MUHAMMAD AFZAL SOOMRO, J.---Petitioners, Asim Textile Mills Limited and others appear to be aggrieved by the letter/reply written on behalf of Respondent No, 2, dated 3-6-2003 refusing interference with the matter in respect of the complaint moved by the Petitioners against Respondent No,3.
2. Brief facts, as set out in this petition are that the Petitioners instituted a banking suit bearing COS No, 48 of 2001 in the Lahore High Court against Respondent No,3 for recovery of damages, redemption of charged properties and consequential relief. It was averred in the plaint that the bank failed to provide agreed loan facility being Rs,100 million and only letters of credit for Rs,25 million were allowed in August, 1994 when the cotton season was already over and resultantly bad quality cotton had to be purchased at a high prices which caused losses to the Company.
Respondent No,3 filed application for leave to defend the suit denying the allegations levelled against them. Respondent No,3 also instituted a banking suit bearing COS No,61 of 2001 against the Petitioners for recovery alongwith cost of finance liquidated damages etc. The Petitioners filed an application for leave to defend disputing their liability.
3. While the said suits were still pending a Legal Notice, dated 12th September, 2001 under section 5(r) of the National Accountability Bureau Ordinance, 1999 (hereinafter referred to as the NAB Ordinance) was served upon Petitioners Nos.2 and 3 who duly responded to the said legal notice reiterating that they were not at all in default of the amount allegedly 'due' in as much as Respondent No,3 and its officials had wilfully breached their statutory obligations exposing them to huge losses. It was further reiterated that since the above-stated suits were pending before the Court, issuance of said legal notice under section 5(r) was unwarranted by law.
4. It has, further, been averred in the memo. Of petition that the Petitioners also lodged a complaint, dated 2-10-2001 before Respondent No,2 praying for taking action against officials of Respondent No,3 under the Banking Companies Ordinance, 1962 read with State Bank of Pakistan Act, 1956 on the ground of their wilfully breaching the State Bank Regulations and the Agreement between Petitioners No,1 and Respondent No,3. However, Respondent No,2, vide letter, dated 19-2-2002, declined to exercise its jurisdiction inasmuch as the matter was stated to be subjudice before the Court. The petitioners, being aggrieved, field a Constitutional Petition bearing W.P. No, 3450 of 2002 taking the ground that jurisdiction of Respondent No,2 under the Banking Companies Ordinance, 1962 was absolutely independent and exclusive of the jurisdiction of the Banking Court under the Financial Institutions (Recovery of Finance) Ordinance, 2001 and in cases involving misconduct, violations of the statutory obligations. State Bank Circular, Rules and Regulations etc., could not refuse to interfere on the pretext that the matter was subjudice before the learned Banking Court: The learned Lahore High Court disposed of the said Constitutional Petition with a direction to Petitioner No,1 to approach Respondent No,2 with an amended Complaint so as to bring it within the four corners of the law, excluding relief prayed for in the COS No,48 of 2001 (suit filed by the Petitioners against Respondent No,3) and the State Bank of Pakistan was directed to act in accordance with the provisions of the Banking Companies Ordinance, 1962 in case such application is filed. On 18-2-2003 the Petitioners filed a revised complaint before Respondent No,2 for taking action against Respondent No,3 and its officials under sections 41-A, 42 and 43-A of the Banking Companies Ordinance, 1962 and against Respondent No,2 declined to interfere with the matter on the ground of pendency of suit bearing COS No,61 of 2001 for recovery against the Petitioners.
5. In, this background, it is averred in the memo. Of petition, that on one hand Respondent No,2 has decided not to interfere in the matter even on revised complaint filed by the Petitioners against Respondent No,3 and its officials while on the other hand Respondent has issued a Show-cause Notice, dated 3-6-2003 under section 5(r) of the NAB Ordinance against the Petitioners calling upon them to pay to Respondent No,3 the amount alleged to be due within 7 days.
