Microfinance institutions

2023 CLD 1536 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 3(2) & PreambleFinancial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S. 20Penal Code (XLV of 1860), S. 489-FCriminal Procedure Code (V of 1898), Ss. 22-A & 22-BRegistration of FIRMicrofinance institutionsObject, purpose and scopeBanking Court, jurisdiction of

Petitioner/accused was aggrieved of order passed by Ex-officio Justice of Peace directing registration of FIR against him for issuing a cheque which was dishonored on presentation

Plea raised by petitioner/accused was that provision of S. 489-F, P.P.C. was not applicable

Validity

Purpose and aim of establishment of microfinance institution was to support persons with meagre means of subsistence

No criminal proceedings against such customer for whose alleviation such bank was established was intended by Microfinance Institutions Ordinance, 2001

If a person who was poor and socially not well placed committed a crime envisaged in S. 489-F, P.P.C., and was not punished for the reason that the provision was inapplicable, this would tantamount to giving a carte blanche to the poor to commit such crime

Microfinance institutions cannot be termed as financial institutions within the contemplation of Financial Institutions (Recovery of Finances) Ordinance, 2001, to say that its matters can only be tried by Banking Court

Provisions of Criminal Procedure Code, 1898 were fully applicable and application filed under Ss. 22-A & 22-B, Cr.P.C. on behalf of complainant/microfinance bank was fully competent

High Court declined to interfere in the order passed by Ex-officio Justice of Peace

Constitutional petition was dismissed, in circumstances.

2018 CLD 1196 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 3Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S. 9Civil Procedure Code (V of 1908), O.XXXVII, Rr. 1 & 2Microfinance institutionsRecovery of financeApprehensions and presumptionsEffect

Petitioners were customers of Microfinance Institutions and they apprehended coercive measures to be adopted for recovery of finance

Validity

Microfinance Institutions were not deemed to be banking companies

Recoveries of loans could not be obtained under Financial Institutions (Recovery of Finances) Ordinance, 2001, by Microfinance Institutions through Banking Courts

High Court declined to issue directions merely on the basis of apprehensions and presumptions of parties

Microfinance Institutions stated that recoveries would be made through summary suit under O. XXXVII, C.P.C. and they were not harassing petitioners rather they would adopt proper procedure prescribed under the law

Constitutional petition being not maintainable was dismissed.

2018 CLD 116 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss. 3(2)Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), Ss. 2(d), 5 & 9Civil Procedure Code (V of 1908) O. XXXVII, Rr. 1 & 2Microfinance institutionsApplication of other lawsDefault in obligations of customers of microfinance institutionsNon-applicability of Financial Institutions (Recovery of Finances) Ordinance, 2001Suit for recovery filed under O. XXXVII, C.P.C. filed by microfinance institution was decreed

Contention of defendant, inter alia, was that a summary suit under O. XXXVII, C.P.C. filed by a microfinance institution was not maintainable and a suit under Financial Institutions (Recovery of Finances) Ordinance, 2001 should have been filed instead

Validity

Bare perusal of S. 3(2) of the Microfinance Institutions Ordinance, 2001 clearly reflected that Banking Companies Ordinance, 1962 and any other law for the time being in force relating to banking companies or financial institutions shall not apply to microfinance institutions licensed under the Microfinance Institutions Ordinance, 2001 and that microfinance institutions shall not be deemed to be a banking companies for purpose of any law for the time being in force relating to banking companies

Impugned order was therefore, rightly passed

Appeal was dismissed, in circumstances.