Banks are debarred from taking advantage of Financial Institutions Ordinance 2001 and Section 489-F because aims and objects of both provisions are entirely different. Both these enactments cannot be amalgamated or Confused.
Aims and object of financial institutions ordinance 2001 and section 489-f cannot be confused with each other by their application at the whims of either party to a case.
Financial institutions ordinance 2001 is a complete code providing a procedure for banking courts, especially constituted under the said ordinance for the recovery of loans from defaulters or taking stock of the institution at the instance of the aggrieved party which may be the loanee against the banks and for the commission of any offense as enumerated under section 7 of the financial institutions (RoF) ordinance 2001.
Banks or their administrations are debarred from taking the advantage of section 489-F of Pakistan penal code through the initiation of proceedings against the defaulters merely on the dishonoring of any cheque issued by the loanee, who had availed any finance facility. The scheme of both financial institutions ordinance 2001 and section 489-F is poles apart from each other.
This view is held in PLD 2009 Lah 541 in a case titled as Muhammad Iqbal Vs. SHO
Registration of case by the Complainant/Bank through its Manager is a malafide action
Registration of the case by the complainant/bank though its manager is a malafide action against the petitioner. It could be avail remedy through the baking court under Financial institutions ordinance 2001.
Registration of the case under section 489-F of PPC being malafide and abuse of process of law, it could not be allowed to sustain on record. On this point, FIR can be quashed by the criminal court.
Objects and Reasons For Enacting Financial Institutions Ordinance 2001 and Section 489-F of PPC 1860 are Different
Cheques issued by the customer to the leasing company in connection with the lease of the vehicle were dishonored. The leasing company got registered FIR against the customer.
The lessee of the vehicle was a ‘customer’ within the meaning of section 2(c) of the financial institution ordinance 2001 and the case of the lessee clearly fell within the ambit of provisions financial institutions ordinance 2001.
Section 7 of the financial institution had conferred criminal jurisdiction to the banking court to try offenses under this ordinance. Jurisdiction of police under this law is ousted because of special law i.e. financial institutions ordinance 2001.
FIR against the customer under section 489-F was only a wastage of time and abuse of the process of law. Parties should not take law in their own hands.
This view was held in PLD 2009 Lah 629 in a case titled Tariq Mehmood Vs. Askari Leasing Ltd.
Operation of Section 489-F
Section 489-F of PPC and section 20 of financial institutions are two independent sections. Sections 489-F is applicable when the transaction is between two individuals. If the cheque is issued dishonestly to satisfy the loan toward the banks than a bank would be required to register a complaint before the banking court.
Registration of case before police it’s investigation and submission of challan will not be in accordance with the law and the trial court will be debarred from taking cognizance of the case.
This view was held in 2009 PCrLJ 1307 (Lah) in a case titled Muhammad Saleem Vs. The State.