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Writ Petition No. II of 1982, decided on Ist June, 1982.

(a) Azad Jammu & Kashmir Co-operative Banks (Repayment and Recovery of Loans) Ordinance (XXXIV of 1977)-

-- S. 8-"Loan"-Repayment of loan to successor of dissolved Bank Debtor obtaining loan from Co-operative Bank-Bank standing dissolved-Registrar after dissolution issuing notice to petitioner demanding Rs. 35,531.96-Debtor repaying Rs. 37,400-Rs. 17,000 being accrued interest was further. demanded from debtor-Debtors to repay loans to successor Bank and in event of debtor's failure, Registrar can force them to do so-Borrower bound to repay entire loan inclusive of interest and word "loan" used in Ordinance plainly means borrowing of money on interest.

-- S. 44 read with S. 31 (5), 32 & 51 - Existing law allegedly against Injunctions of Islam-Petitioner contending interest on loan against Injunctions of Islam and not recoverable-Validity of law levying interest, held, cannot be questioned under S. 44 and till laws brought in conformity with Holy Qur'an and Sunnah', existing laws cannot be called in question.

Muhammad Riaz Inqilabi for Petitioner.

Date of institution : 24th May, 1982.

The petitioner is a debtor who obtained a sum amounting to Rs. 40,000 as such on loan from a Co-operative Bank namely, Kashmir National Co-operative Bank, Mirpur which stands dissolved since January, 1977. According to the petitioner, before the dissolution of the said Bank, an amount of Rs. 3,500 was repaid and after its dissolution a notice demanding Rs. 36,531.96 was issued to the petitioner by the Registrar, Co-operative Societies who is impleaded as a respondent here, on 27-12-1978. Mostly in response to the notice vide Annexure A', it appears that a sum of Rs. 37,400 was repaid and still there is a demand from the respondent for a more sum of Rs. 17,000 being the amount of interest having accrued on the sum borrowed as loan. This demand notice was not brought on record.

In case the payment of interest demanded is not made by the petitioner, he apprehends his arrest to be made by the Registrar (under Law).

The claim of interest is alleged to be made without lawful authority and a relief is sought to the effect that notice of demand of the aforesaid amount of interest would be declared of no legal effect for the reasons to follow :-

(1) that interest accrued cannot be claimed as no such power for claiming the interest is vested in the Registrar who is simply authorised to recover the loan excluding interest payable to the Co-operative Bank ;

(2) that after the dissolution of the Bank concerned, interest cannot be recovered under law ; and

(3) that as the interest is against the injunctions of Islam, it cannot be recovered in view of section 31(5) of the Interim Constitution Act.

The learned counsel for the petitioner was unable to show as to how the Registrar is an unlawful authority while forcing payment of interest. His authority to recover loan is admitted by the counsel of the petitioner himself. Under the relevant Ordinance the Registrar has been empowzred to recover loans advanced to the debtors by the Banks (dissolved).

The amounts of loans are to be paid by the debtors to the Federal Co-operative Bank the Bank succeeding to the dissolved Banks under law and in the event of failure of the debtors to repay the loans secured in the b manner provided by the Ordinance, the Registrar comes into force them to repay the loans borrowed, vide Ordinance No. XXXIV of 1977 called as the Co-operative Banks (Repayment and Recovery of Loans) Ordinance, 1977.

Therefore, there is no substance in the mere assertion of the counsel for the petitioner that Registrar is not a lawful authority in the matter to recover interest at the debt advanced to the petitioner by the Bank dissolved.

Again, the counsel for the petitioner contends that the interest is not included in the term loan and so under the Ordinance, the Registrar is only entitled to recover the principal amount and not the interest accrued and much so, after the dissolution of the Bank, no interest could be added to the amount borrowed. Both these contentions are devoid of any force.

It is not denied that the amount borrowed from the Bank was liable to interest and by the dissolution of the Bank, the liability of the petitioner cannot come to an end. He is bound by law to repay the entire loan inclusive of the interest. The terms on which the loan was secured are to be fulfilled by the debtor and till it is wholly satisfied, the petitioner cannot be absolved of his liability. The terms on which the loan was obtained by the petitioner were not disclosed in the writ petition. By loan, it is always meant that amount borrowed by a person was had on interest. The word loan includes itself the amount of interest. The amount borrowed free of interest from a Bank may be a debt and not the loan in the technical sense. Even the dictionary meaning of the word loan are clear to be interpreted, wherein loan means anything lent especially money at interest. Therefore, the word loan used in the Ordinance plainly means borrowing of money at interest.

Lastly, may be, interest in the mould of 'Reba' is prohibited in Islam and till the law in force in relation to levy of interest is changed or repealed in due course of process of law by referring the matter to Islamic Ideological Council of Pakistan and obtaining its advice there from as required by the Constitution, the validity of such a law cannot be questioned and the section 44 of the Interim Constitution vide section 32 of the Constitution under which the matter is to be taken to the Islamic Council for advice in respect of any question as to whether a certain Law is repugnant to the injunctions of Islam or is not repugnant to the injunctions of Islam, as the case may be, and till the laws are brought in conformity with the Holy Qur'an and Sunnah', the existing laws cannot be called in question under section 44 of the Constitution vide section 51 of the Constitution.

That being so, taking into consideration, the Ordinance No. XXXIV of 1977. read with sections 31(5), 32, 44 and 51 of the Interim Constitution Act, 1974, there is no force in this writ petition for the reasons above which is hereby dismissed in limine.

K. M. A. Petition dismissed.

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