' IJAZ-UL-AHSAN, J.---Through this constitutional petition, the petitioner impugns an order dated 29-11-2012 passed by the Joint Secretary, Government of Pakistan, Ministry of Interior, Islamabad.
Through the impugned order, a review petition filed by the petitioners for deletion of their names from the Exit Control List (ECL) has been rejected.
2. The facts giving rise to the filing of instant petition are that the petitioners are directors of a family business in the name and style of Ceco Tyre (Pvt.) Ltd. Petitioner No,1 who is the Chairman of the company is a chronic heart patient. It is submitted that he is surviving on a pace maker which was medically inserted in October, 2011. He needs to travel for treatment and checkup in a foreign country. When the petitioner No,1 intended to travel with petitioner No,2, they were informed that their names were placed on the ECL maintained by the Government of Pakistan. On further probe, it was orally communicated to the petitioners that their names had been placed on the ECL under orders of respondent No,1 which had been passed at the behest of respondent No,3, The Bank of Punjab on the ground that the company of the petitioners was in default of repayment obligations arising out of the finance and banking facilities availed by the said company from the said bank. It appears that on account of disputes with respondent No,3, the petitioners have filed a suit wider.
Section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, which is pending before this Court in its banking jurisdiction. Respondent No,3 has also filed a suit for recovery of Rs, 268 Million against the company which is also pending before this Court. However, no final determination of liability has been made in the said suits. Although the petitioners have not been communicated the grounds for placement of their names in the ECL, it appears that the said action, has been taken on the behest of respondent No,3 who claims that a sum of Rs,268 Million is recoverable from the company of which the petitioner are directors. The petitioners filed a representation under Section 3 (1) of the Exit From Pakistan (Control) Ordinance before respondent No,1 seeking deletion of their names from the ECL. However, such representation has been denied.
Further, the petitioners are being denied the right to travel abroad for medical/business reasons.
3. The learned counsel for the petitioner submits that the inclusion of the names of the petitioners in the ECL by respondent No,1 at the behest of respondent No,3 on account of an alleged default is illegal. He submits that no Court of competent jurisdiction has made any determination of any liability of the petitioners towards respondent No,3. He maintains that the act of the respondents of placing the names of the petitioners on ECL is arbitrarily ultra vires and contrary to the principles of natural justice. Respondent No,1 did not offer an opportunity to the petitioners of placing their point of view before respondent No,1 before an action which curbs their fundamental right to travel abroad would be taken. The learned counsel submits that respondent No,1 has no authority to place the name of the petitioners on ECL at the behest of respondent No,3 on the ground of an alleged default without determination of any such default by a Court of competent jurisdiction. It is further argued that the Federal Government is under an obligation before passing any adverse order against customer of bank to apply his independent mind, access the material available before him as a precursor to placing the name of customer of the bank on the ECL. In any event, if a lender bank or State Bank of Pakistan considers it necessary that the name of a customer should be placed on the ECL and he should be restrained from travelling abroad, the right Court of action is to approach the competent jurisdiction where the matter relating to adjudication of liability is pending and seeking appropriate orders. He maintains that in the absence of any judicial order in this regard, the name of a citizen / customer cannot be placed on the ECL. The learned counsel for the petitioner further argues that neither respondent No,3 nor respondent No,2 have any authority to issue verdict against their customers with reference to any alleged default relating to repayment of finance and banking facilities. He maintains that the bank cannot be a judge of its own cause.
He argues that courts established under the relevant law are the sole authority to adjudicate upon disputes amongst banks and their customers. A bank cannot on its own accord / declare a customer as a defaulter and seek placement of his name on the ECL, which amounts to denying a fundamental right of a citizen. It is also submitted that respondent No,3 has filed a suit for recovery of Rs,268 Million against the petitioners and others. He points out that properties worth much more then the said amount stands mortgaged in favour of respondent No,3. According to its own estimates, the mortgaged property is valued in excess of Rs, 464 Million. As such there is no likelihood of any decree remaining unsatisfied in case a Court of competent jurisdiction decrees the claim of respondent No,3. Relying on a judgment of this Court rendered in Writ Petition No,24817 of 2010,the learned counsel submits that no power vests either with the State Bank of Pakistan or Bank of Punjab to issue direction for placing the name of a citizen on the ECL through the, Ministry of Interior. Mere fact that there is some claim against the petitioner by a commercial bank is not a valid ground for depriving the petitioner of his fundamental right to travel abroad or restrict his right of free movement. He finally argues that placing the names of the petitioners on the ECL on the behest of respondent No,3 is mala fide. The law relating to ECL cannot be used for collateral purpose of recovering alleged bank dues under coercion before determination of liability by a Court of competent jurisdiction. He also maintains that denial of the right of the petitioner to travel aboard is violative of the fundamental rights of the petitioner guaranteed under the Constitution of Islamic Republic of Pakistan, 1973 including right of due process as enshrined in Article 10-A of the Constitution of Islamic Republic of Pakistan, 1973.
