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ORDINANCE XXV OF 1997 ORDINANCE XXV OF 1997 BANKING COMPANIES (RECOVERY OF LOANS, ADVANCES, CREDITS AND FINANCES) ORDINANCE, 1997 An Ordinance to repeal, and with certain modifications to consolidate and re‑enact the banking Companies (Recovery of Loans) Ordinance, 1979 and the Banking Tribunals Ordinance, 1984 (Gazette of Pakistan, Extraordinary, Part I, 4th February, 1997] No.F.2(1)197‑Pub., dated 4‑2‑1997.‑‑‑The following Ordinance made by the President is hereby published for general information: Whereas it is expedient to repeal and with certain modifications to consolidate and re‑enact the Banking Companies (Recovery of Loans) Ordinance, 1979 (XIX of 1979) and the Banking Tribunals Ordinance, 1984 (LVIII of 1984); And whereas the National Assembly is not in session and the President is satisfied that the circumstances exist which render it necessary to take immediate action; Now, therefore, in exercise of the powers conferred by clause (1) of Article 89 of the Constitution of the Islamic Republic of Pakistan, the President is pleased to make and promulgate the following Ordinance, namely:‑‑ 13. Provisions relating to certain offences.‑‑Whoever‑‑ (a) intentionally destroys, or removes, or reduces the value of the property on the security of which loan or finance was provided to him, or, without the prior approval in writing of the banking company which provided loan or finance transfer such property or any part thereof otherwise than in accordance with the terms of approval; or (b) dishonestly commits breach of the terms of letter of hypothecation of trust receipt or such other instrument or document executed by him whereby the possession of the property offered as security for the loan or finance is not with the banking company but is, retained by or entrusted to him for the purpose of effecting sale and paying over the sale proceeds thereof, to the banking company; or (c) subsequent to the creation of a mortgage in favour of a Banking Company, dishonestly creates any further encumbrance or parts with the possession of the mortgaged property, without the written permission of the banking company, shall, without prejudice to any other action which may be taken against him under this Ordinance or any other law for the time being in force, be punishable with imprisonment of either description for a term which may extend to five years, and shall also be liable to fine, and shall be ordered by the Banking Court trying the offence to deliver up or refund, within a time to be fixed by the Banking Court, the property or the value of the property so destroyed, removed or reduced in value or transferred as the case may be. Explanation.‑‑Dishonesty shall be presumed where a borrower or a customer‑‑ (a) shall not have deposited the sale proceeds of hypothecated goods with the banking company in whose favour the goods were hypothecated in accordance with the hypothecation agreement between the banking company and the borrower or customer; and (b) subsequent to the creation of a mortgage in favour of a banking company, creates any further encumbrance or parts with the possession of the mortgaged property, without the written permission of the banking company. (2) Whoever knowingly makes a false statement in an application for Loan or finance or applies the amount of the loan or finance towards a purpose other than that for which the loans or finance was applied for by him or furnishes false accounts of his business to the banking company, shall be guilty of an offence punishable with imprisonment of either description for a term which may extend to three years, or with fine, or with both. (3) Whoever resists or obstructs, either himself or on behalf of the judgment‑debtor or any other person, the execution of decree or delivery of mortgaged or attached property, shall be punishable with imprisonment which may extend to three years, or with fine or with both. (4) Where the person guilty of an offence under this Ordinance is a company or other body corporate, the Chief Executive by whatever name called and every Director, other than a non‑executive Director, Manager, Secretary and other officer thereof shall, unless he proves that the offence was committed without his knowledge or that he exercised all the due diligence to prevent the commission of such offence, also be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. (5) All offences under this Ordinance shall be bailable, non‑cognizable and compoundable.