Pending recovery suit

2015 PLD 301 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 2Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S. 9Exit from Pakistan (Control) Rules 2010, R.2(1)(d)Constitution of Pakistan, Art.199Constitutional petitionChairman and directors of a company ("petitioners")Alleged default in repayment of loanPending recovery suitPlacing name of alleged defaulter on Exit Control List (ECL) during pendency of recovery suitLegalityRight to travel abroadScope

Mere fact that there was a claim against a person by a commercial bank, which was yet to be adjudicated upon, was no ground for placing name of such person on the Exit Control List or to deprive him of his fundamental right to travel abroad or restrict his right of free movement

No one could be termed a "defaulter" unless so declared by a court of competent jurisdiction

Courts established under the Banking laws were the sole authority to adjudicate upon the default in cases involving commercial loans

Recovery suit filed by the bank was pending, and no determination had been made by the Banking Court relating to status of petitioners as defaulters

No power vested with the commercial bank, the State Bank of Pakistan or for that matter the Federal Government to declare a person to be in default

Such power solely vested with the courts of competent jurisdiction

Any action on part of either the commercial bank or the State Bank of Pakistan, to determine that a customer was in default of an amount calculated by the bank and thereafter recommending placement of his name on the Exit Control List, was not only violative of settled principles of law but amounted to making the entire system of banking law and banking courts redundant

Petitioners were not given an opportunity of being heard by giving them a notice

Besides petitioners had furnished adequate and sufficient securities to the lending bank to cover the entire alleged claim of the bank, if and when decreed

As such the lending bank was adequately covered in terms of its financial risk

Act of placing name of petitioners on the Exit Control List was without lawful authority and of no legal effect

High Court directed that the name of petitioners should immediately be removed from the Exit Control List

Constitutional petition was allowed accordingly.

2014 CLD 1384 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 9Exit from Pakistan (Control) Ordinance (XLVI of 1981), S. 2Exit from Pakistan (Control) Rules, 2010, R.2(1)(d)Constitution of Pakistan, Art. 199Constitutional petitionChairman and directors of a company ("petitioners")Alleged default in repayment of loanPending recovery suitPlacing name of alleged defaulter on Exit Control List (ECL) during pendency of recovery suitLegalityRight to travel abroadScope

Mere fact that there was a claim against a person by a commercial bank, which was yet to be adjudicated upon, was no ground for placing name of such person on the Exit Control List or to deprive him of his fundamental right to travel abroad or restrict his right of free movement

No one could be termed a "defaulter" unless so declared by a court of competent jurisdiction

Courts established under the Banking laws were the sole authority to adjudicate upon the default in cases involving commercial loans

Recovery suit filed by the bank was pending, and no determination had been made by the Banking Court relating to status of petitioners as defaulters

No power vested with the commercial bank, the State Bank of Pakistan or for that matter the Federal Government to declare a person to be in default

Such power solely vested with the courts of competent jurisdiction

Any action on part of either the commercial bank or the State Bank of Pakistan, to determine that a customer was in default of an amount calculated by the bank and thereafter recommending placement of his name on the Exit Control List, was notonly violative of settled principles of law but amounted to making the entire system of banking law and banking courts redundant

Petitioners were not given an opportunity of being heard by giving them a notice

Besides petitioners had furnished adequate and sufficient securities to the lending bank to cover the entire alleged claim of the bank, if and when decreed

As such the lending bank was adequately covered in terms of its financial risk

Act of placing name of petitioners on the Exit Control List was without lawful authority and of no legal effect

High Court directed that the name of petitioners should immediately be removed from the Exit Control List

Constitutional petition was allowed accordingly.