6. Respondent No,2 (State Bank of Pakistan) through their comments has submitted that they were informed by Respondent No,3 that a 30 days notice was served upon the Petitioners through their Lawyers to which they have not responded. It has, further, been submitted that in compliance with directives of the learned Lahore High Court case of the Petitioners was reconsidered and comments were again obtained from Respondent No,3 on the amended application filed by the Petitioners and they were informed that interference in the matter by them at this stage was not appropriate. It has been reiterated that all their actions were under the provisions of Banking Companies Ordinance, 1962 or on the orders/directives of the learned Lahore High Court.
7. Respondent No,3 in their reply have submitted that the suit for recovery filed by them against the Petitioners is pending before the Lahore High Court. The Petitioners have intentionally avoided to repay the facilities admittedly availed by them. The pendency of civil dispute cannot be a ground to suspend criminal proceedings contemplated by a special legislation. Consequently, it is asserted that the machinery provided under the NAB Ordinance, 1999, has, rightly, been set in motion. The Respondent No,2 was justified in issuing the Show-Cause Notice, dated 3-6-2003 under section 5(e) of the NAB Ordinance, 1999. Conversely, Respondent No,2 had rightly declined to interfere on the representation of the Petitioners since the question of failure on the part of the financial institution to provide agreed loan facility rendering it liable for damages thereby, was still subjudice and had not been adjudicated upon.
8. The learned, counsel for the Petitioners have, mainly, contended that section 10 of the NAB Ordinance, 1999, contemplates trial of offence of wilful default and a person can be treated to have committed such offence in terms of section 5(r) of the said Ordinance if he refuses or fails to pay any amount 'due' to a bank. It is contended that a Civil Court alone is competent to undertake determination of what is due. Reliance in this behalf is placed upon the pronouncement of the Hon'ble Supreme Court of Pakistan in Agricultural Development Bank of Pakistan v. Sanaullah Khan (PLD 1988 SC 67). The learned counsel for the Petitioners has further relied upon the judgment of this Court in Abdul Shakoor Kaloodi v. The State (2003 PCr.LJ 626) in which one of us (Sabihuddin Ahmed-J) was a member and wherein the above contention was considered in detail.
9. Learned counsel appearing on behalf of the Respondents have urged that prosecution for the offence of wilful default in terms of section 5(r) of the NAB Ordinance, 1999, could proceed despite pendency of suit under Banking jurisdiction unless, as held in the case of Abdul Shakoor Kaloodi (supra) the proceedings under the NAB Ordinance were clearly initiated to coerce a borrower into payment of amount not found due.
10. This Court has had the opportunity of examining the effect of judgment in Abdul Shakoor Kaloodi (supra) in a subsequent unreported judgment, dated 25th March, 2004 delivered in C.P. No, D-24 of 2004 (Abdul Majid v. Governor State Bank of Pakistan and others). In the case of Abdul Shakoor Kaloodi it was found that a bona fide dispute as to the liabilities had existed prior to enforcement of the NAB Ordinance, 1999, whereas in the case of Abdul Majid., it was found that the question of liability could not be determined except through regular trial; Therefore, interference with the process under NAB Ordinance, 1999, was declined. We have also noted another judgment, dated 27-10-2003 delivered by a Division Bench of this Court in Criminal Accountability Appeal No,4 of 2001 wherein conviction of appellant by an Accountability Court was set aside following the dictum laid down in the case of ADBP v. Sanaullah Khan (PLD 1988 SC 67) on the ground that in order to be termed a wilful defaulter, the amount due against the borrower should be determined and adjudicated upon by a judicial forum. The question which needs to be examined is whether the procedure prescribed in section 25-A of the NAB Ordinance, 1999, displaces the normal mode of settlement of disputes between a bank and borrower. This question was considered by this Court in the case of Abdul Shakoor Kaloodi and decided in the following terms:-- "(17) As regards the first question it needs to be kept in view that normally disputes between banker and customer are to be decided by the Banking Court under the Financial Institutions (Recovery of Finance) Ordinance, 2001, which was promulgated after the promulgation of the NAB Ordinance.
Under this Ordinance the jurisdiction of a Banking Court is exercised by a Judge of this Court when the amount involved is more than Rs,5 million."
