Suit for recovery of bank loan

Borrower under S. 10(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001 was to show in all fairness as to what amount he had availed of from a financial institution, payments so made by him to the financial institution and amount which was accepted to be his liability, to be finally paid to the Bank

Provision of S. 10(4) of Financial Institutions (Recovery of Finances) Ordinance, carried penal consequences as well, which was that in the event of failure of a borrower to meet requirements of S. 10(3)(4) & (5) of Financial Institutions (Recovery of Finances) Ordinance, 2001 his leave to defend application would be rejected

High Court declined to interfere in judgment and decree passed by Trial Court

Appeal was dismissed in circumstances.

Customer who defaulted in installment of obligations was liable to pay cost of funds for the period from date of default till its realization as certified by State Bank of Pakistan, besides other liabilities accrued under any contract agreement

Agreement executed by appellant/ defendant in favour of respondent/Bank did not exonerate him from payment of markup in the event of his default

Basic aim and theme behind such provision of law was to compensate financial institutions for finance blocked on account of breach of fulfillment of obligation by a customer

Banking Court duly attended the controversy involved in the matter and while disallowing application of appellant/defendant for grant of leave to defend, had rightly decreed suit of respondent/Bank through judgment and decree in question

High Court declined to interfere in the judgment and decree passed by Banking Court as the same did not suffer from any illegality, misreading or non-reading of record

Appeal was dismissed in circumstances.

Appellants/defendants were aggrieved of ex-parte judgment and decree passed by Banking Court during pendency of application for leave to appear in suit due to non-prosecution

Validity

Once leave application was filed then Banking Court was under legal duty to consider the same regardless of non-appearance of appellants/defendants and their counsel

Banking Court under S. 10(8) of Financial Institutions (Recovery of Finances) Ordinance, 2001, was required to read contents of plaint, application for leave to defend the suit, replication and then to determine whether any question of law and fact was raised, which needed recording of evidence

Powers were bestowed upon Banking Court under S. 10(9) of Financial Institutions (Recovery of Finances) Ordinance, 2001, to grant conditional or unconditional leave to appellants/defendants

Banking Court under S. 10(11) of Financial Institutions (Recovery of Finances) Ordinance, 2001, was empowered to reject leave application if it had not fulfilled conditions for grant of leave and thereafter could decreed the suit forthwith

Banking Court was required to consider and decide leave application on merits and there was no other choice left with Banking Court and could not dismiss leave application for non-prosecution

No such power was conferred upon Banking Court under Financial Institutions (Recovery of Finances) Ordinance, 2001

Proceeding otherwise than the Financial Institutions (Recovery of Finances) Ordinance, 2001, would defeat the intent of legislature

Dismissal of leave application due to non-prosecution was without jurisdiction and patently illegal

Inherent jurisdiction of Banking Court was not ousted by S. 27 of Financial Institutions (Recovery of Finances) Ordinance, 2001

There was no specific provision available in Financial Institutions (Recovery of Finances) Ordinance, 2001, debarring application under O. IX, R. 9, C.P.C. or application under S. 12(2), C.P.C.

High Court set aside ex-parte judgment and decree passed against appellants/defendants and remanded the matter to Banking Court for decision on merits

Appeal was allowed accordingly.

Appellant assailed the judgment passed by the Banking Court whereby it decided that the cost of funds was payable only if the date of default was determined by the court, with the observation that markup had already been charged

Validity

Settlement was arrived at between the parties during the pendency of the suit

Terms of settlement, eclipse the Financing Agreement and normally the suit is decreed in terms of the settlement

Cost of funds, mentioned in the settlement, was declined, by holding it against the law

Payment of a certain amount as costs of funds was part of the settlement and could not be lightly ignored by the Trial Court

Impugned judgment and decree were set aside and the Trial Court was directed to re-interpret the settlement agreement

Appeal was disposed of accordingly.

Appellant filed the application for leave to defend stating that the amount shown to have been disbursed to him was incorrect and that he had repaid the due amount, which was not reflected in the statement of account

Banking Court did not consider the defense taken by the appellant to be bona fide and consequently passed decree against him

Validity

Judgment passed by the Banking Court had not dealt with the defense raised by the appellant in any meaningful way

Appellant in his application for leave to defend had substantially complied with the requirements of S. 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001

Banking Court, however, had mechanically stated in the order that the appellant had not fulfilled the requirements of S. 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001

Appeal was allowed and the Banking Court was directed to expeditiously decide the application for leave to defend.

