The dispute arose from the sale of a property that was carried out by Zarai Taraqiati Bank Limited (ZTBL). However, ZTBL was not selling the property as a lender seeking to recover its own finances. Instead, they were acting as the attorney of the property owner, exercising powers granted to them through a General Power of Attorney (GPA). The petitioner, Rasheeda Saigol, challenged the validity of this sale.
The Arguments of the Petitioner (Rasheeda Saigol):
The petitioner, Rasheeda Saigol, likely argued that the sale conducted by ZTBL was somehow improper or illegal. While the judgment doesn’t detail the specifics of her challenge, it implies she attempted to use Section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, to contest the sale. This suggests her argument might have been based on the premise that the sale constituted an “obligation” that fell under the purview of this Ordinance, allowing her to challenge it through the mechanisms provided therein.
The Central Legal Question:
The core legal question before the Lahore High Court was whether the sale of a property by a financial institution (ZTBL) acting solely in its capacity as an attorney under a General Power of Attorney constitutes an “obligation” as defined under Section 2(e) of the Financial Institutions (Recovery of Finances) Ordinance, 2001. If it did, then a suit challenging that sale under Section 9 of the same Ordinance would be maintainable.
The Court’s Decision:
The Lahore High Court ruled against the petitioner, Rasheeda Saigol. The court held that the sale of property by a bank acting merely as an attorney under a General Power of Attorney does not fall within the definition of an “obligation” as outlined in Section 2(e) of the Financial Institutions (Recovery of Finances) Ordinance, 2001.
Therefore, the court concluded that a suit filed under Section 9 of the Ordinance, challenging a sale conducted by a bank acting solely as an attorney, is not maintainable. The Ordinance is specifically designed to facilitate the recovery of finances owed to financial institutions. When a bank acts as an attorney to sell property, it is not acting to recover its own debts or obligations in the sense intended by the Ordinance.
In essence, the court distinguished between the role of a bank as a creditor seeking to recover loans and its role as an agent acting on behalf of a principal under a power of attorney. The special legal framework of the Financial Institutions (Recovery of Finances) Ordinance, 2001, is applicable to the former, but not the latter.
