the Plaintiff were
not acted upon or that no finance was extended, disbursed or made available to the
Applicants under the said documents. Denied that the Plaintiff has withheld any
document or the Agreements under which the facilities were extended in the year 20002001. All documents concerning the facilities, which are the subject matter of the suit,
have been attached with the Plaint. Denied that the Plaintiff has submitted only partial
accounts or that the complete and exhaustive details of the accounts have not been
attached with the Plaint. Denied that Plaintiff had raised claim on the basis of such
documents which are not subject matter of the suit or not relied and sued upon. Denied
that the Plaintiff had attempted to camouflage its alleged illegalities. Denied that the
Plaintiff, through any unauthorized, unlawful, arbitrary or unilateral adjustments of the
amounts allegedly paid or made available by the Applicants, ever committed any
illegality or that Plaintiff ever made any adjustment of the said amounts without any
legitimate basis. Denied that the Plaintiff ever unilaterally filled up any document with
malafide intentions as alleged. Denied that any document executed in the past has been
submitted before this Honourable Court by inserting new dates therein. Denied that the
claim of the Plaintiff Bank has not been substantiated by the documents. Denied that the
documents attached with the plaint cannot be made basis of the liability of the Applicants
as claimed in the Plaint. Denied that the documents executed for the facilities, which are
the subject matter of the suits have not been relied and sued upon. Denied that the
documents relied upon by the Plaintiff were executed for the previous facilities alien to
the instant proceedings or that the said documents are beyond the scope of the instant suit
or that such documents/ agreements cannot made basis of the titled suit. Denied that the
titled suit is hit by the provisions of section 9 of the Ordinance of 2001. All documents
and Statements of Accounts required to be attached with the plaint under above law have
been so attached.
4.
Denied vehemently. Denied that the titled suit has not been filed, signed or verified by
duly authorized representatives of the Plaintiff. Denied that the titled suit is a nullity in
the eyes of law or that it is liable to be dismissed. Denied that any resolution, passed by
the Board of Directors of the Plaintiff, was required for delegation of powers through the
Powers of Attorney attached with the Plaint. It is submitted that the Power of Attorney
annexed with the Plaint as Annexures-A & A/1 have been directly granted by the Plaintiff
in accordance with its Articles of Association and not by any other Attorney of Plaintiff.
Annexures A to A/2 to the Plaint clearly establish that Mr. Mohammad Arshad Khan,
Branch Manager of the Plaintiffs branch situated at Badami Bagh, Lahore and Syed
Muhammad Mujtaba Ahmed Gillani officer Grade-I and Relationship Manager of the
Plaintiffs branch situated at 199-Upper Mall, Lahore are duly authorized to institute the
titled suit on behalf of the Plaintiff. It is submitted that Mr. Mohammad Arshad Khan,
who has signed the plaint and instituted the titled suit on behalf of the Plaintiff, is Branch
Manager of the Plaintiff's branch at at Badami Bagh, Lahore , (Annex-A/2 to the Plaint).
Under Section 9(1) of the Ordinance of 2001, a Branch Manager is authorized to institute
a suit on behalf of a Financial Institution. Accordingly, the titled suit has been lawfully
and authorisedly instituted. Denied that the titled suit has not been validly filed and
instituted by the signatories to the Plaint in accordance with section 9 of the Ordinance of
2001 or that the same is liable to be dismissed.
5.
Denied vehemently. Denied that any document sued or relied upon is ineffective, invalid
or unenforceable in law or that the documents attached with the Plaint have not been
attested in accordance with the provisions of Article 17 or any other applicable provisions
of Qanoon-e-Shahadat Order, 1984 or section 18 of the Ordinance of 2001. Furthermore,
by virtue of sub-sections (3) & (4) of section 18 of the Ordinance of 2001, said
documents are legally enforceable and are not invalid or void for any alleged reason.
Denied that either no liability of the Applicants towards the Plaintiff exists or that the
documents attached with the Plaint do not establish the liability of the Applicants. Denied
that the titled suit is liable to be dismissed.
6.
Denied vehemently. Denied that the documents sued and relied upon are not stamped in
accordance with the provisions of Stamp Act or that the documents attached with the
plaint are invalid in law and cannot form the basis of the claim made through the titled
suit. Therefore, it is denied that the titled suit is liable to be dismissed as alleged.
7.
Denied vehemently. Denied that the titled suit has not been validly instituted in terms of
the section 9 of the Ordinance of 2001. Denied that the plaint is not supported by legally
valid and complete Statements of Accounts. Plaint is supported by complete, valid and
legally enforceable Statements of Accounts. Denied that the claim of the Plaintiff Bank
cannot not be adjudicated upon in accordance with the law or that any prejudice would be
caused to the Applicants. Denied that the Statements of Accounts appended with the
Plaint have not been duly certified and verified in accordance with law or that the said
Statements of Accounts contain any dubious, unauthorized or unexplained entries. Denied
that the suit is liable to be dismissed.

8.
Denied vehemently. Denied that either any of the contentions raised in the Plaint are
wrong or any of the Agreements annexed thereto and sued upon are void or against
Public Policy. Denied that the said Agreements are interest bearing or in violation of the
principles of Islamic Common Law as per the dictum of the august Supreme Court of
Pakistan. None of the Agreements attached with the plaint are against Public Policy by
virtue of section 23 of the Contract Act. Therefore, titled suit is maintainable and is not
liable to be dismissed as alleged.
9.
Denied vehemently. Denied that the contentions raised in the plaint are not supported by
the documents sued and relied upon or that there are any contradictions between the
contents of the plaint and the said documents. Denied that any of the documents attached
with the Plaint were ever interpolated by the Plaintiff or that the claim made through the
Plaint is frivolous or false. Denied that either the claim of the Plaintiff Bank requires to
be established through evidence or that Applicants are entitled to grant of leave to defend
the suit as alleged.
10.
Denied vehemently. Denied that the titled suit has not been instituted or that the Plaint
has not been signed and verified by the concerned Branch Manager. It is submitted that
Mr. Mohammad Arshad Khan, who has signed the plaint and instituted the titled suit on
behalf of the Plaintiff, is Branch Manager of the Plaintiff's branch at Badami Bagh,
Lahore (Annex-A/2 to the Plaint). Accordingly, the titled suit has been lawfully and
authorisedly instituted in accordance with the provisions of Section 9(1) of the Ordinance
of 2001. Denied that the plaint is either defective or barred by any law or that it merits
summary rejection as alleged.
11.
Denied vehemently. Denied that Plaintiff ever refused to provide to the Applicants
Statements of Accounts or any agreement whenever requested by them. Plaintiff has been
periodically providing to the Applicants Statements of Accounts of all facilities/accounts
and the documents whenever requested by them. Denied that no amount is legally due,
payable or outstanding against the Applicants. Applicant/Defendant No.1 has been
acknowledging its liabilities and committing to make payments from time to time as
evidenced from the letters dated 21-01-2006, dated 01-02-2006 and dated 10-06-2006
attached with the Plaint as Annex- L to L/2. Hence the Plaint is not liable to be dismissed
as alleged.
12.
Denied vehemently. Denied that the Plaintiff failed to comply with the provisions of the
Order VII Rules 14, 17 & 18 of Civil Procedure Code 1908 or that it did not produce the
original documents before this Honourable Court. It is submitted that all documents for
10
the facilities that are subject matter of the titled suit have been attached with the Plaint in
accordance with the provisions of section 9 of the Ordinance of 2001. Denied that either
any of the documents attached with the Plaint is of dubious nature or has been fabricated
or interpolated by the Plaintiff Bank. Therefore, it is denied the matter/suit cannot be
legally or validly proceeded with or that the plaint is liable to be dismissed in terms of
section 9 of the Ordinance of 2001 as alleged.
13.
Denied vehemently. Denied that the perusal of the plaint or the documents appended
therewith establishes that the Plaintiff has no cause of action against the Applicants.
Denied that the titled suit is liable to be dismissed. Denied that the documents appended
with the plaint were not implemented or acted upon by the Plaintiff or that for the alleged
reason the suit is without any cause of action or is liable to be dismissed.
14.
Denied vehemently. Denied that the documents appended with the Plaint are replete with
any discrepancies or that the said documents do not support the claim of the Plaintiff.
Denied that the documents appended with the plaint are without consideration,
ineffective, inoperative or that same cannot be made basis for determining the liability of
the Applicants.
15.
Denied vehemently. Denied that the Plaintiff has not disclosed or appended with the
Plaint all documents and Agreements executed between the parties as alleged. Similarly,
it is denied that Plaintiff has concealed any material fact. Allegations contained in para
under reply are bald as the Applicants have not given the details of the information and
documents allegedly concealed by the Plaintiff. Therefore, it is denied that any prejudice
has been caused to the case of the Plaintiff or to its claim as alleged. As the Plaintiff has
concealed no document or information, it is denied that the alleged non-disclosure of
material facts or documents denudes the basis of the claim of the Plaintiff against the
Applicants. Denied, therefore, that the suit is not maintainable on the basis of the
documents appended with the plaint or that the suit is liable to be dismissed as alleged.
16.
Denied vehemently. Denied that the Agreements relied and sued upon by the Plaintiff
Bank were never acted upon or implemented or that the said documents cannot be made
basis of the claim against the Applicants. Denied that the said documents do not create
any binding obligation whatsoever upon Applicant No.1 as principal debtor and/or other
Applicants as guarantors as alleged. Denied that either any document was not
implemented or acted upon or that no disbursement of funds was made thereunder.
Therefore, it is denied that any of the documents attached with the Plaint are
liable to be declared as illegal, void, without consideration or of no effect.
11
17.
Denied vehemently. Denied that the Statements of Accounts attached with the Plaint are
either incomplete or sketchy or that the said Statements of Accounts do not reflect the
true and faithful accounts inter se the parties. Denied that the Statements of Accounts
appended with the suit have no relevance with the documents appended with the Plaint.
Denied that the said Statements of Accounts contain any illegal, unauthorized,
unexplained or dubious entries. Denied that there is any discrepancy in the said
Statements of Accounts which denudes the claim of the Plaintiff of any legitimacy or
basis. Denied that the said Statements of Accounts or the entries therein were not
supported by the documents appended with the Plaint or that the said Statements of
Accounts reflect that no amount whatsoever was disbursed to or that no finance was
extended to the Applicants. Therefore, it is denied that the Plaintiff has no cause of action
against the Applicants or that the titled suit is liable to be dismissed as alleged.
18.
Denied vehemently. Denied that the Plaint is seeped in mala-fide as alleged. Denied that
the Plaintiff has either deliberately or otherwise concealed any fact or minutes of
meetings or correspondence exchanged between Applicants and Plaintiff. Allegations
contained in para under reply are bald as the Applicants have not given the details of the
information, facts or minutes of meetings or correspondence allegedly concealed by the
Plaintiff. Denied that the Plaintiffs claim is built on the documents and agreements
which are either without consideration or were not acted upon or that no finance was
disbursed, extended or made available to the Applicants thereunder. Denied that the
documents attached with the Plaint cannot be made basis of the liability of the Applicants
towards the Plaintiff. It is submitted that an out right decree is liable to be passed against
the Applicants on the basis of the documents and Statements of Accounts attached with
the Plaint
19.
Denied vehemently. Denied that either the titled suit is liable to be dismissed or that the
claim against the Applicants made thereunder is non-existent or not maintainable in the
eyes of the law. Denied that no amount is legally due and payable by the Applicants.
Amount claimed in the titled suit is outstanding, legally due and payable by the
Applicants. As stated above, Applicant/Defendant No.1 has been acknowledging from
time to time its liabilities and committing to make payments as evidenced from the letters
dated 21-01-2006, dated 01-02-2006 and dated 10-06-2006 attached with the Plaint as
Annex- L to L/2. Therefore, titled suit is maintainable and is not liable to be dismissed as
alleged.
20.
Denied vehemently. Denied that the perusal of the contents of the Plaint makes it clear or
obvious that the claim of the Plaintiff is bogus or fabricated or that the documents and
agreements on the basis whereof the claim in the Plaint has been raised have not been
12
sued or relied upon. All documents and Statements of Accounts for the facilities subject
matters of the suit have been attached with the Plaint sued and relied upon by the Plaintiff
for passing of a decree against the Applicants. Denied that the titled suit is based upon
concocted or fictitious allegations or that the suit is liable to be dismissed as alleged.
21.
Denied vehemently. Denied that any of the documents including the Personal Guarantees
attached with the Plaint are without consideration, ineffective in law or inadmissible in
evidence. All the documents attached with the Plaint and relied upon by the Plaintiff are
valid, legally executed and are enforceable and admissible under the all applicable and
relevant laws. Therefore, it is denied that the titled suit is liable to be dismissed as
alleged.
22.
Denied vehemently. Denied that the Personal Guarantees appended with the Plaint are
without consideration, illegal or that the said Personal Guarantees are liable to be
discharged. Denied that either the Agreements or the financial facilities that were secured
by the said Guarantees were not performed or acted upon or disbursed respectively or that
no amount can be claimed on the basis of the said Personal Guarantees. Therefore, it is
denied that the said Personal Guarantees are ineffective, unlawful or that the same could
not be made basis of imposing any liability upon the Applicants or that the same are
liable to be cancelled as alleged.
23.
Denied vehemently. Denied that the Personal Guarantees sued upon are inoperative or
ineffective in law or that the said guarantees have not been attested in accordance with
the Article 17 of the Qanoon-e-Shahadat Order, 1984. All of the personal Guarantees
have been attested in accordance with the Article 17 of the Qanoon-e-Shahadat Order,
1984 and all applicable laws. Denied that under any provisions of the Ordinance of 2001,
the said guarantees cannot be made basis of the Plaintiffs claim against the Applicants.
24.
Denied vehemently. Denied that either any legal or factual issues have been raised
through PLA or on the basis of the said alleged legal or factual issues any substantial
questions of law or facts requiring recording of evidence for adjudication of the titled suit
have been raised. In fact, no question of law or facts has been raised through PLA under
reply and an out right decree is liable to be passed against the Applicants. Therefore, it is
denied that Applicants are entitled for grant of leave to defend the suit as alleged.
25.
Denied vehemently. Denied that any of the documents appended with the Plaint are
deficient in any material details or that the said documents are void for uncertainty in
terms of section 29 of the Contract Act, 1872 or under any other law. Therefore, titled suit
is not liable to be dismissed.
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26.
Denied vehemently. Denied that the either the contents of the Plaint or the Statements of
Accounts or the entries therein make it clear or obvious that no amount was disbursed to
the Applicants pursuant to Agreements sued and relied upon by the Plaintiff. It is denied
that no amount is legally due against the Applicants. Amount claimed in the suit is legally
due and payable by the Applicants and any contention contrary thereto is denied
vehemently. Denied that the titled suit is liable to be dismissed or that the same is without
any cause of action against the Applicants. Plaint discloses cause of action against the
Applicants.
27.
Denied vehemently. Denied that the Plaint does not fulfill any requirement of section 9 of
the Ordinance of 2001 or that such alleged non-compliance of the provisions of section 9
of the Ordinance of 2001 substantiates that no amount has been availed by the Applicants
or disbursed to them. Denied that Applicants are not liable to pay their outstanding
liabilities claimed in the suit. Therefore, it is denied that the titled suit is not maintainable
or that it is liable to be rejected under Order 7 Rule 11 of CPC as alleged.
28.
Denied vehemently. Denied that the Plaint does not fulfill the requirements of sub-section
9(3) of the Ordinance of 2001 or that such alleged non-compliance of the provisions of
section 9 of the Ordinance of 2001 substantiates that no amount of finance was availed by
the Applicants or disbursed to them. Particulars/details under sub-section (3) of section 9
of the Ordinance of 2001 for the Running Finance, Demand Finance, FIM-II, FATR Limit
and Cash Finance that are subject matter of the suit have been given in paragraphs 6 to 10
respectively of the Plaint. Therefore, it is denied that the titled suit is not maintainable or
that it is liable to be dismissed.
29.
Denied vehemently. Denied that the Running Financial Facility was not extended or that
no funds were disbursed under the said facility. Denied that the claim against the Running
Financial Facility has been raised on account of some disputed amounts having no
relevance with the subject matter of the titled suit. As evidenced, by the Statement of
Account attached with the Plaint as Annex- B/7, the Running Finance was disbursed to
and availed by the Applicants. Denied that the Plaintiff Bank has illegally and unlawfully
ever charged or claimed any appreciation over the outstanding liabilities as alleged or that
no disbursement of funds was made under the Running Finance. Denied that either partial
Statements of Accounts has been appended with the Plaint or that the said Statements of
Accounts establish that the Plaintiff carried out any illegal, unauthorized or unexplained
transfers of substantial amounts from the Running Finance Account. Therefore, it is
denied that no amount is legally due and payable by the Applicants under the Running
Finance. Denied that Plaintiff has not brought on record of the case or has not allowed the
Defendants to have a clear and transparent picture of their accounts. In the Statements of
14
Accounts of the Running Finance facility (attached with the Plaint as Annex- B/7 & B/8)
a clear, transparent and correct picture of the accounts of Applicant No.1 has been given.
Similarly, actual and correct overdue liability of Defendants/Applicants has been given in
the said Statement of Accounts. Denied that the liability of Applicants given in the said
Statements of Accounts is wrong or that no disbursement of the funds against the
Running Finance was made.
30.
Denied vehemently. Denied that Demand Finance facility was not extended to Applicant
No.1 in terms of the Agreement for Financing dated 08-01-2005 (Annex-C to the Plaint)
sued and relied upon. Denied that the perusal of the Plaint and the documents appended
therewith establish that neither any amount was made available nor funds were disbursed
in terms of the Demand Finance facility. It is submitted that on the request of Applicant
No.1 made through Letter dated 23-11-2004 (Mark-A) Plaintiff vide approval No.
COS/SAMD/MTR/5330 dated 22.12.2004 (Annex-B to the Plaint) granted to the
Defendant No.1, inter alia, the Demand Finance to the tune of Rs.38.00 million in lieu of
then existing Cash Finance and FIM etc. Terms and conditions of the facilities approved
through the above sanction were conveyed to the Applicant No.1 through the Facility
Offer Letter No. BBL/FE/2004/754 dated 23-12-2004. Applicant No.1 returned to the
Plaintiff a copy of the aforesaid Facility Offer Letter No. BBL/FE/2004/754 dated 23-122004, duly signed by it in acceptance of terms and conditions contained therein (AnnexB/1 to the Plaint). Later on through the Sanction Advice No.COS/SAMD/MTR/745 dated
07.02.2005 (Annex-B/2 the Plaint) inter alia the amount of the Demand Finance was
reduced to Rs.22.00 million. In acceptance of and for compliance with the terms and
conditions, contained in the aforesaid Sanction Advice No.COS/SAMD/MTR/745 dated
07.02.2005, Applicant No.1 executed the Undertaking dated 22-02-2005 (Annex-B/3 to
the Plaint). Accordingly, a lawful agreement was reached between the Plaintiff and the
Applicant No.1 in terms of which Plaintiff granted to the Defendant No.1, inter alia, the
aforesaid Demand Finance in lieu of the Cash Finance.
In pursuance of the above approvals and to avail the Demand Finance, Applicant
No.1 also executed, inter alia, Agreement for Financing dated 08-01-2005 (Annex-C to
the Plaint). Further submitted that the Applicant No.1 proceeded to avail funds in terms of
the Demand Finance as evidenced by the Statements of Account appended with the Plaint
as Annex-C/4. Statement of Accounts of the aforesaid Cash Finance is attached with the
Plaint as Annex-F/A8. The above Statements of Accounts establish that on 26-02-2005 a
sum of Rs.22,010,880.00 was the outstanding debit balance against the principal amount
of the Cash Finance which was adjusted on the same day by disbursement of
Rs.22,010,880.00 against the Demand Finance. Therefore, it is denied that the Demand
Finance facility was created to extend legitimacy to any illegal or unlawful adjustment
15
and transfers made from the Cash Finance account as alleged. Denied that the Applicants
had made substantial payments to Plaintiff for adjustment of the Cash finance facility. As
evidenced from the Statement of Accounts of the Cash Finance, against the total
withdrawal of Rs.32,204,338.00, Applicants adjusted merely as sum of Rs10,193,458.00
from their own resources and the balance amount of Rs.22,010,880.00 was adjusted on
26-02-2005 by disbursement of Rs.22,010,880.00 against the Demand Finance . Denied
that Plaintiff ever refused to supply to the Applicants Statements of Accounts of the
facilities subject matter of the suit, containing correct details of the amounts availed by
the Applicants and repaid. On the other hand, Plaintiff has been forwarding Statements of
Accounts of all facilities/accounts to the Applicants periodically without any default and
the Applicants never raised any objection as to any entry therein. Therefore, it is denied
that the Demand Finance facility was granted with the objective to camouflage any
alleged irregularities or illegalities committed or attributed to the Plaintiff Bank in the
Cash Finance account. Denied that either no funds were disbursed to or utilized by the
Applicants against the Demand Finance facility or that that no amount is legally due and
payable under the Demand Finance. Complete and correct Statements of Accounts have
been annexed with the Plaint and nothing has been concealed. Denied that any illegal or
unlawful adjustments were ever made by the Plaintiff Bank in any account of the
Applicants.
It is further submitted that the Applicants have been admitting their liability
towards the Demand Finance and objection as to the same has been raised for the first
time through PLA under reply. Copies of the letters dated 21-01-2006, 01-02-2006 and
10-06-2006 whereby Applicant/Defendant No.1 acknowledged its liability against the
facilities subject matter of the titled suit and committed to make payments there against,
have been annexed with the Plaint as Annex- L to L/2. Through the aforesaid letter dated
21-01-2006 (Annex- L to the Plaint at pages 503 to 504), Applicant No.1 categorically
stated and acknowledged that a sum of Rs.9.613 million (more than the amount of
Rs.9,582,880.00 claimed in the suit against the principal amount of the Demand Finance)
was its outstanding liability against the principal amount of the Demand Finance and
promised to pay the same in full.
31.
Denied vehemently. Denied that any of the facilities, subject matter of the suit, including
the FIM-II facility arising out of the Letter of Credit facility is either deficient in any
manner or barred by limitation as alleged. Denied that any amount has been claimed after
lapse of statutory period provided in the Limitation Act, 1908. Denied that FIM-II was
created by the Plaintiff without the consent and request of Defendant No.1. As stated in
paragraph-8 of the Plaint, Plaintiff had also allowed to the Applicant No.1 an L/c limit
(Sight) for import of Tyres and Tubes and against this limit, Plaintiff had established
16
various Letters of Credit for import of Tyres and Tubes. However, on receipt of shipping
documents under six (6) Letters of Credit by the Plaintiff, Applicant No.1 failed to get
released the imported goods by making any corresponding payment thereof and
resultantly Plaintiff had to make payment of the aggregate sum Rs.18,971,777.00 to the
beneficiaries of the said six (6) L/Cs by allowing to the Applicant No.1 the aforesaid
finance facility of forced FIM-II (Statements of Accounts attached to the Plaint as AnnexE/1E, E/2E, E/3E, E/4E, E/5G, E/6F, E/7G, E/8G, E/9F and E/9G). Subsequently,
Applicant No.1 through the aforesaid Letter dated 23-11-2004 (Mark-A above) not only
acknowledged its liability against the forced FIM but also requested Plaintiff to convert
its then outstanding liability under the forced FIM into Demand Finance. The said request
was accepted by the Plaintiff and it, vide approval No. COS/SAMD/MTR/5330 dated
22.12.2004 (Annex-B to the Plaint), granted to the Applicant No.1 various facilities
including Demand Finance to the tune of Rs.38.00 million in lieu of and by way of
conversion of inter alia the aforesaid forced FIM. Terms and conditions of the facilities
approved through the above approval were conveyed to the Applicant No.1 through the
Facility Offer Letter No. BBL/FE/2004/754 dated 23-12-2004 and Applicant No.1
returned to the Plaintiff a copy of the aforesaid Facility Offer Letter duly signed by it in
acceptance of terms and conditions contained therein (Annex-B/1 to the Plaint). Later on,
through the Sanction Advice No.COS/SAMD/MTR/745 dated 07.02.2005 (Annex-B/2
the Plaint), the amount of the Demand Finance was reduced to Rs.22.00 million and
Applicant No.1 was, inter alia, allowed a fresh FIM-II of Rs.24.00 million by way of
conversion, inter alia, of then outstanding amount of the forced FIM as well as by grant
of additional amount of Rs.8.00 million. In acceptance of and for compliance of the terms
and conditions contained in the aforesaid Sanction Advice No.COS/SAMD/MTR/745
dated 07.02.2005, Applicant No.1 executed the Undertaking dated 22-02-2005 (AnnexB/3 to the Plaint). Accordingly, a lawful agreement was reached between the Plaintiff and
the Applicant No.1 in terms of which Plaintiff inter alia granted to and the Applicant No.1
availed the aforesaid FIM-II of Rs.24.00 million. To avail FIM-II, Applicant No.1 also
executed inter alia the Agreement for Financing and Letter of Pledge both dated 08-012005 (Annex-E/10 & E/12 to the Plaint). Applicant No.1 proceeded to avail funds in
terms of FIM-II as evidenced by the Statement of Account (Annex-E/13 to the Plaint).
The above six Statements of Accounts for L/Cs/forced FIM (Annex-E/1E, E/2E, E/3E,
E/4E, E/5G, E/6F, E/7G, E/8G, E/9F and E/9G to the Plaint ) establish that on 26-2-2005
an aggregate sum of Rs.17,166,735.00 was the outstanding debit balance against the
principal amount of the six L/Cs/forced FIM which was adjusted on the same day by
disbursement of Rs.17,166,735.00 against the FIM-II. Disbursement of further amount of
Rs.6,631,824.00 was made to Applicant No.1 on 16-03-2005. Further submitted that,
through the aforesaid approval No. COS/SAMD/MTR/5330 dated 22.12.2004, Facility
Offer Letter No.BBL/FE/2004/754 and the Sanction Advice No.COS/SAMD/MTR/745
17
dated 07.02.2005, Applicant No.1 was also allowed a financial limit of Finance Against
Trust Receipt (FATR-Limit) of Rs.7.00 million. This Limit was granted for obtaining
delivery by Applicant No.1 of the stocks pledged with the Plaintiff against the aforesaid
Demand Finance of Rs.22.00 million and FIM-II of Rs.24.00 million. Applicant No.1 by
executing Trust Receipt dated 28-10-2005 (Annex-F/2 to the Plaint) took from the
Plaintiff delivery of the stocks/goods of the value of Rs.2,950,099.00 pledged against
FIM-II. Statement of Accounts of FIM-II attached at pages 306 to 309 establishes (page
308 is relevant) that on 28-10-2005 a sum of Rs.2,950,099.00 was transferred to F.A.T.R,
as also evidenced by its Statement of Accounts (Annex-F/4 to the Plaint at page 322).
Therefore, it is denied that Plaintiff had created FIM-II unlawfully or illegally or that no
disbursement of funds against FIM-II was made. Denied that any facility was created for
legitimizing charging of any illegal mark-up through conversion of letter of credit facility
into forced FIM and grant of FIM-II. Denied that any mark-up on FIM-II has been
illegally charged against the norms of established banking practices or in violation of the
judicial pronouncements. Denied that the Agreements dated 08-01-2005 attached with
the Plaint confirmed the factum of fabrication of documents, or raising of frivolous claim,
in respect of the finance facilities which are the subject matters of the titled suit. Denied
that the facilities, subject matter of the suit, were not sanctioned or approved or that any
of the documents/agreements attached with the Plaint are liable to be declared as void or
illegal or cancelled as alleged.
32.
Contents being incorrectly stated are denied vehemently. Denied that the stocks of tyres,
tubes or rims intended to be pledged with Plaintiff as security for the FAPC-I facility
were ever placed under possession, control or custody of the Plaintiff. Possession of the
aforesaid stocks was never handed over to Plaintiff by Applicants. It is submitted that
Applicant No.1, through the Letter dated 31-01-2003 (Mark-B), had requested the
Plaintiff to grant to it a temporary export finance facility to enable Applicant No.1 to
meet its export orders under two Exports L/Cs (Sight) for aggregate sum of
Euro.290,200.00. Above request by Applicant No.1 was accepted by the Plaintiff and it
through the sanction dated 24-02-2003 (Mark-B/1) granted to Applicant No.1 FAPC-I
facility to the tune of Rs.13.00 million. FAPC-I was required to be secured by Applicant
No.1, inter alia, through pledge of stocks of tyres and tubes imported by the Applicant
No.1 through different banks (not through Plaintiff). It was conveyed to the Plaintiff by
Applicant No.1 that the aforesaid stocks intended to be pledged with the Plaintiff were
lying at Tanveer Bonded Ware House situated at Gari Shahoo, Lahore. To take possession
of the said stocks for creation of pledge thereon, Plaintiff appointed M/s Al-Nawab
Traders as Muqaddam. However, when the aforesaid Muqaddam approached
management of the Tanveer Bonded Ware House, it was found that the said stocks were
lying in the aforesaid Bonded Ware House for the last two years under control of the
18
customs authorities and could not be released as huge amount of customs duties/other
charges payable to the customs authorities were not paid by Applicant No.1. Accordingly
the said stocks were not placed under possession, control or custody either of Plaintiff or
its nominated Muqaddam. As per information received by Plaintiff the aforesaid stocks
were subsequently auctioned by the customs authorities to recover custom duty/other
charges payable to the customs authorities. Plaintiff did not receive from the customs
authorities any amount out of the sale proceeds of the said stocks. It is further clarified
that a FAPC-I facility (Finance Against Packing Credit) is granted for manufacturing of
goods to be exported against firm orders or irrevocable L/cs. No goods are imported
under a facility of FAPC-I. Therefore, goods financed under a FAPC-I facility can never
be pledged with the financer of an exporter. Accordingly, goods financed under FAPC-I
mentioned in para under reply were also never pledged with the Plaintiff by Applicant
No.1. Therefore, it is denied that any stocks were ever actually pledged with Plaintiff, as
security for FAPC-I finance, or the Plaintiff failed to perform its obligations or
responsibilities as bailee of any goods or that the Plaintiff failed to safeguard or protect
any goods under its alleged bailment/pledge. Although it is not denied that Applicants
repaid/discharged their liability under the FAPC-I facility from its own resources but it is
stated that as no goods were pledged with Plaintiff as security for the said facility,
Plaintiff was neither in the position nor liable to return any goods to Applicants. It is
submitted that the above assertion has been raised first time through PLA under reply. It
may be noted that even in the letters dated 23-01-2004 and 18-05-2004 (Marks-C&C/1)
whereby Applicant No.1, inter alia, forwarded cheques for adjusting FAPC-I, Applicant
No.1 neither stated that any goods were pledged with Plaintiff as security for FAPC-I
finance nor demanded release of the said stocks. Therefore, it is denied that Applicants
are entitled to the possession of any goods allegedly pledged with Plaintiff. Denied that
Plaintiff committed any negligence of its duties or responsibilities or allowed any person
or customs authorities to auction the said goods. Denied that any prejudice to the interests
of the Applicants was ever caused by any act or omission by the Plaintiff. Denied that
either goods of Rs.35 to 40 Million or of any other amount were ever actually pledged
with Plaintiff as security for FAPC-I or Plaintiff was under any obligation to pay any
compensation to Applicant No.1 as alleged. Denied that either Plaintiff allowed removal
of any of the said stocks under control of the customs authorities or it is liable to return to
Applicants goods worth Rs.40.000 Million or of any other amount or to pay to Applicant
No.1 any amount by way of compensation to the loss, allegedly suffered, by the
Applicants. Denied that Plaintiff ever committed default of any of its any obligation
towards Applicant either in respect of any stocks or otherwise. Denied that the Plaintiff is
under any contractual or legal obligation to pay any amount to Applicants in respect of
any goods or stocks as alleged.
19
33.
Denied vehemently. Denied that the Agreements/documents executed by the Defendants

for FATR facility have been forged or fabricated. Denied that no amount was disbursed
against FATR facility or that the said facility was created to juggle/transfer amounts from
one account to another for making any illegal adjustments. Denied that F.A.T.R facility
was created to claim any illegal mark-up upon mark-up as alleged. Disbursement of funds
against F.A.T.R was made. As stated in para 9 of the Plaint, the aforesaid FATR-Limit
was granted for obtaining delivery by the Applicant No.1 of the stocks pledged with the
Plaintiff against the aforesaid Demand Finance of Rs.22.00 million and FIM-II of
Rs.24.00 million mentioned in paragraphs-7 & 8 of the Plaint. It is submitted that
disbursement of funds against a F.A.T.R limit is always made through delivery of pledged
stocks. Applicant No.1 by executing Trust Receipt dated 28-10-2005 and Trust Receipt
dated 28-10-2005 (Annex-F/2 & F/3 to the Plaint) took from the Plaintiff delivery of the
stocks/goods of the value of Rs.2,950,099.00 and Rs.3,670,000.00 pledged against the
aforesaid FIM-II & Demand Finance respectively. Statements of Accounts for Account
No. 01-540-0144-2 & Account No. 01-540-0145-3 of FATR-Limit appended with the
Plaint as Annex-F/4 & Annex-F/5 evidenced that the disbursement of aforesaid amounts
were made to the Applicant No.1. As per terms of the FATR-Limit, Applicant No.1 was
under an obligation to deposit with the Plaintiff the value of the stocks/goods within 45
days of the delivery of the said stocks/goods to it. However, in violation of its obligations
under the aforesaid Trust Receipts, Applicant No.1 failed to pay to the Plaintiff the
aforesaid values of the stocks/goods delivered to it. Denied that F.A.T.R limit was
extended without any approval or sanction. Denied that the claim in respect of F.A.T.R
facility is either illegal or that it is liable to be rejected.
34.
Denied vehemently. Denied that the claim of Plaintiff Bank made in the Plaint comprises
of the amounts accumulated through charging of markup upon markup, compounding of
markup, unauthorized adjustments, debits or transfers or that no disbursement of the
financial facilities was made to the Applicant No.1. Denied that the claim of Plaintiff as
made in the suit is liable to be rejected. Denied that either any unlawful mark-up or markup in violation of the Agreements for financing and Sanction Advices has been claimed.
Reply to the particulars section 10(4) of the Financial Institutions (Recovery of
Finance) Ordinance, 2001.
Correctness of particulars under section 10(4) is denied.
a)
Denied that no amount of finance was availed by the Answering Defendants from the
Plaintiff under the agreements, subject matter of the suit, or that transactions and
documents sued and relied upon in the plaint are without consideration. Denied that either
said documents were never acted upon or that no finance was extended to the Applicants
20
on the basis thereof.

b)
Denied that Applicants had paid to Plaintiff substantial amounts sufficient to adjust their
whole liabilities towards Plaintiff. Amounts paid by Applicant No.1 since the inception of
each of the facilities subject matter of the suit have been correctly given in the Plaint.
Denied that either the Applicants paid to the Plaintiff the alleged sum of
Rs.204,106,881.00 or that the Plaintiff averred in the Plaint, or otherwise ever admitted,
that the said sum of Rs.204,106,881.00 was paid by Applicants as alleged. Amounts paid
by Applicant No.1 have been correctly shown in the Plaint and Statements of the
Accounts attached thereto. Denied that either no amount is due or payable by Applicants
or that any amount is due from Plaintiff to Applicants.
It is specifically denied that Applicants paid to the Plaintiff a sum of
Rs.110,568,819.00 under the Letter of Credit facility. As stated in para-8(b) of the Plaint
Applicant/Defendant No.1 failed to get released the goods imported under six (6) Letters
of Credit by making any corresponding payment thereof and resultantly the Plaintiff had
to make payment to the beneficiaries of the said six (6) L/Cs.
Denied that either the Applicants paid a sum of Rs.68,299,601.00 towards
Running Finance Facility or Cash Finance Facility or that the said amount allegedly paid
by the Applicants was illegally adjusted or transferred by the Plaintiff Bank towards any
self created facilities or ghost accounts as alleged. Correct facts are as under:
(i)
Running Finance of Rs.30.00 million was on revolving basis and

