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
 6

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
 7

“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
 8

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.
 14

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

 15

- 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.
 16

(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.
 18

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
 19

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

 20

- 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

 21

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)

 22

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 Dewanavs. HBL

PLD 1949 Lahore 301
PLD 1970 Dacca 693
PLD 1966 Lahore 850
DistinguishedPLD 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