Regional Development Finance Corporation Ordinance, 1985(Repeal by ord.LVi of 2001,s.14(w.e.f 01-01-2002))

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THE REGIONAL DEVELOPMENT FINANCE CORPORATION ORDINANCE, 1985 
 
ORDINANCE No. XXXII OF 1985 
 [5th May, 1985] 
 
An Ordinance to provide for the establishment of the Regional Development Finance 
Corporation 
  
WHEREAS it is expedient to provide for the establishment of the Regional 
Development Finance Corporation, and for matters connected therewith or ancillary thereto; 
 
AND WHEREAS the President is satisfied that circumstances exist which render it 
necessary to take immediate action; 
 
NOW, THEREFORE, in pursuan ce of the Proclamation of the fifth day of July, 1977, 
and in exercise of all powers enabling him in that behalf, the President is pleased to make and 
promulgate the following Ordinance: - 
 
1. Short title, extent and commencement. -(1) This Ordinance may be  called the 
Regional Development Finance Corporation Ordinance, 1985. 
 
(2) It extends to the whole of Pakistan, and also applies to the business of the 
Corporation transacted outside Pakistan and the persons conducting such business. 
 
(3) It shall come into force at once. 
  2. Definitions. In this Ordinance, unless there is anything repugnant in the subject or 
context,- 
 
(a) "Board" means the Board of Directors instituted ; 
 
(b) "Borrower" means an enterprise to which a loan is given by or on the guarantee 
of, the Corporation; 
 
(c) "Chairman" means the Chairman of the Corporation ; 
 
(d) "Corporation" means the Regional Development Finance Corporation 
established under section 3 ; 
 
(e) "Director" means a Director of the Corporation ; 
 
(f) "District Judge" sha ll include an Additional District Judge and, in respect of 
areas there a District Judge does not have unlimited pecuniary jurisdiction in 
original civil suits, a High Court or a bench of a High Court exercising original 
civil jurisdiction; 
 
(g) "Industrial Development Bank of Pakistan" means the Industrial Development 
Bank of Pakistan established under section 3 of the Industrial Development 
Bank of Pakistan Ordinance, 1961 (XXXI of 1961) ; 
 
(h) "less-developed areas" means the North -West Frontier Province,  the Northern 
Areas, Baluchistan, Azad Jammu and Kashmir, the Federally Administered 
Tribal Areas, and such other areas as may be declared by the Federal 
Government, by notification in the official Gazette, to he less developed areas ; 
  
(i) "Managing Director" means the Managing Director of the Corporation ; 
 
(j) "National Development Finance Corporation" means the National Development 
Finance Corporation established under section 3 of the National Development 
Finance Corporation Act, 1973 (XIII of 1973) ; 
 
(k) "Nationalized bank" means a bank as defined in the Banks (Nationalization) 
Act, 1974 (XIX of 1974) ; 
  
(1) "prescribed" means prescribed by rules ; 
 
(m) "regulation" means regulation made under this Ordinance ; 
  
(n) "rule" means rule made under this Ordinance ; 
 
(o) "short-term", "medium -term" and "long -term" used in relation to an advance, 
loan or credit made or granted by the Corporation, means an advance, loan or 
credit for such term as may, in each case, be prescribed by regulations ; and 
  
(p) "under-writing" means contracting with or without conditions to subscrible for 
stocks, shares, bonds, debentures or participation term certificates of an 
enterprise with a view to re -selling all or any of such stocks, shares, bonds, 
debentures or participation term certificates. 
  
3. Establishment of the Corporation. -(1) On the coming into force of this Ordinance, 
there shall be established, in accordance with the provisions of this Ordinance, a Corporation to 
be called the Regional Development Finance Corporation. 
 
(2) The Corporation shall be a body corporate having perpetual succession and a 
common seal, with powers, subject to the provisions of this Ordinance, to acquire, own and 
dispose of property and shall by the said name sue and be sued. 
 
