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Criminal Reference No. 85 of 1974, decided on 17th May 1977,

----S. 561‑A read with Penal Code (XLV of 1860), S. 420/422/423 Quashment of proceedings‑Advancement of loan sanctioned by complainant Bank on report of Bank officer, after verification of stocks of firm‑Besides stocks, immovable property also pledged with Bank and a promissory note also executed in favour of complainant‑Bank‑Partners of firm, held, could not be held criminally liable under S. 420/422/423, P. P. C.‑Just because loan amount coup not be paid within time‑Dispute, held further, purely of a .civil nature‑Proceedings quashed, in circumstances.‑[Quashment of ,proceedings].

Nooruddin Sarki for the State.

Muzaffar Hussain Shah and S. Izhar Haider Rizvi for the Complainant.

Date of hearing: 17th May 1977.

This is a reference by Additional Sessions Judge, Court No. 6, Karachi recommending that proceedings of a case stated on direct complaint for offence under sections 420, 422 and 423, P. P. C. against respondents 1 to 4 may be quashed.

2. Facts is brief are that the respondent's firm known as Messrs Easy Pit International had opened an account with Habib Bank Limited, Cloth Market Branch, Karachi and had applied for overdraft facilities to the tune of Rs. 5,00,000 as security they had hypothecated their stock and machinery lying in the factory and mortgaged immovable property consisting of land, building, factory etc. The stocks, which were hypothecated with the Bank had been duly assessed by the Bank surveyor and verified by the officer of the Bank. The Bank officer had reported that the value of .the goods pledged with the value of the machinery, equipment, land and building was worth Rs. 5,40,340. On this report the overdraft of Rs. 5,00,000 was sanctioned on condition that the amount will be paid back within 45 days. A promissory note for the amount was duly executed by the respondents and they also gave the undertaking to repay the amount within 45 days as they expected loan facility from Pakistan Industrial Credit and Investment Corporation Limited to the extent of Rs. 8,50,000. However, on account of the disturbances in East Pakistan this loan could not be obtained and the repayment of the overdraft could not be effected. This led to lot of correspondence between the Bank and the respondents for a period of 17 or 18 months. Thereafter the Bank instead of filing the suit for recovery of the amount preferred to institute a criminal complaint in the Court of A. C. M., Court No. 6, Karachi against all the partners, namely, Sulaiman Hoodbhoy, an old man of about 80 years, his wife Mrs. Zarin Sulaiman an old lady and their two sons Abdul Aziz and Abdul Hussain. Bailable warrants were ordered to be issued against the male accused and summons against the female accused. They accordingly preferred, a revision application in the Court of Session resulting in this reference.

3. It is the cage of the complainant Bank, that the deed of hypotheca tion disclosed the stock in hand of the value of Rs. 5,22,108 but when the stocks were taken over by the Bank they were found worth only Rs. 38,000. That thereby the respondents had defrauded the Bank to obtain the amount of Rs. 5,00,000 which the Bank would not have otherwise sanctioned.

4. The advancement of the loan had obviously been sanctioned on the report of the Bank officer who had verified the stocks and certified them to be worth more than Rs. 5,00,000. Besides the stocks, immovable property had also been pledged with the Bank and the promissory note had been executed. On perusal of the complaint it does not appear that any of the respondents had the guilty intent of not paying back the loan after getting the amount. On the other hand an undertaking had been given to make the pay ment within 45 days on getting the advance from PICIC. But due to unforseen circumstances the loan from PICIC could not be obtained and the firm was not, therefore, in a position to make the payment within time. Thus on the face of the complaint no case of cheating on the part of any of the respondents has been made out. All the partners of the firm cannot be held criminally liable just because the loan amount could not be paid within time. The facts and circumstances make out a case, purely of civil nature.

5. Mr. Nooruddin Sarki on behalf of the State concedes that he fully supports the reference as no criminal offence is indicated from the complaint. Thus the old man and his family have been dragged in criminal Court in order to recover the loan amount in a summary manner, without filing proper action, in a competent civil Court. This is, therefore, a glaring example of abuse of the process of Court.

6. The reference is accordingly accepted and the proceedings of the Criminal Case No. 140/73 in the Court of Additional City Magistrate Court No. 6, Karachi Shahid Afzal v. Sulaiman arid others under section 420 etc. are hereby quashed. .

Proceedings quashed.

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