4. Notice was issued to the respondents who have filed para wise comments. The stance taken by respondent No,1 is that name of the petitioners has been placed on the intimation received from NAB who has informed respondent No,1 that a sum of Rs, 300 Million is to be recovered from Ceco Tyre (Pvt.) Ltd. In case the petitioners abscond, the said amount may not be recovered. On this basis, the name of the petitioners has been placed on the ECL and on this very basis, the representation filed by the petitioners is also rejected.
5. Parawise comments have also been filed by respondent No,2 State Bank of Pakistan. The stance taken by the State Bank of Pakistan is that respondent No,3 has reported to it that a loan default of Rs, 267,377 Million is existing against Ceco Tyre (Pvt.) Ltd. In case the petitioners default in repayment of the aforesaid amount, the bank would not be in a position to recover its dues.
Therefore, their names need to be place on the ECL. It is on the basis of the aforesaid default reported by The Bank of Punjab that a recommendation has been made to place the names of the petitioners on the ECL. It is on the basis of the aforesaid default reported by Bank of Punjab that recommendation has been made to place the names of the petitioners on the ECL. In their Para wise comments filed by respondent No,3, Bank of Punjab itself admitted that the suit filed by the Bank of Punjab is pending adjudication before this Court which has not finally been decided.
Further it is submitted that the petitioners may be allowed to travel provided they furnish security for the finance availed by the company for satisfaction of the judgment and decree that may be passed in favour of respondent No,3.
6. At this stage, the learned counsel for the respondent No,3 has been asked whether the securities furnished by the company at the time of availing the loan facility are adequate and sufficient to cover the decreetal amount in case the suit filed by respondent No,3 is decreed. He has not categorically denied the same.
7. Arguments heard. Record perused.
8. There is no dispute between the parties regarding facts of the case. The most material fact being that the suits filed by respondent No,3 and the company are pending before this Court. Both the suits are being contested and have not been decreed in any amount so far. The learned counsel for the respondent has neither moved an application in the said suit nor any other Court of competent jurisdiction passed any order directing the names of the petitioners be placed on the ECL. It is also not the case of the respondents that the petitioners are engaged in the criminal activity. It is also not denied that the only basis for placement of the names of the petitioners on the ECL is this that respondent No,3 claimed that they owe a sum of Rs, 268,557,481.02 to respondent No,3. The main question requiring determination by this Court are:--
(a) Whether the fact that respondent No,3 claims that the petitioners own the aforesaid sum to it creates legitimate ground to take away the fundamental right of the petitioners which is guaranteed to them and all other citizens of Pakistan.
(b) Whether the Exit from Pakistan (Control) Ordinance, 2010 has the over riding effect on the fundamental principles of Constitution.
(c) Whether the remedy of review under section 3 of the Exit from Pakistan (Control) Ordinance is an adequate alternate remedy in the facts and circumstances of the present case.
9. After hearing the learned counsel for the parties and perusing the case-law on the subject which has been cited at the bar, the answers to the afore-noted questions have to be in the negative for the following reasons:--
(a) The right of a citizen to travel is a fundamental right guaranteed by Articles 2-A, 4, 9, 15 and 25 of the Constitution of Islamic Republic of Pakistan, 1973. Abridgment of fundamental right by the State through legislation or executive measures has to be tested on the touchstone of the Constitution.
(b) In order to appreciate the legal dispute raised herein, it would be useful to reproduce section 2 of the Exit from Pakistan (Control) Ordinance, 1981:- "Power to prohibit exist from Pakistan
(1) The Federal Government may, by order, prohibit any person or class of persons from proceeding from Pakistan to a destination outside Pakistan, notwithstanding the fact that such person is on possession of valid travel documents.
