Procedure of Banking Court

Section 9(1) stipulates the term 'Branch Manager', which, when read in conjunction with S. 2(a), implies that the suit is to be filed by the aforementioned Branch Manager in accordance with Ss. 9(2) & 9(3)

Suit should demonstrate the amount availed by the defendant, the amount paid by the defendant to the financial institution, and other finance-related amounts payable by the defendant

If the wording of S. 9 is read in conjunction with S. 5, it becomes clear that the Banking Court is established to exercise its jurisdiction under the Financial Institutions (Recovery of Finances) Ordinance, 2001.

Appellants had conceded the banker-consumer relationship, the availing of finance facilities and executing the security documents to secure the repayments of amounts availed by the appellants

Petitions for leave to appear filed by appellants did not fall in the exceptions justifying the grounds for grant of appellants' petitions

Mandatory requirements of S. 10(3)(4)(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001 had not been complied with by the appellants

So far as contention of appellants that amounts deposited by them towards satisfaction of their availed finance facilities were embezzled and an FIR in that respect was lodged, was concerned High Court observed that the FIR was lodged against employees of the Bank and not against the Bank

Inherent fallacy existed in the arguments of the appellants that pendency of those proceedings constituted a ground for grant of appellants' petitions for leave to appear

Banking court had rightly dismissed the appellants' petitions for leave to appear

Appeal was dismissed.

Applicability of limitation on execution proceedings under the Financial Institutions (Recovery of Finances) Ordinance, 2001

Scope

Appellant decree-holder Bank impugned order of Banking Court whereby its application for revival of execution proceedings was dismissed on ground that same was barred by limitation

Validity

Under S. 19 of Financial Institutions (Recovery of Finances) Ordinance, 2001, it was clear that decree-holder was empowered to adopt any means for realization of decree, with or without intervention of court and it was not possible that if decree-holder sought to satisfy decree without intervention of court, then doors were permanently closed for it adopt satisfaction of decree through intervention of court if the decree-holder was unable to materialize satisfaction of decree without intervention of court

Appellant decree-holder Bank had filed application for revival of execution proceedings which was within limitation prescribed by Art. 181 of Schedule to Limitation Act, 1908

Under Financial Institutions (Recovery of Finances) Ordinance, 2001, there existed no requirement for a decree-holder to file separate execution petition as it was duty of Banking Court itself to convert a suit into execution proceedings after decree

Application filed by appellant in present case, at most could be pursued to trigger machinery of court and start execution proceedings for realization of decree and thus such application could not be hit by law of limitation or S. 48 of C.P.C.

In the present case, decree remained unsatisfied and mortgaged property as a result could also not be redeemed, therefore impugned order left both parties remediless which could not be allowed

Impugned order was set aside, and execution proceedings were revived before Banking Court

Appeal was allowed, accordingly.

Adding of necessary party to appellate proceedings under S. 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001

Scope

Appellant Bank sought to add name of respondent to appeal against decree of Banking Court, and said respondent was defendant in suit filed by appellant Bank

Per S. 22 of Limitation Act, 1908, limitation started to run against newly added respondent on date he was so impleaded

Appeal, in the present case, was filed in year 2014 and application under O. XLI, R. 30, C.P.C. to add respondent, was filed in the year 2020, after a delay of six years, when appeal against said respondent had become barred by limitation

Said respondent was necessary party as impugned order of Banking Court was passed in his favour with direction to appellant Bank to release said respondent's personal guarantee and property

In absence of said respondent, impugned decree of Banking Court could not be set aside as he was beneficiary of said order

Application under O. XLI, R. 20, C.P.C. and main appeal were dismissed, in circumstances.

Contention of defendant, inter alia, was that the Banking Court did not properly examine the record and had not scrutinized the statement of account filed by plaintiff Bank while passing impugned order

Validity

Perusal of record revealed that Banking Court had rightly computed outstanding amount owed by defendant and no discrepancy was pointed out by defendant in statement of account filed by plaintiff bank, therefore Banking Court was justified on relying upon the same for determination of decretal amount

No illegality existed in impugned order

Appeal was dismissed, in circumstances.