4. Share c apital of the Corporation. -(1) The authorized share capital of the 
Corporation shall, in the first instance, be one hundred million rupees divided into one million 
ordinary shares of rupees one hundred each, of which not less than fifty per cent shall be 
contributed by the National Development Finance Corporation and the balance shall be open 
for subscription by the nationalized banks, the Industrial Development Bank of Pakistan and 
other financial institutions. 
 
(2) The paid up capital of Corporation shall, in the first instance, be fifty million rupees, 
of which not less than fifty per  cent shall be contributed by the National Development Finance 
Corporation and the balance shall be contributed by the nationalized banks and the Industrial 
Development Bank of Pakistan, as mutually agreed to. 
 
(3) The Federal Government may, by notification in the official Gazette, increase the 
authorized share capital and paid up capital of the Corporation to such extent and in such 
manner as may be specified in the Notification. 
 
5. Offices and Branches. -(1) Unless the Federal Government, by notification in the 
official Gazette, otherwise directs, the head office of the Corporation shall be at Islamabad. 
 
(2) The Corporation may establish regional and other offices at such places as the Board 
may think fit. 
 
6. Direction and superintendence.  (1) The overall direction and super intendence of 
the affairs of the Corporation shall vest in the Board, which may exercise all such powers and 
do all such acts and things as may be exercised and done by the Corporation. 
 
(2) In the performance of its functions, the Board shall act on business considerations 
and shall be guided on questions of policy by such directions as may from time to time be given 
to it by the Federal Government, whi ch shall be the sole judge, as to whether a question is a 
question of policy. 
 (3) If the Board fails to carry out the instructions given to it under sub -section (2), the Federal 
Government may supersede the Board and appoint any person or body to function  in place of 
the Board until a new Board is constituted in accordance with the provisions of this Ordinance 
and no such super session or appointment shall be questioned in any Court. 
 
7. Board.-(1) The Board shall consist of the following Directors, namely:- 
   
(a) the Chairman; 
(b) six persons to be appointed by the Federal Government as follows:- 
(i) one person serving under the Federal Government in the Finance 
Division ; 
   (ii) one person serving under each of Provincial Governments ; 
   (iii) one person from the other less-developed areas ; 
 
(c) a representative of the nationalized banks ; 
(d) a representative of the Industrial Development Bank of Pakistan; and 
(e) the Managing Director. 
 
(2) No act or proceeding of the Board shall be invalid by reason  only of the existence of 
any vacancy in, or defect in the constitution of, the Board. 
 
8. Chairman. -(1) The Chairman of the National Development Finance Corporation 
shall be the Chairman of the Corporation, ex-officio. 
 
(2) A casual vacancy in the office of the Chairman shall be filled in by the Federal 
Government by the appointment of such person as it may deem fit ; and the person so 
appointed shall hold office until the Chairman enters upon his office. 
 
9. Managing Director. -(1) The Managing Director sh all be appointed by the Federal 
Government on such salary and terms and conditions as the Federal Government may 
determine. 
 
(2) The Managing Director shall unless the Federal Government otherwise directs, hold 
office for a term of three years which the Federal Government may, from time to time, extend. 
 
(3) The Managing Director shall be the chief executive of the Corpora tion and shall 
perform such functions as are required by this Ordinance and the rules and regulations made 
thereunder to be performed by  him or as may, from time to time, be assigned to him by the 
Board. 
  10. Qualifications and disqualifications of Directors. No person shall be, or shall 
continue to be a Director who- 
 
(a) is or at any time has been adjudicated an insolvent 
  (b) is found to be a lunatic or becomes of unsound mind ; 
(c) is or has at any time been convicted for any offence which, in the opinion of the 
   Federal Government, is an offence involving moral turpitude; 
 
(d) without leave of absence from the Board, absents himsel f from all the meetings 
of the Board for a continuous period of six months or, if less than three meetings 
are held within such period, from three consecutive meetings of the Board ; 
  
(e) is a salaried official of the Corporation, other than the Managing Director ; or 
 
(f) has any financial or other interest in any business to be financed by the 
Corporation. 
 
