Updated: Tuesday April 30, 2013/AthThulatha
Jamada El Thaniah 20, 1434/Mangalavara
Vaisakha 10, 1935, at 07:48:31 PM
The Corporate & Industrial
Restructuring Corporation Ordinance, 2000
L OF 2000
22nd September, 2000
An
Ordinance to make provisions for the
acquisition, restructuring, rehabilitation, management, disposition and
realization of non-performing loans and other assets of various banks and
financial institutions.
WHEREAS it is expedient, in the public interest, to deal with
financial institutions and their assets, to assist the business sector by
dealing with distressed enterprises and to promote the rehabilitation of the
national economy by making provisions for the acquisition, restructuring,
rehabilitation, management disposition and realization of non-performing loans
and other assets of various banks and financial institutions and for matters
ancillary or incidental thereto;
AND
WHEREAS the National Assembly and the
Senate stand suspended in pursuance of the Proclamation of the Fourteenth day
of October, 1999 and the Provisional Constitution Order No. 1 of 1999;
AND
WHEREAS the President is satisfied that
circumstances exist which render it necessary to take immediate action;
NOW, THEREFORE, in pursuance of the Proclamation of Emergency of the fourteenth day of October, 1999, and Provisional Constitution Order No. 1 of 1999, as well as Order No. 9 of 1999, and in exercise of all powers enabling him in that behalf, the President of the Islamic Republic of Pakistan is pleased to make and promulgate the following Ordinance:---
CHAPTER I
PRELIMINARY
1.
Short title, extent and commencement.-(1)
This Ordinance may be called the Corporate and Industrial Restructuring
Corporation Ordinance, 2000.
(2) It extends to the whole of
(3) It shall come into force at once.
2.
Definitions.- In this Ordinance, unless
there is anything repugnant in the subject or context:---
(a) ‘Administration Committee’ means the administration committee established
under section 12;
(b) ‘Board’ means the Board of Directors constituted under section 6;
(c) ‘bonds’ means bonds, debentures, participation term certificates, term
finance certificates, redeemable capital certificates or similar instruments
providing for scheduled or contingent payment of debt obligations;
(d) ‘book value’ means the rupee amount, inclusive of principal and accrued
profit, owed by any obligor in connection with any financial asset as reflected
on the books and records of the financial institution, as of the transfer date.
(e) ‘Chairman’ means the Chairman of the Board;
(f) ‘Chief Executive’ means the Chief Executive Officer of the Corporation;
(g) ‘collateral’ means any asset, property, right, claim, entitlement, share,
undertaking, guarantee, agreement, document or instrument, security interest,
charge, mortgage, lien, hypothecation pledge or assignment in respect of or as
security for any financial asset;
(h) ‘Commission’ means the Securities and Exchange Commission of Pakistan
established under section 3 of the Securities and Exchange Commission of Pakistan
Act, 1997 (XLII of 1997);
(i) ‘Corporation’ means the Corporate and Industrial Restructuring Corporation
established under section 4;
(j) ‘director’ means a director of the Board;
(k) ‘financial asset’ means any short, medium or long term interest and
non-interest bearing loan, finance, advance, lease, instalment, term finance
certificate, participation term certificate, musharaka, modaraba, profit and
loss sharing agreement, redeemable capital, guarantee or contractual right to
receive payment of money in respect of sums advanced or committed to an obligor
by a financial institution including collateral pertaining thereto;
(l) ‘financial institution’ means any bank or other financial institution
operating in Pakistan wherein the Federal Government holds overwhelming equity
in excess of eighty-five per cent as specified in the Schedule;
(m) ‘Government entity’ means any Ministry, Division, Department or office of
the Federal Government or any corporation, company, trust, statutory body or
other entity of which more than fifty per cent of the equity or beneficial
interest is directly or indirectly owned or controlled by the Federal
Government;
(n) ‘non-performing asset’ means any financial asset;
(a) which is held as an asset on the books of a financial institution;
(b) with respect to which the obligor has been in arrears on any payment
obligation for a period of more than three hundred and six-five days,
including:---
(i) collateral with respect to any financial asset; and
(ii) a whole or partial right or interest of a financial institution in any
financial asset, that otherwise constitutes a non-performing asset including a
financial asset with respect to which the financial institution has an ongoing
funding obligation; and
[(c) with respect to which the obligor’s outstanding payment obligation to any
financial institution exceeds thirty million rupees: -
Provided that the Federal Government may, by notification in the official
Gazette, alter, reduce or increase the said amounts and when it deems fit.]
