1989 C L C 524




Before Ajmal Mian, CJ. and Abdul Rahim Kazi, J



and 4 others‑‑Petitioners




PAKISTAN through the Secretary, Ministry of Justice and Parliamentary Affairs, Federal Government Secretariat, Islamabad and 2 others‑‑Respondents


Constitutional Petition No.D‑936 of 1988, decided on 8th December, 1988.



Khalid Anwar for Respondent No. 2.

Qadiir H. Sayeed, Deputy Attorney General.



AJMAL MIAN, C.J.‑‑(1) By this common order, we intend to dispose of the above petitions, as both raise common points of law.


2. The brief facts leading to the filing of the above petitions are that Asian Development Bank, Manila, granted to the Government of Pakistan a loan to the extent of U.S. $ 50,000,000.00 which loan was made available by the Government of Pakistan to respondent No.2 i.e. National Development Finance Corporation for the purpose of inter alia of giving financial facility and assistance to qualified enterprises in Pakistan. Out of the above loan amount financial and credit facilities were extended to petitioner No.l by respondent No.2 pursuant whereof respondent No.2 entered into various financing agreements with petitioner No.l for the grant of working capital on terms and conditions contained therein. Petitioner No.2 is the promoter, a Director and the Chairman of petitioner No.l, whereas petitioners 3 and 4 are Directors. The above working capital finances were converted into long term loan in or about February, 1986, which were not based on interest. It seems that in the month of July, 1988 respondent No.2 filed criminal complaint against petitioners under section 7 of the Banking Tribunals Ordinance, 1984 (hereinafter referred to as the Ordinance), before the Banking Tribunal, (hereinafter referred to as the Tribunal), which took cognizance on 4‑7‑1988 and thereafter framed charge in respect thereof. It appears that respondent No.2 also filed a suit for the recovery of Rs.5,83,72,272.49 under the Ordinance before the Tribunal being Suit No.445 of 1988 for the outstanding amount against petitioner No.l. In the above suit respondent No.2 also filed an application, whereupon an injunction was granted against petitioner No.l on 14‑7‑1988 restraining them from transferring their property etc. The petitioners being aggrieved by the above legal actions have filed C.P. No.D‑936 of 1988 in relation to the above complaint and C.P. No.D‑937 of 1988 in respect of the aforesaid suit for impugning the Ordinance and the constitution of respondent No.3, i.e. the Banking Tribunal, Sind and Baluchistan.


3. In support of the above petition, Mr.All Ahmad Fazeel assisted by M/s. Liaquat Merchant and Akhtar Ali Mahmud has contended as follows:‑


(i) That the Ordinance is ultra vires the powers of the Federal Legislature, inasmuch as the Tribunal could not have been constituted.


(ii) That the provisions of the Ordinance are violative of the Fundamenta Rights. On the other hand, Mr.Khalid Anwar, who submitted the main arguments and who appeared for respondent No.2 has urged as under:‑‑


(i) That the Ordinance is intra vires the Federal Legislature and that the Tribunal has been lawfully constituted.


(ii) That there is no provision in the Ordinance which violates the Fundamental Rights.


Mr. Qadir H.Sayeed, learned Deputy Attorney‑General, who appeared in response to the notice to the learned Attorney‑General has adopted the submissions of Mr.Khalid Anwar and has further submitted that the Ordinance is protected by Article 270‑A of the Constitution.


(4) Mr. Fazeel in furtherance of his submission that the Ordinance is ultra vires the powers of the Federal Legislature, inasmuch as the Tribunal could not have been constituted, has referred to Article 212 of the Constitution which envisages that the appropriate Legislature may by Act provide for the. establishment of one or more Administrative Courts or Tribunals to exercise exclusive jurisdiction in respect of (a) matters relating to the terms and conditions of persons (who are or have been) in the service of Pakistan, including disciplinary matters;


(b) matters relating to claims arising from tortious acts of Government, or any person in the service of Pakistan, or of any local or other authority empowered by law to levy any tax or cess and any servant of such authority acting in the discharge of his duties as such servant; or