Plaintiff impugned order of Banking Court whereby plaintiff's suit against Financial Institution was rejected on ground of lack of pecuniary jurisdiction

Validity

Pecuniary jurisdiction had to be determined with reference to valuation given in plaint, and if Banking Court disagreed with valuation assessed by plaintiff, it should fix value of suit under provisions of Suits Valuation Act, 1887 after holding inquiry and collecting material as deemed expedient by Banking Court, and thereafter matter could have been referred to court of competent jurisdiction

After examining the plaint, once Banking Court had proceeded to issue summons to defendant, and application for leave to defend had been filed, then Banking Court could not take any further steps under C.P.C. without first deciding application for leave to defend under S. 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001

Impugned order was made without first deciding application for leave to defend, and therefore Banking Court had gone outside scope of S. 10(8) of the Ordinance

Impugned order was set aside, and Banking Court was directed to decide application for leave to defend and only thereafter in case leave to defend was granted, it could frame issue with regard to pecuniary jurisdiction

Appeal was allowed, accordingly.

Limitation period for sale of mortgaged property under S. 15 of Financial Institutions (Recovery of Finances) Ordinance, 2001

Scope

Question before High Court was whether Financial Institution could take recourse under S. 15 of Financial Institutions (Recovery of Finances) Ordinance, 2001 for sale mortgaged property after expiry of period of limitation prescribed under Art. 132 of Limitation Act, 1908

Held, that maximum limitation to file suit for recovery under S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001 was 12 years as provided by Art. 132 of Schedule to the Limitation Act, 1908 and same stood expired in the present case

Contention that S. 15 of said Ordinance, was an independent remedy available for Financial Institution and same could be invoked notwithstanding expiry of period of limitation for filing suit for recovery was not valid

Recourse to said S. 15 of the Ordinance would also be hit by law of limitation inasmuch same was an alternate course of action available to Financial Institution to seek recovery of loan amount in addition to suit under S. 9 of said Ordinance

High Court observed that same period of limitation would apply to recourse under S. 15 of the Ordinance, as it did to filing of suit under S. 9 of said Ordinance

Recourse to S. 15 of Financial Institutions (Recovery of Finances) Ordinance, 2001 was therefore not available to appellant Financial Institution in the present case, as limitation period had expired

Appeal was dismissed, in circumstances.

Words used in Ss. 9(5) & 10(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 had to be read in their ordinary meaning, and therefore it was obligatory upon defendant to file application for leave to defend within thirty days of valid service in terms of S. 9(5) of the Ordinance

Application for leave to defend filed after passage of thirty days from time of valid service would be liable to be rejected.

Section 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001 required strict compliance with mandatory requirements for application for leave to defend stated therein, and non-compliance of same would result in rejection of application for leave to defend.

Contention of defendant, inter alia, was that service was not effected on defendant, and therefore ex parte decree was liable to be set aside

Validity

Provisions with regard to service on defendant under Ss. 9(5) & 10(2) of the Ordinance were not to be read disjunctively from rule of natural justice "audi alterm partem", which was to be read into every statute, along with Arts. 10A & 4 of the Constitution

In the present case, Banking Court held service as valid on defendant via publication in two newspapers and summonses were not served on defendant through any other prescribed modes, which was erroneous and thus ex parte decree was passed without proof of effective service

High Court set aside ex parte decree of Banking Court and remanded matter to Banking Court

Appeal was allowed, accordingly.

Failure to comply with mandatory requirements of S. 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001, effect of

Application for leave to defend was dismissed by Banking Court

Contention of defendant, inter alia, was that application for leave to defend ought to have been allowed

Validity

Defendants had failed to make compliance with required parameters of S. 10(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001 and therefore S. 10(6) of said Ordinance would come into play and their application for leave to defend was necessarily liable to be rejected

No illegality in impugned order of Banking Court

Appeal was dismissed, in circumstances.