Applicant No.1 was entitled to make multiple withdrawals while
remaining within the maximum limit of Rs.30.00 Million at one point of
time. Against this limit, Applicant No.1 made total withdrawal of
Rs.67,606,921.00 against which an aggregate sum of Rs.37,650,086.00
was paid leaving the balance principal amount of Rs.29,956,835.00 which
has been claimed in the suit.
(ii)
Cash Finance of Rs.25.00 million was also on revolving basis and

was paid by the Applicant No.1 leaving the balance principal amount of
Rs.22,010,880.00.
The
aforesaid
balance
principal
amount
of
Rs.22,010,880.00 was adjusted, on the request of the Applicant No.1 made
21
through the aforesaid letter dated 23-11-2004 (Mark-A above), against the
disbursements of the Demand Finance.
Denied that any other sum of Rs.25,238,461.00 was also illegally
transferred from the accounts of Applicant No.1 as alleged. Allegations of illegal
transfers of amounts are merely bald and vague and no explanation of such
allegations has been given. Therefore, it is denied that either the Applicants paid
to the Plaintiff the alleged sum of Rs.204,106,881.00 or that any amount allegedly
paid by Applicant No.1 is unaccounted for as alleged.
c)
Denied that either no amount whatsoever is legally due or payable by the Answering
Defendants/Applicants to Plaintiff or that Plaintiff has failed to substantiate or prove
extension of finance facilities to Applicants as alleged.
d)
Denied that either claim of the Plaintiff is wrong or that the said claim is not based on the
documents appended with the Plaint. Documents attached with the Plaint fully support
claim of Plaintiff made in the suit. Denied that no amount is legally due or payable by the
Applicants to Plaintiff.
Reply on merits
1.
Denied vehemently. Memorandum and Articles of Association of Plaintiff and all related
documents/Notifications issued by Governments departments including SBP and SECP
annexed with the Plaint as Annex-A/3 irrevocably establish that Plaintiff is a banking
company incorporated under the Companies Ordinance, 1984 and a financial institution
for the purposes of the Ordinance of 2001. Therefore, Plaintiff is competent to institute
the titled suit before this Honourable Court.
2.
Denied vehemently. Denied that contents of Para No. 2 of the Plaint are misconceived.
Denied that the titled suit has not been validly instituted in terms of section 9 of the
Ordinance of 2001 or that it is liable to be dismissed. Denied that Powers of Attorney
attached with the Plaint do not validly or legally authorize the Attorneys to file or
institute the titled suit on behalf of Plaintiff. Two Powers of Attorney and
Transfer/Posting letter (Annexure A to A/2 to the Plaint) clearly establish that Mr.
Mohammad Arshad Khan, Branch Manager of the Plaintiffs branch situated at Badami
Bagh, Lahore and Syed Muhammad Mujtaba Ahmed Gillani, officer Grade-I and
Relationship Manager of the Plaintiffs branch situated at 199-Upper Mall, Lahore are
duly authorized to institute the titled suit on behalf of Plaintiff. It is submitted that Mr.
Mohammad Arshad Khan, who has signed the plaint and instituted the titled suit on
22
Lahore (Annex-A/2 to the Plaint). Accordingly, titled suit has been lawfully and
authorizedly instituted under section 9(1) of the Ordinance of 2001. Denied that the
signatories to the Plaint are not conversant with the facts of the case or that they have no
requisite authority or entitlement to institute the titled suit. Therefore, it is denied that the
titled suit merits dismissal.
3.
Denied vehemently. Denied that either contents of Para 3 of the Plaint are misconceived
or the finance facilities subject matter of the titled suit were not availed by the Applicants.
Denied that Plaintiff had ever confirmed or admitted that its claim against Applicants is
restricted to the account mentioned in para-3 of the Plaint. In the said para, in fact, status
of Applicant No.1 and history of relationship between Plaintiff and Applicant No.1 has
been given. Para 3 of the Plaint also states that Applicant No.1 has also been availing
various financial facilities from the Plaintiff which facilities were also renewed and
availed by the Defendant No.1 from time to time. It is submitted that as per banking
procedure and practice, a Running Finance facility is disbursed through current accounts
of customers and for all others finances separate accounts are opened on the basis of
sanction advices/facilities letters. In this case also the Running Finance facility was
disbursed through the Current Account No.01-200-7183-2 and all other facilities were
disbursed through other accounts mentioned in the Plaint. Statements of Accounts of the
said accounts have also been attached with the Plaint. Therefore, it is denied that no other
account was operated or that claim of Plaintiff would be confined to the extent of the
account mentioned in paras 3 & 6 of Plaint or that all other accounts mentioned in paras-7
to 10 of the Plaint are redundant or irrelevant as alleged. Denied that Plaintiff has averred
any where in the Plaint that it had unilaterally or on its sole discretion had transferred any
amount form one account to other accounts. Therefore, it is denied that the amounts
shown to be outstanding in the accounts mentioned in paras-7 to 10 of Plaint are not
liabilities of the Applicants. Denied that the Plaintiff had concealed detailed or complete
Statements of Accounts of any account as alleged. Therefore, it is denied that the titled
suit is devoid of any legitimate cause of action or that the same is liable to be dismissed.
4.
Denied that the contents of para 4 of Plaint are misconceived. Denied that the documents
appended with the Plaint are either without consideration or do not create any financial
obligation for repayment of the facilities subject matter of the suit. Denied that no
amount/facility was disbursed under the agreements sued and relied upon in the titled
suit. Denied that either the Personal Guarantees or the mortgage of the properties
mentioned and relied upon in the suit pertain to the agreements that are neither basis of
the cause of action nor subject matter of the titled suit. Applicants had executed the said
Personal Guarantees and mortgaged their properties with the Plaintiff as security inter
alia for the facilities that were granted under the agreements subject matter of the titled
23
suit. Denied that either no finance facilities were extended or disbursed under the
Agreements dated 8-1-2005 or that the said agreements were fabricated by the Plaintiff to
raise any illegal claim. Denied that the Personal Guarantees and mortgage of properties
have no nexus with the Agreements, subject matter or the cause of action of the titled suit,
or that the said the Personal Guarantees and mortgage of properties are liable to be
cancelled or redeemed as alleged.
5.
Needs no comments.
6(a)(i) Denied vehemently. Denied that the contents of para 6(a)(i) of Plaint are misconceived.
Denied that, pursuant to the approval No. COS/SAMD/MTR/5330 dated 22.12.2004 and
the Facility Offer Letter No. BBL/FE/2004/754 dated 23-12-2004 as amended by the
Sanction Advice No.COS/SAMD/MTR/745 dated 07.02.2005 (Annex- B to B/2 to the
Plaint), Running Finance facility was not extended or disbursed to the Applicant No.1.
Denied that Running Finance was not granted or extended to the Applicant No.1 after
2001. Denied that Applicants had paid payments in excess of their liability or that the
amounts accepted or acknowledged by the Plaintiff were not adjusted by it. Each and
every payment made by Applicant No.1 has been adjusted legally and in accordance with
banking principles and the said payments have also been shown in the Statements of
Accounts. Applicants have not paid any excess amount to Plaintiff as alleged. Therefore,
it is denied that no overdue liability of Applicants exists against the Running Finance or
that the Plaintiff Bank is liable to refund to the Applicants any amount. Denied that by the
Undertaking dated 22-02-2005 (Annex-B/3 to the Plaint) Applicant No.1 had not
confirmed and accepted the terms and conditions contained in the Sanction Advice
No.COS/SAMD/MTR/745 dated 07.02.2005 (Annex-B/2 to the Plaint). It is submitted
that in acceptance of and for compliance with the terms and conditions contained in the
aforesaid Sanction Advice dated 07.02.2005, Applicant No.1 had executed the aforesaid
Undertaking dated 22-02-2005. Therefore, a lawful agreement was reached between the
Plaintiff and the Defendant No.1 in terms of which Plaintiff granted to Applicant No.1,
inter alia, the aforesaid Running Finance. In pursuance of the above approvals and to
avail the Running Finance, Applicant No.1 had also executed, inter alia, the Agreement
for Financing dated 08-01-2005 (Annex-B/4 to the Plaint). Therefore, it is denied that
said Undertaking does not support the case of Plaintiff bank. Reply to para-29 of
Preliminary Objections and reply to the Submissions in respect of section 10(4) of the
Ordinance of 2001 above are reiterated.
6(a)(ii) Denied vehemently. Denied that the contents of para 6(a)(ii) of Plaint are misconceived.
Denied that Plaintiff either procured any blank document or it utilized the said documents
in violation of its any representation to support its claim. Denied that either the claim of
24
the Plaintiff is belated or that any of the documents attached with the Plaint are without
consideration or that same cannot be made basis of liability of the Defendants. Denied
that any of the documents referred to para 6(a)(ii) of Plaint are fabricated or that the said
documents are liable to be declared as void, illegal or cancelled. Denied that no finance
was disbursed to or utilized by Applicant No.1 under Agreement for Financing dated 8-12005. Also denied that the Agreement for Financing, Promissory Note or Letter of
Hypothecation mentioned in para 6(a)(ii) of Plaint are without consideration or that the
same cannot be made basis for the liability of the Applicants against the Running
Finance.
6(b)(i) Denied that the contents of Para No.6(b)(i) of Plaint are misconceived. Denied that either
the Running Finance facility was not extended or disbursed to the Applicant No.1
pursuant to the Agreement for Financing dated 8-1-2005 or that the said agreement was
fabricated by the Plaintiff to support its claim against the Applicants. Denied that the
perusal of the documents appended with the Plaint establish that the agreements attached
with the Plaint are without consideration or that the same were never acted upon or do not
create any obligation of the Applicants. Denied that the Plaintiff averred in the Plaint that
the Agreement for Financing dated 8-1-2005 or any other documents/agreements
mentioned in para 6 of the Plaint pertain to any overdue outstanding liability of some
other Running Finance Facility not subject matter of the suit. Denied that the Statements
of Accounts of the Running Finance appended with the Plaint are either incomplete or
deficient in any manner. Complete Statements of Accounts, along with all supporting
agreements and documents, showing correct and complete picture of the accounts,
amounts disbursed, availed and repayments made by the Applicants have been attached
with the Plaint. Therefore, claim of the Plaintiff Bank is not liable to be rejected. Denied
that the Statements of Account referred to in para-6(b)(i) of the Plaint and attached
thereto as Annexure- B/7 & B/8 are replete with any unauthorized, unexplained or
fictitious entries. Said Statements of Accounts depict correct and true status of the
accounts of Applicants.
6(b)(ii) Denied vehemently. Denied that the contents of para 6(b)(ii) of the Plaint are
misconceived or that there is no outstanding liability of Applicant No.1 or that no
amount is payable by Applicants under the Running Finance Facility availed in the year
2005.
(i)
Denied that either Agreement for Financing dated 8-1-2005 was never
acted upon or no funds were disbursed thereunder or that no liability of the
Applicants is outstanding as alleged.
(ii)
25
acted upon or no funds were disbursed thereunder. Denied, therefore, that

no amount of mark-up on the Running Finance is outstanding. Denied that
Plaintiff is not entitled to recover mark-up of the Running Finance from
the Applicants as alleged.
(iii)
acted upon or no funds were disbursed thereunder. Denied that there is no
outstanding liability of the Applicants or that no amount is payable by
them under the Running Finance as alleged.
6(b)(iii)
Denied that the contents of para 6(b)(iii) of the Plaint are misconceived.
i.
It is denied that no amount was disbursed under the Agreement for

Financing dated 8-1-2005 or that the said agreement was never acted upon
or that no funds were disbursed thereunder. Denied that there is no
outstanding liability of the Applicants under the Running Finance as
alleged.
ii.
Denied that the Plaintiff has not provided complete Statement of Accounts
or that the Statements of Accounts of the Running Finance attached with
the Plaint do not show true or faithful status of accounts as alleged.
iii.
Denied that either the Agreement for Financing dated 8-1-2005 was never
acted upon or that no funds were disbursed or that no liability of the
iv.
Denied that the Agreement for Financing dated 8-1-2005 was never acted
upon or that no funds were disbursed thereunder. Denied, therefore, that
v.
no amount of mark-up on the Running Finance is outstanding as alleged.
vi.
26

vii.
them under the Running Finance. Denied that the claim of the Plaintiff is
liable to be rejected as alleged.
It is further submitted that the liability of the Applicants against the Running
Finance has been correctly mentioned in the particulars under Section 9(3) of the
Ordinance of 2001 given in para-6(b)(iii) of the Plaint which are corroborated and
supported by the Statements of Accounts attached thereto as Annex- B/7 & Annex- B/8.
7(a)(i) Denied vehemently. Denied that the contents of para-7(a)(i) of the Plaint are
misconceived. Denied that pursuant to the approval dated 22.12.2004, Facility Offer
Letter as amended by Sanction Advice dated 07.02.2005 no Demand Finance was
extended or disbursed to Applicant No.1. Denied that the Undertaking dated 22-2-2005
has been misconstrued by the Plaintiff Bank or that the same does not relate to the
extension of the Demand Finance. It is submitted that through the Undertaking dated 2202-2005 Applicant No.1 had confirmed and accepted the terms and conditions contained
in the Sanction Advice No.COS/SAMD/MTR/745 dated 07.02.2005. Denied that the
aforesaid approvals, facility letter and the sanction advice are inconsistent or contrary to
the Agreement for Financing dated 8-1-2005 as alleged.
7(a)(ii) Denied vehemently. Denied that the contents of para-7(a)(ii) of the Plaint are
misconceived. Denied that the Plaintiff either procured any blank document or it utilized
the said documents in violation of its any representation to support its claim. Denied that
either the claim of Plaintiff is a belated claim or that any of the documents attached with
the Plaint are without consideration or that the same cannot be made basis of liability of
the Defendants. Denied that any of the documents referred to para 7(a)(ii) of Plaint are
fabricated or that the said documents are liable to be declared as void, illegal or
cancelled. Denied that no finance was disbursed to or utilized by Applicant No.1 under
Agreement for Financing dated 8-1-2005. Also denied that the Agreement for Financing,
Promissory Note or Letter of Pledge mentioned in para 7(a)(ii) of Plaint are without
consideration or that the same cannot be made basis of the liability of the Applicants
against the Demand Finance. Denied that any of the above documents are fabricated or
that the said documents are liable to be declared as void, illegal, of no legal effect or
cancelled. Denied that under the Agreement for Financing dated 8-1-2005 no amount of
27
the Demand Finance was disbursed to or utilized by the Applicant No.1. Denied that
Plaintiff by its acts or omissions ever caused any loss to the Applicants. Denied that
Plaintiff either failed to protect the stocks pledged with it or ever committed default of its
obligations with regard to the said pledged stocks/goods. Contents of reply to para-32 of
the Preliminary Objections above are reiterated. It is further submitted that the Applicant
No.1 was under an obligation to get released the stocks pledged as security for the
Demand Finance by making payment of their value and mark up which it failed.
However, it is categorically stated that Plaintiff will not be responsible if the value or the
quality of the said stocks is depreciated or diminished due to passage of time because of
failure of the Applicants to get released the same by making aforesaid payment to
Plaintiff. As Plaintiff has not committed any illegality as to the stocks in the possession,
custody or control of its appointed Muqaddam, Applicants are not entitled under any law
to initiate any kind of proceedings against the Plaintiff. Contents of reply of para 30 of
the Preliminary Objections above are also reiterated.
7(b)(i) Denied vehemently. Denied that the contents of para-7(b)(i) of the Plaint are
misconceived. Denied that either the Demand Finance facility was not extended or
disbursed to the Applicant No.1 pursuant to the Agreement for Financing dated 8-1-2005
or that the said agreement was fabricated by the Plaintiff to support its claim against the
Applicants. Denied that the perusal of the documents appended with the Plaint establish
that the agreements attached with the Plaint are without consideration or that the same
were never acted upon or do not create any obligation of the Applicants. Denied that
Plaintiff averred in the Plaint that the Agreement for Financing dated 8-1-2005 or any
other documents/agreements mentioned in para 7 of the Plaint pertain to the overdue
outstanding liability of the Cash Finance Facility or that the Cash Finance is not subject
matter of the titled suit. To explain and rebut the above allegation contents of reply of
para 30 of the Preliminary Objections above are reiterated. Denied that the Statements of
Accounts of the Demand Finance, appended with the Plaint, are either incomplete or
deficient in any manner. Complete Statements of Accounts of the Demand Finance since
inception, along with all supporting agreements and documents, showing correct and
complete picture of the accounts, amounts disbursed, availed and repayments made by
the Applicants have been attached with the Plaint. Therefore, claim of the Plaintiff Bank
is not liable to be rejected. Denied that the account of the Demand Finance was
maintained or operated by Plaintiff itself without the knowledge of the Applicants.
Denied that claim of the Plaintiff with regard to the mark-up of the Demand Finance is
illegal or unlawful or that the Statement of Accounts of the mark up of the Demand
Finance attached with the Plaint was incorrect or that it does not reflect true picture of
accounts as alleged. Denied that the Statements of Accounts of the Demand Finance
attached to the Plaint contain any unauthorized, unexplained or fictitious entries as
28
alleged. Said Statements of Accounts depict correct and true status of the accounts of
Applicants.
amount is payable by Applicants under the Demand Finance Facility availed in the year
2005.
(i)
(ii)
no amount of mark-up on the Demand Finance is outstanding. Denied that
Plaintiff is not entitled to recover mark-up of the Demand Finance from
Applicants as alleged.
(iii)
Denied that Agreement for Financing dated 8-1-2005 was never acted
upon or no funds were disbursed thereunder. Denied that there is no
them under the Demand Finance as alleged.
7(b)(iii)
Denied that the contents of para-7(b)(iii) of the Plaint are misconceived.

i.
upon or that no funds were disbursed thereunder. Denied that there is no
outstanding liability of the Applicants under the Demand Finance as
alleged.
ii.
Denied that Plaintiff has not provided complete Statements of Accounts of

the Demand Finance or that the Statements of Accounts of the Demand
Finance attached with the Plaint do not show true and faithful status of
accounts as alleged.
iii.
acted upon or that no funds were disbursed thereunder or that no liability
of the Applicants is outstanding as alleged.
iv.
29

Plaintiff is not entitled to recover from the Applicants mark-up of the
Demand Finance as alleged.
v.
no amount of mark-up on the Demand Finance is outstanding as alleged.
vi.
vii.
them under the Demand Finance. Denied that the claim of the Plaintiff is
It is further submitted that the liability of the Applicants against the Demand
Ordinance of 2001 given in para-7(b)(iii) of the Plaint which are corroborated and
supported by the Statements of Accounts attached thereto as Annex- C/4 & Annex- C/5.
8(a)
Denied vehemently. Denied that the contents of para-8(a) of the Plaint are misconceived.
Denied that the Sanction Advice dated 31-12-2002 or any of agreements and documents
executed thereunder are not the subject matter of the titled suit or that the said documents
do not provide any basis for the cause of action against the Defendants. Denied that
Applicants had cleared their liability that arose due to payment by the Plaintiff to the
beneficiaries of L/Cs mentioned in para-8 of the Plaint. To explain and rebut all
allegations and assertions contained in para under reply, contents of para 31 of the reply
to the Preliminary Objections above are reiterated. Denied that Applicants either paid a
sum of Rs.110,568,819/- against the Letters of Credit mentioned in para-8 or that said
amount allegedly paid by Applicants was not properly or duly adjusted. As stated in para
8 of the Plaint, on receipt of the shipping documents under six (6) Letters of Credit by the
Plaintiff, Applicant No.1 failed to get the imported goods released by making any
corresponding payment thereof and, resultantly, the Plaintiff had to make payment of an
30
aggregate sum of Rs.18,971,777.00 to the beneficiaries of the said six (6) L/Cs from its
own funds. Denied that the Plaintiff ever illegally adjusted any amount against any
illegally charged markup or other fees as alleged. Denied that the complete Statements of
Accounts of the Letters of Credit subject matter of the suit have not been attached with
the Plaint or that the Plaintiff charged amounts in excess of its entitlements. Denied that
Plaintiff is liable to refund any amount to the Applicants. Complete Statements of
Accounts for L/Cs/forced FIM have been attached with the Plaint as Annex-E/1E, E/2E,
E/3E, E/4E, E/5G, E/6F, E/7G, E/8G, E/9F and E/9G. Denied that the claim of Plaintiff
arising out of the Letters of Credit mentioned in para 8 of the Plaint is barred by
limitation or that said claim is illegal, void or that it cannot be made basis for
adjudication under the titled suit. Denied that Plaintiff Bank had charged any excessive
mark-up against the Letter of Credit facility in violation of the sanction advices or that it
made any illegal adjustments. Denied that any adjustment made by the Plaintiff is liable
to be reversed or credited to the accounts of the Applicants.
8(b)
Denied that the contents of para-8(b) of the Plaint are misconceived. Denied that the
FIM-II is either illegal or unlawful or that it was granted for charging of any illegal or
unlawful mark-up over mark-up not permitted by SBP or under provisions of the
Ordinance of 2001 or declared to be illegal or unlawful by the Superior courts of
Pakistan. Denied that through grant of FIM-II an attempt was made by Plaintiff to raise
its time barred claim under six Letters of Credit or that no amount arising out of said
L/Cs/FIM-II can be claimed by the Plaintiff. Denied that any transactions with respect to
cash shown in any Statement of Account or with respect to any Letter of Credit or the
claim thereunder is unlawful, illegal or beyond the statutory period provided under the
Limitation Act, 1908. Denied that no proof of payments to the beneficiaries of the six
L/Cs has been appended with the Plaint or that for the alleged reason the said claim is
denuded of any credibility as alleged. Denied that the claim of the Plaintiff, with regard to
the outstanding liabilities of FIM-II arising from Letter of Credit is without any basis or
is unrecoverable under the law or that same is liable to be rejected. Denied that the
Plaintiff has received from the Applicants a sum of Rs.110,568,819/- against the Letters
of Credit mentioned in para-8 of the Plaint or that Plaintiff failed to provide to the
Applicants details of the adjustments or transfers made by it of the amount received by it,
repayments made by the Applicants or the charges/fee claimed by the Plaintiff.
(1)
Letter of Credit No. 2003/8406-8/LBBB/0212
Denied that the claim of the Plaintiff with regard to FIM-II, inter alia, originating from
the consignments No.1,2,3 & 4 under Letter of Credit No. 2003/8406-8/LBBB/0212, is
either barred by limitation or cannot be recoverable. Denied that it is clear or obvious
from the contents of the Plaint or the documents appended therewith that no amount is
31
legally due or payable by the Applicants to the Plaintiff as alleged. Denied that any of the
Statements of Accounts (Annex-E/1E, E/2E, E/3E, E/4E to the Plaint) referred to in para
8(b)1 of the Plaint suffer from any legal disability or are incomplete or that the same do
not reflect a true picture of the accounts of Applicant No.1. Denied that the aforesaid
Statements of Accounts establish that Plaintiff has been transferring amounts from one
account to another without associating or consulting the Applicants as alleged. Each and
every transfer shown in the said Statements of Accounts were made at the request of
Applicant No.1. Denied that the claim in respect of FIM-II arising out of the aforesaid
Letter of Credit is illegal or unlawful or that the said claim cannot be substantiated on the
basis of the documents attached with the Plaint.
Denied that payments made to the
beneficiaries of the aforesaid Letter of Credit remained unproved or that no document in

proof of such payments has been appended with the Plaint. Denied that Applicants have
paid/repaid a sum of Rs.110,568,819/- against the Letter of Credit facility. It is submitted
that no amount whatsoever was paid by Applicants against the aforesaid Letter of Credit
facility. Contents of reply to Preliminary Objection No.31 are reiterated.
(2)
(3)
(4)
(5)
(6)

Denied that the aforesaid Letters of Credit or claim originating therefrom is barred
by limitation or that the said claim is not recoverable. Denied that it is clear or obvious
from the contents of the Plaint or the documents appended therewith that no amount is
legally due or payable by the Applicants to Plaintiff as alleged. Denied that any of the
Statements of Accounts (Annex- E/5G, E/6F, E/7G, E/8G, E/9F and E/9G to the Plaint)
referred to in para 8(b)(2), (3), (4), (5) & (6) of the Plaint suffer from any legal disability
or are incomplete or that the same do not reflect a true picture of the accounts of
Applicant No.1. Denied that the aforesaid Statements of Accounts establish that the
Plaintiff has been transferring amounts from one account to another without associating
or consulting the Applicants or it has been charging unlawful mark-up or other frivolous
amounts. Denied that the claim in respect of FIM-II arising out of the aforesaid Letters of
Credit is illegal or unlawful or that the said claim cannot be substantiated on the basis of
the documents attached with the Plaint. Denied that payments made to the beneficiaries
of the aforesaid Letters of Credit remained unproved or that no document in proof of such
payments has been appended with the Plaint. Denied that Applicants have paid/repaid a
sum of Rs.110,568,819/- against the Letter of Credit facility. It is submitted that no
amount whatsoever was paid by the Applicants against the aforesaid Letter of Credit
facility. Contents of reply to Preliminary Objection No.31 are reiterated.
32
8(c)
Denied vehemently. Denied that the contents of Para No.8(c) of Plaint are misconceived.
Denied that FIM-II facility was not extended or disbursed pursuant to the approval No.
COS/SAMD/MTR/5330 dated 22.12.2004 and the Facility Offer Letter
BBL/FE/2004/754
dated
23-12-2004
as
amended
by
the
Sanction
No.
Advice
No.COS/SAMD/MTR/745 dated 07.02.2005. Denied that the Plaintiff procured any

blank document or utilized the said documents in violation of its any representation to
support its claim. Denied that the claim of Plaintiff is belated or that any of the
documents are without consideration or that the same cannot be made the basis of
liability of the Defendants. Denied that any of the documents referred to in para 8(c) of
the Plaint are fabricated or that the said documents are liable to be declared as void,
illegal or cancelled. Denied that no finance was disbursed to or utilized by Applicant
No.1 under Agreement for Financing dated 8-1-2005. Denied that the aforesaid approval
letter, facility letter and the sanction advice are inconsistent or contrary to the Agreement
for financing dated 8-1-2005. Also denied that the Agreement for Financing, Promissory
Note or Letter of Pledge mentioned in para 8(c) of the Plaint are without consideration or
that the same cannot be made the basis for the liability of Applicants against the FIM-II
facility. Denied that any of the above documents are liable to be declared as void, illegal,
of no legal effect or cancelled. Denied that the Plaintiff by its acts or omissions ever
caused any loss to the Applicants. Denied that Plaintiff either failed to protect the stocks
pledged with it or ever committing default of its any obligation with regards to the goods
pledged as security for FIM-II. Regarding assertions and allegations with respect to the
stocks allegedly pledged as security for FAPC-I, contents of replies to para-32 of the
Preliminary Objections and para-7(a)(ii) on merits above are reiterated. Applicants are
not entitled under any law to initiate any kind of proceedings against the Plaintiff.
Contents of reply of para 31 of the Preliminary Objections above are also reiterated.
8(d)(i) Denied vehemently. Denied that the contents of Para No.8(d)(i) of the Plaint are
misconceived. Denied that pursuant to the Agreement for Financing dated 8-1-2005 the
aforesaid FIM-II facility was not extended or disbursed to the Applicant No.1 or that the
said agreement was fabricated by the Plaintiff to support its claim against the Defendants.
As stated in para 8(d)(i) of the Plaint, the Plaintiff extended and disbursed and Applicant
No.1 availed FIM-II facility under the Agreement for Financing dated 8-1-2005. Denied
that no amounts under FIM-II Facility were availed, disbursed or made available to the
Defendants or that the said facility is result of juggling of accounts by the Plaintiff carried
out by it to support its claim or to camouflage any illegal or unlawful adjustments as
alleged. It is submitted that the Applicants have been admitting their liability towards the
FIM-II facility and the objection as to the same has been raised first time through PLA
under reply. Copies of the letters dated 21-01-2006, 01-02-2006 and 10-06-2006 whereby
Applicant/Defendant No.1 acknowledged its liability against the facilities subject matters
33
of the suit including FIM-II and committed to make payments there against have been
annexed with the Plaint as Annex- L to L/2. Through the aforesaid letter dated 01-022006 (Annex- L/1 to the Plaint at page 505), Applicant No.1 categorically stated and
acknowledged that a sum of Rs.12.06 million (more than the amount of Rs.11,836,795.00
claimed in the suit against the principal amount of the FIM-II facility) was its outstanding
liability against the principal amount of the FIM-II and promised to pay the same upto
june 2006. Denied that the Statement of Accounts (Annex-E/13 to the Plaint) indicates
that either no disbursement of funds was made to the Applicant No.1 or that the Plaintiff
unilaterally handled the said accounts. Denied that FIM-II was granted with the purpose
to charge markup over markup and to conceal any illegalities committed or any
interpolated entries in the Statements of Accounts as alleged. Denied that for concealing
its alleged malafide or illegal acts, the Plaintiff ever avoided or refused to supply
Statements of Accounts to the Defendants. Denied that the documents and agreements
attached with the Plaint are without consideration, were never acted upon or that the same
do not create any obligation of the Applicants. Denied that the Statements of Accounts of
FIM-II appended with the Plaint are either incomplete or deficient in any manner.
Complete Statements of Accounts, along with all supporting agreements and documents,
showing correct and complete picture of the accounts of Applicant No.1, amounts
disbursed, availed and repayments made by the Applicants have been attached with the
Plaint. Therefore, claim of the Plaintiff Bank is not liable to be rejected. Denied that the
account of FIM-II was maintained or operated by Plaintiff itself without the knowledge
of the Applicants. Denied that the claim of the Plaintiff with regard to the mark-up of
FIM-II is illegal or unlawful or that the Statements of Accounts of FIM-II attached with
the Plaint were incorrect or that they do not reflect true picture of accounts of Applicant
No.1 as alleged. Denied that the Statements of Accounts of FIM-II attached with the
Plaint contain any fictitious entries as alleged. Said Statements of Accounts depict correct
and true status of the accounts of Applicant No.1.
8(d)(ii) Denied vehemently. Denied that the contents of para 8(d)(ii) of the Plaint are
misconceived.
(i)
(ii)
no amount of mark-up of the FIM-II facility is outstanding. Denied that
Plaintiff is not entitled to charge, claim or recover any mark-up in respect
of the FIM-II facility from the Applicants as alleged.
34
(iii)
outstanding liability of the Applicants or that no amount is due or payable
by them under the FIM-II facility as alleged.
8(d)(iii)
Denied that the contents of para-7(d)(iii) of the Plaint are misconceived.

i.
upon or that no funds were disbursed thereunder. Denied that there is no
outstanding liability of the Applicants under the FIM-II facility as alleged.
ii.
Denied that Plaintiff has not provided complete Statements of Accounts or

that the Statements of Accounts attached with the Plaint do not show true
and faithful status of accounts as alleged.
iii.
upon or that no funds were disbursed thereunder or that no liability of the
Applicants is outstanding against the FIM-II facility as alleged.
iv.
no amount of mark-up on the FIM-II facility is outstanding. Denied that
Plaintiff is not entitled to seek recovery of mark-up of the FIM-II facility
from the Applicants as alleged.
v.
upon or no funds were disbursed thereunder. Denied, therefore, that no
amount of mark-up on the FIM-II facility is outstanding as alleged.
vi.
amount of mark-up of the FIM-II facility is outstanding. Denied that
Plaintiff is not entitled to recover mark-up of the FIM-II facility from the
vii.
35
them under the FIM-II facility. Denied that the claim of the Plaintiff is
It is further submitted that the liability of the Applicants against the
Demand Finance has been correctly mentioned in the particulars under Section
9(3) of the Ordinance, 2001 given in para-8 (d)(iii) of the Plaint which are
corroborated and supported by the Statements of Accounts attached thereto as
Annex- E/13 & Annex- E/14.
9(a).
Denied that pursuant to the approval dated 22.12.2004, Facility Offer Letter as amended
by Sanction Advice dated 07.02.2005 no FATR facility was extended or disbursed to
Applicant No.1. Denied that the aforesaid approvals, facility letter and the sanction
advice are inconsistent or contrary to the Agreement for Financing dated 8-1-2005 as
alleged. Denied the Agreement for Financing dated 8-1-2005 has been forged or
fabricated by the Plaintiff to support its frivolous claim against Applicants. Denied that
the liability of Applicants under the Demand Finance and FIM-II facilities claimed in the
titled suit is wrong or that the said facilities were created to charge mark-up over markup
or to camouflage any illegal or unlawful adjustments allegedly made by the Plaintiff
9(b)
Denied vehemently. Denied that the contents of para-9(b) of the Plaint are misconceived.
Denied that the Agreement for Financing dated 8-1-2005 has been forged and fabricated
by the Plaintiff to support its claim against Applicants under FATR facility. Denied that
the FATR limit was not sanctioned through the aforesaid approvals or that no amount of
FATR facility was disbursed pursuant to the Agreement for Financing dated 8-1-2005,
Promissory Note and other documents mentioned in para-9(b) of the Plaint. As stated in
para-9 of the Plaint, the FATR facility was granted for obtaining delivery by the
Defendant No.1 of the stocks pledged with the Plaintiff against the aforesaid Demand
Finance of Rs.22.00 million and FIM-II of Rs.24.00 million. As stated in reply to para-33
of the Preliminary Objections above, it is reiterated that disbursement of funds against a
F.A.T.R limit is always made through delivery of pledged stocks. Defendant No.1 by
executing Trust Receipt dated 28-10-2005 and Trust Receipt dated 28-10-2005 (AnnexF/2 & F/3 to the Plaint) took from the Plaintiff delivery of the stocks/goods of the value
of Rs.2,950,099.00 and Rs.3,670,000.00 pledged against the aforesaid FIM-II & Demand
Finance respectively. Statements of Accounts for Account No. 01-540-0144-2 & Account
No. 01-540-0145-3 of FATR-Limit appended with the Plaint as Annex-F/4 & Annex-F/5
evidenced that the disbursement of aforesaid amounts were made to the Applicant No.1.
However, in violation of its obligations under the aforesaid Trust Receipts, Applicant
No.1 failed to pay to the Plaintiff the aforesaid values of the stocks/goods delivered to it.
36
9(c)
Denied vehemently. Denied that the contents of para-9(c) of the Plaint are misconceived.
Denied that Plaintiff had procured documents mentioned in para-9(c) of the Plaint in
blank or subsequently filled up the said alleged blank documents to legitimize FATR
facility. Denied that the FATR facility was never extended or provided to the Applicants.
It is reiterated that disbursement of funds against a F.A.T.R limit is always made through
delivery of pledged stocks. Applicant No.1 by executing two Trust Receipts both dated
28-10-2005 (Annex-F/2 & F/3 to the Plaint) took delivery of the stocks/goods from the
Plaintiff of the values of Rs.2,950,099.00 and Rs.3,670,000.00 pledged against the
aforesaid FIM-II & Demand Finance respectively. Statements of Account for Account
No. 01-540-0144-2 & Account No. 01-540-0145-3 appended with the Plaint as AnnexF/4 & Annex-F/5 evidenced that the aforesaid two sums of Rs.2,950,099.00 and
Rs.3,670,000.00 were disbursed to the Applicant No.1 on 28-10-2005. Therefore, it is
denied that that the contents of para-9(c) of the Plaint are either inconsistent or contrary
to the Statements of Accounts of FATR facility attached with the Plaint. Denied that the
Plaintiff Bank ever caused any loss to the Applicants or that the Applicants are entitled
under law to recover from the Plaintiff the said alleged loss.
9(d)(i) Denied vehemently. Denied that the contents of Para 9(d)(i) of the Plaint are
misconceived. Denied that, under the Agreement for Financing dated 8-1-2005, no FATR
facility was availed by the Applicant No.1 or that the said Agreement for Financing dated
8-1-2005 was fabricated by the Plaintiff to support its claim against the Applicants.
Denied that the Statements of Accounts of the FATR facility appended with the Plaint are
either incomplete or deficient in any manner. Complete Statements of Accounts, along
with all supporting agreements and documents, showing a correct and complete picture of
the accounts, amounts disbursed to and availed by the Applicant No.1 have been attached
with the Plaint. However, as no amount whatsoever was paid by the Applicants against
the FATR facility, no repayments by the Applicants have been shown in the said
Statements of Accounts. Therefore, claim of the Plaintiff Bank is not liable to be rejected.
Denied that the accounts of the FATR facility were maintained or operated by Plaintiff
itself without the knowledge of the Applicants. Denied that the claim with regard to the
mark-up of the FATR facility is illegal or unlawful or that the Statement of Accounts of
mark-up was incorrect or it does not reflect a true picture of accounts of the Applicant
No.1 as alleged. Denied that the Statements of Accounts of the FATR facility attached
with the Plaint contain any unauthorized, unexplained or fictitious entries as alleged.
Denied that Plaintiff through any illegal adjustments from one account to another or
through creation of some illegal account deprived Applicants of their any right. Denied
that no amount under the FATR Facility was disbursed or that the same was created as an
instrument to adjust some disputed liabilities of Applicants as alleged. Denied that any of
37
the Statements of Accounts mentioned in para 9(d)(i) is deficient in any details or replete
with unauthorized entries as alleged.
9(d)(ii) Denied vehemently. Denied that the contents of para-9(d)(ii) of the Plaint are
misconceived.
(i)
upon or no funds were disbursed thereunder or that no liability of the
(ii)
amount of mark-up on the FATR facility is outstanding. Denied that
Plaintiff is not entitled to recover from the Applicants mark-up of the
FATR facility as alleged.
(iii)
them under the FATR facility as alleged.
9(d)(iii)
Denied vehemently. Denied that the contents of para 9(d)(iii) of the Plaint are
misconceived.
i.
Denied vehemently. Denied that no amount was disbursed under the

Agreement for Financing dated 8-1-2005 or that the said agreement was
never acted upon. Denied that there is no outstanding liability of the
Applicants under the FATR facility as alleged.
ii.
Denied that Plaintiff has not provided complete Statement of Accounts of

FATR facility or that the Statements of Accounts of F.A.T.R facility
attached with the Plaint do not show true and faithful status of accounts as
alleged.
iii.
upon or that no funds were disbursed or that no liability of the Applicants
is outstanding as alleged.
iv.
38
no amount of mark-up on the FATR facility is outstanding. Denied that

