Lahore: Bank stopped from auctioning mortgaged property without court order

[Naveed Yaseen]

LAHORE: The Lahore High Court (LHC) has restraint a bank from auctioning the mortgaged property of a dairy company without obtaining the court’s order. The company moved a petition before the court challenging the notice to auction the company’s property on plea of recovering the loan advanced by the bank. The counsel for the petitioner, Shahid Siddiqui, submitted that an LHC full bench on December 23, 2008 had barred banks from auctioning mortgaged properties of loan defaulters without obtaining the court’s order. The counsel said financial institutions were empowered to sell mortgaged property of loan defaulters under Section 15 of the Financial Institutions (Recovery of Finances) Ordinance 2001, but the bench ruled that the provision in question was in conflict with fundamental rights enshrined in the constitution. He said the Supreme Court suspended the LHC order a few days ago and allowed a bank to recover the loan by auctioning the pledged property. Siddiqui said the apex court order was for a particular case and financial institutions could not adopt it as a general rule to apply it across the board. He requested that the bank be stopped from auctioning the petitioner’s property. staff report

http://www.dailytimes.com.pk/default.asp...009_pg7_34