(c) matters relating to the acquisition, administration and disposal of any property which is deemed to be enemy property under any law in the basis of the above sub‑clauses of para. 1 of Article 212, it was vehemently contended by Mr. Fazeel that Administrative Court or Tribunal can only be constituted for the three purposes specified in the above quoted clauses (a) to (c) of para. 1 of Article 212 and since the recovery of the above alleged due amount in respect of financial transaction between a financial institution and its customers or prosecution of a criminal complaint in respect thereof are not covered by the above clauses, the Tribunal could not have been constituted. Mr. Khalid Anwar appearing for respondent No.2 and so also Mr.Qadir H.Sayeed, learned Deputy Attorney‑General have candidly submitted that there is a distinction between Administrative Court and Tribunal and judicial Court and Tribunal and that the Tribunal is not an Administrative Tribunal but it is a judicial Tribunal/Court and, therefore, Article 212 is not attracted to We are also inclined to hold that Article 212 does not cover the Tribunal in issue and, therefore, the only question for consideration is, as to whether the Ordinance could have been legislated by the Federal legislature either by virtue of Article 175 of the Constitution or by virtue of any one or more entries in the Federal or Concurrent Legislative Lists. MrAA. Fazeel has vehemently canvassed at the bar that even Article 175 or entries 14, 28 and 55 of the Federal Legislative List contained in Schedule IV to the Constitution and entries 3 and 46 of the Concurrent List do not cover the establishment of the Tribunal in issue. To reinforce his above submission the reliance was heavily placed on the case of Iftikhar Ahmad v. The Muslim Commercial Bank Ltd. and another, reported in P L D 1984 Lah. 69, wherein Gul Muhammad Khan, J (as his Lordship then was) has very learnedly and elaborately dealt with the concept of Court and Tribunal ‘ with reference to Articles 175 and 212 of the Constitution of Pakistan (1973) and Article 136 of the Indian Constitution and also in conjunction inter alia with the Australian Constitution, observed as follows:‑‑

“Para. 7.‑‑There appears to be a very special feature in our 1973 Constitution. It includes a specific provision in Article 212 for the constitution of tribunals for purposes expressly given therein and provides for an appeal before the Supreme Court. Article 175 only speaks of Courts. The Supreme Court of Pakistan and a High Court for each Province have been created under that Article while power has been conferred on the Legislature to create other Courts and also to confer jurisdiction on them. This position may be contrasted with the Indian Constitution. Article 136(1) of that Constitution lays down that the Supreme Court may grant special leave to appeal, from any judgment etc., in any cause or matter, passed or made by any Court or Tribunal in the territory of India. Article 227 states that every High Court shall have superintendence over all Courts and tribunals throughout the territories in relation to which it exercises jurisdiction. Thus, while the Indian Constitution recognises existence of tribunals sharing judicial power with Courts, it is conspicuously absent in the 1973 Constitution. This appears to be a very important departure from the previous Constitutional position as even Article 98(5) of the 1962 Constitution recognized tribunals alongwith Courts. Strangely enough, however, the power of superintendence of High Courts was conferred only with regard to the Courts subordinate to them and not for tribunals as in the Indian Constitution. It is thus quite clear that the 1973 Constitution of Pakistan recognises only such specific tribunals to share judicial power with Courts, as are particularly mentioned in Article 212 or elsewhere but none else. It may also be useful to note here that neither a Court nor any other judicial tribunal is relieved of the duty of deciding a matter before it justly, fairly, equitably and objectively. The only difference is that a tribunal is not as much bound by the rules of procedure and the evidence as the Courts of law are. Para. 8.‑‑The Constitution of Pakistan as regards judicial power is thus quite different from that of India and resembles the Australian Constitution inasmuch as that no executive authority can be empowered to exercise judicial power under Article 175 and any power so conferred by a legislature shall be ultra vires. Relevant portions from two Australian judgments may also be quoted in support. In the Attorney? General for Australia v. The Queen and the Boilermakers’ Society of Australia (3) an interesting question arose for the decision of the Court under sections 29(l)(b) and (c) and 29‑A of the Commonwealth Conciliation and Arbitration Act, 19(14‑1952. These provisions purported to vest judicial power‑‑even to the extent of finding a citizen or depriving him of his liberty‑in the Court of Conciliation and Arbitration established under the Act with powers of an administrative, arbitral and executive character. It was held that the said provisions were invalid, because the function of an industrial arbitrator is completely outside the realm of judicial power and is of a different character. Viscount Simonds, cited with approval the observations made by Griffith Civil Judge in Waterside Workers Federation of Australia v. Alexander Ltd. (1), that it is impossible under the Constitution to confer such functions (i.e. judicial functions) upon any body other than a Court, nor can the difficulty bees avoided by designating a body, which is not in its essential character a Court, by that name, or by calling the functions by another name. In short, any attempt to vest any part of the judicial power of the Commonwealth in any body other than a Court is entirely ineffective.” Mr. Fazeel has also referred to the other parts of the above judgment in extenso particularly paras. 12, 13, 27, 31 and 32 and contended that the above quoted observations and the observations contained in the above paras. referred to hereinabove squarely apply to the instant case inasmuch as the Tribunal is not covered by Article 212, nor it is covered by Article 175 or the entries of the Federal Legislative or Concurrent List. He also submitted that the mode of trial before the Tribunal cannot be equated with any mode of trial of a judicial proceeding inasmuch as there is no in between the parties in a proceeding arising under the Ordinance before the Tribunal and that the object is expediency ante not to provide a judicial forum. In furtherance of his above submission, he has also referred to the preamble of the Ordinance which provides that “whereas it is expedient to provide a machinery for the recovery of finances provided by Banking Companies under a system of financing which is not based on interest.” He has also referred to the other provisions of the Ordinance, which we intend to deal with at a latter stage. He has also referred to the following cases:


