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Petitioner: Khawaja Salman Rafique and another VS Respondent: National Accountability Bureau JUDGMENT
Court Name: Supreme Court of Pakistan Judge(s): Maqbool Baqar, Mazhar Alam Khan Miankhel Title:Khawaja Salman Rafique and another vs National Accountability Bureau
JUDGMENT
Reported As: PLD 2020 Supreme Court 456 Result: Bail granted Judgment JUDGMENT MAQBOOL BAQAR, J .--- "A state which dwarfs its men, in order that they may be more docile instruments in its hands even for beneficial purposes---will find that with small men no great thing can really be accomplished" John Stuart Mill The prosecution case, as set out in the Reference, is that it was in pursuance of various complaints received from "Members of Public at Large" that an investigation was authorized by the Competent Authority . on 6.1 1.2018. 2. It is alleged that the petitioners, Khawaja Saad Rafique and Khawaja Salman Rafique, the accused Nos. 2 and 3, in connivance with accused Nos.1, 4 and 5, namely Nadeem Zia Pirzada, Umar Zia and Farhan Ali, and Qaiser Amin Butt ("QAB "), the accused turned approver , launched a housing scheme through a private limited company , namely Paragon City Private Limited, (the Company), by the name of Paragon City, and started collecting money towards booking of plots therein. It is further alleged that though, through letters dated 10.09.2014 and 04.09.2016, Lahore Development Authority ("LDA"), had informed its Town Planning department, the Revenue department Punjab, and the various utility companie s/agencies, that the scheme/ project has been launched without any approval from LDA, and had requested its Director Planning to take action against the ongoing `development work in the scheme, and had also requested the Revenue department to impose a ban on issuance of "Fard-e-Malkiat", pertaining to the scheme, however , the accused continued with the project and the booking/sale of plots therein. 3. It is stated that Paragon City, spread over an area of 7002 Kanals of land, was approved by TMA Aziz Bhatti Town, Lahore on 18.01.2005, but the said approval was obtained by the accused on the basis of forged documents, as the accused, at the relevant time owned only 1085 Kanals of land.
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4. It is further alleged that the paragon City illegally possessed State/Shaamalat lands comprising a total of 39 Kanal and 13 Marlas in different Mauzas of Tehsil Cantt, Lahore, converted the said lands into residential plots; and sold the same. 5. It is also alleged that the Petitioner Khawaja Saad Rafique, in connivance with Nadeem Zia Pirzada, the accused No. 1, illegally occupied 31 Kanals and 80 Kanals of lands owned by some Shahid Butt and Haji Rafique, respectively , converted the said two parcels of land into plots, and sold the said plots as part of Paragon City . 6. It is further alleged that the petitioners acquired 40 Kanals of land in Paragon City in exchange for land measuring 50 Kanals and 3 Marlas. The two are also accused of obtaining 20 plots , measuring 2 Kanals each. It is claimed that though the record shows that the "cost of land of said plots was fully paid but no payment was made to Paragon City (Pvt.) Ltd pertaining to cost of said plots". 7. It is claimed that the Petitioners are the beneficial owners of the Company , who along with Nadeem Zia Pirzada, the accused No. 1, in fact hold 93.6% shares therein, whereas, the remaining 7.4% shares are held by the approver , QAB. The affairs of the Company , as per the prosecution, were being managed by the Petitioner , the accused No. 1, and QAB. 8. It is further alleged that amounts in the sum of Rs.6.2 Million and Rs.12 Million were received by the petitioners from the Company , in their respective bank accounts, receipts of which they failed to justify . 9. The Petitioners have also been accused of receiving amounts of Rs.58 Million and Rs.39 Million, from Messrs Executive Builders, which is a partnership concern of accused Nos.4 and 5, and as per the prosecution, is, under some arrangement with the Company engaged in constructing and selling housing units in Paragon City. It is stated that the said amounts were purportedly received by the petitioners by way of professional fee and consultancy charges, through their proprietary concern namely Messrs Saadian Associates and Messrs KSR Associates, respectively . It is claimed that the firm Executive Builders a "proxy" of the Company and the same, and so also the above business concerns of the Petitioners, have been created and deployed as a mechanism and a ruse, to camouflage the money trail by layering the receipts. The above payment by the Executive Builders, and those also from the Company to the Petitioners, have been described by the prosecution as "illegitimate pecuniary benefits" and "illegal gains". It is stated that during the last few years an amount of Rs.480 Million has been transferred from the various bank accounts of the Executive Builders to the bank accounts of the Company . It is pointed out that out of the two partners of Executive Builders, one being accused No.4, is the real broth er of the accused No.1, and the other , being accused No.5, is the brother-in-law of the Petitioner Khawaja Salman Rafique. 