Law: Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997

Section: 9

(Islamic Jurisprudence)]........Banking---Term "Bai Muajjal" or "Morabaha agreement" ---Connotation-­In such agreement the sale is made to customers and repayment thereof is deferred---Such deferment is nothing but a debt (credit) payable by the borrower to the Bank. Muwatta Imam Malik by Noor Muhammad, Karachi, p.613; HBFC v. Rana Muhammad Sharif SLR 515 and Dr. Muhammad Aslam Khaki and others v. Syed Muhammad Hashim and others PLD 2000 SC 225 ref. (b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)--S. 9---Recovery of Bank loan---Loan agreement---Non-disbursement of money under agreement---Excise duty and other charges included in liability---Two agreements were signed by the borrower---Amount was disbursed under the earlier agreement while under the latter agreement no money was disbursed by the borrower---Bank claimed recovery of the amount under the subsequent agreement---Validity---Debt had been created under the earlier agreement and that upon the debt having been created by earlier agreement no further increase in any manner could be made---Where no amount was disbursed under the subsequent agreement, the agreement did not contemplate continuation of the earlier agreement---Subsequent agreement was not a valid agreement and the same could not be looked into ---All credits and debits made by the earlier agreement would be looked into and en into blunt-_-Amount excise duty and other charges were included in the liability against the borrower---Suit was decreed accordingly. (c)Contract Act (IX of 1872)--- ----S. 23---Contract against public policy---Administration of justice---What could not be done directly, could not be done indirectly and no agreement against public policy was a valid contract. ORDER Upon refusal to grant leave to defend the suit. I had directed by order dated 22-11-2000 the parties to file the details of the amount actually withdrawn and the amount actually paid from the date when the agreement was first entered into. Both the counsel have filed their relevant statements of accounts. Mr. Ainuddin Khan in the statement of account has stated that the principal amount as on 26-7-1992 being the…

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