11. Executive Committee. -(1) The Board may constitute an Executive Committee 
consisting of the Managing Director and two other Directors to assist it  in the performance of 
its functions under this Ordinance. 
 
(2) The members of the Executive Committee other than the Managing Director shall 
hold office for such period as may be determined by the Board. 
 
(3) Decisions of the Executive Committee, other th an those which relate to matters 
specified by the Board in this behalf, shall be laid before the Board for approval. 
 
(4) Subject to the general or special directions of the Board, the Executive Committee 
may deal with any matter within the competence of the Board. 
 
12. Meetings of the Board and Committee. -(1) Four directors shall form the quorum 
for a meeting of the Board. 
 
(2) Subject to sub -section (1), the meetings of the Board and the Executive Committee 
shall be held in such manner as may be prescribed; 
 
Provided that, until rules are made in this behalf, such meetings shall be called by the 
Chairman or, in the absence of the Chairman by the Managing Director, and shall be presided 
at by the Chairman or, as the case may, the Managing Director. 
 
(3) The minutes of every meeting of the Board and the Executive Committee shall be 
maintained in such manner as the Board may determine. 
  13. Annual General Meetings of the Shareholders.-(1) The annual general meeting of 
the shareholders shall be held within a p eriod of three months of the closing of annual accounts 
every year, at such time and place as may be fixed by the Board; 
 
Provided that the first annual general meeting of the shareholders shall be held at 
Islamabad. 
 
(2) The Board shall submit at the annu al general meeting for  considera tion of 
shareholders a balance -sheet and a profit and loss account of the Corporation for the financial 
year. 
 
14. Fee for attending meetings. The Directors shall be paid such fees for attending the 
meetings of the Board and the Executive Committee as may be prescribed. 
 
15. Secrecy and fidelity.  No Director shall assume his office until he has made such 
declaration of secrecy and fidelity as may be prescribed. 
 
16. Indemnity of Directors.  A Director shall not be personally  responsible for the acts 
of any other Director or of any officer or servant of the Corporation or for any loss or 
expenditure resulting to the Corporation by reason of the insufficiency or deficiency in value of 
or title to any property or security acqui red or taken on behalf of the Corporation, or for 
anything done by him in good faith in the discharge of his duties. 
 
17. Business which the Corporation can transact. -Subject to the rules and 
regulations, if any, the Corporation may carry on, transact or d o the several kinds of business 
and acts hereinafter specified, namely:-  
 
(a) promotional work in less -developed areas such as identification and preparation 
of projects for investment ; 
 
(b) to finance commercially viable projects in less -developed areas paying special 
attention to Mining sector or to such other sector as may be directed by the 
Federal Government, through purchase of shares, medium and long -term loans, 
bridge, finance and short -term loans such as working capital as well as 
providing guara ntee for loans and advances, underwriting of stocks bonds 
debentures and participation term certificates and other such instruments as may 
be decided by the Board; 
 
Explanation.- In this clause, "commercially viable projects" does not include hydel 
generation projects and plantation style agricultural activities, such as, vegetable farming, fruit 
orchards and dairy farms, but includes production of handicrafts through sub -contracting, 
workshops in rural areas to meet local engineering needs and the agro-based industries. 
 
(c) financing the construction of internal roads in mineral bearing areas (only if 
these are a part of the project) ; 
 
(d) financing the establishment of machinery pool for mine owners, to be set up 
independently or in association with banks and other organizations ; 
 
(e) to formulate and implement schemes to channelize home remittances towards 
commercially viable projects in less -developed areas on behalf of Pakistanis 
abroad ; 
 
(f) to accept and furnish any lien, charge, hypothecation, or  mortgage on any 
tangible or intangible movable or immovable property or assets in transacting its 
business ; 
  
(g) to purchase or otherwise acquire, own, sell, transfer and exchange any tangible 
and intangible, movable or immovable property or assets in t ransacting its 
business ; 
 
(h) to acquire, retain, or dispose of assets of any type which may in any way come 
into the possession of the Corporation in satisfaction or part satisfaction of its 
claims ; 
  
(i) to acquire ; maintain and transfer its residential and business premises ; 
 
(j) to borrow money for the purpose of its business and to give security for money 
so borrowed by pledging assets or otherwise. 
  