(o) ‘obligor’ means any individual, proprietorship concern, company or other
body corporate, trust, partnership or other entity that has, with respect to a
non-performing asset, a contractual or legal obligation or duty to make
payment, effect performance, provide security, or collateral with respect to
any financial asset whether as principal, surety, guarantor or otherwise and
whether such obligation is primary, secondary, matured or contingent;
(p) ‘outstanding amount’ means the book value of a non-performing asset of the
financial institution less,---
(a) any amount on the books of the financial institution appearing as a
specific reserve applicable to that non-performing asset;
(b) any amount on the books of the financial institution appearing in a general
loan loss and/or other reserve applicable to that non-performing asset; and
if, in the opinion of the Board, the book value of the non-performing asset, as
adjusted in sub-clauses (a) and (b), is higher than the estimated market price
of the non-performing asset, the Board shall commission an independent
evaluator to determine such market price and in the event that the market price
as determined by the independent evaluator is lower than the book value as
adjusted in sub-clauses (a) and (b), such market price shall be deemed to be
the outstanding amount;
(q) ‘regulations’ means regulations made under this Ordinance;
(r) ‘rules’ means rules made under this Ordinance;
(s) ‘Schedule’ means the Schedule to this Ordinance; and
(t) ‘State Bank’ means the State Bank of
3.
Ordinance not to derogate from other laws.-The
provisions of this Ordinance shall be in addition to and save as hereinafter
provided, not in derogation of any other law for the time being in force.
CHAPTER II
ESTABLISHMENT OF THE CORPORATION AND THE BOARD
4.
Establishment of the Corporation.-(1) A
corporation called the Corporate and Industrial Restructuring Corporation is
hereby established for carrying out the purposes of this Ordinance.
(2) The Corporation shall be a body corporate having a common seal, with
powers, subject to the provisions of the Ordinance, to hold and dispose of
property and shall by its name sue and be sued.
(3) The headquarters of the Corporation shall be at
5.
Board and its powers.-(1) The overall
direction, management, control and superintendence of the affairs of the
Corporation shall vest in the Board which may exercise all such powers and do
all such acts and things as may be exercised and done by the Corporation as set
out in section 18.
(2) In discharging its functions, the Board shall act with prudence and sound
business and financial considerations for and on behalf of all persons who have
beneficial interest as creditors or otherwise are beneficiaries, including the
financial institutions and Government entity.
6. Composition of the Board.-(1) The Board shall consist of the
following directors, namely:---
(a) the Minister for Finance, Government of
(b) the Minister of Commerce and Industry, Government of
(c) the Governor, State Bank of
(d) the Chairman, Privatization Commission of
(e) the Secretary General, Ministry of Finance;
(f) the Chief Executive as defined in clause ,(f) of section 2; and
(g) a minimum of four and a maximum of eight persons of repute from the private
sector and as far as possible from each Province, one of whom shall be from the
banking sector.
(2) The directors referred to in clauses (a) to (f) of sub-section (1) shall be
ex officio directors.
(3) The directors under clause (g) of sub-section (1) shall be appointed by the
Federal Government, who shall hold office for a term of two years and shall be
eligible for re-appointment for additional terms of two years each.
(4) No act or proceedings of the Board shall be invalid merely on the ground of
the existence of any vacancy in, or defect in the constitution of, the Board.
(5) No director shall have any direct or indirect financial interest in, or
have business connection with any obligor or financial institution whose
non-performing assets are the subject of this Ordinance.
Explanation.-For the purposes of this sub-section, any involvement of the
spouse or any lineal ascendant or descendant of any director with any obligor
or financial institution shall be considered as a direct financial interest or
connection of the director with such obligor or financial institution.
(6) The directors shall not, for two years after the expiry of their term of
office, enter into the employment of or accept any advisory or consultancy
relationship with any obligor or financial institution whose non-performing
assets are the subject of this Ordinance.
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7.
Chairman of the Board.-The Minister for
Finance shall be the Chairman of the Board.
8.
Chief Executive of the Corporation.-(1)
The Chief Executive shall be appointed by the Federal Government who shall be
the whole-time chief executive officer of the Corporation.
(2) The Chief Executive shall hold office for a term of two years and shall be
eligible for re-appointment for additional terms of two years each.
