| Case ID |
2bd715a2-02f7-4ea2-bffd-8ad1b5a69f16 |
| Body |
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| Case Number |
Constitutional Petition No.D 1491 and Miscellaneou |
| Decision Date |
Jul 30, 2001 |
| Hearing Date |
|
| Decision |
The Sindh High Court ruled that the directive issued by the State Bank of Pakistan was without lawful authority and set aside the order. The court found that the directive did not adequately justify its public interest claim and was contrary to the interests of depositors. The decision emphasized that directives under section 41 of the Banking Companies Ordinance must safeguard depositor interests and cannot be detrimental to them. This ruling underscores the legal boundaries of regulatory authority exercised by the State Bank over commercial banking operations. |
| Summary |
This case involves the legality of directives issued by the State Bank of Pakistan under section 41 of the Banking Companies Ordinance, 1962. The petitioner, Universal Leasing Corporation Ltd., challenged the directive that prohibited withdrawals from its accounts without prior permission from the State Bank. The High Court found that the directive lacked a clear public interest rationale and was detrimental to depositors. The ruling highlighted the importance of regulatory compliance and the necessity for directives to align with depositor protections. The court's decision serves as a critical precedent in banking law, reinforcing the need for lawful authority in regulatory actions and safeguarding the interests of depositors. This case is significant for stakeholders in the banking sector, including depositors and financial institutions, emphasizing the need for transparency and accountability in banking regulations. |
| Court |
Sindh High Court
|
| Entities Involved |
Bank of Ceylon,
Metropolitan Bank Limited,
Prudential Commercial Bank Limited
|
| Judges |
S.A. Rabbani,
M. Musa K. Leghari
|
| Lawyers |
Kamal Azfar,
Ijaz Ahmed
|
| Petitioners |
Universal Leasing Corporation Ltd.
|
| Respondents |
State Bank of Pakistan
|
| Citations |
2002 SLD 2076,
2002 CLD 102
|
| Other Citations |
Not available
|
| Laws Involved |
Banking Companies Ordinance, 1962,
Constitution of Pakistan, 1973
|
| Sections |
41,
199
|