Law: Financial Institutions (Recovery of Finances) Ordinance, 2001

Section: 3,17,22

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)--- ----Ss. 3 & 17---Decree of Banking Court---Cost of funds, grant of---Scope----Under S. 3 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, the customer was liable to pay cost of funds from the date of default till realization of the same and it was erroneous for a Banking Court to award cost of funds in a decree to be calculated from the date of filing of suit for recovery. Habib Bank Limited v. Pak Poly Products (Pvt.) Limited 2013 CLD 1661 and Trycot Synthetic Fiber Company through Proprietor v. Habib Bank Limited 2012 CLD 1670 rel. THIS JUDGMENT DELIVERED BY: SHAMS MEHMOOD MIRZA, J.--- This regular first appeal is filed under section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (the Ordinance) challenging judgment and decree dated 29.04.2014 passed by the banking court. This judgment shall also decide R.F.A. No.1561 of 2014 filed by the Bank of Punjab against the appellants. For the purpose of this judgment, the Bank of Punjab shall be referred to as the "respondent bank". 2. Brief facts of the case are that the respondent bank instituted a suit against the appellants seeking recovery of Rs.433,342,998.45 due under Running Finance-1 and Running Finance-II facilities. The appellants contested the suit by filing their application for leave to defend. The learned Banking Judge of this Court passed decree in favour of the respondent bank on 29.04.2014 in the sum of Rs.23,996,490/- by excluding certain amounts from the suit claim and in view of payment of Rs.292,396,000/- by the appellants during the pendency of the suit. 3. Learned counsel for the appellants submits that an amount of Rs.63,949,858/- was also liable to be excluded from the suit claim in as much as the said amount was charged and recovered as mark up after the expiry of the finance facilities. 4. Learned counsel for the respondent bank (appellant in R.F.A. No.1561 of 2014) submitted that the learned banking court while passing decree granted costs of funds from the date of filing of the suit whereas by the terms of section 3 of the Ordinance, the same ought to have been…

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