Law: Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997

Section: 7 , 9 , 2

(a)    Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)--- ----Preamble, Ss.7, 9 & 2---Objects and reasons of the Act---Powers  of  Banking  Court---Scope  and extent---Borrower or a customer or a Banking Company is entitled to file a suit when any of them commits a default in fulfilling any obligation with regard to any loan or finance---Requirements---Where a suit is filed by a customer or a borrower claiming that amount received by them was not as a result of loan or finance, same will fall within the jurisdiction of a Banking Court---Suit for specific performance filed by a customer or borrower against the Banking company seeking fulfilment of its obligation in respect of loan or finance will also fall within the jurisdiction of Banking Court.-- [Jurisdiction]. The objects and reasons for enacting the Banking Companies Act, 1997 was to provide a single forum to the Banks for the recovery of their loans as the previous system provides two forums which created problems for the litigants. The Act, 1997 is aimed to consolidate both the laws to provide single forum to the Banks as well as remedies to the customers who were required to go before the ordinary Court which creates multifarious proceedings. The Act, 1997 would provide remedy to the customer to approach the same Court which can be approached by a Bank. Prior to the Act, 1997 there were two laws for the purpose of recovery of bank loans and other allied disputes, namely, Banking Companies (Recovery of Loans) Ordinance, 1979 (hereinafter referred to as the Ordinance, 1979) and the Banking Tribunals' Ordinance, 1984 (hereinafter referred to as the Ordinance, 1984) which were repealed through the Act, 1997.   By virtue of subsection (6) to section 7 of the Act, 1997 all such suits which were pending in the Special Banking Courts or Banking Tribunals arising out of the Banking Companies Ordinance, 1979 or arising out of the Ordinance, 1984 stood transferred to the newly-established Banking Court. Therefore, all suits filed by borrowers or customers against the Banks or the counter-cases filed by such persons now stand…