Jurisdiction of Banking Court

PLJ 2013 Lahore 606 [Multan Bench Multan] Present: Muhammad Qasim Khan, J. MUHAMMAD ASIF NAWAZ--Petitioner versus LEARNED ADDITIONAL SESSION JUDGE/JUSTICE OF PEACE, MULTAN and 2 others--Respondents W.P. No. 10707 of 2012, decided on 16.5.2013. Financial Institutions (Recovery of Finances) Ordinance, 2001-- ----S. 7(4)--Pakistan Penal Code, (XLV of 1860), S. 489-F--Cheque was issued for return a loan obtained from Bank--No criminal case could be registered--Banks were debarred from taking advantage of S. 489-F, PPC in presence of special law--Jurisdiction of Banking Court--Any financial institution can avail remedy before any Court, but basic requirement is that such remedy must be available to institution under law by which financial institution had been established--When statute itself makes it clear that offence is not cognizable then registration of criminal case by local police could not be permitted by-law--PPC is general law, whereas Financial Institutions (Recovery of Finances) Ordinance, is a special law and legislators had enacted it in such a manner so as to had overriding effect of any general enactment--Although by amendment in PPC, S. 489-F, PPC had been inserted after promulgation of Ordinance, 2001 but such insertion would not give it an overriding effect over special law that special law is passed before or after general act does not change principle--Provisions of Ordinance, 2001, making offences bailable, non-cognizable and compoundable, were not brought under consideration--Petition was allowed. [Pp. 609, 610, 611 & 612] A, C, D & G 2013 CLD 738, 2013 CLD 508, PLD 2009 Lah. 541, rel. Financial Institutions (Recovery of Finances) Ordinance, 2001-- ----S. 20(4)--Pakistan Penal Code, (XLV of 1860), S. 489-F--Dishonest issuance of cheque towards repayment of finance or fulfillment of an obligation--No criminal case could be registered--Jurisdiction of Banking Court--Jurisdiction only lies with Banking Court established under Financial Institutions (Recovery of Finances) Ordinance and not before any other Court until and unless same is provided by law, by which financial institutions is established--Where special law is later, it will be regarded as an exception to, or qualification of, prior general act, and where general act is later, special statute will be construed as remaining an exception to its terms, unless repealed expressly or by necessary implication--When amendment was not made in Ordinance, 2001--Legislators explicitly made their intention clear that with regard to matters between financial institutions, such enactment shall hold the field and S. 489-F, PPC (dishonest issuance of cheque) will be applicable to other persons in general except those covered by Ordinance, 2001. [Pp. 610 & 611] B, E & F Mr. Javed Iqbal Bhatti, Advocate for Petitioner. Mr. Mubashir Latif Gill, Assistant Advocate General for Respondent. Syed Wasim Haider, Advocate for Respondents No. 3. Date of hearing: 16.5.2013. Order Briefly the facts of the case as unfolded in this writ petition are that Faysal Bank Limited through Relationship Manager (Ghazanfar Ali) filed an application under Section 22-A, Cr.P.C. before the learned Ex-officio Justice of Peace seeking registration of case against the present petitioner, with a narration that Muhammad Asif petitioner had obtained a loan from the Bank and for its return had issued a Cheque No. CA0022608054 dated 31.07.2011 valuing Rs.15,00,000/-, the said cheque when presented for encashment, was bounced. The learned Ex-officio Justice of Peace, vide order dated 15.06.2012 directed the SHO to record statement of said petitioner (respondent before Court) and proceed in accordance with law. This order has been assailed through the instant writ petition. 2. The contention of learned counsel for the petitioner is that in the light of Financial Institutions (Recovery of Finances) Ordinance, 2001, no criminal case could be registered. In support of his arguments the learned counsel placed reliance on the case "Abid Mahmood Malik versus Station House Officer, Police Station Margalla and others" (2013 CLD 508) and with reference to the case "Muhammad Iqbal versus Station House Officer, Police Station Hajipura, Sialkot and 2 others" (PLD 2009 Lahore 541), learned counsel contends that Banks are debarred from taking advantage of S. 489-F, PPC, in the presence of special law i.e. Financial Institutions (Recovery of Finances) Ordinance, 2001, but this fact has been over-sighted by the learned Justice of Peace before passing the impugned order dated 15.06.2012 rendered on the application of Respondent No. 3. 