(2) Before making an order under subsection (1), it shall not be necessary to afford an opportunity of showing cause against the order.
(3) If while making an order under subsection (1) it appears to the Federal Government that it will not be public interest to specify the grounds on which the order is proposed to be made, it shall not be necessary for the Federal Government to specify such grounds."
(c) During the course of arguments, reference has also been made to Circular No,BPRD/SLD- 1/2010/Policy/1952 dated May 12, 2010. The said circular provides as follows:- "With a view to further streamline the procedure of placement of defaulter's names on the Exit Control List, it has been decided that Banks/DFIs shall also provide grounds for placement of names on ECL and documentary evidence to substantiate the fact that a person is a defaulter."
(d) It is by now, an established principle of law that no one can be termed a "defaulter" unless declared so by a court of competent jurisdiction under the laws framed for the said purpose. It is an admitted fact that courts established under the Banking Laws are the sole authority to adjudicate upon the question of default in cases involving commercial loans. A perusal of the law relating to banks and customers i,e, Financial Institutions (Recovery of Finances) Ordinance, 2001 ("FIO") clearly indicates that special courts, with exclusive jurisdiction have been established to adjudicate disputes between the banks and customers. Unless such courts, after following the procedure provided in the law, adjudge a customer to be a defaulter and issue a decree against him, a customer cannot be deemed to be a defaulter. It is clear and obvious and has not been denied by other side that the suit filed by the bank is still pending and no determination has been made by the Banking Court relating to the status of the petitioners as a defaulter.
(e) The learned counsel for respondent No,3 has laid much stress on the "Exit from Pakistan (Control) Rules, 2010". It has been emphasized that the said rules, which have been framed under the Act provide grounds to prohibit persons from proceeding from Pakistan to a destination outside Pakistan. It has been argued that the Government of Pakistan has the power to prohibit any person from proceeding abroad if he is a key director of a firm and is in default of loans or liabilities exceeding 100 million rupees. It is, therefore, argued that since the petitioners are in default of a loan in an amount in excess of Rs,100 million, there is valid and lawful justification to place his name on the Exit Control List.
(f) The argument made by the learned counsel for respondent No,3 has inherent flaws. In the first place, it is a sine qua non to bring the afore noted sub-rule into play to establish that there is a "default" on the part of the customer. As discussed above, no power vests with respondent No,3, the State Bank of Pakistan or for that matter the Government of Pakistan to declare a person to be in default. Such power solely vests with the courts of competent jurisdiction. Further the determination of the amount of such "default", whether more or less than Rs,100 Million, lies in the exclusive domain of judicial forums, which can do so after due process and following the procedure provided under the relevant law. As such, in the facts and circumstances of the present case where admittedly the suit filed by the bank is still pending, the afore noted rule cannot be utilized to exercise as drastic a power as taking away the a fundamental right of a citizen. In addition, the interpretation of Rule-2(1)(d) of the Exit from Pakistan (Control) Rules 2010 canvassed by the learned counsel for respondent No,3, militates against Article 10-A of the Constitution, which guarantees every citizen of a right of a fair trial for determination of his civil rights and obligations.
As such the argument of the learned counsel is found to be without substance and is repelled.
(g) It is common knowledge that banks allow financial facilities to customers on commercial terms against acceptable security. This is done after due satisfaction of the bank that it is fully secured against a possible risk of loss or repayment of finance disbursed to the customer. There are guidelines and mechanisms provided in the State Bank Regulations as well as in the internal risk management systems of the banks, which cater for situations where loans go bad. Securities are taken from customers to cover the risks of non-payment. Such transactions are business transactions and the risk of loss is always present and in the knowledge of bank when such transactions are undertaken. In the event, finance is not repaid or any other dispute arises, law provides forums by establishment of courts to resolve the disputes. However, the authority to issue a verdict against a customer for determining the amounts due. From him and recovery thereafter lies solely and exclusively with the courts of law. As such, any action on the part, either of the bank, which is a party to the dispute (and hence a judge in its own case) or the State Bank of Pakistan, which is certainly not the arbiter is such matters, to determine that a customer is in default of an amount calculated by the Bank and thereafter recommending placement of his name on the Exit Control List, is not only violative of settled principles of law but amounts to making the entire system of banking law and banking courts redundant.
