Financial Institutions (Recovery of Finances) Ordinance, 2001

Exact source transcription retained, including print layout and extraction artifacts. Text SHA-256: 04a19dffbe7d67aeb9d50b5f743a686c8023e025f33e5b0a188f39f55e4e5c18.

Page 1 of 21  
 
 
 
THE FINANCIAL INSTITUTIONS (RECOVERY OF 
FINANCES) ORDINANCE, 2001 
 
 
 
 
 
 
                       CONTENTS 
 
                                             __________________ 
 
SECTIONS: 
1. Short title, extent and commencement. 
2. Definitions. 
3. Duty of a customer. 
4. Ordinance to override other laws. 
5. Establishment of Banking Court. 
6. Resignation and removal of Judges. 
7. Powers of Banking Courts. 
8. Suit for recovery of written off finances etc. 
9. Procedure of Banking Courts. 
10. Leave to defend. 
11. Interim Decree. 
12. Power to set aside decree. 
13. Disposal of suit. 
14. Decree in suits relating to mortgages. 
15. Sale of mortgaged property. 
Updated till 15.12.2021 

 
Page 2 of 21  
16. Attachment before judgment, injunction and appointment of Receivers. 
17. Final Decree. 
18. Banking Documents. 
19. Execution of decree and sale with or without intervention of Banking Court. 
20. Provisions relating to certain offences. 
21. Application of fines and costs. 
22. Appeal. 
23. Restriction on transfer of assets & properties. 
24. Application of the limitation Act, 1908 (Act IX of 1908). 
25. Power to make rules. 
26. Removal of difficulties. 
27. Finality of order. 
28. Indemnity. 
29. Repeal. 
 
Page 3 of 21  
THE FINANCIAL INSTITUTIONS (RECOVERY OF FINANCES) ORDINANCE, 2001 
ORDINANCE NO. XLVI OF 2001 
[30th August, 2001] 
 
An Ordinance to repeal, and, with certain modifications, re­enact, the Banking Companies 
(Recovery of Loans, Advances, Credits and Finances), Act, 1997 
WHEREAS it is expedient to repeal and with certain modifications, re­enact the Banking 
Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, for the purposes 
hereinafter appearing; 
 
AND WHEREAS the President is satisfied that circumstances exist which render it necessary 
to take immediate action; 
 
NOW, THEREFORE, in pursuance of the proclamation of Emergency of the fourteenth day 
of October, 1999 and Provisional Constitution Order No. I of 1999, read with the Prov isional 
Constitution (Amendment) Order No. 9 of 1999, and in exercise of all powers enabling him in that 
behalf, the President of the Islamic Republic of Pakistan is pleased to make and promulgate the 
following Ordinance:___ 
 
1. Short title, extent and commencement :___(1) This Ordinance may be called the Financial 
Institutions (Recovery of Finances) Ordinance, 2001. 
 
(2) It extends to the whole of Pakistan. 
 
(3) It shall come into force at once. 
 
2. Definitions. In this Ordinance, unless there is anything repugnant in the subject or context___ 
 
(a) “financial institution” means and includes___ 
 
(i) any company whether incorporated within or outside Pakistan which 
transacts the business of banking or any associated or ancillary business 
in Pakistan through its branches within or outside Pakistan and includes 
a government savings bank, but excludes the State Bank of Pakistan; 
 
(ii) a modaraba or modaraba management company, leasing company, 
investment bank, venture capital company, financing company, unit 
trust or mutual fund of any kind and credit or investment institution, 
corporation or company; and 
 
(iii) any company authorised by law to carry on any similar business, as the 
Federal Government may by notification in the official Gazette, specify; 
 
(b) “Banking Court” means___ 
 
  
 
Page 4 of 21  
(i) in respect of a case in which the claim does not exceed 1[hundred] 
million rupees or for the trial of offences under this Ordinance, the Court 
established under section 5; and 
 
(ii) in respect of any other case, the High Court. 
 
(c) “customer” means a person to whom finance has been extended by a financial 
institution 1[within or outside Pakistan] and includes a person on whose behalf 
a guarantee or letter of credit has been issued by a financial institution as well 
as a surety or an indemnifier; 
 
(d) “finance” includes___ 
 
(i) an accommodation or facility provided on the basis of participation in 
profit and loss, mark­up or mark­down in price, hire­purchase, equity 
support, lease, rent­sharing, li censing charge or fee of any kind, 
purchase and sale of any property including commodities, patents, 
designs, trade marks and copy­rights, bills of exchange, promissory 
notes or other instruments with or without buy­back arrangement by a 
seller, participation term certificate, musharika, morabaha, musawama, 
istisnah or modaraba certificate, term finance certificate; 
 
(ii) facility of credit or charge cards; 
 
(iii) facility of guarantees, indemnities, letters of credit or any other financial 
engagement which a financial institution may give, issue or undertake 
on behalf of a customer, with a corresponding obligation by the 
customer to the financial institution; 
 
(iv) a loan, advance, cash credit, overdraft, packing credit, a bill discounted 
and purchased or a ny other financial accommodation provided by a 
financial institution to a customer; 
 
(v) a benami loan or facility that is, a loan or facility the real beneficiary or 
recipient whereof is a person other than the person in whose name the 
loan or facility is advanced or granted; 
 
(vi) any amount due from a customer to a financial institution under a decree 
passed by a civil court or an award given by an arbitrator; 
 
2[(vii)]  any amount due from a customer to a financial institution which is the 
subject matter of any pending suit, appeal or revision before any court; 
 
2[(viii)  any amount of loan or facility availed by a person from a financial 
institution outside Pakistan who is for the time being resident in 
Pakistan;] 
 
2[(ix)]  any other facility availed by a customer from a financial institution. 
 
 
1Subs & ins by Act XXXVIII of 2016, s. 2. 
2Numbered and ins. by Act XXXVIII of 2016, s. 2. 
Page 5 of 23 
 
 
(e) “obligation” includes___ 
 
(i) any agreement for the repayment or extension of time in repayment of 
a finance or for its restructuring or renewal or for payment or extension 
of time in payment of any other amounts relating to a finance or 
liquidated damages; and 
 
(ii) any and all repres entations, warranties and covenants made by or on 
behalf of the customer to a financial institution at any stage, including 
representations, warranties and covenants with regard to the ownership, 
mortgage, pledge, hypothecation or assignment of, or other c harge on, 
assets or properties or repayment of a finance or payment of any other 
amounts relating to a finance or performance of an undertaking or 
fulfillment of a promise; and 
 
(iii) all duties imposed on the customer under this Ordinance; and 
 
(f) “rules” means rules made under this Ordinance. 
 
