BANKING RECOVERY LAW Financial Institutions (Recovery of Finances) Ordinance,2001. BY QAISER JAVED MIAN Director Research/Faculty member Punjab Judicial Academy

( Part-I )

- Brief History of Banking Recovery Law:

During the regime of General Zia-ul-Haq, the government

endeavored to introduce Islamic Bank system pursuant to the State

Bank’s Circular No.PBD 13 as a result of which some Islamic modes of

financing mushroomed such as, but not limited to, Mudaraba, Musharika,

lease financing, Takafful etc.

Prior to this venture of Zia-ul-Haq’s Government, all banking

cases used to be heard by the civil courts. In the circumstances, a law was

promulgated by the name of “Banking Courts (recovery of loans)

Ordinance (1979)”, which dealt with the banking cases or in the other

words the recovery suits pertaining to interest based “loans” and “Banking

Courts” were established in different parts of the country. The procedure of

these summary courts, though generally considered unusual, was not

really very unusual as the same was, to a large extent, similar to the

procedure provided in Order 37 of the Civil Procedure Code 1908 with

regard to the recovery of the amounts of the Negotiable Instruments. The

suits of recovery based on the negotiable instruments which includes a

bank cheque, are liable to be filed before the District Judge and ten days

notice is given to file the reply to the show cause notice and summary

procedure of trial is adopted.

These “loans” under the aforesaid Ordinance of 1979 were

generally given/granted/advanced in the cases of foreign transactions such

as opening of letters of credit for the import of foreign machinery or other

products etc. The qualifications of the appointment of such judges was that

any judge or lawyer having the qualifications of District and Session Judge

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or qualification of a judge of High Court could be appointed as a judge of a

Banking Court.

In the meanwhile, pursuant to SBP’s Circular No.BPD 13, the

Banks and/or Financial institutions also started lending/financing on the

basis of “mark up” instead of “interest” because Islamic mode of financing

was being encouraged. To regulate the Islamic mode of financing and their

recovery in case of default a new law was promulgated called the “Banking

Tribunal’s Ordinance, 1984”. The qualifications of the presiding officers of

the tribunal were the same as the judge of the Banking Court.

These two parallel laws i.e. Banking Courts Ordinance, 1979

and the Banking Tribunals Ordinance, 1984 created a lot of confusion

because the one and the same project will have certain sum of “loan”

based on “interest” for import of the machinery from abroad and the same

project/venture will also have certain part called “finance” instead of “loan”

based on “mark up for construction of the project/factory etc. and running

finance or a working capital which also had different dimensions.

This confusion resulted into a lot of litigation at the highest

level i.e. writ petitions were filed in the High Courts , and the Supreme

Court ultimately decided that various provisions of the Banking Courts

Ordinance 1979 and the Banking Tribunals Ordinance 1984 were

unconstitutional. The full bench judgment of the Lahore High Court cited as

M/S Chenab Cement Product (Pvt) Ltd etc. Vs. Banking Tribunal, Lahore

(PLD 1996 Lah Page 672) the appeal against which was later admitted by

the Supreme Court came as a blow to the Federal Government. Therefore,

the Federal Government promulgated another law by the name of

“Banking Companies (recovery of loans, advances, creditors and finances)

Act 1997”.

Again there were many provisions in the aforesaid Act of 1997

which were vague, inadequate or uncertain, particularly with reference to

recovery of bank loans/finances etc and the Federal Government was

finally constrained to promulgate another law namely “Financial Institutions

(recovery of finances) Ordinance, 2001 which laid much more emphasis on

the recovery of finances through section-15 which gives free hand to

the banks to directly sell the secured properties after complying with

minor formalities.

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- FEATURES OF FINANCIAL INSTITUTIONS (recovery of finance) ORDINANCE, 2001: Presently, the recovery of all kinds of loans, finances whether

interest based or markup based, lease financing, credit cards, letters of

credit, long term and short term finance certificates etc., in other words all

kinds of consumer financing, house building finances, investment

financing, development financing etc. are covered under this law.

- ESTABLISHMENT OF BANKING COURTS UNDER SECTION-5:

a) Qualification of courts/judges: The judges of the banking courts are required to possess the

same qualification as prescribed in the previous laws i.e.

qualifications required to be a District and Sessions Judge, or

Judge of a High Court. The judges are nominated by the

Federal Ministry of Law and Parliamentary Affairs. Modarraba

courts are also established in the same manner.

b) Territorial Jurisdiction:

The Banking Courts are established mostly and mainly in

Divisional Headquarters for the convenience of the people of

that Division Territorial jurisdiction is determined under the

basic principle of law i.e. “as to where the whole or part of

cause of action arises”. The cause of action will arise where

the loan/finance agreements(s) are entered into and/or where

the amount of loan/finance is disbursed and/or where the

breach of the loan/finance agreement(s) took place and/or

where the defendant resides permanently or for gain or where

the repayment takes place etc.

c) Pecuniary Jurisdiction: The pecuniary jurisdiction of all the Banking Courts situated at

Divisional Headquarter is to try the suits/cases for the

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recovery up to Rs.5 Crores. However, if the suit amount i.e.

the amount claimed in the suit is more than five crores than a

judge of the high court of that Province, upon the direction of

the Chief Justice of the relevant High Court, shall act as a

banking court and in his capacity as a banking court, it will be

his original jurisdiction under the Banking Law and not the

original jurisdiction of the High Court. It is also important to

note that a financial institution can file a suit against a

customer/borrower while a customer/borrower can also file a

suit against the financial institution for any breach of terms and

conditions of the agreement(s) executed by them.

- POWERS OF THE BANKING COURT.

Under Section 7 of the Financial Institution Ordinance, 2001

the Banking Courts have all the powers of a civil court which a District

Judge/Court possesses under the Civil Procedure Code and at the same

time also has all the powers of a criminal court which a Sessions Court

possesses under the Criminal Procedure Code. A Banking Court can call

any related party as a witness to appear personally before the Court and it

also has the powers to punish any one who commits contempt of the court

or any other offence under the provisions of the law under discussion.

- PROCEDURE OF THE BANKING COURT:

a) PLAINT: Section 9 of the financial Institution Ordinance

2001 specifies the procedure of the Banking Courts. Assuming that a

Financial Institution files a suit/plaint in the Banking Court for the recovery

of the outstanding loan/finance after the default of the customer, the plaint

must contain certain specified particulars, such as the total amount of the

loan/finance, the amount(s) paid back, the outstanding amount etc. the

plaint must be signed by a duly authorized person/officer/manager of the

Bank having valid power of attorney from the Financial Institution to sign

the plaint. As to valid power of attorney, the relevant judgments of the

Superior Courts are stated in Part-II of this Article.

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Technically speaking a borrower/customer can also file a suit

against financial institution for breach of any terms mutually agreed upon.