Plaintiff is not entitled to recover mark-up of the FATR facility from the
v.
amount of mark-up on the FATR facility is outstanding as alleged.
vi.
amount of mark-up on the FATR facility is outstanding. Denied that
vii.
them under the FATR facility. Denied that the claim of the Plaintiff is
It is further submitted that the liability of the Applicants against the FATR
facility has been correctly mentioned in the particulars under Section 9(3) of the
Ordinance, 2001 given in para-9(d)(iii) of the Plaint which are corroborated and
supported by the Statements of Account attached thereto as Annex- F/4, F/5 &
F/6.
10(a)(i)
Denied vehemently. Denied that the contents of para-10(a)(i) of the Plaint are
misconceived. Denied that the Cash Financial Facility of Rs.25.00 million does
not form subject matter of the titled or that the said facility cannot be adjudicated
upon in the titled suit as alleged. As stated in para 10 of the Plaint a sum of
Rs.7,856,550.00 is presently outstanding and payable by the Applicants under the
Cash Finance Facility. Denied that either claim of Plaintiff under the Cash
Finance is non-existent or the said claim has become barred by limitation or that
no amount whatsoever under the Cash Finance can be claimed or recovered from
the Applicants. Denied that any of the documents referred to in the para-10(a)(i)
of the Plaint are without consideration or that the Cash Finance was not disbursed
to or utilized by the Applicants. Denied that no amount against the Cash Finance
is legally due or payable by the Applicants.
39
10(a)(ii)
Denied vehemently. Denied that the contents of para-10(a)(ii) of the Plaint are
misconceived. Denied that the Cash Financial Facility of Rs.25.00 million does
not form subject matter of the titled or that the said facility cannot be adjudicated
upon in the titled suit as alleged. As stated in para 10 of the Plaint, a sum of
Rs.7,856,550.00 is presently outstanding and payable by the Applicants under the
Cash Finance Facility. Denied that the claim of Plaintiff under Cash Finance is
non-existent or the said claim has become barred by limitation or that no amount
whatsoever under the Cash Finance can be claimed or recovered from the
Applicants. Denied that any of the documents referred to in the para-10(a)(ii) of
the Plaint are without consideration or that the Cash Finance was not disbursed to
or utilized by the Applicants. Denied that no amount against the Cash Finance is
legally due or payable by the Applicants. Denied that the Statements of Accounts
of the Cash Finance annexed to the Plaint establish that the Cash Finance Facility
was interest bearing or for that reason the same is beyond the jurisdiction of this
Honourable Court under the Ordinance of 2001. It is submitted that the Cash
Finance was granted Islamic modes of financing on mark-up basis. Therefore, it is
denied that this Honourable Court lacks jurisdiction to adjudicate upon and decide
the claim in respect of the Cash Finance Facility.
10(b)(i)
Denied vehemently. Denied that the contents of Para-10(b)(i) of the Plaint are
misconceived. Denied that the Statements of Accounts of the Cash Finance
attached with the Plaint are deficient in any manner or details or that the said
Statements of Accounts do not evidence, create or establish any liability of the
Applicants as alleged. Denied that either no mark-up can be legally charged on
the Cash Finance or that the claim in respect thereof is barred by limitation.
10(b)(ii)
Denied vehemently. Denied that the contents of para 10(b)(ii) of the Plaint are
misconceived. It is submitted that no where in para 10(b)(ii) of the Plaint, it has
been stated that any Agreement for Financing for the Cash Finance was executed
on dated 8-1-2005. In view of the above fact, contents of para 10(b)(ii) of PLA
under reply are denied.
(i)
Denied that no funds under Cash Finance were disbursed or that no

liability of the Applicants against the Cash Finance is outstanding as
alleged.
(ii)
Denied that no amount of mark-up on the Cash Finance facility is

outstanding. Denied that the Plaintiff is not entitled to recover mark-up of
the Cash Finance facility from the Applicants as alleged.
40
(iii)
10(b)(iii)
Denied that there is no outstanding liability of the Applicants against the

Cash Finance or that no amount is payable by them under the Cash
Finance facility as alleged.
Denied vehemently. Denied that the contents of para 10(b)(iii) of the Plaint are
misconceived. It is reiterated that no where in para 10(b)(iii) of the Plaint, it has
been stated by the Plaintiff that any Agreement for Financing for the Cash Finance
was executed on dated 8-1-2005. In view of the above fact, contents of para 10(b)
(iii) of PLA under reply are denied.
i.
Denied vehemently. Denied that no amount under the Cash Finance was
disbursed or that there is no outstanding liability of the Applicants under
the Cash Finance as alleged.
ii.
Denied that the Plaintiff has not provided complete Statement of Accounts
or that the Statements of Accounts of the Cash Finance facility attached
with the Plaint do not show true and faithful status of accounts as alleged.
iii.
Denied that no funds under the Cash Finance were disbursed or that no
liability of the Applicants is outstanding there against as alleged.
iv.
Denied that no funds under the Cash Finance were disbursed or no amount
of mark-up of the Cash Finance facility is outstanding. Denied that
Plaintiff is not entitled to recover from the Applicants mark-up of the Cash
Finance facility.
v.
of mark-up on the Cash Finance facility is outstanding as alleged.
vi.
of mark-up on the Cash Finance facility is outstanding as alleged. Denied,
therefore, that no amount of mark-up on the Cash Finance facility is
outstanding or Plaintiff is not entitled to recover mark-up of the Cash
Finance facility from the Applicants as alleged.
vii.
Denied that either no funds were disbursed under the Cash Finance or
there is no outstanding liability of the Applicants thereunder. Denied that
no amount is payable by Applicants under the Cash Finance facility.
Denied that the claim of the Plaintiff is liable to be rejected as alleged.
41
It is further submitted that the liability of the Applicants against the Cash
Finance facility has been correctly mentioned in the particulars under Section 9(3)
of the Ordinance, 2001 given in para-10(b)(iii) of the Plaint which are
corroborated and supported by the Statements of Account attached thereto as
Annex- F/A/8 & F/A/9.
11.
Denied vehemently. Denied that the contents of paragraph-11 of the Plaint are
misconceived. Denied that all of the documents referred to in para-11 of the Plaint
whereby the Applicants have created mortgages on their personal assets as security for
the facilities subject matters of the suit were executed before the Agreements of
Financing all dated 8-1-2005. Denied that the titled suit has been filed merely on the basis
of Agreements dated 8-01-2005. Memorandum of Deposit of Title Deeds dated 08-012005, Copy of the Naqal Haqdaran Zamin for the year 1995-96 for the Mauza/ Hadbust
Mauza Bela Basti Ram, Tehsil City, Lahore , Memorandum of Deposit of Title Deeds
dated 08-01-2005, Memorandum of Deposit of Title Deeds dated 08-01-2005 and
Memorandum of Deposit of Title Deeds dated 08-01-2005 attached with the Plaint as
Annex-G/4, G/5, H/4, I/4 & Annex-J /4 were executed and furnished by the Applicants
respectively pursuant to the Agreements for Financing dated 08-01-2005. Similarly, all
other mortgage documents mentioned in para 11 of the Plaint were executed by the
Applicants No. 1 to 4 respectively in consideration of and as security for the finance
facilities including the aforesaid Running Finance, Demand Finance, FIM-II facility,
FATR-Limit and the Cash Finance facility that are the subject matters of the titled suit
granted and renewed by the Plaintiff and availed by the Applicant No.1 from time to time
under Sanction Advice dated 30.6.2001 as amended by the Corrigendum No.CO/CDP/1689 dated 10-7-2001, Sanction Advice No.CO/CD-P/MNA/3188dated31.12.2002,
approval No.COS/SAMD/MTR/5330 dated 22.12.2004, Facility Offer Letter No.
BBL/FE/2004/754 as amended by the Sanction Advice No.COS/SAMD/MTR/745 dated
07.02.2005 (all attached with the Plaint). Therefore, it is denied that the documents
mentioned in para-11 of the Plaint have no nexus with the facilities subject matters of the
titled suit. Denied that either mortgages or the documents whereby the said mortgages
were created/evidenced and referred to in para-11 of the Plaint are without consideration
or that the same do not constitute cause of action for the titled suit. Denied that any of the
said documents and mortgages were neither acted upon nor created any contractual
obligation or liability for the Applicants. Denied that the mortgages mentioned in para-11
of the Plaint are liable to be redeemed or that the mortgaged properties are liable to be
released.
12.
Denied vehemently. Denied that the contents of para-12 of the Plaint are misconceived.
42
Denied that the Personal Guarantees referred to in para-12 of the Plaint and annexed
thereto were executed before four Agreements for Financing, all dated 8-1-2005,
mentioned in paras-6 to 9 of the Plaint. Denied that the titled suit has been filed merely
on the basis of Agreements dated 8-01-2005. It is submitted and clarified that four
Personal Guarantees, all dated 08-01-2005, attached with the Plaint as Annex- K/8 to
K/11 respectively were executed and furnished by the Applicants pursuant to the
Agreements for Financing dated 08-01-2005. Similarly, as stated in para-12 of the Plaint,
all of the Personal Guarantees mentioned in the said para and attached with the Plaint as
Annex-K to K/11 to the Plaint were executed by the Applicants No.1 to 4 respectively in
consideration of, and as security for, the finance facilities including the aforesaid
Running Finance, Demand Finance, FIM-II facility, FATR-Limit and Cash Finance
facility that are the subject matter of the titled suit, granted by the Plaintiff to the
Defendant No.1, and renewed from time to time under Sanction Advice dated 30.6.2001
as amended by the Corrigendum No.CO/CD-P/1689 dated 10-7-2001, Sanction Advice
No.CO/CD-P/MNA/3188dated31.12.2002, approval No. COS/SAMD/MTR/5330 dated
22.12.2004, Facility Offer Letter No. BBL/FE/2004/754 as amended by the Sanction
Advice No.COS/SAMD/MTR/745 dated 07.02.2005 (all attached with the Plaint).
Therefore, it is denied that the Personal Guarantees mentioned in para-12 of the Plaint
have no nexus with the facilities that are the subject matter of the titled suit. Denied that
the said Personal Guarantees are without consideration or that same are liable to be
declared as illegal, void or cancelled as alleged. Denied that any of the said Personal
Guarantees are either barred by limitation or beyond the scope of the titled suit or that the
said Guarantees do not form basis of imposing any liability upon the Applicants as
alleged. Denied that Plaintiff ever misused its authority to fill in any blanks in the
Personal Guarantees. It is submitted that neither any guarantee was procured in blank nor
the Plaintiff filled in the same in order to raise its claim against the Applicants. Denied
that the said Personal Guarantees do not even fulfill requirements of law or that same are
liable to be cancelled as alleged.
13.
Denied that Plaintiff ever refused to provide to Applicant No.1 Statements of Accounts. It
is submitted that Plaintiff has been periodically providing to the Applicants Statements of
Accounts but it never raised any objection thereto. On the other hand, as stated in para-13
of the Plaint as well as in various paras above, Applicant/Defendant No.1 has been
attached with the Plaint as Annex- L to L/2. Perusal of the aforesaid letters categorically
establishes that the Applicants/Defendants never raised any objection or reservation as to
the correctness of any account or entries in the Statements of Accounts including the
43
entries regarding the amounts paid and payable by them to the Plaintiff. Denied that no
amount is legally due or payable by the Applicants. As stated in the Plaint an aggregate
sum of Rs. 87,832,118.00 is legally due from, and payable by, the Applicants against the
aforesaid Running Finance, Demand Finance, FIM-II facility, FATR-Limit and Cash
Finance. Denied that the aforesaid facilities were neither extended nor any funds
thereunder were made available to the Applicants as alleged. Denied that no amount is
legally due, payable or claimed in the titled suit against the aforesaid Running Finance,
Demand Finance, FIM-II facility, FATR-Limit and Cash Finance. Denied that the
aforesaid letters dated 21-01-2006, dated 01-02-2006 and dated 10-06-2006 have been
prepared, fabricated and forged by the Plaintiff by using the letterheads allegedly
procured in blank by the Plaintiff. It is submitted that the Plaintiff neither ever procured
blank letterheads of M/s. Sardar Enterprises nor fabricated any forged documents by
using the same in order to support its claim. Therefore, it is denied that the claim of the
suit amount is illegal or that it is liable to be rejected.
14.
Denied that the amounts claimed in the suit are not legally payable to the Plaintiff.
Denied that any details mentioned in para-14 of the Plaint do not reflect true or integrated
position of the accounts as alleged. In fact complete details of the facilities that are the
subject matter of the suit have been given in paras-6 to 10 of the Plaint and not in para 14
thereof. Denied that the Applicants are entitled under law to provide, at the time of final
hearing of the suit, details of the payments allegedly made by them to the Plaintiff Bank.
Denied that the facilities that are the subject matter of the titled suit were not extended to
Applicant No.1 or that no funds thereunder were made available to the said Applicant.
Therefore, it is denied that no amount is legally due or payable or can be claimed against
the said facilities.
15.
Denied that Plaintiff Bank has no legally valid cause of action against the Applicants.
Plaint discloses cause of action in favour of the Plaintiff and against Applicants.
16.
Denied vehemently. Denied that this Honourable Court lacks jurisdiction to adjudicate
upon and/or consider the facilities that are the subject matter of the titled suit. Denied that
any of the facilities that are the subject matter of the suit bore interest or that for the said
reason the same is beyond the jurisdiction of this Honourable Court under the Ordinance
of 2001. It is submitted that all finance facilities that are the subject matter of the titled
suit were granted on Islamic mode of financing on mark-up basis. Therefore, it is denied
that this Honourable Court lacks jurisdiction to adjudicate upon and decide the titled suit.
17.
Legal.
44
From the reasons, facts and law stated above, it is clear that the Applicants have
failed to raise any Substantial Questions of law and facts necessitating recording of the
evidence for disposal of the titled suit. Therefore, it is respectfully prayed that the
application under reply may kindly be rejected and the suit of the Plaintiff Bank may
kindly be decreed out rightly against the Applicants.
PLAINTIFF (ABL)
through
MIRZA MUZAFFAR AHMAD

Advocate High Court
(Cantab),LL.M(London)
SALMAN AKRAM RAJA

M.A.
LL.M (Harvard)
Advocate Supreme Court
33-C, Main Gulberg, Lahore.
VERIFICATION:Verified on oath at Lahore on this _______, 2008 that the contents of reply to the particulars under section
10(4) of the Ordinance, 2001 and paragraphs 1 to 14 of reply on merit above are true to the best of our
knowledge and the contents of the Legal Objections and replies to the Preliminary Objections and
paragraphs 15 to 17 on merit above are correct to the best of our information which we believe to be true.
DEPONENT
D:\Sohail\Active\Mirza\PLA-ABL-Vs-Jawad-Rasheed-and-others
45
Before the Honourable Lahore High Court, Lahore.
C.O.S. No.___________/2007
Allied Bank Limited, a banking company incorporated under the Companies Ordinance, 1984
and having its registered office at 8-Egerton Road/Kashmir Road, Lahore and a branch amongst
others at Badami Bagh, Lahore.
Plaintiff
Versus
1.
Mr Jawad Rashid s/o Haji Sheikh Mohammad Rashid carrying on business under the
name and style of M/s. Sardar Enterprises, 313 Circular Road, Badami Bagh, Lahore/
House No. 230-231, Block N, Samanabad, Lahore.
2.
Haji Sheikh Javed Rashid s/o Haji Sheikh Abdul Rashid r/o House No. 2-E, Block No.2,
Samanabad, Lahore.
3.
Mst. Sardar Begum w/o Haji Sheikh Abdul Rashid R/o House No. 230-231 Block N,
New Samanabad Scheme, Lahore / House No. 2-E, Block No. 2, Samanabad, Lahore.
4.
Mrs. Naveed Jamal w/o Jamal Rashid Sheikh R/o House No.304-K, D.H.A., Lahore/
House No. 230- N, Samanabad, Lahore.
.Defendants
SUIT FOR RECOVERY OF RS.87,832,118.00 THROUGH ENFORCEMENT & SALE

OF THE MORTGAGED PROPERTIES, HYPOTHECATED & PLEDGED STOCKS,
ENFORCEMENT OF PERSONAL GUARANTEES AS WELL AS SALE OF OTHER
ASSETS OF THE DEFENDANTS.
Respectfully Sheweth:1.
That the Plaintiff is a banking company incorporated under the Companies Ordinance,
1984 having its registered office at 8-Egerton Road/Kashmir Road, Lahore and branches
amongst others at Badami Bagh, Lahore and 199-Upper Mall, Lahore. The Plaintiff is a
46
financial institution for the purposes of the Financial Institutions (Recovery of Finances)
Ordinance of 2001(the Ordinance) and, therefore, competent to institute this suit before
this Honourable Court.
2.
That the titled suit on behalf of the Plaintiff has been filed through Mr. Mohammad
Arshad Khan Branch Manager of the Plaintiffs aforesaid branch situated at Badami
Bagh, Lahore and Syed Muhammad Mujtaba Ahmed Gillani officer Grade-I and
Relationship Manager of the Plaintiffs branch situated at 199-Upper Mall, Lahore. The
said officers have been/are duly authorized by the Plaintiff Bank to institute the suit, sign
and verify plaint, applications, affidavits and appoint advocates etc. and to do all acts
necessary and incidental for the prosecution of the case on behalf of the Plaintiff Bank.
The said officers are also conversant with the facts of the titled case. (Copies of the
Power of Attorney are annexed herewith as Annex-A & A/1). The aforesaid Mr.
Mohammad Arshad Khan being the Branch Manger of the Plaintiffs aforesaid branch at
Badami Bagh, Lahore (Annex-A/2) is also authorized to institute the titled suit and to
sign and verify the plaint on behalf of the Plaintiff under Section 9(1) of the Financial
Institutions (Recovery of Finances) Ordinance, 2001. A copy of the Memorandum and
Articles of Association of the Plaintiff is also annexed herewith as Annex-A/3).
3.
That the Defendant No.1 is carrying on business under the name and style of M/s. Sardar
Enterprises having its principal place of business at 313 Circular Road, Badami Bagh,
Lahore. Defendant No.1 is the sole proprietor of the aforesaid Sardar Enterprises.
Defendant No.1 had opened on 29-03-2001 and maintained with the Plaintiff's aforesaid
Branch at Badami Bagh, Lahore a current account bearing Current Account No. 01-2007183-2 in the name of M/s. Sardar Enterprises. A copy of the application form for
opening of the above current account is attached as Annex-A/4. Defendant No.1 has also
been availing various financial facilities from the Plaintiff which facilities were also
renewed and availed by the Defendant No.1 from time to time.
4.
That Defendant Nos. 1 to 4 executed Personal Guarantees and mortgaged their properties
with the Plaintiff as security inter alia for the facilities that are the subject matter of the
titled suit.
5.
That all the addresses of the parties have been correctly given in the heading of the plaint
which are sufficient for the purposes of the processes that may be issued by this
Honourable Court.
6(a)(i). That Plaintiff, on the request of the Defendant No1, vide approval No.
COS/SAMD/MTR/5330 dated 22.12.2004 (Annex-B) and the Facility Offer Letter No.
BBL/FE/2004/754 dated 23-12-2004 (Annex-B/1) as amended by the Sanction Advice
47
No.COS/SAMD/MTR/745 dated 07.02.2005 (Annex-B/2), extended to the Defendant

No.1 inter alia a Running Finance facility to the tune of Rs.30.00 million (Running
Finance Facility). Through the Undertaking dated 22-02-2005 (Annex-B/3), the
Defendant No.1 undertook to comply with the terms of the aforesaid Sanction Advice
dated 07.02.2005.
(ii) In pursuance of the above approval, the Defendant No.1 executed, inter alia, the
following documents with respect to the Running Finance Facility:
(a)
Agreement for Financing dated 08-01-2005 (Annex-B/4). Full

amount of Rs.30.00 million was disbursed to and utilized by the
Defendant No.1.
(b)
Promissory Note dated 08-01-2005 (Annex- B/5).
(c)
Letter of Hypothecation dated 08-01-2005 (Annex- B/6).
(b)(i) The Defendant No.1 proceeded to avail funds in terms of the Running Finance Facility
evidenced by the Statements of Account for the Current Account No. 01-200-7183-2
appended herewith as Annex- B/7. Statement of Account for mark-up of the Running
Finance Facility is appended herewith as Annex- B/8.
(ii)
The amounts presently outstanding and payable under the Running Finance Facility are
as under:
(i)
Principal Amount outstanding.
Rs. 29,956,835.00
(ii)
Markup outstanding.
Rs. 12,496,285.00
(iii)
Total Amount Payable as of 31.1.07.
Rs. 42,453,120.00
(iii) Particulars as per Section 9(3) of the Ordinance, 2001 are as under:
(i)
Principal amount of finance availed.
Rs.67,606,921.00
(ii) Principal Amount paid.

(Dates & Amounts of payments
are given in the relevant Statement
of Account).
Rs.37,650,086.00
(iii)
Principal Amount payable (i-ii above).
Rs. 29,956,835.00
(iv)
Markup payable upto

31.01.2007.
Rs.12,496,285.00
(v)
(vi)
Markup paid
Balance mark- up upto 31.01.2007
Nil .
48
(vii)
(iv-v).
Rs. 12,496,285.00
Outstanding principal
and markup payable (iii + vi above).
Rs. 42,453,120.00
7(a)(i) That vide the aforesaid approval No. COS/SAMD/MTR/5330 dated 22.12.2004 (Annex-B
above) and the Facility Offer Letter No. BBL/FE/2004/754 (Annex-B/1 above) as
amended by the Sanction Advice No.COS/SAMD/MTR/745 dated 07.02.2005 (AnnexB/2 above), Plaintiff also granted to the Defendant No.1 a long-term finance facility of
Demand Finance to the tune of Rs.22.00 million. A copy of the Undertaking dated 22-022005 by the Defendant No.1 for compliance of the terms of the aforesaid Sanction Advice
dated 07.02.2005 has already been attached herewith as Annex-B/3 above.
(ii)
In pursuance of the above approval, inter alia, the following documents were executed
for the Demand Finance:
(a)
Agreement for Financing dated 08-01-2005 (Annex-C). Full

Defendant No.1.
(b)
Promissory Note dated 08-01-2005 (Annex- C/1).
(c)
Letter of Pledge dated 08-01-2005 (Annex- C/2). Pledged stocks

are lying at the godown situated at Sidiquee Street opposite
Sheranwalla Gate Lahore and are detailed in three Stocks Reports
attached as Annex- C/3, Annex- C/3a & Annex- C/3b.
(b)(i) The Defendant No.1 proceeded to avail funds in terms of the Demand Finance evidenced
by the Statements of Account for Account No. 01-510-0013-4 appended herewith as
Annex-C/4. Statement of Account for mark-up of the Demand Finance is appended
herewith as Annex-C/5.
(ii)
The amounts presently outstanding and payable under the Demand Finance are as under:
(i)
Rs. 9,582,880.00
(ii)
Markup outstanding.
Rs. 1,934,123.00
(iii)
Rs.11,517,003.00
(i)
Rs. 22,692,616.00
49
8(a)

of Account).
Rs. 13,109,736.00
(iii) Principal Amount payable (i-ii above).
Rs. 9,582,880.00
(iv) Markup payable upto

31.01.2007.
Rs. 3,214,007.00
(v) Markup paid

of Account).
Rs. 1,279,884.00
(vi) Balance mark- up upto 31.01.2007

(iv-v).
Rs. 1,934,123.00
(vii) Outstanding principal

and markup payable
(iii + vi above).
Rs.11,517,003.00
That through the Sanction Advice No. CO/CD-P/MNA/3188 dated 31.12.2002 (AnnexD) Plaintiff had also allowed to the Defendant No.1 a limit for establishment of Letter of
Credit (Sight) for import of Tyres and Tubes to tune of the aggregate amount of
Rs.100.00 million (L/c Limit). This L/c Limit was fully utilized by the Defendant No.1
and against this limit, Plaintiff established on the request and on behalf of the Defendant
No.1 various Letters of Credit for import of Tyres and Tubes. The Defendant No.1
undertook to make available the funds required for payment under the letters of credit to
be established on its request by the Plaintiff as well as to take all steps necessary for the
release of the documents at the appropriate time.
(b)
That on receipt of the shipping documents under six (6) Letters of Credit by the Plaintiff
detailed below, Defendant No.1 failed to get released the imported goods by making any
corresponding payment thereof and resultantly Plaintiff had to make payment to the
beneficiaries of the said six (6) Letters of Credit by allowing to the Defendant No.1 a
forced financial facility of Finance against Imported Merchandizes (FIM-II). Details of
the said over due six (6), documents that were executed by the Defendant No.1 in support
of and to secure discharge of its obligations under the said L/C(s), shipping documents
and the Statement of Accounts are as under;
(1)
Letter of Credit No.2003/8406-8/LBBB/0212.

(i)
Letter of Credit No.2003/8406-8/LBBB/0212 dated 28-02-2003

(Annex-E).
(ii)
Application and Agreement for Irrevocable Documentary Credit

dated 28-02-2003 (Annex-E/1).
50
(2)
(a).
Consignment No.1:
i.
Commercial Invoice dated 03-04-2003 (AnnexE/1A).
ii.
Packing List dated 03-04-2003 (Annex-E/1B).
iii.
Bill of Lading dated 17-04-2003- (Annex-E/1C).
iv.
Bill of Exchange dated 25-04-2003 (Annex-E/1D).
v.
Statement of Accounts (Annex-E/1E). Statement of
Accounts
establishes
that
payment
of
Rs.2,581,309.00 was made on 05.05.2003.
(b).
Consignment No.2:
i.
ii.
iii.
Bill of Lading dated 28-03-2003 (Annex-E/2C).
iv.
v.
Accounts
establishes
that
payment
of
Rs.2,606,995.00 was made on 16-04-2003.
(c).
Consignment No.3:
i.
ii.
iii.
iv.
v.
Statement of Account (Annex-E/3E). Statement of
Account
establishes
that
payment
of
Rs.2,593,197.00 was made on 16-04-2003.
(d).
Consignment No.4:
i.
ii.
iii.
iv.
v.
Account
establishes
that
payment
of
Rs.2,522,218.00 was made on 16-04-2003.
Letter of Credit No. 2003/8408-0/LBBB/0212.

i.
ii.
iii.
iv.
v.
vi.
vii.
Letter of Credit No.2003/8408-0/LBBB/0212 dated

28-02-2003 (Annex-E/5A).
Application and Agreement for Irrevocable
Documentary Credit dated 28-02-2003 (AnnexE/5B).
Commercial Invoice dated 11-04-2003 (AnnexE/5C).
Packing List dated 11-04-2003 (Annex-E/5D).
Bill of Lading dated 21-04-2003 (Annex-E/5E).
Bill of Exchange dated 21-04-2003 (Annex-E/5F).
Statement of Accounts (Annex-E/5G). Statement of
Account
establishes
that
payment
of
Rs.1,501,555.00 was made on 20-05-2003.
51
(3)

i.
ii.
iii.
iv.
v.
vi.
(4)

i.
ii.
iii.
iv.
v.
vi.
vii.
(5)

04-04-2003 (Annex-E/7A).
Account
establishes
that
payment
of
Rs.3,552,742.00 was made to the beneficiary of the
L/c on 05-08-2003.

i
ii.
iii.
iv.
v.
vi.
vii.
(6)

28-02-2003 (Annex-E/6A).
Bill of Lading dated 01-08-2003 (Annex-E/6D).
Bill of Exchange dated 25-07-2007 (Annex-E/6E).
Statement of Accounts (Annex-E/6F). Statement of
Accounts
establishes
that
payment
of
Rs.1,068,547.00 was made on 01-09-2003.

14-04-2003 (Annex-E/8A).
Bill of Exchange dated11-07-2003 (Annex-E/7F).
Account
establishes
that
payment
of
Rs.1,402,479.00 was made on 12-08-2003.

i

14-04-2003 (Annex-E/9A).
52
ii.
iii.
iv.
v.
vi.
vii.
(c)
Subsequently,
on
the
request

Account
establishes
that
payment
of
Rs.1,142,735.00 was made on 23-06-2003.
of
the
Defendant
No.1,
vide
approval
No.
COS/SAMD/MTR/5330 dated 22.12.2004 (Annex-B above) and the Facility Offer Letter
No.BBL/FE/2004/754 (Annex-B/1 above) as amended by the Sanction Advice
No.COS/SAMD/MTR/745 dated 07.02.2005 (Annex-B/2 above), the aforesaid FIM-II
facility was continued and increased to Rs.24.00 million. In pursuance of the above
approval by the Plaintiff, the Defendant No.1 executed, inter alia, the following
documents:
(a)
Agreement for Financing dated 08-01-2005 (Annex-E/10). An

amount of Rs.23,978,559.00 was disbursed to and utilized by the
Defendant No.1.
(b)
Promissory Note dated 08-01- 2005 (Annex-E/11).
(c)
Letter of Pledge dated 08-01- 2005 (Annex- E/12). Pledged stocks

are lying at Tanveer Bonded Ware House situated at Gari Shahoo,
Lahore and are detailed in three Reports attached as AnnexE/12a, Annex- E/12b & Annex- E/12c.
(d)(i) The Defendant No.1 proceeded to avail funds in terms of the FIM-II evidenced by the
Statements of Account for Account No. 01-500-0084-3 appended herewith as AnnexE/13. Statement of Account for mark-up of FIM-II is appended herewith as Annex-E/14.
That the Plaintiff bank is entitled to claim the entire amount due to it in terms of the FIMII facility referred to above, the amount outstanding at the time of the above agreement as
well the amounts disbursed thereunder.
(ii)
The amounts presently outstanding and payable under the FIM-II facility are as under:
(i)
Rs. 11,836.795.00
(ii)
Markup outstanding.
Rs. 6,408,344.00
(iii)
Rs. 18,245,139.00
53
(i)
Rs.23,978,559.00
Rs.11,961,764.00

of Account).
Rs. 11,836,795.00

31.01.2007.
Rs. 6,932,275.00
(v) Markup paid
Rs. 523,931.00

of Account).
9(a)

(iv-v).
Rs. 6,408,344.00

and markup payable
(iii + vi above).
Rs. 18,245,139.00
That through the aforesaid approval vide approval No.COS/SAMD/MTR/5330 dated

22.12.2004 (Annex-B above) and the Facility Offer Letter No. BBL/FE/2004/754
(Annex-B/1 above) as amended by the Sanction Advice No.COS/SAMD/MTR/745 dated
07.02.2005 (Annex-B/2 above), the Defendant No.1 was also sanctioned a financial limit
of Finance Against Trust Receipt (FATR-Limit) of Rs.7.00 million. This Limit was
granted for obtaining delivery by the Defendant No.1 of the stocks pledged with the
Plaintiff against the aforesaid Demand Finance of Rs.22.00 million and FIM-II of
Rs.24.00 million mentioned in paragraphs- 7 & 8 above respectively. It may be noted that
the FATR-Limit was on revolving basis and the Defendant No.1 was entitled, while
remaining within the maximum limit of Rs.7.00 Million at one point of time, to take
multiple deliveries of the stocks pledged as security for the aforesaid Demand Finance
and FIM-II. As per terms of the FATR-Limit, Defendant No.1 was under an obligation to
deposit with the Plaintiff the value of the stocks/goods within 45 days of each delivery of
the said stocks/goods to it.
(b)
That in pursuance of the above approval by the Plaintiff, the Defendant No.1 executed,
inter alia, the following documents:
(a)
Agreement for Financing dated 08-01-2005 (Annex-F).
(b)
Promissory Note dated 08-01- 2005 (Annex- F/1).
54
(c)
That the Defendant No.1 by executing Trust Receipt dated 28-10-2005 (Annex-F/2) and
Trust Receipt dated 28-10-2005 (Annex-F/3) took from the Plaintiff delivery of the
stocks/goods of the value of Rs.2,950,099.00 and Rs.3,670,000.00 pledged against the
aforesaid FIM-II & the Demand Finance respectively. However, in violation of its
obligations under the aforesaid Trust Receipts, Defendant No.1 failed to pay to the
Plaintiff the aforesaid values of the stocks/goods delivered to it.
(d)(i) The Defendant No.1 proceeded to avail funds in terms of FATR-Limit evidenced by the
two Statements of Account for Account No. 01-540-0144-2 & for Account No. 01-5400145-3 appended herewith as Annex-F/4 & Annex-F/5. Statement of Account for markup of FATR-Limit is appended herewith as Annex-F/6.
(ii)
The amounts presently outstanding and payable under FATR-Limit are as under:
(i)
Rs. 6,620,099.00
(ii)
Markup outstanding.
Rs. 1,140,207.00
(iii)
Rs. 7,760,306.00
(i)
Rs. 6,620,099.00
Nil
Rs. 6,620,099.00

31.01.2007.
(v) Markup paid
Rs. 1,140,207.00

(iv-v).
Rs. 1,140,207.00

and markup payable
Rs. 7,760,306.00
Nil
(iii + vi above).
10(a)(i) That vide Sanction Advice dated 30.6.2001 (Annex-F/A) as amended by the
Corrigendum No.CO/CD-P/1689 dated 10-7-2001 (Annex-F/A/1) the Defendant No.1
was also sanctioned a financial facility of Cash Finance of Rs.25.00 million. In pursuance
of the above approval, inter alia, the following documents were executed for the Cash
Finance:
55
(a)
Agreement for Financing dated 30-06-2001 (Annex- F/A/2). Full

Defendant No.1.
(ii)
(b)
Promissory Note dated 30-06-2001 (Annex- F/A/3).
(c)
Letter of Pledge dated 30-06-2001 (Annex- F/A/4).
That vide approval No. CO/CD-P/MNA/3188 dated 31.12.2002 (Annex-D above),

Plaintiff on the request of the Defendant No1 again renewed and extended to the
Defendant No.1 inter alia the Cash Finance to the tune of Rs.25.00 million. In pursuance
of the above approval, inter alia, the following documents were executed for the Cash
Finance:
(a)

Defendant No.1.
(b)
(c)
(b)(i) The Defendant No.1 proceeded to avail funds in terms of the Cash Finance Facility
evidenced by the Statements of Account for the Account No. 01-390-0003-6 appended
herewith as Annex- F/A/8. Statement of Account for mark-up of the Cash Finance
Facility is appended herewith as Annex- F/A/9.
(ii)
(iii)
The amounts presently outstanding and payable under the Cash Finance Facility are as
under:
(i)
Nil
(ii)
Markup outstanding.
Rs.7,856,550.00
(iii)
Rs.7,856,550.00
Particulars as per Section 9(3) of the Ordinance, 2001 are as under:

(i)
Rs.32,204,338.00

of Account).
Rs.32,204,338.00
(iii)
Principal Amount payable (i-ii above).
Nil
(iv)
Markup payable upto

31.01.2007.
Rs.7,856,550.00.
56
(v)
Markup paid
(vi)
(vii)
11.
Rs.Nil
Balance mark- up upto 31.01.2007

(iv-v).
Rs.7,856,550.00
Outstanding markup payable

(vi above).
Rs.7,856,550.00
That in addition to the documents mentioned in paras 6 to 10 above of this Plaint, as

security for the above facilities, Defendant Nos.1 to 4 also created charges/mortgages on
their assets in favour of the Plaintiff. The details of the mortgaged properties and
documents whereby said charges/mortgages were created/evidenced/registered are given
below:
I.
Mortgagor:
Mr Jawad Rashid (Defendant No.1)
Mortgaged Property:
All that piece and parcel of land

measuring 3 Marlas along with
house constructed thereon known as
Nayyar
Manzil
bearing
Property/Survey No. N-I-24-S in
Khasra No.2093-Min in the Hadbust
Mauza Bela Basti Ram, situated at
Bearoon Masti Gate, 313 Circular
Road, Lahore together with its all
present and future constructions,
fitting, fixtures and installations
thereon.
Documents furnished
& executed:
(i).
(ii).
(iii).
(iv).
(v).
(vi).
Memorandum of Deposit of Title

Deed dated 30-06-2001 (Annex-G).
Deed of Mortgage dated 14-06-2001
(Annex-G/1).
General Power of Attorney dated 1406-2001 (Annex-G/2).
Deeds dated 31-12-2002 (AnnexG/3).
Deeds dated 08-01-2005 (AnnexG/4).
Copy of the Naqal Haqdaran Zamin
for the year 1995-96 for the Mauza/
57
Hadbust Mauza Bela Basti Ram,

Tehsil City, Lahore (Annex-G/5)
evidencing that the mortgage in
favour of Plaintiff on the Mortgaged
Property mentioned above has been
recorded in the Revenue Record.
(vii). Sale Deed dated 20-06-1992
registered with the Sub-Registrar
Lahore City, Lahore on 25-06-1992
with Dastawiz No.4478 Bahi No.1 &
Jild No.352. Original Sale Deed
dated 20-06-1992 was deposited by
the above Mortgagor with the
Plaintiff to create equitable mortgage
in its favour on the Mortgaged
Property mentioned above (AnnexG/6).
(viii). P.T.1 Form (Annex-G/7).
II.
Mortgagor:
Haji Sheikh Javed Rashid (Defendant No.2)
Mortgaged Property:
All that piece and parcel of the land

measuring 2 Marlas along with
shop constructed thereon bearing
Survey No.S-19-R-15 situated
at Shahrah-e-Quaid-e-Azam and
Maclagon Road, Lahore together
with its all present and future
constructions, fitting, fixtures and
installations thereon.
Documents furnished
& executed:
(i).
(ii).
(iii).
(iv).

Deed dated 30-06-2001 (Annex-H).
(Annex- H/1) registered with the
Sub-Registrar Lahore Saddar, Lahore
on 15-09-2001.
General Power of Attorney dated 1406-2001 (Annex- H/2).
Deeds dated 31-12-2002 (AnnexH/3).
58
(v).
(vi).
(vii).
III.

Deeds dated 08-01-2005 (AnnexH/4).
Sale Deed dated 26-10-1987
registered with the Sub-Registrar
Lahore City, Lahore on 26-10-1987
with Dastawiz No.7490 Bahi No.1 &
Jild No.2842. Original Sale Deed
dated 26-10-1987 was deposited +by the above Mortgagor with the
Property mentioned above (AnnexH/5).
P.T.1 Form (Annex- H/6).
Mortgagor:
Mst.Sardar Begum(Defendant No.3).
Mortgaged Property:

measuring 1 Kanal , 4 Marlas & 40
Sft along with House constructed
thereon bearing Plot No.230-231-N
situated at 134 Acres Scheme,
Samanabad, Lahore together with its
all present and future constructions,
thereon.
Documents furnished
& executed:
(i).
(ii).
(iii).
(iv).
(v).

Deed dated 30-06-2001 (Annex-I).
(Annex-I/1) registered with the SubRegistrar Lahore Saddar, Lahore on
15-09-2001.
General Power of Attorney dated 1406-2001 (Annex- I/2).
Deeds dated 31-12-2002 (AnnexI/3).
Deeds dated 08-01-2005 (AnnexI/4).
59
(vi).
IV.
Sale Deed registered with the SubRegistrar Lahore Saddar, Lahore on

11-06-1996 with Dastawiz No.5629,
Bahi No.1 & Jild No.2280. Original
Sale Deed was deposited by the
above Mortgagor with the Plaintiff to
create equitable mortgage in its
favour on the Mortgaged Property
mentioned above (Annex- I/5).
Mortgagor:
Mrs. Naveed Jamal(Defendant No.4)
Mortgaged Property:

measuring 2 Kanals along with
House constructed thereon bearing
Plot No.304-K situated at Defence
Housing Authority (DHA), Lahore
Cantt, Lahore together with its all
present and future constructions,
thereon.
Documents furnished
& executed:
(i).
(ii).
(iii).
(iv).
(v).
(vi).

