Bank cannot lodge FIR under section 489-F
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This case involved a bank customer who was accused of issuing a dishonoured cheque for repayment of a loan. The bank reported the matter to police, who registered an FIR under Section 489-F of the Pakistan Penal Code, a provision dealing with dishonestly issuing a cheque that bounces. The customer approached the Islamabad High Court asking for the FIR to be cancelled, arguing that since the dispute arose from a bank loan, it should be handled under a special law, the Financial Institutions (Recovery of Finances) Ordinance, 2001, rather than through ordinary criminal proceedings.
The court agreed with the customer. It noted that the complainant was a financial institution and the cheque in question related to repayment of a loan facility, a routine banking matter. The judge held that the 2001 Ordinance is a special law that specifically covers situations where a cheque issued for loan repayment is dishonoured, and it provides its own penalties and procedure, including filing a complaint before a Banking Court. Because this special law overrides the general criminal law, the bank could not use Section 489-F of the Penal Code against the customer. Doing so was ruled an abuse of court process. The FIR was therefore quashed.
This judgment matters because it clarifies that banks and financial institutions must pursue loan-related cheque disputes through banking courts under the specific ordinance, not by lodging criminal FIRs against borrowers.
اس مقدمے میں ایک بینک کے صارف پر یہ الزام تھا کہ اس نے قرض کی واپسی کے سلسلے میں ایک ایسا چیک جاری کیا جو بعد میں بے عزت (ڈس آنر) ہو گیا۔ بینک نے اس معاملے کی اطلاع پولیس کو دی، جس نے پاکستان پینل کوڈ کی دفعہ 489-F کے تحت ایف آئی آر درج کی۔ یہ دفعہ بددیانتی کے ساتھ ایسا چیک جاری کرنے سے متعلق ہے جو بعد میں بے عزت ہو جائے۔ صارف نے اسلام آباد ہائی کورٹ سے رجوع کیا اور ایف آئی آر کو منسوخ کرنے کی استدعا کی۔ اس کا مؤقف یہ تھا کہ چونکہ یہ تنازع بینک کے قرض سے جنم لیتا ہے، اس لیے اسے عام فوجداری کارروائی کے بجائے ایک خصوصی قانون، یعنی فنانشل انسٹی ٹیوشنز (ریکوری آف فنانسز) آرڈیننس، 2001 کے تحت نمٹایا جانا چاہیے۔
عدالت نے صارف کے مؤقف سے اتفاق کیا۔ عدالت نے نوٹ کیا کہ شکایت کنندہ ایک مالیاتی ادارہ تھا اور زیرِ بحث چیک قرض کی سہولت کی واپسی سے متعلق تھا، جو کہ بینکاری کا ایک معمول کا معاملہ ہ
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PLJ 2013 Cr.C . ( Islamabad ) 379 Present: Muhammad Anwar Khan Kasi , J. ABID MAHMOOD MALIK--Petitioner versus S.H.O., P.S. MARGALLA, etc.--Respondents Crl . Misc. No. 22-Q of 2012, decided on 29.1.2013. Pakistan Penal Code, 1860 (XLV of 1860)-- ----S. 489-F-- Quashment of FIR-- Dishonoured of cheque --Dispute between Financial Institution and customer-- Cheque was dishonoured for re-payment of loan amount to Bank--Complainant was a financial institution and the dispute between the parties was a finance facility, which was granted in routine as a Bank Policy--The said cheque , if any, was regarding the re-payment of finance facility and the financial institutions have all the remedies available under the Financial Institutions (Recovery of Finances) Ordinance, 2001--Petitioner cannot be proceeded with under the provision of Pakistan Penal Code and only remedy available for the Bank and financial institution is to invoke the provisions of Section 20 by filing a direct complaint under Section 7(1)(b) of the Ordinance and the prosecution of the petitioner under Section 489-F, PPC is abuse of process of the Court and without lawful authority--Superior Courts is very exhaustive and very unambiguously states that the banks are debarred from taking advantage of Section 489-F, PPC--Petition allowed. [P. 381] A, C & D Financial Institution (Recovery of Finances) Ordinance, 2001 (XLVI of 2001)-- ----S. 20(4)--Whoever dishonestly issues a cheque towards re-payment of a finance or fulfilment of an obligation which is dishonoured on presentation, shall be punishable with imprisonment which may extend to 1 year, or with fine or with both, unless he can establish, for which the burden of proof shall rest on him, that he 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 . [P. 381] B Mr. Yasir Tanveer Awan , Advocate for Petitioner. Mr. Shabbir Ahmad Abbasi , learned Standing Counsel with Mr. Imran Ali Khan, Advocate for Complainant-Respondent No. 3. Date of hearing: 29.1.2013. Order The petitioner seeks quashment of FIR No. 588, dated 28.11.2012, under Section 489-F, PPC of P.S. Margalla Islamabad, on the ground that the cheque was issued in bona-fide good faith for repayment of the loan-amount to the Bank and since the dispute had arisen between Financial Institution & customer, the sole jurisdiction vests with the Banking Court under the Financial Institutions (Recovery of Finance) Ordinance 2001 [hereinafter to be referred as the Ordinance 2001] and under Section 7 of the Ordinance, learned Judge Banking Court in exercise of its criminal jurisdiction shall try offences punishable under the Ordinance.
