Al Wakeelo
Your Digital Lawyer, Always on Duty
Initializing Secure Chambers
Your Digital Lawyer, Always on Duty
Initializing Secure Chambers
Official Citation: 2026 IHC 259771
Court / Jurisdiction: Islamabad High Court
Parties: Allied Bank Ltd vs M/s Electromech Engineering Service, etc
Ruling Summary: This decision was rendered by the Islamabad High Court, officially reported as 2026 IHC 259771. In this matter between Allied Bank Ltd and M/s Electromech Engineering Service, etc, the court adjudicated key questions of statutory construction, procedural regularity, and legal precedent under Pakistani law.
Core Holding: The honorable bench evaluated governing statutory provisions and judicial authorities to establish the rights of the parties, delivering the binding reasoning set out below.
COURT: Islamabad High Court (Honourable Mr. Justice Inaam Ameen Minhas, Honourable Mr. Justice Muhammad Azam Khan) AUTHOR JUDGE: Honourable Mr. Justice Muhammad Azam Khan DECISION DATE: 04-MAY-2026 CASE NO: Civil Revision-278-2026 CITATION: 2026 IHC 259771 PARTIES: Allied Bank Ltd VS M/s Electromech Engineering Service, etc LAW / SECTION: - SUBJECT: Against Order, REMARKS: FAO Against Order dated 15-02-2022 passed by Learned Judge Banking Court, Islamabad. ============================================================ JUDGMENT SHEET IN THE ISLAMABAD HIGH COURT, ISLAMABAD
FIRST APPEAL AGAINST ORDER NO.35 OF 2022 M/s Allied Bank Limited Versus M/s Electromech Engineering Services and 3 others.
Petitioner by : Mr. Mubeen Qureshi, Advocate. Respondents by : Mr. Abdul Hameed Baloch, Advocate for Respondents. Date of hearing : 04.05.2026 Muhammad Azam Khan, J. The present appeal arises out of the order dated 15.02.2022, whereby the learned Executing Court adjudicated upon the issue of cost of funds in favor of the Appellant/Decree Holder Bank, albeit in a manner presently under challenge. 2. Learned counsel appearing on behalf of the Appellant assailed the impugned order on multiple grounds. Placing reliance upon precedents reported as 2012 CLD 1670, 2013 CLD 1661, and 2015 CLD 1416, it was contended that the impugned order suffers from a fundamental legal infirmity inasmuch as it is a non-speaking order, devoid of proper reasoning and reflective analysis. It was urged that the learned Executing Court failed to properly construe the mandate of Section 3 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 (hereinafter referred to as “the Ordinance”), as well as the explicit terms of the Judgment and Decree dated 20.11.2019. In particular, it was contended that the Executing Court erred in holding that cost of funds was to be calculated mechanically on the decreetal amount, without appreciating that such cost must necessarily be linked to the point of default and the fluctuating outstanding liability thereafter. Elaborating further, learned counsel emphasized that the respondents had admittedly committed default on 28.02.2014, upon their failure to discharge their financial obligations within the stipulated time. This date, it was argued, constituted the legally operative trigger for the accrual of cost of funds.
