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

Section: 15

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)--- ----S. 15 [as amended by the Financial Institutions (Recovery of Finances) Amendment Act (XXXVIII of 2016)]---Financial Institutions (Recovery of Finances) Rules, 2018, R. 3(b)---Civil Procedure Code (V of 1908), O.XXI, Rr. 66 90---Constitution of Pakistan, Arts. 10-A 25---Sale/auction of mortgaged property---Procedure---Section 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 [as amended by the Financial Institutions (Recovery of Finances) Amendment Act, 2016], vires of---Section 15 of the Ordinance conferred power of sale upon the failure of the mortgagor to pay mortgage money when demanded, but also imposed conditions to be met before power of sale was exercised---Adherence to issuance of notices and conditions prescribed for the mode, conduct and method for sale of the mortgaged properties, was strictly required before customer's/ mortgagor's right to redeem was lost/extinguished and unassailable title in the property was conveyed unto the purchaser---Section 15 of the Ordinance was intra-vires the Constitution. Section 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance') [as amended by the Financial Institutions (Recovery of Finances) Amendment Act, 2016] equipped the mortgagors with adequate rights and remedies qua the conduct of auction sales of the mortgaged properties, both prior to the conduct of sale and, in particular, after the fall of the hammer. Fundamental right of redemption was acknowledged and secured through provisioning of corresponding remedies to the mortgagor, which inter alia included remedy to raise disputes regarding creation of mortgage and outstanding mortgage money, demanded through statutory notices. The legislature, through section 15 of the Ordinance, had conspicuously provided remedies, before and after the conduct of auction sales. The mortgagor under clauses (a) and (c) of subsection (13) of section 15 may object to the creation of mortgage and quantum of the outstanding mortgage money claimed - sufficiency of the cause to be determined by the Banking Court. In terms of clause (d) of…

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