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Petitioner: PRESIDENT OF THE ISLAMIC REPUBLIC OF PAKISTANReferring Authority VS Respondent: Sardar MUQEEM KHAN KHOSA
Court Name: Sindh High Court Judge(s): Mukhtar Ahmed Junejo Title:PRESIDENT OF THE ISLAMIC REPUBLIC OF PAKISTANReferring Authority vs
Sardar MUQEEM KHAN KHOSA Case No.: Reference No,3 of 1990 Date of Judgment:1991-10-13 Reported As: 1993 CLC 833 Result: Order accordingly Judgment ORDER ' This is a reference by the President of Islamic Republic of Pakistan under clause (2) of Article 4 of the Parliament and Provincial Assemblies (Disqualification for Membership) Order, 1977 (hereafter to be mentioned as the Order) for inquiring into and deciding the case relating to the misconduct of respondent Sardar Muqeem Khan Khoso and for passing appropriate orders in accordance with law. 2. According to the reference, the respondent being M.NA. From the Constituency No, NA-156 Jacobabad moved the Agricultural Development Bank of Pakistan (ADBP) for a loan of Rs, 19.54 million to Al-Rahim Fisheries Limited (a private limited company) of which the respondent was Managing Director, for setting up a Fish Farm over an area of 350 acres of land. Respondent submitted a feasibility report to the ADBP, which evaluated the project for setting up a Fish Farm by Al-Rahim Fisheries Limited at Rs,14.793 million and sanctioned a loan of Rs,10.350 million on 10- 124989. Out of said amount, Rupees 6 million were earmarked for excavation of the land where the Fish Farm was to be set up. Said amount of Rs,6 million was to be disbursed in 12 equal instalments, after satisfaction of certain conditions, one of which was that the respondent would build flood protection bund all along the western side. The disbursement of each instalment was to take place after ensuring that the amount of earlier disbursed instalments was properly utilised. It was alleged that the respondent in abuse of his position as M.NA. Prevailed upon the bank authorities and secured the release of rupees 6 million in two equal instalments instead of twelve instalments without satisfying any pre condition and without raising the flood protection bund all along the western side of the proposed site. It was further alleged that as per the site inspection carried out
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by Ghulam Farooq Wakhro, Regional Manager of ADBP, Shikarpur on 23-8-1990, the respondent had not utilised any amount out of the two instalments of Rs,30,00,000 each, disbursed to him on 12-2- 1990 and on 25-7-1990. In this way the respondent was alleged to have misutilised the entire loan amount and to have committed 'misconduct' by misapplication of Bank loan and by wilful diversion of public money. 3. On receiving the reference, this Court scrutinized the necessary records relating to the charge mentioned in the reference, in pursuance of the provisions contained by clause (3) of Article 4 of the Order. For said purpose some oral as well as documentary evidence was received. 4. As a result of the scrutiny, this Court issued notice Exh.3 to the respondent under sub-clause (b) of clause (3) of Article 4 of the Order, requiring him to show cause as to why he should not be proceeded against under the Order. 5. In response the respondent appeared and filed reply Exh.4 to the show-cause notice Exh. 3. 6. During the enquiry conducted by this Court under Article 5 of the Order, learned counsel for the Referring Authority examined witnesses Muhammad Tasneem Exh.4A, Lal Khan Almas Exh. 5, Muhammad Ishaque Exh.10, Lal Dino Exh.14, Ghulam Farooq Exh. 16, Qamar Amir Khan Exh. 21, and Syed Fahim Ahmed Gardezi Exh. 23. Counsel for Referring Authority closed his side under his statement Exh. 31. 7. Statement of the respondent Exh.32 was recorded in pursuance of sub-rule (2) of Rule 9 of Parliament and Provincial Assemblies (Disqualification for Membership) Rules, 1990 (hereafter to be mentioned as Rules). The respondent chose to give his statement on oath Exh. 33. Respondent did not wish to examine any witness in defence as per his statement Exh. 34. 8. After conclusion of evidence, I have heard Mr. Kamal Mustafa Bukhari, learned counsel for the Referring Authority who was assisted by M/s. Naimur Rehman, Standing Counsel and Qurban Ali Jillani, Advocate. I have also heard Mr. Abdul Hafeez Lakho, learned counsel for the respondent. 9. Mr. Kamal Mustafa Bukhari, learned counsel for Referring Authority referred to the definition of "misconduct" as given under clause (a) of Article 2 of the Order and argued that wilful misapplication or diversion of public moneys or any other abuse of power or position by a M.NA. Amounted to "misconduct" for which the penalty was provided under Article 5 of the Order. Learned counsel referred to Rule 9 of the Rules which gives procedure to be followed by the Special Court, constituted under Article 3 of the Order. 10. Learned counsel next referred to sections 19(1), 22(1) and 23 of the Agricultural Development Bank Ordinance, 1961 (hereafter to be mentioned as ADBP Ordinance) and to Rule 11 of Agricultural Development Bank Rules, 1961 (hereafter to be mentioned as ADBP Rules). Learned counsel for Referring Authority also referred to the Credit Manual and its paras. 