Law:

Section:

Civil Procedure Code (V of 1908)--- ----OX30CVH, Rr. 2 & 3---Banking Companies (Recovery of Loans) Ordinance (XIX of 1979), S.6---Suit for recovery of loan--­Defendants/borrowers had not denied grant of loan to them by plaintiff-Bank­--Defendants having failed to pay back amount of loan, suit for recovery of loan filed by plaintiff'-Bank was decreed against defendants in terms of deed of mortgage executed between parties. PLD 1987 Kar. 466 ref. JUDGMENT The plaintiff has filed this suit for recovery of Rs.16,40,385. The case of the plaintiff is that the defendant No.l is a partnership firm and the defendants Nos.2 to 4 are the partners thereof; and that the defendants Nos.6 and 7 have guaranteed repayment of the loan granted by the plaintiff to the defendant No.l. It is alleged that the loan of Rs.6 million. granted by the plaintiff to the defendant No.l has been secured by the deed of mortgage mentioned in para. 5 of the plaint. It is further alleged that the defendants have also executed a promissory note as security for the payment of the amount of loan. The defendants having failed to repay the loan, the plaintiffs have filed this suit for recovery of the amount claimed in the suit. The defendants have filed a written statement wherein the grant of the loan is not denied but it is claimed that the interest payable on the loan was 11% per annum and not 14% per annum and that the plaintiff is not entitled to charge penal interest. The defendants have also denied the execution of the promissory note and have alleged that they executed a promissory note in blank in 1984 which has not been produced by the plaintiff. They have also denied that the amount claimed in the suit is due to the plaintiff. The mortgage of the property is, however, admitted. On the above pleadings, the following issues, by consent of the parties, arise:-- (1) Whether the suit is not maintainable in law? (2) What should be the rate of interest 11% or 14% per annum with quarterly rests, with penal interest? (3) Whether the interest is un-Islamic and cannot be charged by the plaintiff? If so, what effect? (4) What relief the plaintiff is entitled to? (5) What should the decree be? The…

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