1[(g) “willful default”means___ 
 
(i) deliberate or intentional failure to repay any finance, loan, advance or 
any financial assistance received by any person from a financial 
institution after such payment has become due under the terms of any 
law or an agreement, rules or regulations issued by the State Bank of 
Pakistan; 
 
(ii) utilization of finance, loan, advance or financial assistance or a 
substantial part thereof, obtained by any person from a financial 
institution for a purpose other than that for which such finance, loan, 
advance or financial assistance had been obtained and payment in part 
or full not made to the financial institution; or 
 
(iii) removal, transfer, misappropriation or sale of any assets collateralized 
to secure a finance, loan, advance or financial assistance obtained from 
a financial institution without permission of such institution.] 
 
3. Duty of a customer. ___(1) It shall be the duty of a customer to fulfil his obligations to the 
financial institution. 
 
(2) Where the customer defaults in the discharge of his obligation, he shall be liable to pay, for 
the period from the date of his default till realization of the cost of funds of the financial institution as 
certified by the State Bank of  Pakistan from time to time, apart from such other civil and criminal 
liabilities that he may incur under the contract or rules or any other law for the time being in force. 
 
(3) For purposes of this section a judgment against a customer under this Ordinance shall mean 
that he is in default of his duty under sub­section (1) and the ensuing decree shall provide for payment 
of the cost of funds as determined under sub­section (2). 
 
4. Ordinance to override other laws . The provisions of this Ordinance shall ha ve effect 
notwithstanding anything inconsistent therewith contained in any other law for the time being in force. 
 
1Added by Act XXXVIII of 2016. s.2. 
Page 6 of 23 
 
 
5. Establishment of Banking Court. ___(1) The Federal Government may, by notification in 
the Official Gazette, establish as many Banking Courts as it considers necessary to exercise 
jurisdiction under this Ordinance and appoint a Judge for each of such Courts and where it establishes 
more Banking Courts than one, it shall specify in the notification the territorial limits within which 
each of the Banking Courts shall exercise its jurisdiction. 
 
(2) Where more Banking Courts than one have been established to exercise jurisdiction in the 
same territorial limits, the Federal Government shall define the territorial limits of each such court. 
 
(3) Where more Banking Courts than one have been established in the same or different 
territorial limits, the High Cou rt may, if it considers it expedient to do so in the interest of justice or 
for the convenience of the parties or of the witnesses, transfer any case from one Banking Court to 
another. 
 
1[(4) A Judge of a Banking Court shall be appointed by the Federal Gov ernment after 
consultation with the Chief Justice of the High Court of the Province in which the Banking Court is 
established and no person shall be qualified for appointment as the Judge of a Banking Court unless 
he is, or has been, or is qualified to be a District Judge.] 
 
(5) A Banking Court shall hold its sitting at such places within its territorial jurisdiction as may 
be determined by the Federal Government. 
 
(6) A Judge of a Banking Court, not being a District Judge, shall be appointed for a term of 
three years from the date on which he enters upon his office. 
 
2[(7) The salary, allowances and other terms and conditions of service of a person appointed 
as a Judge of a Banking Court shall be such as the Federal Government may determine.] 
 
(8) The Ba nking Court may, if it so requires, be assisted in technical aspects of banking 
transactions involved in any case by an amicus curiae who has at least ten years experience of banking 
at a senior management level in a Financial institution of repute or the State Bank of Pakistan and has 
the following qualifications, namely:___ 
 
(i) a degree in Commerce and Account or in Economics; or 
 
(ii) a degree in Business Administration; or 
 
(iii) has completed a course in banking from the Institute of Bankers, Pakistan. 
 
(9) Remuneration of the amicus curiae, and the party or parties by whom it will be payable will 
be determined by the Banking Court, keeping in view the circumstances of each case. 
 
1[(10) A Judge of a Banking Court shall submit to the Chief Just ice of the High Court of the 
Province in which the Banking Court is established, reports on a quarterly basis regarding the number 
of cases filed, heard and disposed of by the Banking Court during each relevant quarterly period.] 
 
6. Resignation and removal of Judges.___(1) A person, not being a District Judge, appointed 
as a Judge of a Banking Court under section 5 may, by notice in writing under his hand addressed to 
the Federal Government, resign from his office. 
 
 
1Subs. and added by Act XXXVIII of 2016 s. 3. 
2Subs. by the Financial Institut ions (Recovery of Finance s) (Amdt.) Ordinance, 2001 (51 of 2001), s. 2, for “sub­section (7) ”, (w.e.f. 
30­8­2001). 
Page 7 of 23 
 
 
(2) A person appointed as a Judge of a Banking Court under section 5 may be removed from 
office in consultation with the Chief Justice of the High Court. 
 
7. Powers of Banking Courts.___(1) Subject to the provisions of this Ordinance, a Banking 
Court shall___ 
 
(a) in the exercise of its civil jurisdiction have all the powers vested in a civil court 
under the Code of Civil Procedure, 1908 (Act V of 1908). 
 
(b) in the exercise of its criminal jurisdiction, try offences punishable under this 
Ordinance and shall, for this purpose have the same powers as are vested in a 
Court of Sessions under the Code of Criminal Procedure, 1898 (Act V of 1898): 
 
Provided that a Banking Court shall not take cognizance of any offence punishable under this 
Ordinance except upon a complaint in writing made by a person authorized in this behalf by the 
financial institution in respect of which the offence was committed. 
 
(2) A Banking Court shall in all matters with respect to which the procedure has not been 
provided for in this Ordinance, follow the procedure laid down in the Code of Civil Procedure, 1908 
(Act V of 1908), and the Code of Criminal Procedure, 1898 (Act V of 1898). 
 
(3) All proceedings before a Banking Court shall be deemed to be judicial proceedings within 
the meaning or sections 193 and 228 of the Pakistan Penal Code (Act  XLV of 1860), and a Banking 
Court shall be deemed to be a Court for purposes of the Code of Crimin al Procedure, 1898 (Act V of 
1898). 
 
(4) Subject to sub­section (5), no Court other than a Banking Court shall have or exercise any 
jurisdiction with respect to any matter to which the jurisdiction of a Banking Court extends under this 
Ordinance, including a decision as to the existence or otherwise of a finance and the execution of a 
decree passed by a Banking Court. 
 
(5) Nothing in sub­section (4) shall be deemed to affect___ 
 
(a) the right of a financial institution to seek any remedy before any court or 
otherwise that may be available to it under the law by which the financial 
institution may have been established; or 
 
(b) the powers of the financial institution, or jurisdiction of any court such as is 
referred to in clause (a); or 
 
 require the transfer to a Banking Court of any proceedings pending before any 
financial institution or such court immediately before the coming into force of 
this Ordinance. 
 