(k) to enter into agreements and contracts and execute such documents as may be 
considered necessary for transacting its functions ; 
  
(l) to accept deposits of fixed maturities ; 
 
(m) to deposit its funds with a banking company in current and short  term or any 
other type of deposit ; 
  
(n) to invest its surplus funds in securities in the manner prescribed ; 
 
(o) to open letters of credit and establish correspondent relationships abroad for 
import of machinery or equipment against foreign currency credits or loans and 
cash foreign exchange allocation which may be made available by the Federal 
Government ; 
  
(p) to receive and pay commission, fees and brokerage in connection with its 
business ; and 
  
(q) generally to do all such matters and things as may be incidental or subsidiary to 
the undertaking of any of the aforesaid business and any other functio ns, not 
inconsistent with the purposes of this Ordinance determined by the Board. 
 
18. Power to impose conditions. -(1) For the purpose of transacting any business under 
this Ordinance with any borrower, the Corpora tion may impose such conditions as it ma y 
consider necessary or expedient for protecting its interest and securing that its guarantee, 
underwriting, loan, subscription or other aid is put to such use by the borrower as the 
Corporation has agreed to. 
 
(2) Any condition imposed on the borrower und er sub-section (1) shall valid and shall, 
notwithstanding anything contained in any other law for the time being in force, be enforceable 
against such borrower. 
 
19. Borrowing power.-(1) The Corporation may borrow from the Federal Government, 
and with the prior approval of the Federal Government, also from the State Bank of Pakistan or 
any other lending agency or institution. 
 
(2) The Corporation may issue and sell bonds, debentures and prescrib ed instruments, 
both in rupees and foreign currencies. 
 
(3) The Federal Government may, at the request of the Corporation, guarantee as to the 
repayment of principal and payment of interest or return any sums borrowed by the Corporation 
under sub-section (1) or any bonds, debentures or other instruments issued by th e Corporation 
with the prior approval of the Federal Government. 
 
(4) Notwithstanding anything contained in the Trust Act, 1882 (II of 1882), the 
Insurance Act, 1938 (IV of 1938) or the Banking Companies, Ordi nance, 1962 (LVII of 1962), 
the shares and suc h of the bonds, debentures and any other instruments of the Corporation as 
have been guaranteed by the Federal Government under sub -section (3) shall be deemed to 
included among the securities enumerated in section 20 of the Trust Act, 1882 (I I of 1882), and 
to be approved securities for the purpose of the Insurance Act, 1938 (IV of 1938), and the 
Banking Companies Ordinance, 1962 (LVII of 1962). 
  
(5) The aggregate of the sums borrowed under sub -section (1) and the sums due on the 
bonds, debentures and ot her instruments issued under sub -section (2) and the contingent 
liabilities of the Corporation in respect of guarantee or underwriting agreements shall not at any 
time exceed twenty times the aggregate of the amount of the paid, up share capital and reserv es 
of the Corporation. 
 
20. Powers to call for payment before agreed period. Notwithstanding any agreement 
to the contrary, the Corporation may, by notice, require any borrower to which it has granted 
any loan, or any other person liable for payment of such loan, forthwith to repay the loan in full 
if :- 
 
(a) it appears to the Board that information false or misleading in any material 
particular has been given in the application for the loan ; or 
 
(b) there is a reasonable apprehension to the opinion of the  Board that the borrower 
is unable to pay or discharge. its debts or liabilities or may go into liquidation ; 
or 
 
 
 
(c) the property pledged, mortgaged, hypothecated or assigned to the Corporation as 
security for the loan is not insured or kept insured by the borrower to the 
satisfaction of the Corporation or has, in the opinion of the Board, depreciated in 
value and further security to the satisfaction of the Board is not given ; or 
 (d) without the permission of the Board, machinery or other equip ment is removed 
from the premises of the borrower without being replaced; or 
  
(e) the loan or any part thereof is not being utilized for the pur poses for which it 
was made or is found to have been utilized for other purposes; or 
 
(f) the property pledged, mortgaged, hypothecated or assigned to the Corporation as 
security for the loan, or any other security for the loan has, without the 
permission of the Corporation, been disposed of or charged, or otherwise 
alienated in any manner, by the borrower; or 
  
(g) in the opinion of the Board, the management or business of the borrower is not 
being conducted in a satisfactory manner or its share capital is being impaired; 
or. 
 