(3) Subject to its superintendence, direction and control, the Board may
authorize in writing the Chief Executive to exercise and perform any or all of
the following powers and functions as the Board deems fit, namely:---
(a) to deal with, negotiate, enter into and sign agreements and contracts with
any obligor or financial institution in respect of the non-performing assets or
related collateral and to take any and all actions, in any manner, to advance
the business of the Corporation as specified in section 18;
(b) to institute, finance, manage, oversee and terminate rehabilitation plans
and schemes, for the non-performing assets or the obligor, as the case may be;
(c) to pay the cost, charges and expenses for the day to day business of the
Corporation;
(d) to receive money or goods on behalf of the Corporation;
(e) to sell, deal in and dispose of all articles and goods of the Corporation;
(f) to engage, employ, fix and pay the remuneration and dismiss or discharge
all managers, agents, secretaries, clerks, servants, workmen and other persons
employed in, or in connection with, the Corporation’s business;
(g) to appoint any person or persons to be attorney or attorneys of the
Corporation for such purposes and with such power, authorities and discretions
and for such period and subject to such conditions as he may from time to time
think fit;
(h) to make and give receipt, release and discharge, all moneys payable to the
Corporation or for the claims and demands of the Corporation;
(i) to draw, accept, endorse and negotiate all such cheques, bills of exchange,
promissory notes and Government and other securities as shall be necessary in
or for carrying on the affairs of the Corporation whether the account may be
overdrawn or not;
(j) to institute, compromise, withdraw or abandon any legal proceedings by or
against the Corporation or its officers or otherwise concerning the affairs of
the Corporation;
(k) to provide for the welfare of employees or ex-employee of the Corporation
and the wives, widows or families or the dependents of such persons in such
manner as he may think fit;
(l) to open, maintain and operate accounts or letters of credit for any amount
with any bank or banks and to give instructions for operation of such accounts;
(m) to appear before any Court of law, civil criminal, revenue, excise,
income-tax including Banking Courts and Tribunals established for recovery of
bank dues and loans, whether original or appellate. High Courts and Supreme
Court of Pakistan and other authorities for and on behalf of the Corporation
and to institute, apply for transfer of suits and other proceedings, conduct,
prosecute and defend suits and legal proceedings whatsoever including original,
appellate or any other jurisdiction, sign power-of-attorney or other
authorization, statements, pleadings and petitions on behalf of the Corporation
and to represent, defend and safeguard the interest of the Corporation.
(n) to enter into all such negotiations and contracts and rescind or vary all
such contracts and do all acts, deeds and things, in the name and on behalf of
the Corporation as he may consider necessary, expedient or proper, or in
relation to any of the matters aforesaid or otherwise, for the purposes of the
Corporation;
(o) to give effectual discharge for moneys payable to the Corporation and for
its claims and demands;
(p) to purchase or take on lease or otherwise acquire for the Corporation,
land, buildings, rights and privileges for the purpose of officers or premises
of the Corporation at such prices and generally on such terms as he may think
necessary and expedient, to build, alter and furnish offices, houses or
premises and let or sub-let any such houses or premises in portion or
otherwise;
(q) to demand and enforce payment, delivery, transfer of any dues for recovery
and receive from all and every persons, body corporate or corporations, firm or
companies whatsoever, all money, securities for money, debts and claims of all
kinds and demand, enforce, deliver and receive and take possession of money,
securities, shares, and goods produced and property of all kinds whether
belonging to the Corporation as security or in trust or held by any person or
company in trust or by way of security for the Corporation;
(r) to deal with, make arrangements, sign contracts with Government,
semi-Government, autonomous bodies, corporations, local Government and other
institutions; and
(s) to appoint attorney, agents, managers and authorize them to exercise any or
all such powers and functions as are mentioned in clauses (a) to (r) above.
(4) The Federal Government may, by notification in the official Gazette, remove
the Chief Executive if:---
(a) he refuses or fails to discharge or becomes in the opinion of the Federal
Government, incapable of discharging his responsibilities under this Ordinance;
or
(b) he has been declared insolvent; or
(c) he has been declared to be disqualified for employment in, or has been
dismissed from the service of
(d) he has knowingly acquired or continued to hold without the permission in
writing of the Federal Government, directly or indirectly or through a partner,
any share or interest in any obligor or financial institution.
9.
Committees.-The Board may, for the
purposes of obtaining advice and assistance in carrying out the purposes of
this Ordinance, constitute one or more committees consisting of members of the
Board and any other suitable persons as it may deem fit. Any committee so
formed shall, in exercise of the powers delegated to it or conferred on it,
conform to any restrictions that may be imposed on it by the Board.
10.
Verification Committees.-(1) For the purpose
of this Ordinance and before taking any action thereunder, the Corporation
shall, having regard to the facts and circumstances of a case, refer a question
of bona fide dispute relating to liability of the obligor in respect of the
non-performing assets or cases relating thereto, including the cases of fraud,
misrepresentation, and breach of any provision of law, rule, regulation and
circulars of the State Bank, regarding the calculation, existence and repayment
of a financial obligation or outstanding loan, mark-up or interest claimed
against an obligor, to the Governor State Bank for verification and correct
determination and calculation by the Verification Committee as hereafter
provided:---
Provided that the Corporation may in appropriate cases and having regard to the
facts and circumstances of a case require the Governor State Bank to include
one or more suitable persons including an expert or consultant to be member of
the Verification Committee.
(2) The verification, determination and calculation of matters referred to in
sub-section (1) shall be made in accordance with the existing law, rules,
regulations and circulars of the State Bank in the manner provided herein
regard to the principal amount of loan, mark up, interest and ancillary financial
matters relating to the financial institutions as claimed by or against the
financial institution or the Corporation, as the case may be, in respect of the
non-performing assets and the liability of the obligor.
