Home Special Report Scandal Habib Bank vs. Universal Tractors

Habib Bank vs. Universal Tractors

Habib Bank Limited filed a suit against M/s: Universal Tractors (Pakistan) Limited in the Banking Court Karachi to pass Judgment and Decree for recovery of Rs31,745,143/-.

The Bank also requested the court to order for recovery of costs of funds as determined by the State Bank of Pakistan on the decreed amount from the date of default i.e. 30-6-2011 till realization. Attachment and sale of the mortgaged immovable properties bearing:

a. Plot No.1-A/II, measuring 730 square yards situated at Main Korangi Road, Phase 1, Pakistan Defence Officers Cooperative Housing Society Limited, Karachi.

b. No.A-5, 1st Floor in the project known as “Ahmed Shopping Mall” measuring 806 square feet together with all the 1/7th undivided share in piece and parcel of land bearing Plot No.172-G, Block-2, measuring 600 square yards situated in PECHS Karachi.

c. Attachment and sale of the Hypothecated Assets and attachment of the “Receivables” pursuant to ‘Letter of Hypothecation of Movable assets and Receivables’ dated 14-4-2005, ‘Supplement Letter of Hypothecation of Movable Assets and Receivables’ dated 6-6-2007 and ‘Letter of Hypothecation of Movable Assets and Receivables’ dated 27-12-2020.

According to details, Habib Bank Limited a Banking Company said the defendants M/s: Universal Tractors Pakistan (Private) Limited, Main Tariq Road, Karachi, a private limited company was extended finances by the plaintiff from time to time. Its personal guarantors and mortgagors are; Mst. MominBai, Mr. Muhammad Iqbal, Muhammad Munawar, Abdul Wahab, Muhammad Yasin and Muhammad Jaffar.

The Company had been enjoying and availing the running finance facility from the plaintiff, with different limits at various points in time on its account. The Running Finance Facility was continued to be utilized by the Company till 30-06-2011 and the Company continued to avail the limit of Rs25,000,000/- as Running Finance. The said running finance limit of Rs25,000,000/- was designated as “Sale Price” and Rs29,105,000/- was designated as “Purchase Price”.

The Company was required to discharge its obligations by or before 30-06-2011 which it failed to do and defaulted to discharge its obligations towards the plaintiff on 30-06-2011 and Rs31,745,143/- remained outstanding towards the Company.

The Defendant Nos.2 to 7 individually and personally guaranteed repayment “within four days from demand of all outstanding finances of finance facilities or all amounts due and payable to the plaintiff by the Company as may be reflected in its books of account as outstanding due and payable by the Company.

Since the Company failed to make payment of the borrowed amount on 30-06-2011 in respect of Running Finance Facility as agreed vide Running Finance Agreement and thereby defaulted in its obligations towards the plaintiff, the plaintiff was forced to serve through its counsel Legal Notice dated 18-10-2011 thereby demanding payment of the outstanding amounts owed to the plaintiff, within seven (7) days from the receipt of the said Legal Notice.

Through this Legal Notice the Bank also demanded the amount of Rs29,105,000/- as per the Demand Promissory Note dated27-12-2010. The Bank also, through its counsel, sent Legal Notice to the defendant Nos.2 to 7 requiring the same to advise the defendant No.1 to discharge its financial obligations towards the plaintiff otherwise the defendant Nos.2 to 7 should discharge their respective obligations towards the plaintiff, pursuant to their personal guarantees and the mortgages.

According to Habib Bank application, on 30-06-2011, M/s: Universal Tractors Pakistan (Private) Limited owed an amount of Rs31,745,143/- to the Bank for Running Finance Facility.

In their written statement submitted in the Court M/s: Universal Tractors vehemently denied the allegations by saying the claim as false, baseless, exaggerated, and arbitrary and based on concocted pleas, not maintainable in law. They said the facts had been concealed by the plaintiff hence have come to this honorable Court with unclean hands.

The bank has illegally and wrongfully charged mark-up on mark-up, mark-up beyond agreed period at higher rate, and other charges and for more than agreed period as well as debited the penalties and other charges and claimed liquidated damages without authority in respect thereto. These charges are exaggerated and false. These claims, apart from being unconscionable, are illegal, unwarranted and untenable under the law.

The Company disclosed that the plaintiff’s claim in the above suit is based on various documents which were obtained by suppression of facts and in blank. The said documents had been filled in by the plaintiff of its own choice without any lawful authority. The documents are also inconsistent and contradictory and do not support the entries of the statements of account in question. It is submitted that the said documents are not binding up on the defendants nor the plaintiff is entitled to obtain any decree in the above suit against the defendants on the basis thereto.

M/s: Universal Tractors Pakistan (Private) Limited further stated that the plaintiff is claiming Rs25,000,000/- as existing liability as on 27-12-2010 whereas the alleged agreement for finance were obtained in blank and filled up by the plaintiff for the date and amount of its own choice which is under the law not maintainable. On the contrary the alleged agreement and other relevant documents had been filled up by the plaintiff for the dates and amounts of its own choice which consist of exaggerated mark-up in contradiction to the terms of the sanction advice and therefore, the genuineness, truthness, correctness and authenticity of the said documents is vehemently denied.

The defendant further submitted that the plaintiff Bank has applied the rate of mark-up approximately the double of the agreed rate and heavy repayments have been adjusted against the said unauthorized mark-up. If the fair and honest accounts will be prepared the net amount due and payable by the defendants will be much lesser than the total amount claimed by the plaintiff in the suit.

According to Universal Tractors the balance payable amount was Rs.10,530,369/- only.

-Published on page#-13 & 14 in November-2012 issue of MOBILE WORLD Magazine

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