| Citation(s) |
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| 2026 SLG 533 2026 SLD 533 = 2024 LHC 6699 |
Lahore High Court, Multan Bench, Multan
Writ Petition No. 15816/2023
Presented By: Tariq Saleem Sheikh, J
Date of hearing 15.10.2024 For the Petitioner: Mr. Muhammad Waseem Shahab, Advocate, assisted by Mr. Ali Sarfraz Bhatti, Advocate. For
Respondents No.1 & 2: Mr. Naveed Sharif Chaudhry, Advocate. For
Respondents No.3 to 5: Ch. Muhammad Shahzad Aslam, Deputy Attorney General.
Writ Petition No. 15816/2023
Presented By: Tariq Saleem Sheikh, J
Date of hearing 15.10.2024 For the Petitioner: Mr. Muhammad Waseem Shahab, Advocate, assisted by Mr. Ali Sarfraz Bhatti, Advocate. For
Respondents No.1 & 2: Mr. Naveed Sharif Chaudhry, Advocate. For
Respondents No.3 to 5: Ch. Muhammad Shahzad Aslam, Deputy Attorney General.
Ali Murad Siddiqui
VS
Summit Bank Limited and others
Law: Financial Institutions (Recovery of Finances) Ordinance, 2001
Section: 9
Law: Code of Criminal Procedure, 1898
Section: 160
Core Facts The petitioner took a Rs. 60 million finance facility from a bank but defaulted. A recovery suit under Section 9 of the FIO was filed, later settled via a consent decree (Rs. 70 million). Petitioner again defaulted after partial payment. The bank filed a criminal complaint for “willful default” under Section 20 FIO with the FIA. FIA issued a notice under Section 160 Cr.P.C.. Petitioner challenged this notice in constitutional jurisdiction. 🔹 Key Legal Issues Maintainability of petition against a Section 160 Cr.P.C. notice. Whether FIA had jurisdiction to initiate inquiry. What constitutes “willful default” under Section 2(g)(i) FIO. 🔹 Court’s Findings 1. Maintainability (Ripeness Doctrine) Normally, a Section 160 notice is not challengeable (not an adverse order). However, exceptions exist: Lack of jurisdiction Mala fide action Since the petitioner challenged FIA’s jurisdiction, the petition was maintainable. 2. Nature of “Willful Default” Requires: Deliberate / intentional failure to repay (mens rea) Mere default ≠ willful default Must prove: Bad faith / intention / deliberate conduct 3. Sequence Requirement under FIO Civil liability (default) must be determined first (via Banking Court). Only then can criminal liability (willfulness) arise. Prevents misuse of criminal process to pressure borrowers. 4. Defect in Bank’s Complaint Bank only alleged default, not: Intentional refusal Fraudulent conduct No specific facts showing mens rea Therefore: Complaint was legally deficient 5. FIA’s Jurisdiction FIA can investigate willful default only if statutory requirements are met, including: Proper complaint Evidence of willfulness Since complaint lacked mens rea: FIA acted prematurely and without jurisdiction 6. Doctrine of Election Argument rejected: Civil recovery (Section 9) and criminal proceedings (Section 20) are separate remedies BUT: Criminal action still depends on prior determination of default 🔹 Final Holding Petition allowed FIA notice set aside Bank may file a fresh complaint if: It fulfills legal requirements (especially proving willfulness) 🔹 Key Takeaways (Exam Focus)…