A FULL bench of the Lahore High Court on Monday restrained financial institutions from disposing of mortgaged properties of defaulters through auction without obtaining court’s order in this regard.
The bench comprising Chief Justice of the Lahore High Court Justice Sayed Zahid Hussain, Justice Hamid Ali Shah and Justice Syed Asghar Haider observed this in a 63-page judgment while striking down section 15 of Financial Institutions (Recovery of Finances) Ordinance 2001 after declaring it against the Constitution.
They ruled that this provision of law was in conflict with the fundamental rights enshrined in articles 2-A, 3,4,9,23,24 & 25 of the Constitution.
Under section 15, all financial institutions were empowered to sell out mortgaged properties of defaulters without adopting due process of law.
Khyber Agro and more than 800 companies have approached the Lahore High Court against the financial institutions to stop them from disposing of their mortgaged properties under the said section.
They argued that the introduction of section 15 was abuse of law as the banks were given vast powers to dispose of mortgaged properties by holding auctions without sanction from a court.
They said it was a laid down principle of law that no one could be the judge of his/her own cause but this principle was overlooked by the legislature by introducing this provision of law.
They pleaded that under article 2-A of the Constitution, no law contrary to Islamic injunctions could be introduced in the country.
They also pointed out that article 24 said no person should be forcibly deprived of his/her property save in accordance with the law.
The bench was convinced with the petitioners’ arguments and accepted their petitions.
The bench also settled the issue of already disposed of properties through direct auction by ruling that as far as those properties the sale of which was finalised and possession was delivered to purchasers, the sale process stood adjusted towards outstanding amount and their sale deeds were registered, they would be considered as past and closed transactions.
However, those properties about which the sale had not attained finality, the purchaser should be given their money back within one month after the financial institution concerned has been approached in this regard. The court had already granted a sty order to the petitioners and after hearing, the arguments from all sides had reserved the judgment on September 12 that was announced yesterday.
Source: The News