Page 2 of 25 F.A.O No.35 of 2022
Consequently, any determination of such cost must originate from the date of default and be computed in accordance with the outstanding liability as it evolved over time. 3. Conversely, learned counsel appearing on behalf of the Respondents raised a preliminary objection as to the maintainability of the instant appeal. Invoking Section 22(6) of the Ordinance, it was contended that no appeal or revision lies against an interlocutory order passed by a banking Court. It was argued that the impugned order, being interlocutory in nature, does not qualify as a final judgment or decree, and therefore falls outside the permissible scope of appellate jurisdiction under the Ordinance. On this premise, dismissal of the appeal at the threshold was sought. 4. We have heard the learned counsel for the parties at considerable length and have carefully examined the impugned order, the Judgment and Decree dated 20.11.2019, as well as the authorities cited at the bar. 5. Before turning to the merits, the Court must first identify the juridical character of the present proceedings, for that characterization defines both the scope of review and the source of appellate authority. This matter reaches the Court as a First Appeal Against Order; yet, in substance, it does not arise from the original adjudication of the parties’ rights. The underlying banking suit instituted by the Appellant/Decree Holder Bank under Section 9(3) of the Ordinance for recovery of Rs. 20.00 million together with cost of funds and costs of suit stood conclusively determined by Judgment and Decree dated 20.11.2019. What remains is the enforcement of that decree. The impugned order was entered during execution and concerns the manner in which the decreetal entitlements are to be worked out. The proceeding, therefore, is not one of primary adjudication but of post-decreetal enforcement, governed by the scheme of the Ordinance, 2001. The office, at the time of the institution, categorized this appeal as “First Appeal against Order”. Section 22 of the Ordinance provides the appellate framework as under: -
Page 3 of 25 F.A.O No.35 of 2022
“22. Appeal.- (1) Subject to sub-section (2), any person aggrieved by any judgment, decree, sentence, or final order passed by a Banking Court may, within thirty days of such judgment, decree, sentence or final order prefer an appeal to the High Court. (2) The appellant shall give notice of the filing of the appeal in accordance with the provisions of Order XLIII Rule 3 of the Code of Civil Procedure (Act V of 1908) to the respondent who may appear before the Banking Court to contest admission of the appeal on the date fixed for hearing. (3) The High Court shall at the stage of admission of the appeal, or at any time thereafter either suo motu or on the application of the decree holder, decide by means of a reasoned order whether the appeal is to be admitted in part or in whole depending on the facts and circumstances of the case, and as to the security to be furnished by the appellant: Provided that the admission of the appeal shall not per se operate as a stay, and nor shall any stay be granted therein unless the decree- holder has been given an opportunity of being heard and unless the appellant deposits in cash with the High Court an amount equivalent to the decreetal amount inclusive of costs, or in the case of an appeal other than an appeal against an interim decree, at the discretion of the High Court furnishes security equal in value to such amount; and in the event of a stay being granted for a part of the decreetal amount only, the requirement for a deposit in cash or furnishing of security shall stand reduced accordingly. (4) An appeal under sub-section (1) shall be heard by a bench of not less than two Judges of the High Court and, in case the appeal is admitted, it shall be decided within 90 days from the date of admission. (5) An appeal may be preferred under this section from a decree passed ex-parte. (6) No appeal, review or revision shall lie against an order accepting or rejecting an application for leave to defend, or any interlocutory order of the Banking Court which does not dispose of the entire case before the Banking Court other than an order passed under sub- section (11) of section 15 or sub-section (7) of section 19.” 6. Subsection (1) confers a right of appeal to a person aggrieved by a “judgment, decree, sentence, or final order” of a Banking Court. Subsection
Page 4 of 25 F.A.O No.35 of 2022
(6), in turn, withdraws appellate recourse from interlocutory orders that do not dispose of the entire case, save for specified exceptions not attracted here. Read together, these provisions reflect a legislative design: to permit appeals from determinations that finally settle rights, while foreclosing piecemeal challenges to intermediate rulings. The difficulty, however, arises in the present setting. The “case” in the sense of the original lis has already been disposed of by decree; what remains is execution. The impugned order, though interlocutory in form, operates within a distinct phase where the court is tasked with giving effect to rights already crystallized. The Ordinance is notably silent on a dedicated appellate route against interlocutory orders passed at this execution stage. That silence cannot be treated as a command to abdicate judicial oversight. Procedural law is an instrument, not an end in itself. No code can anticipate the full range of circumstances that arise in the administration of justice; and where a rigid reading would convert procedure into a barrier elevating form over substance and permitting palpable error to persist the court must read the statute in a manner that preserves, rather than defeats, its purpose. 7. Where an execution order merely regulates process without touching the substance of the decree, the bar in Section 22(6) applies with full force. But where, as alleged here, the order determines the content of the decree itself by fixing or curtailing an element expressly awarded, such as cost of funds, it bears directly upon the decree-holder’s substantive entitlement. In that circumstance, to deny any avenue of review would risk insulating legal error and undermining the efficacy of the decree. The Court therefore holds that, notwithstanding Section 22(6), a narrowly confined supervisory review is maintainable to examine whether the executing court has remained within the bounds of the decree and the statute. This is not an invitation to re-litigate execution in appeal; it is recognition that orders which, in effect, alter or misapply the decree cannot be rendered immune from correction by the mere characterization of being interlocutory.
