Law:

Section:

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)--- ----Ss. 16, 23 & 9---Civil Procedure Code (V of 1908), O. XXXVIII, Rr. 5 & 6---Suit for recovery of loan amount---Application for attachment before , injunction and appointment of receiver, acceptance of---Restrictions on transfer of assets and properties---Principles---Arrest and attachment before ---Section 16 of Financial Institutions (Recovery of Finances) Ordinance, 2001 could not be looked into or applied in isolation in view of S. 23 of the said Ordinance---Section 23 of Financial Institutions (Recovery of Finances) Ordinance, 2001 provided that pending final decision of suit filed by financial institution in which summons under S. 9(5) of the Ordinance had been published, no customer would, without prior written permission of Banking Court, transfer, alienate, encumber, remove or part with possession of any of his asset or property furnished to financial institution as security by way of mortgage, pledge, hypothecation, charge, lien or otherwise---Any such transfer, alienation, encumbrance or other disposition by customer in violation of S. 23 of Financial Institutions (Recovery of Finances) Ordinance, 2001 would be void and of no legal effect---Banking Court, while deciding application under S. 16 of Financial Institutions (Recovery of Finances) Ordinance, 2001, must also keep in mind mandatory provisions of S. 23 of the Ordinance---Defendants were duty bound under S. 23 of Financial Institutions (Recovery of Finances) Ordinance, 2001 not to transfer, alienate, encumber, remove or part with possession of any of assets or properties furnished to plaintiff-Bank as security by way of hypothecation, without prior written permission of Banking Court---Parties were duty bound to ensure that hypothecated assets were not wasted or destroyed during pendency of suit in which the same were subject matter---Banking Court was supposed to enforce said duty of parties---Defendants had not disputed execution of any of the letters of hypothecation nor had they filed any counter affidavit or objections to oppose present application---Application was allowed in circumstances. (b)…

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