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ESTABLISHMENT OF BANKING COURTS

(a) Pecuniary Jurisdiction:

The pecuniary jurisdiction of all the Banking Courts situated at Divisional Headquarter is to try
the suits/cases upto the value of Rs. 5 Crores. However if the suit amount i.e. the amount
claimed in the suit is more than five crores then a judge of the high court of that Province, upon
the direction of the Chief Justice of the relevant High Court, shall act as a banking court in his
original capacity as a banking court, it will be his original jurisdiction and not the jurisdiction of
the High Court nor would it be the High Court’s original civil jurisdiction. It is also important to
note that a financial institution can file a suit against a customer/borrower while a
customer/borrower can also file a suit against the financial institution for any breach of terms
and conditions of the agreement(s) executed by them.

(b) Powers of The Banking Court:

Under Section 7 of the Financial Institution Ordinance 2001, the powers of the Banking Courts
has all the powers of a civil court which a District Judge/Court possesses under the Civil
Procedure Code and at the same time also has all the powers of a criminal court which a
Sessions Court possesses under the Criminal Procedure Code. A Banking Court can call any
related party as a witness to appear personally before the Court and it also has the powers to
punish any one who commits contempt of the court or any other offence under the provision of
the law.

PROCEDURE OF THE BANKING COURT

(a) PLAINT

Section 9 of the financial Institution Ordinance 2001 specifies the procedure of the Banking
Courts. Assuming that a Financial Institution files a suit/plaint in the Banking Court for the
recovery of the outstanding loan/finance after the default of the customer, the plaint must
contain certain specified particulars, such as the total amount of the loan/finance, the amount(s)
paid back, the outstanding amount etc. the plaint must be signed by a duly authorized
person/officer/manager of the Bank having valid power of attorney from the Financial Institution
to sign the plaint. As to the valid power of attorney, the following judgments of the Superior
Courts may be resorted to:-

2004 CLD 587

CM. TENTILES VS. I.C.P.

(b) STATEMENT OF ACCOUNTS


The plaint must be supported and accompanied by a “Statement of Account” which should be
duly certified as per Section 3 of the Bankers Books, Evidence Act. Without the valid statement
of account, a suit of the Financial Institution is liable to be dismissed. It is to be noted that a
legal presumption of correctness and truth lies with the duly verified statement of account,
however this presumption can be rebutted by the defendant by introducing strong evidence
against and be proving that the entries contained in the statement of the account are incorrect.
For example defendant can prove that the dates and amount of the disbursement of
loan/finance are incorrect. The defendant can also produce receipts/documents that the
amounts repaid are not reflected in the statement of the account. As to the correctness and
admissibility of the statement of account the following judgments of the superior Courts may be
resorted to:

2004 CLD 937, 2004 CLD 1338; 2004 CLD 587, 2004 CLD 712 and 2004 CLD 838, 2004 CLD
716, 535

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