NOOR MUHAMMAD Versus AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN
ORDER
Briefly stated the facts of the case are that the petitioner obtained agricultural loan for purchase of tractor from respondent No.1 to the tune of Rs.3,55,000 payable in installments upto the year 2002 and started regularly paying the said installments and uptil now he has paid Rs.4,29,000 i.e. about Rs.74,000 more than the loaning amount. Although the petitioner has to discharge the liability upto the year 2002, yet respondent No. l on the pretext that said tractor has been sold, started coercive measures for the recovery of balance interest amount and on 14‑6‑2000 took the petitioner in illegal custody on which the petitioner's son was constrained to file Criminal Miscellaneous No.857/H of 2000 before this Honourable Court in .,which respondents were summoned and after settling the matter, it was directed to deposit Rs.18,500 and the petitioner was set at liberty and that in spite of the fact that the said liability was discharged and finally settled, respondent No. l has filed a recovery suit of Rs.28,0671 before respondent No.2 in which the petitioner has been issued notice and has been directed to seek permission to defend the. suit and that the Bank has also announced policy that loanees who deposit the liability till 31‑12‑2000 would be exempted from the payment of the interest upto 90% and that the proceedings initiated by respondent No.2 at the instance of respondent No.1 in the suit are absolutely illegal and without jurisdiction, inasmuch as mentioned above, the petitioner secured loan of Rs.3,55,000 and has paid back Rs.4,29,000 and in the proceedings of habeas corpus, Rs.18,500 more were deposited to settle the liability once for all, and instead of issuing clearance certificate, civil suit has been filed against the petitioner illegally and that the petitioner has already deposited the amount much more than the principal amount and demand of interest through impugned proceedings is against the injunctions of Islam as well as the judgment of the Supreme Court apart from Article 2A of the Constitution.
2. On the other hand, the learned counsel for the respondent/Bank has submitted that the petitioner applied to the Bank for financial assistance as detailed below:‑‑
Sr. No. L.C. No. Dated Amount Purpose
1. 128848 18‑4‑1994 Rs.4,11,000 Tractor etc.
The Bank sanctioned/allowed the said loan facility to the petitioner who executed usual documents of finance including loan agreement in this respect and that the petitioner‑ created charge over his agricultural land and produced the charge creation certificate to the Branch Manager and that the petitioner was bound to repay the said loan/finance facility alongwith Return/Mark‑up and other due charges in installments but failed to abide by the terms and conditions of the loan and as such became defaulter. He has also misutilized the loan and that the statement of account maintained by the Bank in its ordinary course of business reveals that an amount of Rs.2,80,671 is outstanding against the petitioner as on 30‑6‑2000 and that the petitioner has been requested time and again to repay the said amount but in vain; hence a suit for recovery was filed in this behalf.
3. I have given due consideration to the valuable arguments on both sides.
4. Admittedly, the Recovery Policy and Debt Classification Department in the Credit and Recovery Division and Agricultural Development Bank of Pakistan, Islamabad has issued a Circular No.RD/9/2000, dated 17‑10‑2000, which reads as under:‑‑
"All Regional Managers/Managers, Agricultural Development Bank of Pakistan.
Subject:‑‑ Relief Package for recovery or long outstanding dues under IBS. As approved by the Board of Directors, the Bank has introduced a relief package for recovery of its dues to clear maximum portfolio of non‑performing loans.'
Salient features of this package are enumerated as under:‑‑
(i) Package will be applicable to all loans upto 1.00 million between 1 st April, 1985 to 30th June, 1997. .
(ii) All the defaulters who have at least two or more installments in default in their medium and four term loans on 16‑10‑2000 will be eligible for this package.
(iii) Cases of default under Islamic Banking System are to be closed by affecting recovery as per following critaria:‑‑
(a) Cases disbursed during 1 st April, 1985 to 30th June, 1988.
Principal plus 40% of the principal amount minus total amount already recovered against principal and return accounts till date.
(b) Cases disbursed during 1 st July, 1988 to 30th June, 1992.
Principal plus 30% of the principal amount minus total amount already recovered against principal return accounts till date.