(h) for any other reason, it is necessary, in the opinion of the Board, to protect the 
interests of the Corporation. 
  
21. Special provisions for enforcement of claims by the Corporation. -(1) Where the 
Corporation becomes entitled to require the immediate payment of any loan by reason of the 
breach of any condition of any agreement between the Corporation and a borrower to which the 
loan has been granted or any person liable for repayment of that loan, or where the borrower 
fails to repay the loan in terms thereof or in compliance with the notice under section 22, an 
officer of the Corporation genera lly or specially authorised by the Board in this behalf may 
apply to the District Judge within the local limits of whose jurisdiction the borrower carries on 
the whole or a part of his business, or the officer or branch of the Corporation from which the 
loan was disbursed is situated, for one or more of the following reliefs, namely:- 
 
(a) an order for the sale of the property pledged, mortgaged hypo thecated or 
assigned to the Corporation as security for the loan and any other properties, 
disclosed or undi sclosed, of the borrower or the properties, disclosed or 
undisclosed, of person liable for the repayment of the loan, including guarantors; 
 
(b) an order for the transfer of the management of the borrower to the Corporation 
or its nominee, provided that, w hen such management is so transferred to the 
Corporation, the Corporation shall be deemed to be the agent of the borrower on 
its behalf and all actions taken by the Corporation on such transfer shall be 
deemed to be those of the borrower; or 
 
(c) an injection ad interim where there is apprehension that machinery or equipment 
may be removed from the premises or the building or land may be sold or 
otherwise transferred by the borrower without the permission of the 
Corporation. 
(2) An application under sub -section (1) shall state particulars of the loan and the same 
claimed in respect of the same, particulars of the borrower and any other person or persons 
liable for the repayment of the loan and such other particulars as may be prescribed. 
 
(3) Where the application is for the relief mentioned in clause (a) of sub -section (1), the 
District Judge shall- 
 
(a) pass an order ad interim attaching such properties referred to in clause (a) 
aforesaid as are likely in the estimation of the Court to fetch, on being sold , an 
amount equivalent to the sums claimed by the Corpora tion together with the 
posts of the proceedings taken under this section; and 
 
(b) pass an order appointing one or more Receivers, approved by the Corporation, 
of the properties referred to in clau se (a) aforesaid wherein the application filled 
by the Corporation such remedy is specifically sought. 
  
(4) The Corporation shall have the option to seek an order under clause (b) of 
subsection (3) in the first instance or at any subsequent time prior to  grant of the relief 
mentioned in clause (a) of sub-section (1). 
 
(5) Where the application is for the relief mentioned in clause (b) or clause (c) of sub -
section (1), the District Judge shall grant an injunction ad interim restraining the borrower or 
the person liable for repayment of the loan from transferring any of the properties, including 
machinery, equipment and stocks, building and lands without the permission of the Corporation 
and shall issue a notice calling upon the borrower and the persons liab le for repayment of the 
loan to show cause on a date to be specified in the notice why the management of the borrower 
should not be transferred to the Corporation or the injunction be not confirmed. 
 
(6) Before passing any order under sub-section (3) or sub-section (5), the District Judge 
may, if he thinks fit, examine the person making the application. 
 
(7) At the time of passing an order sub -section (3), the District Judge shall issue to the 
borrower a notice accompanied by a copy of the order, the appli cation and evidence, if any, 
recorder by him and calling upon him to show cause on a date to be specified in the notice why 
order of attachment ad interim should not be made absolute or the injunction be not confirmed. 
  