Scope-Defendant impugned order of Banking Court whereby its application for leave to defend was rejected and suit was decreed in favour of plaintiff Bank

Contention of defendant, inter alia, was that statement of account annexed by plaintiff Bank had various defects, which were pointed out in application for leave to defend, therefore the same ought to have been adjudicated upon

Validity

Statement of account furnished by plaintiff Bank had been properly bifurcated in two parts, showing withdrawals by defendant from time of first sanction of finance, and with some deposits as well and entries therein showed markup that had been charged from time to time, and recovery of the same had been made regular intervals

Such statement of account was prepared in accordance with banking practice and procedure, and certified per S. 4 of Bankers' Books Evidence Act, 1891

Challenge to such statement of account by defendant was merely perfunctory in nature and therefore leave to defend had rightly been rejected by Banking Court

Appeal was dismissed, in circumstances.

Contention of defendants, inter alia, was that no valid and effective service in terms of the Financial Institutions (Recovery of Finances) Ordinance, 2001 had been made, and they had been unaware of proceedings before Banking Court also on account of being forcibly dispossessed from their property, due to which they had to settle in another city

Validity

Per S. 9(5) of the said Ordinance, even if service was effected in any one of the modes given therein, same would be deemed valid service, which was done in the present case - Contention of defendants that they had been forcibly dispossessed was not tenable as it was as bounden duty of borrower to furnish information regarding change of his / her abode to the concerned Bank, which obligation the defendants did not fulfil

Suit was therefore validly decreed, ex parte by Banking Court

Appeal was dismissed, in circumstances.

Scope-Defendant impugned order of Banking Court whereby his application for leave to defend was rejected and suit was decreed - Contention of defendant, inter alia, was that statement of account annexed by plaintiff Bank was defective and therefore impugned order was wrongly passed

Validity

Defendant could not point out any specific entry in statement of account which had been either wrongly entered therein or any markup which had been excessively charged and said statement of account was duly certified also

High Court observed that while suit was rightly decreed by Banking Court however, three specific debit entries in statement of account, which were charged by plaintiff Bank after expiry of finance, ought to have been deleted from decretal amount as same were made in disregard to standard banking practice and procedure

High Court modified the decree to extent of said entries

Appeal was partially allowed, accordingly.

Contention of defendants', inter alia, was that substantial questions regarding factum of death of one of the defendants, and forged signatures on mortgage deed, were raised in said applications, which ought to have been adjudicated upon

Validity

Contention regarding death of a defendant was not tenable as no death certificate or other document had been brought on record by defendants to confirm factum of such death of defendant

Registered mortgage deed had been duly executed and objection of defendants denying signatures on the same were perfunctory in nature and did not lead to substantial questions of law and fact in terms of S. 10(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001

Impugned order was therefore rightly passed by Banking Court

Appeal was dismissed, in circumstances.

Defendants impugned order of Banking Court whereby application for leave to defend of defendants was rejected and suit was decreed

Contention of defendants, inter alia, was that statement of account annexed by plaintiff Bank showed a "brought forward entry" of an amount, which was unaccounted for in documents annexed by Bank, and as such matter ought to have been adjudicated after allowing application to leave to defend

Validity

Record showed mortgage deeds pertaining to past years showing business relations between defendants and banks and during such business relations, certain credit facilities can be safely switched over when fresh sanction of finance was issued while specifying terms and conditions

In such circumstances, said "brought forward entry" was incorporated in statement of accounts by plaintiff Bank and Sanction Advice issued by plaintiff Bank was acknowledged by defendants

Defendants could not now question the very entries in statement of account to which they were beneficiaries, and such statement of account was free of ambiguities

Application for leave to defend was therefore rightly rejected by Banking Court

Appeal was dismissed, accordingly.

Record revealed that statement of account furnished by plaintiff Bank had not been certified per S. 4 of Banker's Books Evidence, 1891, which tantamount to non-compliance with mandate of S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 200

While Banking Court could pass ex parte decree after valid service had been effected, however a heavy duty was cast on Banking Court to have looked at the documents annexed by plaintiff Bank, and statement of account not certified per Banker's Books Evidence, 1891 lost is evidentiary value

High Court set aside ex parte decree of Banking Court and remanded matter to Banking Court

Appeal was allowed, accordingly.