10. It is stated that the Bureau has received complaints from 68 different persons from whom the Company received payments towards allotment of plots, however , neither have the plots been delivered nor is the money being refunded to them. 11. Though the facts contained in the instant paragraph do not seem to be of much relevance, but, having been narrated in the Reference, are for the sake of completeness, also being mentioned herein. It is stated that in the past also the Petitioners and accused No.1, along with QAB, have jointly ventured into real estate development business. The Petitioner Khawaja Salman Rafique has so ventured directly , whereas, the Petitioner Khawaja Saad Rafique has participated therein through his wife Ghazala Saad Rafique. It is thus stated that the Petitioner Khawaja Salman Rafique, along with Ghazala Saad Rafique, Shama Nadeem (wife of accused No. 1), and two others, namely Ziauddin Pirzada, and. Haji Muhammad Amin Butt, established a private limited company by the name of Messrs Debonair (Pvt.) Ltd., which was so registered with SECP on 18.09.1997. The Company purchased lands in Mauzas Jaspal, Malik Pur and Jughian in Lahore, and on 11.04.2000 obtained an NOC from Military Estate Officer Lahore Cantonment for developing a housing scheme thereon under the name and style of Air Avenue Housing Scheme, However , the scheme was not launched and the land was instead sold to Messrs Arban Developers and Eden Development (Pvt.) Ltd. It is alleged that the proceeds of the above sale were received by Messrs Debon air (Pvt.) Ltd., in its three bank accounts which were being operated by Qaiser Amin Butt, Khawaja Salman Rafique, Shama Nadeem and Nadeem Zia.
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It is further stated that the same set of persons, who were directors in Messr s Debonair (Pvt.) Ltd. with the substitution of Haji Muhammad Amin Butt, by his wife, Safia Begum, entered into a partnership, which firm was registered with the Registrar Division by the name of Messrs Debonair (AOB) on 30.06.2000, however , nothing more is said about the said firm. 12. The two amongst the above Directors/ partners, namely Nadeem Zia and QAB, on 25.06.2003, established a private limited company , which was regist ered with the SECP on 25.06.2003 by the name of Air Avenue (Pvt.) Ltd. and it was on 1 1.08.2003 that the name of the Company was changed to Paragon City (Pvt.) Ltd, the company . 13. Admittedly , the record reveals that it is only Nadeem Zia Pirzada, the accused No.1, and QAB, the purported approver , who are the directors of the Company . The prosecution has not drawn our attention to any document or material that establishes the petitioners' control of or any direct relation with the company . Indeed, as noted above, certain payments by the Company and its so called "proxy", Messrs Executive Builders, have been made to the Petitioners, the relevance, effects and implications whereof shall be discussed in the latter part of this judgment. The linchpin of the prosecution case, so far the alleged connectivity of the Petitioners with the affairs of the Company , and their direct financial intere st therein, which may tend to make them liable for any malfeasances or misfeasance of the Company , is concerned, is the purported statement of QAB, that he allegedly made under Section 26 of the NAO, 1999 and Section 164 of the Cr .P.C. on 06.12.2018. 14. The intrinsic value of the purported statement, examination and analysis of its contents, and the facts leading to the recording of the statement, along with the circumstances and the manner in which it was purportedly recorded, shall be made and discussed in a while. We may, however , observe here that the gist of the statement is that the petitioners are the major shareholders in the company , and that the company is in fact being managed by them through Nadeem Zia, the accused No. 1, who has been working for and with them since 1997, which is also the year since which QAB also has been their associate. 