Law:

Section:

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001) Ss.3(2) & 7 West Pakistan Relief of Indebtedness Ordinance (XV of 1960), S.3 ,Suit for recovery was decreed Money decree passed in favour of Bank was based on promissory note Penal interest Legality in the absence of agreement Objection of appellants in appeal was that in the absence of an agreement for charging penal interest, the Bank could only have claimed simple interest and relying on S.3 of West Pakistan Relief of Indebtedness Ordinance 1960 the Bank could not have recovered double the amount from the appellants after having deducted the amount paid by the appellants Record showed that there was no agreement in which appellants undertook to pay penal interest nor it was ever acknowledged by the appellants Penal interest could not be charged without any express contract ¬Held, in the absence of any agreement to pay penal interest, the Bank had no authority to charge the penal interest Amount of penal interest was deducted from the decretal amount in circumstances. National Bank of Pakistan v. Messrs Ch. Ram Din & Company and others PLD 1985 Lah. 117 and Allied Bank of Pakistan v. Masood Ahmad Khan 1994 MLD 1557 ref. (b) West Pakistan Relief of Indebtedness Ordinance (XV of 1960) Ss.3 & 2(b) Section 3 of West Pakistan Relief of Indebtedness Ordinance 1960, applicability of Suit for recovery was decreed Money decree passed in favour of Bank was based on promissory note One of the objections of appellants in appeal was that under S.3 of West Pakistan Relief of Indebtedness Ordinance, 1960 the Banking Court could not have passed a decree in respect of a debt for a larger sum than twice the amount of the sum found by the Court to have been actually advanced as loan deducting any amount already received by the creditor Interpretation of the word "debt" under S. 2(b) of West Pakistan Relief of Indebtedness Ordinance 1960 Exclusion of banking companies and scheduled bank under S.3 of West Pakistan Relief of Indebtedness Ordinance 1960 Section 3 of West Pakistan Relief of Indebtedness Ordinance, 1960 was not applicable to the Bank. Samandar Khan v. Mst. Maqbool and others 1974…

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