SAFDAR SALEEM SHAHID, J. Through this constitutional petition, Humayun Mirza petitioner has challenged the validity of order dated 24.08.2020 passed by learned Addl. Sessions Judge/Ex- Officio Justice of Peace Shahpur District Sargodha, whereby, direction was not issued to SHO concerned for registration of FIR against the proposed accused persons/respondents.
2. Learned counsel for the petitioner contended that from the contents of application under section 22-A, Cr.P.C. submitted by the petitioner before the learned Ex-Officio Justice of Peace commission of cognizable offence was made out against the proposed accused persons but learned Ex-Officio Justice of Peace dismissed the aforementioned application of the petitioner without any lawful justification; that learned Ex-Officio Justice of Peace dismissed the application of the petitioner on the ground that matter comes within the provisions of Financial Institutions (Recovery of Finances)
Ordinance, 2001, therefore, said court lacks jurisdiction to entertain the application of the petitioner under section 22-A/B, Cr.P.C, rather, Banking Court constituted under the aforesaid Ordinance is competent to take, action against criminal act as well as civil act performed by the parties; that the observation of learned Ex-Officio of Justice of Peace is against the law and facts because in the instant case there is no relationship of customer and financial institution between the parties, rather, as per allegations as narrated by the petitioner in application under section 22-A, Cr.P.C submitted by him before the learned Ex-Officio Justice of Peace, Messrs Al Arabia Sugar Mills Limited obtained facility of specific loan from Faisal Bank and pledged the sugar bags as a security and thereafter Bank appointed Messrs Atlantic Surveyors (Pvt.) as Muccadum for security of said sugar bags which were allegedly misappropriated/sold/alienated by the respondents/Muccadum (proposed accused persons), therefore, commission of cognizable offence is made out against the proposed accused persons. Thus, it is prayed that by accepting this petition, impugned order dated 24.08.2020 passed by learned Ex-Officio Justice of Peace Shahpur District Sargodha is liable to be set aside and direction be issued to SHO concerned to register FIR against the proposed accused persons.
3. Learned counsel for respondents has vehemently opposed this petition on the grounds that from the contents of application under section 22-A, Cr.P.C submitted by the petitioner before the learned Ex-Officio Justice of Peace commission of cognizable offence was not made out against the proposed accused persons; that learned Ex-Officio Justice of Peace has rightly dismissed the application of the petitioner by observation that matter comes within the definition of Financial Institutions (Recovery of Finances) Ordinance, 2001 and Banking Court has exclusive jurisdiction to take action against a criminal act as well as civil act performed by the parties. Thus, it is submitted that instant petition is liable to be dismissed.
4. Arguments heard. Record perused.
5. According to allegations as narrated by the petitioner/Bank in application under section 22-A, Cr.P.C submitted by him before learned Ex-Officio Justice of Peace, one Messrs Al Arabia Sugar Mills Limited obtained the facility of specific loan from Faisal Bank/petitioner as per agreement arrived at between Bank and Messrs Al-Arabia Sugar Mills Limited by pledging the sugar bags. It has further been submitted in the application that for the purpose of security/safety of pledged stock, the Bank appointed Messrs Atlantic Surveyors (Pvt.) Limited as Muccadum. On 07.05.2020 the Bank conducted a joint inspection of the Godowns at Shahpur Sadar wherein it came into the knowledge of the Bank that 1,77,890 pledged sugar bags were found missing which were allegedly misappropriated/sold/alienated by the respondents/proposed accused persons.