Such suits may be of any kind envisaged in the civil law, but, generally,

they are for declaration, rendition of accounts, cancellation of documents

along with injunction relief. Oftenly such suits are filed as a counterblast to

the bank’s recovery suit and if a notice has been received by the borrower

from the bank about the default in repayment, a suit may be filed by

borrower as a pre-emption counterblast.

b) Statement of Account:

The plaint must be supported and accompanied by a

“Statement of Account” which should be duly certified as per Section 3 of

the Bankers Books Evidence Act. Without a valid statement of account, a

suit of the Financial Institution is liable to be dismissed. It is to be noted

that a legal presumption of correctness and truth lies with the duly

verified statement of account, however, this presumption can be

rebutted by the defendant by introducing strong evidence against and by

proving that the entries contained in the statement of the account are

incorrect. For example defendant can prove that the dates and amount(s)

of the disbursement of loan/finance are incorrect. The defendant can also

produce receipts/documents that the amounts repaid are not reflected in

the statement of the account. As to the correctness and admissibility of the

statement of account the following judgments of the superior Courts are

mentioned in Part-II of this Article.

c) Special Law:

The banking law under discussion is a special law; therefore,

the provisions of this law will prevail over any other law on the same point.

However, where the banking law is silent on any point the general law,

may it be civil or criminal law will be applicable. Therefore, the procedure

of the banking court being under special law is different from the procedure

of the normal civil courts which strictly follows the civil procedure code.

d) Procedure of Service Of Defendant:

Upon receiving the suit/plaint by the Banking Court if the court

is satisfied that there are no legal infirmities in the plaint/suit, the court shall

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order notices to be issued to the defendant(s) by four modes of the

service:

i) Notice through court bailiff/server

ii) Notice through registered letter.

iii) Notice through courier service

iv) Notice through proclamation in two newspapers one in

English and one in Urdu.

The notice is in the form of a show cause notice. It is different

from the notice of a civil court which simply informs the defendant that

such and such case has been filed against you and on the next date of

hearing you should come in person or through lawyer to defend yourself by

filing, firstly, a written statement. In case of Banking Court, the notice is the

form of a show cause notice stating to defendant(s) as to why judgment

and decree should not be passed against you, presuming that the suit is

correct because it is supported by a certified statement of account. The

case law on valid service is cited in Part-II of this Article.

e) Petition For Leave to Appear & Defend:

Upon the receipt of first notice through any of the four modes

of service, the defendant(s) must file within Thirty days as provided in

Section 10 of the Financial Institution Ordinance 2001 a petition for leave

to appear and defend the suit (PLA). If the PLA is not filed within thirty

days from the date of first service, the suit shall be decreed forthwith

summarily in favour of the plaintiff legally presuming that all the contents of

the plaint are true and correct. However, in case of genuine delay having

plausible reasons, the court may condone the delay in filing of the PLA.

Time is to be computed from the date of first service. For relevant case law

on the point, please see Part-II of this Article.

Section-10 of the Financial Institution Ordinance 2001

provides for the necessary particulars which must be included in a PLA

failing which the PLA may be rejected. The necessary ingredients are for

example the amount of loan/finance availed, the dates of disbursement(s),

the amount(s) paid back, and the total amount which in view of the

defendant(s) is due and outstanding (if any). The PLA must raise

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“substantial questions of law and/or fact.” The case law on this point is

in Part-II of this Article.

f) Preliminary Decree:

In view of the assertions of the plaintiff bank in the plaint and

in view of the contentions of the defendant borrower/customer in the PLA

the banking borrower/customer in the PLA the banking court comes to the

conclusion that a certain sum of money is undisputedly outstanding against

the defendant(s), the court may pass a preliminary decree for the

undisputed amount in favour of the plaintiff. This decree is executable just

like a final decree. However, the amount of preliminary decree shall be

adjusted in the Final Decree.

g) Substantial Questions of Law and Fact:

A PLA must raise substantial question of law and fact to

succeed rebutting the assertions and allegations of the plaintiff and

particularly the statement of account must be attacked very vigorously and

each entry of the statement of account must be tested as to its correctness

and it should be made sure that no excessive markup or other charges or

fines are imposed. Nobody can defend the main suit before first obtaining

the leave i.e. permission to defend from the court because the presumption

of correctness lies with the plaint supported by the statement of account. If

the PLA is rejected, the court shall pass a judgment and decree in favour

of the plaintiff. However, the court can grant conditional or unconditional

leave to appear and defend. In the case of unconditional leave to appear

and defend, the presumption of correctness of the plaint is taken away and

the suit will proceed just like a civil suit in a civil court, meaning thereby

that the plaintiff has to prove its case first and then the defendant will

defend. In case of conditional leave to appear the defendant must fulfill the

conditions imposed by the court, may it be the deposit of certain money

with court as a security or any other such condition. In short a PLA can

succeed only if substantial questions of law and fact are raised and

the court is convinced that questions of law and fact cannot be

decided summarily without leading detailed documentary and/or oral

evidence of the parties. If the leave to appear is granted, the PLA shall

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be treated as a “Written Statement”. The issue shall be framed and the

evidence will be lead by both the sides first the plaintiff’s evidence and the

defendant’s evidence and finally after hearing the arguments, the court

shall either dismiss the suit or pass a decree for the amount proved to be

outstanding.

h) Execution:

After passing of the decree a defendant has thirty days to

fulfill/execute the decree i.e. to make payment according to the judgment

and decree of the court. If the defendant fails to do so, the suit will now be

converted into and will be treated as an execution petition. After the lapse

of thirty days from the date of judgment and decree, on the next date of

hearing the court will ask the plaintiff to file any charge creating, mortgage,

hypothecation and pledge agreements etc. so that the properties which

were given as securities to the Bank for repayment of the loan/finance

should be forfeited, liquidated and sold. No specific and/or detailed

procedure for execution is given in the Financial Institutions Ordinance,

2001, therefore, the procedure given in Order-21 of the Civil Procedure

Code is followed:

I) Recovery Problems of the Banks:

Direct Recovery By Financial Institutions:

Section 15 & 19.

In view of the dissatisfaction of the Financial Institutions over the

relative delay in the procedure of the Banking Courts for actual

recovery under the previous laws, the present law i.e. the

Financial Institutions Ordinance, 2001 inserted a new provision i.e.

