2014 Y L R 120

[Peshawar]

Before Muhammad Daud Khan and Assadullah Khan Chamkani, JJ

SHAH JAHAN KHAN---Petitioner

Versus

STATE BANK OF PAKISTAN through Governor and 5 others---Respondents

Writ Petition No.116-M of 2012, decided on 4th July, 2013.

(a) Constitution of Pakistan---

----Art.25---Equal protection of law---Reasonable classification---Scope---All citizens are equal

before law and are entitled to equal protection of law which should not be allowed to be
withheld---Person or class of persons placed in different circumstances and in different set of
facts could be treated differently and any classification which was reasonable, proper on solid
basis, must always rest upon some differences---Persons placed in different circumstances and in
different set of facts, if given different treatment, would not be treated as unreasonable
classification.

Shehzad Riaz v. Federation of Pakistan through Secretary Cabinet Division and 3

others 2006 YLR 229 rel.

(b) Constitution of Pakistan---

----Art.25---Equal protection of law---Scope---Equal protection of law does not mean that every
citizen, no matter what his condition, must be treated in the same manner---Phrase 'equal
protection' of law means that no person or class of persons shall be denied the same protection of
law which is enjoyed by other persons or other class of persons in like circumstances---Persons,
similarly situated or in similar circumstances, would be treated in same manner---All law implies
classification for, when it applied to a set of circumstances, it created thereby a class and equal
protection meant that classification should be reasonable.
 Brig: (Rtd.) F.B. Ali and another v. The State PLD 1975 SC 506 rel.

(c) Constitution of Pakistan---

----Arts.25 & 199---Constitutional petition--Equal protection of law---Discrimination---Relief

package meant for general customers/borrowers of the Bank---Entitlement of Bank employees
for such relief--- Scope--- Petitioners' being employees of the Bank, got loan on a non-interest
basis---Federal government announced relief package for the borrowers of Malakand Division
through which their loans were written off---Petitioners/employees of the Bank being borrowers
like other domiciled of Malakand Division claimed benefit of said relief package---Bank refused
the claim of petitioners as they were not general customers of the Bank, they were employees
and their arrangements of credits/advances/finances availed were regulated by the rules of the
Bank---Contention of the petitioners was that Bank had already written off the loans of
borrowers having domicile of Malakand Division but the petitioners' who also belonged to the
same division were discriminated against---Validity---Case of petitioners was not covered by the
scheme/ packages approved/launched either by the Government or by the State Bank of Pakistan
and the respondent-Bank---Staff loans or the advances given to the employees of the Bank was
an arrangement between the Bank and its employees covered by their own service rules/scheme
and were not treated at par with the finances advanced to general customers on commercial
basis---Finances advanced to the petitioners/bank employees were not covered by any of the
scheme/package of remission given as relief packages sanctioned/launched by the government
and State Bank of Pakistan---Constitutional petition was dismissed.

Mian Iqbal Hussain for Petitioner.

Zafar Ali, Faroukh Adam Khan, Hidayatullah and Mukaram Shah, D.A.-G. for
Respondents.

Date of hearing: 4th July, 2013.

JUDGMENT

MUHAMMAD DAUD KHAN, J.--This single judgment shall dispose of Writ Petitions
Nos.41, 166, 841, 1203, 1230, 1469, 1470, 1705, 1779, 1781, 2082 of 2011 and Writ Petitions
Nos. 25, 91, 116, 132, 156, 200, 358, 529 of 2012, as almost same question of law and fact is
involved in all these writ petitions.

2. Petitioners, being employees of the Bank, got loan under the Housing Building Advance
Scheme on non-interest basis, filed these petitions against the State Bank of Pakistan including
other Banks to seek the following relief:--
(i) Demand and recovery proceeding of abovementioned loan be declared as written off
loan as declared by Prime / Minister Circular;

(ii) The above proceeding is to be declared as discriminatory, against rights enshrined in

Article 25 of the Constitution of Islamic Republic of Pakistan, 1973.

