ORDER SHEET

IN THE HIGH COURT OF SINDH, KARACHI

Criminal Revision Application No.04 of 2012

------------------------------------------------------------------------------------------------

DATE ORDER WITH SIGNATURE(S) OF JUDGE(S)

----------------------------------------------------------------------------------------------

For Katcha Peshi

------------------------

30.04.2013

Mr. Azhar Faridi, Advocate for the Applicants

Mr. Shaukat Hayyat, Advocate for Respondent No.2

Ms. Sheeraz Iqbal Chaudhri, Standing Counsel.

--------------------------------------------------------------

Naimatullah Phulpoto, J.--- Through this criminal revision application the applicants Syed Asif Ali and another have called in question order dated 30.11.2011 passed by the learned Banking Court No.II at Karachi in Criminal Complaint No.31/2009 (Al-Zamin Leasing Corporation Limited Vs. Syed Asif Ali and another), whereby an application under section 265-K Cr.PC moved on behalf of applicant/accused was dismissed for the following reasons:

“In the instant case applicants/accused are facing trial along with accused No.1 namely Junaid Marfani, proprietor of M/s. Embrodiery Arts, for the offence punishable under Section 2(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, with a charge that the cheques in question were issued by them dishonestly in order to defraud the complainant Bank and the cheques presented before the Bank were bounced/dishonoured. The matter prima facie requires recording of evidence and, as such, Bank officer sent up by the applicants/accused that they have issued the postdated cheques and committed criminal breach of trust requires proper appraisal of the documentary evidence. At this immature stage it cannot be gathered that the applicants/accused have not committed such an offence and that the further proceeding of the case will render the abuse of process of law. More so it cannot be determined at this immature stage that there is absolutely no case against the applicants/accused. The grounds put forth in this application are meritless and, as such, this misconceived application is dismissed.”

Mr. Azhar Faridi, learned advocate for the applicants/accused argued that impugned order is not sustainable under the law. There was no probability of the conviction of the accused/applicants in any offence. No criminal offence has been committed by the applicants/accused under section 20 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. Applicants/accused were guarantors, no criminal liability is made out against the applicants/accused.

Learned D.A.G. and Mr. Shaukat Hayyat, learned counsel appearing for the respondent, have argued that since the respondent No.3 committed a breach of an obligation when postdated cheques issued by respondent No.3 were dishonoured and the appellant had granted repayment of the liability of respondent No.3, therefore, they are also responsible for the criminal liability so crewed, therefore, their application under Section 265-K, Cr.PC was rightly dismissed.

We have heard the learned counsel for the respective parties, perused the record of the case as well as Section 20 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, which for the sake of convenience is reproduced as under:-

“20. Provisions relating to certain offences.- (1) Whoever ¾

(a) dishonestly commits a breach of the terms of a letter of hypothecation, trust receipt or any other instrument or document executed by him whereby possession of the assets or properties offered as security for the re-payment of finance or fulfillment of any obligation are not with the financial institution but are retained by or entrusted to him for the purposes of dealing with the same in the ordinary course of business subject to the terms of the letter of hypothecation or trust receipt or other instrument or document or for the purpose of effecting their sale and depositing the sale proceeds with the financial institution; or

(b) makes fraudulent mis-representation or commits a breach of an obligation or representation made to a financial institution on the basis of which the financial institution has granted a finance; or

(c) subsequent to the creation of a mortgage in favour of a financial institution, dishonestly alienates or parts with the possession of the mortgaged property whether by creation of a lease or otherwise contrary to the terms thereof, without the written permission of the financial institution; or

(d) subsequent to the passing of a decree under section 10 or 11, sells, transfers or otherwise alienates, or parts with possession of his assets or properties acquired after the grant of finance by the financial institution, including assets or properties acquired benami in the name of an ostensible owner

shall, without prejudice to any other action which may be taken against him under this Ordinance or any other law for the time being in force, be punishable with imprisonment of either description for a term which may extend to three years and shall also be liable to a fine which may extend to the value of the property or security as decreed or the market value whichever is higher and shall be ordered by the Banking Court trying the offence to deliver up or refund to the financial institution, within a time to be fixed by the Banking Court, the property or the value of the property or security.”

Learned standing counsel assisted by Mr. Shaukat Hayyat, advocate for respondent No.2 could not satisfy the Court about the criminal liability of the applicants/accused, who were guarantors. From the perusal of the complaint it appears that cheques were dishonoured but under Section 20 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 it appears that applicant/accused did not make fraudulent misappropriation or committed a breach of an obligation to the Financial Institution. They were neither a party to the agreement whereby the respondent No.3 had obtained leasing facility from the respondent No.2 on a specified terms and conditions nor they were signatories to the negotiable instruments/cheques so that they could be held responsible for the consequences of such dishonor. We, therefore, hold that filing of complaint against the applicants/accused was unwarranted and trial Court wrongly took cognizance of matter. Learned trial Court has committed material illegality while dismissing the application under section 265-K Cr.PC. Consequently, revision application is allowed. Looking to the peculiar circumstances of the case, whereby the process of the Court was abused, we had dismissed this petition in open Court while imposing cost of Rs.50,000/- for causing inconvenience to the applicants/accused. However, on the repeated requests of Mr. Shaukat we reduce the cost to Rs.5000/-, which should immediately be deposited with the Nazir of this Court.

JUDGE

Gulsher/PA