Law:

Section:

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)-------S. 9---Banking Companies (Recovery of Loans, Advances, Credits and Advances) Act (XV of 1997) S. 9---State Bank of Pakistan Circular No.19, dated 5-6-1997---Incentive Scheme---Binding nature of State Bank of Pakistan Circulars---Scope---Recovery of bank loan---Contention of defendant was that suit for recovery was not maintainable since the defendants had availed and complied with Incentive Scheme issued by the State Bank of Pakistan via Circular No.19 dated 5-7-1997---Held, that a Banking Company could not deviate from Circulars issued by the State Bank of Pakistan due to their binding nature---Directions issued in the shape of Circulars were as consequence of promulgation of a statute or an Act of Parliament and banks were obliged to follow the same---In the present case, since Invective Scheme was duly complied with by the defendants, therefore suit for recovery of plaintiff Bank was not maintainable--- Suit was dismissed, in circumstances. JUDGMENT MALIK MANZOOR HUSSAIN, J.---This Original Banking Suit had been filed by plaintiff/Bank through Mr. Ashraf Khan Zonal Chief, NBP, Abbottabad, for recovery of Rs.4,37,882,577.00, as outstanding amount against defendants on 30-6-1998, through sale of mortgaged/ charged property/assets, hypothecated machinery/goods, and enforcement of personal guarantees. 2. Facts as emerged from the contents of plaint are that the defendant No.1 is running a Textile Mills in the name and style "Khyber Textile Mills Ltd" situated at Baldher, District Haripur with registered office at The Mall, Abbottabad, who availed several loans and finances from plaintiff/Bank, fully described in Para-4 of plaint, for convenience the same are reproduced as under:-- (i) "In the year 1963, cash credit (K-1) Rs.1.100 Million, enhanced to Rs.16.200 Million in the year 1981. On 11-5-1987 the outstanding balances in K-5 of Rs.54.083 Million and in K-6 of Rs.5.792 Million were merged with K-1. (ii) In the year 1963, cash credit (K-2) of Rs. 2.000 Million, enhanced to Rs.12.500,000 in the year 1973. (iii) In the year 1975, cash credit (K-3) of Rs.3.800 Million. (iv) In the year…

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