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(a) Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑

‑‑ S. 2‑Civil Procedure Code (V of 1908), O. XXXIV, R. 4, O. XLI, R. 5 & S. 151‑‑Suit for recovery of Bank loan‑Decree allowing payment in instalments‑Legality of such order‑Acceptance of instalments by decree‑holder‑Effect‑Defendants admitting claim of plaintiff and requesting instalments in payment of loan amount Decree granted by Court allowing payment of decretal amount by instalments‑Costs to plaintiffs not granted‑Payment of decreed amount could not be ordered by instalments in a suit for recovery of money by sale of property‑Such decree, in a suit on a mortgage, held, could be passed on a compromise between parties providing for payment by instalments and for sale of mortgaged property in default‑Acceptance of instalments by plaintiff, would amount to acceptance of mode of payment of decreed amount‑Conduct of plaintiff during pendency of appeal whereby he accepted major part of decretal amount by instalments being waiver, appeal against mode of payment would become in fructuous‑High Court, however, substituted default clause Nith direction that in default of payment of any instalment due balance would be recoverable forthwith by sale of mortgaged property.

(b) Civil Procedure Code (V of 1908)‑

‑‑ S. 34‑Interest, payment of‑Rate of interest being within dis cretion of Trial Court, grant of interest at specified rate by Court held, would not be illegal.

(c) Civil Procedure Code (V of 1908r‑

S. 35‑Costs of suit, award of‑Discretionary with the Court Nature of costs either compensatory or actual‑Underlying principles for exercise of discretion stated‑Costs awardable by Court are either compensatory or actual costs‑Awarding of costs being discretionary, such discretion, held, could be exercised keeping in view particular circumstances of individual case and in accordance with principles of reasons and justice‑One of considerations to allow or refuse to allow costs in a case is conduct of party in actual litiga tion‑Where defendants accepted claim of plaintiff within short period of institution of suit and did not commit any misconduct, plaintiff was not entitled to costs.

(d) Civil Procedure Code (V of 1908)‑

‑ ‑ S. 96‑Appellate jurisdiction, exercise of‑Appeal against instal ments in payment of decreed amount‑Such instalments accepted by plaintiff during pendency of appeal‑Acceptance whether waiver Plaintiff having waived his right by acceptance of instalment amount, held, would not be entitled to press appeal against mode of pay ment‑Appeal being not competent, was dismissed in circumstances.

Hamid Khan for Appellant.

Azam Rasool for Respondents Nos. 1 to 5.

Date of hearing : 29th November, 1986.

QURBAN SADIQ IKRAM, J.‑Grindlays Bank Limited, a banking company incorporated in U. K. and carrying on business in Pakistan, on 21‑9‑1981. filed a suit against Messrs Delite House (Private) Limited and font others before Special Judge (Banking), Lahore under Order XXXVII, rule 2, C.P.C, for the recovery of Rs. 5,30,326.44 with interest pendente lite and further interest at 14 % per annum till realisation by the sale of mortgaged property described in plaint and sale of hypothecated stocks. The defendant were summoned to appear in Court on 19‑10‑1981. They entered appearance and applied for leave to defend the suit which was adjourned to 16‑11‑1981 for reply and arguments on the said application. On that date, the learned counsel for defendants expressed "a desire to make statement regarding the acceptance of claim of the plaintiff with certain conditions". The suit was adjourned to 19‑11‑1981 for recording of the statement. Mr. Inam Elahi Sheikh defendant No. 2 who was Managing Director of Delite House Limited (defendant No. 1), on his own behalf and on behalf of other defendants made statement in Court. He accepted the claim of the plaintiff and prayed for permission to make the payment by instalments. He requested that the defendants be not burdened with costs and interest.

The learned Special Judge on that very day, decreed the suit of the plaintiff. The prayer for "deduction of insurance premium" and "remission of interest in toto" was not granted. The Court directed firstly that "the decreed amount with interest will be paid by quarterly instalment of Rs. 30,000 by the defendants till complete realisation of outstanding amount"; secondly, that the defendants "shall also be liable to pay simple interest at the rate of 6 % from the date of suit to this date i.e. 19‑11‑1981"; thirdly, the defendants "shall also be liable to pay simple interest at 14 per annum from this date (19‑11‑1981) to the complete satisfaction of the decree on the decretal amount or the reducing balance together with accumulated interest at the above rate"; fourthly, "in all circumstances, the liability shall be cleared by the defendants within a period of five years as requested by them"; fifthly, that first instalment shall be payable on or before 31‑12‑1981 ; the second instalment on or before 31‑3‑1982 ; the third on or before 30‑6‑1982 so on and so fourth"; and sixthly, "in case any instalment is not paid in time, the whole unpaid balance shall be recover able in lump sum with interest and costs". There was no order as to costs.

