LUCKY TEX (PVT.) LIMITED vs CRESOX (PVT — 2025 CLD 561 KARACHI-HIGH-COURT-SINDH

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LUCKY TEX (PVT.) LIMITED VS CRESOX (PVT.) LTD. S.23---Contract Act (IX of 1872), S. 23---Civil Procedure Code (V of 1908), O.VII, R.11---Specific Relief Act (I of 1877), S. 12---Suit for specific performance of agreement to sell---Rejection of plaint---Mortgaged property---Transfer of assets---Restrictions---Plaintiff company sought specific performance of agreement to sell regarding suit properties which were mortgaged with bank as security for a finance facility---Defendant company sought rejection of plaint on the plea that the suit was not maintainable---Validity---Provision of S. 23 of Financial Institutions (Recovery of Finances) Ordinance, 2001, did not operate retrospectively and transfers that occurred prior to promulgation of Financial Institutions (Recovery of Finances) Ordinance, 2001 were not to be treated as void---General restraints as contained in Ss. 23(1) & 23(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 could only set aside those registered transfers that had violated provisions of each of those subsections---Properties that were not furnished as security were not impacted by S. 23(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 prior to any decree passed and were valid transfers---Agreement of sale instituted for sale of a mortgaged property would be void under S. 23 of Contract Act, 1872 as the object of agreement of sale would be to defeat the provision of law i.e., S. 23 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Right of redemption may be recognized in the context of transfers subject to S. 23 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Jurisdiction to determine performance of agreement to sell as entered into between parties, in terms of Ss. 23(1) & 23(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 at all times vested with Banking Court and Civil Court did not have the requisite jurisdiction to entertain such suit---Plaint seeking specific performance of agreement to sell was barred under the provisions of Ss. 23(1) & 23(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 and was liable to be rejected under the provisions of O.VII, R. 11(d), C.P.C.---High Court rejected the plaint seeking specific performance of agreement to sell under O. VII, R. 11(d), C.P.C. as jurisdiction to consider the performance on the agreement of sale in respect of mortgaged property vested in Banking Court under Ss.23(1) & 23(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Plaint was rejected in circumstances.

LUCKY TEX (PVT.) LIMITED vs CRESOX (PVT — 2025 CLD 561 KARACHI-HIGH-COURT-SINDH

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