(i) Mir Rehman Khan and another v. Sardar Asadullah Khan and 14 others, reported in P L D 1983 Ouetta 52, in which a Division Bench of the Baluchistan High Court while dealing with the question, whether a Tribunal constituted under the provisions of the Civil Procedure (Special Provisions) Ordinance (1 of 1968) held that it was not a Court. It wasp also observed after referring to the definition of ‘Court’ in the Black’s Law Dictionary that although in strict sense Courts arc such bodies or organs of the Government which apply laws to controversies and administer justice by pressing into service the prescribed rules of? procedure and Evidence, but at times this term is loosely applied to such forums also which are not the Courts stricto senso.


(ii) Fauj Din and another v. Akhtar Mahmood Khan, Additional District Judge, Multan and 4 others, reported in P L D 1988 Lah. 352. In the above case a learned Single Judge held that a District Magistrate or a Sub Divisional Magistrate discharging their duties under section 337, Cr.P.C. acts as persona designata and not as a Court. It was also observed that judicial power was an exercise of sovereign power and a Court of law means a Court of judicature as a body established by law to exercise either generally or subject to defined limits and that judicial power is to be contrasted with legislative and executive power.


Mr. Fazeel has also invited our attention to Sections 4, 6, 7, 10 and 12 of the Ordinance to demonstrate that the mode of trial and the other incidences relating to the same are such that the Tribunal cannot by any stretch of imagination be said to be a judicial Tribunal or Court. It may be observed that y subsection (1) of section 4 of the Ordinance provides establishment of as many A Banking Tribunals as the Federal Government may consider necessary for the territorial limits to be specified in the Notification, whereas subsection (2) of section 4 deals with the composition of the Tribunal and provides that it shall consist of a person who is or has been or is qualified for appointment as a Judge of the High Court or a District Judge or an Additional District Judge who shall be the Chairman and two members to be appointed by the Federal Government. It was vehemently urged by Mr. Ali Ahmad Fazeel that the composition of the Tribunal comprised of one judicial member and two non‑judicial nominees of the Government and, therefore, the above provision militates against its being a judicial Tribunal or Court. It may further be observed that section 6 deals with the procedure of Banking Tribunals which inter alia provides under subsection (4) that upon the defendant failing to file a reply within the time given in the show‑cause notice under subsection (2) or upon rejection by the Banking Tribunal of the plea taken by him in reply, the Banking Tribunal shall pass a decree in favour of the Banking Company as prayed for in the plaint, whereas it, subsection (6) lays down that all suits filed in the Banking Tribunal shall be disposed of within 90 days of the filing of the plaints and in case proceedings continue beyond the said period the defendant shall be asked to deposit in cash or to furnish a security acceptable to the Tribunal equal in value of the claim in suit t and on failure of the defendant to make such deposit or furnish such security the Banking Tribunal shall pass decree in favour of the Banking Company as prayed for in the plaint.It may also be pointed out that the first proviso of subsection (6) provides that where the claim of the Banking Company is based on default of the defendant in payment of agreed instalments the deposit of security shall be to the extent of the amount of instalments in default. It may also be pointed out that second proviso to the above subsection (6) provides that the requirement of deposit m cash or furnishing of security may be dispensed with if in the opinion of the Banking Tribunal the delay is not attributable to the conduct of the defendant.