(3) Save as provided in this Ordinance, the provisions of sub-sections (1) and
(2) shall not affect the validity, continuance and enforcement of an order of
winding up of a company under the
Companies Ordinance, 1984, which has been made before the commencement of
this Ordinance except for the purpose of calculating the payment of any
financial obligation or verified claim to the creditor or contributory or
liability of the guarantor or any other person.
(4) Where a matter is referred to the Governor State Bank under sub-sections
(1) and (2), he may constitute one or more Verification Committees for the
purposes of this Ordinance.
(5) The Verification Committee shall consist of a nominee of the Governor State
Bank being a senior officer of the State Bank who shall be the Chairman of the
Committee, two Chartered Accountants, to be nominated by the Governor State
Bank and one Chartered Accountant to be nominated by the Council of the
Institute of Chartered Accountants of Pakistan, Karachi, such nomination to be
obtained by the Governor State Bank and such other person as the Corporation
may require.
(6) The Chairman of the Verification Committee shall convene the meetings,
conduct proceedings of the Committee, maintain record including the evidence
submitted before him by the parties and their statements, and on their request
supply authenticated copies of the record to them.
(7) The Verification Committee after examination of the record of the concerned
lending financial institution and the obligor and after due notice by courier
service, fax, U.M.S. or any other effective mode to both parties and affording
them reasonable opportunity to explain their position and hearing them in
person and through their chartered accountants shall make correct
determination, verification and calculation of liability and matters referred
to in sub-sections (1), (2) and (3) in accordance with the law, rules,
regulations and circulars of the State Bank.
(8) Where a party after due notice under sub-section (7) does not appear in
person or through chartered accountant before the Verification Committee, it
may proceed ex-parte:---
Provided that nothing contained herein shall prevent such party from appearance
before the Verification Committee before the conclusion of the proceedings.
(9) The Verification Committee shall submit its finding and report with
recommendations to the Governor State Bank within thirty days of the
commencement of the proceedings or such extended period as the Governor State
Bank may allow for reasons to be recorded in writing.
(10) The Governor State Bank shall consider the findings and report and
recommendations submitted to him by the Verification Committee under
sub-section (9) and may accept or modify the same or may, for reasons to be
recorded, make such other appropriate recommendations and findings in respect
thereof as he may deem fit.
(11) The Governor State Bank shall forward his recommendations and findings
made under sub-section (10) alongwith the finding, report, recommendations and
record of the Verification Committee to the Corporation and the parties will be
entitled to obtain copies thereof from the Corporation.
(12) The recommendations and findings of the Governor State Bank made on the
basis of finding, report and recommendations of the Verification Committee in
regard to calculation of liability of obligor shall be final and have
presumption of truth unless found to contain manifest error or contrary to law,
but the same shall be subject to orders of the High Court.
(13) The Corporation after considering the recommendations and findings of the
Governor State Bank forwarded to it under sub-section (11) will take
appropriate action under this Ordinance having regard to the facts of each
case.
(14) In the event of failure either of the Verification Committee to conclude
the reference within thirty days of the commencement of the proceedings or such
extended period referred to in sub-section (9) or the failure of the obligor or
the financial institution to accept the recommendations and findings of the
Governor State Bank, the Corporation may proceed in respect of the
non-performing asset under this Ordinance.
(15) Notwithstanding any thing contained in any other law for the time being in
force, the final recommendations and findings by the Governor State Bank and
the finding, report and the recommendations of the Verification Committee under
sub-section (11) shall constitute admissible evidence for any legal
proceedings.
Explanation.-For the purpose of this Ordinance any instructions given by
the State Bank to any bank or financial institution for writing off any debt
for the purpose of accounting of any such bank or financial institution shall
not be construed as satisfaction of any debt payable by the obligor.
11.
Guidelines for Corporation and the Governor State Bank.-The Corporation, and where a matter is referred by it
to Governor State Bank under sub-section (1) of Section 10, the Governor State
Bank, shall take into consideration inter-alia the following factors as
the Corporation, or as the case may be, the Governor State Bank, may deem fit
having regard to the facts of each case, namely:---
(a) the practical possibilities of the non-performing asset;
(b) the possibility of re-scheduling of financial assistance;
(c) the adequacy of the subsisting securities and the willingness of the
obligor to provide sufficient additional security;
(d) such other preventive, ameliorative and remedial measures including
amalgamation or merger, change in management whether partial or whole or such
incidental, consequential or supplemental, measures as may be necessary;
(e) examine the possibility of keeping alive a running project by providing
reasonable financial assistance through financial institutions keeping in view
the interest of both borrower and lender and avoiding unemployment;
(f) where the obligor can make financial arrangement on a joint venture basis
with a third person on mutually agreed terms so as to provide sufficient
security to the satisfaction of the Governor State Bank or the Board for
repayment of the outstanding amount or liability of the non-performing asset to
be determined in accordance with the State Bank’s circulars, instructions, rules,
regulations and the law; and
(g) any other facts and circumstances having regard to public interest and the
objectives of the Ordinance.
