LAHORE: The Lahore High Court (LHC) has held that the Mohtasib is entitled to act as mediator for the purpose of resolving the disputes amicably.
The court passed this order on a petition of United Bank of Pakistan and set aside the order of the president of Pakistan dismissing the representation of the bank.
The court said that the complaints shall be deemed pending before the Mohtasib, which shall decide the complaints afresh after affording opportunity to the parties to produce documents, affidavits and evidence, in support of their respective claims.
The court commenting on the jurisdiction of Mohtasib observed that the jurisdiction of the Mohtasib is of quasi-judicial nature; hence, application and adaptation of evidentiary principles are inapplicable for such mediation proceedings.
The court said Mohtasib is only entitled to receive evidence on affidavits without following evidentiary principles strictly. It observed that the Mohtasib failed to segregate cases where exercise of jurisdiction is justified and where it was not justified.
The court said Mohtasib ignores and overlooks to consider the effect and consequence of ‘contributory negligence’ and ‘comparative negligence’. Apparently, Mohtasib shifted absolute responsibility on bank by placing reliance on Section 41 of the Act 2007, the court added.
The bank through its petition claimed that scope and extent of the jurisdiction of the Mohtasib has had to be construed narrowly and conservatively, since it was not a court but a tribunal, which had no authority to investigate and determine allegations of fraud, involving third-party; i.e., an anonymous caller or impersonator.
The bank also claimed that two-factor authentication process was in place, wherein before payment instructions are executed a special code, One-Time-Passcodes (OTPs) is sent at the registered mobile of the customers, and unless OTP is fed in flashed window, no transaction could take effect.
The customers; however, contended that bank had acted in violation of its contractual obligations, omitted duty of exercising reasonable care and skills and allowed unauthorised Electronic Fund Transfers (EFTs) from their accounts.
The customers also claimed that since banks owe a duty of care and diligence; therefore, the bank should inquire into payment instructions before funds are released and if the bank acted diligently all attempts to withdraw funds illicitly could be foiled.
The Mohtasib in its decision held that bank failed to meet the test of burden of proof; hence, declared that bank was in breach of its duties and recommended payment of compensation equal to unauthorised amount transferred.
Decision of the Mohtasib was affirmed by the office of President of Pakistan by dismissing representation of the bank.
Copyright Business Recorder, 2025
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