LAHORE (The Thursday Times) — The Lahore High Court has ruled that the Federal Investigation Agency (FIA) cannot pursue bank customers for wilful default until a banking court has first established it in civil proceedings.
A bench of Justice Jawad Hassan and Justice Abid Hussain Chattha allowed petitions by Qaiser Shabbir and others, who challenged FIA notices issued after lenders complained under the Financial Institutions (Recovery of Finances) Ordinance, 2001. In each case the lender had already sued for recovery, and the suits had been decided, many by consent, or were in appeal or execution.
“A recovery suit only fixes the amount payable and does not establish willful default,” said the judgment, written by Justice Chattha. The bench said letting criminal action start first would give lenders a coercive tool to recover undetermined sums through first information reports and arrests.
The ruling does not wipe out anyone’s debt. Lenders can still sue to recover what they are owed, and the FIA can look into wilful default once a banking court has made its finding. The law also requires a 30-day payment demand before a complaint.
The bench disagreed with a 2019 ruling by a three-member Lahore High Court bench, in the Mian Ayaz Anwar case, which had held that some parts of the ordinance need no earlier civil finding, so the question may come back to the courts.