(6) All proceedings pending in any Banking Court constituted under the Banking Companies 
(Recovery of Loans, Advances, Credits or Finances) Act, 1997; (XV of 1997), including suits for 
recovery of “loans” as defined under that Act shall stand transferred to, or be deemed to be transferred 
to, and heard and disposed of by, the Banking Court having jurisdiction under this Ordinance. On 
transfer of proceedings under this sub­section,  the parties shall appear before the Banking Court 
concerned on the date previously fixed.  
(7) In respect of proceedings transferred to a Banking Court under sub­section (6), the Banking 
Page 8 of 23 
 
 
Court shall proceed from the stage which the proceedings had reached immediately prior to the transfer 
and shall not be bound to recall and re­hear any witness and may act on the evidence already recorded 
or produced before the Court from which the proceedings were transferred. 
 
8. Suit for recovery of written off finances etc. ___1[(1) Subject to s ub­section (2)  and 
notwithstanding anything contained in  the Limitation Act, 1908 ( IX of 1908 ) or any other law, a 
financial institution may, within five years, file a suit for the recovery of any amount written­off, 
released or adjusted under any agreement, contract, or consent, including a compromise or withdrawal 
of any suit or legal proceedings or adjustment of a decree between a financial institution and a 
customer, if it has reasons to believe that the amount was written­off, released or adjusted for political 
reasons or considerations other than bona fide business considerations.] 
 
9. Procedure of Banking Courts.___(1) Where a customer or a financial institution commits a 
default in fulfillment of any obligation with regard to any finance, the financial institution or, as the 
case may be, the customer, may institute a suit in the Banking Court by presenting a plaint which shall 
be verified on oath, in the case of a financial institution by the Branch Manager or such other off icer 
of the financial institution as may be duly authorized in this behalf by power of attorney or otherwise. 
 
(2) The plaint shall be supported by a statement of account which in the case of a financial 
institution shall be duly certified under the Bankers Books Evidence Act, 1891 (XVII of 1891), and 
all other relevant documents relating to the grant of finance. Copies of the plaint, statement of account 
and other relevant documents shall be filed with the Banking Court in sufficient numbers so that there 
is one set of copies for each defendant and one extra copy. 
 
(3) The plaint, in the case of a suit for recovery instituted by a financial institution, shall 
specifically state___ 
 
(a) the amount of finance availed by the defendant from the financial institution; 
 
(b) the amounts paid by the defendant to the financial institution and the dates of 
payment; and 
 
(c) the amount of finance and other amounts relating to the finance payable by the 
defendant to the financial institution upto the date of institution of the suit. 
 
(4) The provisions of section 10 of the Code of Civil Procedure, 1908 (Act  V of 1908), shall 
have no application for and in relation to suits filed hereunder. 
 
(5) On a plaint being presented to the Banking Court, a summons in Form No. 4 in Appendix 
‘B’ to the Code of Civil Procedure, 1908 (Act V of 1908) or in such other form as may, from time to 
time, be prescribed by rules, shall be served on the defendant through the bailiff or process­server of 
the Banking Court, by registered post acknowledgement due, by courier and by publication in one 
English language and one Urdu language daily newspaper, and service duly effected in any one of the 
aforesaid modes shall be deemed to be valid service for purposes of this Ordinance. In the case of 
service of the summons through the bailiff or process­server, a copy of the plaint shall be attached 
therewith and in all other cases the defendant shall be entitled to obtain a copy of the plaint from the 
office of the Banking Court without making a written application but against due acknowledgement. 
The Banking Court shall ensure that the publication of summons takes place in newspapers with a 
wide circulation within its territorial limits. 
 
 
1Subs. by Act XXXVIII of 2016, s. 4. 
Page 9 of 23 
 
 
10. Leave to defend.___(1) In any case in which the summons has been served on the defendant 
as provided for in sub­section (5) of section 9, the defendant shall not be entitled to defend the suit 
unless he obtains leave from the Banking Court as hereinafter provided to defend the same; and, in 
default of his doing so, the allegations of fact in t he plaint shall be deemed to be admitted and the 
Banking Court may pass a decree in favour of the plaintiff on the basis thereof or such other material 
as the Banking Court may require in the interests of justice. 
 
(2) The defendant shall file the application for leave to defend within thirty days of the date of 
first service by any one of the modes laid down in sub­section (5) of section 9: 
 
Provided that where service has been validly effected only through publication in the 
newspapers, the Banking Court may extend the time for filing an application for leave to defend if 
satisfied that the defendant did not have knowledge thereof. 
 
(3) The application for leave to defend shall be in the form of a written statement, and shall 
contain a summary of the substantial questions of law as well as fact in respect of which, in the opinion 
of the defendant, evidence needs to be recorded. 
 
(4) In the case of a suit for recovery instituted by a financial institution the application for leave 
to defend shall also specifically state the following___ 
 
(a) the amount of finance availed by the defendant from the financial institution; 
the amounts paid by the defendant to the financial institution and the dates of 
payments; 
 
(b) the amount of finance and other amounts relating to the finance payable by the 
defendant to the financial institution upto the date of institution of the suit; 
 
(c) the amounts of finance and other amounts relating to the finance payable by the 
defendant to the financial institution upto the date of institution of the suit, 
 
(d) the amount if any which the defendant disputes as payable to the financial 
institution and facts in support thereof: 
 
Explanation. For the purposes of clause (b) any payment made to a financial institution by a 
customer in respect of a finance shall be appropriated first against other amounts relating to the finance 
and the balance, if any, against the principal amount of the finance. 
 
1[(5) Where application for leave to defend submitted under the preceding sub­section is found 
to be materially incorrect at any stage of the proceedings, the defendant shall lose the right to defence 
and shall also be liable to pay penalty of not less than five percent of the amount of the claim, unless 
the defendant can establish that incorrect information was submitted as a result of a bona fide mistake.] 
 
1[(6)] The application for leave to defend shall be accompanied by all the documents which, in 
the opinion of the defendant, support the substantial questions of law or fact raised by him. 
 
1[(7)] An application for leave to defend which does not comply with the requirements of sub­ 
sections (3), (4) where applicable and (5) shall be rejected, unless the defendant discloses therein 
sufficient cause for his inability to comply with any such requirement. 
 
 
1Ins and renumberd by Act XXXVIII of 2016, s. 5. 
Page 10 of 23 
 
 
1[(8)] The plaintiff shall be given an opportunity of filing a reply to the application for leave to 
defend, in the form of a replication. 
 
