LHC limits FIA wilful default probes without prior court determination
The Lahore High Court rules that criminal investigations for wilful default can only start after a banking court conclusively determines the civil claim.
The Lahore High Court ruled that the Federal Investigation Agency cannot prosecute bank customers for wilful default without prior determination by a banking court.
A division bench consisting of Justice Jawad Hassan and Justice Abid Hussain Chattha allowed petitions challenging FIA notices issued under banking recovery laws.
The court stated that criminal proceedings prior to a civil ruling give financial institutions an unchecked and coercive tool against borrowers.
The judgement clarifies that the agency's authority in these cases derives from the 2001 ordinance and 2018 rules rather than the general agency statute.