Law:

Section:

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001) Ss.18 & 22 Documents on record revealed that three separate loan accounts were being maintained by the three Sponsor Directors of Company in their respective names and they were separately disbursed the amount of facility by the Bank and that they had also signed and executed separate agreement and security documents for respective facility allowed to them Contention of the defaulting Director was that all three accounts be considered as one transaction and the payment made against such three transactions be considered as payment of total dues to the Bank and Bank having received amount in excess to what was found due in settling the account of one of the Directors, the Director in default was entitled to adjustment from said excess payment in the account of other Director Validity Held, three accounts of the Sponsor Directors could not be considered as one transaction and that one Director was not entitled to adjustment from the alleged excess payment in the account of one Director Bank had not filed suit against the said other Director and there was no lis before the Court in respect of her loan No principle of law existed on the basis of which the amount in one account could be transferred for the settlement of another account more so when conscious payments had been made in specific account. (b) Financial Institutions (Recovery of Finances) Ordinance(XLVI of 2001) Ss.9 & 22 Facility of finance, in the present case, was granted for a period of six months which as per Bank's own pleadings was maturing on 16 6 1994 and the amount payable on maturity by the borrower to be the Bank was to Rs.3, 759, 795 inclusive of all charges Breakup of the account filed by the Bank showed that the Bank had continued to charge mark up beyond the agreed period and it also reflected charging of mark up over mark up--- Validity Held, charging of mark up beyond agreed period and mark up over mark up were not allowed by law, similarly no extension roll over or renewal was allowed law without actual disbursement and such extension, over or renewal was without consideration and thus void. Textile…

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