3. Brief facts of the case as narrated in the constitutional petitions (hereinafter referred to as
petitions), are that petitioners Bank extended loan to the people of Malakand Division, being
effected by war against terrorists, in response to Relief Package given by the Federal
Government vide which loans in Malakand, Swat, Buner and Chitral Districts were written-off
on the basis of the Relief Package announced by the Prime Minister, State Bank of Pakistan
through Circular Notification SMEFD Circular No.1 of 2011 dated 4-2-2011, which is
reproduced as under:--

The Presidents/CEOs,

All Banks / DFIs / MFBs

Dear Sirs,

Total Write-off of Loans in Malakand, Swat, Buner and Chitral Districts-Fiscal Relief to
Rehabilitate the Economic Life in Khyber Pakhtunkhwa, FATA and PATA

In pursuance of Prime Minister's announcement of above Relief Package and subsequent

release of budgetary allocation by the Ministry of Finance, Government of Pakistan on account
of Total Write-off of Loans in Malakand, Swat, Buner and Chitral Districts, following procedure
has been devised for reimbursement of write-off of loans outstanding as of December 31, 2009
against the borrowers of said Districts:-

(A) Scope & eligibility criteria

(i) Banks, DFIs and MFBs shall write-off the entire loans outstanding as of December 31,
2009 of the borrowers of Malakand, Swat, Buner and Chitral Districts.

(ii) Banks, DFIs and MFBs shall bear the cost of such write-offs to the extent of amount held
into provision against NPLs and interest in suspense account, while the rest of the cost will be
paid by the Government of Pakistan as subsidy.
(iii) Loans booked outside the Malakand, Swat, Buner and Chitral on behalf of businesses
operating /located in these districts shall also qualify.

(iv) Only principal amount of outstanding loans (Performing and NPLs less provisioning) as
of December 31, 2009 shall qualify for subsidy.

(v) Loans disbursed on or after January 1, 2010 shall not qualify for said relief. The amount
of overdue / outstanding Mark-up shall also not qualify for said subsidy.

(B) Reimbursement of Subsidy

(i) After internal approvals of write-off of Total Loans in Malakand, Swat, Buner and
Chitral Districts as per above guidelines the banks, DFIs and MFBs shall submit their claims to
the office of SBP-BSC (Bank), Peshawar on prescribed format (copy attached) duly audited and
authenticated by their Internal Audit up-to March 15, 2011.

(ii) The amount reimbursed by SBP-BSC (Bank), Peshawar shall, however, be subject to on-
site inspection by SBP's Inspection Department and if any amount claimed found ineligible, the
same shall be required to be refunded by the concerned institutions along-with a fine of 25% of
amount reimbursed.

2. For smooth and timely implementation of above Relief Package, Banks, DFIs and
MFBs are advised to stop recovery & accrual of mark-up of all such outstanding loans
immediately and make all out efforts to publicize the Scheme through advertisements, banners
and direct contact with the concerned borrowers.

3. The reimbursement of banks/DFIs/MFBs claims of outstanding loans as of December

31, 2009 as earlier reported to SME Finance Department, shall be full and final settlement of the
borrowers' liabilities and banks/DFIs/MFBs are required to release all securities/charges held
against such loans and issue necessary clearance certificates to concerned borrowers soon after
the receipt of funds from SBP.

Encl: As above

Yours faithfully,

Sd.

(Mansoor H. Siddiqi)
4. As the petitioners/Banks were reluctant to write-off loan in the light of Relief Package
mentioned above, hence respondents moved the present writ petitions.

5. Learned counsel for the petitioners i.e. employees of Bank argued that respondents being
borrowers like other domiciled of Malakand, Swat, Buner, Chitral, were granted Relief Package
by the Prime Minister of Pakistan. He further contended that in pursuance of package announced
by Prime Minister Pakistan in Malakand, Swat, Buner and Chitral for write-off all loans on 31-
12-2009, the respondents be treated same as other borrowers under Article 25 of the Constitution
of Pakistan.