Held, that such assertion had not been substantiated by the appellants in their application for leave to defend through tangible material/details of any amount adjusted and even no specific amount that could have been counted as disputed was mentioned in said application

When the application for leave to defend did not fulfill the dictates of Ss. 10(3), 10(4) & 10(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001 (' the Ordinance 2001'), then such application was liable to be rejected in terms of S. 10(6) of the Ordinance 2001 and in consequence, allegation of facts as contained in the plaint were deemed to have been admitted as per S. 10(1) of the Ordinance 2001

Appellants also failed to raise any substantial question of law and fact

No illegality or infirmity was noticed in the impugned judgment and decree passed by the Court below

Appeal was dismissed, in circumstances.

Application for leave to defend the suit filed by appellant/defendant was dismissed and Banking Court did not passing judgment and decree, instead issues were framed, evidence was recorded and then suit was decreed

Validity

Upon rejection of leave application Banking Court was to forthwith pass judgment and decree under S. 10(12) of Financial Institutions (Recovery of Finances) Ordinance, 2001

Word 'forthwith' was preceded by 'shall' that had not left any discretion with Banking Court but to pass judgment and decree on the material that was available on record

If sufficient material was available on record and suit of respondent/plaintiff/Bank was in accord with S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, then there was no need to proceed further for recording of evidence

If Banking Court on consideration of plaint, leave application and reply thereto was of the view that some substantial question of law and/or fact was raised and it required evidence, then procedure of law as envisaged in Ss. 10(9), (10) & (11) of Financial Institutions (Recovery of Finances) Ordinance, 2001 was to be followed

High Court set aside judgment and decree and remanded the matter to Banking Court for decision afresh on application for leave to defend the suit filed by appellant / defendant

Appeal was allowed accordingly.

Banking Court instead of settling down terms and conditions of auction in the language of Court or granting specific approval as required under O. XXI, R. 66(1), C.P.C., the same was left at discretion of Court Auctioneer leading to manifold and major mistakes

Proclamation was published in two newspapers without fixing any reserved price of suit property

Publication reflected date of auction as 19-6-1999 at 10:00 a.m. and stipulated venue of auction at the site

Report of auction showed that auction was adjourned to 26-6-1999 and site venue was abruptly changed to the office of the decree-holder without fresh publication or proper circulation of change of date and venue

When auction was challenged on the ground of fraud in publication and conduct of sale, time could only run against victim upon gaining clear and definite knowledge of facts which had constituted fraud

High Court set aside order passed by Banking Court confirming sale through auction

Appeal was allowed in circumstances.

Appellants were legal representatives of deceased judgment-debtor who after confirmation of sale filed objections under O. XXI, R. 89, C.P.C. which were dismissed by Banking Court

Plea raised by appellants was that after death of judgment-debtor sale could not have been confirmed without notice to legal heirs

Validity

Application under O. XXI, R. 90, C.P.C. was dismissed in the life time of deceased judgment-debtor, who failed to exercise his right under O. XXI, R. 89, C.P.C., within permissible time by depositing amount as stipulated in O. XXI, R. 89(1)(a) & (b), C.P.C. read with O. XXI, R. 92(2), C.P.C.

Deceased judgment-debtor was left with no interest that could be affected or which could have been passed on to legal representatives

High Court declined to interfere in order passed by Banking Court

Appeal was dismissed in circumstances.

Appellants/ defendants during pendency of their petition for leave to appear and defend the suit, absented themselves and were proceeded ex-parte

Banking Court declined to set aside ex-parte judgment and decree under S. 12 of Financial Institutions (Recovery of Finances) Ordinance, 2001

Validity

Decree could only be set aside under S. 12 of Financial Institutions (Recovery of Finances) Ordinance, 2001, if it was passed for failure to file petition for leave to appear and defend the suit

Such application could be filed within a period of 21 days of the date of decree or where summons were not duly served, when defendant had knowledge of decree

High Court declined to set aside ex-parte judgment and decree as application under S. 12 Financial Institutions (Recovery of Finances) Ordinance, 2001, was not maintainable

Appeal was dismissed in circumstances.

