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2006 CLD 1191

MESSRS YOUSAF SUGR MILLS
V/S
TRUST LEASING CORPORATION AND OTHERS

Per Syed Hamid Ali Shah, J-
Constitution of Pakistan (1973), Art. 18-
R/w Banking Companies Ordinance (LVII of 1962) S. 25-A-
The act of a blacklisting or preventing a company from the privilege and advantages of entering into a lawful relationship with the bank for the purpose of gain, is violative of Article 18 of the Constitution.  The consequences of blacklisting a person, are of great magnitude and warrant that before taking such action there should be a fair and proper trial, through an impartial Court or Tribunal by providing such person reasonable opportunity to defend the allegations made against him.  The effect of placement of a person’s name on the list that facility of finance is extended to such person, only after recording the reasons, according to para.2(a)(ii) of the Prudential Regulations.  It has the effect of negating the facility to a borrower in the ordinary course.  If the name of a person is brought on the list without any verification, it will adversely effect the reputation as well as the business of such borrower.
The placement of a person on CIB List of defaulters places restraint on his business to enter freely into a contract with banks etc., therefore, before such placement, the concerned individual is entitled to a notice.  State Bank of Pakistan which regulates the affairs of banks etc. has the responsibility atleast to see the genuineness and truthfulness of claim of a Banking Company or NBFI qua the default of a borrower.
The action of respondent No. 3 regarding placement of the petitioners on the CIB List without notice and without ascertaining the genuineness of the information is, therefore, violative of Articles 4, 18 and 25 of the constitution of Islamic Republic of Pakistan.  Impugned placement of the petitioner, on CIB List, is declared without lawful authority and with no legal effect. The impugned ord4er is thus set aside.
20(sic).  It is still open to respondent No. 2, to verify the genuineness and correctness of information.  Respondent no. 2, after due notice to petitioners, if feels satisfied that information received is correct, can place the name of the petitioners on CIB List.  [pp. 1199,1200] E,F & G
Shahid Karim for Petitioner.
Rissal Hassan Syed for Respondent No. 1
Rehan Nawaz for Respondent Nos. 2 and 3.

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