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

Section: 20

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)--S. 20(1)(b)---Suit for damages for shortage of pledged stock---Plaintiff/borrower claimed that defendant/Bank had misappropriated the pledged stock---Counsel for the plaints confined his argument only to the claim with regard to shortage of pledged stock worth US$ 37,750---Counsel for the defendant/Bank stated that plaintiff had based its claim on shortage of inventory; and that it was mentioned in Official Assignee's report that on account of Bank's letter though shortage was established, but that letter was never exhibited in the evidence---Validity-Where stocks pledged with the Bank were found to be missing or damaged, the liability solely would lay on the bank to compensate the borrower; however, in order to make Bank liable for any shortage, the burden was on the borrower to establish that there actually was any shortage---Borrower though had a right to seek documents in the custody of the Bank in order to establish shortage of pledged stock, but neither letter which was referred in the Official Assignee's report was produced, though it was with him, nor relevant record of the defendant/Bank was sought from the bank in order to establish any shortage in the pledged stocks---No evidence was available on record from which it could be established that there was any shortage of the inventory that was given under the care of the defendant/bank---Suit was dismissed in circumstances. 1988 CLC 1396 and 2005 CLD 1067 ref. JUDGMENT FAISAL ARAB, J.---The plaintiff has filed this suit for damages as it is claimed that the defendant has committed breach of contract and has also misappropriated the pledged stocks. The claim of the plaintiff was denied by the defendant/Bank in its written statement. Following issues were framed: (1) Whether the suit has been filed unauthorisedly and is liable to be rejected? (2) Whether the suit as framed is not maintainable? (3) Whether the suit has been filed without any cause of action and is liable to be dismissed? (4) Whether the defendant declined the TR facility after the execution of PRO-NOTE, fully secured and committed breach of contract, as also duly…

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