1[(9)] Subject to section 11, the Banking Court shall grant the defendant leave to defend the 
suit if on consideration of the contents of the plaint, the application for leave to defend and the reply 
thereto it is of the view that substantial questions of law or fact have been raised in respect of which 
evidence needs to be recorded. 
 
1[(10)] In granting leave under sub­section (8), the Banking Court may impose such conditions 
as it may deem appropriate in the circumstances of the case, including conditions as to deposit of cash 
or furnishing of security. 
 
1[(11)] Where the application for leave to defend is accepted, the Banking Court shall treat the 
application as a written statement, and in its order granting leave shall frame issues relating to the 
substantial questions of law or fact, and,  subject to fulfilment of any conditions attached to grant of 
leave, fix a date for recording of evidence thereon and disposal of the suit. 
 
1[(12)] Where the application for leave to defend is rejected or where a defendant fails to fulfill 
the conditions attached to the grant of leave to defend, the Banking Court shall forthwith proceed to 
pass judgment and decree in favour of the plaintiff against the defendant. 
 
1[(13)] Where an application for leave to defend has been filed before the coming into force of 
this Ordinance, the defendant shall be allowed a period of twenty­one days from the date of coming 
into force of this Ordinance, or from the date  of first hearing thereafter, whichever is later, for filing 
an amended application for leave to defend in accordance with the provisions of this Ordinance. 
 
11. Interim Decree.___2[(1) If the Banking Court on consideration of affidavit under oath by 
the customer supported by certificate of a chartered accountant  on the approved  panel of auditors of 
the State Bank of Pakistan under section 35 of the Banking Companies Ordinance, 1962 (LVII of 
1962) is of the opinion that the dispute between the parties does  not extend to the whole of the claim 
or that part of the claim is either undisputed or is clearly due or that the dispute is mainly limited to a 
part of the principal amount of the finance or to any other amounts relating to the finance, it shall, 
while granting leave and framing issues with respect to the disputed amounts, pass an interim decree 
in respect of that part  of the claim which relates to the principal amount and which appears to be 
payable by the defendant to the plaintiff.] 
 
(2) The interim decree passed under sub­section (1) shall, for all purposes including appeal and 
execution, be deemed to be a decree passed under this Ordinance, and any amount covered thereby or 
recovered in execution thereof shall be adjusted at the time of the final decree: 
 
Provided that it shall be open to the Banking Court  notwithstanding the pendency of any 
appeal, to modify, in part or in whole, or reverse, the terms of the interim decree at the time of the final 
disposal of the suit and pass such order as it may deem just and proper: 
 
Provided further that neither the Banking Court nor the High Court  acting under sub-section 
(3) of section 22 shall stay execution of an interim decree unless the judgment­debtor deposits in cash 
with the Banking Court the amount or amounts admitted by the judgment­debtor to be payable to the 
financial institution under clause (c) of sub­section (4) of section 10, and furnishe rs security for the 
balance decretal amount if any, inc lusive, in the case of a  suit filed by a financial institution, of cost 
of funds determined under section 3, and other costs. 
 
 
1Renumberd by Act XXXVIII of 2016, s. 5. 
2Subs. by Act XXXVIII of 2016, s. 6. 
Page 11 of 23 
 
 
12. Power to set aside decree. In any case in which a decree is passed against a defendant 
under sub­section (1) of section 10 he may, within twenty­one days of the date of the decree, or where 
the summons was not duly served when he has knowledge of the decre e, apply to the Banking Court 
for an order to set it aside; and if he satisfies the Banking Court that he was prevented by sufficient 
cause from making an application under section 10, or that the summons was not duly served, 1[nor 
published in newspapers] the Court shall make an order setting aside the decree against him upon such 
terms as to costs, deposit in cash or furnishing of security 1[which shall not be less than one third of 
the amount of the decree] and allow him to make the application within ten days of the order. 
 
13. Disposal of suit. ___(1) A suit in which leave to defend has been granted to the defendant 
shall be disposed of within ninety days from the day on which leave was granted, and in case 
proceedings continue beyond the said period the defendant may be required to furnish security in such 
amount as the Banking Court deems fit, and on the failure of the defendant to furnish such security, 
the Banking Court shall pass an interim or final decree in such amount as it may deem appropriate. 
 
(2) The requirement of furnishing security under sub­section (1) shall be dispensed with if, in 
the opinion of the Banking Court, the delay is not attributable to the conduct of the defendant. 
 
(3) Suits before a Banking Court shall come up for regular hearing as expeditiously as possible 
and except in extraordinary circumstances and for reasons to be recorded, a Banking Court shall not 
allow adjournments for more than seven days. 
 
(4) Where leave to defend is granted and evidence is to  be recorded, the parties may file 
affidavits in respect of the examination­in­chief of any witness who is not to be summoned through 
the Banking Court, and where such affidavits are filed, the Banking Court shall give notice thereof to 
the other contestin g parties and on the date fixed for recording evidence, shall, subject to such 
modifications as may be required for purposes of production and exhibiting of documents, or otherwise 
in accordance with law, treat the affidavit as examination­in­chief and allow the contesting parties an 
opportunity for cross­examination on the basis thereof. 
 
14. Decree in suits relating to mortgages. Where the suit filed by a financial institution before 
the Banking Court is for the enforcement of a mortgage of immovable prop erty the Banking Court 
will not be required to pass a preliminary decree as provided in Order XXXIV of the First Schedule 
to the Code of Civil Procedure, 1908 (Act V of 1908), but shall directly pass an interim or final decree 
for foreclosure or sale. 
 
2[15. Sale of mortgaged property.___(1) In this section, unless there is anything repugnant in 
the subject or context,___ 
 
(a) “mortgage” means the transfer of an interest in specific immovable property for 
the purpose of securing the payment of the mortgage money or the performance 
of an obligation which may give rise to a pecuniary liability; 
 
 
1Ins and subs. by Act XXXVIII of 2016, s. 7. 
2Subs. by Act XXXVIII of 2016, s. 8. 
Page 12 of 21 
 
 
(b) “mortgage money” means any finance or other amounts relating to a finance, 
penalties, damages, charges or pecuniary liabilities, payment of which is 
secured for the time being by the document by which the mortgage is effected 
or evidenced, including any mortgage deed or memorandum of deposit of title 
deeds; 
 
(c) “mortgaged property ” means immovable property mortgaged to a financial 
institution; and 
 
(d) “reserve price” means forced sale value of the mortgaged proper ty determined 
by a reputable valuation company under clause (a) of sub­section (4). 
 
