SYED MUHAMMAD FAROOQ SHAH, J.---Through the captioned petition, the petitioner has invoked the extra-ordinary jurisdiction of this Court, under Article 199 of the Constitution of the A Islamic Republic of Pakistan and has sought the relief that the inquiry pending against the petitioner before the NAB be declared illegal, mala fide and an abuse of process.
2. Relevant and necessary facts enumerated in the instant petition depicts that the petitioner had served as a director DCD Pakistan (Pvt.) Limited, which had availed a finance facility amounting to Rs, 350 Million from Bank of Punjab in the year 2007 and the company was a borrower of Bank of Punjab. The company in order to secure its repayment obligations towards Bank of Punjab has transferred shares in the name of Bank of Punjab by a letter of pledge. It is averred that clause 8 of said letter and also under section 176 of the Contract Act, Bank of Punjab hold the right to sell the share to recover the loan amount. Clause-8 of the letter of pledge is reproduced as under:- "In default of payment/repayment of any moneys hereby secured or in the performance of any obligation hereunder, you shall be entitled to sell pledged goods or any part thereof either by public auction or private treaty including the right to acquire the same yourself".
However, Bank of Punjab due to its own ulterior motives did not sell the shares and caused loss to the company. During civil litigation, the Bank of Punjab has filed a recovery suit, bearing No, B-63 of 2009 and the company has also filed a recovery suit bearing No, B-40 of 2011 before this Hon'ble Court, which are still pending for adjudication. It is further averred that the inquiry has been initiated by the NAB despite the fact that no "wilful default" has been established and the recovery proceedings are pending before this Court and till date no amount has been deemed as outstanding by this Court.
3. The case of the petitioner is that it is settled law that proceedings of "Wilful Default" without decree being passed in the recovery proceedings is not maintainable. More particularly, as per section 5 of the NAB Ordinance, proceedings of "Wilful Default" cannot be initiated when there is a substantial dispute between the borrower and the banker.
4. Arguments heard. Record perused.
5. Learned counsel for the petitioner submits that during pendency of suit for recovery, criminal prosecution under the accountability law is not justified. To support his contention, the learned Counsel placed his reliance on a recent unreported judgment delivered by the division bench of this Court in C.P. No, 1941 of 2011, wherein it is held that:-- "We have gone through the provision of section 5(r) of the National Accountability Ordinance. The section 5(r) is quite clear. The wilful default under the National Accountability _Ordinance, 1999 is defined as the amount due from the borrower. The words "amount due" have been inserted in the Ordinance in 2002 through an amendment. This very insertion of the words "amount due from him" implies that wilful default means default of an amount that is undisputedly due and payable.
Where the demanded amount is disputed in a Court of law and the matter is pending adjudication then in such background the criminal prosecution cannot commence as due amount is yet not determined. In the circumstances, relying upon the judgments cited by the petitioners, the State Bank of Pakistan is restrained from sending Reference to the Accountability Court only till such time the matter pending in the Banking Court is finally decided in this Court.
Once the amount due towards the petitioners is determined then the State Bank of Pakistan shall be at liberty to invoke the provision of the National Accountability Ordinance and proceed in accordance with law."
6. Reliance has also been placed on the case of Abdul Shakoor Kaloodi and another v. The State (2003 PCr.LJ 626) wherein division bench of this Court in penultimate paragraph-24 has held as under:-- "Having carefully considered the respective contentions of the learned Counsel, we are of the view that no hard and fast rule can be laid down in the above context. However, it would be safe to conclude that when a bona fide dispute as to the existence of liability was pending before a competent Court, it would not be proper to treat a party as wilful defaulter for the purpose of criminal prosecution. Indeed if the applicants had filed a suit for accounts after investigation into the offence of wilful default had commenced it might have been possible to conclude that such proceedings were instituted only by way of attempt to forestall prosecution and no stay was justified in accordance with the dicta laid down in Muhammad Ahmed's case. Nevertheless, keeping in view the facts of the instant case inasmuch as the applicants' suit for recovery was prior in time both to the banks suit as well as the promulgation of the NAB Ordinance, we are clearly of the opinion that proceedings under the NAB Ordinance ought to be stayed until it is found that the applicants are liable to pay any amount to the Bank and have defaulted in such payment according to the provisions of the Ordinance.
7. In the case of Mian Muneer Ahmed v. The State (2004 PCr.LJ 2012), the Division Bench of this Court, in para-20 has been pleased to observe that the dispute concerning the settlement of amounts is subjudice before the Court of law and when dues are not determined as per law, rules and regulations, then question of recovery of, such dues does not arise. Hence, the case would not be covered within the definition of "Wilful Default". In the case of Asim Textile Mills Limited and others v. National Accountability Bureau and others (PLD 2004 Karachi 638), it is held that amount of liability of a borrower has to be determined through judicial disposition by a Civil or a banking Court and once such determination attains finality or is not disputed, the mechanism provided under the National Accountability Ordinance, 1999 can be invoked. It has further been held in the said citation that Respondent bank having chosen to invoke jurisdiction of Court in one special legislation, cannot be permitted to change its track and invoke penal proceedings in another special legislation, which would render the former proceedings infructuous. Consequently, the proceedings initiated through the impugned show-cause notice under section 5(r) of the National Accountability Ordinance, 1999, against the accused were stayed until final adjudication of the amount due against them by the judicial proceedings, instituted by the Bank.
