Law: National Accountability Ordinance, 1999

Section: 31-C,31-D

Law: Constitution of Pakistan, 1973

Section: 18

National Accountability Ordinance (XVIII of 1999)--- ----Ss. 31-C, 31-D---Constitution of Pakistan, Art. 18, Preamble---’Restructuring’ and ‘rescheduling’ of loans under financial agreements---Prior approval of State Bank of Pakistan---Scope of Sections 31-C and 31-D of the National Accountability Ordinance, 1999 stated. Under section 31-C of the National Accountability Ordinance, 1999 (‘the NAB Ordinance’) the Accountability Court cannot take cognizance, under the NAB Ordinance, of an offence against an officer or an employee of a bank or financial institution for writing off, waving, restructuring or refinancing any financial facility, interest or mark-up, without prior approval of the State Bank of Pakistan. While under section 31-D, no inquiry, investigation or proceedings in respect of imprudent loans, defaulted loans or rescheduled loans can be initiated or conducted by the National Accountability Bureau (NAB) against any person, company or financial institution without reference from the Governor, State Bank of Pakistan. Unlike section 31-C that relates to only taking cognizance of an offence by the Accountability Court, section 31-D provides protection even against initiation of inquiry, investigation or proceedings against a person or a company in respect of imprudent loans, defaulted loans or rescheduled loans. The protection provided under Section 31-D is, therefore, broader and more expansive. Section 31-D is also attracted in respect of a ‘defaulted loan’. Defaulted loan means the failure to fulfill the obligation to repay the loan. ‘Restructuring’ is a comprehensive and a broad ranging term, which includes ‘Rescheduling’. One of the modes of restructuring can be rescheduling. Therefore, for the purposes of the NAB Ordinance, the two terms can be read as having been used interchangeably. Further, the NAB Ordinance has not defined any of the terms used in sections 31-C and 31-D, namely, writing off, waving, restructuring, refinancing, imprudent loans, defaulted loans or rescheduled loans; therefore, their general dictionary meanings are to be considered, for understanding their import and scope. While both the terms signify a financial settlement,…

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