6. It has been noticed that an agreement was executed between the Bank and Atlantic Surveyors (Pvt.) Limited, a company carrying on business of Muccadam. According to terms and conditions of the said agreement it was primarily duty of the Muccadam/respondents (proposed accused persons) to secure the pledged stock (sugar bags) which were lying in the Godowns, in its custody and possession. As per allegation narrated by the petitioner/Bank in application under section 27.- A, Cr.P.C submitted by him before learned Ex-Officio Justice of Peace, the respondents/proposed accused persons committed theft of sugar bags (1,77,890 pledged sugar bags) and misappropriated the same. It is settled law that Financial Institutions (Recovery of Finances)
Ordinance, 2001 is only applicable where there is a relationship of "customer" and "financial institution" between the parties. In the given circumstances, the Muccadam/proposed accused persons neither come within the definition of Financial Institutions (Recovery of Finances)
Ordinance. 2001 nor as customer, rather, they had been appointed as Muccadam by the Bank for the purpose of security/safety of the pledged stock of Messrs Al-Arabia Sugar Mills Limited. The definition of "customer" as defined in section 2(C) of Financial Institutions (Recovery of Finances)
Ordinance, 2002 is reproduced as under for ready reference:- "Customer" means a person to whom finance has been extended by a financial institution (within or outside Pakistan) 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; Admittedly the respondents/proposed accused are the employees of Atlantic Surveyors (Pvt.) limited, a company carrying on business of Muccadam. From the above said definition, the Muccadam does not come within the definition of "customer" rendering the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001, rather it is applicable to the company Messrs Al-Arabia Sugar Mills Limited which had obtained a loan facility from the Faysal Bank Limited. From the contents of application under section 22-A, Cr.P.C submitted by the petitioner, it clearly shows that allegation of misappropriation/theft of pledged sugar bags has been leveled by the petitioner against the Muccadam.
In the case law reported as "Faisal Farooq and 3 others v. SHO" and another (2017 CLD 1 Lahore) wherein Division Bench of this Court observed in paragraph No.13 of the judgment as under:- "It can be seen that the provisions of sections 408 and 409, P.P. C. are of a much wider import and encompass within themselves prosecution against certain individuals and persons other than the customers of the financial institutions who have executed certain documents with the financial institutions. Thus, in case the prosecution is sought to be launched against a clerk or a servant of a customer or it is sought to be included in the prosecution any of the bankers, agents, attorneys or brokers who have committed a criminal breach of trust in respect of property, that may only be brought in terms of sections 408 and 409, P.P. C. and not under the Ordinance, 2001. Further, if prosecution is sought to be initiated by any other person other than a financial institution, it can only be done under the general law and not under the Ordinance, 2001. In most cases, the Muqaddam appointed by the banker is also sought to be prosecuted and it is clear that no prosecution can be brought against the Muqaddam under the Ordinance, 2001 and proceedings will necessarily have to be initiated under the general law. This begs the question; if the criminal complaint or FIR includes the name of accused other than customers then can it be said that the prosecution can only lie under section 20, of the Ordinance, 2001 and under no other law? To lay down such a proposition will be fallacy and irrational and would be tantamount to a complete ouster of the general jurisdiction to register cases conferred upon the officers under the Cr.P.C and taking of cognizable of such offences by the Courts under the general law or under the special law relating to banks which can take cognizance of scheduled offences".
Keeping in view the facts and circumstances of the case and while seeking guidance from aforesaid case law, the Muccadam by virtue of its appointment becomes an agent of the Bank and has to act in accordance with such agency. However, if the agent commits a criminal act, then such criminal acts comes under the general law (under the jurisdiction of Pakistan Penal Code and Criminal Procedure Code) and not under any Special law. Learned Ex-Office Justice of Peace while passing the impugned order erred in law by holding that matter comes within the definition of Financial Institutions rendering special law. Prima facie from the contents of aforesaid application, commission of cognizable offence was made out against the proposed accused persons. Keeping in view the facts and circumstances of the case, this court has reason to believe that observation of learned Ex-Officio Justice of Peace, that matter comes within the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001, therefore, said court lacks jurisdiction to entertain the application of the petitioner under section 22-A/B, Cr1P.C, rather, Banking Court constituted under the aforesaid Ordinance is competent to decide the matter, is against the law and facts.
7. For what has been discussed above, instant petition is accepted and impugned order dated 24.08.2020 passed by lead Ex-Officio Justice of Peace, Shahpur District Sargodha is set aside. SHO Police Station Shahpur Saddar District Sargodha, is directed to record the statement of the petitioner and to act and proceed strictly in accordance with law keeping in view the provisions of section 154, Cr.P.C.