2002 PLP 102 (CLD)
Messrs UNIVERSAL LEASING CORPORATION LTD. ‑‑‑Petitioner Versus STATE BANK OF PAKISTAN‑‑‑Respondent
| Citation | 2002 PLP 102 (CLD) |
| Forum / Court | Karachi |
| Bench Members | S.A. Rabbani and M. Musa K. Leghari, JJ |
| Parties | Messrs UNIVERSAL LEASING CORPORATION LTD. ‑‑‑Petitioner Versus STATE BANK OF PAKISTAN‑‑‑Respondent |
| Primary Law | Banking Companies Ordinance (LVII of 1962)‑‑‑ |
Q1: What are the key laws and sections cited in 2002 PLP 102 (CLD)?
This judgment primarily cites: Banking Companies Ordinance (LVII of 1962)‑‑‑ as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 2002 PLP 102 (CLD)?
The case was heard and decided by the Karachi bench comprising: S.A. Rabbani and M. Musa K. Leghari, JJ.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 2002 PLP 102 (CLD) (Messrs UNIVERSAL LEASING CORPORATION LTD. ‑‑‑Petitioner Versus STATE BANK OF PAKISTAN‑‑‑Respondent). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Representation
- Kamal Azfar for Petitioner.
- Ijaz Ahmed for Respondent.
- Date of hearing: 26th July, 2001.
Headnotes / Summary
‑‑‑‑S.41‑‑‑Constitution of Pakistan (1973), Art. 199‑‑ Constitutional petition‑‑‑Banking Company‑‑‑Directions issued by State Bank of Pakistan in exercise of powers under S.41 of the Banking Companies Ordinance, 1962‑‑ Legality‑‑‑Directions issued by State Bank of Pakistan were neither to prevent the affairs of any Banking Company from being conducted in a manner detrimental to the interest of depositors, or in a manner prejudicial to the interest of Banking Company which rendered all Commercial Banks, nor the same were issued to secure proper management of any Banking Company‑‑‑Contention of the petitioner was that the directive issued by the State Bank of Pakistan was against the provisions of 5:41 of Banking Companies Ordinance, 1962‑‑‑Validity‑‑‑Only ground on which direction could be issued was 'the public interest'‑‑‑Where the directive did not mention as to how the same was in the public interest rather the same was directly against the interest of the depositors, such directive was in violation of S.41 of Banking Companies Ordinance, 19.62‑‑‑Direction issued by the State Bank of Pakistan was without lawful authority and the same was set aside in circumstances. In the present case the impugned order (directive) does not expressly mention for what purpose or object, the direction has been issued. It can, however, be gathered from the contents of the order that the direction has not been issued "to prevent the affairs of any Banking Company from being conducted in a manner detrimental to the interest of the depositors, or in a manner prejudicial to the interest of the Banking Company" which include all the Commercial Banks in this case. The direction has also not been issued "to secure the proper management of any Banking Company generally." The only other ground on which a direction can be issued is "the public interest". The impugned order does not mention as to how the direction is in the public interest., Section 41, Banking Companies Ordinance, 1962 provides that a direction can be issued to safeguard the interest of the depositors. It cannot, therefore, be issued to the detriment to the interest of depositors and the impugned order does exactly the same. The direction contained in the impugned order is directly against the interest of the depositors. The impugned order, and the direction therein, is, thus, in violation of the law itself, viz. section 41 of the Banking Companies Ordinance, 1962, under which the. order has been issued. It was, therefore, declared that the impugned order/direction had been issued without lawful authority and was of no legal effect.
Judgment & Decree
Messrs Inter World Securities (Pvt.) Ltd., Member Islamabad Stock Exchange. 2 Messrs Republic Securities Ltd., Member, Karachi Stock Exchange. 3 Messrs Total Securities Ltd., Member, Karachi Stock Exchange. 4 Mr. Universal Forex (Pvt.) Ltd. 5 Messrs Universal Leasing Corporation Ltd. 6 Mr. Tahir Siddiqui s/o Muhammad Idrees Siddiqui, NIC No.515‑89‑158084 7 Mr. Tariq Siddiqui s/o Muhammad Idrees Siddiqui, NIC No.515‑89‑018024
2. Please note that every Executive, Manager or other officer of the bank or any other person who is associated with or taking part in the management of. bank directly or indirectly is mandated under the law to comply with the directives given hereinabove. Any default in compliance with the above directives or any circumvention thereof shall render all concerned liable to action under the provisions of Banking Companies Ordinance, 1962.
3. All credit in the aforesaid account shall, however, be permitted by the banks.
4. All requests for withdrawal, if any, received may be referred to Director, Banking Supervision Department, SBP, CD, Karachi. Yours faithfully, (Sd.) (Kazi Abdul Muqtadir), Director." This order mentions that it has been issued in exercise of powers under section 41 of the 'Banking Companies Ordinance, 1962. Directions under this section can be issued in case:‑‑ (i) The State Bank is satisfied that it is in the public interest to issue such directions; or (ii) it is necessary to prevent the affairs of a Banking Company being conducted in a manner detrimental to the interest of depositors, or in a manner prejudicial to the interest of the Banking Companies; or (iii) it is necessary to secure the proper management of a Banking Company generally. The impugned order does not expressly mention for what purpose or object, the direction has been issued. It can, however, be gathered from the contents of the order that the direction has not been issued "to prevent the I affairs of any Banking Company from being conducted in a manner detrimental to the interest of the depositors, or in a manner prejudicial to the interest of the Banking Company" which include all the Commercial Banks in this case. The direction has also not been issued "to secure the proper management of any. Banking Company generally." The only other ground on which a direction can be issued is "the public interest". The impugned order does: not mention as to how the direction is in the public interest. The same section provides that a direction can be issued to safeguard the interest of the depositors. It cannot, therefore, be issued to the detriment to the interest of depositors and the impugned order does exactly the same. The direction contained in the impugned order is directly against the interest of the depositors. The impugned order, and the direction therein, is, thus, in violation of the law itself, viz. section 41 of the Banking Companies Ordinance, 1962, under which the order has been issued. It is, therefore, declared that the impugned order/direction has been issued without lawful authority and is of no legal effect. The petition is allowed accordingly. Q.M.H. /M.A. K. /U‑14/K Petition allowed.