Appellant/defendant assailed judgment and decree passed by Banking Court on the ground that suit was not instituted by a competent person having authority

Validity

Plaint was not accompanying any power of attorney and the same was not instituted by manager

Banking Court specifically framed an issue as to the authority for institution of plaint and its verification

Respondent/plaintiff/Bank produced one witness and brought on record as many as sixteen (16) documents including a letter in favour of witness to give evidence but failed to produce any document showing that the person who instituted the suit and verified the plaint, had any such authority or power as required under S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001

High Court set aside judgment and decree passed by Banking Court as institution of suit or verification of the plaint was not in accordance with S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001

Appeal was allowed in circumstances.

Defendants/borrowers sought leave to appear and defend the suit on the plea that pledged stock was in the custody of plaintiff/Bank therefore, it could not seek recovery unless pledged stock was returned

Validity

Matter relating to shortfall in pledged stocks would be determined in execution proceedings when collateral securities were required to be sold

Such was not a ground of defence for grant of leave to defend the suit

Claim of plaintiff/Bank in the suit was substantiated by documents and statement of accounts

Defendants/borrowers were not able to raise any substantial question of law or fact requiring recording of evidence for its resolution

High Court declined to grant leave to appear and defend and decreed the suit in favour of plaintiff/Bank

High Court converted proceedings into execution proceedings under S. 19 of Financial Institutions (Recovery of Finances) Ordinance, 2001

Suit was decreed accordingly.

In order to invoke provision of S. 19 of Limitation Act, 1908, condition precedent was that such acknowledgement had to be made within the period of limitation prescribed for claims sought to be enforced and the same was to be fulfilled in first place

Any credit entry in account constituting an acknowledgment of payment, as per provisions of S. 20 of Limitation Act, 1908, had to be in handwriting or in writing signed by person making the payment so as to bring the case either within the purview of S. 19 or 20 of Limitation Act, 1908, whereby acknowledgment of payment was to be made in handwriting or in a writing signed by the person making the payment within the period of limitation

Fresh period of limitation was to only start when firstly payment/ acknowledgement was made before expiry of period of limitation and secondly, the same was in handwriting and signed by the party against whom and the right was claimed

Appellant/Bank failed to point out or refer any documents showing payment of amount in the handwriting or even signed by respondent/defendant and Trial Court rightly proceeded to non-suit appellant/Bank by holding that suit filed by appellant/Bank was barred by period of limitation

High Court declined to interfere in judgment and decree passed by Trial Court

Appeal was dismissed in circumstances.

Suit filed by plaintiff/Bank was pending and applicant/intervener was another Bank who filed application to be impleaded as plaintiff as necessary and proper party having pari passu charge over the properties

Validity

Presence of applicant intervener was neither beneficial, nor necessary, as it was the parties to suit which could assist the Court in reaching to a conclusion for an effective decree, considering claim of plaintiff and defendant, likely to be passed in proceedings

Provision of O. I, R. 10, C.P.C. essentially sought to adjudged claim of an individual or entity as to be one whose presence before Court was necessary in order to enable the Court to effectually and competently achieve upon and settle all questions involved in the suit

Plaintiff/Bank and applicant/intervener could have been sailing in the same boat in the sense that they had respective claims for the recovery against defendants based on their respective share/bite/pari passu charge, over the properties but those independent claims could not become a claim in the suit in question

High Court declined to implead applicant/intervener as party to proceedings

Application was dismissed in circumstances.

Plaintiff Bank filed suit for recovery of certain amount along with mark-up, cost of funds, charges and costs of suit from the defendant company and its directors, guarantors and mortgagors

Validity

Plaintiff's suit was based on the statements of accounts attached with the plaint duly certified under the Bankers' Books Evidence Act, 1891 and the same was not rebutted by the defendants with cogent reasons either through oral evidence or through documentary evidence

Defendant company had not denied availing finance facilities nor had it denied the documentation hence had admitted the availing of finance facilities and its documents

Plaintiff, however, had alleged default in re-payment thereof

Grievances of defendants revolved around the 'multiple allegations' and 'claims' mentioned in the Petition for Leave to Appeal (PLA)

