Banking court order set aside: LHC rules no fresh application required for decree execution

LAHORE: The Lahore High Court has held that no fresh application is required for execution of a decree pronounced by a court.

The court remarked that the legislature enacted a special and expeditious mechanism for recovery of finances.

The court observed that execution is a continuation of the proceedings which automatically came into existence upon pronouncement of the decree.

An appellant should not be deprived of the fruits of a decree merely on the basis of a procedural technicality, the court added.

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The court passed this order in a petition of Muslim Commercial Bank challenging the decision of a banking court, asking the bank for a fresh execution petition after the bank initiated execution proceedings for enforcement of the decree pronounced.

The court said that the banking court committed an error of law in dismissing the application on the premise that the appellant bank was required to file a fresh execution petition.

The finding of the banking court that the decree-holder was required to file a fresh execution petition is legally unsustainable, the court added.

The court said that the impugned order fails to give effect to the mandatory language of section 19(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

The court set aside the impugned order of the banking court and restored the application of the appellant bank for the execution proceedings.

The court ordered the banking court to treat the decree as forming part of the execution proceedings and proceed with execution of the decree in accordance with law. The court said that the expression employed by the legislature in Section 19(1) of the ordinance that the suit shall automatically stand converted into execution proceedings, is neither directory nor conditional.

The legislature has consciously dispensed with the requirement of filing a separate execution application, the court added.

The court said that the legislative intent was to ensure continuity and automaticity in execution, not to make it dependent upon the survival of individual applications.

The court said that the purpose of execution law is to facilitate enforcement of adjudicated rights and not to provide an artificial means for frustrating a lawful decree.

The court observed that a banking court must examine the matter with reference to the statutory execution proceedings which came into existence automatically under section 19(1) of the ordinance.

The court said that the fundamental object of judicial proceedings is the administration of justice and courts are required to prefer substantial justice over mere technical compliance, unless the conduct in question is shown to be contumacious, malicious or otherwise disentitling, the court concluded.

Copyright Business Recorder, 2026