Banking laws and practice

Recovery Ordinance 2001

Presented to:
Mr.
Zargham
Ullah
khan
PRESENTED BY:

MUHAMMAD BILAL NAQVI M11BBA049

ASAD RIAZ
M11BBA045
ALI HAMZA
M11BBA071
SIDDIQUE DABIR
M11BBA074
RABANI INTIZAR
M11BBA032
MUHAMMAD DANISH MAJID M11BBA044

BANK ALFALAH
V/S
SHOUKAT ZAMAN (KHAN)

Suit filed :
before the judge, banking court no.1 Lahore.

Jurisdiction under Section 9 of the financial institution

(recovery of finances ordinance 2001)
Presented by Mr. Ahmad Pervaiz advocate at 12:10 pm
on 02-01-2010
The suit bears court fess of 15000/(sufficient/insufficient) to the extent of
/ SUIT FOR RECOVERY OF LOAN OF 10,68,888.03/(ONE MILLION SIXTY EIGHT THOUSAND EIGHT
HUNDRED AND EIGHTY EIGHT RUPPES AND THREE
PAISAS ONLY)

The notices are given in the daily English and

Urdu news papers on 20 Jan 2010.

Summon has been sent BY the court under

section 9(5) in form no 4 to the defendant on
13-01-2010

Officers power of attorney

1. Mr. Ayyaz Mehmood butt
2. Mr. Jamshed Yousaf .

LOAN AGREEMENT
19-07-2005

REQUEST FOR THE FACILITY

DEFENDANT APPLIED FOR THE FACILITY ON 19-072005.

PLAINTIFF BANK APPROVE A FACILITY FOR RS.
1,000,000/ TERMS AND CONDITONED WAS GIVEN TO THE
DEFENDANTS.
TERMS AND CONDITION WAS DULY ACCEPTED BY
THE DEFENDANTS.

SIDDIQUE DABIR
M11BBA074

AGREEMENT:
AGREEMENT IS MADE ON 16-08-2005.
THE DEFENDANT HAS MAINTAINING AN
ACCOUNT WITH THE BANK.
BANK APPROVED TO FINANCE THE CREDIT
FACILITIES.
MORTGAGER IS THE LAWFULL OWNER OF
THE PROPERTY DESCRIBED.

AGREEMENT:
THE MORTGAGOR IS THE GURANTOR OF
THE FACILITY FOR RS.1,000,000/ IN CASE DEFENDANTS COMMITS DEFAULT
THE BANK HAS RIGHT TO:
1. SERVE NOTICES TO DEFENDANT TO REPAY.
2. FILES A SUIT IN THE BANKING COURT
3. SELL/TAKE POSESSION OF THE PROPERTY TO
RECOVER THE FUNDS.

Description of mortgage
property:
05 marlas 17 sq.ft consisting of 1142/1550
share of 07 kanals 25sq.ft commonly known
as plot no.4 Muhammad din Park ,
The estimated value of the mortgage property
is 18,40,000/- on this day 16 -08-2005

AGREEMENT FOR FINANCING ON

MARKUP BASES:
REQUESTED FACILITY OF 1,000,000/RUNNING FINANCE.
RS.1,260,000/- WHICH IS PAYBLE TO THE
BANK (PRINCIPLE +INTEREST) BY THIS
AGREEMENT.

PROMISSONARY NOTE:
SIGNED BY THE DEFENDANT
DEFENDANTS PROMISE TO PAY TO THE
BANK A SUM OF RS.1,260,000/-

UNDERTAKING:
DEFENDANT UNDERTAKE THAT HE SHALL
ALWAYS FOLLOW ALL THE REGULATIONS
OF SBP.
ANY PENALTIES CHARGED BY THESE
REGULATIONS ON BE DEFENDANTS
ACCOUNT.

MORTGAGE DEED:
SIGNED AT LAHORE ON 16-08-2005.
THE DEFENDANT MORTGAGE THE PROPERTY IN
THE FAVOR OF PLAINTIFF BANK.
THE MORTGAGOR SHALL ,DURING THE
COUNTINUANCE OF THE MORTGAGE INSURED
THE PROPERTY.
THE MORTGAGOR SHALL PAY ALL RENTS/TAXES
TO THE MORTGAGED PROPERTY
IN CASE OF ANY DEFAULT THE PLAINTIFF BANK
CAN SELL/TAKEPOSSESSION OF THE PROPERTY.

RENEWAL Policies:
THE DEFENDANTS APPLIED TO THE BANK FOR
THE RENEWAL OF THE FACILITIES AND GRANTED
BY THE BANK ON FOLLOWINF DATES:
04-09-2006
31-08-2007
01-09-2007
31-08-2008
19-09-2008
30-09-2009
28-04-2009
30-09-2010

ASAD RIAZ

M11BBA045

Plaint:
Amounts were disbursed to the defendant
Defendant failed to perform their legal
obligation for the financing availed on
28/04/2009
Bank has sent the letters to the defendant
to perform his obligations..