(2) In case of default in payment by a customer, the financial institution may send a notice to 
the mortgagor demanding payment of the mortgage money outstanding within fo urteen days from 
service of the notice and failing payment of the amount within due date, it shall send a second notice 
of demand for payment of the amount within fourteen days. In case the customer on the due date given 
in the second notice sent, continues to default in payment, financial institution shall serve a final notice 
on the mortgager demanding the payment of the mortgage money outstanding within thirty days from 
service of the final notice on the customer. 
 
(3) When a financial institution serves a final notice of demand, all powers of the mortgagor in 
regard to recovery of rents and profits from the mortgaged property shall stand transferred to the 
financial institution until such notice is withdrawn and it shall be the duty of the mortgagor to p ay all 
rents and profits from the mortgaged property to the financial institution: 
 
Provided that where the mortgaged property is in possession of any tenant or occupier , other 
than the mortgagor, it shall be the duty of such tenant or occupier, on receipt  of notice in this behalf 
from the financial institution, to pay to the financial institution the rent or lease money or other 
consideration agreed with the mortgagor. 
 
(4) Where a mortgagor fails to pay the amount as demanded within the period prescribed under 
sub­section (2) and after the due date given in the final notice has expired, the financial institution 
may, without the intervention of any court  and subject to any rules made by the Federal Government 
under sub-section (5), sell the mortgaged property or any part thereof by public auction and apply the 
proceeds thereof towards total or partial satisfaction of the outstanding  mortgage money in the 
following manner, namely:___ 
 
(a) the financial institution shall have the mortgaged property evaluated by a 
reputable valuation company on the panel of the Pakistan Banks Association as 
on the date of the final notice sent to the mortgagor under sub­section (2); 
 
(b) the financial institution shall cause to be published a notice in one reputable 
English daily newspaper with wide circulation and one reputable Urdu daily 
newspaper with wide circulation in the Province in which the mortgaged 
property is situated specifying the following, namely:___ 
 
(i) detailed particulars of the mortgaged property; 
 
(ii) name and address of the mortgagor; 
 
(iii) amount of the outstanding mortgage; 
 
(iv) any encumbrances which the mortgaged property may be subject to 
which the financial institution is aware of; 
Page 13 of 21 
 
 
(v) the financial institution's intention to sell the mor tgaged property 
through a public auction; 
 
(vi) the reserve price below which the mortgaged property cannot be sold; 
 
(vii) the time and place at which the public auction is to take place, provided 
that the public auction shall take place in the city where  the mortgaged 
property is located; and 
 
(viii) any other information, which may be relevant; 
 
(c) the financial institution shall send a notice with the information, specified in 
clause (b), to the mortgagor and to all persons who, to the knowledge of the  
financial institution, have an interest in the mortgaged property as mortgagees; 
and 
 
(d) the public auction for the sale of the mortgaged property shall not take place 
before the expiration of three business days of the publication of the notice as 
required under clause (b). 
 
(5) In addition to its powers under sections 25 and 26, the Federal Government may, by 
notification in the official Gazette, make rules specifying the mode, conduct or method of sale of the 
mortgaged property and in addition to the conditions stipulated in sub­section (4). 
 
(6) The financial institution shall be entitled, in its discretion, to participate in the public auction 
and to purchase the mortgaged property for an amount ten percent higher than the highest bid obtained 
in the public auction, provided that where the financial institution chooses to purchase the mortgaged 
property at the highest bid obtained in the public auction, it shall issue notice to the mortgagor who 
shall have three business days from the service of the notice to match the financial institution's bid. If 
the mortgagor is able to match the financial institution's bid, he shall be allowed to purchase the 
mortgaged property. 
 
(7) Where the mortgagor or his agent or servant or any person put in  possession by the 
mortgagor or on account of the mortgagor does not voluntarily give possession of the mortgaged 
property sought to be sold or sought to be purchased or purchased by the financial institution, a 
Banking Court on application of the financial institution or purchaser shall put the financial institution 
or purchaser, as the case may be, in possession of the mortgaged property in any manner deemed fit 
by it: 
 
Provided that the Banking Court may not order eviction of a person who is in occupation of the 
mortgaged property or any part thereof under a bona fide lease, except on expiry of the period of the 
lease, or on payment of such compensation as may be agreed between the parties or as may be 
determined by the Banking Court to be reasonable. 
 
Explanation.___Where the lease is created after the date of the mortgage and it appears to the 
Banking Court that the lease was created so as to adversely affect the value of the mortgaged property 
or to prejudice the rights and remedies of the financial institution, it shall be presumed that the lease is 
not bona fide, unless proved otherwise. 
 
(8) For purposes of execution and registration of the sale deed in respect of the mortgaged 
property, the financial institution shall be deemed to be the duly authorized attorney of the mortgagor 
and a sale deed executed and presented for registration by duly authorized attorneys of the financial 
institution shall be accepted for such purposes by the Registrar and Sub­Registrar under the 
Registration Act, 1908 (XVI of 1908). 
Page 14 of 21 
 
 
Provided that no such sale deed shall be executed or registered until expiry of seven days after 
the completion of the public auction for the sale of the mortgaged property. 
 
(9) Upon execution and registration of the sale deed of the mortgaged property in favor of the 
purchaser all rights in such mortgaged property shall vest in the purchaser free from all encumbrances 
and the mortgagor shall be divested of any right, title and interest in the mortgaged property. 
 
(10) Net sale proceeds of the mortgaged property, after deducting all expenses of sale or 
expenses incurred in any attempted sale, shall be distributed ratably amongst all mortgagees in 
accordance with their respective rights and priorities in the mortgaged property. Any surplus left, after 
paying in full all the dues of mortgagees, shall be paid to the mortgagor. 
 
(11) A financial institution which has sold mortgaged property in exercise of powers conferred 
herein shall file proper accounts of the sale proceeds in Banking Court within fourteen days of the sale. 
 
(12) All disputes relating to the sale of the mortgaged property under this section including 
disputes amongst mortgagees in respect of the mode, conduct or method of the sale or the distribution 
of the sale proceeds, shall be decided by the Banking Court to the exclusion of any other court of law, 
including the High Court. 
 
(13) The Banking Court may grant an inju nction restraining the sale or proposed sale of 
mortgaged property, if___ 
 
(a) it is satisfied that no mort gage in respect of the immovable property has been 
created; or 
 
(b) it is satisfied that there is fraud in the proposed mode, conduct or method of the 
sale, provided that no injunction shall be granted on the ground of fraud unless 
upon the fact s proved th e Banking Court is satisfied that the applicant has 
sustained substantial injury by reason of such fraud and such injury cannot be 
compensated by damages; or 
 
(c) all moneys secured by mortgage of the mortgaged property have been paid; or 
 
(d) the mortgagor or objector deposits in the Banking Court in cash the outstanding 
mortgage money. 
 
