1. ' MRS.. MAJIDA RAZVI, J.--- This criminal bail application has been filed by two applicants/accused who are managing director and director respectively of a company known- as Messrs Tristar Shipping Lines Ltd. They were arrested on 24-7-1998 in pursuance of an F.I.R. No,27 of 1998 filed by the complainant-bank through their Zonal Chief Mirza Anwar Hussain, A.B.L.
2. ' The brief facts are that Messrs Tristar Shipping Lines (the Company) applied to the Allied Bank Ltd., the complainant herein for grant of loan/ opening of L.Cs. For the purchase of ships. Four L.Cs. Were opened by the said Bank on behalf of the company on the terms and conditions given therein.
3. Admittedly, the company after repaying the installments for about two years in respect of the said four L.Cs. Stopped repayment and, as such, Suit No,1591 of 1997 was filed by the complainant-bank against the company as well as its directors for the recovery of the outstanding amount and subsequently the F.I.R. Was also lodged.
4. ' According to the F.I.R., the day of occurrence of the incidence is the year 1994-95. The facts mentioned therein are similar to the ones we have mentioned hereinabove, however, it has been alleged that the directors of the company after opening the L.Cs. To purchase the ships said installments for some time and then stopped depositing installments with the complainant bank and with a criminal intention made breach of trust and instead of depositing the amounts with the complainant-bank deposited the same with another bank namely Prudential Commercial Bank Ltd. As such complaint was filed under sections 406, 420 and 109, P.P.C.
5. ' Mr. Azizullah K. Shaikh, the learned counsel for the applicants/accused contended that the applicants/accused entered into a finance agreement with the complainant-bank for the purchase of ships and the terms and conditions are given in the L.Cs. Itself. According to him, the company, admittedly, paid the installments as provided under the L.Cs. For about two years but failed to continue repayment due to disturbances and overall economic conditions. According to him, the charge amount shown in the F.I.R. Is incorrect as the said amount i,e, US $10.850 (m) is the total amount for which the L.Cs, were opened, out of which substantial amount has already been repaid and for the balance the complainant/bank has already filed a suit for recovery of the liabilities of civil nature. But to harass the applicants/accused and to put pressure on them the complainant-bank has initiated criminal proceedings by lodging an F.I.R. He categorically denied that any separate terms were settled between the parties except what is mentioned in the L.Cs.
6. ' Mr. Memnoon Hasan. The learned Dy.A.-G., contended that the bank had issued a sanction letter, dated 10th March, 1994 according to which the company was bound to deposit US $4500 per day equivalent to Rs,98.250 (m) as charges/freight charter hire of the ship with the bank to build up monthly installment of US $99,000 to be remitted to the supplier but the company failed to deposit the said freight charter hire with the bank and instead committed criminal breach of trust by depositing it with another bank which resulted in lodging of F.I.R. Under sections 406, P.P.C. And 420, P.P.C.
7. ' We have heard both the counsel and have considered the points raised on behalf of the parties.
8. The four L.Cs. Mentioned by the parties are not disputed nor the amounts mentioned therein. It is also not disputed that US $4.63 (m) is the outstanding amount against the company and applicants/ accused. The F.I.R. Relates to an incidence of 1994-95 and no reason has been given for the delay in filing of the F.I.R. The complainant-bank has already filed a suit for recovery of outstanding amounts which is pending in this Court. We are of the considered opinion that in cases where recoveries are to be made efforts of the lending agency should be more for recovery of its dues than to punish parties in criminal proceedings. To bring an offence under purview of section 406 of P.P.C. The criminal intention of breach of trust must be present so also under section 420, P.P.C. In the present case, it has been established that the applicants/accused continued to pay for about two years which negates the criminal breach of trust or cheating. Then the acts of the complainant-bank itself is a proof that considering the liability of the company and applicants/accused being that of civil nature the suit was filed for the recovery of the outstanding amounts. It was only an afterthought act that F.I.R. Was lodged, thus, trying to convert the said civil liability into criminal liability. In the case of Jamot Ghulam Muhammad v. The State and another 1972 PCr.LJ 1130 it was observed that:- .. It is here that a Court is called upon to act with circumspection and to exercise the utmost care and caution before it is persuaded to employ its process for compelling the attendance. This duty is heavier in private complaints which relate to transactions apparently civil in nature. The tendency to view a criminal action as a handy means to constrain a person's conduct cannot be underscored."
9. ' In the present case, as we have observed hereinabove initially civil proceedings were initiated against the company and the present applicants/accused for recovery of the outstanding amounts and subsequently, to put pressure on the party additional criminal proceedings were initiated. We are clear in our mind that there is no element of mens rea in the offence which is alleged to have been committed by the present applicants/accused. A perusal of the F.I.R. Has clearly established that the offence so alleged was committed somewhere. In 1994-95 but the complainant-bank lodged the complaint in 1998 and, as such, even if the facts given therein are true there is an unexplained delay in filing of the F.I.R. And the dispute at the most can be of breach of contract which would constitute a civil liability. In the case of Badaruddin v. Mehr Ahmed Raza, Additional Sessions Judge, Jhang and 6 others PLD 1993 SC 399 it was held that:-- "... There is no dispute about the fact that ingredients of criminal offences such as, under sections 420, 406, 467 and 468, P.P.C. And other cognate offences are similar as would appear in most cases of breach of contract. No doubt in such cases both remedies on criminal as well as civil sides are available and can be pressed into service but guide-lines in the case-law show that Civil Courts be given preference and allowed to decide such disputed facts. In such circumstances, it is the duty of the Criminal Court to act with circumspection and exercise power with utmost care and caution before it is persuaded to employ its process for compelling attendance."
10. ' In the case of Mian Jamsheed Hussain v. The State 1992 PCr. LJ 141 it was held that:-- "To establish the case under section 420, P.P.C. There must have been clear evidence to the effect that the appellant had guilty mind from the very outset, which evidence as observed earlier, is lacking in this case. In fact, a simple case of breach of contract was turned into a criminal case just to put pressure upon the appellant so that he may repay the loan. It may be added that the parties have already resorted to civil litigation. We think that the general proposition of law is well-settled that a broken promise by itself does not bring the case within the mischief of cheating."
11. Under section 420, P.P.C. There is to be a clear evidence that accused had guilty mind to defraud the other party from the very outset. In the present case, as admitted by the complainant bank that the company and applicants/accused have repaid a substantial amount, indicates that there was no criminal intention to defraud the bank but due to compelling circumstances the company and applicants/accused stopped repayment for which the complainant/bank had already initiated civil proceedings. Without going into the merits of the case or as to the liability/outstanding against the applicants/accused as the same can be determined only after evidence is led by the parties which is out of our domain, in our opinion, it is a case of further enquiry. Under the circumstances, and due to the unsatisfactory and lacking evidence to bring the case under the purview of sections 406 and 420, P.P.C. By a short order, dated 10-9-1998 we granted bail to the applicants/accused on the terms and conditions mentioned therein.