15.12, 15.13, 15.46, 15.17, and 15.18 and argued that necessary formalities in respondent's loan case were not fulfilled. It was added that the loan was sanctioned without moving of proper application for loan. 11. Learned counsel for Referring Authority took the Court through the evidence and pointed out that the respondent in his feasibility report and in his letter copy Exh.11 to the Chairman, ADBP introduced himself as M.NA. That he exerted his influence and got his loan case included in the agenda of Project Loans Committee meeting scheduled for 25-6-1989 without completion of formalities and also got his loan approved by the Project Loans Committee, which in the meeting dated 25-6-1989 vide minutes copy Exh.12 authorized the Chairman, ADBP to sanction the loan to the respondent of M/s. Al-Rahim Fisheries Limited within Rs, 11.724 million. It was also argued that before sanction of loan to the respondent in name of Al Rahim Fisheries Ltd. An investigation was necessary to see if
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the loanee can complete and run the project and can pay back the loan and that the case should have gone to the Project Loan Committee of the Board of Directors before the loan being sanctioned. It was next argued that the respondent got reduced number of instalments from twelve to two for the purpose of disbursement to him a sum of Rs,6 million, out of the loan amount meant for excavation work. In this respect reference was made to the letter copy Exh.17, which was issued in response to the letter/application copy Exh.9 sent by the respondent to the Chairman, ADBP. It was further argued that amount of the first instalment from Rs,six million meant for excavation work disbursed to the respondent on 12-2-1990, could not have been disbursed without receipt of verification report from the Project Credit Officer of ADBP and without verification of the fact that the respondent had constructed the western protective bund, as such conditions were incorporated in the Sanction Letter copy Exh.13. It was also argued that amount of the second instalment from Rs, six million meant for excavation work transferred to the credit of the respondent on 25-7-1990, could not have been so transferred to his account without fulfilment of the conditions mentioned above and without fulfilment of an additional condition given in the sanction letter copy Exh.13 about ensuring proper utilization of earlier disbursed instalment. Learned counsel for the referring authority was of the view that the respondent was guilty of misapplication of public money, by getting the schedule of disbursement of excavation money of Rs,six million changed from twelve instalments to two instalments, by obtaining disbursement of amount of the first instalment without building flood protection bund all along the western side (viz. Condition at clause (iii) of para. 2 of the sanction letter copy Exh. 13), and by obtaining amount of the second instalment without satisfying the bank authorities about proper utilization of the amount of the earlier disbursed instalment. Referring to the evidence of Muhammad Ishaq Exh.10 and to the minutes copy Exh.12 of the meeting of Project Loans Committee dated 25-6-1989 learned counsel for the referring authority argued that said evidence showed that influence was exerted and pressure was applied, otherwise the loan would not have been approved in principle only, without being sanctioned or rejected. That out of 21 cases considered in the meeting dated 25-6-1989, respondent's case was the solitary one in which the loan was neither sanctioned nor refused but the Chairman, ADBP was authorised to sanction the loan subject to the completion of all required formalities and in this way respondent's case was treated extraordinarily. Learned counsel for the referring authority also referred to meeting of the respondent with the Chairman, ADBP on 16-12- 1989 when the former moved his application copy Exh.9 as M.NA. Jacobabad for disbursement of Rs,55 lacs under first instalment. Reference was also made to the chit copy Exh.8 written by Qamar Amir Khan Exh.21 Secretary ADBP, to Shaikh Muhammad Ishaq, Director Project Loan Department informing the latter that the Chairman wanted to talk to him about the case of the respondent. Reference was also made to the office note copy Exh.7 put up by the Deputy Director Project Finance Department proposing disbursement of Rs,6.000 million to the respondent in two equal instalments and order of the Chairman on it, followed by the letter copy Exh.17 dated 19-12-1989 issued by the Deputy Director, Project Finance Department informing the Regional Manager, ADBP Shikarpur that the Chairman, ADBP had allowed disbursement of loan of Rupees six million to the respondent in two instalments. Learned counsel wanted the urgency shown in case of the respondent by the ADBP to be noted. He was of the view that P.W. Lal Dino could not have disbursed amount of the first instalment without being satisfied about costruction of Western Protective Bund by the respondent and without receiving verification report from the Project Credit Officer. Similarly the amount of second instalment could not have been placed at disposal of the respondent on 25- 7-1990 by Ghulam Farooq Exh.16 Regional Manager ADBP, Shikarpur without fulfilment of aforesaid conditions and without ensuring proper utilization of earlier disbursed instalment, as further argued.
