Law:

Section:

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997) Ss. 9 & 21 Civil Procedure Code (V of 1908), O.XXXIX, R.2(B) Loan instalments Failure to clear the instalment in due time Loan facility was advanced to the plaintiff on the basis of letter of credit Four installments were paid to the plaintiff in due time whereas the fifth instalment was withheld by the Bank on the plea of issuance of interim injunction by the Banking Court Contention of the plaintiff was that in view of the provision of O.XXXIX. R.2(B), C.P.C. the interim injunction issued by the Court had lapsed after six months, therefore the Bank should have made the payment of fifth instalment after six months Validity ¬Bank as such ought to have made payment of the fifth instalment immediately after six months without any demand being made by the plaintiff Bank could only have withheld payment of the fifth instalment prior to the six months High Court directed the Bank to pay fifth instalment with 1096 interest thereon Appeal was allowed accordingly. Haral Textiles Mills Limited v. Banque Indosuez Belgium S.A. and others 1999 SCMR 591 ref. JUDGMENT JAWWAD S. KHAWAJA, J. This appeal impugns one portion of the decree, dated 1 10 2001 passed by the learned Banking Court II, Lahore against the appellant bank and in favour of the respondent Company. 2. It is not disputed by the Bank that it had established a letter of credit in favour of the respondent Company, which envisages payment of five instalments to the said Company. The Bank pursuant to the letter of credit made payment of the first four instalments. The fifth instalment of US $ 132,688 was due on 17 7 1999, However, on 12 6 1999 Gulfwood Industries (Pvt.) Ltd. at whose behest the letter of credit had been established, filed a suit before the learned Civil Court at Kasur. The said Court passed an interim order, dated 12 6 1999 restraining the appellant Bank from making payment of the fifth instalment under the aforesaid letter of credit. 3. The said restraining order was not extended after the expiry of six months as envisaged by Order XXXIX. rule 2(B), C.P.C. 4. This appeal was admitted to regular hearing on…

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