Law:

Section:

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)--- ----Ss. 15, 16 & 9---Suit for recovery---Delivery of possession of mortgaged property to Financial Institution---Appellants had purchased mortgaged property after which suit for recovery against sellers of the said property was filed by the mortgage-holder bank---Application of the plaintiff-Bank under S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 seeking possession of the mortgaged property was allowed, and order of Banking Court was impugned by the appellants---Held, that S. 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was declared ultra vires the Constitution in Muhammad Umer Rathore v. Federation of Pakistan (2009 CLD 257), and therefore no order could be made under the provisions of said section, regarding delivery of mortgaged property to the plaintiff-Bank---After filing of suit for recovery by the plaintiff Bank, the mortgagor/customer/defendant, after publication of summons under S.5 of the Ordinance, could not transfer, alienate, encumber, remove or part with possession of any of its assets or property furnished to the Financial Institution as security by way of mortgage, hypothecation, charge, lien or otherwise; pending final decision of the suit---Filing of suit for recovery under the Financial Institutions (Recovery of Finances) Ordinance, 2001; however, would not vest with the plaintiff Bank with rights to obtain possession of mortgaged property as had been done in the present case, especially when it was admitted by the plaintiff Bank that the mortgage was not with possession---No order, therefore, could have been passed for delivery of possession of mortgaged property---High Court observed that the Banking Court, at most, could have exercised powers under S.16 of the Financial Institutions (Recovery of Finances) Ordinance, 2001; however the same could only be done with a view to prevent mortgaged property from being transferred, alienated, encumbered, wasted or otherwise dealt with in a manner which was likely to impair or prejudice the security in favour of the bank---Plaintiff bank, in the present case, in its…

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