First objection of the defendants was with respect to the incompetent institution of the suit by an unauthorized person but perusal of record revealed that suit was filed by the plaintiff through duly authorized attorneys, as their duly signed power of attorney was available on the record and therefore it was well within the requirements encapsulated under S. 9(1) of the Ordinance

Defendants had also challenged the veracity of the documents produced by the plaintiff but was just a bald allegation without any substance or proof

Defendants could not produce anything to support their stance taken in the PLA

Regarding the entries of Statement of Accounts, there was nothing untoward seen as some of the alleged disputed entries pertained to disbursement of finance facility to the defendants

Adjustment of markup was made in accordance with law and no markup over markup was charged by the plaintiff

Application of defendants for leave to defend lacked fulfilment of mandatory requirements

Defence set up in defendants' application for leave to defend was evasive, improbable and no substantial questions of law or fact were raised in the leave application and as such it was liable to be rejected

Defendants had failed to establish any ground for grant of leave to defend

Suit was decreed, in circumstances.

Financial institution filed suit against borrower for its failure to repay demand finance facility and sister-concern of borrower was also impleaded as a defendant

Validity

Nothing was attributed to sister-concern in plaint and there was no document available at plaint to connect it with loan facility

Plaint simply stated that it was a sister-concern of borrower having same directors as borrower

Sister-concern did not come within the definition of 'customer' as defined in Financial Institutions (Recovery of Finances) Ordinance, 2001

Name of sister concern was ordered to be struck off from the array of defendants

Finance facilities and amounts thereof were admitted by defendants

Claim of Bank was substantiated by finance agreements and other documents available on record together with statements of accounts

Defendants failed to raise any dispute on facts requiring recording of evidence

Suit was decreed in circumstances.

Plea raised by borrower was that Bank had not issued notice under S.176 of Contract Act, 1872 and could not sell shares without approval of Securities and Exchange Commission of Pakistan

Validity

If notice by pawnee to pawnor had stated that in case of default of payment of debt within time stipulated, pledged shares would be sold out by pawnee, it was sufficient compliance of requirement of S.176 of Contract Act, 1872

Plaintiff Bank duly made compliance of S.176 of Contract Act, 1872 before exercising its right to sell pledged shares of borrower

Plaintiff was a scheduled Bank in terms of S.2(32) of Companies Ordinance, 1984 and it had obtained shares from borrower as security to finance facility availed by him, in normal course of its banking business

Requirement of seeking approval from Securities and Exchange Commission of Pakistan was not applicable to plaintiff-Bank in view of S. 62(5) of Companies Ordinance, 1984

High Court did not find any infirmity in judgment and decree passed by Banking Court in favour of plaintiff Bank

Appeal was dismissed in circumstances.

Contentions of the petitioners was that offences alleged in the impugned FIR squarely fell under S.20(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, of which only Banking Court could take cognizance and hold trial against the petitioners, after a complaint in writing was made in that regard; that impugned FIR registered under the Penal Code was completely without jurisdiction

Contention of respondent Bank was that petitioners had committed acts punishable under P.P.C., which were Scheduled offences in terms of Offences in Respect of Banks (Special Courts) Ordinance, 1984, and were triable by the Special Court for offences in respect of Banks; that S.20(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, did not envisage any bar on an action which was taken by the aggrieved party (Bank) against accused under any other penal laws, either in addition to it or independent of it

Validity

Words "without prejudice to any other action which could be taken against him under this Ordinance, or any other law for the time being in force" occurring in S.20 of Financial Institutions (Recovery of Finances) Ordinance, 2001, amply established that registration of FIR in case of commission of cognizable offence by a person, was not barred altogether

Mode of taking cognizance by Banking Court under S.7 of Financial Institutions (Recovery of Finances) Ordinance, 2001, was a separate and independent concept under criminal law, which could not overtake or equate the right of a person to register an FIR in the face of a cognizable offence

Impugned FIR had been lodged for offences which were cognizable in nature and were Scheduled offences according to provisions of Offences in Respect of Banks (Special Courts) Ordinance, 1984; and same were triable exclusively by Special Court, notwithstanding anything contained in the Penal Code

Impugned FIR, did not appear to be illegal or coram non judice

First Information Report in question was not alleged to have been lodged maliciously against the petitioners; or contained allegations which ex facie, were not tenable in the eyes of law; or registration of the same was abuse of process of law

In absence of any cogent and legal grounds; merely on the pleas taken by the petitioners, impugned FIR could not be quashed

Constitutional petition was dismissed accordingly.

