1. ' SYED MAHMOOD ALAM RIZVI, J.--- By this criminal miscellaneous application under section 561-A, Cr.P.C. Read with Article 199 of the Constitution of Pakistan, the applicants have sought quashment of F.I.R. No,198 of 2008, registered under section 489-F, P.P.C. At Police Station Korangi, Karachi.
2. ' Precisely, the facts of the prosecution case are that the complainant, being the Manager Legal in Messrs Pak Golf Leasing Company, lodged the impugned F.I.R. On 20-3-2008 regarding the incidents that are said to have occurred between 26-12-2005 to 26-1-2008 and 25-8-2006 to 25-1- 2008 respectively. It is stated therein that the accused/applicants are the Directors of Messrs Marvi Pharmaceuticals (Pvt.) Ltd., and had obtained an amount of Rs,1,51,00,000 from the company against the purchase of machinery and other articles. Per contract, the applicants had to refund the same within four years on a month to month basis. Applicant No,1 has issued twenty cheques in favour of the company but the same were dishonoured between 26-12-2005 to 26-1-2008. The details of the cheques are as under:--- Cheque Number Amount
(i) 0064564 Rs.11,5,000
(ii) 0064568 Rs.1,15,000
(iii) 0064571 Rs.1,20,000
(iv) 0064512 Rs.1,20,000 4,70,000 Rs.4,70,000
(v) 0064574 to 0064581(eight cheques)Rs,1,20,000 Rs.9,60,000
(vi) 0064582 to 0064589(eight cheques)Rs.1,41,000 Rs.11,28,000 Rs.25,58,000 ' While the applicant No,2 obtained machinery and articles amounting to Rs,11,63,060 as per lease agreement, and she had to refund the same within three years, she issued post-dated cheques, amongst which eighteen cheques were dishonoured between the period of 25-8-2006 to 25-1- 2008. Details of the cheques are as under:--- Cheque Number Amount
(i) 0263205 to 0263209(five cheques)Rs.2,02,250 each Rs.10,11,250
(ii) 0263211 to 0263214(four cheques)Rs.2,02,250 each Rs.8,09,000
(iii) 0263210 Rs.4,04,900 4,04,900
(iv) 0263215 to 0263222(eight cheques)Rs.404,900 each Rs.32,39,200 Rs.54,64,350 ' The complainant further argued that the applicants issued thirty-eight cheques amount to Rs,80,22,350 which were dishonoured, therefore, one the above complaint, an F.I.R. Under section 489-F, P.P.C. Has been registered.
3. ' Learned counsel for the applicants has contended that the respondent No,1 being a Financial Institution, in the month of July, 2003, sanctioned to the company a leasing/finance facility to the extent of Rs,15 million for a period of four years. That under the finance agreement, the facility amount was repayable in twelve monthly lease rentals w.e.f, 22-7-2003 to 22-6-2004, at the rate of Rs,1,33,000, and that the remaining thirty-six monthly lease rentals were repayable at the rate of Rs,4,18,950, and against the security of machinery and equipment of the factory, besides the said post-dated cheques.
4. ' It is, next urged that due to certain losses the applicants requested the respondent No,1 for a rescheduling of the liability, as the applicants were regularly paying the instalments upto June, 2007. However, it was urged that the respondent No,1 started blackmailing the applicants and had even threatened to register a criminal case against the dishonouring of the post-dated cheques.
5. As a result, the applicants filed a suit for rendition of accounts, declaration and permanent injunction, bearing Suit No,187 of 2007, which is pending before the Banking Court No,III, Karachi. As a counter-blast the respondent No,1 also filed a suit for recovery of amount bearing Suit No,269 of 2007 against the applicants, which is pending before the Banking Court No,II, Karachi.
6. ' It is, next urged that the respondent No,1 had complete knowledge that the applicants were not in a position to honour the rest of the post-dated cheques lying with the respondent No,1, and deliberately presented the same before the Bank and after their dishonour filed criminal complaint under section 20(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, (hereinafter referred as the Ordinance, 2001), which is pending adjudication before the Banking Court No,III, Karachi bearing Criminal Complaint No,23 of 2007. Besides, the respondent No,1 with mala fides also lodged the instant F.I.R. Of the same offence, which is a sheer abuse of the process of law.