15. Before examining and analysing the contents of the purported statement and evaluating its intrinsic value, we cannot resist expressing our shock and dismay over the facts leading to the recording of the statement, the circumstances and manner in which it was recorded. The whole episode lays bare the prosecution's conduct and is a clear manifestation of their scant regard for the mandate of the law and the principles of fairness, equity and propriety . Before we proceed to record the events culminating in the recording of the purported statement dated 06.12.2018, it may, for a better appreciation of the matter , be noted that the aforesaid statement is not the only statement that QAB purportedly recorded under Section 26 of the NAO. In fact earlier too, a statement under the above provision was recorded by QAB before a Magistrate. It appears, however , that since the same did not inculpate the petitioners in the so-called, alleged or perceived offence, the pardon tendered to him on 23.11.2018 was withdrawn. 16. In order to have a full view of the matter , it may be noted here that QAB was arrested from Sukkur on 14.11.2018. His transitory remand was obtained from an Accountability Court up to 19.11.2018, on which date he was produced before the Administrative Judge, Accountability Court, Lahore, where QAB's physical remand was granted upto 04.12.2018. On 20.11.2018 QAB purportedly submitted to the Chairman NAB ("the Chairman") an application seeking pardon under . Section 26 of the NAO. Through order dated 23.11.2018, the Chairman was pleased to approve tender of pardon to QAB, subject to his making disclosure in terms of Section 26 of the NAO. Resultantly on 26.11.2018, QAB purportedly recorded his statement before a Magistrate. As noted in his second application dated 30.11.2016 (in pursuance whereof QAB recorded the statement dated 06.12.2018, referred to herein before), however , "due to disturbin g situation created by the gathering of various unidentified lawyers and private persons he could not disclose full and true facts" within "his knowledge relevant to the offence", as per his statement before the Chairman NAB. Consequently , the Chairman through order dated 26.11.2018, withdrew the pardon tendered by him to QAB on 23.1 1.2018. 17. It was through the aforementioned application dated 30.11.2018 that the latter once again offered to record his statement and enclosed therewith a copy of a detailed statement purportedly recorded by him before the Investigation Officer the same day. Qaise r Amin Butt also undertook to make a statement in terms of Section 26, NAO before a Magistrate after being tendered full pardon in the case. However , it was only on 04.12.2018, the day
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the physical remand of QAB was expiring, that the prosecution filed an application for transitory remand of QAB for producing him before the Chairman for pardon. The application dated B 04.12.2018, however , made no mention of QAB's earlier statement under Section 26 NAO, the grant of pardon and its subsequent withdrawal. Through another application filed along with the above application, the prosecution also sought 15 days' physical remand of QAB . The remands, as requested, were granted by the Court the same day . 18. Through a written statement dated 05.12.2018, signed by QAB and counter signed by the Chairman, QAB undertook to give statement, as an approver before the Magistrate as offered by him. By an order of even date, the Chairman, whilst, tendering pardon to QAB, subject to his making full disclosure, observed that "if pardon is granted to the accused Qaiser Ameen Butt, more confidence inspiring evidence will come on record, strengthening the prosecution case against his co-' accused persons, which evidence was not directly available against the accused ". Through application dated 06.12.2018, the prosecution requested the Judicial Magistrate, Lahore to record the statem ent of QAB under Section 26 of the NAO. Nevertheless, there was no mention of such statement previously made by QAB. The Magistrate granted the application and proceeded to record the statement the same day, without any notice to the petitioners and the other co-accused , thus depriving them of their right to cross-examine the witness, which is a flagrant violation of the essential requirement of the provision of subsection (1-A) of Section 164, Cr.P.C. It has also not been claimed the approver was informed by the Magistrate that upon conclusion of his statement, his custody shall not be remitted back to the prosecution. The statement thus, also failed to meet the criteria prescribed by the provisions of Section 265-.J, Cr.P.C., for it to be admitted as evidence, even if it had fulfilled the other requirements of admissibility . The statement in these circumstances failed to conform to the principles enunciated by the superior courts, also. In the case titled as NAB. v . Hudaibya Paper Mills PLD 2018 SC 296 it was observed by this Court: "To enable a statement recorded under section 164 of the Code to be used against an accused, it 'must be recorded 'in the presence of the accused, and the accused given an opportunity of cross-examining the witness making the statement." In the case Azeem Khan v. Mujahid Khan 2016 SCMR 274 