Plaintiff customer's suit against defendant Bank was rejected by Banking Court under provisions of O. VII, R. 11, C.P.C.

Validity

Through said suit, plaintiff only attempted to reopen a previous case, where suit for recovery had been filed by Bank against the present plaintiff, in which he actively participated and which culminated in issuance of sales certificate for mortgaged property in his name, and such order of Banking Court was never challenged by plaintiff in appeal

Plaintiff, therefore was estopped by his conduct from instituting a recovery suit against defendant Bank and plaint was therefore rightly rejected by Banking Court under O. VII, R. 11, C.P.C.

Appeal was dismissed, in circumstances.

Defendant, public limited company, impugned order of Banking Court, whereby its application for leave to defend was rejected, and suit was decreed in favour of plaintiff Bank

Contention of defendant, inter alia, was that a number of questions of law and fact were involved, which could not be resolved without recording of evidence, and in particular that statement of account was not duly certified as required by law

Validity

Statement of account submitted by plaintiff Bank carried a note at the end of it, which duly certified said statement, and each page of such statement was duly stamped and initialized by concerned officer of plaintiff bank, which met requirements of S. 2(8) of Banker's Books Evidence, 1891

In the present case, renewal and restructuring of finance facility was done, which was normally a concession upon admission of liability on part of customer, and settlement agreement was duly executed between the parties, and in such circumstances, plaintiff Bank was not obliged to bring on record statement of accounts prior to agreement through which restructuring / settlement was made

Defendant had challenged veracity of documents brought on record by plaintiff bank only verbally and without only documentary proof

Defendant had thus not complied with mandatory requirements of S. 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001 and therefore impugned order rejecting leave to defend of defendant was rightly passed

Appeal was dismissed, in circumstances.

Any charges which were penal in consequence, could not be claimed as a result of civil default of breach of finance agreement.

Appellants impugned order of Banking Court whereby appellants' application objecting to sale of mortgaged property on basis of appellant being bona fide owner of a portion of said property was dismissed by Banking Court

Validity

Banking Court had held that decree-holder Bank had every right to get said property auctioned for realization of decretal amount but also paradoxically stated appellant should avail civil remedy at proper forum against judgment-debtor

Impugned order relied solely on report of a Tehsildar who never appeared as witness and failed to consider that decree-holder Bank failed to tender any evidence, oral or documentary, to rebut evidence of appellant

Issues were wrongly framed by Banking Court as allegation of appellant was that his portion of said property did not form part of the mortgage and such issue was not framed

Banking Court also wrongly concluded that appellant was to approach civil court for determination of his objections as Executing Court under S. 47, C.P.C. had all powers to adjudicate questions necessary for execution and satisfaction of a decree

Impugned order was set aside, and matter was remanded to Banking Court with direction to decide the matter after considering all evidence and recasting issue with regard to objections of appellants

Appeal was allowed, accordingly.

Argument that mere filing of documents by plaintiff Bank along with reply to application for leave to defend, would give rise to grant of application for leave to defend was misconceived

Plaintiff Bank had right to file replication, purpose of which was to provide plaintiff opportunity to rebut averments made by defendant in application for leave to defend

Plaintiff could only file this documents along with replication which were either to be filed by defendant with application to leave to defend, or ancillary documents to rebut averments contained in an application for leave to defend.

Branch Manager of a Bank was authorized under S. 9(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001 to institute suit on behalf of a plaintiff Bank.