On the contrary, it was argued that relief under the package to the effected area was on
the ground that package was meant to rehabilitate the economic life and does not concern
personal finance of bank employees. Secondly; the Bank employees who have executed finance
agreement with their respective Banks, were not subject to same terms and conditions as other
customers loanee of the Banks; thirdly, Relief Package is fiscal in nature by Government of
Pakistan upon which budgetary allocation was made available to business loan meaning that
fiscal Relief Package does not include loan extended by Banks to their employees; fourthly, bank
staff finance stand at a different footings than loans of public-at-large; fifthly, the repayment
made after 1-1-2010 against outstanding amount do not qualify under the package scheme and
lastly, the respondents did not provide the detail of the amount and claim and also did not furnish
the detail of the case at the time of filing their claim, which involve factual controversy,
therefore, this Court is not competent to resolve the factual controversy.

6. Arguments heard and record perused.

7. The perusal of record would reveal that SME Finance Department, State Bank of
Pakistan issued letter on the queries at serial No.8 that loans extended by the banks to their
employees are not eligible under the scheme. Consumer Loans are eligible. However, bank's
overall claim should not exceed the loan amount reported earlier by them to SBP as of 31-12-
2009. The petitioners are not qualified to the status to treat their case within purview of the
Relief Package and respondents have not violated their fundamental right given in the
Constitution of Pakistan.

8. The equality of citizen as fundamental right is provided in Article 25 of the Constitution

of Pakistan.

9. No doubt that Article 25 of Constitution provides one of the most valuable and important
guarantee that all citizens are equal before law and are entitled to equal protection of law which
should not be allowed to be withheld but of person or class of person placed in different
circumstances and in different set of facts can be treated differently and any classification which
is reasonable, proper on solid basis, must always rest upon some differences. If persons placed in
different circumstances and in different set of facts are given different treatment it would not be
treated as unreasonable classification. Reference 2006 YLR 229 [Karachi] "Shehzad, Riaz v.
Federation of Pakistan through Secretary Cabinet Division and 3 others".
10. Equal protection of law does not mean that every citizen, no matter what his condition,
must be treated in the same manner. The phrase "equal protection" of the laws means that no
person or class of persons shall be denied the same protection of laws which is enjoyed by other
persons or other class of persons in the like circumstances. This only means that persons,
similarly situated or in similar circumstances, will be treated in same manner. Besides this, all
law implies classification, for, when it applies to a set of circumstances, it creates thereby a class
and equal protection means that this classification should be reasonable, (PLD 1975 Supreme
Court 506) "Brig: (Retd.) F.B. Ali and another v. The State".

11. It is well-settled law that all persons placed in similar circumstances, must treated alike
and the reasonable classification must be based on reasonable ground in a particular set of
circumstances, but in the instant case, the fundamental rights given in Article 25 of Constitution
have not been violated as the petitioners had got loans in shape of finance facilities under House
Building Advance etc. Housing Finance Scheme, non-interest base with free mark-up or at the
most 2% nominal markup to be paid in 238 monthly installments, clearly differentiates the loan
given to the borrowers belonging to public-at-large and they have to pay more than 15% interest
per annum, hence petitioners are not borrowers according to the spirit of the Notification issued
by the Prime Minister.

12. In our humble view, the petitioners are not general customers of the Bank. They are
employees and their arrangements of credits/advances/finances availed are regulated by the rules
of the Bank. The Schemes issued by the Government of Pakistan, Circulars of State Bank of
Pakistan and that the Banks as placed on the file have been considered with the assistance of the
learned counsel for the parties.

13. The case of petitioners is not covered by the scheme/packages approved/launched either
by the Government or by the State Bank of Pakistan and the Bank concerned. The staff loans or
the advances given to the employees of the Bank is an arrangement between the Bank and its
employees covered by their own service Rules/scheme and are not treated at par with the
finances advanced to the general customers on commercial basis. The said finances are not
covered by any of the schemes/package of remission brought to the notice of this Court.
Moreover, the petitioners have failed to bring on record any document regarding detail of
loan/advance/finance or any document for the convenience or assistance of the Court to justify or
to support their claim as to the relief packages sanctioned/launched by the Government and the
State Bank of Pakistan. All the cases petitions do not merit acceptance, which are accordingly
dismissed.

HBT/539/P Petition dismissed.