12.
Administration Committee.-(1) The
Administration Committee shall consist of the Chief Executive and four other
members of the Corporation to be appointed from the fields of banking, law,
finance, engineering, management or accountancy.
(2) The minutes of every meeting of the Administration Committee shall be laid
before the Board at its meeting next following the meeting of the
Administration Committee.
(3) Subject to the superintendence, direction and control of the Board, the
Administration Committee may deal with any matter within the competence of the
Board and may exercise such powers and perform such functions as may be
assigned to it by the Board.
13.
Members, officers and servants of the Corporation.-(1) The Board shall appoint four members of the
Corporation in the fields of banking, law, finance, engineering, management or
accountancy to assist the Corporation in the discharge of its functions under
this Ordinance. Each member shall receive such salary and allowances, be
subject to such conditions of service and removal, as may be prescribed by the
rules.
(2) The Corporation may appoint such officers and servants as it considers
necessary for the efficient discharge of its functions on such terms and
conditions as the Board may decide. http://www.lawandlawyers.com.pk/
- CONTENTS
14.
Meeting of the Board and the Administration Committee.-(1) No business of the Board or of the Administration
Committee shall be transacted except at a meeting at which a quorum of a
majority of the directors then appointed in the case of the Board, and three
members in the case of the Administration Committee, are present.
(2) The meetings of the Board and of the Administration Committee shall be held
at such times and at such places as the Federal Government may, by rules,
prescribe.
(3) All meetings of the Board shall be presided over by the Chairman of the
Board and of the Administration Committee by the Chief Executive. In the
absence of the Chairman of the Board at a Board meeting, the Chief Executive
shall preside. In the absence of the Chief Executive at a meeting of the
Administration Committee, the meeting shall be presided over by a member
authorized in writing by the Chief Executive.
(4) The decisions at the Board and the Administration Committee shall be taken
by a majority provided that such majority includes the presiding officer as
mentioned in sub-section (3). At a meeting of the Board or of the
Administration Committee, each director or member, as the case may be, shall
have one vote, and in the case of equality of votes, the presiding officer
shall have a second or casting vote.
(5) A resolution in writing signed by the majority of the Board and the
Chairman of the Board or the Administration Committee and the Chief executive
or affirmed by them through facsimile, telex or telegram shall be as valid and
effectual as it has been passed at a meeting of the Board or the Administration
Committee, as the case may be, duly convened land held.
15.
Qualifications and disqualifications of directors.-No person shall be, or shall continue to be a director
who:---
(a) is or at any time has been adjudicated as insolvent;
(b) is found to be a lunatic or becomes o unsound mind;
(c) is or has at any time been convicted of any office which, in the opinion of
the Federal Government, is an offence involving moral turpitude;
(d) absents himself from all the meetings of the Board, without leave of
absence from the Board, for a continuous period of six months or, if less than
three meetings are held with in such period, from three consecutive meetings of
the Board; and
(e) is a salaried official of the Corporation other than the Chief Executive.
16.
Employees of the Corporation to be public servants.-Every person in the service of the Corporation shall,
when acting or purporting to act in pursuance of any of the provisions of this
Ordinance, be deemed to be a public servant within the meaning of section 21 of
the Pakistan Penal Code, 1860
(Act XLV of 1860).
17.
Indemnity of members, directors, officers or servants.-(1) A director shall not be personally responsible for
the acts of any other director or of any member or officer or servant of the Corporation
or for any loss or expenditure of the Corporation by reason of the
insufficiency or deficiency in value of or title to any property or security
acquired or taken on behalf of the Corporation, or for anything done by him in
good faith in the discharge of his duties.
(2) No suit, prosecution or legal proceedings shall lie against the
Corporation, the Chairman of the Board, the Chief Executive, or directors,
members or officers and servants of the Corporation, in respect of anything
done or intended to be done in good faith under this Ordinance.
CHAPTER III
POWERS AND FUNCTIONS OF THE CORPORATION
18.