(c) Cases disbursed during 1 st July, 1992 to 30th June, 1997.
Principal plus 20% of the principal amount minus total amounts . already ‑ recovered against principal and return accounts till date.
(d) Cases where total recoveries already affected against principal and return accounts till date are either equivalent or more than the above specified limits at (a), (b) or (c).
Such cases will be closed after recovery of 10% of the total balance outstanding under principal and return accounts till date.
Terms. and conditions
(a) Admissibility of a defaulter/defaulters for relief package will be worked out on the basis of his/their aggregate loans amount.
(b) Those who intend to avail the package will have to pay at least 20% down payment of the amount due under package up to 30‑11‑2000 and the branches will withdraw such cases if already referred to Revenue Authorities on receipt of down payment.
(c) The defaulters whose cases have been decreed in bank's favour, decrees are executed or those which are yet pending will also be eligible for relief provided they pay additional charges of litigation incurred by the bank.
(d) Loan accounts in Doubtful Loan Ledger are also , eligible for this incentive.
(e) The cases, which were rescheduled due to natural calamity shall also be eligible provided those were in default before reschedulement.
(f) This relief is not admissible in loan accounts closed through cash recoveries and those are not to be reopened and no refund is to be allowed in such cases. However, defaulters whose mortgaged lands have been acquired or purchased in open auction by the Bank under orders/approval of the. competent authority/Court on account of their default are also entitled under this package provided they pay additional charges of litigation and auction etc. as were incurred by the bank.
(g) No refund in any case will be admissible against recoveries already effected.
(h) No fresh loans will be allowed to the defaulters who avail this package till they repay the remitted amount under the package.
(i) The defaulters will have to pay legal charges, insurance expenses etc., incurred by the bank in addition to the amount due under package to close his account.
(j) Revenue commission is not to be charged where recovery is received under this package to close a loan account
(k) While closing the loan account the amount to be remitted will be debited to G.L. Head No.6351 and credited to loan account.
(1) 5% of interest/return recovered under the package will be given as incentive to the employees of the Bank who are instrumental in getting the loan recovered and closing the account.
(m) Eligibility of incentive to the concerned employees will be worked out by the Sub‑Manager on monthly basis and verified by the Branch Manager for ultimate sanction by the respective Regional Managers.
(n) Audit team will verify the correctness of each and every claim of reward/incentive to the employees above during regular audit of. the branch.
(o) This package will be operative upto 31‑12‑2000."
The case of the petitioner falls under Head iii(b) and this has been done to close cases of default under Islamic Banking System. When calculated on this principle, the amount due towards the petitioner comes to Rs.3,06,421 and that concession of Rs.1,94,738 is permissible to him and in this manner, the balance payable by him comes to Rs.1,11,683 upto to 30‑12‑2000 and that it includes all sorts of charges.
5. Learned counsel for the petitioner has submitted that the condition of the petitioner is highly constrained and that the Holy Qur'an says that in such circumstances, time should have been granted to the person who is ready to pay the debt but for the constrained circumstances is unable to pay it. The reference is to Surah Al Baqarah which reads as under:‑‑
If the debtor is
In a difficulty
Grant him time
Till it is easy
For him to repay, but if ye remit it
By way of charity,
That is best for you
If ye only know." (2: 280)
6. Keeping in view the above Injunctions of the Holy Qur'an the petitioner is directed to deposit the total balance amount payable by him i.e. Rs.1,11,683 as under:‑‑
On 30‑11‑2000 Rs.22,336.70
On 30‑12‑2000 Rs.22,336.70
On 30‑1‑2001 Rs.22,336.70
On 28‑2‑2001 Rs.22,336.70
On 30‑3‑2001 Rs.22,336.70
Total Rs.1,11,683.50
In case he fails to deposit any installment as detailed above, the whole amount shall be recovered as arrears of land revenue.
7. The learned Banking Court, Gujranwala is directed to pass a decree in the suit titled as "Agricultural Development Bank v. Noor Muhammad" in the above terms.
8. Disposed of.
Q.M.H./M.A.K./N-49/L Order accordingly.