Messrs LYALLPUR OIL & GENERAL MILLS And 6 Others vs HABIB BANK LIMITED
This civil appeal arose from a leave to appeal petition challenging the judgment of the Lahore High Court, which dismissed the appellants' appeal against a Banking Court's decree for the recovery of a loan amount. The High Court's dismissal was based on the appellants' failure to comply with the mandatory pre-deposit requirement under Section 9 of the Banking Tribunals Ordinance, 1984. The core legal question was whether the existence of mortgaged property securing the loan could substitute for the statutory requirement of depositing the decretal amount to entertain an appeal. The Supreme Court of Pakistan held that unlike preceding banking laws, the Banking Tribunals Ordinance, 1984 contains no provision allowing the substitution of the decretal amount deposit with alternative security such as a mortgage. Consequently, the Supreme Court affirmed the High Court's decision, establishing that the deposit of the decretal amount is an absolute statutory precondition for the entertainment of an appeal under the Ordinance.
- Whether the deposit of the decretal amount under Section 9 of the Banking Tribunals Ordinance, 1984 is a mandatory precondition for the entertainment of an appeal?
- Can a mortgage of property serve as sufficient security to bypass the requirement of depositing the decretal amount under the Banking Tribunals Ordinance, 1984?
- Does the Banking Tribunals Ordinance, 1984 allow courts the discretion to accept alternative security instead of the decretal amount for entertaining an appeal?
- Section 9, Banking Tribunals Ordinance 1984
MUNIR A. SHEIKH, J. - Leave to appeal is sought against the judgment dated 11.12.1995 of the Lahore High Court through which the appeal filed by the appellants under Section 9 of the Banking Tribunals Ordinance, 1984 against the judgment dated 17.7.1995 of the Banking Court decreeing the suit of the respondent-Bank for the recovery of the loan amount has been dismissed on account of noncompliance of the provisions of Section 9 of the Ordinance as regards payment of the decretal amount for entertainment of the appeal.
2. The facts of the case in brief are that the respondent-Bank filed a suit against the appellants for the recovery of specific amount which was advanced to it (appellants) as loan alongwith mark-up.
Lt was decreed in favour of the respondent-Bank against which the appellants filed appeal under Section 9 of the Banking Tribunals Ordinance, 1984. This provision of the Ordinance provides that no appeal shall be entertained unless the appellants had deposited the decretal amount in the Court.
When the appeal came up for hearing before a Division Bench of the High Court, it transpired that the appellants had not deposited the decretal amount as required by this provision of law, as such, the appeal could not be entertained that it was dismissed as such through judgment dated 11.12.1995 against which this appeal by leave has been directed.
3. Learned counsel for the appellants reiterated his arguments as raised before the High Court that the loan amount had been secured by mortgaging the property of the appellants, therefore, there was no need to require the appellants to deposit the decretal amount as the said mortgage was sufficient security for the recovery of the decretal amount.
4. This argument has been repelled adequately by the High Court by observing that in the law enforceable preceding the Banking Tribunals Ordinance, 1984, there was a provision that instead of requiring the appellants to deposit the decretal amount, adequate security could be ordered to be provided but there is no such provision in the Banking Tribunals Ordinance, 1984 and the appellants were required to deposit the decretal amount.
5. The impugned judgment of the High Court does not suffer from any illegality, therefore, this appeal is without any merits which is accordingly dismissed leaving the parties to bear their own costs.