It was contended by Mr.Fazeel that the above subsections in fact are departure from the normal procedure which is being followed by a judicial Court or Tribunal. Mr. Fazeel has also pointed out that even an appeal under section 9 cannot be filed without first depositing decretal amount. He has also submitted that even the application of the Limitation Act has been excluded by section 12. As regards the criminal complaint, his submission was that section 7 provides a severe punishment by providing punishment with imprisonment of either description for a term which may extend to five years and also a line, in addition to ordering of to deliver up or refund the property or the amount referred to in the above section.


On the other hand Mr.Khalid Anwar has pointed out that the above provisions in the Ordinance are not of the nature which can be said to be harsh or unusual. He has submitted that the composition of a Tribunal comprising of three personnel or the factum that upon failure to file a reply to the show‑cause notice or the reply being found unsatisfactory, a decree is to be followed or that the borrower is to deposit the decretal amount at the time of filing of an appeal or that the Limitation Act has not been made applicable do not negate the factum that the Tribunal is a Judicial Tribunal or Court as the above provisions are similar to those which are found in many other enactments.


5. We are inclined to hold that it is not the composition of a Tribunal which’ may determine the nature of its work but it is the work which is entrusted to the Tribunal and the procedure provided to dispose of the same are the material factors for determining the nature of the work of the Tribunal. Similarly the mere fact that in case of failure to file a reply to a show‑cause notice or the reply being found unsatisfactory, a decree is to be followed does not make any difference as to the nature of the Tribunal inasmuch as similar provisions are found in the form of Order XXXVII, C.P.C. which is followed by the normal Civil Courts. It may be pointed out that if a suit is filed under Order XXXVII, a defendant is to apply for leave within 10 days and upon such an application the Court is to decide, whether leave is to be granted or not to be granted and in case of failure to file an application or if the same is filed but is found to be unsatisfactory a decree is to be followed. However, this factum does not change the character of the Court which passes the decree. We may also observe that even in Civil Courts including High Court it is the? A & B a money decree is not stayed until and unless generally a judgment‑debtor deposits the decretal amount in Court and, therefore, the fact that section 9 of the Ordinance provides for deposit of the decretal amount at the time of filing of the appeal cannot be said to be something foreign to the normal law or practice. The non‑application of the Limitation Act, in our view, also does not change the nature of the Tribunal. It is the prerogative of the Legislature not to make applicable Limitation Act or to provide different limitation periods for different purposes. For example under Article 149 of the First Schedule to the Limitation Act the period provided for a suit to be filed by the Government is 60 years, whereas the period for other parties under other Articles is generally three years. We may also point out that in the above Lahore case of Iftikhar Ahmad v. The Muslim Commercial Bank Ltd. and another (P L D 1984 Lah. 69), which has been heavily relied upon by Mr. A.A. Fazeel, the question before the learned single Judge was whether a Banking Court constituted under the Banking Companies (Recovery of Loans) Ordinance (XI of 1979) was a Court or not, and it was held that it was a Court though the provisions of the aforesaid Ordinance are pari materia to the provisions of the Ordinance under reference except that the words used were ‘Special Court’ and not ‘Banking Tribunal’, as is the case in the present case and that the Special Court was manned by a Judicial Officer and was not comprised of three personnel i.e. one judicial and two other nominees of the government. The above difference in the composition of the Tribunal will not make any difference. In this regard, it may he advantageous to reproduce herein below paras. l8 and 29 from the above Lahore judgment of Gul Muhammad Khan, .1.


