Shahid Karim, J. This litigation presents for review the notices issued by the Federal Investigation Agency (FIA) under Section 20(7) of the Financial Institution (Recovery of Finances) Ordinance, 2001 (FIO) pursuant to a complaint filed by the authorized of ficers of the financial institutions in each case. Section 20(7) provides that: "S20(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 notice upon the borrower demanding payment of the loan, advance or financial assistance."
2. These cases can be broadly divided into two categories. The financial institutions in their complaints allege the commission of an of fence envisaged by section 2(g) of willful default which provides that: "S. 2(g) "willful default" means I. deliberate or international failure to repay any finance, loan, advance or any finan cial assistance received by any person from a financial institution after such payment has become due under the terms of any law or an agreement, rules or regulations issued by the State Bank of Pakistan.
II. utilization of finance, loan, advance or financial assistance or a substantial part thereof, obtained by any person from a financial institution for a purpose other than that for which such finance, loan, advance or financial assistance had been obtained and payment in part or full not made to the financial institution; or III. removal, transfer , misappropriation or sale of any assets collateralized to secure a finance, loan, advance or financial assistance obtained from a financial institution without permission of such institution."
3. Section 20(7) of FIO mandates that willful default as defined in section 2(g) is a cognizable offence and action in respect of the offence of willful default shall be taken by the investigating agency nominated by the Federal Government (FIA in these cases) on a complaint in writing filed by the authorized officer of a financial institution. In a previous set of litigation, the customers had challenged the notices under Section 2(g) of the Ordinance, 2001 as well as other notices inter alia issued under the NAB Ordinance, 1999. A Full Bench of this Court dealt with the cases and handed down its judgment reported as Mian Ayaz Anwar and others v. State Bank of Pakistan and others (2019 CLD 375). The case set up by the petitioners in those cases was iterated by the Full Bench in paragraph 4 in the following words: "It is their case that the question whether there is default by a customer of a financial obligation to a financial institution in such cases, jurisdiction vests with the Banking Court established under the FIO. It is for the Banking Court to determine whether there is default in the repayment of financial obligations and if the Banking Court makes a determination on the issue of default then the question whether the default was willful be decided."
4. In closing, the Full Bench classified the offence of willful default into one committed under Section 2(g)(i) and the other covered by section 2(g)(ii) & (iii) to conclude as follows: "19. Under the circumstances and in view of the aforesaid, the petitions are decided in the following terms:
(i) All Petitions as detailed in Schedule "A" which challenge notices issued under sections 5(r), 19 and 31D of the NAB Ordinance or related thereto and notices issued by the FIA under section 2(g) read with section 20 of the FIO or related thereto are allowed and the stated notices are declared to be illegal, hence set aside.
(ii) The petitions which challenge notices issued under section 2(g)(iii) of the FIO being W.Ps. Nos.241265/18, 231658/18 and 237281/18 are dismissed on account of the fact that they constitute an independent offence;
(iii) W.Ps. Nos.28883/14, 31141/15 and 13400/16 which challenge the vires of the NAB Ordinance after promulgation of the Constitution (Eighteenth Amendment) Act, 2010 are dismissed on account of the fact that this issue has already been decided by a learned Full Bench of this Court vide judgment dated 31.8.2018 passed in W.P. No.196881/2018 titled Lawyers Foundation for Justice v . Federation of Pakistan etc. First Category:
5. The first category of the cases in this litigation viz. W.P No.66860 of 2019 relates to a notice sent by FIA on a complaint filed by the respondent/financial institution in this case based on the facts which constitute, according to that complaint, the offences covered by section 2(g)(ii) & (iii) of the Ordinance, 2001. Ayesha A. Malik, J., speaking for the Full Bench, without equivocation concluded that: "17. So far as the offences in section 2(g)(ii) and (iii) of the FIO are concerned, they provide for independent offences which can be tried under section 20 of the FIO independent of any determination of a default in an obligation to pay. Neither offences are dependent on the civil liability of 'default' under section 9 of the FIO as they are offences due to the very act of the customer . So if a customer utilizes the finance obtained from a financial institution for purposes other than for which it was given for or if a customer removes, transfers or misappropriates collateral or security of the financial institution, then the act of such removal, transfer or misappropriation constitutes an offence for which criminal proceedings can be initiated under sectio n 20 of the FIO. A lot has been argued with reference to the power given to a government agency for investigating into the offence of "willful default" under section 20(7). However , we find that the power is simply to investigate, that too on a complaint filed in writing by the Bank and after securing a thirty days' notice. Hence it is neither unconstitutional nor excessive.