while discussing the intent and purpose of Section 164 the court observed as following: "...all signs of fear inculcated by the investigating Agency in the mind of the accused are to be shedded out and he is to be provided full assura nce that in case he is not guilty or is not making a confession voluntarily then in that case, he would not be handed over back to the police. Thereafter , sufficient time for reflection is to be given after the first warning is administered. At the expiry of that time, Recording Magistrate has to administer the second warning and the accused shall be assured that now he was in the safe hands. All police officials whether in uniform or otherwise, including Naib Court attached to the Court must be kept outside the Court and beyond the view of the accused. After observing all these legal requirements if the accused person is willing to confess, then all required questions formulated by the High Court Rules should be put to him and the answers given, be recorded in the words spoken by him". In Abdul Sattar v . The State PLD 1976 SC 404 it was pointed out: "As to how far the evidence of the approver can be accepted to substantiate the prosecution case, it may be conceded at once that he is a competent witness (section 133 of the Evidence Act). But the Courts have invariably in such cases followed the rule of commo n prudence enshrined in illustration (b) to section 114 of the Act and insist on independent corroboration of the evidence of an approver in material particulars. This rule though a rule of practice has acquired the rigidity of law. See Abdul Qadir v. The State (PLD 1956 SC (Pak.) 407) which followed R. v. Baskerville (1916) 2 K B 658)." Similarly , in the case of Federation of Pakistan v . Muhammad Shafi Muhammadi 1994 SCMR 932 , the following principles were enunciated: "The rule of prudence that the testimony of an approver or accomplice is to be corroborated in material particulars by independent evidence has almost hardened into a rule of law with the passage of time and because of the invariable insistence of the Superior Courts to have corroboration."
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"An accomplice who takes part in the commission of the offence for which his co-accused is charged with falls within the category of a wicked person in terms of the above verse of the Holy Qur'an and, therefore, before acting upon his testimony , the truthfulness of it is to be verified by corroborative pieces of evidence on material particulars." Qaiser Amin Butt's statement, thus, insofar as he was not informed that he would not be returned to the custody of the Bureau and also for the reasons that neither any notice of his recording the statement was issued to the petitioners, nor were they otherwise provided any opportunity to cross-examine him, render his statement- irrelevant. Additionally , keeping in view that it otherwise finds no corroboration by any means whatsoever , QAB's statement has absolutely no bearing on the case. However , far more devastating is the fact, as noted earlier , that it was through the second attempt only, that the prosecution was able to procure the purported statement dated 06.12.2018, having failed to secure a statement inculpating the petitioners in the alleged/ perceived offences, and/or even attribut ing to them any shareholding in the company , and/or establishing their control over its affairs. Even, more alarming is the fact that the Judicial Magistrate, Lahore after recording statement of QAB on 26.11.2018, instead of sending him to judicial custody had delivered his physical custody to the prosecution, which is against all norms of justice, fair play and propriety . It appears that the prosecution sought QAB 's physical remand in addition to his transitory remand, for a period longer than fifteen days with a two-pronged strategy: On the one hand it was able to exert pressure on QAB when he recorded his statement. In the event he would have failed to inculpate the petition ers, the prosecution could have continued to hold him and, thus, coerce him into submitting to their will and comm and by recording any statement they desired. However , a perusal of the statement, the gist whereof has been noted herein earlier , and its complete summary is annexed hereto as Annexure 'A', would show that all the efforts made by the prosecution in procuring the same have gone in vain, since it hardly contains anything which lends credence to the prosecution case or furthers their endeavour to lay blame for any alleged or perceived infraction by the Company on the petitioners. 