| Case ID |
0f80bb5b-4418-4450-90e9-1134a93abedf |
| Body |
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| Case Number |
First Appeal No.91 of 2002 |
| Decision Date |
Apr 01, 2004 |
| Hearing Date |
|
| Decision |
The appeal was directed against the judgment and decree of the Banking Court, which had decreed a suit for recovery of Rs.1,73,00,595 in favor of the respondent, with costs and cost of funds at 8% from the date of default. The main grievance of the appellant was regarding the awarding of costs of funds, which they contended could not be awarded to the customer. The court found that under section 3(2) of the Financial Institutions (Recovery of Finances) Ordinance, the benefit of cost of funds was only extended to financial institutions and not to customers. Consequently, the court set aside the award of costs of funds in favor of the respondent but remanded the case back to the Banking Court to determine if the respondent was entitled to any further sums towards compensation, mark-up, or interest from the date of default. |
| Summary |
This case revolves around the appeal by Long Term Venture Capital Modaraba against the Banking Court's decree favoring State Life Insurance Corporation of Pakistan for the recovery of a significant amount due to default in financial obligations. The primary legal question considered was whether the Banking Court had the authority to award costs of funds to the respondent customer under the Financial Institutions (Recovery of Finances) Ordinance, 2001. The judgment clarified that the law only allows financial institutions to claim such costs, thereby setting a precedent for future cases involving financial recovery disputes. The decision emphasizes the importance of understanding obligations under financial contracts and the limitations of claims that can be made by customers in default. This case is crucial for legal professionals and financial institutions as it delineates the boundaries of legal recourse available to them in financial recovery scenarios. |
| Court |
Sindh High Court
|
| Entities Involved |
STATE LIFE INSURANCE CORPORATION OF PAKISTAN,
LONG TERM VENTURE CAPITAL MODARABA
|
| Judges |
ANWAR ZAHEER JAMALI,
S. ALI ASLAM
|
| Lawyers |
Muhammad Rashid Khan,
Sultan A. Allana
|
| Petitioners |
Messrs LONG TERM VENTURE CAPITAL MODARABA
|
| Respondents |
Messrs STATE LIFE INSURANCE CORPORATION OF PAKISTAN
|
| Citations |
2005 SLD 1538,
2005 CLD 122
|
| Other Citations |
Not available
|
| Laws Involved |
Financial Institutions (Recovery of Finances) Ordinance, 2001
|
| Sections |
3,
17,
21
|