The Banking Court being the special forum to try offences under the FIO is the proper forum to try the offence of willful default and in this regard in terms of the provisions of section 20(7) once the civil liability of default is established the offence of willfulness can be investigated by the FIA or any other nominated Federal Government Agency . Offences under section 2(g)(ii) and (iii) however are not dependent on the determination of the civil liability and can be investigated in terms of section 20(7) by the nominated government agency . In all such cases the Banking Court will try the offence of willful default as per section 20 of the FIO."
6. Thus, the Full Bench of this Court considered the issue regarding this category of offences to hold that these provisions provide for independent offences and can be determined under Section 20 of the Ordinance, 2001 and do not require any prior determination of default as a civil liability . Consequently , the petitions challenging the notices alleging these offences were dismissed. W.P No.66860 of 2019 reiterated the same grounds of challenge which featured in Mian Ayaz Anwar and which are entirely covered by the holding of the Full Bench of this Court and so the petitioners cannot be permitted to re-agitate the same issues on the basis of issue preclusion as well as the doctrine of precedents which binds this Court to the judgment of the Full Bench (which is a Larger Bench of this Court) and which conclusively determined the controversy . This petition (W.P No.66860 of 2019 ) is dismissed .
The learned counsel for the petitioners refers to the reply filed by FIA and contends that FIA has, without conducting an investigation or taking into account the contrary view of the petitioners, drawn a forgone conclusion that the offence has indeed been committed. It goes without saying that no such conclusion can be drawn by FIA and any such conclusion must be premised on a proper investigation by FIA after holding an inquiry and taking into account the point of view of the petitioners.
Second Category:
7. W.P No.68772 is a case which brings a challenge to the notices sent by FIA and which allege the commission of both the offences covered by section 2(g)(i) as also (ii) and (iii). In respect of the offences covered by section 2(g)
(ii) and (iii), the determination has already been rendered in W.P No.66860 of 2019 above and shall apply squarely to the notices in this case as well. This leaves us with the portion of the notice under Section 2(g)(i) which deserves to be treated separately as the Court in Mian Ayaz Anwar gave a materially distinct finding with regard to the offence of willful default covered by this provision. It was observed by the Full Bench that: "The FIO prescribe the procedure to be adopted for the purposes of invoking the jurisdiction of the Banking Court for recovery of amounts due to the financ ial institution or breach of any obligation as defined under the FIO. The law prescribes for a special procedure to be followed when filing a suit under the FIO and also prescribes for certain offences which are triable before the Banking Court. Hence the Banking Court is a specialized court where the issue of 'default' can be contested which established for the purposes which pass judgment and decree for recovery of outstanding amounts in cases of default."
And concluded as follows: "...Hence in the context of the definition given in section 2(g)(i) of the FIO, "willful default" is an intentional failure to pay that which is due to the financial institution. In all such cases, the element of "default" precedes the criminality of the offence of willfulness, meaning thereby that the question of default must be established first as per the prescribed procedure under the FIO, before it can be alleged that the default was deliberate or intentional."
"...Even otherwise as we have already observed that the offence of willfulness will come after the civil liability of default, in an obligation to pay, is determined as there has to be an obligation to pay before it can be alleged that the obligation to pay was deliberately avoided. Section 20(7) of the FIO can only be invoked once the civil liability of default has been established."