Section-15 which fully empowers the Financial Institutions to

recover their dues by directly selling the securities through auction

or entertaining sealed bids after proclamation in the newspapers

absolutely without intervention or indulgence of the Banking

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Courts. The procedure laid down in Section 15 is that the

Financial Institution will issue first legal notice of 15-days to the

customer and if the customer does not pay, then the Financial

Institution shall issue second legal notice for 15-days and if the

customer still does not pay the Financial Institution shall issue the

last third legal notice for 30-days, thereafter in case of non-

payment the Financial Institution may directly sell the

mortgaged/hypothecated/pledged or otherwise encumbered/or

charged properties after due advertisement for the satisfaction of

the amount due. In this case the Financial Institution has to only

submit a final report to the Banking Court as to the number of

offers/bids and the amount of sale proceeds etc. this legal

provision has very serious reservations from the legal fraternity on

the following:

GROUNDS:

i. The law used to be that in the case of land revenue or

public revenue, while the money of financial institutions is

deemed as Public Revenue, the “amount due” must be

judicially ascertained and determined. While under section

15, the statement of account of a financial institution does

not get challenged and the Financial Institutions may be

recovering exorbitant or excessive illegal amount. There

are scores of judgment of the Superior Courts that the

“amount due” must be “judicially ascertained” before

recovering the same through coercive measurers in this

regard.

ii. Secondly the Financial Institutions being themselves a

party to the dispute cannot decide all the matters, including

the sale price etc, by themselves. It is an established law

that nobody can be a judge of his own cause.

iii. Thirdly, this procedure is a blow to the transparency which

a court ensures.

iv. There is yet an other provision which is Section 19 with the

heading “Execution of Decree and Sale with or Without

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Intervention of the Court”. This section envisages that the

court may try and adjudicate the suit and pass a decree for

an appropriate due amount after the judicial ascertainment

and determination. But the Financial Institutions have the

right to execute the decree themselves without indulgence

of the court by selling the securities of the customer

through a transparent manner and submitting a report of

the sale to the Banking Court. This provisions is also

seriously attacked on the ground(s) stated above.

J) Nature of Securities.

The securities obtained by the Banks before the disbursement of

the loans/finances are of the following kinds.

1. Landed Property & structure thereon including houses,

offices, plots etc outside the project by way of mortgage

whether equitable, registered, deposit of title document or of

another kind.

2. The project land, structure, machinery i.e. the factory by

way of mortgage whether registered equitable, deposit of

title document etc.

3. Pledging of shares of the directors/sponsors of the

borrowing Co.

4. Hypothecation in its raw form, manufactured or semi-

manufactured.

5. Personal Guarantees/Undertakings of the

Sponsors/Directors involving and specifically stating their

personal properties such as vehicles, cars, houses, lands,

plots etc on which no charge is created in favour of the

Bank.

k) Difficulties in Realization of the “Due Amounts”.

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1. Over-evaluation of the Securities at the time of granting

loan(s)/finance(s).

2. Depreciation of the securities such as the machinery of a

closed mill/factory for a long time.

3. Finding of a serious bidder/buyers who are hesitant because

of possible future litigation and stay order(s) on the purchased

or purchasable property/securities.

4. Possibility of defective title of the mortgagor/borrower(s) at the

end of the day.

l) OFFENCES:

Section-20 of the Financial Institutions Ordinance, 2001 deals

with the offence misrepresentation, fraud, and alienation of securities

parting with the possession of securities etc. The most is subsection (4) of

Section-20, which deals with the dishonouring of a cheque or cheques

given to the Financial Institution for part or whole of the repayment

installment. This section provides for a punishment of one year and fine or

both and the offence is bailable. Upon the commission of this offence, the

Financial Institutions should file a criminal complaint directly before the

Banking Court and cannot file an FIR with the police. People often confuse

this provision with section 489-F of Pakistan Penal Code, which was

introduced by way of an amendment to P.P.C in the year 2002. Section

489-F applies to general public in their personal dealing. Under Section

489-F PPC if a cheque is dishonoured, the imprisonment laid down is up to

3-years and a fine and the offence is non-bailable. Under the present law,

our concern is only with Section-20(4) and not with Section-489-F of the

PPC.

m) APPEAL:

After the passing of the decree by Banking Court, may it be a

single judge of the High Court acting as Banking Court against the

defendant, the appeal must be filed by the Judgment Debtor in the High

Court within 30-days of the passing of the Decree. This appeal shall be

heard by a Division Bench of the High Court consisting two judges and

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shall be called a Regular First Appeal (RFA). Against a decision of the

Division Bench of the High Court, appeal lies to the Supreme Court.

CONCLUSION

The main concern of the Financial Institutions is the recovery

of their outstanding dues. The law under the discussion has sufficient and

effective provisions for the recovery of the dues. If there are any bad debts

that are due to their own doings, the Financial Institutions have

unscrupulously disbursed finances undesirable people without obtaining

sufficient securities.

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BANKING RECOVERY LAW BY QAISER JAVED MIAN Attorney-at-Law

( Part-II )

Some Important Judgments

Banking Companies Ordinance 1962

- Section 25

- Circulars of SBP-effect on commercial banks-circulars are

instructions/directions-all Banks are duty bound to observe

the circulars.

2002 CLC 166.

_________________________________________________________

- Section 33-B

- Circulars of SBP providing incentive scheme and general

guidelines of SBP.

- Time for payment of loans was of essence.

- Such circulars must be treated as having force of law.

2002 CLD 452. PLD 1997 SC 315.

_________________________________________________________

- Circulars BPD 29 of 2002 and such circulars like circular No.8 of

2003- Such circulars of the SBP have the force of law.

2002 CLD 1974 833.

PLD 1997 SC 315 (Hashwani Hotels).

2002 CLD 542 Azmat Textile.

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Order 1997, Section 2(b) & 7.

- Banking Court has exclusive jurisdiction to adjudicate upon

matters relating to redemption of mortgaged property and release

of its documents.

- Cases which a Banking Court could hear-enumerated.

2002 CLD 658

- Contrary view is not that when the entire “amount due” is paid

and the Bank accepts having received the entire dues, the

relationship of the Bank & Customer comes to an end and for

redemption of properties and documents the proper recourse

is the civil court.

2002 CLD 251 Lah.

- Suit can be directly filed against the guarantor without

impleading the principal debtor.

- Guarantor-principal debtor.

2005 CLD 1359 Lah. (ADBP Vs. Malik Food).

2005 CLD 1680 Lah.

Legal heirs of a Personal Guarantor not liable-no coercive measures

can be taken.

2005 CLD 668

- Even whether the contract becomes unenforceable against

the principal debtor, the guarantor would still be liable for the

surety he had executed unless there was any covenant to the

contrary.

2002 CLD 550 SC

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- Board Resolution imperative for filing/instituting the suit. The

person instituting suit must be empowered by Board

Resolution.

2002 CLD 426 2002 CLD 1431 2002 CLD 557

Reliance

PLD 1971 SC 550 1987 CLC 367 PLD 1999 Lah. 450 PLD 1991 Lah. 381 1994 CLC 2413

_________________________________________________________

Contract Act Section 128

Guarantees are co-extensive with the loan.