Plaint
plaintiff claim

As per record maintained by the bank

A sum of Rs. 1068888.03/- (one million sixty eight
thousand eight hundred eighty eight and three paisas
only) owed to the plaintiff bank by the defendant bank.
9(3) (a) amount of finance availed by the defendant
Rs.1,000,000/-

9(3) (b) amount paid by the defendant toward the

finance
Rs.(not mentioned)

Plaint
plaintiff claim
(9) (3) (c) amount of finance and other amounts relating
to the finance payable by the defendants towards
the bank:
PRINCIPAL: RS. 9,42,326.46
MARK UP: RS. 126,561.57
TOTAL :
RS: 1,068,888.03
(statements of accounts are duly verified in
accordance with the bankers book evidence act, 1891
and recovery ordinance has an integral part of this
plaint)

Plaint
plaintiff claim
the defendants have and continue to
commit wilful DEFAULT in repayment
Repeated request have failed to clear
their liabilities. Hence, this suit.

Plaint
plaintiff claim
the cause of action arose in favor of the plaintiff
bank
the cause of action also arose every time
the above mentioned:
Were executed

Mortgage was created

Defendants defaulted in making their
payments
Defendants continue to be In default

Plaint
plaintiff claim
19) that the parties reside and carry on their business in
Lahore
documents above are also executed in Lahore
The facility was also granted at Lahore
Lahore is where the cause of action arise
The Honourable Court has the exclusive jurisdiction to:
a) Entertain this case
b) Adjudicate this matter

Plaint
plaintiff claim
20) that the value of the suit is Rs. 1,068,888.03 (one
million sixty eight thousand eight hundred eighty eight
and three paisas only) and the maximum court fee of
the Rs. 15000/- has been affixed on the plant.

prayer
In the view of the Aforesaid most respectfully said that the
court may be pleased to pass the decree in favor of the
plaintiff and against the defendant in the following manner

a) for the recovery of Rs. 1,068,888.03/- (one million sixty

eight thousand eight hundred eighty eight and three paisa's
only)

b) The mark up and cost of funds , charges from the date of

default till realization of decretal amount

prayer
c) The property mortgaged in favor of the plaintiff
be ordered to be sold for satisfaction of the
HONOURABLE COURTS DECREE
d) personal assets or other properties of the
defendants be attached and sold for the
satisfaction of the decree in favor of the plaintiff
bank.

prayer
e) in case the decree cannot be satisfied through the
liquidation the assets , the defendants may be
arrested and detained I the civil prison in accordance
with the law.
f) Costs of the suit and other expenses incurred and to
be incurred in this regard may also be awarded;
g) Any other relief that this honorable court deems fit
and proper under the circumstances of the case may
also be granted.

prayer
Verification:
verified on oath at Lahore this 1st day of Jan 2010
that the contents of paragraphs number 1 to 17 are true
to the best of my knowledge and that the contents of
paragraphs number 18 to 20 are believed to be true as
per information received.

RABBANI INTIZAR

M11BBA032

Defendant claim:
In the court of judge banking court No 1 Lahore
Bank Al-falah V/S Shukaht Zaman etc.

on behalf of defendant under section 10 of

the financial institution recovery of finance
ordinance 2001 for the grant of unconditional
leave to appear and defend the suit

POWER OF ATTORNEY:

1. ALI SAJID MIRZA. ON BEHALF OF THE

DEFENDANT.
TO ACT AND APPEAR AND PLEAD IN
THE CASE
TO PRESENT PLEADINGS AND
APPELAS CROSS OBJECTIONS OR
PETITIONS

AFFIDAVIT:
Affidavit of Shaukat Zaman son of Khalil-urRahman resident of house no
shadbagh
Lahore.

a. That the contents of the accompanying

application may kindly be read as integral
part of this affidavit.
b. That the contents of the accompanying
application are correct and true to the best of
my knowledge and nothing has been
concealed therefrom.

Defendant claim:
1. That the plaintiff has not come to this honorable
court with clean hands hence suit is liable to be
dismissed.
2. That the plaintiff has no cause of action against
deponent hence the suit is liable to be
rejected.
3. That the suit of plaintiff is based on malice and
concoction which is totally based on the futile
imagination of the plaintiff. So, the same is liable
to dismissed with special cost U\S 35 A CPC.

Defendant claim:

4. that the following substantial question of law

and facts arise for determination by his
honorable court for which leave to defend is to
be granted to the applicant / defendant in the
interest of justice
I. Whether the plaintiff has not come to this
honorable court with clean hands, Hence the suit
is liable to be dismissed .

II.

Whether the plaintiff has no cause of action

against answering defendant hence the plaintiff
is liable to be rejected as it evident from the
clause 18 where no specific date default is

Defendant claim:

it is humbly submitted that no proper

authorization is given to Mr.ayyaz
mahmood and Muhammad jamshed
Yousaf
U/S 13 rule 1.2.3 it is mandatory provision
that all the document must be original to
be presented before the court when the
suit is filed.