(8) If no sufficient cause is show n on or before the date specified in the notice under 
sub-section (5) or sub -section (7), the District Judge shall forth with make the order ad interim 
absolute and direct the sale of the attached property or transfer the management of the borrower 
to the Corporation or confirm the injunction. 
 
(9) If sufficient cause is shown the District Judge shall proceed to investigate, on an 
urgent basis, the claims of the Corporation and provisions of the Code of Civil Procedure, 1908 
(Act V of 1908), shall as far as practicable apply to such proceedings. 
 
(10) On completing an investigation under sub -section (9) the District Judge shall pass 
an order- 
(a) confirming the order of attachment or directing the sale of the attached property, 
or 
   
(b) varying the order o f attachment so as to release a portion of the property from 
attachment and directing the sale of the remainder of the attached property, or 
 
(c) releasing the property from attachment, if he is satisfied that it is not necessary 
in the interest of the Corporation to retain it under attachment, or 
  
(d) confirming or vacating the injunction, or 
 
(e) transferring or refusing to transfer the management of the borrower to the 
Corporation: 
  
Provided that, when making any order under clause (c), the District 
Judge may make such further order as he thinks necessary to protect the interests 
of the Corporation and may apportion the cost of the proceedings in such 
manner as he thinks fit: 
  
Provided further that, unless the Corporation intimates to the District 
Judge that it will not apply against any order releasing any property from 
attachment, such order shall not be executed until the expiry of the period 
mentioned in sub-section (12) or if an appeal is preferred, unless the High Court 
otherwise directs, until the appeal is disposed of. 
 
(11) An order under this section for the attachment or sale of property shall be carried 
into effect as far as may be in the manner provided in the Code of Civil Procedure, 1908 (Act V 
of 1908), for the attachment or sale of prop erty in execution of a decree as if the Corporation 
were the decree-holder. 
  
 
 