Question before High Court was whether Banking Court could dismiss suit without first accepting or rejecting application for leave to defend filed by defendant

Held, that Banking Court was empowered to examine the plaint to determine breach of obligation by a financial institution or a borrower before it fixed a date of hearing to decide application for leave to defend and Banking Court could reject or return a plaint by invoking any provision under the C.P.C. before summoning the defendant under S. 9(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (Ordinance) or before fixing a specific date of hearing for application for leave to defend

Banking Court, however, once it examined plaint, and was satisfied that same was in order as per the requirements of the Ordinance, and had issued summons to defendant pursuant to which defendant filed application for leave to defend, and a date of hearing of same had been fixed, then Banking Court ought to cease taking any further step under the provisions of C.P.C. without first deciding application for leave to defend in accordance with S. 10 of the Ordinance

Banking Court, in such a case, was therefore duty bound to either grant or reject application for leave to defend in terms of S. 10 of the Ordinance before taking any other step towards progression and continuation of the suit.

Where no amount was payable by borrower / customer or even excess amount had been paid by borrower to bank / financial institution, then Banking Court could pass decree regarding cost of funds subject to offsetting excess amount, if any, which could be determined at stage of execution of such decree.

Plaintiff Financial Institution impugned order of Banking Court whereby its claim on additional lease payments for overdue payments, as provided for in lease agreement, was disallowed

Validity

When cost of suit and cost of funds had been awarded by Banking Court in harmony with S. 3(2) of the Ordinance, then the same adequately protected interest of Financial Institution by reimbursing and compensating it for obstruction of funds

Any additional compensation such as additional lease rentals for overdue payments would amount to penalizing costumers and a default in lease finance contract could not have consequences of overpayment by customers and undue fiscal gain for Financial Institution

Allowing such payments would be contrary to S. 73 or Contract Act, 1872 as sufferer of breach could recover compensation only for loss or damage which naturally arose in usual course of things from such breach

No illegality therefore existed in impugned order

Appeal was dismissed, in circumstances.

Contention of defendant, inter alia, was that application for leave to defend ought to have been granted as precious rights of defendant were involved

Validity

Application for leave to defend, in present case, contained no meaningful ground challenging liability set up in plaint and same did not comply with mandatory requirements of S. 10(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001

Failure to meet such mandatory requirements, it was incumbent on Banking Court to reject such application for leave to defend in terms of S. 10(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001, and pass decree forthwith

No illegality therefore existed in impugned order

Appeal was dismissed, in circumstances.

Contention of defendant, inter alia, was that an incomplete statement of account was appended by plaintiff Bank, therefore impugned decree could not have been made

Validity

Record revealed that statement of account appended by plaintiff Bank did not cover entire period of finance facility and in terms of S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, it was obligatory upon plaintiff Bank to provide complete statement of account and such statement of account should be a self-contained document reflecting period for which markup had been debited and also amount repaid by customer, if any

Impugned order was set aside, and matter was remanded to Banking Court with direction to plaintiff bank to file complete statement of account and for defendants to file leave to defend

Appeal was allowed, accordingly.

Contention of appellants was that the Banking Court had not consolidated their suit for cancellation of mortgage deed (originally filed before Civil Court) with Banks' suit despite the fact that the High Court had ordered it to do so

Validity

Order passed by High Court had no relevance to the proceedings before the Banking Court and non-consolidation of suits had not caused any prejudice to the appellants as they had availed opportunity to put forth their stance by filing application for leave to defend

Appellants had generally denied all the allegations without cogent reasons and had also denied relationship with the Bank

Bank, through production of substantial documents, had established on record that finance facility was availed

Banking Court had taken into consideration all the grounds mentioned by the appellants in their application for leave to defend

No illegality or perversity was found in the impugned judgment

Appeal was dismissed, in circumstances.

Contention of defendant, inter alia, was that impugned order did not take into account fact that said application was filed within 30 days from date of knowledge of defendant with regard to proceedings before Banking Court

Validity

Defendant had not mentioned such date of knowledge of proceedings in application for leave to defend and therefore same could only be regarded as an afterthought to remove legal lucana and even otherwise, defendant did not mention mode/source of such knowledge about pending proceedings, and did not make any allegation with regard to postal address on which effective service was made

No illegality therefore existed in impugned order

Appeal was dismissed, in circumstances.

