| Case ID |
395f7e46-c68b-4bec-8bda-984dfbc5445d |
| Body |
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| Case Number |
Writ Petition No.18196 of 2002 |
| Decision Date |
Dec 23, 2008 |
| Hearing Date |
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| Decision |
The Lahore High Court examined the constitutionality of Section 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, which allows financial institutions to sell mortgaged properties without court intervention upon default. The court found that the provisions of this law were discriminatory, as they conferred undue advantages to financial institutions over mortgagors, thereby violating fundamental rights outlined in the Constitution. The court noted that the process of recovery through auction without judicial oversight is contrary to principles of equity and justice. Consequently, the court ruled that Section 15 is ultra vires the Constitution, as it undermines due process and access to justice for mortgagors, leading to arbitrary actions by financial institutions. |
| Summary |
In the case of Writ Petition No.18196 of 2002, the Lahore High Court addressed significant legal issues surrounding the Financial Institutions (Recovery of Finances) Ordinance, 2001, particularly Section 15. This section permits financial institutions to auction mortgaged properties without judicial oversight if the mortgagor defaults on payments. The court highlighted that such provisions violate the fundamental rights guaranteed by the Constitution, particularly the right to due process and equal protection under the law. The ruling emphasized the need for transparency and fairness in banking transactions, criticizing the lack of safeguards for borrowers. The decision has implications for banking law and the treatment of borrowers, stressing the importance of judicial intervention in protecting citizens' rights against potential exploitative practices by financial institutions. This ruling is crucial for maintaining a balance between the interests of financial institutions and the rights of consumers, reaffirming the judiciary's role in upholding justice in financial matters. |
| Court |
Lahore High Court
|
| Entities Involved |
Not available
|
| Judges |
SAYED ZAHID HUSSAIN, CHIEF JUSTICE,
SYED HAMED ALI SHAH, JUSTICE,
SYED ASGHAR HAIDER, JUSTICE
|
| Lawyers |
Not available
|
| Petitioners |
MUHAMMAD UMER RATHORE
|
| Respondents |
FEDERATION OF PAKISTAN
|
| Citations |
2009 SLD 146,
2009 CLD 257
|
| Other Citations |
Messrs Muhammad Siddiq Muhammad Umar v. The Australasia Bank Ltd. PLD 1966 SC 684,
Allied Bank of Pakistan v. Masood Ahmad Khan 1994 MLD 1557,
Citi Bank N. A. A Banking Company through Attorney v. Riaz Ahmad 2000 CLC 847,
Messrs United Dairies Farms (Pvt.) Limited 4 others v. United Bank Limited 2005 CLD 569
|
| Laws Involved |
Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)
|
| Sections |
15
|