11. It was further noted in the said judgment that despite promulgation of the Financial Institutions (Recovery of Finances) Ordinance, 2001 after enforcement of the NAB Ordinance, 1999, it does not contemplate that liabilities of borrowers being charged with the offence of wilful default will be determined according to the earlier Ordinance. It has, further been -noted that section 7(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 stipulates that the jurisdiction of a Banking Court with respect to matters falling within its domain would be exclusive. It is 'pertinent to note that the Legislature has specifically provided under section 4 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 that the provisions of this Ordinance will have overriding effect. Therefore, it is difficult to accept the contention to the effect that the question of liability of the Petitioners could be decided according to the mechanism provided under the NAB Ordinance, 1999. In order to harmonize the provisions of the two legislations we are of the view that the amount of liability of a borrower has to be determined through judicial disposition by a Civil or a Banking A Court and once such determination attains finality or is not disputed, the mechanism provided under the NAB Ordinance, 1999, can be invoked. In the event of reasonable dispute about the quantum of liability, the licence to invoke penal mechanism shall place a financial institution in a position of unreasonable advantage which has to be checked. One cannot remain oblivious of inflated claims preferred by the financial institutions which are contrary to the Islamic Principles of Banking and the settled proposition of law.
12. In the present case, the Petitioners have disputed the amount of liability and have alleged breach on the part of Respondent No,3 in respect of the terms of loan facility. It has, also, been noted that the Petitioners had lodged complaint, dated 2-10-2001 before the Respondent No,2 seeking action against the officials of Respondent No,3 for having wilfully breached their statutory and . Contractual obligations. Respondent No,2 had declined to take action through letter, dated 19-2-2002 on the ground that the matter was subjudice before a judicial forum. The Petitioners had preferred Constitutional Petition seeking writ of mandamus before the learned Lahore High Court assailing the above, referred refusal on the part of Respondent No,2 to take action against Respondent No,3. Thereafter, despite directions issued by the learned Lahore High Court, the second revised complaint preferred by the Petitioners before Respondent No,2 could not elicit any positive response. The record of this case thus, shows that the Petitioners had been agitating against the conduct of Respondent No,3 even before earlier notice, dated 12th September, 2001 was served upon Petitioners Nos.2 and 3 under section 5(r) of the NAB Ordinance, 1999. We are mindful of the rule that there was no universal principle of law requiring that criminal proceedings must invariably be stayed till civil liabilities were determined in matters where criminal. Proceedings were also permissible for a civil wrong. It has, also rightly, been pointed out by the learned counsel for the Respondents that in the case of Abdul Shakoor Kaloodi, the borrowers had filed suit claiming certain sums of money against the bank before even the promulgation of the NAB Ordinance, 1999.
Nonetheless, Respondent No,3, in the present case, has already chosen to have the quantum of liability adjudicated through suit for recovery filed under the Banking jurisdiction being COS No,61 C of 2001. Until the amount claimed by the bank is finally determined in the above referred proceedings initiated by Respondent No, 3, it will, being equitable to allow Respondent No,3 itself to pre-empt the proceedings through resort to action under the NAB Ordinance, 1999. The limitation noted by a Division Bench of the Lahore High Court in Brigadier (R) Mazharul Haq and another v.
Messrs Muslim Commercial Bank Limited and another (PLD 1993 Lahore 706) with regard to powers of a Special Court would squarely apply to a Financial Institution also. Respondent No,3 having chosen to invoke jurisdiction of Court under one Special legislation cannot be permitted to change its track and invoke p penal proceedings under another special legislation which will render the former proceedings, infructuous.
13. In the circumstances, we are clearly of the view that the proceedings initiated through impugned Show-Cause Notice, dated 3-6-2003 ought to be stayed until the amount due to Respondent No,3 is determined through the judicial proceedings filed by the said Respondent and it is found that the Petitioners have defaulted in payment of the amount 'due'.
14. The petition, having finally been heard at the stage of Katcha Peshi, we 'would allow the same to the extent that proceedings initiated under the Show-Cause Notice, dated 3-6-2003 shall remain stayed until final adjudication of the amount due against the Petitioners. There shall be on order as to costs.
Proceedings stayed. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.