“18. Despite the collection of elaborate views above, it has been generally observed that the definitions so far attempted are not exhaustive of the term ‘Court’. However, inspired by all that has been said so far, and without claiming that it will he exhaustive, in my humble view, ‘judicial power’ is the legal right, ability and authority to hear and decide, objectively and after allowing opportunity to produce evidence, a justiciable issue, dispute or controversy, concerning the existing legal rights, duties or interests of persons or property, arising out of relations and dealings, between two or more parties, who bring the same for an authoritative decision, binding on them and may include the authority to execute or get executed its decision and protect rights, prevent and redress wrongs and punish offences through legal process. Further, the judicial power must be conferred by the State under Constitution or law and not the mere consent of parties, on persons who arc paid by the State and removable by it only. The authority or body in which this power is vested is generally called a ‘Court’ and in performing its functions it declares, construes and applies law or custom or usage having the force of law. The ‘judicial power’ is thus the instrument to be used by the Court.


“29. The Banking Court, when judged on the above standard is a Court in fact and law. According to Section 6(1) (a) of the Ordinance, it has to exercise civil jurisdiction as vested in a Civil Court, under the Code of Civil Procedure. Again under section 6(1)(b) it exercises criminal jurisdiction vesting in an Assistant Sessions Judge under the Code of Criminal Procedure. Section 6(3) says that all proceedings before a Special Court shall be deemed to be judicial proceedings within the meaning of sections 193 and 288 of the Pakistan Penal Code and it is a Court for the purposes of Sections 480 and 482, Cr.P.C. It has to decide a controversy before it, objectively vide section 7 in accordance with Order XXXVII in the First Schedule to the Code of Civil Procedure. After hearing the case it pronounces a judgment on which has to follow a decree as per section 8(1). The Special Court has also the power to execute its decree under section 8(3). The orders of the Court arc a1so appealable before the. High Court. The rights or the liabilities of the parties before it are pre‑existing and they have to be dealt with in accord with the evidence produced and the law. The mere fact that the procedure adopted is shorter would not take it out of the ambit of a Court as even the other regular Courts in certain specified matters adopt?? the same procedure.”


?6. We may observe that in the above Lahore judgment Gul Muhammad Khan J has succinctly highlighted the distinction between Indian Constitution and Pakistani Constitution as to the scope of jurisdiction in relation to Tribunals. In this respect there seems to be a marked distinction between the Indian Constitution and Pakistani Constitution of 1973 inasmuch as under Article 136 of the former the Supreme Court has been empowered to grant special leave from any judgment passed by any Court or Tribunal, whereas under Article 212 of the latter constitution, an appeal by special leave is provided against an order/judgment of any of the Tribunals referred to in clauses (a) to (c) of para.1 of the above Article and not against all Tribunals as provided for in the Indian Constitution. Furthermore under Article 227 of the Indian Constitution every High Court enjoys the power to have superintendence over all Courts and Tribunals within its territorial iimits, whereas under Article 203 of the Pakistani Constitution every High Court has been empowered to supervise and control all Courts subordinate to it but it does not refer to Tribunals. However, the above diversity is not pertinent for the purpose of deciding the present controversy, whether the Ordnance is ultra vires the Federal Legislature, and the point in issue is not as to the scope of jurisdiction of the High Court and Supreme Court.


7. Mr. Khalid Anwar has referred to the following two cases of the Indian jurisdiction in addition to referring to the above Lahore case.