Contentions of the petitioners was that offences alleged in the impugned FIR squarely fell under S.20(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, of which only Banking Court could take cognizance and hold trial against the petitioners, after a complaint in writing was made in that regard; that impugned FIR registered under the Penal Code was completely without jurisdiction

Contention of respondent Bank was that petitioners had committed acts punishable under P.P.C., which were Scheduled offences in terms of Offences in Respect of Banks (Special Courts) Ordinance, 1984, and were triable by the Special Court for offences in respect of Banks; that S.20(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, did not envisage any bar on an action which was taken by the aggrieved party (Bank) against accused under any other penal laws, either in addition to it or independent of it

Validity

Words "without prejudice to any other action which could be taken against him under this Ordinance, or any other law for the time being in force" occurring in S.20 of Financial Institutions (Recovery of Finances) Ordinance, 2001, amply established that registration of FIR in case of commission of cognizable offence by a person, was not barred altogether

Mode of taking cognizance by Banking Court under S.7 of Financial Institutions (Recovery of Finances) Ordinance, 2001, was a separate and independent concept under criminal law, which could not overtake or equate the right of a person to register an FIR in the face of a cognizable offence

Impugned FIR had been lodged for offences which were cognizable in nature and were Scheduled offences according to provisions of Offences in Respect of Banks (Special Courts) Ordinance, 1984; and same were triable exclusively by Special Court, notwithstanding anything contained in the Penal Code

Impugned FIR, did not appear to be illegal or coram non judice

First Information Report in question was not alleged to have been lodged maliciously against the petitioners; or contained allegations which ex facie, were not tenable in the eyes of law; or registration of the same was abuse of process of law

In absence of any cogent and legal grounds; merely on the pleas taken by the petitioners, impugned FIR could not be quashed

Constitutional petition was dismissed accordingly.

Judgment and decree passed by Banking Court was set aside by High Court and matter was remanded with direction to plaintiff bank to file complete statement of accounts

Bank, in post remand proceedings failed to file complete statement of accounts as directed by High Court

Effect

Directions contained in order of High Court were not complied with in letter and spirit and plaintiff bank failed to produce any evidence in a legally permissible manner, therefore, it was a case of no evidence

Plaintiff bank was provided ample opportunity to substantiate its claim by production of its evidence but failed to avail such opportunity, therefore, plaintiff bank was not entitled to any leniency

Plaintiff bank failed to establish its claim with the help of any evidence, therefore, judgment and decree passed by Banking Court, in favour of the bank was not sustainable and was set aside

Appeal was allowed in circumstances.

If court was of the opinion, on consideration of contents of plaint, application of leave to defend of defendant and reply thereto that dispute between parties did not extend to whole claim or that part of the claim was either undisputed or was clearly due, then under S. 11(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, Banking Court while grating leave with respect to disputed amounts could pass an interim decree in respect to the amount appeared to be payable by defendant

Amount of Rs. 18.2 million was an admitted loan by defendant for which interim decree under S. 11(1) Financial Institutions (Recovery of Finances) Ordinance, 2001, was passed in favour of bank and unconditional leave to defend the suit was granted to defendant to the extent of disputed amount

Application was allowed accordingly.

Plea raised by plaintiff bank was that defendant company had executed 'contract of guarantee' and 'letter of comfort', therefore, was a real beneficiary of the finance

Validity

In view of definitions of 'contract of guarantee' and 'letter of comfort', in juxtaposition of he contents thereof, defendant company was not liable to make any payment to plaintiff bank

defendant company was not beneficiary of financial facilities granted to and availed by borrower company, therefore, it could not be held liable for outstanding dues of plaintiff bank

plaintiff bank did not obtain any guarantees from Directors of borrower company which omission nonetheless called for wisdom of plaintiff bank

Figures of amount claimed by plaintiff bank was subsequently substituted with other figures on the basis of application filed by plaintiff bank, therefore, such substituted figures were liability of borrower company

defendant company was not liable to pay any amount to plaintiff bank

Suit was decreed accordingly.