Business which the Corporation can transact.-Without
prejudice to the provisions of any other law for the time being in force and
subject to the provisions of this Ordinance, the Corporation may exercise
powers and functions as under:---
(a) to acquire, purchase, hold, manage, restructure, rehabilitate, sell and
dispose of non-performing assets;
(b) to acquire, purchase, manage, restructure, rehabilitate, sell and dispose
of any obligor being a corporation or a company;
(c) to purchase, take over, own, hold, sell, lease, arrange finance for,
manage, dispose of, re-organize, restructure, rehabilitate and otherwise, enter
into any settlement or contract, realize, mortgage, hypothecate, control,
manage any loan, finance, advance, commitment, lease instalment, sale contract
or other activity relating to a non-performing asset;
(d) to purchase, take over, own, hold, sell, lease and otherwise dispose of, re-organize,
restructure, rehabilitate and otherwise enter into any settlement or contract,
realize, pledge, mortgage, hypothecate, control, manage and arrange finance for
any asset, property, undertaking, collateral or security underlying or relating
to or securing any financial asset or instrument, including any intellectual
property, trade mark, equity, financial interest, legal and contractual right,
asset, guarantee and other undertaking;
(e) to initiate, take, continue, resist implement and perform any and all
activities for the recovery of non-performing assets including filing suits and
appeals and to enter into settlements, through the Courts or outside, in
respect thereof;
(f) to engage and enter into agreements with financial and other institutions,
and financial, legal, accounting, valuation and other specialists, for the
purposes of the business of the Corporation;
(g) to purchase, amalgamate, enter into partnerships, form joint ventures, make
profit sharing arrangements or co-operate or participate with any company or
other entity for the business purposes of the Corporation;
(h) to borrow money and secure or discharge any debt or obligation binding on
the Corporation in such manner as may be thought fit, and in particular by
mortgages of or charges upon all or any of the real and personal property,
present and future, of the Corporation or by the creation and issue, on such
terms as may be deemed expedient, of debentures, term finance certificates,
participation term certificates, or other redeemable capital as defined in the
Companies Ordinance, 1984 (Ordinance XLVII of 1984) or other securities of any
description;
(i) to sell, improve, manage, develop, exchange, mortgage, let or rent (for
profit or royalty or otherwise), grant licences, easements, options, servitudes
and other rights over and in any other manner deal with or dispose the real and
personal property, assets, rights and effects of the Corporation;
(j) to open and maintain the Corporation’s accounts with banks and financial
institutions and to draw, make, endorse, accept, discount, execute and issue
promissory notes, bills of exchange, bills of lading, warrants, participation
term certificates and other negotiable or transferable instruments;
(k) to establish or promote, or concur or participate in establishing, any
corporation or other entity whose objects shall include the acquisition of all
or any of the property or liabilities of the Corporation, or the promotion of
which may seem, directly or indirectly, calculated to benefit the Corporation;
(l) to enter into any agreement with any authorities, Federal, Provincial,
autonomous, semi-autonomous, municipal, local or otherwise that may seem
conducive to the Corporation’s objects or any of them, and to obtain from any
such authority, rights, privileges and concessions which the Corporation may
deem desirable to obtain and to carry out, exercise and comply with any such
arrangements, rights, privileges and concessions; and
(m) all powers enumerated in sub-section (3) of section 8 entrusted to Chief
Executive.
19.
Corporation not to be a banking company.-Without
prejudice to the provisions of section 32, the Corporation shall be deemed not
to be engaged in the business of banking for purposes of the Banking Companies
Ordinance, 1962 (LVII of 1962), or, as the case may be the State Bank of Pakistan Act,
1956 (Act XXXII of 1956).
20.
Financial Institutions to which the provisions of this Ordinance shall apply.-The provisions of this Ordinance shall apply to
financial institutions specified in the Schedule to this Ordinance in relation
to the non-performing assets as mentioned in their audited balance sheet
subject to rights of third parties.
21.
Consideration for transfer of non-performing assets.-The Corporation shall pay to the concerned financial
institution the outstanding amount as consideration for the transfer of
non-performing assets by mutual agreement upon such terms and conditions and in
such manner as may be prescribed by rules to be notified in the official
Gazette.
22.
Bonds issued by the Corporation.-(1) The
payment obligations in respect of any bonds issued by the Corporation pursuant
to mutual agreement between the Corporation and the financial institution shall
bear the full faith and credit of the Islamic Republic of Pakistan. Recourse
for payment of such bonds, inaccordance with their respective terms, may be
against the Corporation or directly against the Federal Government without the
necessity of notice to or prior demand on the Corporation. The tenure of the bonds
shall not exceed five years from the date of issuance.
(2) At the request of the Corporation, the appropriate representative of the
Federal Government shall execute and deliver, on behalf of the Federal
Government, any bonds presented to them by the Corporation to evidence the full
faith and credit obligation of the Federal Government.
(3) Any bond issued by the Corporation to a financial institution shall also
constitute an approved investment for purposes of the liquidity and reserve
requirements under the
Banking Companies Ordinance, 1962 (LVII of 1962).
23.