2005 SCMR 72

2005 CLD 1680

- Suit without statement of account not competent-Plaint liable

to be rejected under Section-9.

2007 CLD 320

- No mark-up beyond loan contract period.

2007 CLD 1374

2007 CLD 435

- Banking Ordinance 2001

Cost of funds u/s________is payable from the date of default.

2007 CLD 1639

- Beneficiary of a Letter of Credit or a Bank Guarntor- But not a

“Customer”, even if connected with “finance” in some way

could neither sue nor be sued.

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(Protector & Gamble vs. Bank Al-Falah)

2002 CLD 1532

Beneficiary is not a customer.

2005 CLD 1764

- FIR with police u/s 379, 406, 420 by an officer of the Bank

could not be registered against the borrower as per Section

7(4) of the Banking Ordinance 2001 as exclusive jurisdiction

rests with the Banking Court as to cognizance of offence-FIR

quashed in writ petition.

2005 CLD 436

- Date for filing reply by the Bank to the Borrower’s petition of

Leave (PLA) was not a date of hearing and no exparte decree

was not sustainable.

2005 CLD 663

- Plaintiff Bank (HBL) sought that guarantors be restrained to

encash the TDRs issued by Dubai Bank of HBL- TDRs were

not under lien-Extra territorial jurisdiction denied.

HBL v. Zuchine Industries

2005 CLD 602

- “Loan” and Services in respect of loans are different – Excise

duty to be levied on services and not on amount of loans.

- no nexus between the amount of services and amount of loan.

- “Banking is business not service levy of excise duty is ultra

vires”

2002 CLC 1714

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Section -24 CPC

- Consolidation of case-principle that greater included less would be

applicable. Suit filed by the applicant was in the High Court- Suit filed

by the Bank was in the Banking Court. The suit was transferred from

the Banking Court to the High Court even through the suit in the

Banking Court was of less pecuniary value.

2002 CLD 1466 See 2002 SCJ 82

Section 12(2) CPC

- Not applicable in Banking recovery cases.

2002 CLD 1431; 2002 CLD 365

Reliance PLD 1987 SC 512 (Hudabia Vs. ABL) 2002 CLD 401 2000 MLD 421 2000 CLC 1330

- Jurisdiction of High Court as a Banking Court is not as High

Court in its ordinary jurisdiction.

(PICCIC v. Government)

2002 SCMR 496 = 2002 CLD 1

Reliance PLD 1993 S.C. 109. PLD 1996 S.C. 77 2001 SCMR 410.

- Service of any of the [four] modes of service was sufficient

service period for filing petition for leave shall run from the first

service.

2002 SCMR 476 1999 SCMR 2353 PLD 1990 S.C. 497 (Ahmad Autos Case)

- Interest challenged by the customer/borrower being contrary

to injunctions of Islam. Customer entered agreements with his

free will and under Islam he has to fulfill his contractual

obligation.

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2002 CLD 447 Reliance 2001 YLD 2741 1994 SCMR 2287

Section-9 Contract Act Sections 126-128.

- Recovery of bank loan- liability of Guarantor.

- Even where contract becomes unenforceable against principal

debtor, Guarantor would still be liable for surety rendered

unless there is contrary covenant.

2002 SCMR 1419= 2002 CLD 550

Section-9 Contract Act Sections 133,134,135,CPC O.XXIII R-1.

- Recovery of Bank loan-suit withdrawn by Bank reserving right to

file fresh suit due to compromise between principal debtor and

Bank without reference to guarantor, no payment made by the

principal debtor under compromise agreement. Second suit filed

by Bank impleading guarantors. Fresh suit is based on a

subsequent cause. Guarantors not liable- surety stood

discharged on compromise.

2002 CLD 643

Section-9

- Pledgee Bank under provisions of Contract Act was entitled to

either sell goods before filing suit or to file suit and retain pledged

goods as collateral.

2002 CLD 868

Section-9 Contract Act Section-74.

Liquidated Damages.

Not allowed - Not recoverable.

2002 CLD 1745(D.B) 2002 CLD 1431 & at p.1417 2002 CLD 1170 2002 CLD 1261

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2001 MLD 1955 2002 CLD 1001 & at page 1004 2002 CLD 1099 2002 CLD 1688 ADBD V. Muhammad Tariq 2002 CLD 1297

Modaraba (Floatation and Control) Ord. (xxxi of 1980)- Notification

No.F.48 (7)/80-A (11) dated 30-12-1986.

- Contention that jurisdiction vested only in Modaraba Tribunal-

Notification giving jurisdiction to newly established Modaraba

Tribunal never brought to the notice of the Banking Court. B.C

acted bona fide- Doctrine of Defacto Jurisdiction applicable

and decree passed dejure and is lawful.

2002 CLD 46

Reliance 1999 SCMR 13 PLD 1997 SC 426

- No deposit of money for filing suit for rendition of accounts.

(Riaz Ahmad v. ADBP) 2002 CLD 1411

Section-9 Qanun-e-Shadat Article-17.

- Two witnesses on “Guarantee” second witness is a requirement

of Islam- As to execution of Guarantee, contents thereof not

denied- Non-signing of second witness rightly ignored by Banking

Court.

2002 CLD 1284

Section-9 Stamp Act Section-35.

- There was no dispute regarding lease deed- No need to produce

the same in evidence.

PLJ 2002 Lah. 1416 = 2003 CLD 232

Section-9

- Vehicle of plaintiff was wrongfully seized by Bank on 23-03-1997

without process of law. Article-49 of the Limitation Act (3-years)

and not Article-29 (1 year) will apply.

2002 CLD 1426

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- Cases which Banking Court could completely hear and

adjudicate - enumerated.

2002 CLD 658

- MURABAHA – Sections 9 & 10; Contract Act Section-32,

- Suit filed by borrower for return of pledged shares- Under

Murabaha Agreement whole amount had been repaid. Contention of

Financial Institution was that parties had agreed to renewal of facility upon

payment of mark-up at revised rate and termed such agreement as

substitution of earlier Agreement.

- Where entire sale price had been paid but beyond stipulated

period, roll over or restructuring was not permissible in Murabaha. Nothing

could be charged over and above the purchase price. Any agreement for

extension of payment with further mark up was against the public

policy.

PLA dismissed - Suit decreed.

2002 CLD 276 1994 C;C 2272

Reliance 1999 YLR 323 PLD 2000 SC 225

Order-9 Rule-13 CPC

SETTING ASIDE - not applicable in banking law.

2002 CLD 341.

Section-19

Criminal & Civil Liability.

- Loan obtained by hypothecation of goods-misappropriated- FIR

lodged- merely incurring civil liability does not reliance from

criminal liability. FIR not quashed.

PLJ 2002 Lah 1813= 2002 YLR 3847

Referred AIR 1958 S.C.56

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Review/Recall

- in the banking cases not applicable.

