Law:

Section:

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)----S.9---Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), S. 22---Recovery of bank loan---Time-barred suit---Interest bearing loan---Provisions of S.22 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997---Applicability---Interest bearing loan was granted to defendants in years, 1977-1980 and the suit was filed on 31-5-2000---Banking Court declined to grant leave to defend the suit and decreed the suit in favour of bank---Plea raised by defendants was that suit was barred by limitation---Validity---Loans became time-barred as per provisions of Limitation Act, 1908, prior to enactment of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997---Right of bank to recover amount of finance stood extinguished due to bar of limitation as provisions of Limitation Act, 1908, were applicable to interest bearing loans---Bank failed to file suit against defendants within the period of limitation---Rights, which were past and closed transaction, could not be revived---Fresh cause of action under the provisions of S.22 of repealed Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, arose only in cases where loans were granted on mark-up basis according to Islamic Banking to overcome hardship and inconvenience in cases where no limitation was provided by Banking Companies (Recovery of Loans) Ordinance, 1979 and Banking Tribunals Ordinance, 1984---After coming into force of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, provisions of its S.22 were not made applicable to all cases instituted or filed in Banking Court---Loans disbursed under non-Islamic Banking System, wherein period of limitation was provided, fell outside the purview of S.22 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997---Rights extinguished could not be revived resorting to S.22 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997---Judgment and decree passed by Banking Court was set aside and the suit was…

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