| Case ID |
371feb86-556c-46cf-a701-4435da7a03c6 |
| Body |
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| Case Number |
B-31 of 2001 |
| Decision Date |
Jul 21, 2014 |
| Hearing Date |
May 22, 2014 |
| Decision |
The court ruled in favor of the plaintiff, Union Bank Limited, asserting that the defendant, Refrigerators Manufacturing Company Pakistan Limited, was not liable for the repayment of the loan as it had no direct relationship with the bank and had not executed any guarantee. The evidence showed that the financial facilities were availed by another company, which was the real beneficiary of the loans. The judgment emphasized the need for banking institutions to obtain personal guarantees from directors in such financial arrangements. The claim for recovery of amounts was substantiated, leading to a decree against the primary borrower. The ruling highlighted the importance of contractual obligations and the definitions of customer and beneficiary under the relevant banking laws. |
| Summary |
The case involves Union Bank Limited filing a suit against Refrigerators Manufacturing Company Pakistan Limited for recovery of loans under the Banking Companies Act. The court found that the defendant was not the real beneficiary of the loans and had no obligation to repay the bank. The decision underscored the critical nature of establishing a clear contractual relationship between banks and their clients, emphasizing that banks must ensure proper guarantees are obtained from directors. The judgment serves as a significant precedent in banking law, particularly regarding guarantees and the definitions of customer and beneficiary, which are crucial for financial institutions to understand in order to safeguard their interests. This case is essential for banking professionals and legal experts in the field, highlighting the nuances of financial agreements and the liabilities they entail. Trending keywords include 'banking law', 'financial recovery', 'loan agreements', and 'legal obligations'. |
| Court |
Sindh High Court
|
| Entities Involved |
UNION BANK LIMITED,
REFRIGERATORS MANUFACTURING COMPANY PAKISTAN LIMITED
|
| Judges |
AZIZ-UR-REHMAN, J
|
| Lawyers |
M. Umer Soomro,
Ms. Humayon Paracha,
Khawaja Mansoor,
Ms. Nida Raees
|
| Petitioners |
UNION BANK LIMITED
|
| Respondents |
,
REFRIGERATORS MANUFACTURING COMPANY PAKISTAN LIMITED
|
| Citations |
2015 SLD 1467,
2015 CLD 269
|
| Other Citations |
Lalchand and 2 others v. Officer on Special Duty, Federal Land Commission and 3 others 1984 CLC 2396,
Sardar Abdul Ghafoor Khan and 3 others v. The Federal Land Commission, Islamabad PLD 1979 Lah. 375,
Banque Brussels Lambert SA v. Australian National Industries Ltd. 1989 21 NSWLR 502,
Pak American Fertilizers Ltd. Mianwali v. Amir Abdullah Khan and another 1984 CLC 2170,
Merican Express Bank Ltd. v. Adamjee Industries Limited 1995 CLC 880,
National Bank of Pakistan v. S.G. Fibre Ltd. and others 2004 CLD 689,
Procter and Gamble Pakistan (Pvt.) Ltd., Karachi v. Bank Al-Falah Limited, Karachi and 2 others 2007 CLD 1532
|
| Laws Involved |
Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act
|
| Sections |
2(d),
9
|