Deed dated 30-06-2001 (Annex- J).
(Annex-J/1) registered with the SubRegistrar Lahore Saddar, Lahore on
15-09-2001.
General Power of Attorney dated 1406-2001 (Annex- J /2).
Deeds dated 31-12-2002 (Annex-J /
3).
Deeds dated 08-01-2005 (Annex-J /
4).
Transfer Letter dated 29-061996(Annex- J/5) & NOC dated
25-04-2001 (Annex-J/6) issued by
DHA. Original Transfer Letter dated
29-06-1996 & NOC dated 25-042001 issued by DHA were deposited
60
by the above Mortgagor with the

Property mentioned above.
12.
That in consideration of and as security for the finance facilities granted by the Plaintiff
to the Defendant No.1 under the aforesaid approval No. COS/SAMD/MTR/5330 dated
07.02.2005 (Annex-B/2 above), Sanction Advice No. CO/CD-P/MNA/3188 dated
31.12.2002 (Annex-D above), Sanction Advice dated 30.6.2001 (Annex-F/A above) as
amended by the Corrigendum No.CO/CD-P/1689 dated 10-7-2001 (Annex-F/A/1 above)
including the aforesaid Running Finance, Demand Finance, FIM-II facility, FATR-Limit
and Cash Finance facility that are the subject matter of the titled suit and mentioned in
paras- 6 to 10 above, the Defendant Nos.1 to 4 also executed in favour of the Plaintiff
Bank the following Guarantees:
i.
Guarantee dated 30-06-2001 by the Defendant No.1

(Annex-K).
ii.

(Annex-K/1).
iii.

(Annex-K /2).
iv.

(Annex-K /3).
v.

(Annex- K /4).
vi.

(Annex- K /5).
vii.

(Annex- K /6).
viii.

(Annex- K/7).
ix.

(Annex- K /8).
x.

(Annex- K /9).
xi.

(Annex- K /10).
xii.
61
(Annex- K /11).
13.
That from the above facts it is clear that the Plaintiff, by way of granting the finance
facilities that are the subject matters of the titled suit, provided all possible assistance to
the Defendant No.1. However, Defendant No.1 failed to reciprocate in similar manner. It
committed default and failed to pay and liquidate the aforesaid Running Finance,
Demand Finance, FIM-II facility, FATR-Limit and the Cash Finance mentioned in paras 6
to 10 above on their respective dates of maturities despite consistent demands made in
this respect by the Plaintiff to the Defendant No.1. Accordingly, an aggregate sum of Rs.
87,832,118.00 had become outstanding against Defendants under the aforesaid Running
Finance, Demand Finance, FIM-II facility, FATR-Limit and the Cash Finance. Although
Defendant No.1 has been acknowledging its liabilities from time to time but failed to pay
the amounts due under the aforesaid five facilities. Copies of the letters dated 21-012006, dated 01-02-2006 and dated 10-06-2006 whereby the Defendant No.1
acknowledged its liability and committed to make payments there against are attached as
Annex- L to L/2 respectively.
14.
That every effort was made by the Plaintiff Bank to recover the aforesaid outstanding
amount from the Defendant No.1 but all such efforts were wasted as it failed to pay the
aforesaid sum of Rs.87,832,118.00 that has become outstanding against the aforesaid
Running Finance, Demand Finance, FIM-II facility, FATR-Limit and the Cash Finance.
Defendant No.1 was liable to pay the aforesaid amount but failed to pay the same. Due to
the aforesaid default by the Defendant No.1 to pay the aforesaid sum of Rs.
87,832,118.00, Defendant Nos. 1 to 4 have also become liable to pay the aforesaid
amount in terms of the Personal Guarantees furnished by them as mentioned in para 12
above and attached hereto as Annex-K to Annex-K/11 above that were executed by the
said Defendants in consideration of and as security inter alia for the aforesaid Running
Finance, Demand Finance, FIM-II facility, FATR-Limit and the Cash Finance. Through
the instant suit demand of the guaranteed amounts under the aforesaid Guarantees is
being made from the Defendant Nos.1 to 4. Defendants are also liable to pay the suit
amount under the mortgages created by them on their personal assets mentioned in
paragraph-11 above and the suit amount is recoverable from them through enforcement
and sale of the aforesaid mortgaged properties.
15.
That the cause of the action against the Defendant No.1 arose firstly when the aforesaid
limit of the Letter of Credit (Sight) of Rs.100.00 million (L/c Limit), Running Finance,
Demand Finance, FIM-II facility, FATR-Limit and the Cash Finance were granted to the
Defendant No.1, secondly when the Defendant No.1 committed default and failed to pay
and liquidate the Running Finance, Demand Finance, FIM-II facility, FATR-Limit and the
62
Cash Finance on their respective dates of maturity despite demands. Each

acknowledgement in writing as well as each payment by the Defendant No.1 in
acknowledgement of its liability has also constituted a cause of action. Due to aforesaid
default by the Defendant No.1, the cause of action against the Defendant Nos. 2 to 4 has
arose last week. The cause of action still continues as the Defendant Nos.1 to 4 have
failed to discharge their obligations under various agreements and security documents,
guarantees and mortgages.
16.
That the cause of action has arisen within the territorial jurisdiction of this Honourable
Court. Financial facilities that are subject matters of the titled suit were disbursed and
repayable in Lahore. Defendant No.1 has its principal place of business at Lahore and the
properties and assets mortgaged by the Defendants No.1 to 4 as stated in paragraph-11 (I)
to (IV) above of this Plaint are situated in Lahore which is within the territorial
jurisdiction of this Honourable Court. Defendant Nos.1 to 4 also reside at Lahore.
Therefore, this Honourable Court can adjudicate upon this suit.
17.
That the titled suit for the purposes of court fee and jurisdiction is valued at Rs.
87,832,118.00 and court fee of Rs.15, 000.00 has been affixed on this plaint.
In view of the above facts and submissions, the Plaintiff most respectfully prays that:
a)
A decree in the sum of Rs. 87,832,118.00 may kindly be passed in favour of the
Plaintiff against Defendant Nos.1 to 4 jointly and severally with all costs, charges
and expenses payable under the financing Agreements/Security Documents along
with cost of fund in terms of Section 3 of the Financial Institutions (Recovery of
Finances) Ordinance, 2001 from the date of default to the date of payment
through enforcement of mortgages and sale of the mortgaged properties and sale
of the hypothecated and pledged stocks and other assets of the Defendant Nos.1 to
4 as well as by enforcement of the aforesaid
Personal Guarantees by the
Defendant Nos.1 to 4.
b)
An order be made declaring that the Plaintiff is entitled to take possession of and
recover the properties of Defendants No.1 to 4 that are mortgaged, under any
charge in favour of the Plaintiff Bank and the pledged stocks detailed in the paras
6 to 11 above of this Plaint directly and if need be with the assistance of this
Court.
c)
The Defendants No.1 to 4 be restrained from alienating the mortgaged properties,

hypothecated assets and pledged stocks as well as their all other immoveable and
moveable assets and all such assets be attached.
63
d)
Receiver(s) be appointed over the affairs of the business of the Defendant No.1
i.e. Sardar Enterprises, 313 Circular Road, Badami Bagh, Lahore.
e)
A local commission be appointed to make a complete inventory of all moveable

assets concerning and forming part of the business of the Defendant No.1 i.e.
Sardar Enterprises, 313 Circular Road, Badami Bagh, Lahore.
f)
Plaintiff be allowed to sell the pledged stocks lying at the godowns situated at
Sidiquee Street opposite Sheranwalla Gate Lahore and Tanveer Bonded Ware
House situated at Gari Shahoo, Lahore.
g)
The Defendant Nos. 1 to 4 be directed to file personal wealth statements before

this Honourable Court.
h)
Any other relief, which this Honourable Court deems fit and appropriate in the
circumstances of the case, may also be granted.
i)
Costs of the suit may kindly also be granted.
PLAINTIFF
(Allied Bank Limited)
through
Mirza Muzaffar Ahmad

Advocate High Court
Salman Akram Raja

M.A.(Cantab),LL.M(London)
LL.M (Harvard)
VERIFICATION:Verified on oath at Lahore on _______ 2007 that contents of paragraphs 1 to 14 above are true
to the best of our knowledge and contents of paragraphs 15 to 17 above are correct to the best of
our information which we believe to be true.
64
DEPONENTS
1)D/Banking/ABL Sardar-Revised(1-16)
65
C.M. NO._______/2007
IN
C.O.S. No._______/2007
titled
ABL V/s Mr. Jawad Rashid and others.
APPLICATION
under Section 16 of the Financial Institutions (Recovery of

Finances) Ordinance, 2001 read with the Order XXXVIII Rules 5 & 6 of the Code of
Civil Procedure, 1908(CPC) and all other enabling provisions of law.
Respectfully Sheweth:1.
That the Plaintiff has filed the titled suit for recovery of Rs. 87,832,118.00 against the
Defendants which is pending before this Honourable Court. Contents of the Plaint may
kindly be read as an integral part of this application.
2.
That the Defendants had charged, hypothecated, mortgaged and pledged with the Plaintiff
their following assets:
I.
Mr Jawad Rashid/ Sardar Enterprises (Defendant No.1).
(A).
All that piece and parcel of land measuring 3 Marlas along with
house constructed thereon known as Nayyar Manzil bearing
Property/Survey No. N-I-24-S in Khasra No.2093-Min in the
Hadbust Mauza Bela Basti Ram, situated at Bearoon Masti Gate,
313 Circular Road, Lahore together with its all present and future
constructions, fitting, fixtures and installations thereon.
(B).
All present and future hypothecated current assets, mercantile

products, tangible movable assets of whatsoever nature including
tyres and tubes, alloy rims, stores & spares, furniture & fixtures
lying/stored/kept at any of the premises/godowns of the Defendant
No.1 including at the premises situated at 313 Circular Road,
Badami Bagh, Lahore or elsewhere or in transit and all documents
66
of title thereto as well as its book debts & receivables.

(C).
II.
Pledged stocks of Tyres, Tubes & Alloy Rims lying at the godowns
situated at Sidiquee Street opposite Sheranwalla Gate Lahore and
Tanveer Bonded Ware House situated at Gari Shahoo, Lahore.

All that piece and parcel of the land measuring 2 Marlas along
with shop constructed thereon bearing Survey No.S-19-R-15
situated at Shahrah-e-Quaid-e-Azam and Maclagon Road, Lahore
together with its all present and future constructions, fitting,
fixtures and installations thereon.
III.
Mst.Sardar Begum (Defendant No.3).

All that piece and parcel of land measuring 1 Kanal, 4 Marlas & 40
Sft along with House constructed thereon bearing Plot No.230231-N situated at 134 Acres Scheme, Samanabad, Lahore together
with its all present and future constructions, fitting, fixtures and
IV.
Mrs. Naveed Jamal (Defendant No.4)

All that piece and parcel of land measuring 2 Kanals along with
House constructed thereon bearing Plot No.304-K situated at
Defence Housing Authority (DHA), Lahore Cantt, Lahore together
3.
That having come to know that the Plaintiff is filing the titled suit, the Defendant Nos.1
to 4 have started removing and misappropriating current assets, mercantile products,
tangible movable assets of whatsoever nature including tyres and tubes, alloy rims, stores
& spares, furniture & fixtures charged, hypothecated and pledged by the Defendant No.1
with the Plaintiff and are taking further surreptitious steps to sell the mortgaged
properties, hypothecated and pledged stocks mentioned in the Plaint and also described in
para 2 above.
4.
That if the Respondents/Defendants No. 1 to 4 sell or alienate in any manner the

properties and assets of the Defendant No.1 mortgaged, hypothecated and pledged with
the Plaintiff as specified in para-2 above or other immovable and movable assets,
Plaintiff/ Applicant will suffer an irreparable loss.
5.
It is submitted that the Respondent/Defendant Nos. 1 to 4 in violation of all their legal,

contractual and moral obligations did not repay due amount to the Plaintiff Bank.
Respondent/Defendant Nos. 1 to 4 have been siphoning away and mis-appropriating the
67
funds of the Respondent/Defendant No.1 in an illegal manner for their personal benefits
causing great loss to the Plaintiff who had granted finance facilities to Defendant No.1 as
mentioned in the plaint. Presently as on 03-11-2006 a sum of Rs.87,832,118.00 is due
from the Defendant Nos. 1 to 4.
It is, therefore, most respectfully prayed that this Honourable Court may be
pleased to pass an order:
(a)
attaching before judgment of all the mortgaged and hypothecated properties and
the pledged stocks specified in para 2 above as well as all other immovable or
moveable assets;
(b)
restraining the Respondents No. 1 to 4 from selling or disposing of in any manner

properties, assets and stocks specified in para 2 above as well as all other
immovable or moveable assets or from creating any kind of charge thereon;
(c)
appointing before judgment of Receiver(s) over the affairs of the Defendant No.1
i.e. Sardar Enterprises, 313 Circular Road, Badami Bagh, Lahore and to authorize
the said Receiver(s) to take over possession of the said properties and running of
the project of the Defendant/ Respondents No.1 as described above.
(d)
authorizing the Applicant Bank and/or the Receiver to post security guards at the
aforesaid premises of the Defendant/ Respondent No.1 at 313 Circular Road,
Badami Bagh, Lahore.
(e)
permitting the Applicant Bank to sell before judgment the pledged stocks lying at
the godowns situated at Sidiquee Street opposite Sheranwalla Gate Lahore and
(f)
appointing Local Commissioner to make a complete inventory of all moveable

assets concerning and forming part of business of the Defendant No.1 i.e. Sardar
Enterprises, 313 Circular Road, Badami Bagh, Lahore.
This Honourable Court may also kindly pass any other order deemed fit
and proper.
Plaintiff/Applicant.
(ABL)
through
68
SALMAN AKRAM RAJA

M.A.(Cantab) LL.M(London)
LL.M (Harvard)
1)D/Banking/ABL Sardar-Revised(17-19)
69
C.M. NO._______/2007
IN
C.O.S. No._______/2007
titled
APPLICATION
under Section 16 of the Financial Institutions (Recovery of

Finances) Ordinance, 2001 read with the Order XXXVIII Rules 5 & 6 of the Code of
Civil Procedure, 1908(CPC) and all other enabling provisions of law.
AFFIDAVIT OF Mr. Mohammad Arshad Khan Branch Manager,

Allied Bank Limited, Badami Bagh, Lahore.
I, the above-named deponent do hereby solemnly affirm and declare as under:
1.
That the Plaintiff has filed the titled suit for recovery of Rs. 87,832,118.00 against the
Defendants which is pending before this Honourable Court. Contents of the Plaint may
kindly be read as an integral part of this application.
2.
That the Defendants had charged, hypothecated, mortgaged and pledged with the Plaintiff
their following assets:
I.
Mr Jawad Rashid/ Sardar Enterprises (Defendant No.1).
(A).
70
house constructed thereon known as Nayyar Manzil bearing

Property/Survey No. N-I-24-S in Khasra No.2093-Min in the
Hadbust Mauza Bela Basti Ram, situated at Bearoon Masti Gate,
313 Circular Road, Lahore together with its all present and future
II.
(B).
All present and future hypothecated current assets, mercantile

products, tangible movable assets of whatsoever nature including
tyres and tubes, alloy rims, stores & spares, furniture & fixtures
lying/stored/kept at any of the premises/godowns of the Defendant
No.1 including at the premises situated at 313 Circular Road,
Badami Bagh, Lahore or elsewhere or in transit and all documents
of title thereto as well as its book debts & receivables.
(C).
Pledged stocks of Tyres, Tubes & Alloy Rims lying at the godowns
situated at Sidiquee Street opposite Sheranwalla Gate Lahore and

situated at Shahrah-e-Quaid-e-Azam and Maclagon Road, Lahore
III.

All that piece and parcel of land measuring 1 Kanal, 4 Marlas & 40
Sft along with House constructed thereon bearing Plot No.230231-N situated at 134 Acres Scheme, Samanabad, Lahore together
IV.
Mrs. Naveed Jamal (Defendant No.4)

71
3.
That having come to know that the Plaintiff is filing the titled suit, the Defendant Nos.1
to 4 have started removing and misappropriating current assets, mercantile products,
tangible movable assets of whatsoever nature including tyres and tubes, alloy rims, stores
& spares, furniture & fixtures charged, hypothecated and pledged by the Defendant No.1
with the Plaintiff and are taking further surreptitious steps to sell the mortgaged
properties, hypothecated and pledged stocks mentioned in the Plaint and also described in
para 2 above.
4.
That if the Respondents/Defendants No. 1 to 4 sell or alienate in any manner the

properties and assets of the Defendant No.1 mortgaged, hypothecated and pledged with
the Plaintiff as specified in para-2 above or other immovable and movable assets,
Plaintiff/ Applicant will suffer an irreparable loss.
5.
It is submitted that the Respondent/Defendant Nos. 1 to 4 in violation of all their legal,

contractual and moral obligations did not repay due amount to the Plaintiff Bank.
Respondent/Defendant Nos. 1 to 4 have been siphoning away and mis-appropriating the
funds of the Respondent/Defendant No.1 in an illegal manner for their personal benefits
causing great loss to the Plaintiff who had granted finance facilities to Defendant No.1 as
mentioned in the plaint. Presently as on 03-11-2006 a sum of Rs.87,832,118.00 is due
from the Defendant Nos. 1 to 4.
72
DEPONENT
Mohammad Arshad Khan
Verification:
Verified on oath at ________ on this_______ day of _______ 2007 that the contents of the above
affidavit are true to the best of my knowledge and belief and that nothing has been concealed
therefrom.
DEPONENT
Mohammad Arshad Khan
73
BEFORE THE HONOURABLE LAHORE HIGH COURT, LAHORE
C.O.S. No._______/2007
titled
INDEX
S.N
A
B
C
D
E
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
DESCRIPTION
Stamp Paper worth Rs.____________
Suit for Recovery & Stay Application with
Affidavit
Fard Pata
Form Under Order 7 Rule 14
Form Under Order 13 Rule 1 CPC
Copies of the Power of Attorney
Copy of the Memorandum and Articles of
Association
Sanction Advice
Annexure
DATE
Page
A-B
74
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
PLAINTIFF
through
SALMAN AKRAM RAJA
Advocate
)
75
76
FORM UNDER ORDER 13 RULE 1 CPC

S.N
DESCRIPTION
Annexure
DATE
Page
PLAINTIFF
through
SALMAN AKRAM RAJA
Advocate
1)D/Banking/HBL-Zuchini(19-20)
77
Allied Bank
Ref: XYZ
July 31, 2006
PROFILE OF M/S. SARDAR ENTERPRISES
M/s Sardar Enterprises, a proprietorship concern having its registered address at 313, Circular
Road General Bus Stand, Badami Bagh, Lahore, engaged in the business of import and export of
automobiles tyres and tubes since 1981. The salient particulars of the firm are as under:
Name of the Firm

Corporate Status
Registered Address
Name of Proprietor
C.N.I.C.
N.T.N.
Account No.
Date of A/C Opening with ABL
M/s Sardar Enterprises

Proprietorship
313, Circular Road, General Bus Stand,
Badami Bagh, Lahore.
Mr. Jawad Rashid S/o Sh. Muhammad
Rashid
35200-1439702-5
05-16-0148966-6
7183-2
29-03-2001
M/s Sardar Enterprises indulged in the business of import of tubes/tyres of M/s Good Year,
Hankook, Continental, Dunlop and Yokohama brands. They are approved supplier/Contractor of
Army and also meet the local market requirements. Prior to our bank, the party was availing
credit facilities from Prudential Commercial Bank Limited and Doha Bank Limited. Later on,
party approached our bank B/O Badami Bagh, Lahore for some credit lines. The requested
proposal of the party has been initially sanctioned vide letter No. CO/CD-P/FS/1021 dated
30.6.2001 detail as under:
NATURE & AMOUNT OF LIMIT
Letter of Credit (Sight)

Running Finance
Cash Finance
Rs.100.000 (M)
Rs. 30.000 (M)
Rs. 25.000 (M)
78
Later on the limit of the party was renewed in 2002 and subsequently in 2003 to avoid
classification but due to poor repayment behaviour of the party, the account became stuck up and
eventually classified. After one year default, the party requested us for restructuring the account
and was restructured vide letter CO/SAMD/MTR/5330 dated 22.12.2004 valid upto 31.12.2005
detail as under.
Allied Bank
Ref: XYZ
July 31, 2006
Nature of
Amount of
Finance/Facilities
Limit
Running
Finance
(Renewal)
Rs.30.000 M
Margin
Mark Up / Commission
Expiry
Date of Final
Adjustment
25% on
4% P.A. plus average 6
stock
months KIBOR rate with
31.12.2005
30.01.2006
floor of 7% PA
L/C Sight (Renewal
with reduction)
As per Banks latest

Rs.50.000 M
NIL
schedule of charges
Date of
31.12.2005
maturity /
Lodgement of
each bill
FIM 60 days (fresh)

Rs.20.000 M
20% cash
60 days from
at the time
of each
floor of 7% P.A.
FIM
5.00% P.A. plus average 6
One and half
31.12.2005
creation of each
FIM
DF-I
(fresh)
Conversion
of
Rs.22.000 M
NIL
existing cash finance
months KIBOR RATE
30.06.2006
floor of 10%
date of creation
limit of Rs.25.000 M
FIM-II
of D.F.
(fresh)
Conversion
of

Rs.24.000 M
NIL
existing forced FIM

and
year from the
months KIBOR rate floor
Six months
31.07.2005
o 10% P.A.
from the date of

creation of
additional
FIM-II
Rs.8.000 M
FATR
45
days
(fresh) for obtaining

delivery of stocks
held against forced
FIM
Demand

Rs.7.000 M
25% on
stocks
floor of 7% P.A.
31.12.2005
31.12.2005
79
Finance only
** DF-I represents conversion of existing outstanding cash finance outstanding for Rs.22.000 M
to be repaid in 06 quarterly installments of Rs.3.670 M each, commencing from 31.03.2005
along with mark up thereupon to be recovered on quarterly basis.
FIM-II represents conversion of outstanding Forced finance and additional amount of Rs.8.000
M approximately for payment of Government taxes / Custom Duties to be repaid within six
months from the date of disbursement, but not later than 31.07.2005 along with mark up
thereupon.
Allied Bank
Ref: XYZ
July 31, 2006
Security Clause:
Principal Security:
1.
Running Finance:
Hypothecation of Stock of Tyres and Tubes duly insured with banks clause.
2.
L/C Sight:
Lien on valid import documents covering import of tyres and tubes H.R. Coils & Zine.
3.
FIM (60 DAYS):

20% cash margin at the time of creation of each FIM and banks lien on goods imported
through the bank, to be pledged at Public Bonded Warehouse under control of Banks
approved Muaqaddam. This facility will be allowed against pledge of fresh imported
marketable stock.
Principal of Security against DFI, FIM-II and FATR:
1. DF-I and FIM-II are to be secured against pledge of stock already held by the bank
under the head cash Finance and Forced FIM valuing of Rs.44.400 M as per stock
evaluation reports dated 29.06.04 submitted by M/s Dimen Associates Pvt. Ltd. PBA
80
approved valuer (Stock pledged to be delivered through delivery order against

appropriate amount.
2. Against FATR facility, delivery orders will be issued to the borrowers on revolving
basis to get the pledged stock against Forced FIM and DFI
Collateral Securities:
1. Token registered mortgage for Rs.0.100 M and remaining amount equitable
mortgage of following four properties:
Description of Property
Named of PBA
Market
Forced Sale
evaluator & date
Value
Value
dated
10.481
9.000
23.066
of Valuation
Residential Property H. No. 230,231 Block N, New
Dimen Associates
Samanabad Scheme Lahore in the name of Sardar
Pvt.
Begum measuring 1 Kanal 4 Marlas.
19.11.2004
Bungalow No. 304 K, Block Phase # 1, D.H.A.
Dimen Associates
Lahore in the name of Mrs. Naveed Jamal
Pvt.
measuring 2 Kanals
19.11.2004
Double Storey/Commercial shop / show room at
Dimen Associates
312 Circular Road, Lahore in the name of Mr. Javed
Pvt.
Rashid
19.11.2004
Shop No. 14 Dina Nath mansion Maclagor Road,
Dimen Associates
Nila Gumbad, Lahore owned by Sheikh Jawed
Pvt.
Rashid measuring 2 Marlas
19.11.2004
Total:
Ltd.
Ltd.
Ltd.
Ltd.
dated
20.000
34.965
30.000
21.937
19.000
90.449
78.000
dated
dated
Allied Bank
Ref: XYZ
July 31, 2006
Detail of outstanding liabilities of the Party As On 12.07.06
M. UP
81
IN
MEMORANDUM
ACCOUNT
31.03.06
Period of Mark up
Recoverable
Nature of Limit
Principal
RF
29.955
10.011
01.07.03 to 30.06.06
DF
9.582
8.939
01.07.02 to 26.02.05
and 01.10.05 to
30.06.06
FIM II
11.837
4.940
Mark up on old
forced FIM before
restructuring and
upto 30.06.06
FATR
6.620
0.750
21.10.05 to 30.06.06
TOTAL
57.994
24.640
That through aforesaid Offer Letter dated 28-08-2003 (Annex-C above) the Defendant
No.1 was also granted a limit for establishment of Letter of Credit for Import of Tyres
and Tubes Inland for the aggregate amount equivalent to US$. 173,500. The aforesaid
Limit was also continued in the limit of Rs.80.0 million through the aforesaid Offer Letter
dated 2-08-2004 (Annex- C/2 above). Against this limit of Letter of Credit, Plaintiff
established on the request and on behalf of the Defendant No.1 various Letters of Credit.
The Defendant No.1 undertook to make available the funds required for payment under
the L/Cs to be established at the request of Defendant No.1 and to take all steps
necessary for the release of the documents at the appropriate time.
82
Particulars of FIM A/C M/s Sardar Enterprises as per Section 9(3) of the Ordinance, 2001 are
as under:
(i) Principal amount of finance availed by
23,978,559
Defendant No. 1
(ii)
Principal
Amount
paid
by
the
11,961,764
Defendant No. 1
Dates of Payments/Adjustment
Amount paid in Rupees
=Statement of A/C attached=

(iii) Principal Amount payable ( i-ii )
Rs. 11,836,795
(iv) Mark up payable upto 31-01-07
Rs. 6,932,275
(v) Mark up paid
Rs. 523,931
(vi) Balance mark up upto 31-01-07 (iv-v)
Rs. 6,408,344

and markup payable (iii+vi)
Rs. 18,245,139
83
Particulars of Running Finance A/C M/s Sardar Enterprises as per Section 9(3) of
the Ordinance, 2001 are as under:
(i)
Principal
amount
of
finance
Rs. 259,345,258
(ii) Principal Amount paid by the
Rs. 229,388,523
availed by Defendant No. 1

Defendant No. 1
Rs. 29,956,735
Rs. 21,671,046
(v) Mark up paid
Rs. 9,174,761
(vi) Balance mark up up to 31-01-07 (iv-v)
Rs. 12,496,285

Rs. 42,453,020
84
Particulars of Demand Finance A/C M/s Sardar Enterprises as per Section 9(3) of the
Ordinance, 2001 are as under:
Rs. 22,692,616
Defendant No. 1
(ii)
Principal
Amount
paid
by
the
Rs. 13,109,736
Defendant No. 1
Rs. 9,582,880
Rs. 11,070,557
(v) Mark up paid
Rs. 1,279,884
(vi) Balance mark up up to 31-01-07 (iv-v)
Rs. 9,790,673

and markup payable ( iii+vi )
Rs. 19,373,553
85
Particulars of F.A.T.R A/C M/s Sardar Enterprises as per Section 9(3) of the Ordinance, 2001
are as under:
Rs. 6,620,099
Defendant No. 1
(ii)
Principal
Amount
paid
by
the
Rs. NIL
Defendant No. 1
Rs. 6,620,099
Rs. 1,140,207
(v) Mark up paid
Rs. NIL

Rs. 1,140,207

Rs. 7,760,306
86
87
Note for personal use.

1. Sanction Advice for original facilities not available. (First Sanction Advice No.
CO/CD-P/FS/1021 dated 30-6-2001 (Annex-B) made available indicates that
facilities were inter alia being renewed.
2. Documents under Sanction Advice No.CO/CD-P/FS/1021 dated 30-6-2001 (AnnexB) for Running Finance of Rs.30.00 million (Running Finance) and Cash Finance to
the tune of Rs.25.00 million are undated and blank. Documents date should be 01-072001.
3. Facilities and their renewal:
(I)
Facilities of Running Finance, Cash Finance and L/c limit approved vide
above Sanction Advice dated 30 06-2001 were valid upto 30-6-2002,
(II)
Above facilities were renewed six months after maturity i.e.30-6-2002

vide approval No. CO/CD-P/MNA/3188 dated 31.12.2002 (Annex-B/2).
The renewed facilities were valid upto 30-06-2003 (only for six months).
However, apparently in the Financing Agreements, marked up price
includes mark up for one year.
(III)
About one & half year after expiry/ maturity dates of 30-06-2003 above
three
facilities
were
restructured/rescheduled
vide
approval
No.
COS/SAMD/MTR/5330 dated 22.12.2004 (Annex-B/4) and the Facility

Offer Letter No. BBL/FE/2004/754 dated 23-12-2004 (Annex-B/5) as
amended by the Sanction Advice No.COS/SAMD/MTR/745 dated
07.02.2005(Annex-B/6),
(a) Running Finance was again renewed and continued till 31-12-2005,
(b) Cash Finance (principal amount) was converted into a Demand
Finance of Rs. 22.00 m. Over due mark up of Cash Finance has been
included in the Statement of account of mark up pf Demand Finance
and being claimed in suit.
(c) Regularization of Forced FIM (FIM-II). Under L/c Limit under
Advice No. CO/CD-P/MNA/3188 dated 31.12.2002 (Annex-B/2
above) Plaintiff established L/c for import of Tyres and Tubes. On
receipt of the shipping documents under six (6) L/Cs Borrower failed
to get released the imported goods by making any corresponding
payment thereof and resultantly ABL had to make payment to the
beneficiaries of the said 6 L/Cs by creating forced FIM which was
regularized by grant of FIM-II of Rs.24.00 million.
Documents not provided,
* Bill of Exchange/Drafts received with shipping
88
documents (ABL says that as they are drawn on ABL there

is no need to provide the same,
* Packing List dated 25-07-2003 (Annex-E/6D) under L/c
No. 2003/8421-7/LBBB/0212 (Annex-E/6A).
*Bill of Lading dated 30-05-2003
(Annex-E/9E) under
Letter of Credit No.2003/8424-0/LBBB/0212 (AnnexE/9A).

(d)
FATR-Limit of Rs.7.00 million. Financial limit of Finance

Against Trust Receipt (FATR-Limit) of Rs.7.00 million.
This Limit was granted for obtaining delivery by the
Defendant No.1 of the stocks pledged with the Plaintiff
against the aforesaid Demand Finance of Rs.22.00 million
and FIM-II of Rs.24.00 million mentioned above.
4. Almost 50% documents are undated, contains blank spaces and not witnessed.
+++
6.
Plaintiff, vide Sanction Advice No. CO/CD-P/FS/1021 dated 30-6-2001 (Annex-B) as

amended by the Corrigendum No. CO/CD-P/1689 dated 10-7-2001 (Annex-B/1) had
allowed to the Defendant limits of the Letter of Credit (Sight) of Rs.100.00 million (L/c
Limit), Running Finance of Rs.30.00 million (Running Finance) and Cash Finance to the
tune of Rs. 25.00 million (Cash Finance). Above limits were fully utilized by and
disbursed to the Defendant No.1.
89
(ii).
(iii)
The amounts presently outstanding and payable under the Running Finance are as under:
(i)
Rs. 29,956,735.00
(ii)
Markup outstanding.
Rs. 12,496,285.00
(iii)
Rs. 42,453,020.00
Particulars as per Section 9(3) of the Ordinance, 2001 are as under:
(i) Principal amount availed.

Rs. 259,345,258.00
(ii) Principal Amount paid(Payments Rs. 229,388,523.00
dates are given in the statement of Account).
(iii) Principal Amount payable( i-ii )
(v) Mark-up paid.
(Dates of payments
Shown in the Statement of
Account)
(vi) Balance mark up
up to 31-01-07 (iv-v)
and markup payable (iii+vi).
Rs. 29,956,735.00
Rs. 21,671,046.00
Rs.9,174,761.00
Rs. 12,496,285.00
Rs. 42,453,020.00
+++ Rs. 22,692,616.00

(i) Principal amount availed
Amount & dates of payments
given in the relevant statement
Of Account.
Rs. 22,692,616.00
Rs. 13,109,736.00
(iii) Principal Amount payable ( I-ii )

(v) Mark up paid.
Amount & dates of payments
Given in the relevant statement
Of Account.
Rs. 9,582,880.00
Rs. 7,296,357.00
Rs. 1,279,884.00
(vi) Balance mark up up to 31-01-07 (iv-v) Rs. 6,016,473.00
90
and markup payable ( iii+vi )
Rs. 15,599,353.00
91
__________________
(i)

of Account).
31.01.2007.
(v) Markup paid
of Account).
(iv-v).
and markup payable
(iii + vi above).
(i) Principal amount of finance availed.

Rs.23,978,559.00
(ii) Principal Amount paid. Amount & Rs.11,961,764.00
dates of payments given in the relevant
statement
Of Account.
Rs. 11,836,795.00
Rs. 6,932,275.00
(v) Mark up paid. Amount & dates of Rs. 523,931.00
payments given in the relevant
StatementOf Account.
Rs. 6,408,344.00

Rs. 18,245,139.00
92
(i)
Rs.23,978,559.00
Rs.11,961,764.00

of Account).
Rs. 11,836,795.00

31.01.2007.
Rs. 6,932,275.00
(v) Markup paid
Rs. 523,931.00

of Account).
(iv-v).
Rs. 6,408,344.00
Rs. 18,245,139.00
and markup payable

(iii + vi above).
93

Rs. 6,620,099.00
Rs. NIL
Rs. 6,620,099.00
Rs. 1,140,207.00
(v) Mark up paid
Rs. NIL
(vi) Balance mark up upto 31-01-07 (iv-v) Rs. 1,140,207.00
Rs. 7,760,306.00
Rs. 6,620,099.00
Nil
Rs. 6,620,099.00

31.01.2007.
Rs. 1,140,207.00
(v) Markup paid
Nil

(iv-v).
Rs. 1,140,207.00

and markup payable
(iii + vi above).
Rs. 7,760,306.00
94
Certified and verified on oath that the entries contained in the above Statement of Account are
true copies of the above entries/of the accounts books/ledger maintained by the bank in the
ordinary and normal course of business and the books and ledger wherefrom above entries have
been copied are still in the custody of the bank.
_____________________(name).
________________________
Allied Bank Limited
Badami Bagh,
Lahore.
Dated_________.
____________________(name).
Branch Manager,
Allied Bank Limited
Badami Bagh,
Lahore
Dated______________.
95
(I)
Running Finance Facility:

(a)
Agreement for Financing dated 08-01-2005 (Annex-B/4). Para 1

Blank.
(b)
Promissory Note dated 08-01-2005 (Annex- B/5). To be dated and

witnessed.
(c)
Letter of Hypothecation dated 08-01-2005 (Annex- B/6). To be

dated and witnessed & Schedule of goods blank.
(d)
Agreement for Sale and Buy-Back of Marketable Securities dated

08-01- 2005 (Annex- B/7). To be dated , witnessed & blank spaces
to be filled in.
(e)
Statement of Account for mark-up of the Running Finance Facility

Annex- B/9. To be replaced by starting from 28-02-2005.
(II)
Demand Finance:
(a)
Agreement for Financing dated 08-01-2005 (Annex-C). Wrong

date of repayment given i.e 31-12-2005 & Para 1 Blank.
(b)
Promissory Note dated 08-01-2005 (Annex- C/1). To be dated and

witnessed.
(c)
Letter of Pledge dated 08-01-2005 (Annex- C/2). To be dated and

witnessed, Blank spaces, Schedule of goods blank.
(d)
From the Statement of Account for mark-up of the Demand

Finance (Annex-C/5), over due mark up of the Cash Finance
aggregating Rs.3,774,200.00 to be deleted.
(III)
(a)

Missing
(b)
Bill of Exchange/Draft dated ______ (AnnexE/6F). To be replaced by correct one.
(IV) FIM-II facility.

(a)
Agreement for Financing dated 08-01-2005 (Annex-E/10).

Date of Repayment to be filled in para 3 & Para 1
Blank.
(b)
Promissory Note dated 08-01- 2005 (Annex-E/11). To be

dated and witnessed.
(c)
Letter of Pledge dated 08-01- 2005 (Annex- E/12). To be
96
dated and witnessed, Blank spaces, Schedule of goods blank.
(V) (FATR-Limit) of Rs.7.00 million.

(a)
Agreement for Financing dated 08-01-2005 (Annex-F).

Date of Repayment to be filled in para 3 & Para 1
Blank .
(b)
Promissory Note dated 08-01- 2005 (Annex- F/1). To be dated

and witnessed.
(c)
Trust Receipt dated 28-10-2005 (Annex-F/2) for

Rs.2,950,099.00 and Trust Receipt dated 28-10-2005
(Annex-F/3) for Rs.3,670,000.00. Values of the Goods
released to be given.
(V)
All statement of accounts to be verified by the Manager of Badami

Bagh Branch.
(VI)
Guarantees
(a)
Guarantee dated 08-01-2005 by Jawad Rashid (Annex- K). To be

dated, witnessed and blank spaces to be filled in.
(b)
Guarantee dated 08-01-2005 by Haji Javed Rashid (Annex- K /1).

