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

Section: 3(2),9,22

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)--- ----Ss. 3(2), 9 & 22---Recovery of finance---Cost of funds---Determination---Appellant/borrower was aggrieved of cost of funds determined by Banking Court and included in decree passed in favour of respondent/financial institution---Validity---Cost of funds of financial institution payable under S. 3(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 were as certified by State Bank of Pakistan from time to time---There was no need for Banking Court to exercise its discretion and apply its own formula of cost of funds and not those certified by State Bank of Pakistan---Division Bench of High Court declined to determine rate of cost of funds of commercial banks and there was no basis provided for bifurcating period for which cost of funds was due and payable---High Court set aside the criterion adopted by Banking Court for calculating cost of funds---High Court set aside cost of funds imposed against appellant/borrower and remanded the matter to Banking Court for calculation afresh---Appeal was allowed accordingly. JUDGMENT JAWAD AKBAR SARWANA, J.---The Appellant/Plaintiff-Bank, House Building Finance Company Ltd. ("HBFC"), has filed this First Appeal No.88 of 2016 under section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (hereinafter referred to as "the FIO, 2001") against the Banking Court No.5 at Karachi's Judgment dated 04.05.2016 and Decree dated 05.05.2016 in Banking Suit No.107/2015 passed against Respondent No.1-Customer (Major Muhammad Abdul Aziz). HBFC seeks modification of the amount of the said judgment and decree on the ground that the cost of funds of Rs.1,288,148 are contrary to law and has prayed to set aside the Judgment and Decree and to enhance the cost of funds or future rent at the rate of Rs.14,856/- per month from 01.12.2015 till realisation of the outstanding amount. The Appellant-Bank claims no other relief in the prayer clause. 2. The brief facts are that on 18.12.2015, HBFC filed Banking Suit No.107/2015 against Respondent No.1-Customer under Section 9 of FIO, 2001, for recovery of finance facility of…

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