Plaint, in terms of S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001 was required to disclose cause of action and failure to do so may lead to rejection of plaint on basis of averments of plaint, irrespective of whether leave to defend had been obtained by defendant or not

Plaint, if sought to be rejected on grounds other than averments in plaint, for example, on ground of defence of defendant, then such defendant was required to obtain leave to defend before his plea for rejection of plaint, such as on ground of res judicata or limitation, was considered by Banking Court

Application for rejection of plaint was a special kind of application, different from other interlocutory applications for reason that Banking Court itself was vested with suo motu powers to reject plaint at any stage

Grounds taken in an application for rejection of plaint may also be treated as grounds for grant of application for leave to defend, which had to be considered on its own merits and if circumstances of case so required, leave may be granted on said grounds

Dismissal of application for leave to defend did not mean that suit was to be decreed in all cases and Banking Court retained power to reject plaint in a suit or dismiss the same even after rejection of application for leave to defend, if plaintiff failed to make out a case for passing decree.

Contention of defendant, inter alia, was that power of attorneys in favour of persons filing suit against defendants, were executed on date prior to sanction of finance facilities, and therefore same could not be used to file said suits

Held, that perusal of power of attorneys in the present case revealed that powers vested in attorneys authorized them generally to prosecute/file recovery suits and legal proceedings on behalf of plaintiff Bank and they had also been authorized to perform other acts on behalf of Bank including filing of present suit

Suit therefore had been filed competently.

Plaintiff Bank impugned order and decree of Banking Court on the ground that "reversal entries" in statement of account had been treated as payments made by defendants, thereby suit was decreed for lesser amount than sought by plaintiff Bank

Validity

Record showed that after expiry of finance facility, defendants had continued making deposits from time to time and same was reflected in statement of account, and after adjusting the same, Banking Court had rightly arrived at correct decretal amount, to which no exception could be taken

Appeal was dismissed, in circumstances.

Contention of plaintiff Bank, inter alia, was that limitation began to run from date of last payment by defendants and on such basis, suit was within time

Validity

Limitation in a banking suit normally did not run from date of disbursement of loan but from date of last payment or default, however same was only true when such last payment had been otherwise made within applicable limitation period

In the present case, certificate of charge for finance was created in year 1991 and thus limitation period under Limitation Act, 1908 would be 12 years from date when payment became due and even if such period of 12 years is applied, admittedly date of disbursement of loan was made year 1991 and no action was taken by the plaintiff Bank and it only filed present suit after a certain amount was deposited by defendants in the year 2019

Such amount was admittedly deposited after expiry of period of 12 years limitation

Acknowledgement, if any, in terms of S. 19 of Limitation Act, 1908 could be relied upon only if same was made within prescribed period of limitation and not otherwise

Payment made by defendants in year 2019 therefore would not extend period of limitation

Record also reflected that no application for seeking discretionary relief by plaintiff Bank was filed in Banking Court to satisfy it that there was sufficient cause for not filing suit within time

No illegality existed in impugned order

Appeal was dismissed, in circumstances.

Petitioner Bank impugned order of Banking Court on ground that liability of defendant computed by Banking Court in decree was not in accordance with statement of account furnished by plaintiff and was significantly less than amount of finance payable by defendant to plaintiff Bank

Validity

Perusal of impugned order revealed that treatment of amount adjusted by Banking Court was done in a mechanical fashion without any reasoning for not considering entire claim of plaintiff

High Court set aside impugned order and remanded matter to Banking Court with direction to recalculate decretal amount in accordance with law and after providing parties opportunity of hearing and to make a well-reasoned order

Appeal was allowed, accordingly.

Statutory duty existed on Banking Court to consider application for leave to defend regardless of whether counsel/representative on behalf of defendant was present or not

Order of Banking Court disposing of an application for leave to defend, was to be made with application of mind towards the application for leave to defend and contents thereof.

Omission on part of Bank/Financial Institution in filing statement of account of markup with plaint was non-compliance of S. 9(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, the effect of which was to be examined by Banking Court independent of defence set up by defendant.