Certain rights and remedies.-(1) In
addition to the provisions of this Ordinance or any other law for the time
being in force, the Corporation shall, for the rehabilitation, management and
restructuring of the obligor in respect of whom any non-performing assets and
collateral are held by it or on its behalf, have the following powers, rights
and remedies, each of which shall be independent and in addition to the others
namely:---
(a) the Corporation may request the Commission as provided in section 295 of
the Companies Ordinance, 1984 (XLVII of 1984) to take action under section 295
of the said Ordinance if it is of the opinion that the condition of the obligor
warrants such action. The Commission may in pursuance of the said section and
after complying with its requirements and giving the obligor an opportunity to
be heard, appoint the Chief executive or his nominee as an Administrator,
hereinafter referred to as the Administrator, to manage, the affairs of the
obligor;
(b) all the provisions of section 295 of the Companies Ordinance, 1984
(XLVII of 1984) shall apply, as far as possible, to the functioning of the
Administrator as stated herein; and
(c) the Corporation shall be entitled to apply to the Commission to avail the
benefits of section 296 of the
Companies Ordinance, 1984 (XLVII of 1984).
24.
Powers of the Corporation to seek assistance.-(1)
The Corporation shall have the power to seek assistance and information from
any department of the Federal Government or a Provincial Government, local
authority, financial institution, law enforcement agencies including the police
and the Federal Investigation Agency, Patwari, mukhtiarkar, registrar of
assurances and the Commission and it shall be the duty of such department,
local authority, financial institution, law enforcement agency, registrar of
assurances and the Commission to render such assistance or furnish such
information as it may reasonably require.
(2) Any information required under sub-section (1) shall only be used for the
purpose of the Corporation and shall not be divulged to any other person.
CHAPTER IV
FINANCE
25.
Corporation Fund.-(1) There shall be a
fund to be known as the ‘Restructuring Corporation Fund’ vested in the Corporation
which shall be utilized by the Corporation to meet charges in connection with
its functions under this Ordinance including the payment of salaries and other
remunerations to the Chief Executive and members of the Corporation and to its
officers and servants.
(2) The Corporation fund shall consist of:---
(a) funds provided by the Federal Government;
(b) allocations made by the Federal Government from the Federal Consolidated
Fund or any other source available with the Federal Government;
(c) loans obtained from the Federal Government;
(d) loans obtained by the Corporation with the special or general sanction of
the Federal Government;
(e) foreign aid and loans obtained with the sanction of, and on such terms and
conditions as may be approved by the Federal Government.
(f) recovery fees collected by the Corporation from financial institutions; and
(g) all other sums received by the Corporation including income from
investments.
26.
Accounts and audit.-(1) The financial
year of account of the Corporation shall be the year commencing the first day
of July and ending he last day of June.
(2) Subject to sub-section (1), the Corporation shall maintain its accounts in
such manner as the Federal Government may, in consultation with the Auditor
General of
(3) The accounts of the Corporation shall be audited by one or more auditors
who are Chartered Accountants within the meaning of the Chartered Accountants
Ordinance, 1961 (X of 1961), appointed by the Corporation.
27.
Reserve fund.-The Corporation shall
establish a reserve fund to which shall be credited its annual recoveries.
CHAPTER V
BUDGET STATEMENT AND ANNUAL REPORT
28.
Budget statement.-The Corporation shall,
in respect of respect of each financial year, prepare its own budget and submit
to the Federal Government three months before the commencement of every
financial year for allocation of funds required before the commencement of
every financial year.
(2) The budget statement shall specifically state the estimated receipts and
expenditure and the sums which are likely to be required by the Corporation
from the Federal Government for the relevant financial year.
(3) Any surplus of receipts over the actual expenditure in a year shall be
remitted to the Federal Consolidated Fund and any deficit from the actual
expenditure shall be made up by the Federal Government.
(4) Notwithstanding the provisions of sub-section (1) the Corporation may apply
to the Federal Government for a supplementary grant during the financial year for
sufficient reason.
29.
Annual report to the Federal Government.-Within
one hundred and eighty days of the end of each financial year of the
Corporation, the Board shall prepare a presentation to the Federal Government
with respect to the financial performance and results of operations of the
Corporation for the preceding financial year and the overall policies and goals
of the Corporation.
CHAPTER VI
RULES AND REGULATIONS
30.
Power of Federal Government to make rules.-The
Federal Government may, by notification in the official Gazette, make rules for
carrying out the purposes of this Ordinance.
http://www.lawandlawyers.com.pk/ - CONTENTS
31.
Power of the Board to make regulations.-(1)
The Board may make regulations not inconsistent with the provisions of this
Ordinance and the rules made hereunder to provide for all matters for which
provision is necessary or expedient for carrying out the purposes of this
Ordinance.