To be dated.
(c)
Guarantee dated 08-01-2005 by Mst Sardar Begum (Annex- K /2).

To be dated.
(d)
Guarantee dated 08-01-2005 by Mrs. Naveed Jamal (Annex- K /

3). To be dated.
97
I.
Name of the Branch Manager and one other officer with

designation of ABLs
branch
at
Badami
Bagh,
Lahore.
II.
Copies of the Power of Attorney of above Branch

Manager and officer along with the copies of authorities
on the basis whereof said Power of Attorney were granted
on behalf of ABL.
III.
Copy of the Letter dated whereby the above said officer

was appointed/designated as the Chief Manager/Branch
Manager of the aforesaid branch.
98
ZAFAR, IQBAL & RAJA

ADVOCATES AND LEGAL CONSULTANTS
33-C Main Gulberg
Lahore, Pakistan
Tel.: (042) 575-0074 and (042) 575-0208
Fax: (042) 575-0175
E-mail: zir@zirlaw.com
Walid Iqbal
Salman Akram Raja
MR. Tariq Mehmood Sheikh,

VP/Manager Sam Branch,
Allied Bank Limited,
199-Upper Mall, Lahore.
Subject:
06 April 2007
Filing of Suit against M/s. Sardar Enterprises.
Dear Sir,
Please refer to the captioned matter.
It may kindly be recalled that in the Statement of Account for the mark-up of the Demand
Finance, the over due mark up of the earlier Cash Finance aggregating Rs.3,774,200.00
(Rs.1,867,000.00 for the period from 01-07-02 to 31-12-02 & Rs.1,907,200.00 for the period
from 01-01-03 to 30-06-03) has been included.
We have been advised to file a suit for recoveries of the facilities approved vide approval
No. COS/SAMD/MTR/5330 dated 22.12.2004, the Facility Offer Letter No. BBL/FE/2004/754
as amended by the Sanction Advice No.COS/SAMD/MTR/745 dated 07.02.2005 and the
documents dated 08-01-2005 executed in pursuant to the above approval. Under the above
approval, ABL had granted to the M/s. Sardar Enterprises inter alia the aforesaid new Demand
Finance to the tune of Rs.22.00 million in lieu of and by way of restructuring of the aforesaid
Cash Finance.
However, at the time of the restructuring of the Cash Finance its then over due mark up
was not included in the Demand Finance and was left un paid.
Accordingly, in our view the said amount cannot be included under the head of the
Demand Finance and claimed on account of Demand Finance. Similarly, the over
due/outstanding mark up of the aforesaid Cash Finance is also likely to be refused by the
Honourable Court by declaring it to be time barred under the law.
In view of the above, you are requested to provide to us a new Statement of Account for
mark-up of the Demand Finance for the period commencing from 8-01-2005 by excluding the
over due mark-up of the aforesaid Cash Finance.
We hope that the above is some of assistance to you.

Yours truly,
99
SALMAN AKRAM RAJA

M.A. (Cantab) LL.M (London)
LL.M (Harvard)
Advocate High Court
100
ZAFAR, IQBAL & RAJA

33-C Main Gulberg
Lahore, Pakistan
Tel.: (042) 575-0074 and (042) 575-0208
Fax: (042) 575-0175
Walid Iqbal
Salman Akram Raja

Subject:
06 April 2007
Dear Sir,
We were advised to file a suit for the recoveries of the outstanding amounts under four
facilities of the Running Finance, Demand Finance, FIM-II and FATR-Limit approved vide
approval No. COS/SAMD/MTR/5330 dated 22.12.2004, the Facility Offer Letter No.
BBL/FE/2004/754 as amended by the Sanction Advice No.COS/SAMD/MTR/745 dated
07.02.2005 and the documents dated 08-01-2005 executed in pursuant to the above approval.
It may kindly be recalled that under the above approval, the above mentioned Demand
Finance to the tune of Rs.22.00 million granted by ABL in lieu of and by way of restructuring of
the then outstanding principal amount an earlier Cash Finance of Rs.25.00 million.
On perusal of the Statement of Account for mark-up of the Demand Finance, it was
observed that the over due mark up of the ear
lier Cash Finance for the following periods has been included:
(a)
from 01-07-02 to 31-12-02
Rs.1,867,000.00
(b)
from 01-01-03 to 30-06-03
Rs.1,907,200.00
(c)
from 01-07-03 to 08-01-05 (556 days)
Rs.3,552,092.00 (approximately)
Total. Rs.7,326,292.00
Thus it appears that through the aforesaid restructuring of the Cash Finance its then over
101
due mark up was not restructured and included in the Demand Finance and was left un paid.
Furthermore, the aforesaid amounts of Rs.1,867,000.00 & Rs.3,552,092.00 charged as
mark-up of the Cash Finance for the period from 01-07-02 to 31-12-02 and from the period from
01-07-03 to 08-01-05 respectively are not covered under any sanction advice/Agreement for
financing as:
(a)
Cash Finance approved vide Sanction Advice dated 30-06-2001 was valid
upto only 30-6-2002 and was not renewed for the period from 01-07-02 to
31-12-02,
(b)
Cash Finance approved/renewed through the Sanction Advice dated 31

12-2002 was valid upto 30-6-2003 and was not renewed for the period
from 01-07-03 to 08-01-05 (556 days).
It is opined that the courts do not grant any mark up which is beyond the contract period/
charged for the period after the date of expiry of agreements for financing.
Similarly, copies of the Agreements for Financing and other charged and security
documents executed for the Cash Finance under Sanction Advice No.CO/CD-P/FS/1021 dated
30-6-2001 and the Sanction Advice No. CO/CD-P/MNA/3188 dated 31.12.2002 were not
furnished to us as we were advised to file suit for recovery of the outstanding amounts of four
facilities approved under the Sanction Advice No.COS/SAMD/MTR/745 dated 07.02.2005 and
the documents dated 08-01-2005 executed in pursuant to the above approval. .
Accordingly, in our view the aforesaid approximate amount of Rs.7,326,292.00 cannot
be included under the head of the Demand Finance and claimed as mark up of the Demand
Finance.
If ABL desires that the aforesaid over due/outstanding mark up of the Cash Finance be
included in the suit amount, copies of the Agreements for Financing and other charged and
security documents executed for the Cash Finance under Sanction Advice No.CO/CD-P/FS/1021
dated 30-6-2001 and the Sanction Advice No. CO/CD-P/MNA/3188 dated 31.12.2002 along
with the Statements of Account for the principal amount and mark up of the Cash Finance be
furnished to us.
However, in our view ABL should file separate suit for recovery of the mark up of the
Cash Finance, and if agreed, a new Statement of the Account of the mark up of the Demand
Finance from the period 08-01-2005 by excluding the over due mark-up of the aforesaid Cash
Finance along with the documents as per lists provided to Mr. ______ of your branch may kindly
be furnished to us at the earliest.
102
Yours truly,
SALMAN AKRAM RAJA

LL.M (Harvard)
Advocate High Court
103
Note for personal use.

Sanction Advice for original facilities not available. (First Sanction Advice No. CO/CDP/FS/1021 dated 30-6-2001 (Annex-B) made available indicates that facilities were inter
alia being renewed.
copies of the Agreement for Financing and other charged and security documents
executed for the Cash Finance under Sanction Advice No.CO/CD-P/FS/1021 dated 30-62001
5. Facilities and their renewal:
(I)
Facilities of Running Finance, Cash Finance and L/c limit approved vide
above Sanction Advice dated 30 06-2001 were valid upto 30-6-2002,
(II)
Above facilities were renewed six months after maturity i.e.30-6-2002

vide and the Sanction Advice No. CO/CD-P/MNA/3188 dated 31.12.2002
(Annex-B/2). The renewed facilities were valid upto 30-06-2003 (only for
six months). However, apparently in the Financing Agreements, marked
up price includes mark up for one year.
(III)
About one & half year after expiry/ maturity dates of 30-06-2003 above
three
facilities
were
restructured/rescheduled
vide
approval
No.
COS/SAMD/MTR/5330 dated 22.12.2004 (Annex-B/4) and the Facility

Offer Letter No. BBL/FE/2004/754 dated 23-12-2004 (Annex-B/5) as
amended by the Sanction Advice No.COS/SAMD/MTR/745 dated
07.02.2005(Annex-B/6),
(a) Running Finance was again renewed and continued till 31-12-2005,
(b) Cash Finance (principal amount) was converted into a Demand
Finance of Rs. 22.00 m. Over due mark up of Cash Finance has been
included in the Statement of account of mark up pf Demand Finance
and being claimed in suit.
(c) Regularization of Forced FIM (FIM-II). Under L/c Limit under
Advice No. CO/CD-P/MNA/3188 dated 31.12.2002 (Annex-B/2
above) Plaintiff established L/c for import of Tyres and Tubes. On
receipt of the shipping documents under six (6) L/Cs Borrower failed
to get released the imported goods by making any corresponding
payment thereof and resultantly ABL had to make payment to the
beneficiaries of the said 6 L/Cs by creating forced FIM which was
regularized by grant of FIM-II of Rs.24.00 million.
Documents not provided,
* Bill of Exchange/Drafts received with shipping
documents (ABL says that as they are drawn on ABL there
104
is no need to provide the same,

* Packing List dated 25-07-2003 (Annex-E/6D) under L/c
No. 2003/8421-7/LBBB/0212 (Annex-E/6A).
*Bill of Lading dated 30-05-2003
(Annex-E/9E) under
Letter of Credit No.2003/8424-0/LBBB/0212 (AnnexE/9A).

(d)
FATR-Limit of Rs.7.00 million. Financial limit of Finance

Against Trust Receipt (FATR-Limit) of Rs.7.00 million.
This Limit was granted for obtaining delivery by the
Defendant No.1 of the stocks pledged with the Plaintiff
against the aforesaid Demand Finance of Rs.22.00 million
and FIM-II of Rs.24.00 million mentioned above.
4.
Almost 50% documents are undated, contains blank spaces and not
witnessed.
Rs.1,867,000.00 charged for the period from 01-07-02 to 31-12-02 & Rs.1,907,200.00
charged for the period from 01-01-03 to 30-06-03
Rs.1,907,200.00
105
Note
a. Agreement for Financing dated 08-01-2005 (AnnexB/4) in terms whereof the agreed Purchase Price of
Rs.33,000,000.00 was to be paid by the Defendant No.1
in lump sum on or before 31-12-2005. Full amount of
Rs.30.00 million was disbursed to and utilized by the
Defendant No.1.
(a) Agreement for Financing dated 08-01-2005 (Annex-C) in terms whereof the agreed
Purchase Price of Rs.24,200,000.00 was to be paid by the Defendant No.1 on or before
31-12-2005 in lump sum. Full amount of Rs.22.00 million was disbursed to and utilized
by the Defendant No.1.
(a)
Agreement for Financing dated 08-01-2005 (Annex-E/10) in terms
whereof the agreed Purchase Price of Rs.26,640,000.00 was to be
paid by the Defendant No.1 on or before 31-07-2005 in lump sum.
(b) (a)
Agreement for Financing dated 08-01-2005 (Annex-F) in terms whereof the
agreed Purchase Price of Rs.7,700,000.00 was to be paid by the Defendant No.1 on or
before 31-12-2005 in lump sum.
In pursuance of the above approval, inter alia, the following documents were executed
for the Cash Finance:
(a)
Agreement for Financing dated 30-06-2001 (Annex-). Full amount

of Rs.25.00 million was disbursed to and utilized by the Defendant
No.1.
(b)
Promissory Note dated 30-06-2001 (Annex-).
(c)
Letter of Pledge dated 30-06-2001 (Annex-).
106
12.
That in consideration of and as security for the finance facilities granted by the Plaintiff
to the Defendant No.1 under the aforesaid approval No. COS/SAMD/MTR/5330 dated
07.02.2005 (Annex-B/2 above), Sanction Advice No. CO/CD-P/MNA/3188 dated
31.12.2002 (Annex-D above), Sanction Advice dated 30.6.2001 (Annex-F/A above) as
amended by the Corrigendum No.CO/CD-P/1689 dated 10-7-2001 (Annex-F/A/1 above)
including the aforesaid Running Finance, Demand Finance, FIM-II, FATR-Limit and
Cash Finance facilities that are the subject matter of the titled suit and mentioned in
paras- 6 to 10 above, the Defendant Nos.1 to 4 also executed in favour of the Plaintiff
Bank the following Guarantees:
i. Guarantee dated 30-06-2001 by the Defendant

No.1 (Annex-K).
ii. Guarantee dated 30-06-2001 by the Defendant
No.2 (Annex-K/1).
iii. Guarantee dated 30-06-2001 by the Defendant
No.3 (Annex- K /2).
iv. Guarantee dated 30-06-2001 by the Defendant
No.4 (Annex- K /3).
v. Guarantee dated 31-12-2002 by the Defendant
No.1 (Annex- K /4).
vi.
Guarantee dated 31-12-2002 by the Defendant

No.2 (Annex- K /5).
vii. Guarantee dated 31-12-2002 by the Defendant

No.3 (Annex- K /6).
viii. Guarantee dated 31-12-2002 by the Defendant
No.4 (Annex- K /7).
ix. Guarantee dated 08-01-2005 by the Defendant
No.1 (Annex- K /8).
x. Guarantee dated 08-01-2005 by the Defendant
No.2 (Annex- K /9).
xi. Guarantee dated 08-01-2005 by the Defendant
No.3 (Annex- K /10).
xii. Guarantee dated 08-01-2005 by the Defendant
No.4 (Annex- K /11).
12.
That in consideration of and as security for the aforesaid Running Finance,
Demand Finance, FIM-II and FATR-Limit extended to and availed by Defendant No.1
107
and specified in the above paras- 6 to 9 above, the Defendant Nos.1 to 4 also executed in
favour of the Plaintiff Bank the following Guarantees:
i. Guarantee dated 08-01-2005 by the Defendant No.1 (Annex- K).
ii. Guarantee dated 08-01-2005 by the Defendant No.2 (Annex- K /1).
iii. Guarantee dated 08-01-2005 by the Defendant No.3 (Annex- K /2).
iv. Guarantee dated 08-01-2005 by the Defendant No.4 (Annex- K /3).
I.
Mr Jawad Rashid (Defendant No.1)

(A).
II.
house constructed thereon and known as Nayyar Manzil bearing
Property/Survey No. N-I-24-S in Khasra No.2093-Min, Hadbust
Mauza Bela Basti Ram, situated at Bearoon Masti Gate, 313
Circular Road, Lahore together with its all present and future

situated at Shahrah - e - Quaid - e - Azam and Maclagon Road,
Lahore together with its all present and future constructions,
fitting, fixtures and installations thereon.
III.

All that piece and parcel of land measuring 1 Kanal , 4 Marlas &
40 Sft along with House constructed thereon bearing Plot No.230231-N situated at 134 Acres Scheme, Samanmabad, Lahore
IV.
Mrs. Naveed Jamal(Defendant No.4)

108

(iii)
(iv)
Rs. 42,453,120.00
Rs.11,517,003.00
Rs. 18,245,139.00
Rs. 7,760,306.00
Rs.7,856,550.00
109
ZAFAR, IQBAL & RAJA

33-C Main Gulberg
Lahore, Pakistan
Tel.: (042) 575-0074 and (042) 575-0208
Fax: (042) 575-0175
Walid Iqbal
Salman Akram Raja

Subject:
06 April 2007
Dear Sir,
Plaint in the suit was finalized on 14-04-2007, after meeting in our office on 1304-2007 by Mr. Sadiq Ali AVP and Mr. Riaz Ahamad officer ABL. Above officers have
conveyed that they would furnish us within three days copies of all documents for
facilities granted in the year 2005, copies of the documents for the Cash Finance executed
on 30-06-2001 and 31-12-2002, Personal Guarantees and mortgage documents executed
on 30-06-2001, 31-12-2002 and 8-01-2005, copies of the Power of Attorney of the
Branch Manager and one other officer of ABLs branch situated at Badami Bagh, Lahore
along with the copies of authorities on the basis whereof said Power of Attorney were
granted on behalf of ABL and copy of the letter whereby the incumbent Manager was
appointed/designated as the Chief Manager/Branch Manager of the aforesaid branch.
On 16-04-2007, it was again conveyed to us that the copies of the above
documents are being prepared and same would be provided within two days.
Matter was also discussed with you over telephone on 17-04-2007, 18-04-2007 &
19-04-2007.
However, copies of the above documents are still awaited.
It is requested that the above document may kindly be furnished at the earliest.
110
Yours truly,
SALMAN AKRAM RAJA

LL.M (Harvard)
Advocate High Court
The aforesaid Mr. Mohammad Arshad Khan being the Branch Manger of the Plaintiffs aforesaid
branch at Badami Bagh, Lahore is also authorized to institute the titled suit and to sign
and verify the plaint on behalf of the Plaintiff under Section 9(1) of the Financial
Institutions (Recovery of Finances) Ordinance, 2001. Copy of the Letter dated 23-012007 whereby the above said Mr. Mohammad Arshad Khan was posted as Manager of
the aforesaid branch of the Plaintiff Badami Bagh, Lahore is attached as Annex-A/2. A
copy of the Memorandum and Articles of Association of the Plaintiff is also annexed
herewith as Annex-A/3)
111
ZAFAR, IQBAL & RAJA

33-C Main Gulberg
Lahore, Pakistan
Tel.: (042) 575-0074 and (042) 575-0208
Fax: (042) 575-0175
Walid Iqbal
Salman Akram Raja

Subject:
06 May 7
Dear Sir,
It is requested that the following persons may kindly visit our office on 07-062007 at 2.30 p.m for signing the plaint, application for attachment/affidavit and certifying
Statements of Accounts;
(i)
Mr. Mohammad Arshad Khan Branch Manager ABL, Badami Bagh

Branch, Lahore,
(ii)
Syed Muhammad Mujtaba Ahmed Gillani Relationship Manager of the

Sam Branch, of ABL 199-Upper Mall, Lahore.
(iii)
Officer of the ABL, Badami Bagh Branch, Lahore who have signed the
Statements of Accounts already furnished to us.
Above officers may kindly bring with them their official stamps, official stamp of ABL
Badami Bagh Branch, Lahore, stamp for certifying/verifying statements of accounts and
photo copies of their N.I.Cs
Yours truly,
Zafar, Iqbal & Raja.
112
C.C. Mr. Mohammad Arshad Khan Branch Manager ABL, Badami Bagh Branch, Lahore,
Mr. Hamid Zaidi ABL, Badami Bagh Branch, Lahore,
113
114
Note.
C.O.S. No.25-B/2007
ABLV/s Mr Jawad Rashid/M/s. Sardar Enterprises & others
1.
Suit Amount
2.
Authority to institute suit.
Annex-A, A/1 & A/2 pg 24-28.
i.Mr. Mohammad Arshad Khan Manager

Branch Badami Bagh, Lahore
ii. Syed Muhammad Mujtaba Ahmed Gillani ,
officer Grade-I/ Relationship Manager
Branch,199-UpperMall,Lahore.
Annex-A & A/2 pg24 & 28.
3.
Rs.87,832,118.00
Annex-A/1 pg-26.
Facilities.
(A). Running Finance of Rs.30.0M.
Para-6 pg 2-3
I.Total Amount Payable

Rs. 42,453,120.00
(i)
Principal Amount.
Rs. 29,956,835.00
Statements of Account (Current Account)
Annex- B/7 pg 129-134.
(ii)
(iii)
Markup outstanding. Rs. 12,496,285.00

Annex- B/8 pg135.
Particulars as per Section 9(3)
Para 6(b)(iii) pg 3

Annex-B pg 109
Annex-B/1 pg 112
Annex-B/2 pg 116
Annex-B/3 pg 120

with the terms of the above Sanction dtd 07.02.2005).
III. Documents.
Annex- B/4 pg121.
(B) Demand Finance of Rs.22.0 M.

I.Total Amount Payable.
(i)Principal Amount .
Rs.11,517,003.00
Rs. 9,582,880.00
Para7-pg 3-4
115
Rs. 1,934,123.00
(iii) Particulars as per Section 9(3)
Annex-C/4 pg150-151.
Annex-C/5 pg 152
Para 7c(ii) pg 4

B pg 109,B/1 pg 112,-B/2 pg 116 & B/3 pg 120
III. Documents.
Annex-C- C/3b pg136-149

Annex-C pg136
(C) FIM-II of Rs.24.0M.
Para-8 pg 4-8
I.This facility arises out from Import L/c (sight)

limit of Rs. 100.0 M.
i. Sanction of L/c Limit dtd 31-12-2002
ii. Documents of L/c Limit including
shipping documents of six consignments
of imported tyres & tubes & Statements of Accounts
II. Amount Payable against FIM-II. Rs. 18,245,139.00
(i)Principal Amount outstanding.
Para-8(a) (b) pg 4-7

Annex D pg 153-154
Annex E to E/9G pg 155-294
Rs. 11,836.795.00
Annex-E/13pg306-309
Rs. 6,408,344.00
Annex-E/14pg 310
Para 8d(iii) pg 7-8
III. Approvals/sanctions/ Facility Offer Letters etc of FIM-II

B pg 109,B/1 pg 112,-B/2 pg 116 & B/3 pg 120
III. Documents of FIM-II.
Annex-E/10 to E/12c pg 295-305
Agreement for financing dtd 08-01-2005.
Annex- E/10 pg 295
(D) FATR-Limit of Rs.7.0M.
Para-9-pg 8-9

Para-9(a)-pg 8
I.Total Amount Payable. Rs. 7,760,306.00
(i)Principal Amount
Rs. 6,620,099.00
Statements of Account for Account No. 01-540-0144-2
& for Account No. 01-540-0145-3
(ii)Markup outstanding.Rs. 1,140,207.00
Annex-F/4 & F/5 pg322-323

Annex-F/6 pg324.
Para 9d(iii) pg 9
III. Approvals/sanctions/ Facility Offer Letters.

B pg 109, B/1 pg 112,-B/2 pg 116 & B/3 pg 120
III.Documents.
Annex-F to F/3 pg 311-321
i.Agreement for financing dtd 08-01-2005.
Annex- F pg 311
Annex-F/2 pg 316-318
116

Annex-F/3 pg 319
(E) Cash Finance of Rs.25.0M.
Para-10 pg 9-10
I.Amount Payable
Rs.7,856,550.00
(i)Principal Amount outstanding. Nil
Annex- F/A/8 pg 344-348

Rs.7,856,550.00
Annex- F/A/9 pg 349.
(iii) Particulars as per Section 9(3).
Para10b (iii) pg 10

i.Sanction Advice dtd 30.6.2001
ii.Amended sanction dtd10-7-2001
iii.Approval dtd 31.12.2002
Annex-F/A pg 325
Annex-F/A/1 pg 327
Annex-D pg 153
III.Documents.
Annex-F/A/2 to F/A/7 pg 328-343.
Last Agreement for Financing dated 31-12-2002
Annex- F/A/5 336
4.
Mortgages. Para-11 of Plaint by Defendant 1 to 4.
Annex-G to -J/6 pg 350-446
5.
Guarantees.
Annex-K to K /11-pg 447-502.
6. Acknowledgment Letters
Annex- L to L/2 pg 505-506
117
It is submitted that on the request of the Applicant No.1 made through Letter dated 23-112004 (Mark_ ) Plaintiff vide approval No. COS/SAMD/MTR/5330 dated 22.12.2004
(Annex-B to the Plaint) granted to the Defendant No.1 inter alia the Demand Finance to
the tune of Rs.38.00 million in lieu of and by way of restructuring of the aforesaid Cash
Finance. Terms and conditions of the facilities approved through the above approval
were conveyed to the Applicant No.1 through the Facility Offer Letter No.
BBL/FE/2004/754 dated 23-12-2004. Applicant No.1 returned to the Plaintiff returned a
copy of the aforesaid the Facility Offer Letter No. BBL/FE/2004/754 dated 23-12-2004
duly signed by it in acceptance of terms and conditions contained therein (Annex-B/1 to
the Plaint). Later on through the Sanction Advice No.COS/SAMD/MTR/745 dated
07.02.2005 (Annex-B/2 the Plaint) inter alia the amount of the Demand Finance was
reduced to Rs.22.00 million. In acceptance of and for compliance of the terms and
conditions contained in the aforesaid the Sanction Advice No.COS/SAMD/MTR/745
dated 07.02.2005, Applicant No.1 executed the Undertaking dated 22-02-2005 (AnnexB/3 to the Plaint). Accordingly, a lawful agreement was reached between the Plaintiff
and the Defendant No.1 in terms of which Plaintiff inter alia granted to the Defendant
No.1 the aforesaid Demand Finance in lieu of the Cash Finance. In pursuance of the
above approvals and to avail the Demand Finance, Applicant No.1 also executed inter
alia the Agreement for Financing dated 08-01-2005 (Annex-C to the Plaint).
(a)
The Defendant No.1 proceeded to avail funds in terms of the Demand Finance evidenced
by the Statements of Account appended with the Plaint as Annex-C/4. Statement of
Accounts of the aforesaid Cash Finance is attached with the Plaint as Annex-F/A8. The
above Statements of Accounts establish that on 26-02-2005 a sum of Rs.22,010,880.00
was outstanding debit balance against the principal amount of the Cash Finance which
was adjusted on the same day by disbursement of Rs.22,010,880.00 against the Demand
Finance.
118
119
AB etc. (pledgee)
Whereas on _____________ you borrowed Rs. ________ from me on pledge of the
articles mentioned in the inventory below and whereas as per account given below Rs.
_________ are now due to me from you on account of balance of the said debt and interest, I
hereby demand the said amount from you and give you notice that in case you fail to make the
payment by the _______ day of ___________ the said articles shall be sold by the public auction
to the highest bidder at __________ (place) at _______ (time) (or, shall be sold by me privately
at the best obtained price) for realization of my dues and if the same are not satisfied from the
sale proceeds after deducting the expenses incurred in sale or attempted sale the deficiency shall
be recovered from you.
Sd. CD (Creditor)
Inventory above referred to.
120
Mr Jawad Rashid,
Sole Proprietor, M/s. Sardar Enterprises,
313 Circular Road, Badami Bagh, Lahore,
Subject:
Dated __________
Notice of sale of pledged stocks under section 176 of the

Contract Act, 1872.
Sir,
1.
You availed from Allied Bank Limited (ABL) through its branch at Badami Bagh, Lahore
inter alia Demand Finance to the tune of Rs.22.00 million and Finance against Imported
Merchandizes (FIM-II) to the tune of Rs.24.00 million under the terms of two
Agreements for Financing both dated 08-01-2005. Your liabilities in respect of the
Demand Finance and FIM-II facilities were inter alia secured through pledge of stocks
and you executed two separate Letters of Pledge both dated 08-01-2005 for the Demand
Finance and FIM-II respectively. Pledged stocks for the Demand Finance and FIM-II are
lying at the Godown situated at Sidiquee Street opposite Sheranwalla Gate Lahore
(detailed in the Stock Report attached herewith as Annex-A) and the Tanveer Bonded
Ware House situated at Gari Shahoo, Lahore (detailed in the Stock Report attached
herewith Annex-B) respectively.
2.
The above mentioned facilities of Demand Finance and FIM-II expired on 31-12-2005
and 31-07-2005 respectively but you committed default and failed to liquidate and adjust
the aforesaid facilities. As per details given below an aggregate sum of Rs.29,762,172 is
due to ABL from you:
A.
B.
3.
Demand Finance.
(i)
Rs. 9,582,880.00
(ii)
Markup outstanding.
Rs. 1,934,123.00
(iii)
Rs.11,517,003.00
FIM-II.
(i)
Rs. 11,836.795.00
(ii)
Markup outstanding.
Rs. 6,408,344.00
(iii)
Rs. 18,245,139.00
You are given notice to make payment of the aforesaid aggregate sum of Rs.29,762,172
on or before 11-11-2007. Take notice that in the event of your failure to pay the above
amount of Rs.29,762,172 by the aforesaid date of 11-11-2007, the pledged stocks shall be
sold by ABL through public auction at the best offered price to the highest bidder at
__________ (place) and at _______ (time) for realization of the aforesaid dues of ABL
121
and if the same are not satisfied from the sale proceeds after deducting the expenses
incurred in sale or attempted sale the deficiency shall be recovered from you.
Sd.
For and on behalf of
M/s Allied Bank Limited
Enclosures as above.
122
RAJA MOHAMMED AKRAM & CO.

33-C Main Gulberg
Lahore, Pakistan
Tel.: (042) 575-0074 and (042) 575-0208
Fax: (042) 575-0175
SALMAN AKRAM RAJA
M.A.(Cantab) LL.M (London)

LL.M (Harvard)
Mr. Asim Hafeez,

Asim Hafeez & Associates,
Advocates, Solicitors & Legal Consultants,
E-Plomer Building,
26 Shahrah-i-Quaid-i- Azam,
Lahore.
SUBJECT:
NOMAAN AKRAM RAJA
LL.B (Hons) London

Barrister-at-Law, Advocate
07-02- 2008
Reply on behalf of M/s Allied Bank Limited (ABL) to your letter dated
15-12-2007 in response to the Legal Notice dated 30-11-2007 under

section 176 of the Contract Act, 1872 served upon Mr. Jawad Rashid,
sole proprietor of M/s. Sardar Enterprises.
Dear Sir,
We have received your reply dated 15-12-2007 to the Legal Notice dated 30-11-2007
served upon by ABL (our client) to your client Mr Jawad Rashid, Sole Proprietor, M/s. Sardar
Enterprises.
Our client has instructed us to reply to your aforesaid reply dated 15-12-2007 in the
following terms:
First, it is conveyed to you that contents of your letter dated 15-12-2007 are based on
incorrect and misleading information provided to you by your client as well as on incorrect
interpretation of law.
Secondly, it is totally incorrect to suggest that, due to pendency of C.O.S No.25/2007, our
client cannot sell the stocks pledged with it as security for the Demand Finance to the tune of
Rs.22.00 million and Finance against Imported Merchandizes (FIM-II) to the tune of Rs.24.00
million availed by your client under the terms of two Agreements for financing both dated 08-012005. It may kindly be noted that, under the law, rights of our client to sue upon the debt or to
sell the pledged stocks are concurrent and not alternative rights and filing of the aforesaid C.O.S
No.25/2007 by our client does not exclude or destroy its right to sell the pledged stocks.
Through the instant reply, it is conveyed to your client that as it has failed to make
payment of the sum of Rs.29,762,172 to our client as demanded through the aforesaid Legal
Notice dated 30-11-2007, our client is proceeding to sell the pledged stocks through two public
auctions on 11-02-2008 at 11.30 a.m and 12.30 p.m at the godown situated at Sidiquee Street
opposite Sheranwalla Gate Lahore and Tanveer Bonded Ware House situated at Gari Shahoo,
123
Lahore respectively at the best offered price to the highest bidders for realization of the aforesaid
dues of our client and if the same are not satisfied from the sale proceeds after deducting the
expenses incurred in sale or attempted sale the deficiency shall be recovered from your client.
However, it is conveyed that, in case the highest bids received at the auctions are acceptable to
our client, your client will be given an opportunity to purchase the pledged stocks at the amount
equivalent to the accepted highest bid(s).
We are retaining a copy of this reply/second notice for further reference and necessary
action.
M/s Allied Bank Limited.
for Raja Mohammed Akram & Co.
124
Mr Jawad Rashid,
Sole Proprietor, M/s. Sardar Enterprises,
313 Circular Road, Badami Bagh, Lahore,
Subject:
Dated __________
Notice of sale of pledged stocks.
Whereas you availed from the Allied Bank Limited (ABL) through its branch at Badami Bagh,
Lahore inter alia the Demand Finance of Rs.22.00 million and Finance against Imported
Merchandizes (FIM-II) of Rs.24.00 million. Aforesaid Demand Finance and FIM-II were inter
alia secured through pledge of the stocks lying at the Godown situated at Sidiquee Street
opposite Sheranwalla Gate Lahore and the Tanveer Bonded Ware House situated at Gari Shahoo,
Lahore and detailed in the Stock Reports attached herewith Annexure-A & B respectively.
Aforesaid Demand Finance and FIM-II expired on 31-12-2005 and 31-07-2005 respectively but
you failed to adjust the same and an aggregate sum of Rs.29,762,172 inclusive of mark-up as per
details given below is due to ABL from you:
A.
Demand Finance.
Rs.11,517,003.00
B.
FIM-II.
Rs. 18,245,139.00
ABL hereby demand the said amount of Rs.29,762,172 from you and give you notice that in
case you fail to make the payment of the aforesaid amount by 11-11-2007 said pledged stocks
shall be sold by ABL through public auction at the best offered price to the highest bidder at
__________ (place) and at _______ (time) for realization of the aforesaid dues of ABL and if the
dues are not satisfied from the sale proceeds of the stocks after deducting the expenses incurred
in sale or attempted sale the deficiency shall be recovered from you.
Sd.
M/s Allied Bank Limited
Enclosures as above.
125
03002014508
126
As stated in paragraph-8 of the Plaint, Plaintiff had also allowed to Defendant No.1 an L/c limit
(Sight) for import of Tyres and Tubes and against this limit, Plaintiff had established various
Letters of Credit for import of Tyres and Tubes. However, on receipt of the shipping documents
under six (6) Letters of Credit by the Plaintiff, Defendant No.1 failed to get released the imported
goods by making any corresponding payment thereof and resultantly Plaintiff had to make
payment of the aggregate sum Rs.18,971,777.00 to the beneficiaries of the said six (6) L/Cs by
allowing to the Defendant No.1 the aforesaid finance facility of forced FIM-II (refer Statement
of Accounts attached to the Plaint as Annex-E/1E, E/2E, E/3E, E/4E, E/5G, E/6F, E/7G, E/8G,
E/9F and E/9G). Subsequently, Applicant No.1 through the aforesaid Letter dated 23-11-2004
(Mark_ above ) not only acknowledged its liability against the forced FIM but also requested
the Plaintiff to convert then existing liability there against the same into Demand Finance .The
said request was accepted by Plaintiff and it vide approval No. COS/SAMD/MTR/5330 dated
22.12.2004 (Annex-B to the Plaint) granted to the Defendant No.1 various facilities including
Demand Finance to the tune of Rs.38.00 million in lieu of and by way of conversion of inter alia
the aforesaid FIM. Terms and conditions of the facilities approved through the above approval
were conveyed to the Applicant No.1 through the Facility Offer Letter No. BBL/FE/2004/754
dated 23-12-2004 and Applicant No.1 returned to the Plaintiff a copy of the aforesaid the
Facility Offer Letter duly signed by it in acceptance of terms and conditions contained therein
(Annex-B/1 to the Plaint). Later on through the Sanction Advice No.COS/SAMD/MTR/745 dated
07.02.2005 (Annex-B/2 the Plaint) the amount of the Demand Finance was reduced to Rs.22.00
million and Applicant No.1 was inter alia allowed a fresh FIM-II of Rs.24.00 million of by way
of conversion of inter alia the then existing forced FIM as well as by grant of additional amount
of Rs.8.00 million. In acceptance of and for compliance of the terms and conditions contained in
the aforesaid the Sanction Advice No.COS/SAMD/MTR/745 dated 07.02.2005, Applicant No.1
executed the Undertaking dated 22-02-2005 (Annex-B/3 to the Plaint). Accordingly, a lawful
agreement was reached between the Plaintiff and the Defendant No.1 in terms of which Plaintiff
inter alia granted to and the Defendant No.1availed the aforesaid FIM-II of Rs.24.00 million. To
avail the FIM-II, Applicant No.1 also executed inter alia the Agreement for Financing and Letter
of Pledge both dated 08-01-2005 (Annex-E/10 & E/12 to the Plaint). Defendant No.1 proceeded
to avail funds in terms of FIM-II as evidenced by the Statements of Account (Annex-E/13to the
Plaint). The above six Statements of Accounts for L/Cs/forced FIM (Annex-E/1E, E/2E, E/3E,
E/4E, E/5G, E/6F, E/7G, E/8G, E/9F and E/9G to the Plaint ) establish that on 26-02-2005 an
aggregate sum of Rs.17,166,735.00 was outstanding debit balance against the principal amount
of the six L/Cs/forced FIM which was adjusted on the same day by disbursement of
17,166,735.00 against the FIM-II. Further disbursement of Rs.6,631,824.00 was made on 1603-2005. Further submitted that that through the aforesaid approval No. COS/SAMD/MTR/5330
dated 22.12.2004, Facility Offer Letter No. BBL/FE/2004/754 and Sanction Advice
No.COS/SAMD/MTR/745 dated 07.02.2005 Defendant No.1 was also allowed a financial limit
of Finance Against Trust Receipt (FATR-Limit) of Rs.7.00 million. This Limit was granted for
127
obtaining delivery by the Defendant No.1 of the stocks pledged with the Plaintiff against the
aforesaid Demand Finance of Rs.22.00 million and FIM-II of Rs.24.00 million. Defendant No.1
by executing Trust Receipt dated 28-10-2005 (Annex-F/2 to the Plaint) took from the Plaintiff
delivery of the stocks/goods of the value of Rs.2,950,099.00 pledged against FIM-II. Statement
of Account of FIM-II attached at pages 306 to 309 establish (page 308 is relevant) that on 28-102005 a sum of Rs.2,950,099.00 was transferred to F.A.T.R as also evidenced by its Statement of
Accounts (Annex-F/4 to the Plaint at page 322). Therefore, it is denied that the Demand Finance
facility was created to extend legitimacy to any illegal or unlawful adjustment and transfers made
from the Cash Finance account as alleged. Denied that the Applicants had made substantial
payments towards the adjustment of the Cash finance facility. As evidenced from the Statement
of Accounts of the Cash Finance, against the total withdrawal of Rs.32,204,338.00,
128
Statements of Accounts of L/c

(Annex-E/1E).
Rs.2,581,309.00
05.05.2003.
(Annex-E/2E)
Rs.2,606,995.00
16-04-2003.
(Annex-E/3E).
Rs.2,593,197.00
16-04-2003.
(Annex-E/4E).
Rs.2,522,218.00
16-04-2003.
(Annex-E/5G).
Rs.1,501,555.00
20-05-2003.
(Annex-E/6F).
Rs.1,068,547.00
01-09-2003.
(Annex-E/7G).
Rs.3,552,742.00
05-08-2003.
(Annex-E/8G).
Rs.1,402,479.00
12-08-2003.
(Annex-E/9G).
Rs.1,142,735.00
23-06-2003.
Total.
Rs.18,971,777.00
129
To be replied later on.