(12) Any party aggrieved by an order under subsection (8) or sub section (10) may, 
within thirty days from the date of the order, appeal to the High Court, or where the order is of 
a Judge of a High Court exercising original civil jurisdiction, to the Courts to which an appeal 
from a judgment of such Judge lies, and upon such appeal the appellate Court may, after 
hearing the parties, pass such orders as it thinks proper. 
(13) N othing in this section shall be construed, where proceedings for liquidation in 
respect of the industrial concern have commenced before an application is made under 
subsection (1), as giving the Corporation any preference over other creditors of the borrow er 
not conferred on it by any other law for the time being in force. 
22. Special provisions relating to limitation.__ (1) Notwithstanding anything contained 
in the Limitation Act, 1908, (IX of 1908), or any other law for the time being in force, for the 
purposes of computing the periods of limitation for the enforcement of any claims or for the 
recovery of any money due to the Corporation in pursuance of loans granted, whether by way 
of suits or applications for recovery of money or by way of mortgage suits  or by way of 
enforcement of any rights in pursuance of the provisions of this Ordinance by the Corporation 
against borrower or persons liable for repayment of the loans, the periods of limitation and 
methods of computation thereof prescribed in the Schedule shall apply.  
(2) Section 5 of the Limitation Act, 1908 (IX of 1908), shall apply to an appeal or 
application under this Ordinance. 
23. Rights of Corporation in cases of default. __ (1) Where any borrower which is 
under a liability to the Corporation und er an agreement makes any default in payment of 
otherwise fails to comply with the terms of its agreement with the Corporation, the Corporation 
may, notwithstanding anything contained in section 21 take over the management of the 
borrower, and may sell or realize any property pledged, mortgaged hypothecated or assigned by 
the borrower to secure its liability to the Corporation. 
(2) Any transfer of property made by the Corporation in exercise of its powers of sale or 
realization under subsection (1) shall v est in the transferee all rights in or to the property 
transferred as if the sale had been made by the owner of the property. 
(3) The Corporation shall have the same rights and powers with respect to goods 
manufactured or produced wholly, or partly from go ods forming part of any security held by it 
as it has with respect to the original goods. 
(4) Where the Corporation takes over the management of the borrower under subsection 
(1), it shall be deemed to be the agent of such borrower for the purposes of suit s by or against 
the borrower. 
24. Recovery of Corporation's dues .__ Without prejudice to the provi sions of sections 
21 rind 23, all sums due to the Corporation shall be recoverable as arrears of land revenue: 
Provided that no sum shall be so recovered un less fifteen days' notice has first been 
given by the Corporation to the debtor that the sum will be so recovered. 
Explanation 1.__ In this section, "debtor" includes the borrower and any other person 
liable for the repayment of any loan or other sum due to the Corporation. 
Explanation 2.__ For the purposes of this section, the Corporation shall issue a 
certificate stating the sum due to the Corporation from the debtor, whether under any 
agreement or other document or otherwise howsoever, as at any given da te and such certificate 
shall be conclusive evidence of the sum due to the Corporation and be treated as final and 
binding accordingly. 
25. Delegation of powers . The Board may for the purpose of ensuring efficient 
functioning of the Corporation and facilit ating transaction of its daily business, by a resolution, 
delegate to the Chairman or the Managing Director or any other officer of the Corporation, 
subject to such conditions and limitations, if any, as may be specified therein, such of its 
powers and duties under this Ordinance as it may deem necessary. 
26. Officers and servants . The Corporation may appoint or employ such officers and 
servants as it considers necessary for the efficient perform ance of its functions, on such terms 
and conditions as may be laid down by regulations. 
27. Offences. Any person who__  
(a)  in an application for the grant of a loan gives false or misleading information 
relating to a matter which is material for the purpose of deciding the application 
or wilfully makes a false sta tement or knowingly permits any false statement to 
be made, or to remain, in any bill of lading, warehouse receipt or other 
document of title or any other document given to the Corporation by way of 
security in respect of any financial and sought or grante d under this Ordinance; 
or 
(b)  diverts or applied the amount of the - loan granted to him to a purpose other than 
the purpose for which it was granted; or 
(c)  intentionally destroys, or reduce, the value of the property on the security of 
which a loan was  granted to him or, without the prior approval of the 
Corporation in writing or otherwise than in accordance with the terms of such 
approval; transfer such property or any part thereof shall, without prejudice to 
any other action which may be taken against  him under this Ordinance, be 
punishable with imprisonment for a term which may extend to three years. 
  
 
(2) No Court shall take cognizance of an offence punishable under subsection (1) except 
upon a complaint in writing made by the Cor poration or an of ficer of the Corporation 
authorized by it in this behalf. 
28. The Corporation and its officers to be public officers .__ (1) For the purposes of 
Article 7 of the Qanun -e-Shahadat, 1984, and the provisions of Part IV of the Code of Civil 
Procedure, 1908 (Act  V of 1908), the provi sions of rule 27 of Order V and rule 52 of Order 
XXI of the said Code, the Corporation and any officer of the Corporation in his capacity as 
such shall be deemed to be a public officer. 
(2) The provisions of Article 6 of the Qanun -e-Shahadat, 1984, shall apply to the 
unpublished record of the Corporation and the Managing Director shall be deemed to be the 
officer or head of the Department concerned. 
(3) Every person in the service of the Corporation shall be deemed to be a public 
servant within the meaning of section 21 of the Pakistan Penal Code (Act (XIV of 1960). 
29. Disposal of profits .__ (1) The Corporation shall establish a Reserve Fund to which 
shall be credited such amount out of its annual net profit, not being less than fifty  per cent of its 
annual net profit, as may be determined by the Board. 
(2) The minimum appropriation of profits to the Reserve Fund fixed under subsection 
(1) shall apply till such time as the amount in the Reserve Fund equals the paid-up capital of the 
Corporation. 
30. Accounts and audit.__ (1) The financial year of the Corporation shall be determined 
by the Board. 
(2) Subject to subsection (1), the Corporation shall maintain its accounts in such manner 
as may be prescribed. 
(3) The Corporation shall subm it to the Federal Government a copy of its audited 
annual accounts and the report to the Board on the operations of the Corporation for the 
preceding financial year, includ ing the report on the performance of the borrowers to whom it 
has subscribed capital or advanced loans or on whose behalf it has undertaken any guarantee. 
(4) The accounts of the Corporation shall be audited by two auditors who are chartered 
accountants within the meaning of the Chartered Accoun tant Ordinance, 1961 (X of 1961), 
appointed by the Corporation with the prior approval of the Federal Government. 
 