(14) Where any mortgaged property has been sold, the mortgagor or  any person entitled to a 
share in the rateable distribution of assets or whose interest is affected by the sale, may apply to the 
Banking Court to set aside the sale on the ground of fraud: 
 
Provided that no sale shall be set aside on the ground of fr aud unless, upon the facts proved, 
the Banking Court is satisfied that the applicant has sustained substantial injury by reason of such fraud 
and such injury cannot be compensated by damages. 
 
(15) An application for setting aside the sale under sub­section (14) must be made within seven 
days of completion of the public auction for the sale of the mortgaged property and shall not be 
entertained by the Banking Court unless the applicant deposits an amount equal to twenty­five percent 
of the reserve price or furnishes security for the same amount to the satisfaction of the Banking Court. 
 
Page 15 of 21 
 
 
(16) The rights and remedies provided under this section are in addition to and not in lieu of 
any other rights or remedies a financial institution may have under this Ordinance. 
 
(17) The provisions contained in this section shall have effect notwithstanding anything 
contained in this Ordinance or any other law for the time being in force or any judgment of any court 
and in case of any conflict between the provisions contained in  this section and any other law for the 
time being in force or any judgment of any court, the provisions contained in this section shall prevail.] 
 
16. Attachment before judgment, injunction and appointment of Receivers. ___(1) Where 
the suit filed by a financial institution is for the recovery of any amount through the sale of any property 
which is mortgaged, pledged, hypothecated, assigned, or otherwise charged or which is the subject of 
any obligation in favour of the fina ncial institution as security for finance or for or in relation to a 
finance lease, the Banking Court may, on application by the financial institution, with a view to 
preventing such property from being transferred, alienated, encumbered, wasted or otherwi se dealt 
with in a manner which is likely to impair or prejudice the security in favour of the financial institution, 
or otherwise in the interest of justice___ 
 
(a) restrain the customer and any other concerned person from transferring, 
alienating, partin g with possession or otherwise encumbering, charging, 
disposing or dealing with the property in any manner, 
 
(b) attach such property; 
 
(c) transfer possession of such property to the financial institution; or 
 
(d) appoint one or more Receivers of such pro perty on such terms and conditions 
as it may deem fit. 
 
(2) An order under sub­section (1) may also be passed by the Banking Court in respect of any 
property held benami in the name of an ostensible owner whether acquired before or after the grant of 
finance by the financial institution. 
 
(3) In cases where a customer has obtained property or financing through a finance lease, or 
has executed an agreement in connection with a mortgage, charge or pledge in terms whereof the 
financial institution is authorize d to recover or take over possession of the property without filing a 
suit, the financial institution may, at its option: 
 
(a) directly recover the same if the property is movable; or 
 
(b) file a suit hereunder and the Banking Court may pass an order at any time, either 
authorising the financial institution to recover the property directly or with the 
assistance of the court: 
 
Provided that in the event the financial institution wrongly or unjustifiably exercises the direct 
power of recovery hereunder it sh all be liable to pay such compensation to the customer as may be 
adjudged by the Banking Court in summary proceedings to be initiated on the application of the 
customer and concluded in thirty days. 
(4) Nothing in sub­sections (1) to (3) shall affect the powers of the Banking Court under Order 
XXXVIII Rules 5 and 6 of the Code of Civil Procedure, 1908 (Act  V of 1908 ), to attach before 
judgment any property other than property mentioned in sub­section (1). 
 
Page 16 of 21 
 
 
17. Final Decree.___(1) The final decree passed by a Banking Court shall provide for payment 
from the date of default of the amounts found to be payable on account of the default in fulfillment of 
the obligation, and for costs including, in the case of a suit filed by a financial institution cost of funds 
determined under section 3. 
 
(2) The Banking Court may, at the time of passing a final decree, also pass an order of the 
nature contemplated by sub­section (1) of section 16 to the extent of the decretal amount. 
 
18. Banking Documents.___(1) No financial institution shall obtain the signature of a customer 
on banking document which contains blanks in respect of important particulars including the date, the 
amount, the property or the period of time in question. 
 
(2) Finance agreements executed by or on behalf of a financial institution and a customer shall 
be duly attested in the manner laid down in Article 17 of the Qanun­e­Shahadat Order, 1984 (P.O. 10  
of 1984). 
 
(3) Nothing contained in sub­section (1) and (2) shall affect the validity of any document 
executed prior to the date of enforcement of this Ordinance. 
 
(4) Notwithstanding anything contained in this section or any other law, the Banking Court 
shall not refuse to accept in evidence any document creating or purporting to create or indicating the 
creation of a mortgage, charge, pledge or hypothecation in relation to any property or assumption of 
any obligation by a customer, guarantor, mortgagor or otherwise merely because it is not duly stamped 
or is not registered as required by any law or is not attested or witnessed as required by Article 17 of 
the Qanun­e­Shahadat Order, 1984 (P.O. 10 of 1984), and no such document shall be impoundable by 
the Banking Court or any other Court or authority: 
 
Provided that nothing contained in this sub­section shall operate to defeat the legal rights of a 
bona fide purchaser for value without notice of a document which ought to have been registered. 
 
19. Execution  of decree and sale with or without intervention of Banking Court. ___(1) 
Upon pronouncement of judgment and decree by a Banking Court, the suit shall automatically stand 
converted into execution proceedings without the need to file a separate application and no fresh notice 
need be issued to the judgment­debtor in this regard . Particulars of the mortgaged, pledged or 
hypothecated property and other assets of the judgment­debtor shall be filed by the decree­holder for 
consideration of the Banking Court and t he case will be heard by the Banking Court for execution of 
its decree on the expiry of 30 days from the date of pronouncement of judgment and decree: 
 
Provided that if the record of the suit is summoned at any stage by the High Court for purposes 
of hearing an appeal under section 22 or otherwise, copies of the decree and other property documents 
shall be retained by the Banking Court for purposes of continuing the execution proceedings. 
 
(2) The decree of the Banking Court shall be executed in accordance with the provisions of the 
Code of Civil Procedure, 1908 (Act V of 1908) or any other law for the time being in force or in such 
manner as the Banking Court may at the request of the decree­holder consider appropriate, including 
recovery as arrears of land revenue. 
Explanation.___The term assets or properties in sub­section (2) shall include any assets and 
properties acquired benami in the name of an ostensible owner. 
 