32.
That without prejudice to the above, it is submitted that the Defendants have availed
FAPC-I facility from the Plaintiff Bank against the pledge of tyres, tubes and rims which
pledged goods were placed under the possession, control and custody of the Plaintiff
Bank. It is pertinent to mention that upon the sanction of FAPC Facility it was agreed and
understood that the Plaintiff Bank will not only exercise lien over the documents but the
goods imported thereunder as well and shall extend absolute protection thereto,
performing its obligation and responsibilities as bailee, primarily to safeguard and protect
the goods under bailment/pledge. It is pertinent to mention that the goods were placed
under the control and possession of the Muqaddam appointed by the Plaintiff Bank. It is
submitted that the Defendants repaid/discharged entire liability under the FAPC facility
from its own resources upon discharge whereof the same becomes entitled to the
possession of the pledged goods. It subsequently transpired that the Plaintiff Bank in utter
negligence of its duties and responsibilities allowed the pledged goods to be auctioned
causing serious prejudice to the interest of the Applicants. It is pertinent to mention that
the pledged goods worth Rs.35-40 Million were neither returned to the Defendants nor
any compensation paid thereunder by the Plaintiff Bank. It is pertinent to mention that
explicitly and impliedly the Bank was obliged to arrange for and pay any amount against
the goods in order to protect and preserve the pledged goods but the bank even without
extending any information to the Applicants allowed removal thereof, which is unlawful
and renders the Plaintiff Bank liable to return the goods worth Rs.40.000 Million or pay
equivalent amount in order to compensate the loss incurred by the Applicants on account
of default of the Plaintiff Bank. It is pertinent to mention that the Plaintiff Bank is under
an implied contractual obligation to arrange and pay for any amount due upon the goods
in order to protect it and the interests of the Applicants.
130
Reply to the particulars section 10(4) of the Financial Institutions (Recovery of Finance)
Ordinance, 2001.
Correctness of particulars under section 10(4) are denied.
a)
Denied that No amount of finance has been availed by the Answering Defendant against
the alleged agreements subject matter of the suit from the Plaintiff and the alleged
transaction and the documents sued and relied upon in the plaint are without
consideration never acted upon and admittedly no finance was extended to the Applicants
b)
That the Applicants had paid substantial amounts to the Plaintiff bank since the inception
of the Customer-Banker relationship, which payments have been accepted and
acknowledged by the Plaintiff Bank. As per the case of the Plaintiff the Applicants had
paid a sum of Rs.204,106,881/- as on 31-07-2007 however the Applicants had
acknowledged payment of Rs.68,299,601/- to the Plaintiff Bank, alleged statements
showing payment by the Applicants are enclosed with the plaint. It is believed that in case
of the rendition of accounts no amount shall be due and payable by the Applicants, which
legitimate exercise has always been avoided by the Plaintiff Bank.
Amounts paid under the Letter of Credit facility are
Rs.110,568,819/-
Amounts paid towards Running Financial Facility, Cash Financial Facility (illegally
adjusted and transferred by the Plaintiff Bank towards self created facilities and ghost
accounts)
Rs. 68,299,601/Amounts illegally transferred (deciphered from the accounts appended with the plaint).
Rs. 25,238,461/-
Total amount paid but unaccounted for
Rs.204,106,881/-
c)
No amount whatsoever is legally due and payable by the Answering Defendant to the
Plaintiff which failed to substantiate or prove any alleged extension of finance to the
Applicants on the basis of the suit and alleged documents appended therewith.
d)
That the Applicants disputes/denies and objects to the entire alleged claim of the Plaintiff
on the basis of alleged documents appended with the Plaint and categorically assert that
no amount is legally due and payable by the Applicants to the Plaintiff Bank.
131
132
Original by Muzaffar
IN THE LAHORE HIGH COURT, LAHORE.
P.L.A. No.51-B/ 2007

In
C.O.S. No.25 of 2007
Allied Bank Limited V/s Jawad Rasheed & others
Reply by the Plaintiff to the Petition for Leave to Defend the Suit under Section 10
of the Financial Institutions (Recovery of Finances) Ordinance, 2001 filed by and on
behalf of Defendants No.1 to 4.
Respectfully Sheweth:
PRELIMINARY SUBMISSIONS/OBJECTIONS:
1.
Application for leave for leave to defend the suit (PLA) under reply has not been filed
within stipulated period of 30 days from the date of effectiveness of service of summons.
Service of summons was affected on Applicants on ________ through______________
and PLA should has been filed latest by __________ but the same was filed
on__________. Therefore, PLA is hopelessly time barred. And for that reason it is liable
to be dismissed out rightly.
2.
PLA under reply completely fails to comply with mandatory provisions of law as per
Section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001
(hereinafter referred to as the Ordinance of 2001). Particulars of the facilities such as
amounts of finance availed, amounts paid by the defendant and the dates of such
payments, amounts of finance and other amounts relating to the finance payable by the
defendant and the amounts which the defendant disputes as payable to the Plaintiff and
facts in support thereof has not been given strictly in accordance with the mandatory
requirement of the Section 10(4) of the Ordinance of 2001.
Similarly, under section 10(3) of the Ordinance of 2001, Applicants were
required to give in PLA a summary of the substantial questions of law as well as facts in
respect of which, in the opinion of the defendant, needs to be recorded. However, in the
lengthy PLA neither any question of law or facts has been formulated/stated or any
summary of substantial questions of law or fact qua the claim of the Plaintiff has been
given.
It is submitted that the sub-section 6 of section 10 reproduced below lays down
133
that the Application for leave to defend shall be rejected if it fails to comply with the
mandatory requirements of Sub-sections 3, 4 and 5:
(6)
An application for leave to defend which does not comply with the requirements
of sub-section (3), (4) where applicable and (5) shall be rejected, unless the
defendant discloses therein sufficient cause for his inability to comply with any
such requirement.
It may be submitted that through out PLA under reply no sufficient cause has been
disclosed by the Applicants for their inability to comply with the above mandatory
requirements of law. Therefore, as PLA under reply has not complied with the mandatory
requirements of sub-sections 3 & 4 of section 10 of the Ordinance of 2001, the same is
liable to be rejected and Plaintiff is entitled for passing of an out right decree in its favour.
REPLY TO THE PRELIMINARY OBJECTIONS
1.
Denied vehemently. Denied that the plaint or the documents appended therewith do not
make out any case against the Applicants. Denied that any fictitious or false claim has
been raised against the Applicants. Denied that any of the documents made basis of the
claim made in the suit are without consideration, were never acted upon or that no
finance was extended to the Applicants on the basis thereof. Denied that either the said
documents cannot be made basis of the liability of the Applicants as stated in the Plaint or
that the Plaint is liable to be rejected as alleged.
2.
Denied vehemently. Denied that the Plaintiff Bank has forged, fabricated or interpolated
any document. Denied that the documents and the sanction advices appended with the
Plaint establish that the claim of the Plaintiff is frivolous or non-existent as alleged.
Denied that the disbursement of the facilities after execution of the Agreements dated 801-2005 is tantamount to any illegality. It is submitted that agreements for financing are
executed first and than disbursements are made there under. Denied that any facility that
was not sanctioned or considered for approval has been shown to have been extended. All
of the facilities subject matter of the suit were approved and disbursed. Denied that the
perusal of the documents attached with the Plaint establishes that the Plaintiff had
manufactured the said documents to set up claim against the Applicants. Denied that the
claim made through the titled suit is hit by the provisions of the Limitation Act, 1908.
3.
Denied vehemently. Denied that the documents sued and relied upon by the Plaintiff were
not acted upon or that no finance was extended, disbursed or made available to the
Applicants under the said documents. Denied that the Plaintiff has withheld any
document or the Agreements under which the facilities extended in the year 2000-2001.
All documents concerning the facilities subject matter of the suit have been attached with
134
the Plaint. Denied that the Plaintiff has submitted only partial accounts or that the
complete and exhaustive details of the accounts have not been attached with the Plaint.
Denied that Plaintiff had raised claim on the basis of such documents which are not
subject matter of the suit or not relied and sued upon. Denied that the Plaintiff had
attempted to camouflage its illegalities. Denied that the Plaintiff, through any
unauthorized, unlawful, arbitrary or unilateral adjustments of the amounts paid or made
available by the Applicants, ever committed any illegality or made any adjustment of the
said amounts without any legitimate basis. Denied that the Plaintiff ever unilaterally filled
up any document with malafide intentions as alleged. Denied that any document executed
earlier has been submitted before this Honourable Court by inserting new dates therein.
Denied that the claim of the Plaintiff Bank has not been substantiated by the documents.
Denied that the documents attached with the plaint cannot be made basis of the liability
of the Applicants as stated in the Plaint. Denied that the documents executed for the
facilities subject matters of the suits have not been relied and sued. Denied that the
documents relied upon by the Plaintiff were executed for the previous facilities alien to
the instant proceedings or that the said documents are beyond the scope of the instant suit
or that such documents/ agreements cannot made basis of the titled suit. Denied that the
titled suit is hit by the provisions of section 9 of the Financial Institutions (Recovery of
Finance) Ordinance, 2001. All documents and Statements of Accounts required to be
attached with the plaint under above law have been so attached.
4.
Denied vehemently. Denied that the titled suit has not been filed, signed or verified by
duly authorized representatives of the Plaintiff. Denied that the titled suit is a nullity in
the eye of law or that it is liable to be dismissed. Denied that any resolution passed by the
Board of Directors of the Plaintiff was required for delegation of powers through the
Powers of Attorney attached with the Plaint. It is submitted that the Power of Attorney
annexed with the Plaint as Annex-A & A/1 have been directly granted by the Plaintiff in
accordance with its Articles of Association and not by its any Attorney. Annexure A to
A/2 to the Plaint clearly establish that Mr. Mohammad Arshad Khan Branch Manager of
the Plaintiffs branch situated at Badami Bagh, Lahore and Syed Muhammad Mujtaba
Ahmed Gillani officer Grade-I and Relationship Manager of the Plaintiffs branch
situated at 199-Upper Mall, Lahore are duly authorized to institute the titled suit on
behalf of the Plaintiff. It is submitted that Mr. Mohammad Arshad Khan, who has signed
the plaint and instituted the titled suit on behalf of the Plaintiff, is Branch Manager of the
Plaintiff's branch at at Badami Bagh, Lahore , Lahore (Annex-A/2 to the Plaint) . Under
Section 9(1) of the Ordinance of 2001, a Branch Manager is authorized to institute a suit
on behalf of a Financial Institution. Accordingly, the titled suit has been lawfully and
authorisedly instituted. Denied that the titled suit has not been validly filed and instituted
by the signatories to the Plaint in accordance with section 9 of the Ordinance of 2001 or
that the same is liable to be dismissed.
135
5.
Denied vehemently. Denied that any document sued and relied upon is ineffective,
invalid and unenforceable in law or that the documents attached with the Plaint have not
been attested in accordance with the provisions of Article 17 or any other applicable
provisions of Qanoon-e-Shahadat Order, 1984 or section 18 of the Ordinance of 2001.
Furthermore, by virtue of section 18(3) of the Ordinance of 2001, said documents are
legally enforceable and are not invalid or void for any alleged reason. Denied that either
no liability of the Applicants towards the Plaintiff exists or that the documents attached
with the Plaint do not establish the liability of the Applicants. Denied that the titled suit is
liable to be dismissed.
6.
Denied vehemently. Denied that the documents sued and relied upon are not stamped in
accordance with the provisions of Stamp Act or that the documents attached with the
plaint are invalid in law and cannot form the basis of the claim made through the titled
suit. Therefore, it is denied that the titled suit is liable to be dismissed as alleged.
7.
Denied vehemently. Denied that the titled suit has not been validly instituted in terms of
the section 9 of the Ordinance of 2001. Denied that the plaint is not supported by legally
valid and complete Statements of Accounts. Plaint is supported by complete, valid and
legally enforceable Statements of Accounts. Denied that the claim of the Plaintiff Bank
cannot not be adjudicated upon in accordance with the law or that any prejudice would be
caused to the Applicants. Denied that the Statement of Accounts appended with the Plaint
have not been duly certified and verified in accordance with law or that the said
Statements of Accounts contain any dubious, unauthorized or unexplained entries. Denied
that the suit is liable to be dismissed.
8.
Denied vehemently. Denied that either any of the contentions raised in the Plaint are
wrong or any of the Agreements annexed thereto and sued upon is void or against Public
Policy. Denied that the said Agreements are interest bearing or in violation of the
principles of Islamic Common Law as per the dictum of the august Supreme court of
Pakistan. None of the Agreements attached with the plaint is against Public Policy by
virtue of section 23 of the Contract Act. Denied that the suit is not maintainable or that it
is liable to be dismissed as alleged.
9.
Denied vehemently. Denied that the contentions raised in the plaint are not supported by
the documents sued and relied upon or that there are any contradictions between the
contents of the plaint and the said documents. Denied that any of the documents attached
with the Plaint was ever interpolated by the Plaintiff or that the claim made through the
Plaint is frivolous or false claim. Denied that either the claim of the Plaintiff Bank
requires to be established through evidence or that Applicants are entitled to grant of
leave to defend the suit as alleged.
10.
Denied vehemently. Denied that the titled suit has not been instituted or that the Plaint
136
has not been signed and verified by the concerned Branch Manager. It is submitted that
Mr. Mohammad Arshad Khan, who has signed the plaint and instituted the titled suit on
Lahore, Lahore (Annex-A/2 to the Plaint). Accordingly, the titled suit has been lawfully and
authorisedly instituted in accordance with the provisions of Section 9(1) of the Ordinance
of 2001. Denied that the plaint is either defective or barred by any law or that it merits
summary rejection as alleged.
11.
Denied vehemently. Denied that Plaintiff ever refused to provide to the Applicants
Statements of Accounts or any agreement whenever requested by them. Plaintiff has been
providing to the Applicants the Statements of Accounts periodically and the documents
whenever requested by them. Denied that no amount is legally due, payable or
outstanding against the Applicants. Applicant/Defendant No.1 has been acknowledging
its liabilities and committing to make payments from time to time as evidenced from the
letters dated 21-01-2006, dated 01-02-2006 and dated 10-06-2006 attached with the
Plaint as Annex- L to L/2. Hence the Plaint is not liable to be dismissed as alleged.
12.
Denied vehemently. Denied that the Plaintiff failed to comply with the provisions of the
Order VII Rule 14, 17 & 18 Civil Procedure Code 1908 or that it did not produce the
original documents. It is submitted that all documents for the facilities that are subject
matter of the titled suit have been attached with the Plaint in accordance with the
provisions of section 9 of the Ordinance of 2001. Denied that either any of the documents
attached with the Plaint is of dubious nature or has been fabricated or interpolated by the
Plaintiff Bank. Therefore, it is denied the matter/suit cannot be legally or validly
proceeded with or that the plaint is liable to be dismissed in terms of section 9 of the
Ordinance of 2001 as alleged.
13.
Denied vehemently. Denied that the perusal of the plaint or the documents appended
therewith establish that the Plaintiff has no cause action against the Applicants. Denied
that the titled suit is liable to be dismissed. Denied that the that the documents appended
with the plaint were not implemented or acted upon by the Plaintiff or that for the alleged
reason the suit is without any cause of action or is liable to be dismissed.
14.
Denied vehemently. Denied that the documents appended with the Plaint are replete with
any discrepancies or that the said documents do not support the claim of the Plaintiff.
Denied that the documents appended with the plaint are without consideration,
ineffective, inoperative or that same cannot be made basis for determining the liability of
the Applicants.
15.
Denied vehemently. Denied that the Plaintiff has not disclosed or appended with the
Plaint all documents and Agreements executed between the parties as alleged. Similarly,
it is denied that the Plaintiff has concealed any material fact. Allegations contained in
para under reply are bald as the Applicants have not given the details of the information
137
and documents allegedly concealed by the Plaintiff. Therefore, it is denied that any
prejudice has been caused to the case of the Plaintiff or to its claim as alleged. As no
document or information has been concealed by the Plaintiff, it is denied that the alleged
non-disclosure of material facts or documents denudes the basis of the claim of the
Plaintiff against the Applicants. Denied, therefore, that the suit is not maintainable on the
basis of the documents appended with the plaint or that the suit is liable to be dismissed
as alleged.
16.
Denied vehemently. Denied that the Agreements relied and sued upon by the Plaintiff
Bank were never acted upon or implemented or that the said documents cannot be made
basis of the claim against the Applicants. Denied that the said documents do not create
any binding obligation whatsoever upon Applicant No.1 as principal debtor other
Applicants as guarantors as alleged. Denied that either any document was not
implemented or acted upon or that no disbursement of funds was made there under.
138
Therefore, it is denied that any of the documents attached with the Plaint is liable to be
declared as illegal, void, without consideration or of no effect.
17.
Denied vehemently. Denied that the Statements of Accounts attached with the Plaint are
either incomplete or sketchy or that the said Statements of Accounts do not reflect the
true and faithful accounts inter se the parties. Denied that the Statements of Accounts
appended with the suit has no relevance with the documents appended with the Plaint.
Denied that the said Statements of Accounts contain any illegal, unauthorized,
unexplained or dubious entries. Denied that there is any discrepancy in the said
Statements of Accounts which denudes the claim of the Plaintiff of legitimacy or basis.
Denied that the said Statements of Accounts or the entries therein were not supported by
the documents appended with the Plaint or that the said Statements of Accounts reflect
that no amount whatsoever was disbursed to or that no finance was extended to the
Applicants. Therefore, it is denied that the Plaintiff has no cause of action against the
Applicants or that the titled suit is liable to be dismissed as alleged.
18.
Denied vehemently. Denied that the Plaint under reference is seeped in mala-fide as
alleged. Denied that the Plaintiff has either deliberately or otherwise concealed any fact
or minutes of meetings or correspondence exchanged inter se the parties. Allegations
contained in para under reply are bald as the Applicants have not given the details of the
information, facts or minutes of meetings or correspondence allegedly concealed by the
Plaintiff. Denied that the Plaintiffs claim is built on the documents and agreements
which are either without consideration or were not acted upon or that no finance was
disbursed, extended or made available to the applicants there under. Denied that the
documents attached with the Plaint cannot be made basis of the liability of the Applicants
towards the Plaintiff. It is submitted that an out right decree is liable to be passed against
the Applicants on the basis of the documents and Statements of Accounts attached with
the Plaint
19.
Denied vehemently. Denied that either the titled suit is liable to be dismissed or that the
claim the claim against the Applicants made there under is non-existent or not
maintainable in the eye of law. Denied that no amount is legally due and payable by the
Applicants. Amount claimed in the titled suit is legally due and payable by the
Applicants. As stated above, Applicant/Defendant No.1 has been acknowledging its
liabilities and committing to make payments from time to time as evidenced from the
letters dated 21-01-2006, dated 01-02-2006 and dated 10-06-2006 attached with the
Plaint as Annex- L to L/2. Therefore, titled suit is maintainable and is not liable to be
dismissed as alleged.
20.
Denied vehemently. Denied that the perusal of the contents of the Plaint makes it clear or
obvious that the claim of the Plaintiff is bogus or fabricated or that the documents and
139
agreements on the basis whereof the claim in the Plaint has been raised has not been sued
or relied upon. All documents and Statements of Accounts for the facilities subject
matters of the suit have been attached with the Plaint, sued and relied upon by the
Plaintiff for passing of a decree against the Applicants Denied that the titled suit is based
upon concocted or fictitious allegations or that the suit is liable to be dismissed as
alleged.
21.
Denied vehemently. Denied that any of the documents including the Personal Guarantees
attached with the Plaint are without consideration, ineffective in law or inadmissible in
evidence. All the documents attached with the Plaint and relied upon by the Plaintiff are
valid and legally executed and are enforceable and admissible under the all applicable
relevant laws. Therefore, it is denied that the titled suit is liable to be dismissed as
alleged.
22.
Denied vehemently. Denied that any of the Personal Guarantees appended with the Plaint
are without consideration, illegal or that the said Personal Guarantees are liable to be
discharged. Denied that either the Agreements and the financial facilities that were
secured by the said Guarantees were not performed or acted upon or that not amount can
be claimed on the basis of said Personal Guarantees. Therefore, it is denied that the said
Personal Guarantees are ineffective, unlawful or that the same could not be made basis of
imposing any liability upon the Applicants or that the same are liable to be cancelled as
alleged.
23.
Denied vehemently. Denied that the Personal Guarantees sued upon are inoperative or
ineffective in law or that the said guarantees have not been attested in accordance with
the Article 17 of the Qanoon-e-Shahadat Order, 1984. All of the personal Guarantees
have been attested in accordance with the Article 17 of the Qanoon-e-Shahadat Order,
1984 and all applicable laws. Denied that under any provisions of the Ordinance of 2001,
the said guarantees cannot be made basis of the Plaintiffs claim against the Applicants.
24.
Denied vehemently. Denied that the either any legal or factual issues have been raised
through PLA under reply or that on the basis of the said alleged questions of law or facts
require recording of evidence for adjudication of the titled suit. In fact, no substantial
question of law or facts has been raised through PLA under reply and an out right decree
is liable to be passed against the Applicants. Denied that any ground or question of law or
facts for grant of leave to defend the suit has been raised through the Application under
reply.
25.
Denied vehemently. Denied that any of the documents appended with the plaint is
deficient in any material details or otherwise or that the said documents are void for
uncertainty in terms of section 29 of the Contract Act, 1872 or under any law. Hence, the
titled suit is not liable to be dismissed.
26.
Denied vehemently. Denied that the either the contents of the Plaint or the Statement of
accounts and the entries mentioned therein makes it clear and obvious that no amount
140
was disbursed to the Applicants pursuant to Agreements sued and relied upon by the
Plaintiff. It is denied that no amount is legally due against the Applicants. Amount
claimed in the suit is legally due and payable by the Applicants and any contention
contrary thereto is denied vehemently. Denied that the titled suit is liable to be dismissed
or that the same is without any cause of action against the Applicants. Plaint discloses
cause of action against the Applicants
141
27.
Denied vehemently. Denied that the Plaint does not fulfill any requirement of section 9 of
the Ordinance of 2001 or that such alleged non-compliance of the provisions of section 9
of the Ordinance of 2001 substantiates that no amount has been availed by the Applicants
or disbursed to them. Denied that the Applicants are not liable to pay their outstanding
liabilities claimed in the suit. Denied that the titled suit is not maintainable or that it is
liable to be rejected under Order 7 Rule 11 CPC as alleged.
28.
Denied vehemently. Denied that the Plaint does not fulfill the requirements of sub-section
9(3) of the Ordinance of 2001 or that such alleged non-compliance of the provisions of
section 9 of the Ordinance of 2001 substantiates that no amount of finance was availed by
the Applicants or disbursed to them. Particulars/details under sub-section (3) of section 9
of the Ordinance of 2001 for the Running Finance, Demand Finance, FIM-II, FATR Limit
and Cash Finance subject matters of the suit have been given in paragraphs 6 to 10
respectively of the Plaint. Therefore, it is denied that the titled suit is not maintainable or
that it is liable to be dismissed.
29.
Denied vehemently. Denied that the Running Financial Facility was not extended or that
no funds were disbursed under this facility. Denied that the claim against the Running
Financial Facility has been raised on account of some disputed amounts having no
relevancy with the subject matter of the titled suit. As evidenced by the Statements of
Account attached with the Plaint as Annex- B/7, the Running Finance was disbursed to
and availed by the Applicants. Denied that the Plaintiff Bank has illegally and unlawful
ever charged or claimed any appreciation over the outstanding liabilities as alleged or that
no disbursement of funds was made under the Running Finance. Denied that either partial
Statement of Accounts has been appended with the Plaint or that from the said Statement
of Account it is clear or obvious that the Plaintiff had carried out any illegal, unauthorized
or unexplained transfers of substantial amounts from the Running Finance Account.
Therefore, it is denied that no amount is legally due and payable by the Applicants under
the Running Finance. Denied that the Plaintiff has not brought on record of the case or
has not allowed the Defendants to have a clear and transparent picture of the accounts. In
the aforesaid Statement of Accounts a clear and transparent picture of the accounts has
been given. Similarly, the actual and correct overdue liability of the Defendants has been
given in the Statement of Accounts. Denied that the liability of the Defendants given in
the said Statement of Account is wrong or that no disbursement of the funds against the
Running Finance was made.
30.
142
No.1 made through Letter dated 23-11-2004 (Mark_ )
Plaintiff vide approval No.

Defendant No.1 inter alia the Demand Finance to the tune of Rs.38.00 million in lieu of
and by way of restructuring of the aforesaid Cash Finance. Terms and conditions of the
facilities approved through the above approval were conveyed to the Applicant No.1
through the Facility Offer Letter No. BBL/FE/2004/754 dated 23-12-2004. Applicant
No.1 returned to the Plaintiff returned a copy of the aforesaid the Facility Offer Letter
No. BBL/FE/2004/754 dated 23-12-2004 duly signed by it in acceptance of terms and
conditions contained therein (Annex-B/1 to the Plaint). Later on through the Sanction
Advice No.COS/SAMD/MTR/745 dated 07.02.2005 (Annex-B/2 the Plaint) inter alia the
amount of the Demand Finance was reduced to Rs.22.00 million. In acceptance of and
for compliance with the terms and conditions contained in the aforesaid the Sanction
Advice No.COS/SAMD/MTR/745 dated 07.02.2005, Applicant No.1 executed the
Undertaking dated 22-02-2005 (Annex-B/3 to the Plaint). Accordingly, a lawful
agreement was reached between the Plaintiff and the Defendant No.1 in terms of which
Plaintiff granted to the Defendant No.1 inter alia the aforesaid Demand Finance in lieu
of the Cash Finance. In pursuance of the above approvals and to avail the Demand
Finance, Applicant No.1 also executed inter alia the Agreement for Financing dated 0801-2005 (Annex-C to the Plaint). Further submitted that the Defendant No.1 proceeded
to avail funds in terms of the Demand Finance evidenced by the Statements of Account
appended with the Plaint as Annex-C/4. Statement of Accounts of the aforesaid Cash
Finance is attached with the Plaint as Annex-F/A8. The above Statements of Accounts
establish that on 26-02-2005 a sum of Rs.22,010,880.00 was outstanding debit balance
against the principal amount of the Cash Finance which was adjusted on the same day
by disbursement of Rs.22,010,880.00 against the Demand Finance. Therefore, it is denied
that the Demand Finance facility was created to extend legitimacy to any illegal or
unlawful adjustment and transfers made from the Cash Finance account as alleged.
Denied that the Applicants had made substantial payments towards the adjustment of the
Cash finance facility. As evidenced from the Statement of Accounts of the Cash Finance,
against the total withdrawal of Rs.32,204,338.00, Applicants adjusted merely as sum of
Rs10,193,458.00 from their own resources and the balance amount of Rs.22,010,880.00
was adjusted on26-02-2005 by disbursement of Rs.22,010,880.00 against the Demand
Finance. Denied that the Plaintiff ever refused to supply to the Applicants Statements of
Accounts of the facilities subject matters of the suit containing correct details of the
amounts availed by the Applicants and repaid. On the other hand, Plaintiff has been
forwarding Statements of Accounts of all facilities to the Applicants periodically without
any default and Applicants never raised any objection as to any entry therein. Therefore,
it is denied that the Demand Finance facility granted with the objective to camouflage
any alleged irregularities or illegalities committed attributed to the Plaintiff Bank in the
143
cash finance account. Denied that that either no funds were disbursed to or utilized by the
payable under the Demand Finance. Complete and correct accounts have been annexed
with the Plaint and nothing has been concealed. Denied that any illegal or unlawful
adjustments were ever by the Plaintiff Bank in any account of the Applicants.
It is submitted that the Applicants have been admitting their liability towards the
Demand Finance and the objection as to the same has been raised first time through PLA
under reply. Copies of the letters dated 21-01-2006, dated 01-02-2006 and dated 10-062006 whereby Applicant/Defendant No.1 acknowledged its liability against the facilities
subject matters of the suit and committed to make payments there against have been
annexed with the Plaint as Annex- L to L/2. Through the aforesaid letter dated 21-012006 (Annex- L to the Plaint at pages 503 to 504), Applicant No.1 categorically stated
and acknowledged that a sum of Rs.9.613 million (more than the amount of
31.
Denied vehemently. Denied that any of the facilities subject matter of the suit including
the FIM-II facility arising out of the Letter of Credit facility is either deficient in any
manner or barred by limitation as alleged. Denied that any amount has been claimed after
the lapse of statutory period provided in the Limitation Act. Denied that FIM-II was
created by the Plaintiff without consent and request of Defendant No.1. As stated in
paragraph-8 of the Plaint, Plaintiff had also allowed to Defendant No.1 an L/c limit
(Sight) for import of Tyres and Tubes and against this limit, Plaintiff had established
various Letters of Credit for import of Tyres and Tubes. However, on receipt of the
shipping documents under six (6) Letters of Credit by the Plaintiff, Defendant No.1 failed
to get released the imported goods by making any corresponding payment thereof and
resultantly Plaintiff had to make payment of the aggregate sum Rs.18,971,777.00 to the
beneficiaries of the said six (6) L/Cs by allowing to the Defendant No.1 the aforesaid
finance facility of forced FIM-II (refer Statement of Accounts attached to the Plaint as
Annex-E/1E, E/2E, E/3E, E/4E, E/5G, E/6F, E/7G, E/8G, E/9F and E/9G). Subsequently,
Applicant No.1 through the aforesaid Letter dated 23-11-2004 (Mark_ above ) not only
acknowledged its liability against the forced FIM but also requested the Plaintiff to
convert then existing liability there against the same into Demand Finance .The said
request was accepted by Plaintiff and it vide approval No. COS/SAMD/MTR/5330 dated
22.12.2004 (Annex-B to the Plaint) granted to the Defendant No.1 various facilities
including Demand Finance to the tune of Rs.38.00 million in lieu of and by way of
conversion of inter alia the aforesaid FIM. Terms and conditions of the facilities approved
through the above approval were conveyed to the Applicant No.1 through the Facility
144
Offer Letter No. BBL/FE/2004/754 dated 23-12-2004 and Applicant No.1 returned to the
Plaintiff a copy of the aforesaid the Facility Offer Letter duly signed by it in acceptance
of terms and conditions contained therein (Annex-B/1 to the Plaint). Later on through the
Sanction Advice No.COS/SAMD/MTR/745 dated 07.02.2005 (Annex-B/2 the Plaint) the
amount of the Demand Finance was reduced to Rs.22.00 million and Applicant No.1 was
inter alia allowed a fresh FIM-II of Rs.24.00 million of by way of conversion of inter alia
the then existing forced FIM as well as by grant of additional amount of Rs.8.00 million.
In acceptance of and for compliance of the terms and conditions contained in the
aforesaid the Sanction Advice No.COS/SAMD/MTR/745 dated 07.02.2005, Applicant
No.1 executed the Undertaking dated 22-02-2005 (Annex-B/3 to the Plaint). Accordingly,
a lawful agreement was reached between the Plaintiff and the Defendant No.1 in terms of
which Plaintiff inter alia granted to and the Defendant No.1availed the aforesaid FIM-II
of Rs.24.00 million. To avail the FIM-II, Applicant No.1 also executed inter alia the
Agreement for Financing and Letter of Pledge both dated 08-01-2005 (Annex-E/10 &
E/12 to the Plaint). Defendant No.1 proceeded to avail funds in terms of FIM-II as
evidenced by the Statements of Account (Annex-E/13to the Plaint). The above six
Statements of Accounts for L/Cs/forced FIM (Annex-E/1E, E/2E, E/3E, E/4E, E/5G,
E/6F, E/7G, E/8G, E/9F and E/9G to the Plaint ) establish that on 26-2-2005 an aggregate
sum of Rs.17,166,735.00 was outstanding debit balance against the principal amount of
the six L/Cs/forced FIM which was adjusted on the same day by disbursement of
17,166,735.00 against the FIM-II. Further disbursement of Rs.6,631,824.00 was made
on 16-03-2005. Further submitted that that through the aforesaid approval No.
COS/SAMD/MTR/5330 dated 22.12.2004, Facility Offer Letter No. BBL/FE/2004/754
and Sanction Advice No.COS/SAMD/MTR/745 dated 07.02.2005 Defendant No.1 was
also allowed a financial limit of Finance Against Trust Receipt (FATR-Limit) of Rs.7.00
million. This Limit was granted for obtaining delivery by the Defendant No.1 of the
stocks pledged with the Plaintiff against the aforesaid Demand Finance of Rs.22.00
million and FIM-II of Rs.24.00 million. Defendant No.1 by executing Trust Receipt dated
28-10-2005 (Annex-F/2 to the Plaint) took from the Plaintiff delivery of the stocks/goods
of the value of Rs.2,950,099.00 pledged against FIM-II. Statement of Account of FIM-II
attached at pages 306 to 309 establish (page 308 is relevant) that on 28-10-2005 a sum of
Rs.2,950,099.00 was transferred to F.A.T.R as also evidenced by its Statement of
Accounts (Annex-F/4 to the Plaint at page 322). Therefore, it is denied that Plaintiff
unlawfully or illegally created FIM-II or that no disbursement of funds against FIM-II
was made. Denied that any facility was created for legitimizing charging of any illegal
mark-up through conversion of letter of credit facility into forced FIM and grant of FIMII. Denied that any mark-up on FIM-II has been illegally charged against the norms of the
Banking practices or in violation of the judicial pronouncements.
Denied that the
Agreements dated 08-01-2005 attached with the Plaint confirmed the factum of
145
fabrication of documents or raising of frivolous claim in respect of any finance facilities.

Denied that the facilities subject matter of the suit were not sanctioned or approved or
that any of the documents/agreements attached with the Plaint, is liable to be declared as
void or illegal or cancelled as alleged.
32.
Denied vehemently. Denied that+++++ Defendants have availed FAPC-I facility

from the Plaintiff Bank against the pledge of tyres, tubes and rims which pledged
goods were placed under the possession, control and custody of the Plaintiff Bank. It
is pertinent to mention that upon the sanction of FAPC Facility it was agreed and
understood that the Plaintiff Bank will not only exercise lien over the documents but
the goods imported thereunder as well and shall extend absolute protection thereto,
performing its obligation and responsibilities as bailee, primarily to safeguard and
protect the goods under bailment/pledge. It is pertinent to mention that the goods were
placed under the control and possession of the Muqaddam appointed by the Plaintiff
Bank. It is submitted that the Defendants repaid/discharged entire liability under the
FAPC facility from its own resources upon discharge whereof the same becomes entitled
to the possession of the pledged goods. It subsequently transpired that the Plaintiff Bank
in utter negligence of its duties and responsibilities allowed the pledged goods to be
auctioned causing serious prejudice to the interest of the Applicants. It is pertinent to
mention that the pledged goods worth Rs.35-40 Million were neither returned to the
Defendants nor any compensation paid thereunder by the Plaintiff Bank. It is pertinent to
mention that explicitly and impliedly the Bank was obliged to arrange for and pay any
amount against the goods in order to protect and preserve the pledged goods but the bank
even without extending any information to the Applicants allowed removal thereof,
which is unlawful and renders the Plaintiff Bank liable to return the goods worth
Rs.40.000 Million or pay equivalent amount in order to compensate the loss incurred by
the Applicants on account of default of the Plaintiff Bank. It is pertinent to mention that
the Plaintiff Bank is under an implied contractual obligation to arrange and pay for any
amount due upon the goods in order to protect it and the interests of the Applicants.
33.
Denied vehemently. Denied that the Agreements/documents executed by the Defendants

for the FATR facility have been forged or fabricated. Denied that no amount was
disbursed against FATR facility or that the said facility was created to juggle/transfer
amounts from one account to another for making any illegal adjustments. Denied that
F.A.T.R facility was created to claim any illegal mark-up upon mark-up as alleged.
Disbursement of funds against F.A.T.R was made. As stated in para 9 of the Plaint FATRLimit was granted for obtaining delivery by the Defendant No.1 of the stocks pledged
with the Plaintiff against the aforesaid Demand Finance of Rs.22.00 million and FIM-II
of Rs.24.00 million mentioned in paragraphs- 7 & 8 above of the Plaint. It is submitted
that disbursement of funds against a F.A.T.R limit is always made through delivery of
pledged stocks. Defendant No.1 by executing Trust Receipt dated 28-10-2005 and Trust
146
Receipt dated 28-10-2005 (Annex-F/2 & F/3 to the Plaint) took from the Plaintiff
delivery of the stocks/goods of the value of Rs.2,950,099.00 and Rs.3,670,000.00
pledged against the aforesaid FIM-II & the Demand Finance respectively. Statements of
Account for Account No. 01-540-0144-2 & for Account No. 01-540-0145-3 appended
with the Plaint as Annex-F/4 & Annex-F/5 of FATR-Limit evidenced that the
disbursement of aforesaid amounts were made to the Applicant No.1. As per terms of the
FATR-Limit, Defendant No.1 was under an obligation to deposit with the Plaintiff value
of the stocks/goods within 45 days of the delivery of the said stocks/goods to it. However,
in violation of its obligations under the aforesaid Trust Receipts, Defendant No.1 failed to
pay to the Plaintiff the aforesaid values of the stocks/goods delivered to it. Denied that
F.A.T.R limit was extended without any approval or sanction. Denied that the claim in
respect of the F.A.T.R facility is either illegal or that it is liable to be rejected.
34.
Denied vehemently. Denied that the claim of Plaintiff Bank made in the Plaint comprises
of the amounts accumulated through charging of markup upon markup, compounding of
markup, unauthorized adjustments, debits or transfers or that no disbursement of the
financial facilities were made to the Applicant No.1. Denied that the claim of Plaintiff as
made in the suit is liable to be rejected. Denied that either any unlawful mark-up or markup in violation of agreements and sanction advices has been claimed.
Reply to the particulars section 10(4) of the Financial Institutions (Recovery of Finance)
Ordinance, 2001.
Correctness of particulars under section 10(4) are denied.
a)
Denied that no amounts of finance was availed by the Answering Defendants from the
Plaintiff under the agreements subject matter of the suit or that transactions and
documents sued and relied upon in the plaint are without consideration. Denied that either
said documents were never acted upon or that no finance was extended to the Applicants
b)
Denied that the Applicants had paid to Plaintiff substantial amounts sufficient to adjust
their whole liabilities towards Plaintiff. Amounts paid by Applicant No.1 since the
inception of the each of the facility subject matter of the suit has been correctly given in
the Plaint. Denied that either Applicants paid to the Plaintiff the sum of
Rs.204,106,881.00 or that Plaintiff averred in the Plaint or otherwise ever admitted that
the said sum of Rs.204,106,881.00 was paid by Applicants as alleged. Amounts paid by
Applicant No.1 have been correctly shown in the Plaint and Statements of the Accounts
attached thereto. Denied that either no amount is due or payable by the Applicants or that
any amount is due from Plaintiff to Applicants.
It is specifically denied that Applicants paid to Plaintiff a sum of
Rs.110,568,819.00 under the Letter of Credit facility. As stated in para-8(b) of the Plaint
Applicant/Defendant No.1 failed to get released the goods imported under six (6) Letters
of Credit by making any corresponding payment thereof and resultantly Plaintiff had to
147
make payment to the beneficiaries of the said six (6) L/Cs.

