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

Section: 7(2) , 1

Banking Companies (Recovery of Loans) Ordinance (XIX of 1979).-- -...S. 7(2)---Civil Procedure Code (V of 1908), OXXXIV, R.1---Loan advanced against security of Demand Promissory Note and Registered Mortgage Deed---Provision of OXXXIV, R.1, C.P.C. envisages that preliminary decree has to be passed in suit based on mortgage security and ii defendant fails to pay requisite amount within specified time, if so fixed, then plaintiff could apply for final decree---Banking Court failed to pass preliminary decree, thus, decree passed by it being in derogation of legal requirement, would require rectification---Decree passed by Banking Court was set aside and case was remanded to it for rectification of error. Saleh Mehmood Awan for Appellants. Aurangzeb Khan for Respondents. Date of hearing: 21st June, 1995. JUDGMENT MIAN MUHAMMAD AJMAL, J.---This regular first appeal is directed against the judgment/decree of Banking Judge, N.-W.F.P., Peshawar dated 5-8-1993 whereby the application of the defendant-appellant for grant of permission to appear and defend the suit was dismissed and the suit of plaintiff-Bank against the defendant was decreed with costs alongwith interest at the contracted rate or 2% above the Bank rate, whichever is higher. The defendants-appellants were granted financial assistance under I.D.A. Credit Scheme vide Sanction Advice No. WB/UBL-17 dated 11-11-1982, a sum of Rs.5,00,000 was advanced as loan. The defendants as security executed the registered mortgage deed No. 1106 deed No. 1106 dated 17-11-1982 in favour of the Bank and Demand  Promissory  Note  dated  20-11-1982  for  Rs.5,00,000.  The defendants-appellants failed to adjust the loan liabilities according to the terms and conditions of the deed, therefore, they were served with legal notice but to no effect.   Hence suit for recovery of outstanding dues amounting to Rs.14,52,379 was filed by the plaintiff-Bank on the basis of statement of account with effect from 20-11-1982 to 30-6-1990 alongwith the future interest at the rate of 11% per annum till the final payment. In pursuance to the summons the defendants-appellants filed an application under Order…