8. Therefore, in the opinion of the Full Bench, the determination of default as a civil liability must precede any notice regarding the commission of the offence of willful default under Section 2(g)(i) as this related to civil liability of default and must be determined by a court of competent jurisdiction which would conclude that there was an obligation to pay the amount in default and would trigger the offence of willful default in such cases. This view is soundly based on a long line of decided cases where the superior courts have grappled with the meaning of the term "sum due" to hold that it entails, in the first instance, a determination by a court of competent jurisdiction that the liability in respect of the amount claimed stands established in civil law. Any liability in criminal law must take a back seat till then. This was held to be a cardinal fracture of the offence under section 2(g)(i) of FIO, in Mian Ayaz Anwar .
9. On this aspect although the final determination has already been made by the Full Bench which generally holds that the commission of the offence of willful default covered by section 2(g)(i) must be based on a civil liability of default having been priorly determined, the words " once the civil liability of default has been established" as used in Mian Ayaz Anwar , are alleged to be susceptible to competing views of the parties representing opposite poles.
For, according to the learned counsel for the petitioners, in this case, the matter is sub judice before a Division Bench of this Court in an appeal filed by the petitioners and although a judgment and decree has been passed by the Banking Court, the said judgment and decree has to be affirmed in appeal provided under the law by the appellate court. Thus, in order for the civil liability to be established finally the decis ion made by the appellate court is an essential prerequisite and any notice under Section 20(7) of FIO (alleging the offence of section 2(g)(i) must await till that time. This view, it is argued hews more closely with the precedent' s purpose. This strain of the matter the petitioners contend has not been clearly dealt with in Mian Ayaz Anwar and calls for interpretation by this Court in this petition. Two strands of this statement require unpacking.
10. To reiterate, this Court will not be engaged in the re-determination of the contro versy whether prior to complaint under Section 20(f) with regard to the offence of willful default covered by section 2(g)(i), a determination of the civil liability by a court of competent jurisdiction is a sine qua non or not. That issue stands conclusively resolved by the Full Bench. This Court is constricted by that precedent. The scope and remit of this Court in this litigation would remain restricted to whether determination of the civil liability would include a determination to be made by the appellate court as well or not. This, too, will have to be teased out by an objective analysis of the precedent.
11. The intention of the learned Judges as expressed in Mian Ayaz Anwar has to be ascertained by considering the precedent' s words, context and purpose and on this basis interpretative role will be assumed by this Court. In doing so, this Court will be guided by the rule that the interpretation has to be one which a reasonable reader would give to the precedent read against its background. Although, the learned Judge, speaking for the Full Bench did not elaborate (since the issue did not arise squarely before the Court) I have no doubt in my mind that in laying down the rule regarding pre-determination of civil liability of default in Mian Ayaz Anwar the learned Judges clearly meant that not only the determination must be made by court of first instance but doubtles s by one appellate court as well.
This is based on various established principles in our jurisprudence and on sound policy . For, proceedings for a criminal offence entail the infringement of a number of fundamental rights enshrined in the Constitution of Islamic Republic of Pakistan, 1973 and unless the person against whom an offence is alleged has been given full and complete opportunity of hearing and determination by an independent Tribunal, he cannot be burdened with criminal liability emanating from determination regarding civil liability of obligation to pay. The words "become due" used in the definition of willful default under Section 2(g)(i) have been interpreted in Mian Ayaz Anwar to mean that there has to be determination made of the sum due, which is primarily a civil liability by a court which has been established under the law for doing so.
12. The view that the appellate procedure must conceivably be part of the determination of civil liability is based on two principles entrenched in our jurisprudence. The first is drawn from an established line of respectable authority that an appeal is a continuation of the original suit and opens up the case for rehearing on error and facts, both.
And the second is the critical importance of constitutional criminal law which protects and preserves the right of a person to due process of law in all criminal prosecutions.