Denied that either Applicants paid Rs. 68,299,601.00 towards Running Finance
Facility or Cash Finance Facility or that the said amount allegedly paid by the Applicants
was illegally adjusted or transferred by the Plaintiff Bank towards any self created
facilities or ghost accounts as alleged. Correct facts are as under:
(i).
Running Finance of Rs.30.00 million was on revolving basis and

was paid leaving the balance principal amount of Rs. 29,956,835.00
claimed in the suit.
(ii).
Cash Finance of Rs.25.00 million was also on revolving basis and

was paid by the Applicant No.1 and a sum of Rs.22,010,880.00 was
converted in to Demand Finance on the request of the Applicant made
through the aforesaid letter dated 23-11-2004.
Denied that the sum of Rs.25,238,461.00 was also illegally transferred from the
accounts of Applicant No.1 as alleged. Allegations of illegal transfers of amounts are
merely bald and vague and no explanation of such allegations have been given.
Therefore, it is denied that the amount of Rs.204,106,881.00 allegedly paid by
Applicant No.1 is unaccounted for
c)
Denied that either no amount whatsoever is legally due or payable by the Answering
Defendants to the Plaintiff or that Plaintiff has failed to substantiate or prove extension of
finance facilities to the Applicants as alleged.
d)
Denied that either claim of the Plaintiff is wrong or that the said claim is not based on the
documents appended with the Plaint. Documents attached with the Plaint fully support
claim of Plaintiff made in the suit. Denied that no amount is legally due or payable by the
Applicants to Plaintiff.
Rply on merits
1.
Denied vehemently. Memorandum and Articles of Association of Plaintiff and all related
documents/Notifications issued by Governments departments including SBP and SECP
annexed with the Plaint as Annex-A/3 irrevocably establish that Plaintiff is a banking
company incorporated under the Companies Ordinance, 1984 and a financial institution
for the purposes of the Ordinance of 2001. Therefore, Plaintiff is competent to institute
148
this suit before this Honourable Court.

2.
Denied vehemently. Denied that contents of Para No. 2 of the Plaint are misconceived.
Denied that the titled suit has not been validly instituted in terms of section 9 of the
Ordinance of 2001 or that it is liable to be dismissed. Denied that Power of Attorney
attached with the Plaint do not validly or legally authorize the Attorneys to file or
institute the suit. Two Power of Attorney and Transfer/Posting letter (Annexure A to A/2
to the Plaint) clearly establish that Mr. Mohammad Arshad Khan Branch Manager of the
Plaintiffs branch situated at Badami Bagh, Lahore and Syed Muhammad Mujtaba
Ahmed Gillani officer Grade-I and Relationship Manager of the Plaintiffs branch
situated at 199-Upper Mall, Lahore are duly authorized to institute the titled suit on
behalf of the Plaintiff. It is submitted that Mr. Mohammad Arshad Khan, who has signed
the plaint and instituted the titled suit on behalf of the Plaintiff, is Branch Manager of the
Plaintiff's branch at at Badami Bagh, Lahore, Lahore (Annex-A/2 to the Plaint).
Accordingly, the titled suit has been lawfully and authorizedly instituted under section
9(1) of the Ordinance of 2001. Denied that the signatories to the Plaint are not conversant
with the facts of the case or that they have no requisite authority or entitlement to institute
the titled suit. Therefore, it is denied that the titled suit merit dismissal.
3.
Denied vehemently. Denied that either contents of Para 3 of the Plaint are misconceived
or the finance facilities subject matter of the instant suit were not availed by the
Defendants.
Denied that Plaintiff had confirmed or admitted that its claim against
Applicants is restricted to the account mentioned in para-3 of the Plaint. In the said para,
in fact, status of Applicant No.1 and history of relationship between Plaintiff and
Applicant No.1 has been given in the said para. Para 3 of the Plaint also states that
Defendant No.1 has also been availing various financial facilities from the Plaintiff which
facilities were also renewed and availed by the Defendant No.1 from time to time. It is
submitted that as per banking procedure and practice, a Running Finance facility is
disbursed through current accounts of customers and for all others finances separate
accounts are opened on the basis of sanction advices/facilities letters. In this case also
Running Finance was disbursed through the Current Account No.01-200-7183-2 and all
other facilities were disbursed through other accounts mentioned in the Plaint. Statements
of Accounts of the said accounts have also been attached with the Plaint. Therefore, it is
denied that no other account was operated or that claim of Plaintiff would be confined to
the extent of the account mentioned in paras 3 & 6 of Plaint or that all other accounts
mentioned in paras-7 to 10 shall become redundant or irrelevant as alleged. Denied that
Plaintiff has averred any where in Plaint that it had unilaterally or on its sole discretion
had transferred any amount form one account to other accounts. Therefore, it denied that
the amounts shown to be outstanding in the accounts mentioned in paras-7 to 10 of Plaint
are not liabilities of the Applicants. Denied that Plaintiff had concealed detailed or
complete Statements of Account of any account as alleged. Therefore, it is denied that the
149
titled suit is devoid of any legitimate cause of action or that the same is liable to be
dismissed.
4.
Denied that the contents of para 4 of Plaint are misconceived. Denied that the documents
appended with the Plaint are either without consideration or do not create any financial
obligation for the facilities subject matter of the suit. Denied that no amount/facility was
disbursed under the agreements sued and relied upon in the instant suit. Denied that
either the personal guarantees or the mortgage of the properties mentioned and relied
upon in the suit pertain to the agreements that are not subject matter of the suit.
Applicants had executed the said Personal Guarantees and mortgaged their properties
with the Plaintiff as security inter alia for the facilities that were granted under the
agreements subject matter of the titled suit. Denied that either no finance facilities were
extended or disbursed under the Agreements dated 8-1-2005 or that the said agreements
were fabricated by the Plaintiff to raise any illegal claim. Denied that the Personal
Guarantees and mortgage of properties has no nexus with the agreements subject matter
of the cause of action in the titled suit or that the said the Personal Guarantees and
mortgage of properties are liable to be cancelled or redeemed as alleged.
5.
Needs no comments.
6(a)(i) Denied vehemently. Denied that the contents of para 6(a)(i) of Plaint are misconceived.
Denied that the Running Finance facility was not extended or disbursed pursuant to the
approval No. COS/SAMD/MTR/5330 dated 22.12.2004 and the Facility Offer Letter No.
BBL/FE/2004/754
dated
23-12-2004
as
amended
by
the
Sanction
Advice
No.COS/SAMD/MTR/745 dated 07.02.2005 (Annex- B to B/2 to the Plaint). Denied that

Running Finance was not granted or extended to the Applicant No.1 after 2001. Denied
that Applicants had paid payments in excess of their liability or that the amounts accepted
or acknowledged by Plaintiff were not adjusted. Each and every payment made by
Applicant No.1 has been adjusted legally and in accordance with the banking principles
and the said payments have been shown in the Statement of Accounts. Applicants have
not paid any excess amount to Plaintiff as alleged. Therefore, it is denied that no overdue
liability of Applicants exists against the Running Finance or that Plaintiff Bank is liable
to refund to Applicant any amount. Denied that by the Undertaking dated 22-02-2005
(Annex-B/3 to the Plaint) Applicant No.1 had not confirmed and accepted the terms and
conditions contained in the Sanction Advice No.COS/SAMD/MTR/745 dated 07.02.2005
(Annex-B/2 to the Plaint). It is submitted that in acceptance of and for compliance with
the terms and conditions contained in the aforesaid the Sanction Advice dated
07.02.2005, Applicant No.1 executed the Undertaking dated 22-02-2005. Therefore, a
lawful agreement was reached between the Plaintiff and the Defendant No.1 in terms of
which Plaintiff granted to Applicant No.1 inter alia the Running Finance. In pursuance of
the above approvals and to avail the Running Finance, Applicant No.1 had also executed
inter alia the Agreement for Financing dated 08-01-2005 (Annex-B/4 to the Plaint).
150
Therefore, it is denied that said Undertaking does not support the case of Plaintiff bank.
Replies to para 29 of Preliminary Objections and Submissions in respect of section 10(4)
of the Ordinance of 2001 above are reiterated.
6(a)(ii) Denied vehemently. Denied that the contents of para 6(a)(ii) of Plaint are misconceived.
Denied that Plaintiff either procured any blank document or it utilized the said documents
in violation of its representation to support its claim. Denied that either claim of Plaintiff
is belated claim or that any of the documents is without consideration or that same cannot
be made basis of liability of the Defendants. Denied that any of the documents referred to
para 6(a)(ii) of Plaint are fabricated or that the said documents are liable to be declared as
void, illegal or cancelled. Denied that no finance was disbursed to or utilized by
Applicant No.1 under Agreement for Financing dated 8-1-2005. Also denied that the
Agreement for Financing, Promissory Note or Letter of Hypothecation mentioned in para
6(a)(ii) of Plaint are without consideration or that cannot be made basis for the liability
upon the Applicants against the Running Finance.
6(b)(i) Denied that the contents of Para No.6(b)(i) of Plaint are misconceived. Denied that either
the Running Finance facility was not extended or disbursed to the Applicant No.1
pursuant to the Agreement for Financing dated 8-1-2005 or that the said agreement was
fabricated by the Plaintiff to support its claim against the Defendants. Denied that the
perusal of the documents appended with the Plaint establish that the said agreements are
without consideration or that the same were never acted upon or do not create any
obligation of the Applicants. Denied that Plaintiff averred in the Plaint that the
Agreement for Financing dated 8-1-2005 or any other documents/agreements mentioned
in para 6 of the Plaint pertain to for the overdue outstanding liability of some other
Running Finance Facility not subject matter of the suit. Denied that the Statements of
Accounts of the Running Finance appended with the Plaint are either incomplete or
amounts disbursed, availed and repayments made by the Defendants have been attached
that the Statements of Account referred to in para-6(b)(i) of the Plaint and attached
thereto as Annexure- B/7 & B/8 are replete with unauthorized, unexplained or fictitious
entries. Said Statements of Accounts depict correct and true status of the accounts of
Applicants.
amount is payable by Applicants under the Running Finance Facility availed in the year
2005.
(i)
acted upon or no funds were disbursed there under or that no liability of
151
the Applicants is outstanding as alleged.

(ii)
acted upon or no funds were disbursed there under. Denied, therefore, that
(iii)
acted upon or no funds were disbursed there under. Denied that there is no
them under the Running Finance as alleged.
6(b)(iii)
Denied that the contents of para 6(b)(iii) of the Plaint are misconceived.
i.
Denied vehemently. It is denied that no amount was disbursed under the

never acted upon or that no funds were disbursed there under. Denied that
there is no outstanding liability of the Applicants under the Running
Finance as alleged.
ii.
Denied that Plaintiff has not provided complete Statement of Accounts or

that the said Statements of Accounts do not show true and faithful status of
iii.
iv.
upon or that no funds were disbursed there under. Denied, therefore, that
v.
no amount of mark-up on the Running Finance is outstanding as alleged.
vi.
vii.
them under the Running Finance. Denied that the claim of the Plaintiff is
152

It is further submitted that the liability of the Applicants against the Running
Ordinance, 2001 given in para-6(b)(iii) of the Plaint which are corroborated and
supported by the Statements of Account attached thereto as Annex- B/7 & Annex- B/8.
7(a)(i) Denied vehemently. Denied that the contents of para-No.7(a)(i) of the Plaint are
misconceived. Denied that pursuant to the approval dated 22.12.2004, Facility Offer
Letter as amended by Sanction Advice dated 07.02.2005 no Demand Finance was
extended or disbursed to Applicant No.1. Denied that the Undertaking dated 22-2-2005
has been misconstrued by the Plaintiff Bank or that the same does not relate to the
extension of the Demand Finance. It is submitted that through the Undertaking dated 2202-2005 Applicant No.1 had confirmed and accepted the terms and conditions contained
in the Sanction Advice No.COS/SAMD/MTR/745 dated 07.02.2005. Denied that the
aforesaid approvals, facility letter and the sanction advice are inconsistent or contrary to
the Agreement for Financing dated 8-1-2005 as alleged.
7(a)(ii) Denied vehemently. Denied that the contents of Para No.7(a)(ii) of the Plaint are
misconceived. Denied that Plaintiff either procured any blank document or it utilized the
said documents in violation of its representation to support its claim. Denied that either
claim of Plaintiff is belated claim or that any of the documents is without consideration or
that same cannot be made basis of liability of the Defendants. Denied that any of the
documents referred to para 7(a)(ii) of Plaint are fabricated or that the said documents are
liable to be declared as void, illegal or cancelled. Denied that no finance was disbursed to
or utilized by Applicant No.1 under Agreement for Financing dated 8-1-2005. Also
denied that the Agreement for Financing, Promissory Note or Letter of Pledge mentioned
in para 7(a)(ii) of Plaint are without consideration or that cannot be made basis for the
liability upon the Applicants against the Demand Finance. Denied that any of the above
documents are fabricated or that the said documents are liable to be declared as void,
illegal, of no legal effect or cancelled. Denied that under the Agreement for Financing
dated 8-1-2005 no amount of the Demand Finance was disbursed to or utilized by the
Applicant No.1. Denied that Plaintiff by its acts or omissions ever caused any loss to the
Applicants. Denied that Plaintiff either failed to protect stocks pledged with it
(worth
Rs.35-40 Million) or ever committing default of its any obligation with regards
to the pledged goods. Applicant was under obligation to get released the pledged stocks
by making payment of their value and mark up which it failed. However, it is
categorically stated that Plaintiff will not be responsible if value or quality of the said
stocks is depreciated or diminishes due to passage of time because of failure of the
Applicants to get released the same by making aforesaid payment to Plaintiff. As Plaintiff
153
has not committed any illegality as to the stocks in the possession, custody or control of
its appointed Muqaddam, Applicants are not entitled under any law to initiate any kind of
proceedings against Plaintiff. Contents of reply of para 30 of the Preliminary Objections
above are reiterated.
7(b)(i) Denied vehemently. Denied that the contents of Para No.7(b)(i) of the Plaint are
misconceived. Denied that either the Demand Finance facility was not extended or
disbursed to the Applicant No.1 pursuant to the Agreement for Financing dated 8-1-2005
or that the said agreement was fabricated by the Plaintiff to support its claim against the
Defendants. Denied that the perusal of the documents appended with the Plaint establish
that the said agreements are without consideration or that the same were never acted upon
or do not create any obligation of the Applicants. Denied that Plaintiff averred in the
Plaint
that
the
Agreement
for
Financing
dated
8-1-2005
or
any
other
documents/agreements mentioned in para 6 of the Plaint pertain to for the overdue

outstanding liability of the Cash Finance Facility or that the Cash Finance is not subject
matter of the suit. To explain and rebut the above allegation, contents of reply of para 30
of the Preliminary Objections above are reiterated. Denied that the Statements of
Accounts of the Demand Finance appended with the Plaint are either incomplete or
deficient in any manner. Complete Statements of Accounts of the Demand Finance since
inception, along with all supporting agreements and documents, showing correct and
complete picture of the accounts, amounts disbursed, availed and repayments made by
the Defendants have been attached with the Plaint. Therefore, claim of the Plaintiff Bank
is not liable to be rejected. Denied that the account of the Demand Finance was
maintained or operated by Plaintiff itself without the knowledge of the Applicants.
Denied that claim of Plaintiff with regard to the mark-up of the Demand Finance is illegal
or unlawful or that the Statement of Accounts of the mark up of the Demand Finance
attached with the Plaint was incorrect or that it does not reflect true picture of accounts as
alleged. Denied that the Statements of Accounts of the Demand Finance attached to the
Plaint contain any unauthorized, unexplained or fictitious entries as alleged. Said
Statements of Accounts depict correct and true status of the accounts of Applicants.
amount is payable by Applicants under the Demand Finance Facility availed in the year
2005.
(i)
(ii)
154

(iii)
them under the Demand Finance as alleged.
7(b)(iii)
Denied that the contents of para-7(b)(iii) of the Plaint are misconceived.

i.
Denied vehemently. It is denied that no amount was disbursed under the

there is no outstanding liability of the Applicants under the Demand
Finance as alleged.
ii.

iii.
iv.
v.
no amount of mark-up on the Demand Finance is outstanding as alleged.
vi.
vii.
them under the Demand Finance. Denied that the claim of the Plaintiff is
155
It is further submitted that the liability of the Applicants against the Demand
Ordinance, 2001 given in para-7(b)(iii) of the Plaint which are corroborated and
supported by the Statements of Account attached thereto as Annex- C/4 & Annex- C/5.
8(a)
Denied vehemently. Denied that the contents of Para No.8(a) of the Plaint are
misconceived. and denied. Denied that the Sanction Advice dated 31-12-2002 or any of
agreements and documents executed there under are not neither subject matter of the
titled suit or that the said documents do not any provide basis for the cause of action
against the Defendants. Denied that Applicants had cleared their liability arisen due to
payment by Plaintiff to the beneficiaries of L/Cs mentioned in para-8 of the Plaint. To
explain and rebut allegations and assertions contained in para under reply, contents of
reply of para 31 of the Preliminary Objections above are reiterated. Denied that
Applicants either paid a sum of Rs.110,568,819/- against the Letters of Credit mentioned
in para-8 or that said amount allegedly paid by Applicants was not properly or duly
adjusted. As stated in para 8 of the Plaint, on receipt of the shipping documents under six
(6) Letters of Credit by the Plaintiff, Defendant No.1 failed to get released the imported
goods by making any corresponding payment thereof and resultantly Plaintiff had to the
beneficiaries of the said L/Cs. Plaintiff had to made payment of an aggregate sum
Rs.18,971,777.00 to the beneficiaries of the said six (6) L/Cs. Denied that Plaintiff ever
illegally adjusted any amount against any illegally charged markup or other fees as
alleged. Denied that either entire Statements of Accounts of the Letters of Credit subject
matter of the suit have not been attached with the Plaint or that Plaintiff charged amounts
in excess to its entitlements or that Plaintiff is liable to refund any amount to the
Applicants. Complete Statements of Accounts for L/Cs/forced FIM have been attached as
Annex-E/1E, E/2E, E/3E, E/4E, E/5G, E/6F, E/7G, E/8G, E/9F and E/9G to the Plaint.
Denied that the claim of Plaintiff arising out of the Letters of Credit mentioned in para 8
of the Plaint is barred by limitation or that said claim in is illegal, void or that it cannot be
made basis for adjudication under the titled suit. Denied that Plaintiff Bank had charged
any excessive markup against the Letter of Credit facility in violation of the sanction
advices or that it made any illegal adjustments. Denied any adjustment made by Plaintiff
is liable to be reversed or credited to the accounts of the Applicants.
8(b)
Denied that the contents of Para No.8(b) of the Plaint are misconceived. Denied that
FIM-II is either illegal or unlawful or that it was granted for charging of any illegal or
unlawful mark-up over mark-up not permitted by SBP or under provisions of Ordinance
of 2001 or declared to be illegal or unlawful the Superior courts of Pakistan. Denied that
through grant of FIM-II an attempt has been made by Plaintiff to raise its time barred
claim under six Letters of Credit or that no amount arising out of said L/Cs/FIM-II can be
claimed by Plaintiff. Denied that any transactions with respect to cash shown in any
156
Statement of Account or with respect to any Letter of Credit or the claim there under is
unlawful, illegal or beyond the statutory period provided under the Limitation Act, 1908.
Denied that no proof of payments to the beneficiaries of six L/Cs has been appended with
the Plaint or that for the alleged reason the said claim is denuded of any credibility as
alleged. Denied that claim of the Plaintiff with regard to the outstanding liabilities of
FIM-II arising from Letter of Credit is either without any basis or is unrecoverable under
the law or that same is liable to be rejected. Denied that Plaintiff has received from
Applicants a sum of Rs.110,568,819/- against the Letters of Credit mentioned in para-8
or that Plaintiff failed to provide to Applicants details of the adjustments or transfers
made by it of the amount received by it, repayments made by Applicants or the
charges/fee claimed by Plaintiff.
(1)
Denied that the claim of Plaintiff with regard to FIM-II inter alia originating from the
consignments No.1,2,3 & 4 under Letter of Credit No. 2003/8406-8/LBBB/0212 is either
barred by limitation or cannot be recoverable. Denied that it is clear or obvious from the
contents of the Plaint or the documents appended therewith that no amount is legally due
or payable by the Applicants to Plaintiff as alleged. Denied that any of the Statements of
Accounts (Annex-E/1E, E/2E, E/3E, E/4E to the Plaint) referred to in para 8(b)1 of the
Plaint either suffers from any legal disability or is incomplete or that same do not reflect
true picture of accounts. Denied that the aforesaid Statements of Accounts establish that
Plaintiff has been transferring amounts from one account to another without associating
or consulting the Applicants as alleged. Each and every transfer shown in the said
accounts were made on the request of Applicant No.1. Denied that the claim in respect of
FIM-II arising out of the aforesaid Letter of Credit is illegal or unlawful or that the said
claim cannot be substantiated on the basis of the documents attached with the Plaint.
Denied that payments made to the beneficiaries of Letter of Credit remained unproved or
that no document in proof of such payments been appended with the Plaint. Denied that
Applicants have paid/repaid a sum of Rs.110,568,819/- against the Letter of Credit
facility. It is submitted that no amount whatsoever was paid by Applicants against the
aforesaid Letter of Credit facility. Contents of reply to Preliminary Objection No.31 are
reiterated.
(2)
(3)
(4)
(5)
(6)

Denied that the either aforesaid Letters of Credit or claim originating there from is
barred by limitation or that said claim is not recoverable. Denied that it is clear or
157
obvious from the contents of the Plaint or the documents appended therewith that no
amount is legally due or payable by the Applicants to Plaintiff as alleged. Denied that any
of the Statements of Accounts (Annex- E/5G, E/6F, E/7G, E/8G, E/9F and E/9G to the
Plaint) referred to in para 8(b)(2), (3), (4), (5) & (6) of the Plaint either suffers from any
legal disability or is incomplete or that same do not reflect true picture of accounts.
Denied that the aforesaid Statements of Accounts establish that Plaintiff has been
transferring amounts from one account to another without associating or consulting the
Applicants or it has bee charging unlawful mark-up or other frivolous amounts. Denied
that the claim in respect of FIM-II arising out of the aforesaid Letters of Credit is illegal
or unlawful or that the said claim cannot be substantiated on the basis of the documents
attached with the Plaint. Denied that payments made to the beneficiaries of Letter of
Credit remained unproved or that no document in proof of such payments been appended
with the Plaint. Denied that Applicants have paid/repaid a sum of Rs.110,568,819/against the Letter of Credit facility. It is submitted that no amount whatsoever was paid
by Applicants against the aforesaid Letter of Credit facility. Contents of reply to
Preliminary Objection No.31 are reiterated.
8(c)
Denied that FIM-II facility was not extended or disbursed pursuant to the approval No.
COS/SAMD/MTR/5330 dated 22.12.2004 and the Facility Offer Letter
BBL/FE/2004/754
dated
23-12-2004
as
amended
by
the
Sanction
No.
Advice
No.COS/SAMD/MTR/745 dated 07.02.2005. Denied that Plaintiff either procured any

blank document or it utilized the said documents in violation of its representation to
support its claim. Denied that either claim of Plaintiff is belated claim or that any of the
documents is without consideration or that same cannot be made basis of liability of the
Defendants. Denied that any of the documents referred to para 8(c) of Plaint are
fabricated or that the said documents are liable to be declared as void, illegal or
cancelled. Denied that no finance was disbursed to or utilized by Applicant No.1 under
Agreement for Financing dated 8-1-2005. Denied that the aforesaid approval letter,
facility letter and the sanction advice are inconsistent or contrary to the Agreement for
financing dated 8-1-2005. Also denied that the Agreement for Financing, Promissory
Note or Letter of Pledge mentioned in para 8(c) of the Plaint are without consideration or
that cannot be made basis for the liability upon the Applicants against the FIM-II facility.
Denied that any of the above documents are liable to be declared as void, illegal, of no
legal effect or cancelled. Denied that Plaintiff by its acts or omissions ever caused any
loss to the Applicants. Denied that Plaintiff either failed to protect stocks pledged with it
or ever committing default of its any obligation with regards to the pledged goods.
Regarding assertions and allegations with respect to the pledged stocks, contents of reply
to para-7(a)(ii) above are reiterated. Applicants are not entitled under any law to initiate
any kind of proceedings against Plaintiff. Contents of reply of para 31 of the Preliminary
158
Objections above are also reiterated.

8(d)(i) Denied vehemently. Denied that the contents of Para No.8(d)(i) of the
Plaint are misconceived. Denied that either FIM-II facility was not extended or disbursed
to the Applicant No.1 pursuant to the Agreement for Financing dated 8-1-2005 or that the
said agreement was fabricated by the Plaintiff to support its claim against the Defendants.
As stated in para 8(d)(i) of the Plaint, Plaintiff extended and disbursed and Defendants
availed FIM-II under the Agreement for Financing dated 8-1-2005. Denied that no
amounts under FIM-II Facility were availed, disbursed or made available to the
Defendants or that the said facility is result of juggling of accounts by Plaintiff carried out
by it to support its claim or to camouflage any illegal or unlawful adjustments as alleged.
It is submitted that the Applicants have been admitting their liability towards the FIM-II
facility and the objection as to the same has been raised first time through PLA under
reply. Copies of the letters dated 21-01-2006, dated 01-02-2006 and dated 10-06-2006
whereby Applicant/Defendant No.1 acknowledged its liability against the facilities
subject matters of the suit including FIM-II and committed to make payments there
against have been annexed with the Plaint as Annex- L to L/2. Through the aforesaid
letter dated 01-02-2006 (Annex- L/1 to the Plaint at page 505), Applicant No.1
categorically stated and acknowledged that a sum of Rs. 12.06 million (more than the
amount of Rs.11,836,795 claimed in the suit against the principal amount of the FIM-II
facility) was its outstanding liability against the principal amount of the FIM-II and
promised to pay the same upto june 2006. Denied that the Statement of Account (AnnexE/13 to the Plaint) indicates that either no disbursement of funds was made to the
Defendants or that Plaintiff unilaterally handled the said accounts. Denied that FIM-II
was granted with the purpose to charge markup over markup and to conceal any
illegalities committed or any interpolated entries in the Statements of Accounts as
alleged. Denied that for concealing its any alleged malafide and illegal acts Plaintiff ever
avoided or refused to supply Statement of Account to the Defendants. Denied that the
documents and agreements attached with the Plaint are without consideration, were never
acted upon or that the same do not create any obligation of the Applicants. Denied that
the Statements of Accounts of FIM-II appended with the Plaint are either incomplete or
amounts disbursed, availed and repayments made by the Applicants have been attached
that the account of FIM-II was maintained or operated by Plaintiff itself without the
knowledge of the Applicants. Denied that claim of Plaintiff with regard to the mark-up of
FIM-II is illegal or unlawful or that the Statements of Accounts of FIM-II attached with
the Plaint were incorrect or that they do not reflect true picture of accounts as alleged.
Denied that the Statements of Accounts of FIM-II attached to the Plaint contain any
159
fictitious entries as alleged. Said Statements of Accounts depict correct and true status of
the accounts of Applicants.
misconceived.
(i)
(ii)
Plaintiff is not entitled to charge, claim or recover any mark-up in respect
of the FIM-II facilty from the Applicants as alleged.
(iii)
outstanding liability of the Applicants or that no amount is due or payable
by them under the FIM-II facility as alleged.
8(d)(iii)
Denied that the contents of para-7(d)(iii) of the Plaint are misconceived.

i.

there is no outstanding liability of the Applicants under the FIM-II facility
as alleged.
ii.

that the Statements of Accounts attached with the Plaint do not show true
and faithful status of accounts as alleged.
iii.
iv.
no amount of mark-up on the FIM-II facility is outstanding. Denied that
Plaintiff is not entitled to seek recovery of mark-up of the FIM-II facility
from the Applicants as alleged.
v.
no amount of mark-up on the FIM-II facility is outstanding as alleged.
vi.
160
Plaintiff is not entitled to recover mark-up of the FIM-II facility from the
vii.
them under the FIM-II facility. Denied that the claim of the Plaintiff is
Annex- E/13 & Annex- E/14.
9(a).
Denied that pursuant to the approval dated 22.12.2004, Facility Offer Letter as amended
by Sanction Advice dated 07.02.2005 no FATR facility was extended or disbursed to
Applicant No.1. Denied that the aforesaid approvals, facility letter and the sanction
advice are inconsistent or contrary to the Agreement for Financing dated 8-1-2005 as
alleged. Denied the Agreement for Financing dated 8-1-2005 has been forged or
fabricated by the Plaintiff to support its frivolous claim against Applicants. Denied that
either liability of Applicants under the Demand Finance and FIM-II facilities claimed is
wrong or that the said facilities were created to charge mark-up over markup or to
camouflage any illegal or unlawful adjustments allegedly made by Plaintiff
9(b)
Denied vehemently. Denied that the contents of para-9(b) of the Plaint are misconceived.
Denied that the Agreement for Financing dated 8-1-2005 has been forged and fabricated
by Plaintiff to support its claim against Applicants under FATR facility. Denied that the
FATR limit was not sanctioned through the aforesaid approvals or that no amount of
FATR facility was disbursed pursuant to the Agreement for Financing dated 8-1-2005 and
Promissory Note and other documents mentioned in para-9(b) of the Plaint. As stated in
para-9of the Plaint the FATR facility was granted for obtaining delivery by the Defendant
No.1 of the stocks pledged with the Plaintiff against the aforesaid Demand Finance of
Rs.22.00 million and FIM-II of Rs.24.00 million. As stated in reply to para-33 of the
Preliminary Objections above, it is reiterated that disbursement of funds against a
F.A.T.R limit is always made through delivery of pledged stocks. Defendant No.1 by
executing Trust Receipt dated 28-10-2005 and Trust Receipt dated 28-10-2005 (AnnexF/2 & F/3 to the Plaint) took from the Plaintiff delivery of the stocks/goods of the value
of Rs.2,950,099.00 and Rs.3,670,000.00 pledged against the aforesaid FIM-II & the
Demand Finance respectively. Statements of Account for Account No. 01-540-0144-2 &
for Account No. 01-540-0145-3 appended with the Plaint as Annex-F/4 & Annex-F/5 of
161
FATR-Limit evidenced that the disbursement of aforesaid amounts were made to the
Applicant No.1. However, in violation of its obligations under the aforesaid Trust
Receipts, Defendant No.1 failed to pay to the Plaintiff the aforesaid values of the
stocks/goods delivered to it.
9(c)
Denied that Plaintiff had procured documents mentioned in para-9(c) of the Plaint in
blank or subsequently filled up the said alleged blank documents to legitimize FATR
facility. Denied that the FATR facility was never extended or provided to the Applicants.
It is reiterated that disbursement of funds against a F.A.T.R limit is always made through
delivery of pledged stocks. Defendant No.1 by executing two Trust Receipts both dated
28-10-2005 (Annex-F/2 & F/3 to the Plaint) took delivery of the stocks/goods from the
Plaintiff of the values of Rs.2,950,099.00 and Rs.3,670,000.00 pledged against the
aforesaid FIM-II & the Demand Finance respectively. Statements of Account for Account
No. 01-540-0144-2 & for Account No. 01-540-0145-3 appended with the Plaint as
Annex-F/4 & Annex-F/5 evidenced that the aforesaid two sums of Rs.2,950,099.00 and
Rs.3,670,000.00 were disbursed to Applicant No.1 on 28-10-2005. Therefore, it is denied
that that the content of para-9(c) of the Plaint are either inconsistent or contrary to the
Statements of Accounts of FATR facility attached with the Plaint. Denied that either
Plaintiff Bank ever caused any loss to the Applicants or that Applicants are entitled under
law to recover from the Plaintiff the said alleged loss.
9(d)(i) Denied vehemently. Denied that the contents of Para 9(d)(i) of the Plaint are
misconceived. Denied that, under the Agreement for Financing dated 8-1-2005, no FATR
facility was availed by the Applicant or that the said Agreement for Financing dated 8-12005 was fabricated by the Plaintiff to support its claim against the Defendants. Denied
that the Statements of Accounts of the FATR facility appended with the Plaint are either
incomplete or deficient in any manner. Complete Statements of Accounts, along with all
supporting agreements and documents, showing correct and complete picture of the
accounts, amounts disbursed to and availed by the Defendant No.1 have been attached
with the Plaint. However, as no repayment whatsoever was made by the Applicants
against the FATR facility, no repayments by the Applicants has been shown in the said
Statements of Accounts. Therefore, claim of the Plaintiff Bank is not liable to be rejected.
Denied that the accounts of the FATR facility were maintained or operated by Plaintiff
itself without the knowledge of the Applicants. Denied that the claim with regard to the
mark-up of the FATR facility is either illegal or unlawful or that the Statement of
Accounts of mark-up was incorrect or it does not reflect true picture of accounts as
alleged. Denied that the Statements of Accounts of the FATR facility attached with the
Plaint contain any unauthorized, unexplained or fictitious entries as alleged. Denied that
Plaintiff through any illegal adjustments from one account to another or through creation
of some illegal account deprived Applicants of their any right. Denied that no amount
162
under the FATR Facility was disbursed or that the same was created as an instrument to
adjust some disputed liabilities of Applicants as alleged. Denied that any of the
Statements of Accounts mentioned in para 9(d)(i) is deficient in any details or replete
with unauthorized entries as alleged.
misconceived.
(i)
(ii)
(iii)
them under the FATR facility as alleged.
9(d)(iii)
Denied vehemently. Denied that the contents of para 9(d)(iii) of the Plaint are
misconceived.
i.

there is no outstanding liability of the Applicants under the FATR facility
as alleged.
ii.

iii.
iv.
v.
no amount of mark-up on the FATR facility is outstanding as alleged.
163
vi.
vii.
them under the FATR facility. Denied that the claim of the Plaintiff is
Annex- F/4, F/5 & F/6.
10(a)(i)
Denied vehemently. Denied that the contents of para-10(a)(i) of the Plaint are
misconceived. Denied that the Cash Financial Facility of Rs.25 million does not
form subject matter of the titled or that the said facility cannot be adjudicated
upon in the instant proceedings as alleged. As stated in para 10 of the Plaint a sum
of Rs.7,856,550.00 is presently outstanding and payable by the Applicants under
the Cash Finance Facility. Denied that either claim of Plaintiff under Cash
the Defendants. Denied that any of the documents referred to in the para-10(a)(i)
are without consideration or that the Cash Finance was not disbursed to or utilized
by the Defendants. Denied that no amount against the Cash Finance is legally due
or payable by Applicants.
10(a)(ii)
Denied vehemently. Denied that the contents of para-10(a)(ii) of the Plaint are
misconceived. Denied that the Cash Financial Facility of Rs.25 million does not
form subject matter of the titled or that the said facility cannot be adjudicated
upon in the instant proceedings as alleged. As stated in para 10 of the Plaint a sum
of Rs.7,856,550.00 is presently outstanding and payable by the Applicants under
the Cash Finance Facility. Denied that either claim of Plaintiff under Cash
the Defendants. Denied that any of the documents referred to in the para-10(a)(ii)
are without consideration or that the Cash Finance was not disbursed to or utilized
by the Defendants. Denied that no amount against the Cash Finance is legally due
164
or payable by Applicants. Denied that the Statements of Account of the Cash

