This bill made amendments to eight different sections of the Ordinance, but made the most substantial changes to Section 15, adding three subsections, and significantly changing the language of at least two subsections. A borrower is one who has signed a legally binding and valid agreement, and secured payment of the money against specified immovable property. Services & General Administration Department (Regulations Wing) has issued letter to The Section Officer (E-III), Government of Punjab, Irrigation Department regarding Clarification Implementation Lahore High Court Judgment Regarding Regularization 17-Rule Employees. According to Siddiqui, an appeal is expected to be drafted this very week. This particular rule went against Article 24 of the constitution, which protects property rights, and is contrary to the spirit of competitive bidding. Copyright © 2020. ASSOCIATION OF PAKISTAN VS FOP.ETC.) The borrower could also exercise the right of redemption of property, subject to the payment of the outstanding loan amount. According to Raja, the court system in Pakistan is a long and laborious process, in which cases would often be heard eight to ten years later. A Lahore High Court bench suspended enforcement of the newly reconstituted Section 15 of the law while the matter was under litigation at the court. You have entered an incorrect email address! “The key motivation behind this was that the bank should feel more confident and have the security that they will be able to enforce this fairly and efficiently, and not have to go to the court system.”. This would significantly reduce the banks’ risks, and thereby make it easier for them to lend to consumers. No decision taken by a high court is binding, as it is by the Supreme Court. Case No. At its heart, the law was designed to address a fundamental problem that drives at the core of banking: how to enforce a loan contract against a borrower who has defaulted on their loan payment obligations, and how to do so cheaply, and efficiently? breaks down the judgement reading, and spoke to both petitioners and defendants about the case to learn more. ICA No.77347/2017 Province of Punjab Versus. But it is a fight that Raja is prepared for. Make matters too easy for the lender, and you open up the possibility of the lender engaging in highly exploitative behaviour with the borrower, and with a reduction in the demand for loans over time. Under Subsection 13, a banking court could grant an injunction to restrain the sale of a property, under certain conditions. An appeal really just depends on whether the individuals and petitioners in question have deep enough pockets to keep going forward. Business, Economic & Financial news by 'Pakistan Today'. Editors: Zaman Khan I Jawad Zulfiqar I Muhammad Faran Bukhari l Abdullah Niazi I Mariam Zermina I Ahmad Saad I Tender Notice - For Stainless Steel Benches, Air Conditioners, Electric Water Cooler, CCTV Cameras and Accessories etc. For instance, the bank must have loan defaults and amounts verified by a chartered accounting firm, the cost of which will be paid for by the bank. The borrower makes contractual promises and commitment with the lender (the bank). Delayed cases of defaulting borrowers often mean a higher chance of a favorable settlement goes up. The 2001 Financial Institutions (Recovery of Finances) Ordinance came into force in the early years of the Musharraf Administration, when then-Finance Minister Shaukat Aziz was seeking to update Pakistan’s regulatory structure to make credit markets in the country function better. The only problem was that the Asian Development Bank (ADB) was unwilling to give loans for this project without some kind of reassurance with regard to Pakistani law. Judgments Approved for Reporting by Sitting Judges; Judgments Approved for Reporting by Former Judges; Green Bench Orders; School Security Orders; Green Bench Notifications; District Judiciary; ADR Centre; Commercial & Overseas Cell; 150 Years Celebrations But the court agreed with the defence that the new Section 15 had explicit and conspicuous remedies, in particular, Subsections 13, 14, and 15. As the court noted, both Section 15 and the Rules referred to a “public auction”. Any decision taken by the Lahore High Court, can be appealed in the Supreme Court of Pakistan. According to the government, Section 15 was reenacted precisely to curb this ‘menace’ that was having a significant effect on the economy. Why was the law promulgated in the first place, and why was it challenged? This was confirmed by Raja, who said that the ADB, and even the World Bank, had been waiting to give money to the housing sector, but were waiting on a concrete decision by our courts. The third issue was one of the court’s standing: could the Lahore High Court even rule on the matter, given the fact that the Supreme Court had previously ruled on the older draft of the law and had ruled it unconstitutional (the initial 2013 judgement). very public. And it did so despite setting for itself a relatively high standard to meet with respect to what would constitute adequate protections for borrowers: Did the remedies in the rewritten Section 15 provide enough rights to the borrower, “both prior to the conduct of sale and, in particular, after the fall of the hammer?”, the court asked. 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