Suit for declaration and permanent injunction filed by customer, seeking to restore possession of vehicle and schedule of payment, after vehicle had been repossessed by defendant Bank, was rejected by Banking Court under O. VII, R. 11, C.P.C.

Validity

Suit of plaintiff seeking revival of schedule of payment and mandatory injunction for restoring possession of vehicle was outside the scope of Financial Institutions (Recovery of Finances) Ordinance, 2001

Section 16(3) of the Ordinance only entitled the plaintiff/customer to seek compensation in case a vehicle had been wrongly and unjustifiably possessed by Bank

Banking Court had therefore rightly rejected plaint as plaintiff's suit was not maintainable in its present form in terms of S.9 of the Ordinance

Appeal was dismissed, in circumstances.

Petitioner impugned order of Banking Court whereby his objections to notice of sale of mortgaged property, in execution proceedings of Banking Court, were rejected

Validity-Sections 15(11) & 19(7) of Financial Institutions (Recovery of Finances) Ordinance, 2001 pertained to disposal of disputes by Banking Court relating to sale of mortgaged property, and therefore orders passed under same were final orders which were appealable under S. 22 of said Ordinance

High Court observed that in presence of remedy of appeal, Constitutional petition was not maintainable, and same was disposed of with observation that petitioner may avail remedy of appeal under S. 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001.

Section 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001 provided that a defendant/customer was required to specifically mention amount of finance availed, amounts paid to Financial Institution, dates of payments, and other information, up to date of institution of a suit for recovery

Such requirements had to be fulfilled by a defendant in stricto sensu

Where application for leave to defend contained mere vague averments and simply denied claim of Financial Institution, then such application had to be rejected by Banking Court.

Financial Institution/Bank impugned order and decree of Banking Court whereby it was held not to be entitled to recover "Agreed Loss Value" and overdue rentals/installments of customer, after default on part of customer and termination of lease of vehicles provided by Bank to customer

Validity

Financial Institution, being a "leasing company", on termination of such lease, would be entitled to recover "Agreed Loss Value" which would be equivalent to unpaid installments, which in the present case, were overdue rentals and remaining amount of lease finance which was payable in the remaining period of lease

Banking Court in impugned order committed error of law by excluding amount of "Agreed Loss Value" from decree, despite fact that defendant was obligated to pay overdue rentals

Impugned order of Banking Court was modified and Financial Institution/Bank was held to be entitled to receive Agreed Loss value along with overdue rentals inclusive of unpaid installments

Appeal was allowed, accordingly.

Jurisdiction of Banking Court to entertain suits relating to "finance" as defined in Financial Institutions (Recovery of Finances) Ordinance, 2001

Plaintiff impugned order of Banking Court whereby plaint of plaintiff was returned by Banking Court on ground that suit in the matter should be filed before Insurance Tribunal

Contention of plaintiff/appellant, inter alia, was that suit was contested by defendant and leave to application was filed, therefore Banking Court could not pass impugned order for return of plaint before decision on application on for leave to defend

Validity

Admitted fact that basis on which suit was filed related to "finance" as defined by S. 2(f) of Financial Institutions (Recovery of Finances) Ordinance, 2001

Without decision on leave application, plaint of appellant could not be returned by Banking Court, and impugned order was therefore an error in law

Impugned order was set aside, and Banking Court was directed to pass decision on application for leave to defend

Appeal was allowed, accordingly.

Respondent had filed a suit against the appellant with the averments that he had paid off the entire liability in respect of Credit Card under settlement letter

Banking Court after issuance of summons had proceeded ex parte against the appellant and disposed of the suit

Contention of appellant was that the Banking Court without calling evidence had disposed of the suit whereas argument of respondent was that as per settlement letter, which was acknowledged by the appellant Bank, he had paid off his entire liability

High Court, on the joint request of both the parties, allowed the appeal, set aside the impugned order and remanded the matter to the Banking Court for decision afresh.