Finance annexed to the Plaint establish that the Cash Finance Facility was interest
bearing or for that reason the same is beyond the jurisdiction of this Honourable
Court under the Ordinance of 2001. It is submitted that Cash Finance granted on
mark-up basis. Therefore, it is denied that this Honourable Court lacks
jurisdiction to adjudicate upon and decide the claim in respect of the Cash
Finance Facility.
10(b)(i)
Denied vehemently. Denied that the contents of Para-10(b)(i) of the Plaint are
misconceived. Denied that the Statements of Accounts of the Cash Finance
attached with the Plaint are deficient in any manner or details or that the said
Statements of Accounts do not create or establish any liability of the Applicants.
Denied that either no mark-up can be legally charged on the Cash Finance or that
claim in respect thereof is barred by limitation.
10(b)(ii)
Denied vehemently. Denied that the contents of para 10(b)(ii) of the Plaint are
misconceived. It is submitted neither any Agreement for Financing dated 8-12005 for the Cash Finance was executed nor the said alleged agreement has been
attached with the Plaint. In view of the above fact, contents of para 10(b)(ii) of
PLA under reply are denied.
(i)
Denied that no funds under Cash Finance were disbursed or that no

liability of the Applicants against the Cash Finance is outstanding as
alleged.
(ii)
Denied that no amount of mark-up on the Cash Finance facility is

outstanding. Denied that Plaintiff is not entitled to recover mark-up of the
Cash Finance facility from the Applicants as alleged.
(iii)
10(b)(iii)
Denied that there is no outstanding liability of the Applicants against the

Cash Finance or that no amount is payable by them under the Cash
Finance facility as alleged.
Denied vehemently. Denied that the contents of para 10(b)(iii) of the Plaint are
misconceived. It is reiterated that neither any Agreement for Financing dated 8-12005 for the Cash Finance was executed nor the said alleged agreement has been
attached with the Plaint. In view of the above fact, contents of para 10(b)(iii) of
PLA under reply are denied.
i.
Denied vehemently. Denied that no amount under Cash Finance was
disbursed or that there is no outstanding liability of the Applicants under
the Cash Finance as alleged.
ii.

that the Statements of Accounts of the Cash Finance facility attached with
the Plaint do not show true and faithful status of accounts as alleged.
iii.
Denied that either no funds under the Cash Finance were disbursed or that
no liability of the Applicants is outstanding there against as alleged.
165
iv.
Denied that either no funds under the Cash Finance were disbursed or no
amount of mark-up of the Cash Finance facility is outstanding. Denied that
Plaintiff is not entitled to recover from the Applicants mark-up of the Cash
Finance facility.
v.
amount of mark-up on the Cash Finance facility is outstanding as alleged.
vi.
amount of mark-up on the Cash Finance facility is outstanding as alleged.
Denied, therefore, that either no amount of mark-up on the Cash Finance
facility is outstanding or Plaintiff is not entitled to recover mark-up of the
Cash Finance facility from the Applicants as alleged.
vii.
Denied that either no funds were disbursed under the Cash Finance or
there is no outstanding liability of the Applicants there under. Denied that
no amount is payable by Applicants under the Cash Finance facility.
Denied that the claim of the Plaintiff is liable to be rejected as alleged.
It is further submitted that the liability of the Applicants against the Cash
Finance facility has been correctly mentioned in the particulars under Section 9(3)
of the Ordinance, 2001 given in para-10(b)(iii) of the Plaint which are
Annex- F/A/8 & F/A/9.
11.
Denied vehemently. Denied that the contents of paragraph-11 of the Plaint are
misconceived. Denied that all of the documents referred to in para-11 of the Plaint
whereby Applicants have created mortgages on their personal assets as security for the
facilities subject matters of the suit were executed before the Agreements of Financing all
dated 8-1-2005. Denied that the titled suit has been filed merely on the basis of
Agreements dated 8-01-2005. Memorandum of Deposit of Title Deeds dated 08-01-2005,
Copy of the Naqal Haqdaran Zamin for the year 1995-96 for the Mauza/ Hadbust Mauza
Bela Basti Ram, Tehsil City, Lahore , Memorandum of Deposit of Title Deeds dated 0801-2005, Memorandum of Deposit of Title Deeds dated 08-01-2005 and Memorandum of
Deposit of Title Deeds dated 08-01-2005 attached with the Plaint as Annex-G/4, G/5,
H/4, I/4 & Annex-J /4 were executed and furnished by the Applicants respectively
pursuant to the Agreements for Financing dated 08-01-2005. Similarly, all other mortgage
documents mentioned in para 11 of the Plaint were executed by the Applicants No. 1 to 4
respectively in consideration of and as security for the finance facilities (including the
aforesaid Running Finance, Demand Finance, FIM-II facility, FATR-Limit and Cash
Finance facility) that are the subject matter of the titled suit granted and renewed by the
Plaintiff from time to time under Sanction Advice dated 30.6.2001 as amended by the
Corrigendum No.CO/CD-P/1689 dated 10-7-2001, Sanction Advice No.CO/CDP/MNA/3188dated31.12.2002, approval No.COS/SAMD/MTR/5330 dated 22.12.2004,
166
Facility Offer Letter No. BBL/FE/2004/754 as amended by the Sanction Advice

No.COS/SAMD/MTR/745 dated 07.02.2005 (all attached with the Plaint). Therefore, it is
denied that the documents mentioned in para-11 of the Plaint have no nexus with the
facilities subject matters of the titled suit. Denied that either mortgages or the documents
whereby same were created/evidenced and referred to in para-11 of the Plaint are without
consideration or that same do not constitute cause of action for the titled suit or that any
of the said documents and mortgages were neither acted upon nor created any contractual
obligation or liability for the Applicants. Denied that the mortgages mentioned in para-11
of the Plaint are liable to be redeemed or that the mortgaged properties are liable to be
released.
12.
Denied that the Personal Guarantees referred to in para-12 of the Plaint and annexed
thereto were executed before four Agreements for Financing all dated 8-1-2005
mentioned in paras-6 to 9 of the Plaint. Denied that the titled suit has been filed merely
on the basis of Agreements dated 8-01-2005. It is submitted and clarified that four
Personal Guarantees all dated 08-01-2005 attached with the Plaint as Annex- K/8 to K/11
respectively were executed and furnished by the Applicants pursuant to the Agreements
for Financing dated 08-01-2005. Similarly, as stated in para-12 of the Plaint all of the
Personal Guarantees mentioned in said para and attached with the Plain as Annex-K to
K/11 to the Plaint were executed by the Applicants No.1 to 4 respectively in
consideration of and as security for the finance facilities including the aforesaid Running
Finance, Demand Finance, FIM-II facility, FATR-Limit and Cash Finance facility that are
the subject matter of the titled suit granted by the Plaintiff to the Defendant No.1 and
renewed from time to time under Sanction Advice dated 30.6.2001 as amended by the
Corrigendum No.CO/CD-P/1689 dated 10-7-2001, Sanction Advice No.CO/CDP/MNA/3188dated31.12.2002,approvalNo. COS/SAMD/MTR/5330 dated 22.12.2004,
Facility Offer Letter No. BBL/FE/2004/754 as amended by the Sanction Advice
No.COS/SAMD/MTR/745 dated 07.02.2005 9 (all attached with the Plaint). Therefore, it
is denied that the Personal Guarantees mentioned in para-12 of the Plaint have no nexus
with the facilities subject matters of the titled suit. Denied that the said Personal
Guarantees are without consideration or that same are liable to be declared as illegal, void
or cancelled as alleged. Denied that any of the said Personal Guarantees is either barred
by limitation or beyond the scope of the titled suit or that it does not form basis of
imposing any liability upon the Applicants as alleged. Denied that Plaintiff ever misused
its authority to fill in blanks in the Personal Guarantees. It is submitted that neither any
guarantee was procured in blank nor Plaintiff filled in the same in order to raise its claim
against the Applicants. Denied that the said Personal Guarantees do not even fulfill
requirements of law or that same are liable to be cancelled as alleged.
13.
167
Denied that Plaintiff ever refused to provide to Applicant No.1 Statements of Accounts. It
is submitted that Plaintiff has been periodically providing to the Applicants Statements of
Accounts but it never raised any objection thereto. On the other hand, as stated in para-13
of the Plaint as well as in various paras above, Applicant/Defendant No.1 has been
attached with the Plaint as Annex- L to L/2. Perusal of the aforesaid letters categorically
establishes that Applicants/Defendants never raised any objection or reservation as to the
correctness of any account or entries in the Statements of Accounts including the entries
regarding the amounts paid and payable by them to Plaintiff. Denied that no amount is
legally due or payable by Applicants. As stated in the Plaint an aggregate sum of Rs.
87,832,118.00 is legally due from and payable by Applicants against the aforesaid
Running Finance, Demand Finance, FIM-II facility, FATR-Limit and Cash Finance.
Denied that the aforesaid facilities were neither extended nor any funds there under were
made available to the Applicants as alleged. Denied that no amount is legally due,
payable or claimed in the titled suit against the aforesaid Running Finance, Demand
Finance, FIM-II facility, FATR-Limit and Cash Finance. Denied that the aforesaid letters
dated 21-01-2006, dated 01-02-2006 and dated 10-06-2006 have been prepared,
fabricated and forged by the Plaintiff by using the letterheads allegedly procured in blank
by Plaintiff. It is submitted that Plaintiff neither ever procured blank letterheads of M/s.
Sardar Enterprises nor fabricated any forged documents by using the same in order to
support its claim. Therefore, it is denied that the claim of the suit amount is illegal or that
it is liable to be rejected.
14.
Denied that the amounts claimed in the suit are not legally payable to Plaintiff. Denied
that any details mentioned in para-14 of the Plaint do not reflect true or integrated
position of the accounts as alleged. In fact complete details of the facilities subject
matters of the suit have been given in paras-6 to 10 of the Plaint and not in para 14
thereof. Denied that Applicant are entitled under law provide at the time of final hearing
of the suit details of the payments allegedly made by them to the Plaintiff Bank. Denied
that the facilities subject matters of the titled suit were not extended to Applicant No.1 or
that nor funds there under were made available to the said Applicant. Therefore, it is
denied that no amount is legally due or payable or can be claimed against the said
facilities.
15.
Denied that Plaintiff Bank has no legally valid cause of action against Applicants. Plaint
discloses cause of action in favour of Plaintiff and against Applicants.
16.
Denied vehemently. Denied that this Honourable Court lacks jurisdiction to adjudicate
upon and consider the facilities subject matters of the titled suit. Denied that any of the
168
facilities subject matters of the suit was interest bearing or that for that reason the same is
beyond the jurisdiction of this Honourable Court under the Ordinance of 2001. It is
submitted that all finance facilities subject matters of the titled suit were granted on markup basis. Therefore, it is denied that this Honourable Court lacks jurisdiction to adjudicate
upon and decide the titled suit.
17.
Legal.
From the reasons, facts and law stated above, it is clear that the Applicants have
failed to raise any Substantial Questions of law and facts necessitating recording of the
evidence for disposal of the titled suit. Therefore, it is respectfully prayed that the
application under reply may kindly be rejected and the suit of the Plaintiff Bank may
kindly be decreed out rightly against the Applicants and other Defendants.
PLAINTIFF (ABL)
through
Mirza Muzaffar Ahmad

Advocate High Court
Salman Akram Raja

M.A.(Cantab),LL.M(London)
LL.M (Harvard)
VERIFICATION:Verified on oath dated ________ on _______ 2007 that contents of reply to the particulars under section
10(4) of the Ordinance 2001 and paragraphs 1 to 14 of reply on merit above are true to the best of our
knowledge and the contents of the replies to the Preliminary Objections and paragraphs 15 to 17 on merit
above are correct to the best of our information which we believe to be true.
DEPONENT
D:\Sohail\Active\Mirza\PLA-ABL-Vs-Jawad-Rasheed-and-others
Original finished
169
The stock of adjusted forced FIM has been retained as pledge of stock against
FAPC-1 which is lying at Tanveer Custom Bonded Warehouse, Lahore and the
custom duties/other charges are yet to be paid.
Importer has not so far paid a huge amount of custom duty/other charges due to
which its import price can be considered as Rs. 5.197(M) whereas the market price
and the price quoted by the party in Letter of Pledge is Rs. 9.718 (M) which is
unrealistic.
The said pledged stock was imported through different banks during the year from 1999
to 2002 (details given at Page 13 of the report) and said imported stock was accepted as
security by the branch.
Pledged stock is lying in bonded warehouse since last two years and custom
duty/other charges has not yet been paid by the party. Custom Authorities may
auction the pledged stock at any time without informing to the bank.
M/s Sardar Enterprises B/O Badami Bagh, Lahore.
The goods are pledged in a Custom Bonded Warehouse had Muccadum has been
appointed and Muccadumage charges @ Rs. 15,000/- per month are also being
paid to him, which is not advisable, keeping in view the fact that despite posting of
Muccadum, the custom authorities have auctioned the stock in the recent past. In this
regard, the Regional Controller (Operations/Credit) were advised to review the
situation and take the necessary steps to safeguard the interest to the bank.
Deniedit is pertinent to mention that explicitly and impliedly the Bank was obliged to arrange for
and pay any amount against the goods in order to protect and preserve the pledged goods
but the bank even without extending any information to the Applicants allowed removal
thereof, which is unlawful and renders the Plaintiff Bank liable to return the goods worth
against whichpledged stocks of Defendants have availed
170
32.
Contents being incorrectly stated are denied vehemently. Denied that the stocks of tyres,
tubes or rims intended to be pledged with Plaintiff as security for the FAPC-I facility
were ever placed under the possession, control and custody of the Plaintiff pledge/bailee.
Possession of the aforesaid stocks was never handed over to Plaintiff by Applicants. It is
submitted that Applicant No.1 through the Letter dated 31-01-2003 (Mark-___) had
requested Plaintiff to grant to it a temporary export finance to enable Applicant No.1 to
meet its exports orders under two Exports L/Cs (Sight) for aggregate sum of euro
200,200. Above request by Applicant No.1 was accepted by Plaintiff and Plaintiff through
the sanction dated 24-02-2003 (Mark-___) granted to Applicant No.1 FAPC-I facility to
the tune of Rs.13.00 million. FAPC-I was required to be secured by Applicant No.1 inter
alia through pledge of stocks of tyres and tubes imported by the Applicant No.1
through different banks (not through Plaintiff). It was conveyed by Applicant No.1
that the aforesaid stocks intended to be pledged with Plaintiff were lying at Tanveer
Bonded Ware House situated at Gari Shahoo, Lahore. To take possession of the said
stocks for creation of pledge thereon, Plaintiff appointed m/s Al-Nawab Traders as
Muqaddam. However, when the aforesaid Muqaddam approached management of the
Tanveer Bonded Ware House, it was found that the said stocks were lying in the
aforesaid Bonded Ware House for the last two years under the control of the
customs authorities and could not be released as huge amount of customs
duty/other charges payable to the customs authorities were not paid by Applicant
No.1. Accordingly said stocks were not placed under the possession, control or custody
either of Plaintiff or its nominated Muqaddam. As per information received by Plaintiff
the aforesaid stocks were subsequently auctioned by the customs authorities to
recover custom duty/other charges payable to the customs authorities. Plaintiff did
not receive from the customs authorities any amount out of the sale proceeds of
the said stocks. It is further clarified that a FAPC-I facility (Finance against
packing credit) is granted for manufacturing of goods to be exported against firm
orders or irrevocable L/cs. No goods are imported under a facility of FAPC-I.
Therefore, goods financed under a FAPC-I facility can never be under pledge of a
financer of an exporter. Therefore, goods financed under FAPC-I mentioned in
para under reply were also never pledged with Plaintiff by Applicant No.1.
Therefore, it is denied that either any stocks were ever actually pledged with
Plaintiff as security for FAPC-I finance or it failed to perform its obligations or
responsibilities as bailee of any goods or that Plaintiff failed to safeguard or protect the
goods under its alleged bailment/pledge. Although it is not denied that the Defendants
repaid/discharged their liability under the FAPC-I facility from its own resources but it is
stated that as no goods were pledged with Plaintiff as security for the said facility,
171
Plaintiff was neither in the position nor liable to return any goods to Applicants. It is
submitted that the above assertion has been raised first time through PLA under reply. It
may be noted that even in the letters dated 23-01-2004 and dated 18-05-2004 (Marks____) whereby Applicant/Defendant No.1 inter alia forwarded cheques for adjusting
FAPC-I, Applicant No.1 neither stated that any goods were pledged with Plaintiff as
security for FAPC-I finance nor demanded release of the said stocks. Therefore, it is
denied that Applicants are entitled to the possession of any goods allegedly pledged with
Plaintiff. Denied that Plaintiff committed any negligence of its duties or responsibilities
or allowed any person or customs authorities to auction the said goods. Denied that any
prejudice to the interests of the Applicants was ever caused by any act or omission by
Plaintiff. Denied that either goods of Rs.35 to 40 Million or of any other amount were
ever actually pledged with Plaintiff as security for FAPC-I or Plaintiff was under any
obligation to pay any compensation to Applicant No.1 as alleged. Denied that either
Plaintiff allowed removal of any of the said stocks under control of the customs
authorities or it is liable to return to Applicants goods worth Rs.40.000 Million or of any
other amount or to pay to Applicant No.1 any amount by way of compensation to the loss
allegedly suffered by the Applicants as alleged. Denied that Plaintiff ever committed
default of any of its any obligation towards Applicant either in respect of any stocks or
otherwise. Denied that Plaintiff is under any contractual or legal obligation to pay any
amount to Applicant in respect of any goods or stocks as alleged.
172
32.
Denied vehemently. Denied that+++++ Defendants have availed FAPC-I facility

from the Plaintiff Bank against the pledge of tyres, tubes and rims which pledged
goods were placed under the possession, control and custody of the Plaintiff Bank. It
is pertinent to mention that upon the sanction of FAPC Facility it was agreed and
understood that the Plaintiff Bank will not only exercise lien over the documents but
the goods imported thereunder as well and shall extend absolute protection thereto,
performing its obligation and responsibilities as bailee, primarily to safeguard and
protect the goods under bailment/pledge. It is pertinent to mention that the goods were
placed under the control and possession of the Muqaddam appointed by the Plaintiff
Bank. It is submitted that the Defendants repaid/discharged entire liability under the
FAPC facility from its own resources upon discharge whereof the same becomes entitled
to the possession of the pledged goods. It subsequently transpired that the Plaintiff Bank
in utter negligence of its duties and responsibilities allowed the pledged goods to be
auctioned causing serious prejudice to the interest of the Applicants. It is pertinent to
mention that the pledged goods worth Rs.35-40 Million were neither returned to the
Defendants nor any compensation paid thereunder by the Plaintiff Bank. It is pertinent to
mention that explicitly and impliedly the Bank was obliged to arrange for and pay any
amount against the goods in order to protect and preserve the pledged goods but the bank
even without extending any information to the Applicants allowed removal thereof,
which is unlawful and renders the Plaintiff Bank liable to return the goods worth
173
1.
Mr ___________ s/o _________________ carrying on business under the name and style
of
M/s.
_______________________________________________
________________.
at
SUIT FOR RECOVERY OF RS.87,832,118.00 THROUGH ENFORCEMENT & SALE

OF THE MORTGAGED PROPERTIES, HYPOTHECATED & PLEDGED STOCKS,
ENFORCEMENT OF PERSONAL GUARANTEES AS WELL AS SALE OF OTHER
ASSETS OF THE DEFENDANTS.
3.
That the Defendant No.1 is carrying on business under the name and style of M/s.
______________having its principal place of business at ______________ Defendant
No.1 is the sole proprietor of the aforesaid ____________. Defendant No.1 had opened
on 29-03-2001 and maintained with the Plaintiff's aforesaid Branch at ______________,
a current account bearing Current Account No. __________in the name of M/s.
________________. A copy of the application form for opening of the above current
account is attached as Annex-A/4. Defendant No.1 has also been availing various
financial facilities from the Plaintiff which facilities were also renewed and availed by the
Defendant No.1 from time to time.
Prayer
In view of the above facts and submissions, the Plaintiff most respectfully prays that:
a)
A decree in the sum of Rs. 87,832,118.00 may kindly be passed in favour of the
Plaintiff against Defendant Nos.1 to 4 jointly and severally with all costs, charges
and expenses payable under the financing Agreements/Security Documents along
with cost of fund in terms of Section 3 of the Financial Institutions (Recovery of
Finances) Ordinance, 2001 from the date of default to the date of payment
through enforcement of mortgages and sale of the mortgaged properties and sale
of the hypothecated and pledged stocks and other assets of the Defendant Nos.1 to
4 as well as by enforcement of the aforesaid
Personal Guarantees by the
Defendant Nos.1 to 4.
b)
An order be made declaring that the Plaintiff is entitled to take possession of and
recover the properties of Defendants No.1 to 4 that are mortgaged, under any
charge in favour of the Plaintiff Bank and the pledged stocks detailed in the paras
6 to 11 above of this Plaint directly and if need be with the assistance of this
Court.
c)
The Defendants No.1 to 4 be restrained from alienating the mortgaged properties,

hypothecated assets and pledged stocks as well as their all other immoveable and
174
moveable assets and all such assets be attached.

d)
Receiver(s) be appointed over the affairs of the business of the Defendant No.1
i.e. _______________ M/s _____________________.
e)
A local commission be appointed to make a complete inventory of all moveable

assets concerning and forming part of the business of the Defendant No.1 i.e. i.e.
_______________ M/s _____________________.
f)
Plaintiff be allowed to sell the pledged stocks lying at the godowns situated at
_____________________________
g)
Any other relief, which this Honourable Court deems fit and appropriate in the
circumstances of the case, may also be granted.
i)
Costs of the suit may kindly also be granted.
Denied vehemently. Denied that either any legal or factual issues have been raised
through PLA or on the basis of the said alleged legal or factual issues any substantial
questions of law or facts requiring recording of evidence for adjudication of the titled suit
have been raised. In fact, no question of law or fact has been raised through PLA under
reply and an out right decree is liable to be passed against the Applicants. Denied that any
ground, legal or factual issues or question of law or facts entitling Applicant for grant of
leave to defend the suit has been raised through PLA under reply.
Denied vehemently. Denied that either any legal or factual issues have been raised through PLA
under reply, or that on the basis of the said alleged questions of law or facts require
recording of evidence for adjudication of the titled suit. In fact, no substantial question of
law or fact has been raised through PLA under reply and an out right decree is liable to be
passed against the Applicants. Denied that any ground or question of law or facts for
grant of leave to defend the suit has been raised through the Application under reply.
30.
No.1 made through Letter dated 23-11-2004 (Mark-A) Plaintiff vide approval No.
Defendant No.1 inter alia the Demand Finance to the tune of Rs.38.00 million in lieu of
and by way of restructuring of the aforesaid Cash Finance. Terms and conditions of the
175
facilities approved through the above approval were conveyed to the Applicant No.1
through the Facility Offer Letter No. BBL/FE/2004/754 dated 23-12-2004. Applicant
No.1 returned to the Plaintiff returned a copy of the aforesaid the Facility Offer Letter
No. BBL/FE/2004/754 dated 23-12-2004 duly signed by it in acceptance of terms and
conditions contained therein (Annex-B/1 to the Plaint). Later on through the Sanction
Advice No.COS/SAMD/MTR/745 dated 07.02.2005 (Annex-B/2 the Plaint) inter alia the
amount of the Demand Finance was reduced to Rs.22.00 million. In acceptance of and
for compliance with the terms and conditions contained in the aforesaid Sanction Advice
No.COS/SAMD/MTR/745 dated 07.02.2005, Applicant No.1 executed the Undertaking
dated 22-02-2005 (Annex-B/3 to the Plaint). Accordingly, a lawful agreement was
reached between the Plaintiff and the Defendant No.1 in terms of which Plaintiff granted
to the Defendant No.1 inter alia the aforesaid Demand Finance in lieu of the Cash
Finance. In pursuance of the above approvals and to avail the Demand Finance,
Applicant No.1 also executed inter alia the Agreement for Financing dated 08-01-2005
(Annex-C to the Plaint). Further submitted that the Defendant No.1 proceeded to avail
funds in terms of the Demand Finance evidenced by the Statements of Account appended
with the Plaint as Annex-C/4. Statement of Accounts of the aforesaid Cash Finance is
attached with the Plaint as Annex-F/A8. The above Statements of Accounts establish that
on 26-02-2005 a sum of Rs.22,010,880.00 was outstanding debit balance against the
principal amount of the Cash Finance which was adjusted on the same day by
disbursement of Rs.22,010,880.00 against the Demand Finance. Therefore, it is denied
that the Demand Finance facility was created to extend legitimacy to any illegal or
unlawful adjustment and transfers made from the Cash Finance account as alleged.
Denied that the Applicants had made substantial payments towards the adjustment of the
Cash finance facility. As evidenced from the Statement of Accounts of the Cash Finance,
against the total withdrawal of Rs.32,204,338.00, Applicants adjusted merely as sum of
Rs10,193,458.00 from their own resources and the balance amount of Rs.22,010,880.00
was adjusted on26-02-2005 by disbursement of Rs.22,010,880.00 against the Demand
Finance. Denied that the Plaintiff ever refused to supply to the Applicants Statements of
Accounts of the facilities subject matters of the suit containing correct details of the
amounts availed by the Applicants and repaid. On the other hand, Plaintiff has been
forwarding Statements of Accounts of all facilities to the Applicants periodically without
any default and Applicants never raised any objection as to any entry therein. Therefore,
it is denied that the Demand Finance facility granted with the objective to camouflage
any alleged irregularities or illegalities committed attributed to the Plaintiff Bank in the
cash finance account. Denied that that either no funds were disbursed to or utilized by the
payable under the Demand Finance. Complete and correct accounts have been annexed
with the Plaint and nothing has been concealed. Denied that any illegal or unlawful
176
adjustments were ever by the Plaintiff Bank in any account of the Applicants.
It is submitted that the Applicants have been admitting their liability towards the
Demand Finance and the objection as to the same has been raised first time through PLA
under reply. Copies of the letters dated 21-01-2006, dated 01-02-2006 and dated 10-062006 whereby Applicant/Defendant No.1 acknowledged its liability against the facilities
subject matters of the suit and committed to make payments there against have been
annexed with the Plaint as Annex- L to L/2. Through the aforesaid letter dated 21-012006 (Annex- L to the Plaint at pages 503 to 504), Applicant No.1 categorically stated
and acknowledged that a sum of Rs.9.613 million (more than the amount of
177
L/C Limit of Rs._____________.

Documents.
Comments.
i. Letter of Credit No._________

dated ______________.
i.__________________________________
____________________________________
____________________________________
____________________________________
ii. Application and Agreement for

Irrevocable Documentary Credit
Dated ____________
ii.__________________________________
___________________________________
___________________________________
___________________________________
iii. Undertaking/IB-9
iii._________________________________
___________________________________
___________________________________
___________________________________.
iv. _____________________
________________________
iv._________________________________
___________________________________
___________________________________
___________________________________.
v. _____________________
________________________
v._________________________________
___________________________________
___________________________________
___________________________________.
vi. Shipping Documents.

i.Commercial Invoice dated ________.
________________________
i._________________________________
___________________________________
___________________________________
___________________________________.
ii.Packing List dated _____________.

________________________
ii._________________________________
___________________________________
___________________________________
___________________________________.
iii.Bill of Lading dated ____________

________________________
iii_________________________________
___________________________________
___________________________________
___________________________________.
iv.Bill of Exchange dated ___________

________________________
iv._________________________________
___________________________________
178
___________________________________
___________________________________.
v.Statement of Accounts of forced PAD.
Statement of Accounts establishes that

payment of Rs.________ was made to the
______________ on __________________.
Limit of Rs._____________ for negotiation of L/c/ Bills.

Documents.
Comments.

dated ______________.
i.__________________________________
____________________________________
____________________________________
____________________________________

Dated ____________
ii.__________________________________
___________________________________
___________________________________
___________________________________
iii._________________________________
___________________________________
___________________________________
___________________________________.
iv. _____________________
________________________
iv._________________________________
___________________________________
___________________________________
___________________________________.
v. _____________________
________________________
v._________________________________
___________________________________
___________________________________
___________________________________.

________________________
i._________________________________
___________________________________
___________________________________
___________________________________.

________________________
ii._________________________________
___________________________________
___________________________________
___________________________________.

________________________
iii_________________________________
___________________________________
___________________________________
179
___________________________________.

________________________
iv._________________________________
___________________________________
___________________________________
___________________________________.
v.Statement of Accounts.
Statement of Accounts establishes that, on

____________ payment of Rs.________
was made to the customer through
negotiation of L/C/Bill.
180
(b).
Consignment No.2:
i.
ii.
iii.
iv.
v.
Accounts
establishes
that
payment
of
Rs.2,606,995.00 was made on 16-04-2003.
(c).
Consignment No.3:
i.
ii.
iii.
iv.
v.
Statement of Account (Annex-E/3E). Statement of
Account
establishes
that
payment
of
Rs.2,593,197.00 was made on 16-04-2003.
(d).
Consignment No.4:
i.
ii.
iii.
iv.
v.
Account
establishes
that
payment
of
Rs.2,522,218.00 was made on 16-04-2003.
L/C Limit of Rs._____________.
Documents.
Comments.

dated ______________.
i.__________________________________
____________________________________
____________________________________
____________________________________

Dated ____________
ii.__________________________________
___________________________________
___________________________________
___________________________________
iii._________________________________
___________________________________
___________________________________
___________________________________.
iv. _____________________
________________________
iv._________________________________
___________________________________
___________________________________
___________________________________.
v. _____________________
________________________
v._________________________________
___________________________________
___________________________________
___________________________________.
181

________________________
i._________________________________
___________________________________
___________________________________
___________________________________.

________________________
ii._________________________________
___________________________________
___________________________________
___________________________________.

________________________
iii_________________________________
___________________________________
___________________________________
___________________________________.

________________________
iv._________________________________
___________________________________
___________________________________
___________________________________.
v.Statement of Accounts of forced PAD.
Statement of Accounts establishes that payment of

Rs.________ was made to the ______________ on
__________________.
Limit of Rs._____________ for negotiation of L/c/ Bills.
Documents.
Comments.

dated ______________.
i.__________________________________
____________________________________
____________________________________
____________________________________

Dated ____________
ii.__________________________________
___________________________________
___________________________________
___________________________________
iii._________________________________
___________________________________
___________________________________
___________________________________.
iv. _____________________
________________________
iv._________________________________
___________________________________
___________________________________
___________________________________.
v. _____________________
________________________
v._________________________________
___________________________________
___________________________________
___________________________________.

________________________
i._________________________________
___________________________________
182
___________________________________
___________________________________.

________________________
ii._________________________________
___________________________________
___________________________________
___________________________________.

________________________
iii_________________________________
___________________________________
___________________________________
___________________________________.

________________________
iv._________________________________
___________________________________
___________________________________
___________________________________.
v.Statement of Accounts.
Statement of Accounts establishes that, on

____________ payment of Rs.________ was made to
the customer through negotiation of L/C/Bill.
183
C.O.S. No.___________/2007
Allied Bank Limited, a banking company incorporated under the Companies Ordinance, 1984
and having its registered office at 8-Egerton Road/Kashmir Road, Lahore and a branch amongst
others at Badami Bagh, Lahore.
Plaintiff
Versus
1.
___________________s/o Haji Sheikh Mohammad Rashid carrying on business under

the name and style of M/s. Sardar Enterprises, 313 Circular Road, Badami Bagh, Lahore/
House No. 230-231, Block N, Samanabad, Lahore.
3.
That the Defendant No.1 is carrying on business under the name and style of M/s. Sardar
Enterprises having its principal place of business at 313 Circular Road, Badami Bagh,
Lahore. Defendant No.1 is the sole proprietor of the aforesaid Sardar Enterprises.
Defendant No.1 had opened on 29-03-2001 and maintained with the Plaintiff's aforesaid
Branch at Badami Bagh, Lahore a current account bearing Current Account No. 01-2007183-2 in the name of M/s. Sardar Enterprises. A copy of the application form for
opening of the above current account is attached as Annex-A/4. Defendant No.1 has also
been availing various financial facilities from the Plaintiff which facilities were also
renewed and availed by the Defendant No.1 from time to time.
4.
That Defendant Nos. 1 to 4 executed Personal Guarantees and mortgaged their properties
with the Plaintiff as security inter alia for the facilities that are the subject matter of the
titled suit.
5.
That all the addresses of the parties have been correctly given in the heading of the plaint
which are sufficient for the purposes of the processes that may be issued by this
Honourable Court.
184

Annex-B pg 109
Annex-B/1 pg 112
Annex-B/2 pg 116
Annex-B/3 pg 120

with the terms of the above
Sanction Advice dtd 07.02.2005).

B pg 109,B/1 pg 112,-B/2 pg 116 & B/3 pg 120
III. Documents.
Last Agreement for financing dtd 08-01-2005 Annex- B/4 pg121.
185

Annex-F/2 pg 316-318
Annex-F/3 pg 319

(a)

Defendant No.1.
(ii)
(b)
(c)
That vide
186
Disbursement of Demand Finance

Statement of Accounts of Cash Finance
On 26-02-2005 (pg 348) a sum of Rs.22,010,880.00 that
was the outstanding debit balance against the principal
amount of the Cash Finance which was adjusted
on the same day by disbursement of Rs.22,010,880.00
against the Demand Finance (pg150).
Annex-F/A8 pg 344-348
Pg 348 of Plaint
Annex-C/4pg150
187
To ____________
Dated __________
Subject:
Notice of sale of pledged stocks under section 176 of the

Contract Act, 1872.
Sir,
1.
You availed from Habib Bank Limited (HBL) through its branch at ________________
inter alia, ______________ Finance to the tune of Rs._______________.00 million under
the terms of the Agreement for Financing dated _______________. Your liabilities in
respect of the finance facility was inter alia secured through pledge of stocks of
___________ and you executed Letter of Pledge dated ____________. Pledged stocks
are lying at the Godown situated at _________________________(detailed in the Stock
Report attached herewith as Annex-A).
2.
The above mentioned facility expired on _______________ but you committed default
and failed to liquidate and adjust the aforesaid facility. As per details given below an
aggregate sum of Rs.______________is due to HBL from you:
3.
(i)
Rs.
(ii)
Markup outstanding.
Rs.
(iii)
Total Amount Payable as of ______.
Rs.
You are given notice to make payment of the aforesaid aggregate sum of Rs. on or before
________________. Take notice that in the event of your failure to pay the above amount
of Rs.________________ by the aforesaid date of ___________________, the pledged
stocks shall be sold by HBL through inviting sealed bids/ public auction at the best
offered price to the highest bidder at __________ (place) and at _______ (time) for
realization of the aforesaid dues of HBL and if the same are not satisfied from the sale
proceeds after deducting the expenses incurred in sale or attempted sale the deficiency
shall be recovered from you.
Sd.
M/s Habib Bank Limited

ABL Sardar Revised

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1

ABLV/s Mr Jawad Rashid/M/s. Sardar Enterprises & others

Authority to institute suit.

Annex-A, A/1 & A/2 pg 24-28.

i.Mr. Mohammad Arshad Khan Manager

Annex-A & A/2 pg24 & 28.

(A). Running Finance of Rs.30.0M.

I.Total Amount Payable

Annex- B/7 pg 129-134

Markup outstanding. Rs. 12,496,285.00

Annex- B/8 pg135.

Particulars as per Section 9(3)

II. Approvals/sanctions/ Facility Offer Letters etc

ii.Facility Offer Letter dtd 23-12-2004

iii. Amended Sanction Advice dtd 07.02.2005

iv. Undertaking dtd 22-02-2005

(Defendant No.1 undertook to comply

Annex-B to B/6 pg109-128.

Agreement for financing dtd 08-01-2005

Annex- B/4 pg121.

(B) Demand Finance of Rs.22.0 M.

I.Total Amount Payable.

Disbursement of Demand Finance

II. Approvals/sanctions/ Facility Offer Letters etc

Mark-A to reply to PLA No.52-B/2007 at pg 40.

Above referred to Annexure

B pg 109,B/1 pg 112,-B/2 pg 116 & B/3 pg 120

Annex-C- C/3b pg136-149

(C) FIM-II of Rs.24.0M.

I.This facility arises out from Import L/c (sight)

Para-8(a) (b) pg 4-7

II. Amount Payable against FIM-II. Rs. 18,245,139.00

(iii)Particulars as per Section 9(3)

Para 8d(iii) pg 7-8

III. Approvals/sanctions/ Facility Offer Letters etc of FIM-II

B pg 109,B/1 pg 112,-B/2 pg 116 & B/3 pg 120

III. Documents of FIM-II.

Annex-E/10 to E/12c pg 295-305

(D) FATR-Limit of Rs.7.0M.

This Limit was granted for obtaining delivery

I.Total Amount Payable. Rs. 7,760,306.00

Annex-F/4 & F/5 pg322-323

(ii)Markup outstanding.Rs. 1,140,207.00

(iii)Particulars as per Section 9(3)

III. Approvals/sanctions/ Facility Offer Letters.

B pg 109, B/1 pg 112,-B/2 pg 116 & B/3 pg 120

Annex-F to F/3 pg 311-321

i.Agreement for financing dtd 08-01-2005.

ii.Trust Receipt dtd 28-10-2005

iii.Trust Receipt dated 28-10-2005

(E) Cash Finance of Rs.25.0M.

Annex- F/A/8 pg 344-348

Annex-F/A/2 to F/A/7 pg 328-343.

Annex-G to -J/6 pg 350-446

Mortgages. Para-11 of Plaint by Defendant 1 to 4.

Annex-K to K /11-pg 447-502.

Annex- L to L/2 pg 503-506

IN THE LAHORE HIGH COURT, LAHORE

P.L.A. No.51-B/ 2007

Allied Bank Limited V/s Jawad Rasheed & others

Similarly, under section 10(3) of the Ordinance of 2001, Applicants were

REPLY TO THE PRELIMINARY OBJECTIONS

that the suit is liable to be dismissed.

Denied vehemently. Denied that the Agreements/documents executed by the Defendants