QUETTA, Aug 5: The Balochistan High Court has held that provisions of Section 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, which allow financial institutions to foreclose on mortgaged property of defaulters without seeking intervention of a court are not unconstitutional, arbitrary or discriminatory.

A division bench of the BHC comprising Chief Justice Raja Fayyaz Ahmed and Justice Akhtar Zaman Malghani dismissed a constitutional petition filed by Abdul Sattar Lasi against the federation and the Saudi-Pak Commercial Bank (formerly Prudential Commercial Bank), declaring that the provisions did not create a parallel judiciary and were not contrary to the constitution.

It said in the judgment: “If we see provisions of Section 15, it is manifest that these provisions are applicable only to a class of those individuals who have mortgaged their properties in order to obtain financial facilities, loans but failed to repay the amount as agreed and are defaulters; whereas for other classes of customers whose loans are not based on mortgage, the bank has to file suit under Section 9 of the Ordinance, 2001, which is reasonable classification.”