3. The learned Assistant Advocate General assisted by learned counsel for the respondents, defended the impugned order and argued that admittedly the Cheque was issued by the petitioner, the same when presented in Bank for encashment was dishonoured, as such, the commission of a cognizable offence was disclosed and the learned Ex-officio Justice of Peace after considering the factual aspect, issued a valid direction, as such, the impugned order does not suffer from any illegality or irregularity. The learned counsel for the respondent bank further argued that taking cognizance is something different as compared to the registration of case and the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001 deal with cognizance of offence but not deal with registration of cases, therefore, the registration of case is not barred under this Ordinance. In support of his contention the learned counsel placed reliance on the case "Abdul Rauf Chaudhry and 2 others versus The State and 2 others" (2013 CLD 738). 4. I have considered the arguments of learned counsel for the parties and perused the available record with their assistance. 5. Earlier, Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 was promulgated and later, after certain modification, the same was re-enacted as the Financial Institutions (Recovery of Finances) Ordinance, 2001. This Ordinance specially deals with matters arising between the Financial Institutions and its customers including Guarantors, etc. Section 9(1)(b) of the Ordinance, ibid, provides:-- "7. Powers of Banking Courts.-- (1) Subject to the provisions of this Ordinance, 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 Sessions 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." ................................ ................................ ................................ (4) Subject to sub-section (5), no Court other than a Banking Court shall have or exercise any jurisdiction with respect to any matter to which the jurisdiction of a Banking Court extends under this Ordinance, including a decision as to the existence or otherwise of a finance and the execution of a decree passed by a. Banking Court." "(5) Nothing in sub-section (4) shall be deemed to affect-- (a) the right of a financial institution to seek any remedy before any Court or otherwise that may be avail able to it under the law by which the financial institution may have been established; or (b) the powers of the financial institution, or jurisdiction of any Court such as is referred to in clause (a); or Require the transfer to a Banking Court of any proceedings pending before any financial institution or such Court immediately before the coming into force of this Ordinance." Section 7(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 clearly postulates that no Court other than Banking Court shall have or exercise jurisdiction with respect to any matter to which the jurisdiction of Banking Court extends under this Ordinance. A bare reading of the above reproduced provision clearly show that any financial institution can avail remedy before any Court, but the basic requirement is that such remedy must be available to the said institution under the law by which the financial institution has been established. 6. Section 20 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 is the provision relating to certain offences and its sub-section (4) deals with dishonest issuance of a cheque towards repayment of a finance or fulfillment of an obligation which is dishonoured on presentation. The punishment of said offence has been provided as one year or with fine or with both. Therefore, it becomes quite obvious that in the matter, like the one in hand, the jurisdiction only lies with the Banking Court established under the Financial Institutions (Recovery of Finances) Ordinance, 2001 and not before any other Court, until and unless the same is provided by law, by which the financial institution is established. 7. The contention of learned counsel for the respondent bank is that taking cognizance is something different as compared to the registration of case and the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001 deal with cognizance of offence but not deal with registration of cases, therefore, the registration of case is not barred under this Ordinance. I am afraid this stance advanced by learned counsel for respondent Bank is not considerable at all. Section 20(6) of the Ordinance, ibid, read as under:-- "20. Provisions relating to certain offences.