Provisions of S.12(2) were made part of Civil Procedure Code, 1908 by withdrawing the right of a suit of aggrieved party challenging the decree on the ground of fraud

Section 12(2), C.P.C. was applicable to the proceedings arising under Financial Institutions (Recovery of Finances) Ordinance, 2001

Application under S.12(2), C.P.C. was maintainable in appropriate cases

Possession of suit property was with the applicants

Applicants purchased the suit property through registered sale deed against consideration

Mortgagor or his tenant or representative of mortgagor was not in possession of the mortgaged property

Trial Court could only transfer the symbolic possession under O.XXI, R.96, C.P.C. to the auction purchaser

Warrant of possession against the mortgagor was issued by the Trial Court but applicants were dispossessed from the suit property

Applicants filed application under S.12(2), C.P.C. on coming to know about the sale of suit land

Applicants had the right to challenge the decree and to get the property redeemed

Banking Court was bound to hold inquiry whether the decree was rightly passed or not and the applicants were bona fide purchasers for value without notice or not

Applicants had given the particulars of fraud in their application which required the detailed inquiry

Impugned orders were set aside in circumstances

Application under S.12(2), C.P.C. would be deemed to be pending before the Banking Court which should be decided after framing of issues and recording of evidence.

Suit filed by plaintiff bank was dismissed for non-prosecution and bank sought its restoration on the plea that wrong date had been noted by clerk of its counsel

Validity

At the time of dismissal of suit at 3-30 p.m. only clerk of counsel for defendants was marked present

Pages of diary of counsel of plaintiff bank revealed that case was wrongly noted in counsel's diary

No rebuttal to affidavits brought on record along with application for restoration of suit

High Court set aside order passed by Banking Court and remanded the case to Banking Court for decision on merits

Appeal was allowed in circumstances.

Banking Court dismissed application for leave to defend the suit and resultantly suit was decreed in favour of plaintiff bank

Defendants contended that blank documents were not signed by them

Validity

Documents were duly signed by defendants and no illegality was pointed out in credit and debit entries as reflected in statement of accounts

By giving blank documents by defendants, an opportunity was provided to fill the same according to bank's choice

Trial Court rightly concluded that defendants failed to make out it case for grant of leave to defend

Defendants failed to point out any misreading or non-reading of evidence in judgment and decree passed by Banking Court

High Court declined to interfere in judgment and decree passed by Banking Court

Appeal was dismissed in circumstances.

Appellants were guarantors and assailed judgment and decree passed by Banking Court on the plea that no guarantees were executed by them, as the same were not available on Court record

Validity

Contention of appellants was contrary to record, where personal guarantees were available

Once given the guarantees, it was not open for appellants to wriggle out of it on a bald assertion that there was no guarantee available on record

Appellants failed to point out any illegality in judgment passed by Banking Court

Appeal was dismissed in circumstances.

Expiry date of finance facility was 7-1-1999, whereas outstanding finance liability was finally paid in Court on 11-1-2008

Banking Court rightly rejected claim of bank regarding excess markup charged after expiry date of finance and allowed cost of funds for such period in terms of S.3 of Financial Institutions (Recovery of Finances) Ordinance, 2001

High Court declined to interfere in judgment and decree passed by Banking Court

Appeal was dismissed in circumstances.

Claim under Financial Institutions (Recovery of Finances) Ordinance, 2001, was based on accounts and once such accounts did not qualify test, it could not be a basis of passing decree in favour of plaintiff and on such score claim must fail

Claim of plaintiff financial institution could neither be established nor did it lie as the claim lacked necessary compliance of S. 9(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001

Plaint was rejected in circumstances.

Bank first filed banking suit under S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, against respondents for recovery of money

Respondents filed leave to defend applications therein which were still pending and instead of following that remedy, bank resorted to new remedy by sending notice to respondents under the provisions of National Accountability Ordinance, 1999

Respondents approached Banking Court seeking orders restraining Bank from taking any action under notice issued by NAB

Validity

Bank had nothing to show that respondents were wilful defaulters; it could only be so when a competent court would determine liability of debtor i.e. respondents that lender (Bank) could approach Accountability Court under National Accountability Ordinance, 1999

Bar provided under S.22(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001, could not be circumvented by filing revision under S.115, C.P.C. or appeal under O.XLIII, C.P.C. or constitutional petition under Art.199 of the Constitution

Appeal was dismissed in circumstances.

