Messrs QUALITY STEEL WORKS LIMITED and 2 others vs Messrs GULF
This criminal revision application was filed by the applicants seeking to set aside the trial court's order dismissing their application under section 265-K, Code of Criminal Procedure 1898, and praying for their acquittal in a complaint case regarding dishonoured cheques issued for the repayment of a finance facility. The core legal questions involved whether failure to immediately record the complainant's statement vitiated the proceedings, whether simultaneous civil and criminal proceedings constitute double jeopardy under Article 13 of the Constitution of Pakistan 1973, and whether directors who guaranteed company obligations can evade criminal liability. The Sindh High Court held that procedural omissions not causing prejudice are curable irregularities under section 537, Code of Criminal Procedure 1898, and that the pendency of a civil recovery suit does not bar criminal prosecution for the same underlying transaction or constitute double jeopardy. The court laid down the principle that the simultaneous pursuit of civil recovery and criminal liability for dishonoured cheques is permissible and does not amount to double jeopardy, and that quashment of trial proceedings at an early stage is unwarranted when a prima facie criminal liability exists.
- Does the failure of a trial court to record the complainant's statement immediately upon receipt of a direct complaint vitiate the proceedings?
- Does the pendency of a civil recovery suit bar criminal proceedings for the dishonour of cheques involving the same subject matter?
- Does simultaneous civil and criminal litigation constitute double jeopardy under Article 13 of the Constitution of Pakistan 1973?
- Can directors who guarantee a company's financial obligations evade criminal liability when cheques issued by them are dishonoured?
- Section 265-K, Code of Criminal Procedure 1898
- Section 2(a)(i), Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997
- Section 2(d), Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997
- Section 20(4), Financial Institutions (Recovery of Finances) Ordinance, 2001
- Article 13, Constitution of Islamic Republic of Pakistan 1973
- Section 537, Code of Criminal Procedure 1898
ORDER
1. ' MUHAMMAD ROSHAN ESSANI, J.---By this criminal revision application the applicants have sought the following relief: ' It is, therefore, prayed that this Honourable Court may be pleased to check the impropriety and the illegality of the proceedings initiated malafidely to harass the applicants and, thereby, set aside the impugned order of dismissal of application under section 265-K, Cr.P.C. By invoking the above said provisions of law and acquit the applicants.
2. ' The brief facts of the prosecution case as disclosed in the complaint are that the respondent/complainant is a Banking Company within the definition prescribed under section 2(a)
(i) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 (Act XV of 1997) and carries on the business of Banking with its Branch Office situated at Karachi. The applicant/accused No,1 is a public limited company having its place of business at Karachi and the applicants/accused Nos.2 and 3 are the Directors of the applicant/accused No,1 company and they in terms of personal letters of guarantee executed by each of them, guaranteed the payment obligations of towards the respondent/complainant in respect of finance facility extended to the applicants/accused by the respondent/complainant. The applicants/accused are all customers within the definition of section 2(d) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 (Act XV of 1997). On or about 8-5-1996 the respondent/complainant via a facility offer letter sanctioned/renewed/enhanced a letter of credit (D/A 120 days) facility of Rs,50 million in favour of the applicant/accused No, l's company against the securities required thereby and upon terms and conditions provided therein.
3. ' That the applicant/accused No,1 under the cover of their letters dated 15-11-1999 and 16-11-1999 issued six cheques towards adjustment of outstanding liability in favour of the respondent/complainant drawn on Account No,00413 at SITE, Branch of Allied Bank of Pakistan Limited which were dishonoured. The dishonoured cheques were executed on behalf of the applicant/accused No,1 by the applicants/accused Nos.2 and 3.
4. ' Since the cheques were dishonoured, the respondent/complainant filed a direct complaint before the Banking Court No,III at Karachi. The trial Court took cognizance of the matter and issued process against the applicants/ accused.
5. ' The applicants/accused moved an application under section 265-K, Cr.P.C. Before the trial Court and the same was dismissed by impugned order dated 1-2-2001.
6. ' We have heard Mr. Faisal Khalid Daudpota learned counsel appearing on behalf of the applicants/accused, Mr. Yousuf Ali Saeed, learned counsel appearing on behalf of the respondent No,1 and Mr. Khursheed A. Hashmi, learned Deputy Attorney-General appearing on behalf of the State.
7. It is contended by the learned counsel for the applicants/accused that the statement of the complainant was not recorded by the trial Court immediately upon the, receipt of the complaint.
8. That the proceedings are hit by section 20(4) of the Financial Institutions (Recovery of Finances)
9. Ordinance, 2001 as well as Article 13 of the Constitution of Islamic Republic of Pakistan (1973). We have considered the submissions made by the learned counsel. We are of the considered view that the contentions are not tenable in law. It is not pointed out by the learned counsel for the applicants/accused that by not examining the complainant immediately upon the receipt of complaint what prejudice was caused to his clients. Moreover, at the best it could be an irregularity, which is curable under section 537, Cr.P.C.
10. ' The next submission is that a civil suit filed by the respondent/complainant against the applicants/accused is pending before the Court with regard to recovery of the amount which is the subject-matter of the present case. This is no ground for the quashment of a criminal case. It does not tantamount to double jeopardy as envisaged under Article 13 of the Constitution of Islamic Republic of Pakistan (1973). If a criminal liability is spelt out from the facts and circumstances of a particular case the accused can be tried upon a criminal charge. Moreover, the applicants/accused Nos.2 and 3 were not sureties but they were/are directors of applicant/accused No,1 company, therefore, prima facie, they cannot evade liability. The citation relied upon by the learned counsel for the applicants/ accused reported as Mrs. Tehmina Bashir v.
11. Abdul Rauf and another (1995 CLC 973) and United States v. Irwin Halper (490 US 435) are distinguishable from the facts and circumstances of the present case.
12. Thus, looking towards the peculiar facts and circumstances of the case, we are of the considered view that the quashment of the proceedings at this stage tantamounts to stifling the proceedings pending before the trial Court, which is not warranted by law. Consequently, the present application stands dismissed alongwith listed application.