LAHORE: The Lahore High Court (LHC) has ruled that the Federal Mohtasib has the authority to act as a mediator to facilitate amicable dispute resolution, while setting aside a presidential order that had upheld a decision against United Bank Limited (UBL).
The verdict came in response to a petition filed by UBL, challenging the decisions of both the Mohtasib and the President of Pakistan regarding customer complaints of unauthorized electronic fund transfers.
In its judgment, the LHC stated that all complaints shall now be considered pending before the Mohtasib, who must re-examine the cases and allow all parties to submit relevant documents, affidavits, and evidence to support their claims.
The court clarified that the Mohtasib operates with quasi-judicial powers, and therefore, strict application of traditional evidentiary principles does not apply. Evidence may be received in the form of affidavits, and the process should focus on mediation rather than litigation.
However, the LHC also found fault in the Mohtasib’s earlier proceedings, stating that it failed to differentiate between cases that warranted its jurisdiction and those that did not. Furthermore, the Mohtasib reportedly overlooked key legal concepts such as contributory and comparative negligence, and relied heavily on Section 41 of the Federal Ombudsman Institutional Reforms Act, 2007 to hold the bank solely liable.
UBL argued that the Mohtasib overstepped its mandate by addressing complex fraud allegations involving third parties, which fall outside the tribunal’s jurisdiction. The bank maintained that it had implemented a two-factor authentication process using One-Time Passcodes (OTPs) to ensure secure transactions.
Customers, however, claimed that the bank had breached its duty of care by failing to prevent unauthorized fund transfers. They alleged that the bank neglected its responsibility to verify payment instructions thoroughly, which could have prevented fraudulent transactions.
The Mohtasib initially ruled in favor of the customers, recommending compensation equal to the amount of unauthorized transfers. This decision was later endorsed by the President of Pakistan, prompting the bank’s legal challenge.
By overturning the presidential affirmation and remanding the matter to the Mohtasib, the LHC has emphasized procedural fairness and reaffirmed the role of mediation in dispute resolution within the financial sector.
