Ss. 22-A/22-B--Repayment of loan--Issuance of cheque--Allegation of dishonesty--Application of criminal and general laws--Jurisdiction--Challenge to--NRSP Microfinance Bank Limited being only a microfinance institution and not being included in list of Scheduled Banks, cannot take immunity from applicability of general law i.e. Criminal Procedure Code--

 PLJ 2021 Lahore 98

Microfinance Institution Ordinance, 2001--

----S. 3(2)(3)--Legal position--Micro Finance Institutions cannot deemed to be a banking company--Jurisdiction--All microfinance institutions have been specifically taken out of pail of other banking laws by making legal position clear that no such institutions would be considered as banking company--Banking Court has no jurisdiction to deal with any matter other than business of Scheduled Bank, and definitely microfinance institutions are not included in list of Scheduled Banks--It becomes crystal clear that remedy before banking Court would be available to exclusion of all other forums only when Financial Institutions (Recovery of Finances) Ordinance, 2001 would attract, whereas, in terms of Section 3(2) of Microfinance Institutions Ordinance, 2001, financial institutions shall not apply to microfinance institutions.                                                               

                                                                      [Pp. 100 & 101] A, B & C

PLJ 2013 Lahore 606 and 2017 SCMR 1218.

Microfinance Institution Ordinance, 2001--

----S. 3(2)--Criminal Procedure Code, (V of 1898), Ss. 22-A/22-B--Repayment of loan--Issuance of cheque--Allegation of dishonesty--Application of criminal and general laws--Jurisdiction--Challenge to--NRSP Microfinance Bank Limited being only a microfinance institution and not being included in list of Scheduled Banks, cannot take immunity from applicability of general law i.e. Criminal Procedure Code--Therefore, both above referred citations do not advance case of petitioner--Microfinance institutions cannot be termed as financial institution within contemplation of Financial Institutions (Recovery of Finances) Ordinance, 2001, to say that its matter could only be tried by Banking Court--Thus, Code of Criminal Procedure being fully applicable, application filed under Section 22-A/22-B Cr.P.C. on behalf of microfinance institution was fully competent and impugned orders passed by learned Ex-officio Justice of Peace do not suffer from any jurisdictional or legal error.

                                                                                      [P. 102] D & E

Mian Shahid Ali Shakir, Advocate for petitioner.

Mr. Zeeshan Ali Khurshid, Advocate for Respondent No. 3.

Mr. Zafar Hussain Ahmad, Additional Advocate General for State.

Date of hearing: 7.3.2019.

 PLJ 2021 Lahore 98
Present: Muhammad Qasim Khan, J.
MUHAMMAD MUMTAZ AKHTAR--Petitioner
versus
ADDITIONAL SESSIONS JUDGE, etc.--Respondents
W.P. No. 233516 of 2018, decided on 7.3.2019.

Order

This single order is meant to decide three connected matters i.e. (i) Writ Petition No. 233516 of 2018 “Muhammad Mumtaz Akhtar versus ASJ, etc., (ii) Writ Petition No. 233530 of 2018 “Muhammad Nawaz Akhtar versus ASJ, etc.”, and (iii) Writ Petition No. 233532 of 2018 “Muhammad Sarfraz Akhtar versus ASJ, etc. as all these have arisen out of similar facts and circumstances.

2. Briefly the facts of the case are that Abdul Qadir (Respondent No. 3 in all these three petitions) in his capacity as Manager NRSP (National Rural Support Program) Microfinance Bank Shorkot Road, Toba Tek Singh filed separate applications under Section 22-A Cr.P.C., to seek direction for registration of criminal cases against all the three writ petitioners, with the allegation of dishonestly issuing a cheques pleading that the same had been issued by the petitioners towards repayment of loan. The learned Additional Sessions Judge/Ex-officio Justice of Peace vide three separate orders of even date i.e. 29.08.2018 directed the SHO to record statement of the applicant/Respondent No. 3 and proceed further in accordance with law. These orders have been challenged by the respective petitioners through their independent writ petitions.

3. The main contention of learned counsel for the petitioners before this Court is that the petitioner (Muhammad Mumtaz Akhtar) had obtained loan from NRSP (National Rural Support Program) Microfinance Bank, which is established with a purpose to provide Micro Credit, therefore, in case of a dispute between NRSP Microfinance Bank and its customers, criminal proceedings could not be initiated and the only course available to the said bank was to file a complaint before the Banking Court. In support of his contentions the learned counsel placed reliance on the case “Syed Mushahid Shah and others versus Federal Investment Agency and others” (2017 SCMR 1218) and “Muhammad Asif Nawaz versus ASJ, etc” (PLJ 2013 Lahore 606). The learned counsel concluded his arguments by submitting that the applications filed by Respondent No. 3 before the learned Additional Sessions Judge/Ex-officio Justice of Peace were neither maintainable nor could be entertained and thus the impugned orders are not sustainable in the eye of law.