Appeal is a constitutional right:
13. The first principle has to be prefaced by alluding to another right which has come to be recognized as fundamental and basic to the over-arching principle of rule of law. It is that a person is entitled to be heard by at least one appellate forum in the settlement of his rights and liabilities. In essence, a right to one appeal is a constitutional right. A most natural readin g of these aspects would lend actuality to the phrase used by the Full Bench. It has also been recognized on the basis of Islamic law which lays down that in order to have a fair determination made in respect of civil rights of citizens and other persons, one right of appeal must be granted in order to ensure that rights of persons are fairly and reasonably determined before any liability is finally fixed as in all these matters invariably rights to property and other individual rights are involved which cannot be taken away without recourse to independent adjudication including a right of appeal to an appellate forum. Recently , this right has been recognized and reiterated in 2021 SCMR 440 by the Supreme Court of Pakistan. If one right of appeal is a fundamental and basic right, it follows ineluctably that a person's civil liability would necessarily hinge upon a determination not only to be made by the court of original jurisdiction but also by at least one appellate court. If the contention of the counsel for the financial institutions is to prosper , that would be tantamount to taking away a fundamental right by simply holding that the trial court's determination would suffice to bring home a criminal liability of willful default of a customer . An objective approach to the findings in Mian Ayaz Anwar would lead to the conclusion that the Full Bench intended the entirety of the process to be completed which process would commence with the court of first instance and conclude with the determination by the appellate court. No other meaning can be attributed to the Full Bench in Mian Ayaz Anwar while stating that "the offence of willfuln ess will come after the civil liability of default in an obligation to pay is determined." And further that "section 20(7) of FIO, can only be invoked once the civil liability of default has been established." The word "established" used by the Full Bench in Mian Ayaz Anwar , clearly point to the final determination as it cannot be conceived that the defau lt is established merely by the court of original jurisdiction without a rehearing of the matter by the appellate court.
These reservations will have to be squared with the phrase used earlier which stated that "the question of default must be established first as per the prescribed procedure under the FIO" to underscore the intention. "Prescribed procedure under the FIO" is a compendious term and refers to the entire procedure which includes the appeal under FIO. This is also the clear comma nd of the statute' s text and the broad context. Indeed, instances can be conjured where the original decree is upset by the appellate court which returns a materially different finding from the one given by the trial court. Thus, in a given case, if the financial institution were permitted to do so, it may proceed to file a criminal complaint in terms of section 20(7) of the Ordinance, 2001 and even before the appeal is finally decided, that complaint may have been concluded and punishments inflicted on the persons accused of that offence. In the meantime the appellate court may reverse the findings of default rendered by the trial court. This will be a likely scenario in a number of cases and can it not be argued that in such a case, the fundamental right of dignity and liberty which has been conferred by the Constitution on a citizen may have already been infringed to the utter detriment of that citizen and this will have taken place by accepting the proposition to exclude the appellate procedure from any determination of civil liability of default which the counsel for the financial institutions invites this Court to hold. The principle did bite with the Full Bench and this Court remains unpersuaded too.
Appeal is continuation of suit:
14. Coming back to the first rule which compels this Court to hold that a determination of civil liability of default must include the right of appeal and its final decision it is based on the established principle vouched in F.A Khan v. The Government of Pakistan (PLD 1964 Supreme Court 520) that the original and appellate proceedings are steps in one proceedings and that an appeal is merely a continuation of the suit and the appellate court does not merely act as a court of error. These principles were distilled from respectable authority which were eruditely considered by Kaikaus J. in the following words: "Are the original and appellate proceeding s independent proceedings in one of which the other is challenged or are they steps in the same proceedings?
None of these matters is res integra and in fact decided case show that in respect of the nature of an appeal the following propositions may be regarded as established:
(i) when an appeal is filed the matter becomes sub judice and is reheard by the appellate Court which does not Act merely as a Court of error;
(ii) after there has been an appeal even though an appellate Court simply affirms the order of the original Court the only decree or order in existence is the order of the appellate Court;
(iii) the original and appellate proceedings are steps in one proceedings.