2. We have been informed by the learned counsel for the parties that through regular instalments, defendants have paid upto 29‑6‑1986 a sum of Rs. 5,73,990.50 towards satisfaction of the decree and only a sum of Rs. 1,35,725.20 remains outstanding which the learned counsel for the defendants undertake to pay within due time.

The plaintiff‑bank has come up in appeal seeking modification of the decree dated 19‑11‑1981. It was contended on behalf of the appellant firstly that the payment of the decretal amount by instalments could not have been allowed in the instant case ; secondly, the interest pendente lite, should have been 14 % instead of 6 % allowed by the trial Court ; thirdly the learned trial Judge did not record any reason for not allowing costs to the plaintiff ;and finally that the terms of decree were lenient and favourable to the defendant‑respondents and harsh towards the plaintiff appellant. The learned counsel for the respondents controverted these contentions. It was argued by him that the learned trial Judge rightly did not allow costs to the plaintiff because the defendants did not prolong the proceedings of the trial and accepted the claim of the plaintiff at the earliest occasion. It was contended by him that the impugned order was not lenient or favourable to defendants and that the learned trial Judge had the jurisdiction to allow payment of decreed amount by instalments.

3, We have considered the respective contentions on behalf of the parties.

(i) The suit of appellant was for recovery of Rs. 5,30,326.44 with interest etc., by sale .of mortgaged property and hypothecated stocks. The learned counsel, therefore, argued that after admission of claim of plaintiff by the defendants, it was obligatory for trial Court to proceed under Order XXXIV, C. P. C. There being no other alternative, the Court should have passed a preliminary decree to allow six months time to defendants to pay the entire decree amount failing which the decree should have been made final and the same should ha4e been realised by sale of mortgaged property. We have considered this argument in the light of facts of this case. We agree with the learned counsel that normal course in a suit for recovery of money by sale of mortgaged property is to proceed under Order XXXIV, C.P.C. and Rules framed thereunder. We, but for the' conduct of the appellant (plaintiff), would have remanded the suit to the trial Court with a direction that proceedings be held in accordance with provisions of Order XXXIV, C. P. C. It will be observed that the present appeal was filed in this Court on 16‑12‑1981. Alongwith this appeal the bank filed C. M. No. 6492‑C of .1981 under Order XLI, rule 5 read with section 151, C. P. C. seeking suspension of facility of the instalment during pendency of appeal. This petition came up for hearing on 22‑11‑1982. The learned counsel for the appellant did not press this petition which was accordingly disposed of. At the same time the appellant‑Bank went on accepting instalments towards payment of decreed amount with the result that a sum of Rs. 5,73,990.50 has already been received by it. The total amount due under the decree with interest etc., was Rs. 7,09,715.70. In this way only a sum of Rs. 1,35,725.20 remains outstanding under the impugned decree. This act of the appellant‑bank, in fact, renders this appeal infructuous because the decree by this time is close to its accord and satisfaction. The acceptance of decreed money by instalments amounts to a waiver of protection afforded in the procedural law. As a result of this, the mode of payment of amount by instalments becomes binding on the appellant. There is another consideration as well for which no weight can be given to the arguments on behalf of the appellant, if we analyses properly, apart from the opinion already expressed that mortgage and hypothecation was by way of collateral security. The suit, in sub stance was for recovery of loan as advanced. The trial Court, therefore, appears to have prescribed mode of payment by instalments virtually taking it as basically a money suit. The impugned judgment and decree appears to have been passed in presence of the parties. There is nothing to show that the plaintiff at the time of passing of the decree took any exception to the mode of payment or form of decree. It is, therefore, surprising to note that the appellant is still insisting for sale of the mortgaged property when only a meagre amount remains outstanding which as assured by the learned counsel for the respondents will be paid duly. The plaintiff appellant accepted the payment of the decreed amount by instalments which as stated above, amounts to the acceptance by the appellant of the mode of payment of the decreed amount. It appears to us that the learned counsel appearing on behalf of the plaintiff before the learned trial Judge by conduct accepted the mode of payment of the due amount by instal ments. The appellant, therefore, is estopped now to urge that the decreed amount should have been ordered to be recovered and should be recovered by sale of mortgaged property. From all these facts it clearly appears that parties did agree at the time when the trial Court passed the decree and directed payment of the decretal amount by instalments. The bank authorities after passing of the decree might have decided to back out from the said verbal and implied consent given by their learned counsel before the trial Judge when after decreeing the suit, order of payment by instalments was recorded. The conduct of the bank during this appeal also is a circumstance which supports this view. As such, in view of the waiver of the plaintiff‑appellant, the present appeal becomes infructuous. There appears no fun now in passing a preliminary decree under Order XXXIX, C. P. C. and then allowing six months' time to the judgment‑debtor to pay the decreed amount specially, as stated above, major part of the decree has already been satisfied. There is no denying of the fact that payment of decreed amount could not have been ordered by instalments in a suit for recovery of money by sale of property, but independently of this rule, a decree, may, in a suit on a mortgage, be passed on a compromise between the parties providing for payment by instalments and for sale of the mortgaged property in default. In the instant case, it will be observed that the claim of plaintiff was accepted by the defendants without contesting the suit ; the debt due to the bank was admitted by the defendants on account of which there was no occasion for framing of issues or recording of evidence. The decree was passed within a period of two months of the institution of the suit. These facts lend support to the view that in fact the learned counsel for the plaintiff, at the time of passing of the decree, agreed to the mode of payment of the decretal amount. This inference further stands fortified by the conduct of the bank whereby the bank started accepting the decretal amount in instalments and did not press its Application Civil Miscellaneous No. 6492/C of 1981. However, on a perusal of the impugned judgment, we are of the view that the later part of the decree can be regularised by substituting the default clause with a direction that in case of default of payment of any instalment, the due balance will be recoverable forthwith by sale of the mortgaged property.

