Law:

Section:

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)--- ----S. 9---Suit for recovery of loan amount---Second suit on same cause of action---Effect---Trial Court dismissed suit at leave stage on the ground that decree in the first suit had attained finality and second suit on the same cause of action was barred---Validity---Banking Court could not dismiss suit at leave stage---Proper course for Banking Court was to grant leave to defend the suit to the defendants and then to frame issues for its decision thereon---Banking Court in first suit directed the defendants to keep on depositing the instalment amount of loan as per terms of the agreement---Whether said direction had furnished a fresh cause of action was to be thrashed out by the Banking Court---Trial Court had not disclosed under which provision of law second suit was time barred---Impugned order passed by the Trial Court was not sustainable which was set aside---Suit would be deemed to be pending before the Banking Court which should be decided after granting leave to defend the suit to the defendants. ORDER This is an appeal filed under section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (the Ordinance) against judgment and decree dated 04.05.2011 whereby the suit filed by the appellant bank was ordered to be dismissed. 2. Brief facts of the case are that the appellant bank filed a suit (suit No.280 of 2001) against respondents Nos.1 and 2 for the recovery of Rs. 553,085 on account of a loan granted under Prime Minister Self Employment Scheme. The said loan was repayable in seven years in 72 installments with one year grace period. A decree was passed in the said suit by the banking court on 31.01.2002 in the sum of Rs. 189,127/- representing the defaulted amount of 23 installments, which had become due and payable by the time the said suit was filed. It was further held in the said judgment as under: Since the decree has been passed with regard to the default installments, therefore, the defendants shall keep on depositing future installments of the loan as per terms and conditions of the agreement. The plaintiff shall be entitled to recover cost of funds…

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