Page 5 of 25 F.A.O No.35 of 2022
8. In the peculiar facts of the present case, a foundational question arises: whether this Court, while exercising jurisdiction under the Financial Institutions (Recovery of Finances) Ordinance, 2001, can entertain a challenge to an order passed in execution proceedings, ostensibly interlocutory in nature, despite the bar contained in Section 22(6) of the Ordinance; and if so, whether the Court may, for procedural propriety, re-characterize the proceedings (from a First Appeal Against Order to an Civil Revision) without transgressing statutory limitations or improperly invoking inherent powers under Section 151 of the Code of Civil Procedure, 1908. 9. The issue under consideration, though appearing technical at first glance, in fact raises a deeper question regarding the balance between statutory limitations and the preservation of substantive rights. The apparent conflict arises from the interplay between Section 22(6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 which bars appeals against interlocutory orders and the necessity of ensuring that rights crystallized through a decree are not rendered illusory at the stage of execution. The resolution of this tension lies not in disregarding the statutory bar, but in correctly understanding the nature and effect of the impugned order. 10. It is a settled principle that not every order passed during the course of proceedings can be treated alike merely on the basis of its procedural label. An order may be interlocutory in form, yet its effect may travel far beyond procedural regulation and extend into the realm of substantive rights. In ordinary circumstances, interlocutory orders such as those granting adjournments, calling for documents, or regulating the conduct of proceedings do not affect the vested rights of the parties and are, therefore, rightly insulated from appellate interference under Section 22(6). The legislative object behind such insulation is to prevent fragmentation of litigation and to
Page 6 of 25 F.A.O No.35 of 2022
ensure that proceedings are not unduly delayed by repeated challenges to routine procedural directions. 11. However, the situation stands on an entirely different footing where an order, though passed in execution and ostensibly interlocutory, has the effect of altering, curtailing, or misapplying a right already adjudicated and embodied in a decree. In such cases, the Court must look beyond the form and examine the substance and consequence of the order. For instance, if an executing court merely directs a party to file a fresh statement of account or adjourns the matter for further proceedings, such directions remain purely procedural and fall squarely within the bar of Section 22(6). No interference would be warranted in such cases, as the rights of the parties remain unaffected. In contrast, consider a situation, akin to the present case, where the decree expressly awards cost of funds from the date of default till realization, yet the executing court directs that such cost of funds be recalculated on a reduced principal amount, thereby effectively diminishing the decreetal entitlement. Although such an order is passed in execution proceedings, its effect is not procedural but substantive, as it alters the very basis upon which the decree-holder’s rights have been determined. To treat such an order as a mere interlocutory direction would be to ignore its real impact and to permit a modification of the decree without recourse to appellate scrutiny. 12. The principle that where a right is recognized, a remedy must also be available for its enforcement lies at the very foundation of any legal system governed by the rule of law. A judicial decree is not merely a formal declaration of rights; it is a binding determination that carries with it the expectation of effective enforcement. If a decree-holder, having successfully established his entitlement before a competent court, is thereafter left without any mechanism to protect or realize that entitlement, the decree itself would be reduced to a hollow formality. The law, therefore, cannot be interpreted in a manner that recognizes rights in theory but denies their enforcement in
Page 7 of 25 F.A.O No.35 of 2022
practice. In this backdrop, the bar contained in Section 22(6) of the Ordinance, 2001 be understood in its proper context. The provision is designed to prevent unnecessary and premature interference in the progress of proceedings by excluding appeals against interlocutory orders of a purely procedural nature. Its object is to ensure expeditious disposal of cases and to avoid fragmentation of litigation through repeated challenges to interim directions. However, this bar cannot be extended to situations where the impugned order, though passed during execution and labeled as interlocutory, in effect alters or diminishes a substantive right that has already been adjudicated and embodied in a decree. To apply Section 22(6) mechanically in such circumstances would produce an unjust result. It would mean that even if an executing court were to misinterpret the decree, modify its terms, or reduce the entitlement