AYESHA A. MALIK, J. --- Through this petition, the Petitioner has impugned order dated 29.4.2017 passed -by Respondent No, 2, Judge Banking Court-II, Lahore.
2. The basic grievance of the Petitioner is that the Respondent Bank filed a recovery suit against the Petitioner in which the Petitioner filed Leave Application ("PLA"). In the PLA he denied execution of documents which as . per the contentions of the learned counsel is the right of the petitioner while defending his position in the suit. On the basis of the denials made in the PLA, the Respondent Bank filed a complaint under Section 20 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ("F10") on 30.1.2016 before Respondent No, 2 and on 29.4.2017 the impugned order was passed wherein the respondents were summoned for 30.5.2017 to face trial in the complaint.
3. Learned counsel for the Petitioner submitted that the only allegation in the criminal complaint is that in the PLA filed. in COS No, 71/2015, the Petitioner has falsely stated that he did not avail the letter of credit facility, hence he has committed an offence under Section 20 of the FIO. Learned counsel further submitted that the Petitioner is entitled to raise his defence in the suit and that by raising his defence in the-PLA, an offence is not made out under Section 20 of the F1O. Learned counsel further stated that no offence is made out under Section 20 of the FIO as the matter is still sub judice before the Banking Court and it is yet to be determined whether or not the suit of the Bank can be decreed. Until then the Bank cannot presume that a criminal offence has been made out .under Section 20 of the FIO on the basis of the PLA.
4. Learned counsel for the Respondent Bank submitted that the Petitioner has mis-stated before the Court in the PLA by denying the relationship with the Bank and by denying the availment of the facilities from the Bank. Learned counsel further submitted that in terms thereof an offence has been committed under Section 20(b) and 20(2) of the FIO, hence the Petitioner is liable to be prosecuted and punished in terms of Section 20(5) of the F10. Learned counsel further argued that the Respondent Bank is entitled to -pursue the matter by way of filing a banking suit as well as lodging a criminal complaint against the Petitioner for making false statements.
5. The basic dispute before the Court is the order 29.4.2017 passed by Respondent No 2 wherein summons were issued for the purposes of proceeding on the complaint filed by the Respondent Bank under Section 20 of the F10. The question therefore is whether the summons are illegal and in excess of jurisdiction. As per the contents of the complaint, the main grievance of the Respondent Bank is that the Petitioner has wrongfully denied its relationship with the Bank, which means denial of the execution and availment of finance facilities, the creation of charge documents and mortgages alongwith restructuring of the finance facilities. The complaint states that the Petitioner has knowingly made a false statement by denying his signatures on the documents. Section 20(b) of the FIO provides that:--- whoever makes fraudulent mis-representation or commits a breach of an obligation or representation made to a Financial Institution on the basis of which the Financial Institution has granted a finance.
Section 20(2) of the HO provides that:--- whoever knowingly makes a statement which is false in material respects in an application for finance and obtain a finance on the basis thereof, or applies the amount of the finance towards a purpose other than that for which the finance was obtained by him, or furnishes a false statement of stocks in violation of the terms of the agreement with the Financial Institutions or falsely denies his signatures on any banking document before the Banking Court, shall be guilty of an offence punishable with imprisonment of either description for a term which may extend to three years, or with fine, or with both.
In terms of the afore-mentioned sections an offence is made out if fraud and misrepresentation is made or if a person denies his signatures on any banking document. The Respondent Bank filed its complaint on the assumption that finance facilities were availed and utilized by the Petitioner, hence denying the same in the PLA amounts to fraud and misrepresentation by the Petitioner in terms of Section 20(b) of the FIO and denial of the signatures is an offence under Section 20(2) of the F10. Admittedly the suit of the Bank is still pending, at the stage of PLA and the Banking Court, which is the competent forum, has yet to decide whether or not a case of recovery has been made out. Hence the Court has yet to consider the plea of the Petitioner with respect to the denials made, especially whether he executed the documents or availed any facility from the Bank. In such circumstances where the matter is still pending before the Court of competent jurisdiction, the Banking Court cannot initiate proceedings under Section 20 of the FIO and the entire complaint of, the Bank at this stage is presumptive. The question of whether or not the Petitioner availed the finance facility and signed the documents is subjudice before Respondent No, 2 and has not conclusively been adjudicated upon. Under the circumstances, in case the Banking Court proceeds in the complaint and finds that the Petitioner has made a false statement it will prejudice the case of the Petitioner before Respondent No, 2.
6. Furthermore the impugned order states that ex-facie an offence is made out without considering the fact that the matter is still sub judice and has not been determined as yet. Section 20 of the FIO provides for the powers of the Banking Court to punish an accused or culprit with imprisonment or fine where an, offence is made out. At this stage it cannot be said that an offence is made out and the Bank will have to wait until the matter is decided by the Banking Court. Under the circumstances, we are of the opinion that the criminal complaint filed by the Bank against the Petitioner is misconceived and at this stage the. Banking Court could not have proceeded on the basis of the complaint.
In view of the aforesaid, the instant petition is allowed and the impugned order dated 29.4.2017 passed by Respondent No 2 is set aside.