Infringement to a right of fair trial through the banking regime in Pakistan.

Abstract

By providing speedy measures for recovery of outstanding loans of Banking Companies as the recovery suits remained pending in civil Courts for years together. The Banking Regime has been enacted to improve the economic situation which has arisen in the country on account of default in payment of loans and finances by the borrower and customer of Banking Companies. The current banking regime in Pakistan is infringing the right of Fair Trial which is the essence of natural justice and the right has been protected by the constitution through the fundamental rights granted thereby. The impugned provisions that are regarding sale of mortgaged property without intervention of court and direct recovery of movable property has even been declared as ultra vires the constitution by the apex courts of Pakistan. Therefore an opportunity for amendment has been created. The purpose of the enactment of the latest Banking Regime was to facilitate the financial institution for recovery of debt, latterly, which was abused and the financial institutions considered themselves as they are the adjudicating and investigative authorities and basically this consideration and practice of the financial institution as adjudicating and investigating authority is a question mark on the basic principles of natural justice. Thus when the Financial Institution sells the mortgaged property without intervention of court or does direct recovery of movable property, the customer/borrower is deprived of the right of a fair and public hearing and he is presumed guilty until proven innocent which is explicitly vice versa of the basic standard for the fair trial. Therefore a system shall be established where it is made obligatory on the Banking courts to follow a procedure in which neither the bank nor the client is legally discriminated as impugned provisions of the banking regime are in clear violation of principles of natural justice that are protected under the fundamental rights of the constitution therefore they cannot survive and need to be struck down.