2. It is further contended that the Banks are de-barred from taking advantage of Section 489-F, PPC through initiation of proceedings against the defaulter merely on the dishonouring of any cheque issued by the debtor, who had availed any finance facility.
3. In support of his submissions, learned counsel for petitioner placed reliance upon following case laws:-- ( i ) PLD 2009 Lahore 541 (ii) 2009 P.Crl.L.J . 325 (D.B) (iii) 2010 YLR 547 (iv) 2009 CLD 1422 (v) 2010 CLD 344 (vi) 2010 P.Crl . LJ 412 (vii) 2009 CLD 1149 (viii) 2011 CLD ( Lahore ) 1539 (ix) 2012 MLD ( Sindh ) 1551 (vii) 2012 P.Crl.LJ ( Sindh ) 1890 3-A. The case laws are on the point that the Ordinance 2001 is a complete code providing procedure of the Banking Courts and in case of a financial dispute, a complaint in writing has to be filed before the Banking Courts.
4. Conversely, learned Standing Counsel assisted by learned counsel for the Respondent No. 3 complainant opposed the petition by stating that the cheque was issued for the payment of loan, which was dishonoured , and, therefore, the provisions of Section 489-F, PPC are attracted in the case and since it is a cognizable offence, the police rightly lodged the FIR.
5. It is further contended that the purpose of law is to bring the facts into light through investigation; while quashment of FIR at the earlier stage would be an attempt to burry the factual issues between the parties and such practice shall encourage the offenders. In this regard, reliance is placed upon case laws reported as 2006 CLD 625 and 2010 CLD 10.
6. Heard & record perused.
7. Admittedly, the Respondent No. 3 complainant is a financial institution and the dispute between the parties is a finance facility, which was granted in routine as a Bank Policy. The said cheque , if any, was regarding the re-payment of finance facility and the financial institutions have all the remedies available under the Financial Institutions (Recovery of Finances) Ordinance, 2001.
8. Section 20(4) of the Ordinance, 2001 provides that whoever dishonestly issues a cheque towards re-payment of a finance or fulfilment of an obligation which is dishonoured on presentation, shall be punishable with imprisonment which may extend to 1 year, or with fine or with both, unless he can establish, for which the burden of proof shall rest on him, that he 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 .
9. The Ordinance being special enactment has also an overriding effect on the ordinary law, therefore, in my view, petitioner cannot be proceeded with under the provision of Pakistan Penal Code and only remedy available for the Bank and financial institution is to invoke the provisions of Section 20 by filing a direct complaint under Section 7(1 )( b) of the Ordinance and the prosecution of the petitioner under Section 489-F, PPC is abuse of process of the Court and without lawful authority.
10. The dictum laid down by the superior Courts is very exhaustive and very unambiguously states that the banks are debarred from taking advantage of Section 489-F, PPC.
11. In view of above, this petition is allowed and in consequence thereof FIR Bearing No. 588, dated 28.11.2012, under Section 489-F, PPC of P.S Margalla Islamabad is quashed. No orders as to costs.
12. Petition allowed. FIR quashed. (A.S.) Petition allowed