Law:

Section:

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)--- ----Ss. 2(a)(i), 9, 3 & 22---Banking Companies Ordinance (LVII of 1962), Ss. 5(b), 5(c), 5(ff) & 7---Civil Procedure Code (V of 1908), O.VII, R. 10---Banking Company---"Financial Institution", definition of---Scope---Suit for recovery filed by foreign banking company not licensed by State Bank of Pakistan---Suit filed in respect of transaction carried outside Pakistan---Maintainability---Suit for recovery of plaintiff-bank was rejected under O. VII, R. 10, C.P.C. on the ground that the plaintiff-bank did not fall within the definition of "Financial Institution" under S. 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 since inter alia, plaintiff was a banking company incorporated outside Pakistan---Held, that a foreign banking company which was not registered with the State Bank of Pakistan, could not do banking business in Pakistan and therefore could not file a suit for recovery under S.9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and was not a "Financial Institution" under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Under S. 3 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, State Bank of Pakistan certified the "cost of funds" of banking companies which were to be awarded in a decree passed by the Banking Court, and the word "shall" used in the said section indicated that without awarding of "cost of funds", no decree could be passed---Definition of "Financial Institution" given in S. 2(a)(i) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, made it clear that transaction in respect of which a "banking company" can file a suit for; must be in Pakistan in light of the words "any associated or ancillary business in Pakistan through its branches within or outside Pakistan"---High Court observed that it was necessary that for filing of suit for recovery under the Financial Institutions (Recovery of Finances) Ordinance, 2001; the transaction must take place in Pakistan, however, the branch of the Financial Institution may be outside Pakistan---In the present case,…

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