(h) Perusal of the relevant record shows that there is a chain of mechanical actions starting from the State Bank of Pakistan to NAB and respondent No,3 culminating at the Ministry of Interior which placed the names of the petitioners on the ECL. It is clear and obvious and has not seriously denied by the Respondents that there is no application of mind at any stage. Further all actions were taken behind the back of the petitioners, without giving them any opportunity of being heard of even issuing them a notice. Such actions are not only contrary to the principles of natural justice but have also clearly violated the fundamental rights guaranteed to the petitioners under the Constitution.
(i) In "Munir Ahmad Bhatti v. Government of Pakistan, Ministry of Interior" (PLD 2010 Lah. 697), this Court has examined similar questions of law and has held as follows:- "It is an established law that the involvement of a person in litigation civil/criminal is no ground to put his name on ECL unless the court where the matter is sub judice passes specific order in this regard. Needless to say that the only ground which the bank has for placement of name on ECL is an alleged claim for recovery for which the bank has filed a suit under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, which is pending before this court and has not been decided yet. Only the court where suit is pending has the jurisdiction to determine whether the claim of the bank is true and whether the customer has defaulted in fulfillment of his obligations. Even otherwise the bank cannot become a judge of its own cause and cannot declare the petitioner as defaulter without any verdict from the court in this regard."
(J) The Hon'ble Supreme Court of Pakistan in various judgments has stressed upon upholding fundamental rights with specific reference to dignity of than and right of movement. In the case reported as "Higher Education Commission through Project Manager v. Sajid Anwar and others"
(2012 SCM R 186), the apex Court held as follows:- "In pursuance of an agreement supported by a bond, the competent authority, who awarded scholarships to respondents for higher education outside the country subject to the conditions laid down therein, at the best could have enforced the agreement or bond but had no jurisdiction to deny fundamental rights of respondents enshrined under Articles 14 and 15 of the Constitution In absence of any restriction imposed by law as it had been envisaged under Articles 14 and 15 of the Constitution, the Authorities had acted illegally and denied constitutional rights of respondents If Authorities had any grievance, they could have approached court of law and enforced the agreements of bond or could claim any relief under civil litigation.... No criminal action torturing educated persons, to have them off loaded at the instance of Higher Education Commission and allegedly keeping them in lockup for several hours, could be justified.... Despite knowing that their action was illegal, authorities had assailed the judgment passed by High Court for relief to grant of leave to appeal."
(k). In a recent judgment reported as "Hassan Raz through Lawfully Constituted Attorney v.
Federation of Pakistan through Secretary, Ministry of Interior, Islamabad and 2 others" (2012 CLD 92), facts of which are on all fours with the present case, a learned Division Bench of the Sindh High Court held as follows:-- "On examining the E.C.L. Rules, 2010 quoted, above, these rules are not applicable in case where person is involved in a private dispute unless where the government interest is at stake or where person is involved in fraud against foreign banks and reputable companies with significant foreign investment or if it is shown that person involved in heinous crime or in drug trafficking.... There is nothing on record to show that the petitioner has committed any fraud ... "
(1) In "Messrs Zurash Industries (Pvt.) Ltd. Through Director and 4 others v. Federation of Pakistan through Secretary, Ministry of Interior, Islamabad and 3 others." (2011 CLD 511), another learned Division Bench of the Sindh High Court in similar circumstances held as follow:-- "Petitioner was Director of company which had obtained financial facility film respondent-bank which had filed recovery suit and criminal complaint against the petitioner and his company....
Petitioner challenged inclusion of his name in the Exit Control List without any notice or information to him.... Right to travel abroad was an important feature of citizen's liberty... Provision of notice must be read as an integral part of each statute unless specifically excluded.... Person concerned must be heard before passing an adverse order against him Show cause notice must follow the order which should disclose reasons for the action taken against a person Order barring a person from going abroad without reasons was liable to be set aside.... If there was provision in the substantive law under which a person was being proceeded against (that his name be placed on exit control list) it would not be permissible to put his name in the exit control list.... Pendency of criminal cases did not, ipso fact, disentitles a person from travelling abroad...Petitioner's leave to defend in recovery suit had yet to be decided.... Placement of petitioner's name on the Exit Control List was clumsy exercise of power in circumstances ' Similar view was taken by this Court in two unreported judgments rendered in Writ Petition No,20730-2010 and Writ Petition No,7713-2010.
