CH. MUSHT AQ AHMAD, J.---Through this Constitutional petition, quashment of FIR No326/19 dated 23.06.201 9 registered at Police Station City Shorkot District Jhang for the of fence under Section 406 P .P.C. has been sought.
2. Heard and perused the file.
3. FIR above mentioned was registered on the complaint made by Muhammad Abbas son of Muhammad Ramzan, Area Manager of M/s Chishti Associates, Security Company . As per FIR, said company was deputed by M/s MCB Bank for security of 2,43,000- bags of refined sugar lying in godown of M/s Kashmir Sugar Mills, Shafi-abad Shorkot District Jhang. On 27.03.2019, complainant was informed by godown keeper namely Aamir that he was forcibly expelled from the Mills, which information was forwarded by complainant to Tanvir Ahmad Shah, Director of the company , who directed the complainant to reach the spot. On 28.03.2019, complainant along with Tariq Naaz Hussain Bajwa, General Manager of the company , reached the Mills where godown keeper Aamir was already present. After much struggle, they became successful in entering the Mills, where they saw that 2,43,000-bags of sugar valuing Rs.68,00,00,000/- pledged with MCB Bank, were being lifted by Mills administration at the instance of Directors of Mills (present petitioners). Complainant reported the matter to Rescue 15 but of no avail. It was alleged in the FIR that sugar which was in possession of complainant's company , was forcibly removed by Mills owners and administration in order to misappropriate the same.
4. Contention of learned counsel for petitioner is that the substance alleged to have been removed, as per contents of FIR itself, was pledged with MCB Bank and the complainant was acting on behalf of the Bank, as such dispute being between bank and the customer (Mills), local police had no jurisdiction to register the impugned FIR. Learned counsel added that if any wrong as alleg ed in the impugned FIR was committed, remedy for resolution of such dispute was available with the Bank in the shape of recourse to Banking Court concerned as provided under Section 20 of Financial Institutions (Recovery of Finances) Ordinance, 2001 (FIO 2001). Submits that a suit under Section 9 of the FIO 2001 has already been filed by MCB Bank against petitioners (Mills) seeking recovery of amount in question on the basis of allegedly removed sugar bags, which is pending adjudication and that misappropriation of pledged goods is a question to be decided by the Executing Court. In support of his arguments, learned counsel has relied on cases titled "Syed Mushahid Shah v. Federal Investment Agency "and others"
(2017 SCMR 1218 ), "Muhammad Asif Nawaz v. Learned Additional Sessions Jud: e/Justice o Peace Multan and 2 others" 2014 PCr.LJ 1 = 2014 CLD 45, "Murshid Ali and 4 others v. SHO Police Station Saddar , Khanewal and another" (2011 CLD 1539 ) and "The State through Prosecutor Gener al Punjab Lahore v.
Karam Dad Bhatti" (2019 PCr .LJ 902 ).
5. Learned counsel for respondents conceded stance of learned counsel for petitio ners regarding pendency of suit before Banking Court as a dispute between Bank and its customer . However , he has contended that FIR was got registered by third party , as such matter falls within the domain of authority of local police.
6. Arguments heard and record perused.
7. Sugar bags were allegedly removed by petitioners, lying in godown of the Sugar Mills of which they are Directors. Said sugar bags were, however , in control of M/s MCB Bank as the same were pledged against loan taken by petitioners' Mills. Complainant's company was deputed by Bank for security of the sugar bags vide an agreement. Actual issue, therefore, was between Bank and Mills. (customer). It is also admitted by both sides that a civil suit has already been filed by the Bank for recovery of amount in dispute, acceding jurisdiction of Banking Court on the issue. In such backdrop, it is to be seen whether registration of impugned FIR was without jurisdiction and was the same liable to be quashed or it falls within domain of local police. Similar proposition time and again came under consideration before this Court as well as Hon'ble Supreme Court. In the leading case referred by learned counsel for petitioner "Syed Mushahid Shah v. Federal Invest ment Agency and others" (2017 SCMR 1218 ) it was laid down that provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001 shall have over-riding effect and forum competent to try such offences would be the Banking Court constituted under the provisions of above referred Ordinance. It was further laid down that Special Court under the Offences in Respect of Banks (Special Courts) Ordinance, 1984 the ordinary criminal courts under Criminal Procedure Code, 1898 and the Federal Investigating Agency under Federal Investigating Agency Act, 1974 would have no jurisdiction in the matter . Section 7 (b) of FIO 2001 provides as follows:- "7. Powers of Banking Courts .-(I) Subject to the provisions of this Ordinance, a Banking Court shall - -
(a) ------------
(b) in the exercise of its criminal jurisdiction, try offences punishable under this Ordinance, and shall, for this purpose have the same powers as are vested in a Court of Session under the Code of Criminal Procedure 1898 (Act V of 1898): Provided that a Banking Court shall not take cognizance of any offence punishable under this Ordinance except upon a complaint in writing made by a person authorized in this behalf by the financial institution in respect of which the offence was committed".