Suit filed by Bank was decreed in favour of bank and against defendants jointly and severally in the sum of Rs.100,798,440 along with cost of funds and cost of suit, however liquidated damages were not granted

Validity

Single Judge of High Court was not cognizant of the fact that amount shown as recoverable from defendants in summary of accounts, filed by Bank, also included amount of liquidated damages at fix rate of 20%

Liquidated damages in absence of any evidence, showing actual amount of damages sustained by any party, particularly when cost of funds in terms of S.3 of Financial Institutions (Recovery of Finances) Ordinance, 2001, had already been granted along with cost of suit, could not be allowed at flat rate

Division Bench of High Court upheld judgment and decree by modifying the same by deleting amount of liquidated damages i.e. Rs.16,799,740 claimed by Bank at flat rate of 20%

Appeal was disposed of accordingly.

Banking Court passed judgment and decree in favour of bank to the extent of Rs.67,490 but on application filed by bank, a sum of Rs.289,117 was included in decretal amount as service charges which were stated to have been missed due to accidental slip

Validity

Alleged claim of service charges was Rs.533,656/40 whereas Banking Court while deciding application under S.152, C.P.C. had come to the conclusion that in fact it was Rs.289,117 and such could not be an accidental slip, as claimed

Figure of Rs.289,117 could only be achieved after discussion, deliberation and arguments and not merely by clerical or typographical mistake, which in fact was mandate of S.27 of Financial Institutions (Recovery of Finances) Ordinance, 2001

Banking Court misapplied S.152, C.P.C. and while applying provision of S.27 of Financial Institutions (Recovery of Finances) Ordinance, 2001, it provided no room for accidental slips as claimed in application which was granted in terms of order as the same could not have been done

High Court set aside the order passed by Banking Court

Appeal was allowed in circumstances.

Banking Court properly appreciated evidence in accordance with settled principles of law and not a single anomaly either legal or factual was pointed out by borrower

No substantial objection and/or prima facie defence was raised by borrower before Banking Court

Un-rebutted documents filed by bank fully substantiated its claim and finding recorded by Banking Court required no interference by High Court

Appeal was dismissed in circumstances.

Application for leave to defend filed by defendant was dismissed and bank also sought recovery of cost of funds and liquidated damages

Validity

Along with finance agreement, neither 'Repayment schedule' was annexed nor in the agreement itself there was any mention of dates of installments on which it became due, and even number of installments were not mentioned

Bank was only entitled to claim 'cost of funds' from date of expiry of finance agreement

Bank was not entitled to liquidated damages in absence of any positive evidence, as the same required evidence muchless to the effect of actual loss suffered

Even fixed amount of liquidated damages could not be awarded unless quantum of actual loss was proved

Suit was decreed accordingly.

Defendants failed to comply with condition imposed while granting leave to defend the suit on the plea that suit was not maintainable

Validity

No rebuttal of statement of accounts was on the record and as such the suit was maintainable

Certified statement of accounts under S.4 of Bankers' Books Evidence Act, 1891, was the core document under S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001

Statement of account was available on record and no entry of the same was challenged and as such it was presumed that account prepared and maintained by bank were correct

Statement of account having certificate under S.4 of Bankers' Books Evidence Act, 1891, was admissible per se specially when there was no opposition and there was no objection against any debit entry

In absence of any rebuttal, amount due as per statement of account would be deemed to be the correct liability of defendants

Suit was decreed accordingly.

Some of charged documents were executed on behalf of guarantor by her husband as general attorney but the attorney was not on record

Bank had shown that documents were signed by guarantor in year 1997, including registered mortgage deed for an amount of Rs. 100,000 and another mortgage deed for an amount of Rs.6.155 million, were signed " by guarantor personally and signatures matched

Both the mortgage documents stated that security was tendered to secure disbursement of finance to defendant company

High Court passed interim decree in favour of bank to the extent of Rs.6.155 million and in respect of claim made by the bank for remaining amount of Rs.75.8 million unconditional leave to defend was granted to the guarantor

Decretal amount, under. S.3 of Financial Institutions (Recovery of Finances) Ordinance, 2001, was subject to payment of cost of funds from the date when, guarantor first disputed her liability towards bank in her petition for leave to appear

Petition was allowed accordingly.