-- (1) -------------------------------- (2) -------------------------------- (3) -------------------------------- (4) Whoever dishonestly issues a cheque towards re-payment of finance or fulfillment of an obligation which is dishonoured on presentation, shall be punishment 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 not honouring the cheque. (5) -------------------------------- (6) All offences under this Ordinance shall be bailable, non-cognizable and compoundable." The above reproduced provision makes it abundantly clear that offences under this Ordinance shall be bailable, non-cognizable and compoundable and Section 154, Cr.P.C. comes in the field where the commission of a cognizable offence is disclosed. But as discussed above, when the Statute itself makes it clear that offence is not cognizable then the registration of criminal case by the local police could not be permitted by law. Even otherwise, the Pakistan Penal Code, 1860 is general law, whereas, the Financial Institutions (Recovery of Finances) Ordinance, 2001 is a special law and the legislators have enacted it in such a manner so as to have overriding effect of any other general enactment. A general law and a special law on the same subject are statutes in pari materia and should, accordingly, be read together and harmonized, if possible, with a view to giving effect to both. The rule is that where there are two acts, one of which is special and particular and the other general, which if standing alone, would include the same matter and thus conflict with the special act, the special law must prevail since it evinces the legislative intent more clearly than that of a general statute. 8. Although by amendment in PPC, Section 489-F, PPC has been inserted after promulgation of Financial Institutions (Recovery of Finances) Ordinance, 2001 but this insertion would also not give it an overriding effect over special law, for the reason that the special law is passed before or after the general act does not change the principle. Where the special law is later, it will be regarded as an exception to, or a qualification of, the prior general act; and where the general act is later, the special statute will be construed as remaining an exception to its terms, unless repealed expressly or by necessary implication. Blackstone defines general law as a universal rule affecting the entire community and special law as one relating to particular persons or things of a class. And the rule commonly said is that a prior special law is not ordinarily repealed by a subsequent general law. The fact that one is special and the other general creates a presumption that the special is to be considered as remaining an exception of the general, one as a general law of the land, the other as the law of a particular case. If the legislators had an intention otherwise, they could at the very beginning formulate or afterwards could amend the Financial Institutions (Recovery of Finances) Ordinance, 2001 in such a manner so as to bring this offence within the definition of "cognizable" offence. In such circumstances, when the amendment was not made in the Ordinance, ibid, the legislators explicitly made their intention clear that with regard to the matters between financial institutions and their customers, this enactment shall hold the field and Section 489-F, PPC (dishonest issuance of cheque) will be applicable to all other persons in general except those covered by the Financial Institutions (Recovery of Finances) Ordinance, 2001. The purpose by not amending the Financial Institutions (Recovery of Finances) Ordinance, 2001 appears to be that normally in any case of loan from financial institution, the loans are protected by mortgage, warranties covenants made by or on behalf of the customer to a financial institution, including representations, warranties and covenants with regard to the ownership, mortgage, pledge, hypothecation or assignment of, or other charge on assets or properties, and the financial institution can recover the amount by adopting appropriate process under any of the above mode. The case law referred by learned counsel for the petitioner i.e. "Abid Mahmood Malik versus Station House Officer, Police Station Margalla and others" (2013 CLD 508) and "Muhammad Iqbal versus Station House Officer, Police Station Hajipura, Sialkot and 2 others" (PLD 2009 Lahore 541), by all force is applicable to the facts and circumstances of the instant case, whereas, the citation referred to by learned counsel for the respondent Bank i.e. "Abdul Rauf Chaudhry and 2 others versus The State and 2 others" (2013 CLD 738) is based entirely on different footings, therefore, have no applicability to the instant case and even otherwise, the provisions of the Financial Institutions (Recovery of Finances) Ordinance, 2001 making certain offences bailable, non-cognizable and compoundable, were not brought under consideration in the said case. 9. For what has been discussed above, this writ petition is allowed and the impugned order dated 15.06.2012 passed by learned Additional Judge/Ex-officio Justice of Peace, Multan, is hereby set-aside. This order, however, will not be considered a bar in the way of the respondent Bank to plead their case before the appropriate forum under the Financial Institutions (Recovery of Finances) Ordinance, 2001. (R.A.) Petition allowed