(m) The law laid down in all the aforesaid judgments is that the mere fact that there is a claim against a person by a commercial bank, which is yet to be adjudicated upon, is no ground for placing such person on ECL or to deprive him of his fundamental right to travel abroad or restrict his right of free movement.
(n) As far as the question of alternate remedy is concerned, a perusal of the Impugned Memorandum shows that it was issued on the basis of a letter sent by the Finance Division, which in turn had relied upon a letter from the State Bank of Pakistan. The actions of none of the said functionaries indicate due application of mind. Even otherwise, neither a show cause notice was issued to the petitioners nor were they ever given an opportunity to defend themselves or place their point of view on record. As such, the remedy of review has become illusory. Therefore, the petitioners are not debarred from approaching this Court in exercise of its constitutional jurisdiction for enforcement of his fundamental rights. Even otherwise, the question raised in this petition involves interpretation of the Constitution and enforcement of fundamental rights of the petitioner in the context of section 2 of the Exit from Pakistan (Control) Ordinance, 1981 and the Exit from Pakistan (Control) Rules, 2010. In these circumstances, the remedy of review does not constitute adequate remedy for the purpose of Article 199 of the Constitution. As such, the petition is held to be maintainable. Reference in this regard may usefully be made to a judgment of this Court reported as "Mian Ayaz Anwar v. Federation of Pakistan through Secretary Interior. And 3 others" (PLD 2010 Lahore 230).
(o) In the case reported as "Wajid Shamas-ul-Hassan v. Federation of Pakistan through Secretary, Ministry of Interior, Islamabad" (PLD 1997 Lahore 617), the provisions of section 2 of the Exit from Pakistan (Control) Ordinance, 1981 were examined with reference to Articles 199, 2-A, 4, 9, 15 and 25.
In the said case, this Court held as follows:-- "Right of a citizen to travel abroad being a fundamental right guaranteed by Articles 2-A, 4, 9, 15 and 25 of the Constitutions of Pakistan, 1973, abridgement of such right by the State through legislative measures has to be tested on the touchstone of the constitutional provisions.... Provision of section 2, Exit from Pakistan (Control) Ordinance, 1981 failing to provide any guidelines or reasonable classification for taking action against a person prohibiting him from travelling abroad and denying him valuable right of being heard and of knowing the reasons for such an action, was ex facie discriminatory as also capable of being administered in a discriminatory manner"
(p) There is yet another aspect of the matter. It has been submitted by the learned counsel for petitioners that the petitioners had furnished adequate and sufficient securities, to respondent No,3, which are still in its possession and are adequate to cover its entire alleged claim. The details of such securities are as follows:
(q) It is not specifically denied that the aforesaid securities are sufficient to meet the claim of the bank if and when the same is decreed. As such, respondent No,3 is adequately covered in terms of its financial risk. It is clear that the impugned action of placing the name of petitioners has been taken to force and pressurize the petitioners to pay the claimed amount without going through the process of trial before a court of competent jurisdiction, and to keep a Damocles sword hanging on their head till such time that the bank recovers its dues. Unfortunately, this is being done even before a court of competent jurisdiction has adjudicated the matter in lawful proceedings, which have been initiated by respondent No,3. Even otherwise, the FIO has adequate and sufficient provisions to address all concerns of banks relating to securities held by them till such time that a final pronouncement is made on their suits. These provisions were never resorted to by respondent No,3 and an apparent short cut was attempted to be adopted. Laws are framed to foster justice and all parties whether individuals, banks or corporations having financial muscle and resources are equal before the courts of law. Citizens and entities are to treated and dealt with in accordance with law and the constitution. Fundamental rights are sacred and cannot lightly be allowed to be taken away or abridged on the whims of private parties or even the State except in accordance with law.
10. In the present case, I am in no manner of doubt that the fundamental rights guaranteed to the petitioners under the Constitution of Islamic Republic of Pakistan, 1973 have been violated without due process of law.
11. For the afore-noted reasons, the complained actions of the respondents are declared to be without lawful authority and of no legal effect. Consequently, by accepting this petition, I direct that the name of petitioners .Shall immediately be removed from the Exit Control List.