(i) Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhunjhunwala and others, A I R 1961 Supreme Court, 1969 (V 48 C 315), in which the Indian Supreme Court while construing the word ‘Courts’ used in Article 136 of the Indian Constitution has inter alia observed that by ‘Courts’ is meant Courts of Civil Judicature and by ‘tribunals’ those bodies of men who are appointed to decide controversies arising under certain special laws and that among the powers of the State is included the power to decide such controversies. It has also been observed that broadly speaking, certain special matters go before tribunals and the residue goes before the ordinary Courts of Civil judicature and that their procedure may differ but the functions are not essentially different and that what distinguishes them has never been successfully established and that it has been further observed that the real distinction, it is said, is that Courts have “an air of detachment” but this is more a matter of age and tradition and is not of the essence, and that a Court in the strict sense is a tribunal which is a part of the ordinary hierarchy of Courts of Civil Judicature maintained by the State under its constitution to exercise the judicial power of the State.


(ii) Engineering Mazdoor Sabha and another v. Hind Cycles Ltd. and others, A I R 1963 Supreme Court, 874 (V 50 C 132). In the above case the Indian Supreme Court again while construing Article 136 which refers to the Courts and Tribunals held that the decisions of the Arbitrator to whom industrial disputes were voluntarily referred under section 10‑A of the Industrial Disputes Act, 1947, are, no doubt, quasi‑judicial decisions and amount to a determination or order under Article 136 but an Arbitrator under section 10‑A is not a Tribunal under Article 136 even though it has some of the trappings of a Court. It was also observed that in order to, invoke Article 136, two conditions must be satisfied, (1) the act complained against must have the character of a judicial or a quasi judicial act as distinguished from a mare executive or administrative act, and (2) the authority whose act is complained against, must be a Court or a Tribunal.


8. We may observe that even according to the above judgments of the Indian Supreme Court there is no clear cut demarcation between a judicial Court and a judicial Tribunal and in fact they are synonymous and arc engaged in discharging the functions of the State.


9. This leads us to the question whether the ‘tribunal could have been constituted under Article 175 or under any of the entries contained in the Federal Legislative List or the Concurrent List. On this aspect Mr. Khalid Anwar has cited a Division Bench judgment of this Court to which one of us (Ajmal Mian CI) is a party, namely, in the case of Sham‑, Textile Mills. Lahore v. Federation of Pakistan and others, P L D 1982 Kar. 513 in which the Division Bench while dealing with more or less similar question, as to the vires of the Banking Companies (Recovery of Loans) Ordinance, 1979, held as follows:


“9(b)The learned counsel for the parties have vehemently urged and again as to the scope of above Entries 10, 31 and 55 Part I of the 4th Schedule to the Constitution. In our view, it is not necessary to examine in detail the above contentions as even if we were to hold that the aforesaid entry 28 does not empower the Federal Legislature to enact the impugned Ordinance, in our view in any case the power to legislate the impugned Ordinance can be spelt out from entries Nos.2 and 3 of the Concurrent Legislative List quoted hereinabove particularly Entry No.3, which empowers the Federal Legislature to legislate in respect of civil procedure including law of limitation to all matters included in the Civil Procedure Code on the commencing day, the recovery in a province or the Federal Capital of claims in respect of taxes and other public demands including arrears of land revenue and sums recoverable as such, arising outside the province, Section 9, C.P.C. provides that the Courts shall have jurisdiction over suits of a civil nature excepting suits of which their cognizance is expressly or impliedly barred. Furthermore. there are other provisions in the C.P.C., providing the mode of trial etc. Order XXXIV, C.P.C., deals with the trial of mortgage suits, whereas Order XXXVII enters for trial of suits based on a negotiable instrument. The impugned Ordinance is a procedural law providing forum for the recovery of the dues of a banking company or a financial institution notified by the Government through a gazette as a banking company Section 5 of the Ordinance contemplates establishment of as many Special Courts as the Federal Government considers necessary, whereas section 6 deals with the jurisdiction of a special Court. It provides that a special Court in exercise of its Civil jurisdiction shall have in respect of a claim filed by a banking company against a borrower and or by a borrower against a banking company in respect of claim arising out of a loan, the powers vested in the civil Courts under the Civil Procedure Code. It further provide that in exercise of its criminal jurisdiction, it shall for the purpose of the Ordinance have the same power as vested in the Court of Assistant Sessions Judge under the Cr.P.C. 1898. It also provides that for the purpose of trial Court before a special Court provisions of Chapter XVIII of the said Code shall not apply. Furthermore, section 7 inter alia provides that in the exercise of civil jurisdiction the special Court shall in all suits before it including suits based on mortgages of all kinds, on a statement of account for recover) of money paid to or to the order of defendant follow the summary procedure provided for in Order XXXVII, C.P.C., in the First Schedule to the Civil Procedure Code, whereas section 8, contemplates pronouncement of a judgment and the preparation of a decree in terms of judgment. Section 9 relates to the trial of offences mentioned in the above section. Section 12 contemplates filing of an appeal by aggrieved party against the judgment or sentence of a special Court within 30 day to the High Court, which is to he heard by a Division Bench. In our view, there cannot be any doubt that the impugned Ordinance provides for the recovery of the claim of a banking company or a financial institution which is notified by the Federal Government as a banking company and the trial of offences committed in connection or in respect of loans transactions. The above power can be spelt out from above Entry No.3 read with Entry No.2 of the Concurrent Legislative List. It may he pertinent to observe that the impunged ordinance has reenacted with certain modifications the Banking Companies (Recovery of Loans) Ordinance, 1978 (XXIII of 1978). The object in the above: Ordinance was given in its preamble as follows:


