Law: Financial Institutions (Recovery of Finances) Ordinance, 2001

Section: 10 & 7

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)------Ss.10 & 7---Respondent-Bank filed a suit against appellants for recovery of loan---Application for leave to defend -suit was dismissed and claim of Bank was decreed---Contention raised by appellants was that the Loan in question had been secured through hypothecation of stock which was lost---Said stock had been insured and Bank was also a beneficiary of such insurance, therefore, Bank was only entitled to receive claim from Insurance Company and that future mark up could not have been granted---Contentions were repelled as appellants were unable to show from the documents admittedly executed between the parties that liability of appellants would cease in case of loss of hypothecated goads---Defence taken by appellants, at the best was illusionary as receipt of loan amount was not disputed nor it had been disputed at the bar that a certain sum was otherwise due from the appellants---High Court, however, deemed it appropriate that appellants be granted leave to defend .suit subject to deposit of liability of Rs.2,40,000.JUDGMENT SH. AZMAT SAEED, J.---This appeal under section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 is directed against the judgment and decree dated 30-5-2006 passed by the Banking Court. 2. Brief facts leading to the filing of this appeal are that the respondent bank filed a suit for recovery of Rs.2,40,921.84 along with cost of suit, mark up and cost of funds against the present appellants. Pursuant to the notice, the appellants entered appearance and filed their application .for leave to defend the suit which did not find favour and was dismissed. The Banking Court passed a decree of Rs.2,40,921.84 along with cost of suit, mark up to the expiry date and cost of funds till realization of the outstanding liability against the present appellants vide the impugned judgment and decree dated 30-5-2006 which has been…