Law: Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)

Section: 9,10(9),11,17

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)--- ----Ss. 9, 10(9), 11 & 17---Suit for recovery of loan amount---Leave to defend, application for---Condition, imposition of---Scope---Interim decree and final decree were passed which were distinct and independent---Merger of decrees, principle of---Scope---Banking Court passed an interim decree while deciding the application for leave to defend and granted conditional leave subject to furnishing bank guarantee---Defendants failed to submit bank guarantee and suit was finally decreed---Validity---Banking Court had power to pass an interim decree for an amount which was not disputed after consideration of pleadings and documents appended therewith---Banking Court had passed an interim decree for Rs. 12,398,584 and final decree was passed in the sum of Rs. 38,075,958---Both the said decrees were distinct and independent and were passed with regard to two separate amounts constituting the entire claim of plaintiff-bank in the suit---Final decree was not an adjudication on merits but same was passed due to default in submitting the bank guarantee---"Interim decree" had not merged into the "final decree" entitling the defendants to challenge the same---Principle of merger of decrees was limited to the situation where decree of lower court was modified or altered by the Appellate Court which would result in merger of decrees of lower court with that of the higher court---Matters dealt with by the interim decree were conclusive and final and were unalterable through any proceedings which were taken subsequently in the suit---Interim decree did not merge in the final decree and both the decrees retained their independent legal status in terms of filing of execution and appeals---Defendants had not challenged the interim decree in the present case---Basis for challenging the final decree was no longer available to the defendants---Final decree was passed merely for non-fulfilment of condition attached with to the grant of leave to defend the suit---High Court could not go behind the final decree and pass on merits on interim decree which had not merged with the final decree and was not…

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