(a) To what extent is this type of business 'finance' technique practised in this economy?

 

This mode of financing was introduced only some years ago and is gradually gaining ground but is at the moment confined to office equipment ie computers etc. and not to heavy machinery.

(b) If default is made what are the rights of the owner of the property to recover the leased property?

 

These rights are as per the terms of the agreements. It is standard to provide that the owner can forthwith take possession of the property and freely dispose of it.

(c) Does the exercise of these rights require court process?

 

In the event of hindrance by the borrower recourse would be to the Banking or Civil Court.

(d) How effective in actual practice is the process of recovery (list any relevant impediments, such as the right of access to the place where the equipment is situated; the right to physically take the equipment away from the place; and so forth)?

 

The right of access and physical take-over exists in most arrangements but non-cooperation by the lessee can cause impediments including difficulty of access or physical removal.

(e) What effect does the commencement of insolvency proceedings in respect of the corporate debtor have on the recovery of leased property?

 

Commencement of insolvency proceedings has no effect on the recovery of leased property where recovery is made directly pursuant to the agreements, but where intervention of the court has been sought and proceedings are pending, such proceedings may be stayed or transferred to the court hearing the winding up petition.

(f) Is it usual for an equipment lease to be supported by guarantees (sureties) for payment of lease charges; default penalties; and so forth?

 

The common form of equipment lease as evidenced in Pakistan is normally not supported by guaranties or sureties or payment of lease charges and default penalties.