2003 CLD 349 Lah PLD 2000 Lah 162 2000 CLC 1153

- As is where is - meaning.

2003 CLD 1336 Kar. (D.B).

Guarantor= Retiring from directorship of the defaulter Co. and transferring

entire shareholding-Letter from Bank showing outstanding liability to be

cleared up to 30-12-2003. As long as decree stood unsatisfied,

petitioners remained defaulters.

(Tariq Mahmood v. Election Commission) PLD 2003 Lah. 165

Guarantor- Surety competent to revoke guarantee u/s 130 Contract Act

but subsequent revocation of guarantee/resignation would not discharge

guarantee undertaken prior to such happening.

(Kh.M.Dawood Suleiman v. Election Tribunal)

PLD 2003 Lah 106.

Financial Institutions Recovery of Finances Ordinance

(XLVI) of 2001

Preamble: Limitation Act (IX of 1908)

Section-5 Condonation not applicable.

(2004 CLD 817)

Preamble: Ordinance having no retrospective applicability-could

not be used to attach property transferred.

2004 CLD 1600 (Buttar & Mazammal)

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Preamble: Ordinance not retrospective in operation.

2004 CLD 1600

Preamble: Section-10 Order-7 Rule-11 CPC.

- Question of rejection of plaint for lack of jurisdiction cannot be

raised until P.L.A is decided and leave be obtained.

2004 CLD 726

Sections-2 (A) & 9.

- Underwriting Agreement-Underwriting not covered under the

definition of Finance-recovery suit converted into ordinary civil

suit.

2004 CLD 689 NBP VS. S.G.Fibre. 2000 YLR 2407 Avari Hotels vs. I.CP. 2003 CLD 363 Bank Alfalah vs. Iftikhar A. Malik.

Section-4 & 7(4)- NAB Ordinance.

- Amount of liability has to be legally determined first either by the

Banking Court or the Criminal Court before taking action under

the NAB Ordinance.

PLD 2004 Kar. 638 Aasim Textile v. NAB.

Section-5.

- Cases finally decided under BTO, 1984- part & closed

transactions.

2004 PLD 1146 2004 CLD 1589 2004 CLD 1557 2004 CLD 87

23

Section-7.

- No further mark up.

2004 PLD 953 2004 CLD 1150 2004 CLD 927

Section-7.

- No liquidated damages.

2004 PLD 927,1150’956 2005 CLD 1543 2005 CLD 1588 2004 CLD 1571’1563

Section-7.

- Certain amounts deposited by the defendant which had not

been created into account series question of law and fact

raised- Leave to be granted.

2000 CLD 1561.

Section-7-3(2).

- Interest granted from the date of filing of suit and not from the

disbursement. Up held.

2004 CLD 968.

Section-7 & 9.

- Limitation Act (ix) of 1908.

Void order- Limitation would run from the date of knowledge

and aggrieved party should approach competent forum for

setting aside.

PLD 1997 S.C 397 2004 CLD 1445

Section-7 & 10.

- No dismissal of suit for non-prosecution on the date of

arguments on the P.L.A.

24

2004 CLD 963 2004 CLD 1609 U.B.L v. Khawaja Radio House.

Sections-7,10 & 13.

- “Judgment not a speaking judgment as a “judicial order”

set aside.

2004 CLD 811

Section-9

- Riba Interest Article-203-G. Constitution High Court had no

jurisdiction to determine validity of charging of interest.

2004 CLD 947

- Credit Card Facility.

Services rendered by a bank dismissed.

2004 CLD 1247

- Punjab Small Industries Corporation Article falls under

“Banking Company” as well as finance Institution.

2004 CLD 1424 2005 CLD 1790.

- Section-12(2) C.P.C. Not applicable.

Dissenting 2000 MLD 421 2004 CLD 279 2004 CLD 1573

Dissenties 2005 CLD 438.

Appeal against dismissal of 12(2) CPC not competent.

2004 CLD 748.

- Territorial Jurisdiction

Section-20 of C.P.C applies.

2004 CLD 1266 Also 2004 CLD 1465.

25

Section-9 Contract Act Section-127

- Guarantor for original loan, Guarantor having no nexus with

subsequent loan-no liable.

2004 CLD 1472

- Guarantor even if employee is liable.

2004 CLD 1289

Section-9 No mark on mark up or beyond agreed period.

2005 CLD 444 2004 CLD 1289 H.B.Z v. Orient Rice Mills 2004 CLD 889 Pak Green Acres v. U.B.L 2005 CLD 581.

- Service fee by Credit Card Cos. not an interest- card holder

agreed to service fee- Legal.

2004 CLD 1247

Section-9 & 4 CPC Order-32.

- Even if no PLA filed, suit to be decided after considering the

plaint and the documents relied upon.

2004 CLD 587.

Section 9 & 10.

- Disputes between two groups of the shareholders of the

borrowing company in civil court and before Companies Judge

have to effect and the PLA was rejected- Appeal dismissed.

2004 CLD 1620

S.A Hameed v. A.B.L.

Section 9 & 10.

- Even if the Bank had shown the amount as bad debt in annual

report only for the purpose of accounting- the loan was still

recoverable.

2004 CLD 1266.

26

Section 9,15,21 Specific Relief Act, Section-42 & 54.

- Suit for declaration, injunction and rendition of accounts-

Bank’s statement of A/C not conclusive as cyclostyle

document. Bank had to justify by independent evidence

entries in statement of A/C.

2004 CLD 808.

- Banking Company’s certificate of balance could not be termed

as statement of A/C.

2004 CLD 587

- Suit not “supported by” statement of A/D could not proceed.

2004 CLD 587

Section 9(3).

- Service only by publication- by any one of the modes is

sufficient service.

PLD 1990 S.C.497 (Ahmad Antoes Case referred) 2004 CLD 1555, 771.

- Amendment in PLA- to the within the corners of material

appended with PLA-Discretion of Court.

2004 SCMR 111.

Leave to Defend

- requisite raise various questions of law & fact.

- Plausible defense-leave could be granted. 1986 CLD 1086 Kar.

- If he could raise good defense or could raise a triable issue or

disclose such facts which would be deemed to be sufficient to

entitle him to defend.

1987 CLD 288.

27

- The defense raised for leave to defend should be one likely to

succeed.

PLD 1987 Lah 290.

Section-10 Contract Act- Section-7,23 & 74.

- Additional lease rental & liquidated damages beyond contract

against public policy

2004 CLD 1213

- Conditional leave to PLA on deposit of bank guarantee held

not unable.

2004 CLD 532

Section-10

- Non-filing of amended application for leave to defend- PLA

rejected.

2004 CLD 716 ABL vs. Mohib.

Section-10

- Interim application for leave to defend.

- Filing of detailed leave application cannot be filed after expiry of 21-days.

