' Brief facts of the case are that Dehi Taraqiati Committee bein a NGO is working in different projects including literacy, health population and vocational welfare etc. Mumtaz Akhtar Rana is th president of the NGO.
2. Respondent No. 2 is Additional Director F & R, Punjab Health Foundation, Lahore an organization which came into being o the strength of the Punjab Health Ordinance, 1994 (herein after Act, 1992). _The said act was promulgated on 10th of November, 1992 t provide for the establishment of the Punjab Health Foundation to promote and finance the development of the health sector in the Province of the Punjab. Section 10 of the Act, 1992 deals with the function of the foundation and Section 10(1)(e) provides to give loans to health institutions. The health institutions also covey the institutions established under the NGOs.
3. The petitioner's NGO applied for load of Rs. 12,00,000/-from Respondent No. 2 for construction of hospital over land measuring 09-kanals 11-marlas situated at Mauza Hajrai Khurd Tehsil Pattuki District Kasur, which was accordingly allowed to the said NGO against an agreement executed between petitioner and Respondent No.
2. Respondent No. 2 at the time of execution of loan agreement obtained sixteen cheque as security of loan from the petitioner @ Rs.75,000/ each with the promise that on deposit of each installment, respective cheque would be given back to the petitioner,
4. This is contention of the petitioner that she has been paying the installments but Respondent No. 2 submitted an application before Respondent' No. 3 with the allegation that three cheque Bearing Nos. 630379061, 63087908 and 63037911 were dishonored on their presentation. Further that on the application of Respondent No. 2, Respondent No. 1, Inspector General of Police, Punjab directed CCPO, Lahore to take necessary legal action by way of lodging FIR before Respondent No.
3. That letter has been impugned by the petitioner in the instant writ petition by making assertion that the loan is secured by mortgaging the precious land of the petitioner; that Respondent No. 2 can only invoke jurisdiction of the competent Court to determine the liability of the petitioner and then proceed in accordance with law, Further that police has no lawful authority to interfere into the matter which purely of civil nature. It was further contended that the cheques were given to Respondent No. 2 as security and the same were not issued against any obligation.
5. Notices were issued to respondents and learned Assistant Advocate General, Punjab made appearance on behalf of the respondents and submitted before this Court brief history of the case pertaining to the loan issued -by 'Punjab Health Foundation to the petitioner. - After perusal of the same, it transpired that recovery of loan is to be made in sixteen installments i.e. Rs.75,000/- each were detailed in the brief history. According to the same the loanee has to pay the 6th installment on the due date. Show-cause notices were issued to the loanee for the deposit of installments but in vain. As the advance cheque was dishonored, therefore, the police department was approached for launching FIR against the loanee considering the dishonor of cheque a criminal act on the part of loanee. Subsequent to the assessment of said show-cause notices, the loanee approached the foundation and promised ,to pay 4th coming installment on due date. Learned Assistant Advocate General Punjab further contended that loanee has paid 12th installment on 12.02.2014 and still defaulter of 7 to 11 installments and surcharge @ 4% per month.
6. The petitioner has also provide a copy of loan agreement executed between petitioner and Respondent No. 2 and has adverted to clause 3, 9 and 12 of the agreement.
Clause (3). Before the release of land the borrower shall execute a registered mortgage deed of immoveable property on prescribed format or provide bank guarantee or Government security to the satisfaction of the Foundation.
Clause (9) if the loan is not repaid according to the repayment schedule, the borrower will be liable to pay a penalty of 4% per month on the defaulted amount.
Clause (12), If the borrower commits a breach of any clause of this agreement the creditor may issue show-cause notice to the borrower to pay the loan immediately alongwith penalty. The creditor is also at liberty to take any legal action to recover the loan and penalty, if any, which may include legal notice, publication in newspaper and sale of the mortgaged property OR invoke the Bank Guarantee OR as arrears of land revenue under the Revenue Recovery Act, 1890.
7. The criminal action proposed entails the punishment contained in Section 489-F of the Pakistan Penal Code for dishonestly issuing a cheque and maximum punishment whereof is three years.
This section was introduced and inserted by Ordinance LXXXV of 2002 dated 25.10.2002. The said section was inserted in Pakistan Penal Code to punish the delinquents having dishonestly issued a cheque towards repayment of loan or fulfillment of an obligation which is dishonored on presentation. This section could only be invoked where cheque has been deliberately issued with an intention to defraud the payee with criminal intention.
8. Now advert to the terms and conditions of the loan agreement and going through the above referred clauses of the loan agreement, it transpires that other than deposit of cheque as security, the land was secured by way of mortgage deed dated 24.03.2007 executed by the petitioner in favour of Respondent No. 2 before the Sub-Registrar Pattoki, District Kasur against land measuring 9-kanals 11-marlas bearing Khewat No. 738, Khetoni No. 2143 to 2145, Qita No. 3 situated at Mauza Hanjrai Khurd Tehsil Pattoki District Kasur.
9. The assertion of learned Assistant Advocate General Punjab that police department was approached for launching of FIR against the loanee considering the dishonor of cheque as a criminal act on the part of the loanee, is not correct. When a loan has been granted and same is secured by mortgage deed of valuable immoveable property and that too in presence of Clause
(12) of above referred agreement and same cannot be recovered by way of exercising coercive measures not mentioned in the loan agreement. There is a procedure provided in the said clause that the recovery of loan could be effected by resorting to the provisions of the Revenue Recovery Act, 1890.
10. This is an admitted fact that the Punjab Health Foundation does not come within the purview of financial institution as provided in the Financial Institutions (Recovery of Finances) Ordinance, 2001 but being an organization empowered to extend loans could be equated with the status of financial institution which is creation of statute i.e. Punjab Health Foundation Act, 1992, being a special law, having empowered (PHF) to grant loans.
11. Rather I could not find any case law in this particular situation but inference could be drawn on the basis of judgments of the superior Courts having dealt with such like 'matters. Reference could be placed on the judgment passed in case reported as "Khalil Javed v. State etc" PLJ 2014 Cr.C.
(Lahore) 48 and 2014 CUD 45 in which it is held that any provision of Section 489-F of the Pakistan Penal Code could not be attracted where loans were protected by , mortgage, warranties and covenants with regard to ownership, mortgage, pledge, hypothecation or in terms of other purchase on assets of property and financial institutions could recover the amount by adopting a property process under any of such mode. Reference could also be made of a case report as Tariq Mehmood V. Askari Leasing LTD PLD 2009 Lahore 629.
12. In the instant case the loan issued by Respondent No. 2 in favour of petitioner has been secured through a mortgage Deed No. 398 dated 24.03.2007 registered with Sub-Registrar, Pattoki District Kasur. In case of default, a mode has been provided where in case of default by the petitioner, Respondent No. 2 may issue show-cause 9 notice to the borrower to pay the loan immediately alongwith penalty which may be in the shape of sale of mortgage property and recovery of arrears of land revenue under Revenue Recovery, Act, 1890.
13. In presence of these claws in the agreement, I am of the considered view that Respondent Net. 2 is not competent to resort to the provision of Section 489-F of the Pakistan Penal Code and any such action will be nullity in the eye of law as held by the renowned pronouncements made by the superior Courts.
14. What has been discussed above, I allow the instant writ petition in the above terms and set-side the letter dated 10.07.2012 which has recommended registration of FIR against the petitioner under Section 489-F of the Pakistan Penal Code.