Banking Suit under the Financial Institutions (Recovery of Finances) Ordinance, 2001 was well-defined and controversies in such a suit were restricted to "availed", "claimed", or "dispute amounts" and facts in support thereof

Controversial details, unnecessary facts and time for the trial under the Financial Institutions (Recovery of Finances) Ordinance, 2001 was curtailed by its provisions

Trial under the Financial Institutions (Recovery of Finances) Ordinance, 2001 was restricted only to claimed or disputed amounts and therefore was a suit of accounts duly based on credit, debit and balance entries properly ledgered and maintained in Books of Accounts

Provisions of Ss.9 & 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 being mandatory, parties were compulsorily obliged not only to plead but also state nature of accounts otherwise such parties were bound to face legal consequences.

Section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was different and independent from provisions of C.P.C., Banking Tribunals' Ordinance, 1984 and Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 in so far as institution of proceedings by way of filing of plaint was concerned

Section 6 of the Banking Tribunals' Ordinance, 1984 was not pari materia with S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and basic difference between the two was that under the later, suit could be filed by an authorized officer on basis of power of attorney duly executed in favour of such officer whereas under the first, suit could be filed by Bank with approval of the Board of Directors of the Bank and not otherwise.

Banking Suit under the Financial Institutions (Recovery of Finances) Ordinance, 2001 was well-defined and controversies in such a suit were restricted to "availed", "claimed", or "dispute amounts" and facts in support thereof

Controversial details, unnecessary facts and time for the trial under the Financial Institutions (Recovery of Finances) Ordinance, 2001 was curtailed by its provisions

Trial under the Financial Institutions (Recovery of Finances) Ordinance, 2001 was restricted only to claimed or disputed amounts and therefore was a suit of accounts duly based on credit, debit and balance entries properly ledgered and maintained in Books of Accounts

Provisions of Ss.9 & 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 being mandatory, parties were compulsorily obliged not only to plead but also state nature of accounts otherwise such parties were bound to face legal consequences.

Under S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, service through any prescribed modes of services was to be deemed valid service.

Plaintiff Bank impugned order of Banking Court whereby defendant, who was guarantor to a finance facility availed by a company, was discharged of his obligation for repayment of amounts, inter alia, on ground of transfer of shareholding of defendant company and provision of additional securities to the plaintiff Bank

Contention of guarantor / defendant, inter alia, was that correspondence and proposals exchanged between parties showed that plaintiff Bank had accepted discharge of guarantee of said defendant

Validity

Proposal for discharge of guarantee would become a binding contract if acceptance of such proposal was absolute and unqualified under S. 7 of the Contract Act, 1872

Nothing, in the present case, showed that plaintiff Bank ever conveyed an absolute and unqualified acceptance of letters addressed and proposals exchanged

Doctrine of acceptance by silence merely for reason that additional properties were provided and accepted by the plaintiff Bank was not tenable

Guarantor defendant, in the present case, failed to establish absolute and unqualified acceptance or even acceptance by way of conduct

Facts regarding acceptance of discharge of defendant's guarantee on part of the plaintiff Bank and entitlement to discharge/release in lieu of any obligation, were relevant facts, which were required to be proved in terms of Art. 119 of Qanun-e-Shahadat, 1984

Impugned order to the extent of guarantor defendant was set aside by the High Court

Appeal was allowed, accordingly.

Novation, rescission and alteration of finance facility contract on account of change of shareholding of company / agreement between directors

Effect

Bilateral arrangement between in-coming and out-going directors, even if it showed an enforceable understanding, in the absence of creditor/Bank, would not be binding upon the said creditor/Bank.

Defendants impugned order of Banking Court whereby defendants' application for leave to defend was dismissed and suit was decreed

Contention of defendants, inter alia, was that impugned order was illegal and suit ought to have been dismissed

Validity

Defendants had not denied availing of finance facilities in their application for leave to defend and only alleged that suit was filed three years after expiry of the finance facility, which ground alone was not sufficient for granting leave to defend as suit could be filed by the plaintiff Bank from date of refusal to the defendants to make payments to the plaintiff Bank

Statement of entries were also not denied and therefore, no illegality existed in the impugned order

Appeal was dismissed, in circumstances.