(3) In cases of mortgaged, pledged or hypothecated property, the financial institution may sell 
or cause the same to be sold with or without the intervention of the Banking Court either by public 
Page 17 of 21 
 
 
auction or by inviting sealed tenders and appropriate the proceeds towards total or partial satisfaction 
of the decree. The decree passed by a Banking Court shall constitute and confer sufficient power and 
authority for the financial institution to sell or cause the sale of the mortgaged, pledged or hypothecated 
property together with transfer of marketable title and no further order of the Banking Court shall be 
required for this purpose. 
 
(4) Where a financial institution wishes to sell mortgaged, pledged or hypothecated property 
by inviting sealed tenders, it sha ll invite offers through advertisement in one English and one Urdu 
newspaper which are circulated widely in the city in which the sale is to take place giving not less than 
thirty days time for submitting offers. The sealed tenders shall be opened in the p resence of the 
tenderers or their representatives or such of them as attend: 
 
Provided that the financial institution shall be entitled in its discretion, to purchase the property 
at the highest bid received. 
 
(5) The provisions of sub­sections (5), (6), (7), (8), (9), (10), (11) and (12) of section 15 shall, 
mutatis mutandis , apply to sales of mortgaged, pledged or hypothecated property by the financial 
institution in exercise of its powers conferred by sub­section (3). 
 
(6) The Banking Court and the finan cial institution shall be entitled to seek the services and 
assistance of the police or security agency in the exercise of powers conferred by this section. 
 
(7) Notwithstanding anything contained in the Code of Civil Procedure 1908 (Act V of 1908), 
or any other law for the time being in force___ 
 
(a) the Banking Court shall follow the summary procedure for purposes of  
investigation of claims and objections in respect of attachment or sale of any 
property, whether or not mortgaged, pledged or hypothecated, and shall 
complete such investigation within 30 days of filing of the claims or objections; 
 
(b) if the claims or o bjections are found by the Banking Court to be malafide or 
filed merely to delay the sale of the property, it shall impose a penalty upto 
twenty percent of the sale price of the property; 
 
(c) the Banking Court may, in its discretion, proceed with the sale of the mortgaged, 
or pledged or hypothecated property if, in its opinion the interest of justice so 
require: 
 
Provided that the financial institution gives a written undertaking that in 
the event the objections are found to be valid, or are sustained, it shall in addition 
to compensating the aggrieved party by the payment of such amount as may be 
adjudged by the B anking Court also pay a penalty upto twenty percent of the 
sale proceeds and such amounts shall be recoverable from the financial 
institution in the same manner as in execution of decrees passed hereunder. 
20. Provisions relating to certain offences.___(1) Whoever___ 
 
(a) dishonestly commits a breach of the terms of a letter of hypothecation, trust 
receipt or any other instrument or document executed by him whereby 
possession of the assets or properties offered as security for the re­payment of 
finance or fulfillment of any obligation are not with the financial institution but 
are retained by or entrusted to him for the purposes of dealing with the same in 
Page 18 of 21 
 
 
the ordinary course of business subject to the terms of the letter of hypothecation 
or trust receipt or other instrument or document or for the purpose of effecting 
their sale and depositing the sale proceeds with the financial institution; or 
 
(b) makes fraudulent mis­representation or commits a breach of an obligation or 
representation made to a financial institution on the basis of which the financial 
institution has granted a finance; or 
 
(c) subsequent to the creation of a mortgage in favour of a financial institution, 
dishonestly alienates or parts with the possession of the mortgaged property  
whether by creation of a lease or otherwise contrary to the terms thereof, without 
the written permission of the financial institution; or 
 
(d) subsequent to the passing of a decree under section 10 or 11, sells, transfers or 
otherwise alienates, or parts with possession of his assets or properties acquired 
after the grant of finance by the financial institution, including assets or 
properties acquired benami in the name of an ostensible owner, 
 
shall, without prejudice to any other action which may be tak en against him 
under this Ordinance or any other law for the time being in force, be punishable 
with imprisonment of either description for a term which may extend to three 
years and shall also be liable to a fine which may extend to the value of the 
property or security as decreed or the market value whichever is higher and shall 
be ordered by the Banking Court trying the offence to deliver up or refund to 
the financial institution, within a time to be fixed by the Banking Court, the 
property or the value of the property or security. 
 
Explanation.___Dishonesty may be presumed where a customer has not deposited the sale 
proceeds of the property with the financial institution in violation of the terms of the agreement 
between the financial institution and the customer. 
 
(2) Whoever knowingly makes a statement which is false in material respects in an application 
for finance and obtains a finance on the basis thereof, or applies the amount of the finance towards a 
purpose other than that for which the finance w as obtained by him, or furnishes a false statement of 
stocks in violation of the terms of the agreement with the financial institution or falsely denies his 
signatures on any banking document before the Banking Court, shall be guilty of an offence punishable 
with imprisonment of either description for a term which may extend to three years, or with fine, or 
with both. 
 
(3) Whoever resists or obstructs, either by himself or on behalf of the judgment debtor, through 
the use of force, the execution of a decree , shall be punishable with imprisonment which may extend 
to one year, or with fine, or with both. 
 
(4) Whoever dishonestly issues a cheque towards re­payment of a finance or fulfillment of an 
obligation which is dishonoured on presentation shall be punisha ble with imprisonment which may 
extend to one year, or with fine or with both, unless he can establish, for which the burden of proof 
shall rest on him, that he had made arrangements with his bank to ensure that the cheque would be 
honoured and that the bank was at fault in not honouring the cheque. 
 
(5) Where the person guilty of an offence under this Ordinance is a company or other body 
corporate, the chief executive by whatever name called, and any director or officer involved shall be 
Page 19 of 21 
 
 
deemed to be guilty of the offence and shall be liable to be prosecuted against and punished 
accordingly. 
 
1[(6) All offences under this Ordinance shall be triable by a Banking Court in accordance with 
section 7. All offenses, except for the offence of willful default, shall be bailable, non­cognizable and 
compoundable.] 
 
1[(7) Notwithstanding anything to the contrary provided in any other law for the time being in 
force, action in respect of an offence of willful default shall be taken by an investigating agency, to be 
nominated in this behalf by the Federal Government, on a complaint in writing filed by an authorized 
officer of a financial institution after it has served a thirty days notice upon the borrower demanding 
payment of the loan, advance or financial assistance. 
 
(8) An offence of willful default shall be cognizable, non­bailable and non­compoundable and 
punishable with imprisonment which may extend to seven years or fine not exceeding the amount of 
default or with both. 
 
(9) Any person convicted of the offenc e of willful default by a  Banking Court shall not be 
eligible to receive any loan, advance or finance from any financial institution for a period of ten years 
and shall not be permitted to contest any election as a member of the Majlis­e­Shoora (Parliament ), 
any Provincial Assembly or a local body for a period of five years, after serving out a sentence after 
conviction.] 
 
