What are the powers of the Banking Courts?

Under Section 7 of the Financial Institution Ordinance 2001, Banking Courts would have all the powers vested in a Civil Court under the Code of Civil Procedure 1908 and at the same time also has all the powers of a criminal court which a Sessions Court possesses under the Criminal Procedure Code. Some of the inherent powers of the Banking Courts include power to recall, examine execution proceedings, powers in auction procedure, power to grant adjournment, interim relief, and extra territorial injunction. A banking court has power to summon witnesses for further cross examination, jurisdiction to determine fraud and misrepresentation and it also has powers to punish anyone who commits contempt of the court or any other offence under the provision of the law.

Section 9 of the financial Institution Ordinance 2001 specifies the procedure of the Banking Courts. Where a customer or a financial institution commits a default in fulfillment of any obligation with regard to any finance the financial institution or as the case maybe, the customer, may institute a suit in the Banking Court by presenting a plaint.

The plaint shall be supported by a statement of account which in the case of a financial institution shall be duly certified under the Bankers Book Evidence Act 1898 and all other relevant documents relating to grant of finance. Without a valid statement of account a suit of financial institution is liable to be dismissed. Legal presumption of correctness and truth lies with the statement of account however it can be questioned and challenged by the defendant with regards to its correctness and admissibility. The plaint must contain certain particulars which include the amount of finance availed, the amount paid back the outstanding amount etc.

After examing the correctness of the suit the court shall send notice\summons to the defendant who has by virtue of Section 10 of the Financial Institution Ordinance 2001 has thirty days to file a petition of leave to appear and defend the suit. In default of doing so the allegations of fact in the plaint shall be deemed to be admitted and the suit shall be decreed summarily. According to Section 10 application for leave to defend shall state the amount of finance availed by the defendant, the amount paid by the defendant, dates of payment, the total amount which in the view of the defendant is outstanding and the amount if any which the defendant disputes as payable.

Maryam Hayat

Author: Maryam Hayat

The writer is a Barrister working as an Associate for Kilam Law and is also a member of the Editorial Team at Courting the Law.