4. On the other-hand, learned law officer as well as the learned counsel for the respondent-Bank have opposed these writ petitions by arguing that per force of Section 3 of the Microfinance Ordinance, the Banking Companies Ordinance and any other law for the time being in force relating to banking companies or financial institutions shall not apply to microfinance institutions, as microfinance institutions cannot be deemed to be a banking company for the purposes of said ordinance, therefore, no other remedy under the Banking Laws was available and there was no bar for the respondent Bank to have recourse to the learned Ex-officio Justice of Peace and the orders impugned herein, are perfectly in accordance with law.

5. I have considered the arguments of learned counsel for the parties at length and perused the record.

6. Before proceeding further, I would like to reproduce Section 3 (2) of the Microfinance Institutions Ordinance, 2001:

“Save as otherwise provided in this Ordinance, the Banking Companies Ordinance and any other law for the time being in force relating to Banking Companies or financial institutions shall not apply to microfinance institutions licensed under this ordinance and microfinance institution shall not be deemed to be a Banking company for the purpose of the said Ordinance, the State Bank of Pakistan Act, 1956 (XXXIII of 1956), or any other law for the time being in force relating to Banking companies.”

As shall be seen from the above reproduced provision of Microfinance Institutions Ordinance, 2001, the same in fact is an ouster clause and by specific insertion of said Section 3 sub- section (3) in the Ordinance ibid, all the microfinance institutions have been specifically taken out of the pail of other banking laws by making the legal position clear that no such institutions would be considered as banking company. On this legal proposition that Court in the case “NRSP Microfinance Bank Limited versus The Additional Sessions Judge and two others” Writ Petition No. 7964 of 2018-BWP has held that Banking Court has no jurisdiction to deal with any matter other than the business of Scheduled Bank, and definitely the microfinance institutions are not included in the list of Scheduled Banks.

7. As regards the contention of learned counsel for the petitioners with reference to case law i.e. “Syed Mushahid Shah and others versus Federal Investment Agency and others” (2017 SCMR 1218) and “Muhammad Asif Nawaz versus ASJ, etc” (PLJ 2013 Lahore 606), there can be no second opinion that in the cited cases, the Hon’ble Supreme Court of Pakistan has held that whenever an offence is committed by a customer of a financial institution within the contemplation of the Financial Institutions (Recovery of Finances) Ordinance, 2001, it could only be tried by the Banking Court constituted thereunder and no other forum. On careful perusal of the judgment of the apex Court it becomes crystal clear that remedy before the banking Court would be available to the exclusion of all other forums only when the Financial Institutions (Recovery of Finances) Ordinance, 2001 would attract, whereas, in terms of Section 3(2) of the Microfinance Institutions Ordinance, 2001, financial institutions shall not apply to microfinance institutions.

8. Similarly, in the case “Muhammad Asif Nawaz versus Additional Sessions Judge, etc.” (PLJ 2013 Lahore 606), the matter with regard to an order for registration of case passed by learned Ex-officio Justice of Peace on an application filed on behalf of Faysal Bank Limited alleging dishonour of cheque issued by its customer towards payment of loan, had come under consideration and this Court held:

“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.”

It is again clear that jurisdiction with the Banking Court established under the Financial Institutions (Recovery of Finances) Ordinance, 2001 would lie only when the bank/company is covered by the Financial Institutions (Recovery of Finances) Ordinance, 2001,

whereas, in the instant case the NRSP Microfinance Bank Limited being only a microfinance institution and not being included in the list of Scheduled Banks, cannot take immunity from applicability of general law i.e. Criminal Procedure Code. Therefore, both the above referred citations do not advance the case of the petitioner.

9. In view of the above, this Court has no hesitation to hold that microfinance institutions cannot be termed as financial institution within the contemplation of the Financial Institutions (Recovery of Finances) Ordinance, 2001, to say that its matter could only be tried by the Banking Court. Thus, Code of Criminal Procedure being fully applicable, the application filed under Section 22-A/22-B Cr.P.C. on behalf of the microfinance institution was fully competent and the impugned orders passed by learned Ex-officio Justice of Peace do not suffer from any jurisdictional or legal error. These writ petitions therefore fail and are accordingly dismissed.

(M.M.R.)         Petition Dismissed