JAWAD HASSAN, J.---This single judgment will dispose of the instant petition as well as another Writ Petition No, 5639 of 2018 titled "Muhammad Saleem v. the Manager FINCA Microfinance Bank Ltd. etc." (the "Petitions") as the issues involved in the Petitions are similar and interconnected.
2. Through the petitions, filed under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973 (the "Constitution"), the Petitioners have prayed that the Respondents Nos,2 and 3 be restrained from recovering the amount of loan/finance obtained by the Petitioners from the Microfinance Banks by adopting coercive measures in violation of the due course of law.
3. Brief facts of the instant cases are that the Petitioners are the residents of the backward area of the District Bahawalpur. The Petitioners and former Respondents Nos, 4 to 31 obtained loans from the Respondent No,1 for one year from April 2017 to April 2018 but due to financial position of the Petitioners, the said loan amounts are not being paid to the Microfinance Banks. The Petitioners allege that the Respondent No:2 is threatening and adopting coercive measures through the Respondent No,3 for the recovery of said loans without adopting the legal procedure as prescribed under the Financial Institutions (Recovery of Finances) Ordinance, 2001 (the "Recovery Ordinance").
Hence, these Petitions.
4. The learned counsel for the Petitioners inter alia submitted that the Respondent No, 2 in Writ Petition No, 5591/2018 and the Respondent No,1 in Writ Petition No, 5639/2018 (the "Respondents") are the Microfinance Banks established in 2002 under the Microfinance Institution Ordinance, 2001 (the "Microfinance Ordinance"); that the Microfinance Banks are going to recover the alleged loans from the Petitioners by arrest and threatening/harassing them which is totally against the law; that for the recovery of said amount the proper procedure has been provided under the Recovery Ordinance; that under the Recovery Ordinance, the Respondents should file a suit before the Banking Court and thereafter they may adopt coercive measures in accordance with law and without adopting the procedure prescribed under the Recovery Ordinance, the act of recovery of said loan amounts is illegal and against Articles 4 and 10-A of the Constitution. In Writ Petition No, 5639/2018, the Petitioner has also alleged that the Petitioner obtained loan of Rs,1,50,000/- from the Respondents which was without any interest but when the Petitioner tried to return the principle amount, the Respondents started threatening him and issued letter dated 30.05.2018 mentioning the recoverable amount as Rs,1,96,500/- by adding interest on the said amount.
5. On the other hand, the learned counsel for the Respondents appeared and vehemently contested the arguments advanced by the learned counsel for the Petitioners and prayed for dismissal of the Petitions on the grounds that the nature of loan/finance obtained by the Petitioners is not to be dealt with by the Banking Court under the Recovery Ordinance, and to invoke the jurisdiction of the Banking Court, the parties must fall under the definitions of the "Financial Institution" and the "Customer" as provided in the Recovery Ordinance. He further Contended that the Petitioners do not have any nexus with the definitions of the above referred Recovery Ordinance rather the amount is to be recovered through a summary suit under Order XXXVII of the Code of Civil Procedure, 1908 ("C.P.C."); that at the time of obtaining the loans, the Petitioners duly signed different documents including cheques and now they are refusing their liability to repay the said facility. To fortify his contentions, the learned counsel has placed reliance on the cases titled Syed Itrat Hussain Rizvi v. Messrs TameerMicro. Finance Bank Limited through Attorney and another (2018 CLD 116 [Sindh]) and Marhaba Pakistan and others v. HBL and others (2017 CLD 995).
6. The learned Law Officer also vehemently opposed the petition and submitted that there is nothing on file to show that any coercive measures have been adopted against the Petitioners rather they will be dealt with in accordance with the law; that these Petitions have been filed mere on the basis of apprehensions and assumptions, as such are not maintainable.
7. I have heard the arguments of both the parties and perused the record.
8. In both the Petitions, the Petitioners have taken the specific stance that the recovery of the loan obtained by them from the Respondents is to be made under the Recovery Ordinance. Whereas, on the other hand, the learned counsel for the Respondents submitted that the case of the Petitioners does not fall within the ambit of the Recovery Ordinance rather the recovery of loan facility is to be made by filing a summary suit under Order XXXVII of C.P.C. The controversy, therefore, arising out of the instant petitions is that whether the procedure provided in the Recovery Ordinance has to be followed for recovery of the loans obtained by the Petitioners from the Microfinance Banks?
