Leasing of vehicle

2014 CLD 198 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Ss. 9 & 10Leasing of vehicleRe-possession of vehicle by BankProcedure of Banking Court

Plaintiff/customer filed suit for declaration and permanent injunction assailing re-possession of leased vehicle by the bank and sought return of said vehicle

Suit was disposed of on basis of statement of plaintiff that he was willing to pay the instalments and subject to said payment of instalments and re-possession fee, the defendant bank was directed to return the vehicle

Validity

Banking Court had erred in law by neglecting to follow prescribed procedure under the Financial Institutions (Recovery of Finances) Ordinance, 2001

Banking Court, in the present case, failed to give defendant an opportunity to defend their case under S.10 in the form of a preliminary leave to defend application

Suit was filed by the plaintiff/customer seeking a declaration that the acts of the defendant bank in re-possessing the vehicle were illegal and unlawful; for directing the Bank to render true and faithful statement of accounts; a permanent injunction not to auction the re-possessed vehicle and to hand over the possession of the re-possessed vehicle to the plaintiff

By virtue of the impugned order the Banking Court had accepted the statement of the plaintiff that he was a defaulter of some instalments, and had granted him an opportunity to pay defaulted instalments along with repossession charges

Banking Court, therefore, granted the plaintiff final relief without giving the defendant bank an opportunity to file its leave to defend application under S.10 of the Ordinance

Banking Court had to determine in the first instance whether or not the defendant should be granted leave to defend in the case as some substantial questions of law and fact had been raised for which evidence needed to be recorded

Once leave to defend had been granted and issues had been framed as to the substantial questions of law and fact, then evidence had to be recorded and only thereupon disposal of the suit under S.10 could be done

Banking Court therefore could not have disposed of the suit vide impugned order as it had to exercise jurisdiction strictly according to Financial Institutions (Recovery of Finances) Ordinance, 2001

High Court set aside impugned order and remanded the case to the Banking Court to decide the same afresh

Appeal was allowed, accordingly.