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

Section: 15

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---S.15---Sale of mortgaged property--Analysis of S.15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. An analysis of S.15, Financial Institutions (Recovery of Finances) Ordinance, 2001 gives a clear inference that:-- (i) The provision is invoked against the mortgagor for recovery of mortgage money, which includes finance, penalties, damages, charges or pecuniary liabilities. In case of default in payment by customer/mortgagor the Financial Institution can proceed for the sale of the mortgaged property, after serving three notices upon him (mortgagor). (ii) By issuance of notice of demand, the power of mortgagor regarding collection of rents and profits vests with Financial Institution. (iii) Financial Institution, after issuance of notice and in the event of non-payment in response thereto, can proceed to sell the mortgaged property without intervention of Court. (iv) Financial Institution is entitled to:- (a) participate in auction; (b) purchase mortgaged property; (c) take its possession; (d) apply to the Banking Court to be put in possession of mortgaged property, if there is resistance by mortgagor; (e) execute sale deed and get it registered; (f) transfer the mortgaged property without encumbrance; (g) adjust all expenses of sale; and (h) distribute sale proceeds amongst the mortgagees and pay to the mortgagor surplus, if any. (v) Financial Institution is required to file accounts and disputes relating to mortgage and the detail of distribution of the proceeds amongst the mortgagees are to be resolved by the Banking Court. An embargo has been placed on the powers of the Banking Court and also of the High Court, to issue or grant injunction restraining sale, unless the Court is satisfied that no mortgage has been created or mortgage money has been paid or the same is deposited in the Banking Court. (b) Banker and customer--- ----Statement of account cannot be taken as gospel's truth and not sufficient to prove the claim of the Bank; the presumption of correctness attached to its entries is rebuttable and corroboration is necessary. Messrs Muhammad Siddiq…

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