(u) The learned trial Judge in the impugned decree allowed simple interest at the rate of 14 % per annum to the plaintiff on the decreed amount from the date of decree to the date till final payment. It was contended on behalf of the appellant that the simple interest at the rate of 6 % pendente lite per annum was meagre and it should also have been 14% per annum. It will be noticed that the suit was decided within two months of it l institution. The rate of interest was within the discretion of the trial Court and there was nothing illegal if interest at the rate of 6 % only was allowed for two months period during which the suit remained pending in Court. This contention on behalf of the appellant is, therefore, repelled.

(iii) The third contention that the impugned decree was lenient and favourable to the defendant‑respondents is without any substance. Although the learned trial Judge did not record the statement of the plaintiff, it appears that the decree was passed with verbal and implied consent of the plaintiff on the terms stated in the impugned judgment and decree. The total amount to be received by the defendants from plaintiff was Rs. 5,30,326.44 and the amount due under the decree was Rs. 7,09,715.70. The plaintiff‑bank, therefore, has not suffered in any manner and it cannot be said that the decree was in any way lenient or favourable to defendants. The learned counsel for the appellant did not press the civil miscellaneous petition before this Court on 22‑12‑1981 meaning thereby

that the payment of the decreed amount by instalments was accepted and the objection regarding the mode of satisfaction of the decree was waived.

(iv) The last contention on behalf of the appellant pertains to absence of reasons of the trial Court and for not recording any order as to costs of the cause. In a suit costs under section 35, C. P. C. are awardable by Court either as compensatory or actual costs. It is discretionary with Court to allow costs. This discretion is to be exercised keeping in view the particular circumstances of an individual case and in accordance with the well‑estab lished principles of reason and justice. One of the considerations to allow or refuse to allow costs in a case is the conduct of the party in actual h6gation. In the instant case, it will be observed that the suit by Grindlays Bank was instituted on 21‑9‑1981. The defendant‑respondents for the first time appeared in Court on 19‑10‑1981 and filed an application for leave to defend the suit. This application was adjourned to 16‑11‑1981 for reply and arguments. On that day, i.e. within a period of two months of the institution of the suit; the learned counsel for the defendants expressed a desire to make statement regarding acceptance of the claim of the plaintiff. The proceedings in suit were adjourned for three days only. It was fixed for hearing on 19‑11‑1981 when Mr. Inam Elahi Sheikh defen dant No. 2 on his own behalf and on behalf of other defendants made statement accepting the claim of the plaintiff and praying that permission to make payment by instalments be accorded. It is, therefore, clear that 'the suit was finally disposed of within a period of two months without framing of issues and recording of evidence on behalf of the parties. The acceptance of the claim of plaintiff by the defendants saved the parties from prolonged litigation in the trial and appellate Courts. It is correct that the learned trial Judge should have given reasons for not allowing costs of the cause to the plaintiff but this omission does not mean that the] plaintiff was entitled to costs. In view of the fact that the defendants, accepted the claim of the plaintiff within two months of the institution of the suit and that the defendants did not commit any misconduct, we are of) the view that the plaintiff was not entitled to costs of the suit.

4. In view of the above discussion, this appeal stands disposed of subject to above modification leaving the parties to bear their own costs) throughout.

A. A. Order accordingly.

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