of the decree-holder, no remedy would be available merely because the order is categorized as interlocutory. Such an interpretation would render the substantive relief granted by the decree vulnerable to distortion at the execution stage, thereby defeating the very purpose of adjudication. The law does not contemplate such an outcome, as it would undermine both the authority of judicial decisions and the confidence of litigants in the justice delivery system. Accordingly, a purposive interpretation of Section 22(6) becomes necessary. When read in light of its object, the provision must be confined to those interlocutory orders that are procedural in nature and do not affect the substantive rights of the parties. At the same time, where an order, though interlocutory in form, has the effect of determining, curtailing, or impairing a right flowing from the decree, it cannot be placed beyond judicial scrutiny. In such cases, the Court is justified in examining the order, not to reopen the decree, but to ensure that it is faithfully implemented and not altered in execution. Thus, the distinction lies not in the nomenclature of the order, but in its effect. If the order merely regulates the process, the bar under Section 22(6) operates fully. But if it touches the substance of the decree, the Court must ensure that a remedy remains available, so that the rights already recognized by law are not rendered
Page 8 of 25 F.A.O No.35 of 2022
illusory. This approach preserves both the legislative intent behind the statutory bar and the fundamental principle that justice must not only be declared but also be effectively enforced. It is necessary to elucidate that the power of this Court to interfere does not stem from any unrestricted appellate authority against interlocutory orders; rather, it emanates from the limited yet well-recognized jurisdiction vested in this Court to ensure that subordinate courts act within the confines of law and do not, under the guise of judicial process, pass orders which are coram non judice, procedurally unsustainable, or destructive of rights already crystallized through a decree. For such purpose, this Court possesses, inter alia, the following jurisdictions:— (i) Inherent jurisdiction preserved under Section 151 of the Code of Civil Procedure, 1908; (ii) Constitutional supervisory jurisdiction vested in the High Court under Article 203 of the Constitution, and (iii) Powers of High Court in Section 115 of CPC. (i) Section 151 of the Code 13. The role of Section 151 CPC in the present context is limited to addressing procedural gaps and ensuring that the administration of justice is not frustrated in situations not expressly contemplated by law. Where the statutory framework is silent as to the procedural course to be adopted particularly in execution-stage disputes involving substantive rights the Court may invoke its inherent powers in a supportive capacity, not to create jurisdiction, but to regulate procedure in a manner consistent with justice. It is in this limited sense that inherent powers operate: as a tool to prevent the failure of justice, not as a mechanism to override legislative intent. Accordingly, when this Court proceeds to re-characterize the present matter from a “First Appeal Against Order” to a “Civil Revision,” it does not do so by invoking Section 151 CPC as a source of jurisdiction. Rather, it recognizes that the matter, in substance, pertains to execution of a banking decree and concerns the manner in which a decreetal entitlement is being enforced. The
Page 9 of 25 F.A.O No.35 of 2022
re-characterization is thus a procedural correction aimed at aligning the form of the proceedings with their true legal nature. Jurisdiction, in this regard, flows from the Court’s authority under the Ordinance to ensure proper execution of decrees, and not from any independent exercise of inherent power. This distinction is of fundamental importance. The Court does not expand its jurisdiction, nor does it dilute the statutory bar against interlocutory appeals. Instead, it ensures that the impugned order is examined within the correct legal framework, having regard to its substantive effect. The exercise undertaken is, therefore, one of jurisdictional clarification and procedural regularization, rather than jurisdictional innovation. 14. In light of the foregoing, it is held that while Section 22(6) of the Ordinance bars appeals against interlocutory orders in general, such bar cannot be applied mechanically in cases where an execution order, though interlocutory in form, has the effect of altering or impairing substantive rights arising from a decree. In such exceptional circumstances, and in the absence of an express procedural mechanism, the Court may re-characterize the proceedings to reflect their true nature and proceed to examine the matter on merits, ensuring that justice is not defeated while remaining within the bounds of statutory limitations. It is in this backdrop that the principle articulated in 2003 CLD 1822 assumes relevance, wherein it has been observed that procedural law must be interpreted in a manner that advances justice and not in a way that renders a party remediless. The Court therein emphasized that the existence of a right necessarily carries with it the availability of a remedy, and any interpretation to the contrary would defeat the very purpose of adjudication. This issue has been well-analyzed in 2003 CLD 1822, a portion whereof reads as under: - “Mr. A. I. Chundrigar further maintained that no doubt this Court has wide powers to treat an appeal as petition under Article 199 and petition can be converted into appeal subject to limitation and jurisdiction. But he contended that this appeal cannot be converted into Constitution petition in view of the dictum of the apex Court in Syed Saghir Ahmad Naqvi v. Province of Sindh through Chief