2004 CLD 1227

Section-10.

- Leave to defend - serious & bonafide defence- Bank had to

provide guarantee and L/C to enable Co. to get project from

Wapda. Bank failed to provide-Co. on this ground denied

liability to pay claim of Bank. It was a serious & bonafide

defence.

2004 CLD 1181

28

Section-10

- Any concession made by the liquidators not binding on

guarantors who have to independently show that the Bank did

not have any right against them.

2004 CLD 1181

Section-10

- Suit for rendition of accounts against Bank- leave granted-

issued & have to be framed.

2004 CLD 821

Section-10,9(3)

- Service to be computed from first service.

2004 CLD 1227 1999 SCMR 2353

Section-12,9(3)

- Defect in any one of the process of serving. No reliance could be

placed on the process.

2004 CLD 771(a)

- Service by any mode is a good service.

2004 CLD 393

Section-17

- Registration Act.

If guarantee is admitted personal guarantee need not be

witnesses or registers.

2004 CLD 1289

- Mortgage Deed has to be properly attested.

2004 CLD 1289

- Unregistered Mortgage Deed dismissed.

2004 CLD 881

29

- Proclamation must be within the approval of the Court- otherwise

all subsequent proceedings are nullity.

2004 CLD 1616

Section-22

- No review, revision or appeal against rejected of PLA

2004 CLD 1084

Bankers Books Evidence Act.

- Suit filed by person not authorized- Treating Recovery Certificate

as a statement of A/C- it was not duly verified- judgment and

decree was set-aside by the High Court- PLA deemed to be

pending before Banking Court to be decided afresh.

2005 CLD 393 Rani Association (Pvt) Ltd. Vs. I.D.B.P.

- The statement of A/C not in accordance with law- neither showing

disbursement nor verification as per Bankers Book Evidence Act

containing bogus entries High Court accepted appeal, remanded

case to Banking Court, directed Bank to file proper statement of

A/C.

2005 CLD 1186

M/S Icepack Ltd. V. Pakistan Industrial Leasing Corporation.

2004 CLD 587 Relied

C.M. Textile vs. I.C.P.

PLD 1998 Kar 302.

- Discrepancies in the statement of A/C- PLA accepted leave

granted for recording evidence.

2005 CLD 1746; 2005 CLD 1129

30

B.C.O 1962- Section-25

- Circular issued by the State Bank including enhancement of

interest rate is legal-Such-circulars would have prospective and

retrospective effect.

2005 CLD 380, 114 PLD 1997 S.C. 315 Hashwani Hotels vs. Federation.

___________________________________________________________

- Punjab Small Industries Corporation is Banking Co. & a financial

Institution.

2005 CLD 1790.

Section-2e & Section-9.

- Competence of parties to suit. “Banking Company” “Financial

Institution” “Borrower” “Customer”.

- No other person can sue or be sued under this law.

2005 CLD 50

Section-2© Section-9

- Future mark up declined.

2005 CLD 373

- Sanction of loan on “buy-back arrangement-bank could not charge

mark up beyond agreed date and over & above agreed mark

up.

NBP V. W.P. Tanks Terminal

I.C.P vs. Chiniot Textile PLD 1998 Kar. 316 2000 C L C 896 2005 C L D 373

Section-3, 18(3)

- Execution of Decree- Mortgaged property- Rights & Obligations of tenant.

2005 C L D 515

31

B.T.O 1984

- Order of BTO 1984 dated 18-05-1989 directing defendant to deposit

certain amount as security, non-compliance- Suit decreed on 01-10-

2001. High Court remanded suit to be decided according to the

Ordinance of 2001.

2005 C L D 361

- Evasive denial- Presumption-misstatement. Evasive, illusionary,

improbable and set up just to prolong matter-Appeal dismissed.

2005 C L D 287

Section-7 Banking General Clauses Act. Section-24-A,

- Courts are bound to apply independent judicial mind. Section-24-A is

procedural in nature and has retrospective effect. Judgments passed

without application of mind.

2005 C L D 1151 & 2005 C L D 389 2005 C L D 629, Also page 126.

Sections-7,9,10,12.

- Suit decreed exparte- Application for setting aside exparte is not a

review application, therefore competent.

2005 C L D 1660.

- Executing Court- Committed error apparent on the face of record its

correction upon application would not amount to reviewing of its

order- It has to retrace its wrong steps.

2005 C L D 42(a)

- Non recording in plaint names of principal officers and general

attorney of Bank- Non verification of plaint by office- Non-signing of

Vakalatnama, These defects are rectifiable without dismissing suit.

2005 C L D 854

- Application under Order-7 Rule-11 C.P.C could not decided until the

first decision on P.L.A.

32

2005 C L D 653 2005 C L D 1201

- Recovery suit instituted by a person who neither Bank Manager nor

authorized by the Board of Directors- He asserted that he was duly

constituted attorney-held-suit filed by incompetent person and liable

to the dismissed.

2005 C L D 1126; Gul-e-Rana vs. Citi Bank. 2005 C L D 1076 P L D 1999 Lah 450 See also 2005 C L D 50; 2005 C L D 1116, See also 2005 C L D 934

- Awarding cost of funds- Retrospective effect- Cost of fund provided

in the Banking Ordinance, 2001 would not have retrospective effect

to previous suits under previous laws.

2005 C L D 1114

- After due service, if the defendants does not file PLA, the allegations

of fact in the plaint shall be deemed to be admitted and the Banking

Court may pass decree.

2005 CLD 653

- Section-9. Suit for declaration & permanent injunction- Failure to file

P.L.A-effect-decree in such suit cannot be passed straightway as

claim for declaration could not be equated with suit based on

negotiable instrument and evidence should be called.

2005 CLD 1481

- Section-9. Suit for mandatory injunction by borrower/customer

against Banking Company- maintainable.

2005 CLD 1751

- Contract Act- Section-35

Property of minors as surety cannot be given by the guarantor even if he was natural guardian and legal guardian- Void ab initio. What could not be done directly cannot be done indirectly. 2005 CLD 314

33

- A suit filed under Ordinance, 2001 cost of funds would be awarded

but cases filed under the Act of 1997 court could grant mark up from

the date of filing suit till realization.

2005 CLD 1569

- Suit for damages- dismissal of suit without deciding P.L.A- held

illegal- PLA to be decided first.

2005 CLD 920

M.Shahid Saigol vs. Al-Towfeeh Investment Bank.

- Absence of written finance agreement from the contents of the

plaint, the case was wrongly dismissed under Order-7 Rule-11

C.P.C.

2005 CLD 292

- Section-9 & 21, Companies Ordinance, 1984 Section-316(1).

