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

Section: 19

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---S. 19---Execution of decree---Cost of funds, recovery of---Dispute between the parties was with regard to payment of cost of funds for the period beyond the date when they were required to pay amount under the terms of settlement contained in letter of appellant/decree holder Bank---Validity---State Bank of Pakistan had notified rates of cost of funds from time to time but cost of funds demanded by appellant/decree holder Bank at the rate of 12% per annum with effect from 18-10-2007 had contractual force as was apparent from letters of parties/ debtors were to have raised objection to the condition on which extension in time had been granted to them by appellant/decree holder bank at the stage when letter was sent to respondents/ debtors, who did not object to the condition rather acquiesced and accepted the same---Executing Court committed illegality by ignoring the condition on which extension in time for payment of remaining principal amount was granted to respondents/ debtors by appellant/decree holder Bank through its letter---High Court directed that respondents/ debtors to pay cost of funds for delayed period at the rate of 12% per annum under the terms of agreement and order passed by Executing Court was set aside---Appeal was allowed accordingly. JUDGMENT: MIANGUL HASSAN AURANGZEB, JUSTICE:---.--- Through this judgment, we propose to decide E.F.A. No. 06/2011 and E.F.A. No. 07/2011. 2. In this judgment, M/S. Industrial Development Bank of Pakistan shall be referred to as the “decree holder”, whereas respondents Nos.1 to 3 shall be referred to as the “judgment debtors”. 3. Through appeal (E.F.A. No. 06/2011), the decree holder has assailed the order dated 08.03.2011 passed by the learned Executing Court to the extent of making the judgment debtors liable to pay cost of funds on the delayed payment with effect from 24.11.2010. The decree holder seeks for the cost of funds to be payable by the judgment debtors with effect from 18.10.2007. 4. Through appeal (E.F.A. No. 07/2011), the judgment debtors have assailed the said order dated 08.03.2011 to the extent of imposing a liability on…

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