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12. Mr. Abdul Hafeez Lakho learned counsel for the respondent took legal objection that the Reference was not filed properly because it was not signed by the President, who alone was competent to make the reference as provided by clause (a) of sub-Article (2) of Article 4 of the Order. Referring to the words "The Special Court shall not proceed to enquire into any charge of misconduct except on a reference in writing made to it", appearing in sub-Article (2) of Article 4 of the Order, learned counsel for the respondent argued that the Special Court established under Article 3 of the Order was a Court of limited jurisdiction with no power to enquire into any charge other than the one referred to it by the competent authority (which in case of a M.NA. Is the President of Pakistan) and hence this Court has to confine its enquiry to the specific charge of misconduct mentioned in the Reference. Learned counsel for the respondent referred to the definition of "misconduct" given in clause (a) of Article 2 of the Order and argued that wilful misapplication or diversion of public money by themselves would not constitute misconduct unless they are coupled with "abuse of whatsoever kind of power or position". It was next argued that the Reference Exh.1 contained specific charge against the respondent about his having prevailed upon the bank authorities in obtaining disbursement of Rupees 6 million in two equal instalments instead of twelve instalments without satisfaction of any precondition, but scope of such charge was widened during the proceedings and that this Court being Court of limited jurisdiction was not competent to take cognizance of the facts beyond the charge given in the Reference. Learned counsel for the respondent referred to Article 4(3) of the Order and argued that the Special Court on receiving a reference has to scrutinize the necessary records mentioned in the reference, which according to him, should accompany the reference. He also referred to the words "on perusal of the documents placed on record herewith", appearing in para. 2 of the reference Exh.1 and contended that scrutiny could be only of the documents accompanying the reference or of the documents referred in the reference as "the documents placed on record herewith", on the basis of which the President is satisfied that there are reasonable grounds for believing that an act of "misconduct" has been committed by the respondent in abuse of his position as M.NA. It was also argued that the scrutiny under Article 4(3) of the Order was limited to the necessary records relating to the charge mentioned in para. 6 of the Reference which were required to be read in support of the Reference. Learned counsel for the respondent attempted to make his point further clear by arguing that the Special Court was not empowered to record evidence other than that adduced on behalf of the Referring Authority. It was further argued on behalf of the respondent that in para. 3(a) of the Reference Exh.1 no exception was taken to sanction of the loan to the respondent. In respect of the allegation made under para. 3(c) of the reference, learned counsel for the respondent argued that report (Annexure D-1) of Mr. Muhammad Anwar Bajwa Director General Project Loan Department was not brought on record and he was not examined as a witness. Learned counsel referred to the notice Exh.3 issued to the respondent and argued that the bank authorities, over whom the respondent allegedly prevailed had not been specified. It was argued that even if the respondent did not spend amount of the loan correctly, he could be dealt with as an ordinary borrower of the bank and his case was not covered by Article 2(a) of the Order. It was also argued that there was no allegation in the reference that the respondent abused his position as M.NA. Or got sanctioned the loan by such abuse of position. It was next argued that agenda papers of the meeting of Project Loan Committee dated 25-6-1989, were not produced and so also the file containing the office notes before issue of the Sanction Letter copy Exh.17 and hence it could not be ascertained if case of the respondent was included in the meeting dated 25- 6-1989 at late stage. Referring to the evidence of Muhammad Ishaq Exh.10, learned counsel for the respondent argued that he had not disclosed author of the note written on application of the respondent which came to him from Project Development Department on 17-6-1989. Muhammad Ishaq was said to have admitted in cross-examination that it was his decision to put proposal in
