Habib Metropolitan Bank prevails: Lahore High Court curbs Consumer Court’s reach on legal fees

The Lahore High Court has partially overturned a lower court’s decision, significantly curtailing the ability of consumer courts to award legal fees incurred in higher judicial forums. The ruling, issued on May 29, 2025, by Justice Malik Waqar Haider Awan, stems from an appeal filed by Habib Metropolitan Bank Pakistan Limited against a judgment by the District Consumer Court, Sialkot.

Disputes between a bank and its customer in Pakistan have been adjudicated by the Lahore High Court, touching upon aspects of consumer protection in banking, such as this case from United Bank.

The case originated from a complaint filed by a consumer, identified as respondent No. 2, against Habib Metropolitan Bank/appellant for “sub-standard and defective services” related to an ATM machine and debit card. After a jurisdictional battle that reached the Supreme Court of Pakistan, which ultimately affirmed the Consumer Court’s authority to hear the matter and directed it to decide the complaint, the Consumer Court partially accepted the consumer’s complaint.

The Consumer Court had awarded the consumer a total of Rs. 666,500/-, which included Rs. 1,500/- for a new debit card, Rs. 50,000/- as compensation for the non-utilization of the ATM card, and Rs. 15,000/- for litigation charges. However, the point of contention for Habib Metropolitan Bank was the additional award of Rs. 100,000/- and Rs. 500,000/- for lawyers’ fees incurred by the consumer for legal proceedings before the Lahore High Court and the Supreme Court of Pakistan.

During the appeal hearing on May 26, 2025, the bank’s counsel, Mr. M. Wisal Khan, stated that the bank would not challenge the awards for the debit card fee, compensation, and litigation charges. The dispute centered solely on the lawyers’ fees for the higher court proceedings, with the bank arguing that such costs could not be imposed upon them to the extent of this Court as well as the Supreme Court of Pakistan and consequences thereof are to be borne by the parties.

Justice Awan’s judgment focused on the interpretation of Section 31(g) of the Punjab Consumer Protection Act, 2005, which allows the Consumer Court “To award actual costs including lawyers’ fees incurred on the legal proceedings”.

The court determined that awarding lawyers’ fees for cases pleaded before the High Court and Supreme Court amounted to the Consumer Court exceeding its jurisdiction and stepping into the jurisdiction of Superior Courts, especially since the Supreme Court had not allowed the Civil Petition with costs.

The judgment clarified that the term “actual costs” in Section 31(g) refers only to the costs of litigation incurred by a litigant in relation to the proceedings pending before it and not the costs incurred to the proceedings before another court, such as this Court or the Supreme Court of Pakistan.

Consequently, the appeal was partly allowed and the impugned judgment was set aside to the extent of the grant of lawyers’ fee to respondent No. 2 incurred by him before this Court as well as the Supreme Court of Pakistan as mentioned at Sr. No.(d) in paragraph No.1 of this judgment.