7. ' He has further contended that the local police had no power to register the F.I.R. And investigate the case as articles and machinery were already pledged with the bank and half of the amount had already been paid, and that being special law, only the Banking Court had jurisdiction under the Ordinance, 2001. As such the impugned F.I.R. Was liable to be quashed. He has relied upon the following judgments:---
(1) Capt. (Retd.) Nayyar Islam v. Senior Superintendent of Police and others PLD 2001 Lah. 533, (2)
8. Maj. (Rtd.) Javed Inayat Khan Kiyani v. The State PLD 2006 Lah. 752, (3) Mian Tariq Azmat Sheikh v.
9. S.H.O. Police Station FIA and others 1996 M LD 1362, (4) Miraj Khan v. Gul Ahmed and others 2000 SCM R 122.
10. ' Conversely, the learned counsel for the respondent No,1 has vigorously opposed the application and has contended that neither the instant application was maintainable nor had this Court any jurisdiction to quash the F.I.R. He has further argued that a prima facie case is made out, therefore, the F.I.R. Could not be quashed. He has admitted that though counter-suits and a complaint under section 20(4) of the Ordinance, 2001, are pending in the Banking Court, even then the F.I.R. Could be registered under section 489-F, P.P.C., as cheques issued by the applicants were dishonoured. In support of his arguments he had relied upon the following reported judgments:---
(a) "F.I.R. Cannot be quashed and C.P. Is not maintainable."
(1) Dr. Ghulam Mustafa v. The State and others 2008 SCM R 76, (2) Col. Shah Sadiq v. Muhammad Ashiq and others 2006 SCM R 276, (3) Seema Fareed and others v. The State and another 2008 SCM R 839, (4) Muhammad Saleem Bhatti v. Syed Safdar Ali Rizvi and 2 others 2006 SCM R 1957, (5)
11. Agha Wazir Abbas and others v. The State and others 2005 SCM R 1175.
(b) On the ground of absconder
(6) Hayat Bakhsh and others v. The State PLD 1981 SC 265, (7) Allah Bakhsh v. The State 1982 SCM R 911, (8) Gul Hassan and another v. The State PLD 1969 SC 89, (9) Muhammad Jamil Ahmad and another v. The State SBLR 2005 Sindh 1146 (10) Muhammad Farooq Khan v. Province of Sindh and others 2008 YLR 1265.
12. ' Learned Assistant Advocate-General has adopted the arguments of the learned counsel for the respondent No,l.
13. ' Heard both the sides as well as the A.A.-G. And perused the record.
14. ' It is, an admitted fact that the lease amount and the outstanding amount is not disputed, which is evident from the F.I.R. That amount Rs,80,22,358 is outstanding against both the applicants. Per suit of the applicant No,1 the amount of Rs,80,00,000 was due upon him. It is, admitted that the applicants have paid almost 50% of the amount therefore, in failure, the respondent No,1 filed suit for recovery of amount and the pledged articles after the dishonouring of the cheques, and initiated proceeding provided under section 20(4) of the Ordinance, 2001, and subsequently, has lodged the impugned F.I.R. As well.
15. ' For ready reference we have first to go through section 20(4) of the Ordinance, 2001, which reads as under:--- "20. Provisions relating to certain offences.--- (1) Whoever
(a) ...........................................
16. (b)
17. (c)
18. (d)
19. (2)
20. (3)
(4) Whoever dishonestly issues a cheque towards repayment of finance or fulfilment of an obligation which is dishonoured on presentation, shall be punishable with imprisonment which may extend to one year, or with fine or with both, unless he can establish, for which the burden of proof shall rest on him, that he made arrangements with his bank to ensure that the cheque would be honoured and that the bank was at fault in not honouring the cheque.
(5) Where the person guilty of an offence under this Ordinance is a company or other body corporate, the chief executive by whatever name called, and any director or officer involved shall be deemed to be guilty of the offence and shall be liable to be prosecuted against and punished accordingly.
(6) All offences under this Ordinance shall be bailable, non bailable and compoundable. "
21. ' Therefore, the applicants rightly filed the complaint in the Banking Court besides the suit for recovery of amount. Though the above offence is punishable for imprisonment for one year but the same is bailable. Therefore, perhaps to put more pressure upon the applicants, the respondent No,1 had lodged the instant F.I.R. Under section 489-F, P.P.C. For ready reference section 489-F, P.P.C. Is reproduced as under:--- "489-F Dishonestly issuing a cheque.--- Whoever dishonestly issues a cheque towards repayment of a loan or fulfillment of an obligation which is dishonoured on presentation, shall be punishable with imprisonment which may extend to three years, or with fine, or with both, unless he can establish, for which the burden of proof shall rest on him, that he had made arrangements with his bank to ensure that the cheque would be honoured and that the bank was at fault in not honouring the cheque."
22. This section was added by virtue of Ordinance LXXX-B of 2002, dated 25-10-2002, to punish those persons who take loans on the basis of forged and fabricated documents or with intent to defraud a bank of financial institution with intention not to pay back the amount. Therefore, to restrain such persons the above section was introduced, which is not bailable, but is compoundable and punishable with imprisonment for 3 years, or with fine or with both, and that the police may also arrest such persons without warrant.
23. But the instant case is entirely different. The articles were pledged, loan was obtained and at least 50% amount has been paid and subsequently, the cheques were dishonoured. As a result, for such defaulters Ordinance, 2001 was introduced and by virtue of section 20(4) B (supra) the bank or financial institution can initiate proceeding before the banking Court, which is also punitive in nature and the bank had rightly initiated the proceedings against the applicants by filing civil suit as well as the complaint in the Banking Court.
