Supreme Court bars banking courts from awarding unclaimed markup
The Supreme Court overturned a Lahore High Court decision, ruling that banking courts cannot add markup to a decree unless it was expressly claimed in the original plaint.
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Open on Dawn## Supreme Court Decision
The Supreme Court of Pakistan, in a three‑member bench led by Justice Muhammad Ali Mazhar, dismissed a Lahore High Court (LHC) judgment that had permitted Citibank to recover additional markup through an amended decree. The apex court held that a banking court may not award any relief that was not specifically pleaded in the original plaint, citing Section 152 of the Civil Procedure Code (CPC) as inapplicable for altering substantive rights.
## Background of the Case
In the 1990s, Crescent Spinning Mills obtained financing from Citibank but defaulted on its obligations. Citibank filed a recovery suit for Rs 76 million in 1995, which was decreed in its favour in 1999. The bank later sought to include markup on the outstanding amount by filing a Civil Miscellaneous Application (CMA) under Section 152 CPC, leading to an amended decree that added the markup.
## Legal Arguments
Crescent Spinning Mills, represented by Advocate Haq Nawaz Chattha, argued that the original plaint only sought the principal and liquidated damages, and the banking court had no authority to add markup. The bank, through Advocate Muhammad Omar Saleem, contended that the amendment was permissible because the 1997 Banking Companies (Recovery of Money) Act was in force when the decree was passed.
## Supreme Court Reasoning
The Court clarified that Section 152 CPC cannot be used to rehear a case or modify the parties’ substantive rights. Any error must be corrected via a review petition or appeal, not by amending the decree. It reiterated that relief not claimed in the plaint is considered abandoned under Order II, Rule 2 of the CPC, and a generic prayer for “any other relief” does not justify the addition of unclaimed markup.
## Outcome
The Supreme Court converted the petition into an appeal, set aside the LHC judgment and the banking court order that had allowed the markup, and restored the original decree limited to the principal amount and liquidated damages.