Law:

Section:

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Ordinance (XXV of 1997)-------Ss. 9 & 12---Contract Act (IX of 1872), S.59---Suit for recovery of loan----Execution of decree----Application of payment made by debtor' to discharge debt----Conditions---Debtor making payment for discharge of a particular debt---Entitlement---Debtor would have vested right to indicate that the payment was to be applied towards the liquidation of a particular debt---Provisions of S.59, Contract Act, 1872 provided in mandatory terms that where a payment was made with the said indication and creditor accepted the same, then the payment was to be applied according to the indication made by the debtor. Munshi Emamuddin Ahmad's case PLD 1952 Dacca 279 ref. JUDGMENT MAULVI ANWARUL HAQ, J.--- This E.F.A. arises out of proceedings -for execution of a decree passed in a suit filed by the respondent-bank against, inter alia, the appellants. It will be appropriate, in order to understand the controversy between the parties, to refer to the plaintiff's case to indicate the finances for the recovery whereof the suit was filed. These are detailed in para.2 of the plaint and are as follows: (i) Rs.27,15,000 disbursed vide a sanction letter, dated 23-12-1987; (ii) additional Financial assistance of Rs.30,00,000 vide sanction letter, dated 20-6 1988; (iii) financial assistance of Rs.15,00,000. vide sanction letter, dated 4-2-1989. In para.2 of the plaint it was stated that Rs.85,10,96 stood accrued for payment on account of finances and other charges as per terms of the agreement between the parties. Consequently a prayer was made for a decree for recovery of Rs.85,10,596. A decree was accordingly passed by Banking Tribunal, Lahore on 4-9-1995 for the said amount with costs which were assessed at Rs.21,504. The decree was accordingly put into execution. While the decree was so under execution negotiation started between the parties for restructuring of the several loan accounts with reference to the incentive schemes issued by the State Bank of Pakistan. It is an. admitted position that apart from the said financial assistances or working capital accounts some other loan…

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