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ISLAMABAD: The Supreme Court held that the Banking Court has the power to determine the unsoundness of mind or mental infirmity of a person on an inquiry under Order XXXII of the Code of Civil Procedure (CPC) and appoint a guardian for the suit for the limited purpose of representation before the court of law, without first seeking an appointment of a guardian under the MHO.

A three-judge bench, headed by Justice Syed Mansoor Ali Shah, and comprising Justice Jamal Khan Mandokhail and Justice Athar Minallah heard the case.

The United Bank Limited (respondent) filed a recovery suit under the Financial Institutions (Recovery of Finances) Ordinance, 2001 (FIO) against the brother and father of the petitioner on 03.01.2011. While the father of the petitioner contested the suit by filing his application for leave to defend, the brother of the petitioner was proceeded against the ex-parte vide order dated 10.02.2011.

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Subsequently, the petitioner filed an application under Rules 3 and 15 of Order XXXII of the Code of Civil Procedure, 1908, before the Banking Court seeking his appointment as guardian for the suit of his brother who he asserted was suffering from mental infirmity and was of unsound mind.

The said application was dismissed by the Banking Court on merits vide order dated 16.09.2013 on the ground that there was no valid document on the record to establish that the brother of the petitioner was of unsound mind or suffering from any mental infirmity.

Aggrieved of the said order, the petitioner filed an appeal before the High Court under Section 22 of the FIO, which was dismissed through judgment dated 18.06.2020. The High Court maintained that the petitioner’s brother had to be first adjudged as mentally disordered by the Court of Protection under the provisions of the (Punjab) Mental Health Ordinance, 20011 (MHO) before the petitioner could be entitled to file an application under Order XXXII, CPC, before the Banking Court.

The petitioner then approached the Supreme Court.

The Supreme Court maintained that the High Court has committed a legal error by dismissing the appeal filed by the petitioner holding that the petitioner’s brother had to first to be adjudged as a person of unsound mind under the MHO before an application could be moved under Order XXXII before the Banking Court.

The apex court; therefore, remanded to the High Court to decide the appeal of the petitioner on merits and in accordance with the provisions of Rule 15 of Order XXXII of the CPC.

The instant petition emanates from a suit for recovery filed under the FIO which prescribes a special mechanism for dealing with recovery of finance by the financial institutions from the customers and also establishes special courts, i.e., the Banking Courts for this purpose. Section 4 of the FIO gives its provisions overriding effect over any other law for the time being in force. Section 7 stipulates the powers of Banking Courts and grants them all powers vested in a Civil Court under the CPC in the exercise of its civil jurisdiction.

Furthermore, Section 7(2) of the FIO prescribes the Banking Court to follow the procedure laid out in the CPC in all matters with respect to which the procedure has not been provided for in the FIO.

Therefore, for the procedure as to how a person of unsound mind or mental infirmity can file or defend a suit filed under the FIO, recourse has to be made to Rule 15 of Order XXXII of the CPC.

Copyright Business Recorder, 2024

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