"The third proposition should really follow from the first two, but reference may be made in this connection to the judgment of the Supreme Court of India in Garikapati Yeeraya v. Subbiah Choudhury (PLD 1957 SC (Ind.) 448), where after an exhaustive review of cases it was held that "the legal pursuit of a remedy , suit, appeal and second appeal, are really but steps in a series of judicial proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding". We are not at all unfamiliar with cases where an appeal is said to be a continuation of a suit or is included within the word suit. The Legislature when it provides a hierarchy of tribunals for the determination of a dispute is really providing one complete procedure for such determination, proceedings before dif ferent tribunals being only steps in this procedure.
If the propositions stated above are to be accepted there appears to be good groun d for holding that the passing of an order subject to appeal will not necess itate the filing of a suit for it is only a step in a proceeding and not a final order . In any case once an appeal is filed the matter become sub judice and when the appellate authority passes an order the order of the original authori ty disappears and merges in the order of the appellate authority so that there remains in existence only the appellate order and this order can be made the basis of a suit...."
"This case supports the proposition put forward above that it is only when a litigation in one forum is completed that the litigation in the other forum should start and that an order really becomes an order when the appeals to which it subject are exhausted."
15. In Sahabzadi Maharunisa and another v. Mst. Ghulam Sughran and another (PLD 2016 Supreme Court 358) the legal proposition laid down in F .A Khan was reiterated and reaf firmed and it was held as follows: "In the Nasrullah Khan case (supra) we have held that merger of a judgment/decree means "that it is integrated, implanted, inculcated, infixed and instilled into the decree of the higher forum and becomes the decree/order of the later forum for all legal intents and implications". It is relevant to mention here that according to settled law, an appeal (in particular) is a continuation of the original proceedings and when an appeal is filed the entire case is reopened for examination both on the question(s) of fact and the points of law involved in any lis (Note: a second appeal, however , is subject to the conditions laid down in Sections 100 and 102 C.P.C.). Be that as it may, the legal position and the concept of merger in relation to an appeal has been considered and authoritatively resolved in the judgment reported as F.A. Khan v . The Government of Pakistan ( PLD 1964 SC 520 )."
16. The rule is well-entrenched in our jurisprudence and plainly means that an appeal is a continuation of the original proceedings and upon its filing the entire case is reopened for examination, both on the question of fact as well as any error of law. Once an appeal is considered and decided by the appellate forum, the concept of merger applies to which a reference was made in F.A Khan and reaffirmed in Sahabzadi Maharunisa by the Supreme Court of Pakistan. The rest of the case law cited by the learned counsel for the petitioners need not to be alluded to since these two judgments of the Supreme Court are sufficient for the proposition that the appeal is a continuation of the original proceedings and which leads one to conclude that until the appellate court has finally affirmed or reversed the judgment and decree of the trial court in the suit, no civil liability is established.
17. The argument of the learned counsel for the petitioner finds support from the incontrovertible fact that in some of the cases before the Full Bench in Mian Ayaz Anwar , appeals were pending before the Division Bench of this Court and knowing fully well that appeals were pending, the Full Bench nevertheless rendered its findings regarding the civil liability to be established before the offence of willful default can be alleged against the petitioners. The interpretation which has been placed by this Court on the judgment of Mian Ayaz Anwar has been done by taking into account the context in which that judgment was passed and it would be presumed that the learned Judges of the Full Bench were well aware of the fact that in some of the cases before them appeals were pending and were yet to be decided and despite this a distinction was sought to be made in these cases on the basis of court of original jurisdiction and the appellate court.