24. It appears from the facts and circumstances that the applicants had no intention to cheat or defraud the respondent No,1 and it has not come on record that all the cheques were dishonestly issued. Besides, the applicants had filed a suit for rescheduling the amount and permanent C injunction, hence apparently ingredients of section 489-F, P.P.C. Were not made out against the applicants.
25. ' That some what similar situation arose in the case of Capt. (Retd.) Nayyar Islam (supra) where the petitioner committed default in payment of loan and as a result, an F.I.R. Was registered. The petitioner filed petition for cancellation of F.I.R. Registered under sections 420/ 468/471, P.P.C. As the matter was already sub judice before the Banking Court where the bank had filed a suit for recovery of amount. The High Court was pleased to cancel the F.I.R. And directed the police not to take the law into its own hands in future, in cases covered by section 7 read with section 94 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997.
26. ' In another case of Mian Tariq Azmat Sheikh (supra) the same facts arose where suits were pending before the Banking Tribunal, even then, an F.I.R. Was lodged under sections 420/406/408/409/380 read with section 5(2) of P.C.A., 1947. The borrower filed a writ petition for quashing the F.I.R. And the High Court held that lodging of F.I.R. Was out of mala fides and was an abuse of the process of law and of the gravest type. As a result, the said F.I.R. Was quashed.
27. ' Learned counsel for the respondent No,1 heavily relied upon the case of Dr. Ghulam Mustafa (supra), in which an F.I.R. Registered under sections 406/468/471, P.P.C. Was quashed by the High Court on the mere statement of the Advocate-General that the matter has been settled between the parties, and that even no notice had been issued to the complainant, and no merit was discussed. The Honourable Supreme Court set aside the said order and held that the High Court had no jurisdiction to quash the F.I.Rs, while exercising constitutional powers under Article 199 of the Constitution or section 561-A, Cr.P.C. Unless and until very exceptional circumstances existed. The facts and circumstances of the above case were distinguishable with the instant case and actually favour the case of the applicants.
28. ' The next case relied upon by the learned counsel for the respondent No,1 was of Col. Shah Sadiq (supra), in which it was held that the High Court had no jurisdiction to resolve the disputed question of fact in constitutional jurisdiction. Even this case is not applicable to the instant case as the petitioner rightly urged a legal issue, for which the respondent No,1 had no answer as to how the ingredients of section 489F, P.P.C. Were applicable in this case, since the remedy had already been exhausted before the Banking. Court.
29. ' In the case of Seema Fareed and others (supra), relied upon by the learned counsel for the respondent No,1, both the private parties made a contract. One party issued 7 cheques of Rs,1,00,000 each to the other party, which on presentation were dishonoured. As a result, a case under sections 420/406/114/109/34 and 489-F, P.P.C. Was registered at Police Station Frere, Karachi, and the accused filed application before this Court for quashing the proceedings but the same was dismissed. The accused thereafter approached the Honourable apex Court, while refusing leave held as under:--- "(b) Constitution of Pakistan, 1973--- Art. 199---Criminal proceedings cannot be stifled and prosecution cannot be throttled at initial stage through exercise of writ jurisdiction under Article 199 when ingredients of D offences charged in the F.I.R. Are prima facie made out---High Court in such case would be right in dismissing writ petition seeking quashing of F.I.R.---Supreme'Court upholding judgment of High Court and refusing its leave to appeal against it.
(c) Criminal/Civil proceedings--- It is well-settled that a criminal case must be allowed to proceed on its merits and merely because civil proceeding relating to same transaction have been instituted has never been considered to be a legal bar to maintainability of criminal proceedings which can proceed concurrently because conviction for a criminal offence is altogether different matter from civil E liability. While the spirit and purpose of criminal proceedings is to punish the offender for the commission of a crime, the purpose behind the civil proceedings is to enforce civil rights arising out of contracts. In law both the proceedings can co-exist and proceed simply simultaneously without any legal restriction as to maintainability of criminal proceedings during pendency of civil proceedings."
30. ' The above case is distinguishable to the instant case, as in the above case no payment was made, and that fraud was apparent, and also that it was between private parties.
31. ' The other judgments relied upon by the learned counsel for the respondent No,1 also have different facts and circumstances, hence are not applicable to the instant case and need not be discussed in detail.
32. In peculiar circumstances, when on the face of it, no case is made out, or when there is want of jurisdiction, or when there is a sheer abuse of the process of law, the High Court under inherent powers available under section 561-A, Cr. P. C . Can quash an F. I .R. Or even proceedings for that matter.
33. In view of the above facts, circumstances, laws and available judgments, it appears that the impugned F.I.R. Is based on mala fides and ulterior motives, hence is not sustainable. Therefore, the same is hereby quashed.
34. ' The application is allowed.