Law:

Section:

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997) Ss. 9 & 21 Companies Ordinance (XLVII of 1984), S.316(1) Recovery of bank loan Failure to seek permission from Company Judge Bank filed suit against defendant company and its Directors/guarantors for recovery of bank loan Defendant company was wound up by Company Judge and Provisional Manager was appointed Company Judge permitted bank to file application for seeking permission to continue proceedings before Banking Court against the defendant company for recovery of bank loan but no such application was filed by the bank Suit was decreed by Banking Court in favour of the bank Plea raised by Directors/guarantors was that without seeking permission as mentioned in S.316(1) of Companies Ordinance, 1984, the Banking Court could not pass any decree Validity When winding up order was made or Provisional Manager was appointed, the proceedings in the suit or other legal proceedings would remain stayed only against company under S.316 (1) of Companies Ordinance 1984, and could not further proceed except with the leave of the Court If any party wished to commence or continue with the proceedings, then it had to file .application under S.316(1) of Companies Ordinance, 1984, before Company Judge Seeking his permission to commence, proceed and continue with the proceedings against the company and the Court might grant such permission, subject to certain terms Company Judge granted permission to the bank and the Banking Court which was seized of the suit for recovery, to continue and proceed with the proceedings, thus the Banking Court was justified in passing the and decree against the defendants Proceedings could not commence or proceed only against the defendant company, while the proceedings against the other persons arrayed in the suit as defendants in the capacity of guarantors/mortgagors/beneficiaries, apart from the company, could be commenced proceeded with and continued even without the leave of the Court ¬Directors/guarantors had failed to make out a case calling for interference by High Court in exercise of its appellate jurisdiction in the and decree passed by Banking…

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