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respect of the respondent in the meeting dated 25-6-1989 for sanction of the loan in principle. It was next argued that there was absolutely no evidence to show that pressure was exerted on Muhammad Ishaq and the Project Loan Committee before whom the proposal for loan to the respondent came on 25-6-1989 for sanction in principle. Referring to the evidence of Qamar Amir Khan Exh.21 learned counsel for the respondent submitted that the former did not state if the respondent exerted any pressure for sanction of the loan. It was argued that the meeting of Project Loan Committee dated 25-6-1989 was attended by Syed Munir Hussain as Chairman ADBP and not by Ch. Ahmed Saeed who was labelled to be a man of the respondent's political party. It was added that Project Loan Committee could refuse loan, as stated in the cross-examination of Muhammad Ishaq Exh.10, who added that the loan was sanctioned on 6-12-1989 after preparation of the appraisal report. Learned counsel for the respondent referred to the minutes copy Exh.12 of the meeting of Project Loan Committee dated 25-6-1989 and argued that there were many cases placed before the said Committee requiring fulfilment of certain conditions of loan. It was added that Muhammad Ishaq had admitted in cross-examination that there had been deviations from the Credit Manual with approval of the Chairman and hence case of the respondent was not an exceptional one. Learned counsel for the respondent argued with full force that there was no evidence if the respondent had pressurised anybody or that he had misused his position as M.NA. In respect of the allegation about reduction of the instalments from twelve to two, it was argued that such instalments were to be fixed by the loan-giving authority but there was no evidence if the respondent had pressurised anybody, or had misused his position as M.NA. In respect of the allegation about disbursement of instalments, it was argued that it was the duty of the Disbursing Officers to see that the conditions of loan were complied with before disbursement and that the reference was silent, as to, which of the conditions was not fulfilled. As regards non-receipt of Credit Verification Report, it was argued that such report was to be issued by an officer of the bank and the respondent was not liable for the same. It was further argued that all the remaining formalities were required to be complied with by the ADBP and nothing remained to be done by the respondent. That it was for the ADBP to see that all the formalities were over before release of the second instalment. That there was no evidence if the respondent had ever moved for release of either first instalment or the second instalment. As regards construction of Western Protective Bund, it was argued that such bund was to be constructed by the respondent from his own money and not from amount of the loan.- It was added that report of Abbas All Ghumro Exh.22 was not of any value as it was not proved through examination of its author as a witness and more-over it was not mentioned in the reference to be one of the documents to be used against the respondent. Copy Exh.20 of the telegram, about release of second instalment, was alleged to be a fabricated document, which was not mentioned in the reference and was not confirmed by the sender. Learned counsel for the respondent further argued that loan was given to Al-Rahim Fisheries Ltd. And not to the respondent, who was only Managing Director of the same. That relationship between the respondent and the ADBP was that of a debtor and a creditor. That amount of the loan was not entrusted to the respondent or given to him in trust and as such no case of misconduct was made out. It was further argued that amount of the first and the second instalment was given to the respondent for making advance payment for excavation work and even if it was misapplication of bank loan it was by a borrower and not by a M.NA. In support learned counsel for the respondent cited the cases of Haji Abdullah Khan and others v. Nisar Muhammad Khan and others (PLD 1965 SC 690), S.Mahmood Alam Shah v. State (PLD 1987 SC 250) and Hamidul Haq Chowdhury v. The Governor-General of Pakistan (PLD 1953.FC 279). In the case of Haji Abdullah Khan and others (PLD 1965 SC 690) it was held that a pure question of law can be raised at any stage. The pure question of law is explained, in said case, to be a question which does not require any investigation into facts and which could not have been met by a plea of fact if