21. Application of fines and costs.___(1) A Banking Court may direct that the whole or part of 
any fine or costs imposed under this Ordinance shall be applied in or towards___ 
 
(a) payment of costs of all or any proceedings under this Ordinance; and 
 
(b) payment of compensation to an aggrieved party. 
 
(2) An order under sub­section (1) shall be deemed to be a decree passed under this Ordinance 
for purposes of execution. 
 
22. Appeal. ___(1) Subject to sub­section (2), any person aggrieved by any judgment, decree 
sentence, or final order passed by a Banking Court may, within thirty days of such judgment, decree 
sentence or final order prefer an appeal to the High Court. 
 
(2) The appellant shall give notice of the filing of the appeal in accordance with the provisions 
of Order XLIII Rule 3 of the Code of Civil Procedure, 1908 (Act  V of 1908) to the respondent who 
may appear before the Banking Court to contest admission of the appeal on the date fixed for hearing. 
 
 
 
1Subs. and added by Act XXXVIII of 2016, s. 9. 
(3) The High Court shall at the stage of admission of the appeal, or at any time thereafter either 
suo motu or on the application of the decree holder, decide by means of a reasoned order whether the 
appeal is to be admitted in part or in whole depending on the facts and circumstances of the case, and 
as to the security to be furnished by the appellant: 
 
Provided that the admission of the appeal shall not per se operate as a stay, and no shall any 
stay be granted therein unless the decree­h older has been given an opportunity of being heard and 
unless the appellant deposits in cash with the High Court an amount equivalent to the decretal amount 
inclusive of costs, or in the case of an appeal other than an appeal against an interim decree, at the 
Page 20 of 21 
 
 
discretion of the High Court furnishes security equal in value to such amount; and in the event of a 
stay being granted for a part of the decretal  amount only, the requirement for a deposit in cash or 
furnishing of security shall stand reduced accordingly. 
 
(4) An appeal under sub­section (1) shall be heard by a bench of not less that two Judges of the 
High Court and, in case the appeal is admitted, it shall be decided within 90 days from the date of 
admission. 
 
(5) An appeal may be preferred under this section from a decree passed ex­parte. 
 
(6) No appeal, review or revision shall lie against an order accepting or rejecting an application 
for leave to defend, or any interlocutory order of the Banking Court which does not dispose of the 
entire case before the Banking Court other than an order passed under sub­section (11) of section 15 
or sub­section (7) of section 19. 
 
(7) Any order of stay of execution of a decree passed under sub­section (2) shall automatically 
lapse on the expiry of six months from to date of the order whereupon the amount deposited in Court 
shall be paid over to the decree­holder or the decree­holder may enforce the security furnished by the 
judgment­debtor. 
 
23. Restriction  on  transfer  of assets  &  properties. __(1)  After  publication  of  summons  
under sub­section (5) of section 9, no customer shall, without the prior written permission of the 
Banking Court transfer, alienate, encumber, remove or part with possession of any of his asset or 
property furnished to the financial institution as security by way of mortgage, pledge, hypothecation, 
charge, lien or otherwise pending final decision of the suit filed by the financial institution under this 
Ordinance, and any such transfer, alienation, encumbrance or other disposition b y the customer in 
violation of this sub­section shall be void and of no legal effect: 
 
Provided that the customer may sell any such asset or property which has been retained by or 
entrusted to him for purposes of dealing with the same in the ordinary course of business subject to the 
terms of the letter of hypothecation or trust receipt or other instrument or document executed by him, 
or for purposes of effecting their sale and depositing the sale proceeds with the financial institution: 
 
Provided further t hat the customer before making the sale shall file in the Banking Court a 
statement supported by affidavit, containing full particulars of such asset or property, and within three 
days after the sale shall submit a full account thereof to the Banking Court and the financial institution. 
 
(2) After pronouncement of judgment and decree by the Banking Court, including an interim 
decree under section 11, no judgment­debtor shall without the prior written permission of the Banking 
Court transfer, alienate, encumber or part with possession of any assets or properties and any such 
transfer, alienation, encumbrance or other disposition by a judgment­debtor in violation of this sub­ 
section shall be void and of no legal effect. 
 
(3) The provisions of sub­section (1) shall also apply to a person who has furnished any security 
on behalf of a customer to the financial institution on the basis of which finance was granted, provided 
such person is a defendant in the suit filed under section 9 or is added as a defendant thereafter. 
 
24. Application of the Limitation Act, 1908 (Act IX of 1908). ___(1) Save as  otherwise 
provided in this Ordinance, the provisions of the Limitation Act, 1908 (Act IX of 1908) shall apply to 
all cases instituted or filed in a Banking Court after the coming into force of this Ordinance. 
Page 21 of 21 
 
 
 
(2) A suit under section 9 may be entertained by a Banking Court after the period of limitation 
prescribed therefor, if the plaintiff satisfies the Banking Court that he had sufficient cause for not filing 
the suit within such period. 
 
25. Power to make rules. The Federal Government may, by notification in the official Gazette, 
make rules for carrying out the purposes of this Ordinance. 
 
26. Removal of difficulties. If any difficulty arises in giving effect to any of the provisions of 
this Ordinance, the Federal Government may, by notification in th e official Gazette, make such 
provisions as it thinks fit for removing such difficulties. 
 
27. Finality of order. Subject to the provisions of section 22, no court or other authority shall 
revise or review or call, or permit to be called, into question any  proceeding, judgment, decree, 
sentence or order of a Banking Court or the legality or propriety of anything done or intended to be 
done by the Banking Court in exercise of jurisdiction under this Ordinance: 
 
Provided that the Banking Court may, on its own  accord or on application of any party, and 
with notice to the other party or, as the case may be, to both the parties, correct any clerical or 
typographical mistake in any judgment, decree, sentence or order passed by it; 
 
28. Indemnity. No suit, prosecution or other legal proceeding shall lie against the Federal 
Government or a Banking Court or a financial institution or any person for any thing which is in good 
faith done or intended to be done under this Ordinance or any rule made thereunder. 
 
29. Repeal.___(1) The Banking Companies (Recovery of Loans, Advances, Credits and 
Finances) Act, 1997 (Act XV of 1997) is hereby repealed. 
 
(2) Notwithstanding the repeal of the (Recovery of Loans, Advances, Credits and Finances) 
Act, 1997 (Act XV of 1997) and the provisions of this Ordinance, decrees in cases relating to interest­ 
bearing loans which have not been converted into finance shall be passed in accordance with the 
provisions of section 15 of the said Act.