(2) In particular and without prejudice to the generality of the foregoing
power, such regulations may provide for:---
(a) the manner and terms of issue and redemption of bonds and debentures by the
Corporation;
(b) the form of returns and statements required to be prepared under this
Ordinance;
(c) the duties and conduct of officers and servants and agents of the
Corporation; the recruitment of officers and staff of the Corporation; the
terms and conditions of their service, the constitution and management of
provident or other funds for the officers and staff of the Corporation
connected with any of these things;
(d) The disclosure of interest, direct or indirect of any director or any
member of the Administration Committee in any financial institution or obligor;
(e) the manner in which the handing over of all original documents and files
from the financial institution to the Corporation will take place; and
(f) generally for the efficient conduct of the affairs of the Corporation.
CHAPTER VII
RIGHTS AND REMEDIES OF CORPORATION
32.
Rights and remedies available to Corporation.-(1)
In respect of any non-performing asset held by the Corporation and any
collateral, the Corporation shall be entitled to exercise and shall have all
rights and remedies available to a banking company under the Code of Civil Procedure (Act V
of 1908), the Banking
Companies Ordinance, 1962 (LVII of 1962), the Offences in Respect of
Banks (Special Courts) Ordinance, 1984 (LVII of 1984), and the Banking Courts (Recovery of
Loans, Advances, Credits and Finances) Act, 1997 (Act XV of 1997) and shall
also have the rights and remedies available under the Companies Ordinance, 1984
(XLVII of 1984), and further all recoveries by the Corporation in pursuance
of this Ordinance shall be made in accordance with the aforesaid laws.
(2) It is declared that the Corporation shall be entitled to the rights, title,
interest, benefits, privileges of a financial institution as specified in the
Schedule subject to the terms of mutual agreement between the Corporation and
the Financial Institutions specified in the Schedule, and likewise the
Corporation shall be subject to the legal liability, if any, of the Financial
Institutions.
(3) All acts pursuant to and in exercise of the powers under this Ordinance and
rights and remedies thereunder shall be done performed and pursued in
accordance with the provisions of the prevailing law inter alia as set out in
sub-section (1).
33.
Rights and remedies not exhaustive.-The
rights and remedies provided to the Corporation under this Ordinance may be
exercised separately or concurrently by the Corporation and are in addition to,
and not in lieu or derogation of, any other rights or remedies the Corporation
or any other person may legally have in respect of any non-performing assets of
the obligor and any related collateral.
34.
Exemption from taxes.-Notwithstanding
anything contained in any other law for the time being in force, the Federal
Government may exempt Corporation from the payment of all or any other taxes,
duties, levies, charges and fees payable under or pursuant to any Federal law,
on its investment, income, assets or wealth.
35.
Liquidation of the Corporation.-(1) The
Corporation shall have a life of six years from the date of commencement of
this Ordinance which may be extended further by the Federal Government by law.
The Corporation may be wound up by order of the Federal Government in such
manner as it may direct, or under the orders of the competent Court.
(2) Notwithstanding anything contained in sub-Section (1) or any other
provision of this Ordinance or the agreement between the Corporation and the
Financial Institutions concerned and further in case the Corporation is wound
up at any time prior to the expiry of the third year of its existence, all
non-performing assets at that time shall be deemed transferred, assigned, sold
and conveyed back hereunder to the financial institution by the Corporation
with immediate effect and without the necessity of any further action or
instrument.
(3) On the winding up of the Corporation, the bonds issued by the Corporation,
if any under section 21, shall be deemed to be bonds as if they were issued
directly by the Federal Government and the winding up of the Corporation shall
in no way affect the ability of the holder of the bond to receive full payment
in terms of the bond.
CHAPTER VIII
GENERAL
36.
Limitation of liability.-The Corporation
shall not have any liability to any financial institution save in accordance
with law.
37.
Right of recovery as arrears of land revenue.-The
Corporation shall be entitled to recover all outstanding amounts, subject to
law, on the basis of and under any non-performing assets held by the
Corporation as if they are arrears of land revenue under the Land Revenue Act, 1967
(West Pakistan Act XVII of 1967).
38.
Power to obtain information and documents etc.- (1) The Corporation may call upon any person, authority, agency,
bank or financial institution to furnish any information, document, papers and
accounts it may require for the purposes of this Ordinance.
(2) Any person who does not or fails to furnish the information, documents,
papers and accounts required by the Corporation under sub-section (1) shall be
punishable with imprisonment of either description for a term which may extend
to one year, or with fine, or with both.
39.
Removal of difficulties.-If any
difficulty arises in giving effect to any provision of this Ordinance, the
Federal Government may, by order published in the official Gazette, make such
provisions not inconsistent with the provisions of this Ordinance as may appear
to it to be necessary for the purpose of removing such difficulty.
SCHEDULE
(See section 2(1) and section 20)
Name of the Financial Institution
(1) Extent of shares/Equity of the Federal
Government
(2)1.
Habib Bank Limited 100%
2. United Bank Limited 100%
3. National Bank of
4. National Development Finance
Corporation. 100%
5. Industrial Development Bank
of
6. Agriculture Development Bank of
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