Law:

Section:

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)------- --------Ss. 9 & 22-------State Bank of Pakistan F.E. Circular No.83 of 1993 dated 30th December, 1993-------Law Reforms Ordinance (XII of 1972), S. 3-------Suit for declaration, injunction and recovery of money-------Intra-court appeal------- Overdraft/Telegraphic transfer, buying rate-------Applicability-------Principle of set off-------Plaintiff, exported rice by negotiating letters of credits (LC) through defendant Bank-------Plaintiff contended that as per exchange control regulations, if payments were made to it from the funds of LC opening Bank abroad, then telegraphic rates as prescribed by State Bank of Pakistan had to be applied because funds of defendant Bank were not involved-------Plaintiff further contended that if funds of defendant Bank were involved then overdraft buying rate as prescribed by State Bank of Pakistan had to be applied while disbursing payment to plaintiff-------Plea raised by plaintiff was that defendant Bank made payment on the basis of telegraphic transfer buying rate and all payments out of the proceeds and funds being maintained by LC opening fund therefore, recovery notices issued by defendant Bank were illegal-------Suit was dismissed by Single Judge of High Court-------Validity-------Single Judge of High Court was not justified to hold that in view of Foreign Exchange Circular No. 83/1993 dated 30-12-1993 and of the fact that negotiation of the document was on the basis of Letters of Credits, overdraft buying rates were applicable-------Funds of defendant Bank were not utilized and State Bank of Pakistan had already dealt with such a situation in the Foreign Exchange Circular No. 83/1993-------Plaintiff was entitled for negotiation of documents on the basis of telegraphic transfer buying rate which had been initially applied by defendants-------Order for recovery of an amount along with markup from plaintiff was not justified and the same was unlawful-------Division Bench of High Court declared plaintiff entitled for reimbursement of the amount with profit/markup as prescribed by State Bank of Pakistan for the relevant period and set aside…