8. In the case of Air Marshal (Retd.) Waqar Azim and 3 others v. The State (2002 YLR 1811), the division bench of Lahore High Court observed that the accused were unable to return or pay the loan amount due to the circumstances beyond their control or the failure of the Bank or Financial Institution to fulfil its contractual liability in the matter of providing financial facility to them and, in circumstances, they might be held liable for default alone, not amounting to the offence of "Wilful Default" as defined under section 5(r) of the NAB Ordinance, 1999. It has further been held that mere non-payment of default, could not be equated with "wilful default", which denoted deliberate and calculated refusal to pay the amount of loan. Learned Counsel has also placed reliance on ADBP and another v. Abid Akhtar and others (2003 SCMR 1547) wherein it is held in para-7 that:-- "Ratio decidendi of the precedent cases clearly appears to be that in the event of substantial dispute between the parties, the procedure of recovery of amount by way of land revenue arrears would be available only where the amount claim was found due, ascertained and determined by a competent judicial forum. We are in no manner of doubt that this unbridled power cannot be said to be available with the petitioner-Bank in the peculiar facts and circumstances of the case, in which the original borrower has died while his successor-in-interest has seriously disputed the liability giving authenticated facts and figures of having made payment as stated above. In the absence of any proper judicial determination as to the amount due by a proper forum created under the law, we do not find any legal flaw with the view taken by the High Court."
9. Mr. Murtaza Wahab, learned counsel for the petitioner has drawn our attention to paragraph 4 of parawise comments filed on behalf of the respondent No,02/Bank of Punjab, which reveals that the answering respondent has candidly admitted in the said para that "in any case these matters are sub judice in the suits pending before this Hon'ble Court being Suits No, B-63 of 2009 and B-40 of 2011", therefore, in such view of the matter, liability had not been determined, therefore, the judgment in the case of Sunrise Textile Mills v. Crescent Commercial Bank Limited (2007 SCMR 1569) is not attracting in the circumstances of the present case. Learned Counsel has also distinguish the judgment reported as PLD 2005 SC 323 and stated that citation relied upon by the learned counsel for respondent No. 1/NAB, is not applicable in the circumstances of present case, since again the amount in that case was admitted by way of consent decree, which is not the case in the instant petition. Learned Counsel further contended that the whole purpose of pendency of suits before the banking Court for recovery of alleged default would be defeated if criminal proceedings of "Wilful Default" are allowed, when the amount is yet to be determined by competent Court of law.
10. Mr. Murtaza, learned Counsel while placing his reliance on PLD 1999 Karachi 468 and PLD 2004 Karachi 407, re-emphasized that the Bank of Punjab, despite the power given in clause 8 of letter of pledge as well as under section 176 of the Contract Act decided not to sale the shares, which caused massive losses to the Company as under section 151- of the Contract Act, Bank. Of Punjab was under statutory duty to take good care of the pledged shares and was under duty to sell the shares, especially, in light of the fact that the shares price was fast declining.
11. Conversely, Mr. Noor Muhammad Dayo, learned DPG NAB, while placing reliance on 2007 SCMR 1569 submitted that the proceedings under sections 5 and 31-D of NAB Ordinance can be initiated against the petitioner, who had committed "Wilful Default". It appears that such plea earlier raised in C.P. No, D-1941 of 2011 was distinguished vide order dated 8-10-2012, by the Division Bench of this court, merely on the ground that in the said ruling, the Banking Court had already decreed the suit of the Banking Company.
12. On the other hand, learned counsel for respondent No.2, Bank of Punjab was also found concurred with the arguments advanced by Mr. Dayo, Deputy Prosecutor NAB and submitted that the Criminal Proceedings of "Wilful Default" can be initiated against the petitioner.
13. Keeping in view, the dicta as laid down in the aforementioned judgments, delivered by this Court, we have no hesitation to reach at the irresistible conclusion that the criminal proceedings of "Wilful Default" by the NAB depended upon the result of civil litigation, therefore, the Criminal Court during pendency of civil suits for recovery of defaulted amount, to stay its hands until the civil litigation is disposed of as the dispute between the banker and customer are to be decided by the banking Court in the Financial Institutions (Recovery of Finances) Ordinance, 2001, which was promulgated after the promulgation of NAB Ordinance. Admittedly, under this ordinance, the petitioner and the banker have filed counter suits pending for adjudication. So far statutory provision of section 25-A of the NAB Ordinance is concerned, section 25-A only serves a limited purpose and rights and liabilities between banks and borrowers can only be determined by the Banking Court, therefore, it is domain of competent Banking Court to determine the rights and liabilities of the parties to suit, therefore, by a short order dated 2-4-2014, we were clear of the opinion that proceedings under the NAB Ordinance ought to he stayed until it is found that the petitioner is liable to pay any amount to the bank through decree of the Court. At the same time, keeping in view, the importance of proceedings under the NAB Ordinance and request made by learned Counsel for Bank of Punjab, we would appreciate the efforts of the learned Single Judge to proceed with the aforementioned suits expeditiously, on priority basis, which are reportedly ripen for final arguments but without any undue haste. These are reasons of the said short order.
Petition is decided in the manner indicated above.