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raised at the proper stage. Duty of the Court to apply whatever law becomes applicable on the admitted or proved facts, has also been high-lighted in the said case. In the case of Hamidul Haq Chowdhury (PLD 1953 FC 279) it was held that an enquiry under the Public and Representative Offices (Disqualification) Act, 1949 is similar to the enquiry conducted against Government servants under the Public Servants (Enquiries) Act, 1850. It may be mentioned here that enquiries under the Order are similar to the enquiries which were being conducted by Judges of the superior Cotirts under the Public and Representative Offices (Disqualification) Act 1949 (commonly known as PRODA). In respect of nature of such enquiries the Supreme Court of Pakistan observed in the case of Hamidul Haq Chowdhury as below: "....As far as enquiries under the Act are concerned, the Court or the Tribunal is not entitled to pass any order at all. 'It can merely record findings on the various charges. The Report of the Court cannot even suggest the infliction of any penalty on the person who has been found guilty in respect of any charges. It appears to me that the object of making a reference by the Governor or the Governor-General under the Act is to get the benefit of the judicial training and experience of High Court Judges, and to obtain a fording on questions of fact by the application of judicial processes. The legislature has thought it right that the Governor-General or Governor should obtain such expert advice from the judiciary rather than executive or administrative officeRs, The whole course of proceedings, as I will show later on, is of an administrative or executive character and the opinion of the High Court Judges is sought as an assistance and an aid by high executive officers such as the Governor or the Governor-General. The enquiries under the Act are very similar to enquiries conducted against Government servants under the Public Servants (Enquiries) Act, 1850." ' In the same case the Supreme Court of Pakistan laid down some guidelines for the Judges conducting such enquiries in the following words: "The enquiry under the Act must be confined to charges of bribery, corruption, jobbery, favouritism, nepotism, wilful maladministration, wilful misapplication or diversion of public moneys or moneys collected, whether by public subscription or otherwise and any other abuse of official power or position. It will be noticed that a large number of acts are included in the , term 'misconduct' which are unknown to any system of criminal jurisprudence. What is more, a great many of these terms elude precise definition. Jobbery, favouritism, nepotism, wilful maladministration, and other abuses of official power and position have not been defmed in the Act. No doubt the Judges of the High Court or the Members of the Tribunal are required to give findings on these matters, and they would somehow have to surmount the difficulty of there being no precise definition in the Act of these terms. It is clear that in giving findings in such an enquiry the Judges would be general considerations of justice, equity, and good conscience. The enquiry would be a judicial enquiry only in the sense that the procedure followed would be that prescribed by the Code of Criminal Procedure with a few minor alterations indicated in the rules." ' In the first instance it is to be resolved if the reference has been competently made. According to sub-Article (2) of Article 4 of the Order, the Special Court shall not proceed to enquire into any charge of misconduct except 'on a reference in writing made to it. Such reference in respect of a member of the National Assembly is to be made by the President of Pakistan, in view of clause (a) below sub-Article (2) of Article 4 of the Order. In the present case the reference has been signed by Mr. Fazlur Rahman Khan Secretary to the President. In this respect learned counsel for the Referring Authority referred to rule 7 of the Rules of Business, 1973 framed in pursuance of Article 99(3) of the Constitution of Islamic Republic of Pakistan. As per rule 7(1) of the said Rules all executive actions of Government shall be expressed to be taken in the name of the President subject to Article 173 of the Constitution. Making of a reference under clause (a) of sub-Article (2) of Article 4 of the Order is prerogative of the President as against an executive action of the Federal Government. Hence rule 7(1) of the said rules does not cover the instant case. Sub-rule (2) of rule 7 of the said rules states
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that the officers listed in Schedule IV of the said rules may authenticate by signature all orders and other instruments made and executed in the name of the President. Schedule IV of said rules includes Secretary in President's Secretariat. Sub-Article (2) of Article 99 of the Constitution of Pakistan empowers the President to specify by rules the manner in which orders and other instruments made and executed in his 'name shall be authenticated and the validity of any order or instrument so authenticated shall not be questioned in any Court on the ground that it was not made or executed by the President. There is presumption attaching to the official acts. Article 129 of the Qanun-e-Shahadat states that the…
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