Law: Banking Companies (Recovery of Loans), Ordinance, 1979

Section: 6

Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)--- ---S. 6---Suit for recovery of "house purchase loan" from ex-employee of bank whose services stood terminated---"House purchase loan" on termination of employee's services, whether converted into a commercial loan, entitling bank to recover interest thereon at commercial rate---In absence of any undertaking given by the borrower (employee) on such score (in the event of termination of his services) or any rule meeting such eventuality, no employee falling in said category (termination) could be burdened with commercial rate of interest--Ex-employee had received loan on 5-7-1977; he had paid nine instalments up to 25-10-1978 totaling as Rs.2,250 original loan being 40,000 after deduction of instalments sum of Rs.37,250 remained unpaid---Had ex-employee paid all the due instalments, loan in entirety would have been paid in 12 years and five months with effect from November 1978, when he discontinued to pay instalments---Loan would thus, have been paid by the end of April 1990---Ex-employee having not paid back loan by the stipulated period, would be liable to pay interest at the commercial rate with effect from May, 1990, till the satisfaction of his entire liability---Judgment and decree in question, was modified to that effect. M. Shaukat Hussain for Appellant. Qaisar Rashid for Respondent. Date of hearing: 24th January, 1994. JUDGMENT MUHAMMAD BASHIR KHAN JEHANGIRI, J----- This Regular First Appeal is directed against the judgment and the decree dated 17-12-1989 for recovery of Rs.41,611 with further interest accruing thereon till payment of the decretal amount passed by the learned Special Judge (Banking Companies) N.-.W.F.P., in favour of M/s. Allied Bank of Pakistan Ltd., I.I. Chundrigar Road, Karachi (hereinafter called as the respondent-Bank) against Shah Nawaz, ex-Manager, Allied Bank of Pakistan, Chowk Yadgar Branch, Peshawar City.   The facts relevant for the disposal of this appeal are that the appellant, while employed as Manager of the Bank in the Board of Intermediate and Secondary Education Branch, Peshawar, was allegedly granted on 5-7-1977 the facility…