1* *  *  *  *  *  * 
32. Corporation not to be a Banking Company. The Corporation shall not be deemed 
to be a banking company for the purposes of the Banking Companies Ordinance, 1962 (LVII of 
1962), or any other law for the time being in force relating to banking companies. 
33. Returns.__ (1) The Corporation shall furnish in the prescribed form to the Federal 
Government at least once a year, or as frequently as the Federal Government  may require, a 
classification of its loans and invest ments, and all loans guaranteed by it and underwriting 
agreements entered into by it. 
(2) The Corporation shall furnish to the Federal Government within three months of the 
close of the financial year an audited statement in the prescribed form of its assets and 
liabilities as they stand at the close of that year together with a profit and loss account for the 
year and a report on the working of the Corporation during the year, and shall also cause the 
said statement, account and report to be published in the official Gazette. 
34. Liquidation of the Corporation . The Corporation shall not be wound up save by 
order of the Federal Government, in such manner as it may direct.  
35. Power to make rules . The Federal Government may, by notifica tion in the official 
Gazette, make rules for carrying out the purposes of this Ordinance. 
36. Power to make regulations .__ (1) The Board may make regulations to provide for 
all matters not required to be provided for by ru les and provision for which is necessary or 
expedient for carrying out the purposes of this Ordinance. 
(2) Where any provision of the regulations is inconsistent with any provision of the 
rules, the provision of the rules shall prevail. 
37. Removal of diff iculties. If any difficulty arises in giving effect to any of the 
provisions of this Ordinance, the Federal Government may make such order, not inconsistent 
with the provisions of this Ordinance, as may appear to it to be necessary for the purpose of 
removing the difficulty. 
Omitted by Act 4 of 1999, s. 25. 
  
      SCHEDULE 
[See SECTION 22 (1)] 
[Limitation periods and computation thereof as per section 22(1)] 
S.No. Description of action/cause Period of 
Limitation. 
Time from which period 
being to run. 
1 2 3 4 
1. For money payable  for money lent. 6 years When the loan is made. 
2. Under Order XXXVII of the Code of Civil 
Procedure, 1908. 
6 years When the debt becomes 
payable. 
3. On. a promissory note or bond payable by 
instalments which provides that, if d efault 
be made in payment of or on more instal -
ments, the whole shall be due. 
6 years When the default is made 
unless where the payee or 
oblige waives the benefit 
of the provision, and 
thereafter when fresh 
default is made in respect 
of which there is no s uch 
waiver. 
4. On a bill of exchange payable at sight, or 
after sight, but not at a fixed time. 
6 years When the bill is 
presented. 
5. On a bill of exchange or pro missory note 
payable at a fixed time after sight or after 
demand. 
6 years When the fixed t ime 
expires. 
6. Suit on a bill of exchange, pro missory note 
or bond not herein expressly provided for. 
6 years When the bill, note or 
bond becomes payable. 
7. For compensation for breach of a promise 
to do anything at a specified time, or upon 
the happening of a specified contingency. 
6 years When the time specified 
arrives or the contingency 
happens. 
8. Upon any contract to indemnify. 6 years When the Corporation is 
actually to be indemnified 
9. For compensation for the breach of a 
contract in writing registered. 
9 years When the period of 
limitation for a suit 
brought on a similar 
contract not registered 
would 'begin to run. 
10. To enforce payment of money charged 
upon immovable property. 
15 years When the money becomes 
dues. 
Explanation.—For the purposes hereof advances secured by mortgage by deposit of title deeds 
shall be deemed to be money charged upon immovable property. 
11. Action of cause for which no period   of 
limitation is herein provided. 
9 years When the right to sue or 
of recovery accrues.