ASKARI BANK LIMITED vs MUHAMMAD FAROOQ Ss — 2025 CLD 1897 KARACHI-HIGH-COURT-SINDH

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ASKARI BANK LIMITED VS MUHAMMAD FAROOQ Ss. 7, 8, 20 & 22---Civil Procedure Code (V of 1908), Ss. 96, 115, O.XXXIX, Rr.1, 2 & O.XLIII, R.1---Suit for recovery filed by Bank---Interlocutory order---Appeal---Scope---Suit for recovery of Rs.1,210,815,254.77/- was filed against the respondent on the premise that respondent availed Export Re-finance Facilities, whereas respondent filed suit for declaration, mandatory and prohibitory injunction, etc., against the bank---Both the matters were still sub-judice---Bank filed a criminal complaint against the respondent---Respondent had been fighting the case and recently got proceedings postponed until Court settled related banking suits---Trial Court had stayed the proceedings arising out of the criminal complaint until the final disposal of said two suits---Bank objected to the stay of the proceedings and contended that criminal and civil proceedings could proceed simultaneously---Validity---Record showed that the witness of the applicant-bank, Branch Manager, claimed in his private complaint filed under S. 200 of Cr.P.C. that the respondent/accused obtained a significant loan from the bank under false pretenses and failed to repay it---Further, the respondent/accused's actions constituted a criminal offence under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Prima facie the bank had the remedy to pursue a civil lawsuit to recover the outstanding debt---However, it was yet to be determined if the accused's misrepresentations were intentional and caused harm to the bank---Offenses under Ss. 2(g)(ii) and (iii) of Financial Institutions (Recovery of Finances) Ordinance, 2001, were independent of civil liability for default---Said offences were triggered by specific actions of the customer, such as misusing funds or misappropriating collateral---Once civil liability for default is established, the offence of willfulness could be investigated---When the criminal charges depend on the outcome of the civil cases, proceeding with the criminal case before the civil cases are resolved could potentially harm the accused---Additionally, the amount owed, which is a crucial element in the criminal case, can only be determined in the civil Court and the criminal Court is divested from such determination---Criminal proceedings should be stayed until the related civil case is resolved---Criminal case should not proceed if it depends on the outcome of a civil case, especially when the same issues are involved in both cases to avoid potential prejudice to the accused if the criminal case are to be decided first---No prejudice shall be caused to the applicant bank if the banking suits proceed first to fix the liability on the respondent concerning liability for default and breach of obligations---Besides the respondent had not been exonerated from the charges, therefore judicial propriety demanded that the applicant bank be allowed to substantiate its allegations by adducing evidence; once liability was determined the criminal case could be revived for its culmination to its logical conclusion within reasonable time---When the witnesses claimed that the respondent/accused obtained a large loan from the bank under false pretenses and failed to repay it, such assertion needed adjudication first by this Court on the banking side in the Banking Suits and if the applicant bank succeeded in proving default on the part of the respondent, certainly the consequences shall follow, therefore interference at this stage was not called for---Petition was dismissed, accordingly.

ASKARI BANK LIMITED vs MUHAMMAD FAROOQ Ss — 2025 CLD 1897 KARACHI-HIGH-COURT-SINDH

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