Suit filed against the company and the directors/guarantors

Company got wound up- application u/s 316(1), inspite of Company

Judge permitted the Bank, not filed. Suit was decreed. The Banking

Court proceeding would remain stayed only to the extent of the

Company. The Banking Court was justified to pass decree against

other defendants arrayed as guarantors/mortgagors etc, apart from

the Company could be tried even without the permission of the

Company Judge.

2005 CLD 503 (D.B.) Lahore.

Tanis Akhtar vs. ADBP.

- Section-9 & 21.

Held, an incorrect order of dismissal of suit could be

rescinded/recalled u/s 151 CPC keeping aside technicalities which

the dismissal of the suit was not under Order-9 Rule-8.

ADBP vs. Zasha Ltd.

2005 CLD 953.

34

- Section -10,7,21.

Unauthorized amendment in the plaint, Banking Court should have

decided the matter after granting leave.

2005 CLD 941.

- Allegation of fraud about signature and thumb impressions on

documents-if court does not allow expert opinion- it must express its

own expertise in this regard. No presumption in law in the matter of

negative proof could be raised against defendants. This was

substantial question of law & fact.

2005 CLD 941 Rifat vs. HBL.

- Allegations of the defendant that mark up has been charged on mark

up- court failed to give any finding on the statement of A/C and

simply observed that “moreover presumption of truth is attached with

the statements of A/C” held illegal. Court should have given some

findings on the allegation.

2005 CLD 581.

- Mere bold denial of the guarantor of his signatures on the letter of

guarantee not sufficient to grant leave.

2005 CLD 50.

Robina vs. HBL.

2000 CLC 1201.

- PLA dismissed without deciding the application for condonation of

delay- held illegal.

2005 CLD 1417

- No new plea in appeal which not taken in the PLA- in trial court- principle of estoppel & walner applicable. 1996 SCMR 1770 1998 SCMR 593 2005 CLD 581 2005 CLD 1116.

35

- Ex-parte decree- setting aside- limitation was a mixed question of

law & fact- for non-suiting evidence should have been allowed to be

lead.

2005 CLD 1011.

- Section-12,7,9,10 Review.

Application filed by defendant under section-12 Ordinance, 1997 for

setting aside ex-parte decree- was rejected by Banking Court that it

had no authority to review- held, present was not the case of review.

2005 CLD 1660.

- Order-21 Rule-66,64.

The being not certain to satisfy the decree, the court has to

first sell the mortgaged property and if the proceeds were not

sufficient, then the other property.

2005 C LD 214.

- Section-15,18,21

Appellant executed letter of hypothecation and the M.D.T in capacity

as director but did not sign any personal guarantee – he is not liable

as any guarantor liability could not ipso facto fall on the director.

2005 CLD 187

- Section-15,21,10,7,9.

Judgment- operative part court must apply its mind which was

condition precedent and speaking judgment should be given.

2005 CLD 126.

- Allegation of blank and semi blank documents- Borrower in view of Section-20 read with section 118 of Negotiable Instrument Act, 1881 was estopped to challenge legally.

2005 CLD 1751.

36

- Documents executed in 1996 i.e. before the Banking Act of 1997-

No attestation by two witnesses would not invalidate any document

as per force of Section-17(3) of the Act.

2005 C LD 1129 and also 934

- Equitable mortgage under section-58-F of Transfer of Property Act

need not to be registered u/s 17 of the Registration Act.

2005 CLD 1047.

- Appellant raised objection that he was owner of property by

registered mortgage deed- bone fide purchaser without knowledge

that property had already been equitably mortgaged in favour of

Bank no defence could be taken by subsequent purchaser of being

bona fide purchaser without knowledge- rule of bona fide purchase

not applicable in these facts of the case. Appeal of objector

dismissed.

2005 CLD 1047. See also 2005 CLD 384.

- As to deposit of sale price within prescribed time, cancellation of sale

and then reselling the property.

See PLD 2005 SC 470 2005 CLD 967 PLD 2005 SC 819 2005 CLD 1589.

- Failing to deposit 20% auction money.

See 2005 CLD 1445

- Section-18. Sale made by compromise was not covered by Section 18.

2005 CLD 1162

- Subsequent events to be taken into account u/s 47 C.P.C- execution

proceedings.

2005 CLD 624

37

- Section-18,6. - Appeal does not lie against an interlocutory order

but the executing court order dismissing application objection to sale

that its dismissal was a “Final Order” Appeal lies under section-

21(6).

2005 CLD 42.

- No party shall be made to suffer due to the act or omission of the

court in performance of its duties.

2005 CLD 187.

- Whether Pakistan Export Finance Guarantee Agency” was a

“financial institution”, held yes.

2005 CLD 510.

- Liability of guarantors Co-extension with customer.

2005 CLD 1680 2005 CLD 1359

- Deposit on amount of profit between customer and the Leasing

Company on the “certificates of investment”

See 2005 CLD 898

- Section-2(c),(d), 9,10.

Refusal of bank to encash bank guarantee issued in plaintiff’s favour

law includes on whose behalf guarantee was issued but not in

whose favour it was issued-beneficiary is not a customer.

2005 CLD 1764

- Cost of funds not applicable to cases under previous repealed laws.

2005 CLD 1114

- Under the Act of 1997 mark up could be given from the date of filing

suit to realization.

2005 CLD 1569.

Likewise no cost of funds in cases under BTO 1984.

2005 CLD 619

38

- Executing court could attach properties outside its territorial

jurisdiction not with standing. Section-39 CPC.

2005 CLD 206

___________________________________________________________

- Section-27. Even error of law or non-consideration of any particular

provision by a Banking Court which rendering any descion order,

judgment or sentence could not be revisited by the court because of

Section-27.

2005 CLD 206

- Section-5,7 & 20 PPC 408 & 34 Cr.P.C, 402 General Clause Act

Section-26

Disputed property under hypothecation with bank in return of loan-

No FIR exclusive jurisdiction of Banking Court.

2005 P.Cr.L.J 1228

- Plaintiff bank sought that guarantors be sustained to encash the

TDRs issued by Dubai Bank of HBL- TDRs were not under lien-

Extra territorial Injunction denied.

HBL vs. Zuchini Industries

2005 CLD 602.

- Any miscellaneous application should be decided first before the

final judgment.

2005 CLD 875

- Date for filing reply by the bank to borrower’s PLA’s was not a date

of hearing and not ex-parte decree could be passed- subsequently

order of dismissal of the application for setting aside exparte decree

was not sustainable.

2005 CLD 603

39

- FIR with police u/s 379,406,420 by an officer of the Bank could not

be registered as per Section-7(4) of Ordinance, 2001 as exclusive

jurisdiction vests with the Banking Court as to cognizance of offence-

FIR quashed in writ petition.

2005 CLD 436

- Circular 29 BPD of 2002 and such circulars circular No.8 of

2003 Such circulars had the force of law.

2005 CLD 833

. PLD 1997 SC 315 (Hashwani Hotels) 2002 CLD 542 Azmat Textile.