ALI HAMZA

M11BBA071

Defendant claim:
It is submitted in this context that the defendant /
petitioner obtained the finance facility which is
obtained on the basis of running finance facility for
the running of his business the defendant /
petitioner
the plaintiff obtained facility on 19 .07.2005
to the extent of Rs. 10,00.000
paid more than 35,00,000

Defendant claim:
in the month of August 2009 on the
request of the bank authorities
Defendants/ petitioners paid Rs. 55,000/to the bank with the commitments the
matter be settled amicably

Defendant claim:
instead of issuing the NOC to the
Defendants/ petitioners the
Defendants/ petitioners came by
surprised when on 15.03.2010 a
notice by hand is served upon by the
server of this Honorable court
regarding the pendency of this titled
suit.

Defendant claim:
It is further to be added that as per rules and
based upon numerous judgments of Apex courts
the cases must be decided on merits rather than
on technicalities as the Defendants/ petitioners
never ever defaulted , therefore, under this
score only the suit is liable to be dismissed.

Defendant claim:

furthermore on probing into the matter

it that the suit is just filed to blackmail
and harassed the Defendants/
petitioners.
from clause 18 there is no specific date
upon when the Defendants/ petitioners
became defaulters.
On this score this suit is liable to be
dismissed.

Defendant claim:
(renewal facility)
The Defendants/ petitioners never requested to
further renewal of the facility,
The bank to maintain his books good requested
the defendants for renewal of the facility.
The Defendants are in good books of the bank
so they are renewing his finance facility.

Defendant claim:
4th feb 2011 lastly
The defendant paid Rs. 30.000/- upon the
assurance firstly that the bank never
initiate any proceedings against the
defendant.
the mortgage property of the defendant /
petitioners will be released along with the
issuance of NOC to the defendant
/petitioners

Defendant claim:
(renewal facility)
Defendant never ever requested for the
renewal of the plaintiff bank.
Defendant never ever defaulted in the
repayment of the loan debt.
Defendant has paid more then
RS.35,000,000/- to the plaintiff bank.

Defendant claim:

Para no 16 is denied vehemently and categorically

nothing is due against the defendant /petitioners.
It is important to mention here that the
defendant /petitioners availed the running finance
facility Rs. 10.00.000/ in the year 2005 and till
august 2009 paid more then RS 35.00.000/
in the month august 2009 to settle the matter the plaintiff
bank demanded RS. 55.000 which was paid by the
defendant /petitioners

Defendant claim:
Para no 16 is denied vehemently and
categorically nothing is due against the
defendant /petitioners.
Also the plaintiff bank has failed to determine the amount
of default.
para no 17 is denied as the Defendants/
petitioners never ever defaulted in the payment

Defendant claim:
No cause of action is accrued
in the favor of the plaintiff and
against the Defendants/
petitioners because the
Defendants/ petitioners never
ever defaulted in the payment
nor any specific date default is
written in the plaint.

BILAL NAQVI
M11BBA049

Defendant prayer:
It is therefore, most respectfully
prayed that this application may very
kindly be accepted and leave to
appear and defend the suit may also
be granted to the defendant or in
alternative the suit of the plaintiff
be dismissed in-liming in the light of
Para no 18 of the plaintiff

Summary:
No desion from 2/01/2010 until now.
The bank has malafied intension regards to the
property that mortgaged.

Due to malafied intensions bank didnt recognize the

payments made by the client .

Plaintiff bank did not mentioned the date of default in

clause 18. under section 9 of the ordinance it is
mandatory to mention the date of default

Summary:
The financial institution didnt give the original documents
in the court that is mandatory by section 9 (1).
In the month of August 2009 the defendant paid 55000 to
the bank for the settlement of account but bank didnt issue
NOC to the defendant and defendant come by surprised
when 15/03/2010 notice by hand is served upon by court.
As per apex court decision that the defendant never
defaulted the case should be dismissed on this score.
The defendant never requested to further renewal of the
facilities but bank did it.

Summary:

The bank official gave assurance to defendant that if

defendant has paid 30000 on 4th February 2011 then
bank will issue NOC and never proceeding against
the defendant.
The defendant paid 30000 to the bank official but
bank didnt issue NOC and gave samon to the
defendant.
The bank has failed to determine the amount of the
default
Under section 9(3) C the amount of default and the date of
default must be mentioned in the plaint.

Solutions
Due to the lack of employment in judiciary sector the
case is still pending in court The government should
employ more judges. so the case should be given
decision on time
The court should identify the malafied attention of the
bank and should give the decision accordingly as
early as possible because of the pending decision the
property value is deteriorating

Solutions
The fact of corruption cab be clearly observed in this
case the bank has not even mentioned the date of
default but still case pending when the main conflict
clause is not there
As per law the plaintiff should submitted all original
documents in front of court but the can not presented
them as they have malafied attention in this case
The malafied attention of the plaintiff are clearly
exposed after receiving the settlement amount
instead of issuing the NOC the bank issued semen to
the client

Solutions
The banking court is not following the instruction of
higher court as per law the decision of Apex court is
consider as final decision but the decree given by
higher court is not implemented
The defendant didn't wanted to extend the period of
loan but the bank did it itself and it resulted in default
as per the claim of the bank
The bank official were indulge in bribes they approach
the defendant for the settlement of the case but it
never helped and once again the defendant was
exploited the bank should hire personnel who should
be loyal to the financial institutions

THANK YOU