| Case ID |
323aff15-bbca-4b6f-a1db-387d2561e4e0 |
| Body |
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| Case Number |
Regular First Appeal No.454 of 2000 |
| Decision Date |
Jul 01, 2003 |
| Hearing Date |
Jul 01, 2003 |
| Decision |
The appeal was decided in favor of the respondent Modaraba, modifying the decree to exclude the excessive mark-up charged by the Modaraba. The court held that the appellant was not liable to pay the additional mark-up amounting to Rs.5,22,365 for the period between the expiry of the Morabaha facility and the date of the filing of the suit. The final decree was reduced to Rs.15,00,000, with agreed mark-up from the date of filing of the suit till realization. The Modaraba Tribunal's decision to award compensation pendente lite was upheld, as it was deemed justified due to the breach of agreement by the appellant. |
| Summary |
In this landmark case from the Lahore High Court, the legal principles surrounding the Modaraba Companies and Modarabas (Floatation and Control) Ordinance were explored. The appellant, having taken a Morabaha facility, challenged the excessive mark-up charged by the respondent Modaraba. The court found that the additional interest charged was impermissible under the relevant laws governing Modaraba operations. This decision is significant for financial institutions and borrowers alike, clarifying the boundaries of permissible charges under Morabaha agreements. The precedent set in this case underscores the importance of adhering to statutory provisions, thereby protecting borrowers from unlawful interest claims. The ruling serves as a crucial reference for future disputes involving Modaraba financing, particularly in the context of excessive interest claims, thus enhancing the legal landscape for financial transactions in Pakistan. |
| Court |
Lahore High Court
|
| Entities Involved |
Modaraba Tribunal,
FIRST PUNJAB MODARBA
|
| Judges |
MIAN SAQIB NISAR,
JAWWAD S. KHAWAJA
|
| Lawyers |
Rana Muhammad Arshad Khan,
Muhammad Aqeel Malik
|
| Petitioners |
Not available
|
| Respondents |
FIRST PUNJAB MODARBA
|
| Citations |
2004 SLD 633,
2004 CLD 944
|
| Other Citations |
Not available
|
| Laws Involved |
Modaraba Companies and Modarabas (Floatation and Control) Ordinance (XXXI of 1980),
Civil Procedure Code (V of 1908)
|
| Sections |
25,
O.XXXVII, R.2
|