- Damages granted against bank.

2005 CLD 1383

Banking Ordinance, 2001

- Section-2(b)- There is no difference between the words “suit”

and “case”.

2007 CLD 69(e)

- Writ – maintainable with Banking Court has wrongly assumed

jurisdiction.

2007 CLD 69(d) 2007 CLD 1352

- Bank Guarantee letter of credit- Beneficiary of the letter of credit or a bank guarantee not a customer even if connected with “finance” in some way could neither sue nor be sued.

(Proctor & Gamble vs. Bank Alfalah)

2007 CLD 1532 ©

- Tort suit for recovery of damages for malicious prosecution against

bank-plaintiffs only successors not borrowers-plaint returned under

Order-7 Rule-10 CPC.

(Manzoor A. Piracha vs. HBL)

2007 CLD 571

40

- Cost of funds is from the date of default.

2007 CLD 1639

- Banking Ordinance, 2001 does not exclude or override the

Partnership Act unless there is specific provision to contrary.

2007 CLD 501

- Mark up accruing under the fresh finance agreement was claimed

which had accrued during the default period during which Bank

exercised forbearance to sue- Such mark up constituted mark up on

mark up.

Saudi Pak vs. Lucky Textile 2007 CLD 1005(b).

- Detection- requirement of Section-51 CPC should be fulfilled in

execution of decree.

2007 C LD 964

- No mark up beyond contract period.

2007 CLD 1374(b) 2007 CLD 435 (a).

- Suit without statement of A/C not competent plaint liable to be

rejected u/s 9. (UCP 500) Uniform Customs of Letters of Credit.

2007 CLD 320(b)

- Power of review or revision is a substantive right which cannot be

exercised without conferment of such jurisdiction by the statute itself-

such powers can only be exercised by a court, tribunal or authority

when that power is granted by the very statute that created it.

Shah Dewana vs. HBL PLD 1949 Lahore 301 PLD 1970 Dacca 693 PLD 1966 Lahore 850 Distinguished PLD 1980 Lahore 441 PLD 1970 SC 1 referred.

41

- 1991 SCMR 1756- as to review under Ordnance, 1979

- PLD 1994 Karachi 67 (a) as to remission under BTO, 1984.

- 1998 SCMR 1961

- 1982 CLC 1625 Lahore.

- 1987 MLD 186 Karachi.

- On limitation of review application see 1995 SCMR 69

- Article-173 of Limitation Act, 90-days.

- Attaching certified copy with the application not necessary,

1989 MLD 1458. Also see Article-162

REVIEW

- Section-27 of Banking Courts Act 1997 (Finality of Orders)

- Section-21 Appeal.

- Section-21(5)- No appeal, review or remission shall lie against

any interlocutory order of the Banking Court other than an order

passed under subsection-6 of Section-18.

- Review petition time barred. 90-days limitation.

- No application of condonation of delay.

- Order-7 Rule-11- Declaratory suit against Bank alleging that bank

did not disburse the amount as claimed by it, court without granting

appeal rejected plaint for not disclosing cause of actions- case

remanded- Banking Court will have to decide PLA and decide about

maintainability of the suit.

2005 CLD 1083

- Compromise between bank and principal debtor – guarantor alleged

that the guarantee should discharge in view of Section-135 of

Contract Act- held- guarantor precluded from taking advantage of

Section-135 in view of section-128 of Contract Act as the liability is

co-extensive.

2005 CLD 1689

42

- Cause of action subsisting not time barred.

2005 CLD 1705

___________________________________________________________ Section-9 and Negotiable Instrument Act Section-20,118.

Bank documents – estopped from challenging legality.

2005 CLD 1237

- Section-9. Suit for borrowers for declaration, rendition of accounts

and permanent injunction – Suit by bank for recovery of loan – court

through consolidated judgment decreed bank suit and dismissed

borrowers. The suits were never consolidated. Held borrower’s suit

shall to be decided separately.

2005 CLD 1486

- Guarantor – Guarantee co-extensive.

2005 SCMR 72 2005 CLD 1680

- Personal Guarantee – Suit directly against guarantor.

2005 CLD 1359 ADBP vs. Mehk Food.

- Doctrine of sub-judice as in Section-10 C.P.C.

2005 CLD 569

- Section-9(4) – Pleas for consolidation of suits for damages with

banking suit – not tenable.

2005 CLD 569

- Person Guarantee.

2005 SCMR 72 = 2005 CLD 95

- Reference to wrong provision of law in consequential.

2005 CLD 169

- Suit for recovery of damages against bank and the insurance company involved in transaction – application under Order-7 Rule-11 CPC. Held insurance company not covered as “Borrower” and “indemnifier” in the sense. Banking Court had no jurisdiction. 2005 CLD 1781

43

- Insurance clause was an independent and separate agreement –

could not be made basis to restrict bank to recover the amount.

2005 CLD 643 Naeem Bhatti vs. HBL.

- Where immovable property was charged limitation under Article-132

( c) was 12-years otherwise it was 3-years.

The Punjab Debtors Protection Act, 1935 page 1491.

- The offences in respect of Banks(Special Courts) Ordinance, 19

page 839.

- The Usurons Loans Act, 1918 page 1381 Money Lenders 1960 at page 296.

- Board Resolution Imperative.

2002 CLD 1431 (e)

- Guarantor/Contract – Even where the contract becomes

unenforceable against the principal debtor, the guarantor would still

be liable for the surety he had executed unless there was any

covenant to the contrary.

2002 CLD 550 S.C

- Bar of unconditional withdrawl of suit. Order-23 Rule-1(1)(3). In

Banking there will be a fresh cause of action upon breach of

settlement by defendants.

2003 CLD 1468

- Legal heirs of personal guarantor not liable – no coercive

measures.

2005 CLD 668 Lah.

- Guarantor – Principal debtor.

2005 CLD 1359 Lah.

ADBP vs. Malik Food.

2005 CLD 1680 Lah.

44

- Section-7(2) Banking Act, 1997

C.P.C. primarily is procedural law though it has some substantive

provisions. Section-7(2) makes C.P.C. available. “with respect to

which procedure has not been provided for in this Act”.

- Right to claim review of any decision of a court of law, like the right

to appeal is a substantive right and not a mere matter of procedure –

as such neither of them is unless it has been

conferred by law.

PLD 1970 S.C 1 1987 MLD 505 PLD 1965 Lah 183

- No power or right vests in the court, tribunal or authority unless such

power is specifically given by the very statute to that creates it.

1985 CLD 2885 PLD 1981 S.C 94 PLD 1980 Lah 414 1990 MLD 909

- Power of review must be conferred by law either specifically or by

necessary implication.

PLD 1970 S.C. 1273