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AL BARAKA BANK PAKISTAN LIMITED vs EDEN HOUSING LIMITED Ss — 2024 CLD 852 LAHORE-HIGH-COURT-LAHORE

Case information

Citation
2024 CLD 852 LAHORE-HIGH-COURT-LAHORE
Court
Lahore High Court
Year
2024
Reporter
CLD
Parties
AL BARAKA BANK PAKISTAN LIMITED vs EDEN HOUSING LIMITED Ss
Subject matter
Civil
Provisions referred to
S. 2; S. 3

Fields are extracted from the reported citation and judgment text. Where a detail is not stated in the record, it is not shown.

Judgment text as reported

AL BARAKA BANK PAKISTAN LIMITED VS EDEN HOUSING LIMITED Ss. 2(d), 3, 9 & 10---Suit for recovery filed by the bank against the borrower /company and its directors/guarantors---Late payment charges /charity , recovery of---Penalty---Scope---Argument of the defendants was that amount of Rs.65,716,498 as late payment charges was not recoverable by the bank---Validity---Perusal of relevant clause of the "Master Murabaha Finance Agreement" (having been relied upon by the plaintiff/bank itself to justify late payment charges) showed that where amount payable by the customer under the principal documents was not paid by a specific date or within a week of the demand, the said amount be paid by the customer as charity @ 18% to the bank for donation by the bank on behalf of the customer for charity purposes---Such amount of charity claimed by the bank/plaintiff was not covered under the finance facility under S.2(d) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ('the Ordinance 2001 ') as said amount was merely a penalty, which was not permissible under the law---Charity or gift is something the doner gives or grants with his free will and can not be recovered as compulsion---Thus, the amount claimed as late payment charges / charity by the bank/plaintiff was declined---After excluding the amount claimed as late payment charges by the bank / plaintiff , suit was decreed in favour of plaintiff / bank and against defendants jointly and severally together with costs and cost of funds as contemplated by S.3 of the Ordinance, 2001.

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