9. In Order to resolve this controversy, it is, essential. to see the applicable provisions and definitions provided under the Recovery Ordinance and the Microfinance Ordinance. The Microfinance Ordinance has been promulgated to regulate the establishment, business and operations of microfinance institutions for providing organizational financial and infrastructural support to poor persons particularly poor women, for mitigating poverty and promoting social welfare and economic justice through community building and social mobilization and to provide for matters connected therewith or ancillary thereto. The Microfinance Ordinance, in Section 2, has defined the "customer", "microfinance institution", "Microfinance bank", "microfinance services" and "poor persons", as: "(d) "customer" means any person or group of persons availing the services of a microfinance institution;
(i) "microfinance institution" means an institution, which extends micro credit and allied services to the poor through sources other than public savings and deposits; ";
(ia) "microfinance bank" means an institution licensed by State Bank under this Ordinance to establish and operate as microfinance bank;
(j) "microfinance services" means the financial and other related services specified in section 6, the value of which does not exceed such amount as the State Bank may, from time to time, determine;
(k) "poor persons" means persons who have meager means of subsistence and whose total income during a year is less than such minimum limit as the State Bank may, from time to time, prescribe; "
10. On the other hand, section 2 of the Recovery Ordinance defines the "Financial Institution and the "Customer" as follows:
(a) "financial institution" means and includes
(i) any company whether incorporated within or outside Pakistan which transacts the business of banking or any associated or ancillary business in Pakistan through its branches within or outside Pakistan and includes a government savings bank, but excludes the State Bank of Pakistan;
(ii) a modaraba or modaraba management company, leasing company, investment bank, venture capital company, financing company, unit trust or mutual fund of any kind and credit or investment institution, corporation or company, and (iii)any company authorised by law to carry on any similar business, as the Federal Government may by notification in the official Gazette, specify;
(c) "customer" means a person to whom finance has been extended by a financial institution and includes a person on whose behalf a guarantee or letter of credit has been issued by a financial institution as well as a surety or an indemnifier;
11. It is essential to highlight that section 3 of the Microfinance Ordinance clearly bars the applicability of the laws relating to banking companies or financial institutions to the microfinance institutions licensed under the Microfinance Ordinance: "3. Applications of other taws
1. The provisions of this Ordinance shall be in addition to, and, save as hereinafter provided, not in derogation of any other law for the time being in force.
2. Save as otherwise provided in this Ordinance, the Banking Companies Ordinance and any other law for the time being in force relating to banking companies or financial institutions shall not apply to microfinance institutions licensed under this Ordinance and microfinance institution shall not be deemed to be a banking company for the purposes of the said Ordinance, the State Bank of Pakistan Act, 1956 (XXXIII of 1956), or any other law for the time being in force relating to banking companies.
3. Save as expressly provided in this Ordinance, the provisions of this Ordinance shall have effect notwithstanding anything contained in any rules, regulations, memoranda or articles of association of a microfinance institution or in any resolution passed by such institution in its general meeting or by its Board of Directors, whether the same be applied, executed or passed before or after the commencement of this Ordinance and any provision contained in any rules, regulations, memoranda, articles or resolutions aforesaid shall, to the extent of its inconsistency become or be voia and of no legal effect.." (emphasis added)
12. Admittedly, in both the petitions, the Petitioners availed services from the First Microfinance Bank Limited and FINCA Microfinance Bank Limited respectively, which have been established under the Microfinance Ordinance. From the above definitions provided in the Microfinance Ordinance, it is explicit that the Petitioners, being "customers", obtained the "microfinance services" from the "microfinance institutions" and/or the "microfinance banks", and accordingly, the Microfinance Banks and the Petitioners do not fall under definitions of the "financial institution" and "customer" provided in the Recovery Ordinance. Consequently, the case of the Petitioners does not fall within the domain of the Recovery Ordinance. Even otherwise, Section 3 of the Microfinance Ordinance has explicitly barred the applicability of any law relating to the banking companies or financial institutions to the microfinance institutions licensed under the Microfinance Ordinance. Above Section 3 further clarifies that the microfinance institutions shall not be deemed to be the banking companies. Therefore, it can be safely held that the recoveries from the Petitioners of the loans obtained from the Microfinance Institutions cannot be made under the Recovery Ordinance through Banking Court. For this purpose, reliance can also be placed on the case titled Syed Itrat Hussain Rizvi v. Tameer Micro Finance Bank Limited through Attorney and another (2018 CLD 116 [Sindh]), in which the honourable Sindh High Court has restrained the recovery of the loans obtained from the Microfinance Banks under the Recovery Ordinance and has allowed such recovery through summary suit under Order XXXVII of C.P.C., as under: "9. Besides above, a bare perusal of section 3(2) of Microfinance Institution Ordinance 2001, as reproduced in para No,2 above, clearly reflects that the Banking Companies Ordinance and any law for the time being in force relating to banking companies or financial institutions shall not apply to microfinance institutions licensed under the Ordinance and microfinance institutions shall not be deemed to be a banking company for the purposes of the said Ordinance, the State Bank of Pakistan Act, 1956 (=III of 1956) or any other law for the time being in force relating to banking companies.
10. From the above legal position, it appears that the summary suit filed by respondent No,1 /plaintiff against the appellant/defendant before respondent No,2 [District Judge, Karachi (Central)] was competent and was rightly decided by the said court."
13.Furthermore, it also reveals from the prayers of the Petitions that these have been filed mere on the basis of apprehensions and still no action has been taken against the Petitioners. Therefore, the issuance of directions to the Respondents as prayed for by the Petitioners would, at this stage, tantamount to throw arrows in the dark. It is settled principle of law that this Court cannot issue directions mere on the basis of apprehensions and assumptions of the parties. Moreover, the learned counsel for the Respondents has categorically stated that the recovery from the Petitioners is to be made through summary suit under Order XXXVII of C.P.C., and the Respondents are not harassing the Petitioners rather they will adopt the proper procedure prescribed under the law.
14.In this view of the discussion made above, I am of the affirmed view that these petitions are not maintainable, and consequently, the same are hereby dismissed.