“Whereas it is expedient to provide for a summary procedure for recovery of loans of banking companies and for matters connected therewith or incidental thereto.


We are inclined to adhere to the above view and hold that Entry No .3 read with Entry No.2 of the Concurrent Legislative List provides the requisite power to the Federal Legislature to legislate the Ordinance in issue and, therefore, the same is intra vires the Federal Legislative power.


10. As regards Mr. Fazeel’s contention that some of the provisions of the Ordinance referred to hereinabove are violative of the Fundamental Rights, in our view, this is not so. In our view, if the law provides more expeditious remedy for the recovery of the amounts of loan which are advanced out of foreign loans, it does not violate any provision of the Fundamental Rights. We cannot be unmindful of the fact that the Pakistani Financial Institutions which advance loan t o the Pakistani entrepreneurs out of the foreign loan amounts are also obliged t o pay back the same to the foreign lending agencies within the scheduled time and, therefore, it is incumbent to ensure that the borrowers in Pakistan should not commit default and in case of any default the recovery is to be made expeditiously. In our view, one can have any justifiable grievance from the factum that the matter is to be adjudicated upon by a Tribunal within a short time so long as the Tribunal gives a fair hearing to the parties in consonance with the basic norms of justice. We may also observe that subsection (6) of section 6 requiring to deposit the suit amount or to furnish security thereof is to be attracted to if a suit is not disposed of within 9ti days on account of the delay caused by the defendant, which intention is evident from proviso 2 to subsection (6) of the above section. There is nothing in the Ordinance from which it can be inferred that the Tribunal is not bound to follow the basic norms of judicial proceedings i.e. being impartial, fair and to provide reasonable opportunity to the parties evenly. On the other hand section 5 of the Ordinance indicates that it has to follow C.P.C. and Cr.P.C. in the absence of any contrary provision in the Ordinance. This reinforces our above conclusion that the Tribunal is to follow the basic norms of judicial proceedings. Additionally, an appeal under section 9 of the Ordinance is provided to this Court which is to be heard by two Judges as in the case of any other civil and criminal appeal, under the general law.


11. We are inclined to hold that section 7 of the Ordinance relating to the criminal complaint does not in any way deviate from the basic concept of criminal trial. The above section is attracted to a person who intentionally destroys or removes or reduces the value of the property on the security of which finance was provided to him, or without the prior approval in writing of the company which provided finance, transfers such property or any part otherwise than in accordance with the terms of approval. The above provision cannot be said to be unreasonable keeping to view that it can be pressed into service only when a person commits any of the acts referred to hereinabove which even under Pakistan Penal Code may be an offence entailing more or less same sentence of imprisonment.


12. The upshot of the above discussion is that the above petition have no merits and, therefore, they are dismissed in limine.

A.A,/S‑312/K                 Petitions dismissed



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