| Case ID |
2a0f56b1-9ba7-48d5-bcf0-9bfd67eff625 |
| Body |
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| Case Number |
Civil Appeal No.17-K of 2011 |
| Decision Date |
Feb 27, 2013 |
| Hearing Date |
|
| Decision |
The appeal was dismissed, affirming the High Court's judgment that allowed the recovery of compound interest as per the agreement between the parties. The court emphasized that the State Bank of Pakistan's BCD Circulars do not displace the legislative framework governing loan recoveries. The amalgamation of loans into one with a provision for compound interest was upheld, as it was voluntarily agreed upon by both parties. The court clarified that the BCD Circulars provided guidelines but did not negate the enforceability of contracts made under previous agreements, particularly regarding interest on loans. |
| Summary |
This case revolves around a dispute between the Industrial Development Bank of Pakistan (IDBP) and its borrower regarding the recovery of loans with respect to interest rates stipulated in their agreements. The Supreme Court of Pakistan addressed the legal implications of the State Bank of Pakistan's circulars, particularly the BCD Circulars, and their binding nature on financial institutions. The court ruled that the State Bank's guidelines do not override the legal agreements made between banks and their clients. The decision clarified that loans amalgamated with a compound interest agreement are enforceable, highlighting the importance of contractual obligations in financial dealings. The ruling is significant for banking law, loan recovery processes, and the regulatory landscape impacting financial institutions in Pakistan. This case serves as a precedent for future disputes involving banking agreements and the interpretation of regulatory directives. Keywords such as 'banking law', 'loan recovery', 'financial regulations', and 'compound interest' are relevant for understanding the legal context and implications of this ruling. |
| Court |
Supreme Court of Pakistan
|
| Entities Involved |
Not available
|
| Judges |
ANWAR ZAHEER,
JAMALI,
SARMAD JALAL OSMANY,
GULZAR AHMED
|
| Lawyers |
Akhtar Husain, Advocate Supreme Court,
K.A. Wahab, Advocate-on-Record for Appellant,
A.I. Chundrigar, Advocate Supreme Court,
A.S.K. Ghori, Advocate-on-Record for Respondents
|
| Petitioners |
AZAM WAZIR KHAN
|
| Respondents |
Akhtar Husain,
K.A. Wahab,
A.I. Chundrigar,
A.S.K. Ghori
|
| Citations |
2013 SLD 2116 = 2013 CLD 974
|
| Other Citations |
Hashwani Hotels Limited v. Federal of Pakistan and others PLD 1997 SC 315,
Qamaruzaaman Khan v. Industrial Development Bank of Pakistan and others 2009 CLD 460,
Mushtaq Ahmed Vohra v. Crescent Investment Bank Limited 2005 CLD 444,
Messrs Dadabhoy Cement Industries Ltd. and 6 others v. National Development Finance Corporation, Karachi (PLD 2002 SC 500)
|
| Laws Involved |
State Bank of Pakistan Act (XXXIII of 1956),
Banking Companies Ordinance (LVII of 1962),
Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)
|
| Sections |
9A,
25,
29
|