Constitutional Criminal Law:
18. Constitutional criminal law is a new creature in the legal landscape of Pakistan. It is well-known in the Anglo- American legal literature as also to the academies of those countries. Of the fundamental rights guaranteed by Articles 9 to 28, almost 16 belong to criminal procedure and may as well (like the American Bill of Rights) be described as a mini-code of criminal procedure. Article 9 confers the right to life and to liberty . The significance of rights conferred by this Article and their relevance to the criminal procedure is that whenever someone faces a criminal charge what is at stake in his life or liberty or property . Article 9 provides protection against deprivation and loss of life and liberty and Article 24, clause (1) provides protection against depriva tion and loss of property . Access to justice is part of the right to life under Article 9 (Mehram Ali v. Federation PLD 1998 SC 1445 ); Liaqat Hussain v Federation, PLD 1999 SC 504, 632). Access to justice means the right to have access to justice through independent judiciary as envisaged by the Constitution and includes the right to have a fair and proper trial by an impartial court or Tribunal. Read in conjunction with the constitutional right to one appeal, access to justice would mean an interwoven set of rights which includes a proper trial as well as an appellate procedure. And no man should be subjected to any detriments, especially in criminal law, unless willful default has been established by the court of appeal.
"Reputation, reputations, reputation! Oh, I have lost my reputation! I have lost the immortal part of myself, and what remains is bestial" __William Shakespeare, Othelo, Act II, Scene III.
19. Article 10 guarantees a number of criminal procedural rights which, for our purpose, enunciates that a person arrested shall not be detained in custody unless he is informed, as soon as may be, of the grounds for such arrest.
The implied right guaranteed by Article 10 is that the grounds of arrest must exist before the arrest takes place. The classic case on the issue is the English case of Christie v Leachinsky (1947) 1 All ER 567 and from the leading judgment of Justice S.A Rehman in Government of East Pakistan v. Rowshan Bijaya, PLD 1966 SC 286 at 313.
The rule of law that emerges is that there can be no arrest without probable cause. The probable cause in the present context of the offence of willful default has a linkage to the determination of civil liability by the Banking Court (and one appellate court, by extension). The filing of a complaint would give rise to an imminent threat of seizure of person and his arrest and this cannot be countenanced unless probable cause exists which has a reference to prior determination of civil liability .
20. Article 14 of the Constitution states that the dignity of man and the privacy of home, shall be inviolable. They run with each other . Human dignity is guaranteed in absolute terms. Saleem Akhtar , J. observed in Benazir Bhutto v . President of Pakistan, PLD 1998 SC 388 , 621 : "The inviolability of privacy is directly linked with the dignity of man. If a man is to preserve his dignity , if he is to live with honour and reputation, his privacy whether in home or outside the home, has to be saved from invasion and protected from illegal intrusion."
21. The learned Judges of the Full Bench had the centrality of this constitutional principle in mind when they chose to erect the bar of determination of civil liability in all cases covered by section 2(g)(i) of FIO. Arrest and detention leave an indelible imprint on the reputation and dignity of a person. Power to arrest, to handcuf f and human dignity are closely tied in with each other and these constitutional protections of dignity and privacy of home cannot be reduced to irrelevance under a scheme of an ordinary statute.
22. In view of the above, this petition (W.P No.68772 of 2019) is allowed and the impugned notices of FIA are struck down being ultra vires . It is held that the offence of willful defau lt under Section 2(g)(i) can only arise once not only the proceedings before the court of original jurisdiction but also before the appellate court in any appeal filed under FIO by the petitioners have concluded.
23. In W.P No.10625 of 2021, W.P No.73639 of 2019 and W.P No.38706 of 2020 notices by the FIA have been brought under challenge. Once again the offence alleged against the petitioners is covered by section 2(g)(i) of the Ordinance, 2001. However , no appeals are admittedly pending and a judgment and decree has already been passed against the petitioners in these cases. Therefore, there is no ground for holding the notices to be without lawful authority as the basis of the holding of this Court in W.P No.68772 of 2019 is conspicuously absent for failure on the part of the petitioners to file an appeal. The civil liability of default it seems stands determined. These petitions are dismissed .