SME BANK LIMITED vs PUNJAB STORE S — 2022 CLD 251 LAHORE-HIGH-COURT-LAHORE

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SME BANK LIMITED VS PUNJAB STORE S. 3--- Mandatory nature--- Interpretation of statutes--- Strict adherence---Scope---Section 3 of Financial Institutions (Recovery of Finances) Ordinance, 2001 being mandatory in nature, was required to be strictly adhered to/followed/enforced without interpreting/construing the same in any manner liberally. Ss. 3 & 9---Suit for recovery---Running Finance Facility with multiple renewal/enhancement was availed by respondents---Banking Court held the suit infructuous and disentitled appellant/Bank---Validity---Record showed default on the part of respondents in repayment of obligations within stipulated time whereupon Banking Court was obliged to pass decree to that effect and grant cost of funds as per law---Default in discharge of such obligation not only incurred the cost of funds under S. 3(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, but was also actionable under S. 9 of the Ordinance---Appeal was allowed and appellant's suit was decreed to the extent of cost of funds from the date of default till the date of realization to be determined/calculated by Banking Court as per law. Mandatory provisions--- When a statute would create rights/ obligation and prescribed the mode of its enjoyment of enforcement, such provision was considered mandatory and that the Legislature intended compliance of such provision to be essential to the validity of the act/proceedings. S. 3---Banking court, power/duty of---Section 3 of Financial Institutions (Recovery of Finances) Ordinance, 2001, was not procedural in nature as the same imposed pecuniary burden on defaulting customer and entailed substantive obligation---Banking Court had been empowered to award cost of funds as compensation to financial institution for finance blocked/stuck up due to breach in the fulfillment of obligation by customer, after determining the date of default.

SME BANK LIMITED vs PUNJAB STORE S — 2022 CLD 251 LAHORE-HIGH-COURT-LAHORE

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