Page 10 of 25 F.A.O No.35 of 2022
Secretary, S&GAD, Karachi and another (1996 SCMR 1165), that the statute excluding a right of appeal from the interim order cannot be bypassed by bringing under attack such interim orders in Constitutional jurisdiction. The party affected has to wait till it matures into a final order and then to attack it in the proper exclusive forum created for the purpose of examining such orders. The object of enacting the Ordinance is to provide speedy measures for recovery of outstanding loans of the Banking Institutions as their recovery suits remained pending in the Civil Courts for years together. If the orders in the nature of interlocutory orders are brought under challenge before the High Court, the object for which the enactment was made would be frustrated. The appellate power conferred on the High Court is only to the extent of entertaining appeal against the final order and judgment of the Banking Court. For these reasons, we are of the view that the order passed by learned Single Judge is an interlocutory order which does not decide the entire case, therefore, is not subject to the appeal in view of the bar contained in subsection (6) of section 22 of the Ordinance. Before reverting to the merit of the appeal, it would be proper to capitulate the scope, purpose and effect of the consolidation of analogous proceedings. (i) There will always be cases and circumstances which are not covered by the express provisions of the Code wherein justice has to be done. The reason is that the Legislature can foresee only the most natural and ordinary events and no rule can regulate for all times to come so as to make express provision against all inconveniences which are infinite in number and so that their dispositions shall express all the cases that may probably happen. (ii) The prescribed rule of procedure may be abuse, or so used as to give a mere formality, the significance of substantive effect and thus obstruct, instead of facilitating the administration of justice. Such power of Court to prevent abuse of the process of the Court is recognized to exist as stated by Lord Denning M.R. in Goldsmith v. Sperrings Ltd. (1977) 2 All ER 566, 754: “In a civilized society, legal process is the machinery for keeping order and doing justice. It can be used properly or it can be abused. It is used properly when it is invoked for the
Page 11 of 25 F.A.O No.35 of 2022
vindication of men’s rights or the enforcement of justice claims. It is abused when it is diverted from its true course so as to serve extortion or oppression; or to exert pressure so as to achieve an improper end. When it is so abused, it is a tort, a wrong known to the law. The Judges can and will intervene to stop it. They will stay the legal process, if they can, before any harm is done. If they cannot stop it in time, and harm is done, they will give damages against the wrongdoer. Sometimes abuse can be shown by the very steps being taken in the Courts. Further, the ultimate object of all procedural rules is to ensure that there should be a fair trial according to law; the fair trial is not all one-sided; it means fairness to both the parties.” The inherent power of the Court is recognized only to meet those cases for which no provision is made by the Code. It follows, therefore, that where there are express provisions of law applicable to particular case, there is no inherent power in the Court to override them. The words “nothing in this Code shall be deemed to limit or otherwise affect” used in section 151 do not mean that the Code stands repealed where a Court decides to exercise its inherent powers ex debito justitiae to consolidate the proceedings. Such power can be exercised for the ends of justice.” (ii). Supervisory Jurisdiction of Superintendence and Control under Section 115 CPC 15. The matter may also be examined from another equally significant legal perspective, namely, the supervisory revisional jurisdiction vested in the High Court under Section 115 of the Code of Civil Procedure, 1908. Section 115 CPC embodies the doctrine of judicial superintendence and control. For reference, the Section 115 of the CPC is reproduced as under: - “115. Revision.—(1) The High Court may call for the record of any case which has been decided by any Court subordinate to such High Court and in…
Read the unabridged text and precedent citation network on Al Wakeelo Legal Research Platform.