Section 20 of the FIO 2001 reads as under:- "20. Provisions relating to certain offences. -
(1) Whoever
(a) Dishonestly commits a breach of the terms of a letter of hypothecation, trust receipt or any other instrument or document executed by him whereby poss ession of the assets or properties offered as security for the repayment of finance or fulfillment of any obligation are not with the financial institution but are retained by or entrusted to him for the purposes of dealing with the same in the ordinary course of business subje ct to the terms of the letter of hypothecation or trust receipt or other instrument or document or for the purpose of effecting their sale and depositing the sale proceeds with the financial institution; or
(b) 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; or
(c) Subsequent to the creation of a mortgage in favour of a financial institution, dishonestly alienates or parts with the possession of the mortgaged property whether by creation of a lease or otherw ise contrary to the terms thereof, without the written permission of the financial institution; or
(d) Subsequent to the passing of a decree under section 10 or 11 sells, transfers or otherwise alienates, or parts with possession of his assets or properties acquired after the grant of finance by the financial institution, including assets or properties acquired benami in the name of an ostensible owner Shall, without prejudice to any other action which may be taken against him under this Ordinance or any other law for the time being in force, be punishable with imprisonment of either description for a term which may extend to three years and shall also be liable to a fine which may extend to the value of the property or security as decreed or the market value whichever is higher and shall be ordered by the Banking Court trying the offence to deliver up or refund to the financial institution, within a time to be fixed by the Banking Court, the property or the value of the property or security .
Explanation. --Dishonestly may be presumed where a customer has not deposited the sale proceeds of the property with the banking company in violation of the terms of the agreement between the financial institution and the customer .
(2) Whoever knowingly makes a stateme nt which is false in material respects in an application for finance and obtains a finance on the basis thereof, or applies the amount of the finance towar ds a purpose other than that for which the finance was obtained by him, of furnishes a false statement of stocks in violation of the terms of the agreement with the financial institution or falsely denies his signatures on any banking document before the Banking Court, shall be guilty of an offen ce punishable with imprisonment of either description for a term which may extend to three years, or with fine, or with both.
(3) Whoever resists or obstructs, either by himself or on behalf of the judgment debtor , through the use of force, the execution of a decree, shall be punishable with imprisonment, which may extend to one year, or with fine, or with both.
(4) Whoever dishonestly issues a cheque towards repayment of a finance or fulfillment of an obligation which is dishonoured on presentation, shall be punishable with imprisonment which may extend to one year, or with fine or with both, unless he can establish, for which the burden of proof shall rest on him, that he had made arrangements with his bank to ensure that the cheque would be honoured and that the bank was at fault in dishonouring the cheque
(5) ----------
(6) All offences under this Ordinance shall be triable by a Banking Court in accorda nce with section 7. All offences, except for the offence of willful default, shall be bailable non-cognizable and compoundable.
(7) Notwithstanding anything to the contrary provided in any other law for the time being in force, action in respect of an offence of willful default shall be taken by an investigating agency , to be nominated in this behalf by the Federal Government, on a complaint in writing filed by an authorized officer of a financial institution after it has served a thirty days (sic) notice upon the borrower demanding payment of the loan, advance of finance assistance.
(8) An offence of willful default shall be cognizable, non-bailable and non-compoundable and punishable with imprisonment which may extend to seven years or fine not exceeding the amount of default of with both.
8. Above noted provisions of Section 20 of FIO 2001 clearly bar the Banking Court from taking cognizance of any offence punishable under this Ordinance except upon the complaint in writing made by a person authorized in this behalf by the financial institution in respect of which the offence was committed. However , in respect of willful default, Subsections (7) and (8) added through amendment in the year 2016 provide that action shall be taken by an Investigating Agency to be nominated in this behalf by Federal Government on a complaint in writing moved by authorized officer of a financial institution after it has served a thirty days notice upon the borrower demanding payment of loan, advance or financial assistance. Above referred provisions make it clear that local police in matters between bank and its customers has no authority to register a criminal case. Other case laws referred to by learned counsel for petitioner also supports his stance that registration of FIR by local police in this case was without lawful authority as the matter does not fall within the domain of local police.
9. After going through the available record and case law referred, I am of the view that registration of impugned FIR by local police was unwarranted and uncalled for as the alleged offence can only be tried by Banking Court constituted under the Provisions of FIO, 2001.
10. As a result of above discussion, this petition is allowed and impugned FIR No.326/19 dated 23.06.2019 registered at Police Station City Shorkot for the offence under Section 406 P.P.C. being without lawful authority and jurisdiction is ordered to be quashed with no order as to costs.