Law:

Section:

(a) Islamic Jurisprudence------- Banking---Banks are not permitted to charge mark-up on mark-up under the non-interest banking system of finance. (b) Contract Act (IX of 1872)--- ----S. 62---Novation of contract---Scope---Where the parties to a contract agree to substitute a new contract for the old one or to rescind or alter the same, the original contract need not be performed. (c) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)--- ----Ss. 10 & 11---Contract Act (IX of 1872), S.62---Suit for recovery of Bank loan ---Novation of contract---Agreement was a novation of old contract, the consideration of which was the agreement of Bank to extend time for payment of outstanding liabilities of the borrower---Validity---Such agreement being valid and legal, was binding upon the parties---Rate of interest was not denied by borrower---Such was decreed against the defendants severally and jointly in circumstances. Banque Indosuez v. Banking Tribunal 1994 CLC 2272; National Bank. of Pakistan v. Punjab Building Company PLD 1998 SC 302 and United Bank Limited v. Chaudhary Ghulam Hussain 1998 CLC 816 ref. (d) Banking Companies Ordinance (LVII of 1962)--- ----S. 83-B---Every Officer of company is entrusted with the property belonging to the company---Where such officer fails to exercise such degree of care as a reasonable person might be expected to take of his property in the circumstances and the company in consequence of such failure suffers loss, such officer is liable to the company for loss arising from his negligence. (e) Banking Companies Ordinance (LVII of 1962)--- ----S. 33-B---Prudential Regulations, Reglns. III & XVIII---Responsibilities of Batik Officer---Where an Officer of a Bank, who is responsible for disbursement of loans, acts negligently or omits to take the reasonable degree of care in extending a loan 'or credit facilities as required by the Prudential Regulations and under normal international banking practice and consequently the Bank suffers loss, the Bank is justified in suing such an officer for recovery of loss suffered by the Bank. (f) Banking Companies Ordinance (LVII of 1962)--- ----S.…

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