{
  "id": 18241422,
  "title": "FIA can probe ‘wilful default’ after court order",
  "url": "https://urgent.news/2026/11/05/fia-can-probe-wilful-default-after-court-order",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-11-05T02:01:16.000Z",
  "source": {
    "name": "Dawn Business",
    "slug": "dawn-business",
    "url": "https://www.dawn.com/news/2042200/fia-can-probe-wilful-default-after-court-order"
  },
  "original_language": "en",
  "account": "In a recent ruling, the Lahore High Court (LHC) has set a precedent that the Federal Investigation Agency (FIA) cannot initiate criminal proceedings against a bank customer for 'wilful default' until a separate banking court has first determined the allegations in civil proceedings. The court's decision was made after hearing petitions filed by Qaiser Shabbir and others who challenged notices issued by the FIA in response to complaints from financial institutions.\n\nThe financial institutions had already taken legal action against the petitioners for recovery, but the court ruled that the FIA must wait for the banking court to make a determination before proceeding. The petitioners' lawyers argued that the provisions of the Financial Institutions (Recovery of Finances) Ordinance 2001, which the FIA is acting under, require a civil determination of wilful default before any criminal charges can be brought. They contended that a customer cannot be deemed a defaulter or a wilful defaulter under the ordinance unless the allegations of breach of obligations have been conclusively established by the banking court.\n\nOn the other hand, the FIA's lawyers argued that each part of the offence is independent and that the agency has exclusive jurisdiction under Rule 5 of the Rules 2018. They maintained that the notices were merely meant to gather information and that the criminal complaints were filed appropriately after the financial institutions had already issued notices for payment of defaulted amounts.\n\nThe court's judgement, written by Justice Chattha, first dismissed the objection to the maintainability of the petitions. It then examined the merits of the case and concluded that wilful default is a distinct category of default that carries both civil and criminal implications. The court emphasized that a recovery suit only determines the amount payable and does not establish wilful default. It also pointed out that the law mandates a 30-day payment demand before a complaint can be filed, and the punishment is contingent on the extent of the default.\n\nThe ruling directly contradicts a 2019 LHC decision that had allowed the FIA to commence criminal proceedings before a civil determination of wilful default was made. This earlier judgement was criticized for giving financial institutions an unchecked, unilateral tool to recover undetermined sums through arrests and FIRs. The LHC's latest decision maintains that the FIA's powers are derived from the ordinance and the 2018 Rules, not from the FIA Act itself, and it rejects the notion that criminal proceedings can be initiated before the civil determination of wilful default.",
  "summary": "LAHORE: The Lahore High Court (LHC) has ruled that the Federal Investigation Agency (FIA) cannot prosecute a bank customer for ‘wilful default’ until a banking court first determines the allegation in civil proceedings. A division bench comprising Justice Jawad Hassan and Justice Abid Hussain Chattha issued the ruling allowing petitions filed by Qaiser Shabbir and others. The petitioners…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}