19. The Statement is completely bereft of necessary particulars and much of it contents are absolutely irrelevant. Qaiser Amin Butt's claim of petitioners' shareholding in the company and their control over it is wholly contrary to the record. No details, particulars, document and/or material, either official, financial, personal or relating to any business deal, transaction, undertaking, or arrangement, or any kind of correspon dence-in support of such claim, has even been referred to in the statement. Additionally , the prosecution has not been able to refer to or rely upon anything to substantiate the statement, or the allegations contained therein, nor has it mentioned of any other witness who supports QAB's purported stance. No question was put to the petitioners with respect to their alleged shareholding in or control of the company through the call up notices placed before us. However , even if the relevant contents of the purported statements are presumed to be true and correct, the same also do not, by themselves, constitute any offence or wrong doing on the part of the accused, attracting the provisions of NAO, 1999. 20. Reverting to the various allegations contained in the Reference,' which according to the prosecution, constitute acts of corruption and corrupt practices within the meaning of Section 9 of NAO,1999, we may first deal with the allegation that although LDA, had through its letters dated 10.09.2014 and 04.01.2016, informed its director Town Planning, the Collector Revenue Department, Punjab, Lahore, and the various utility companies/ agencies, that the sponsors of Paragon City have launched the said scheme within the controlled area of LDA, without prior permission from the compe tent authority , and are carrying out construction and development work, and sale/purchase of plots therein, without the requisite approvals and also asked its directors to take legal action against such development and requested the Collector Revenue not to issue Fard-e-Malkiyat and register , or attest any document pertaining to the scheme. The LDA also requested the utility providers to stop/ discontinue such provisions, but the accused persons continued with the development of the sche me and booking/selling of plots therein. In this regard it may be noted that the scheme, as noted in the Reference itself, was approved by TMA Aziz Bhatti, Lahore way back in January , 2005 and as mentioned by QAB in his statement under Section 26 of the NAO, (relied upon by the prosecution for roping in the petitioners in this case,) was launched the same year, i.e. the year 2005. The prosecution and/or the LDA has thus far not mentioned/disclosed, since when, or under what law,
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notification, or scheme, to what extent, and in what manner , the area in which Paragon City is situated, fell within the jurisdiction of the LDA. It is also not submitted as to why and to what extent did the scheme require an approval from the LDA to begin with. It was not even claimed that the LDA ever sought any such submission or regularization from the company . It has also not been submitted as to what could be the consequences of noncompliance with the provisions, if any, in that regard, and whether such non-compliance triggers any penal action, and if so, under what circumstances. We have also not been apprised regarding the nature of these penal consequences to initiate such action, and whether any warnings were issued by the LDA or any other relevant department before proceeding in that regard. It is also worth asking if the public at large were cautioned regarding the violation of any law, rule or regulation by the company in relation to Paragon City. Little was offered by the prosecution in the way of details about the extent of the scheme's development and as to how many plots/ properties have been sold by the time Paragon City allegedly fell within the jurisdic tion, control and competence of LDA. National Accountability Bureau has not even claimed putting any question to the petitioners, regarding the permission, either through their call up notices or otherwise, nor have they implicated any public functionary in this regard. There is absolutely no allegation that any buyer/purchaser in Paragon City was deprived of his accrued/vested rights, on account of the alleged lack of permission and/or approval. It has been admitted that out of 8,000 purchasers, NAB received complaints only from 68 through the Petitioners have been operating the Scheme since last 16 years. 62 of these complaints have admittedly been settled, affidavits of the complainants in this regard duly verified by the NAB have been placed before us. How in the above backdrop could the alleged development work and sale then fall within the ambit of Section 9 of the NAO, 1999. In any event, and as noted earlier too, since the prosecution has thus far not been able to connect the petitioners with the company in the manner so that they may be held liable for its acts, deeds and conduct, the alleg ations dealt through the instant paragraph, in so far as the petitioners are concerned, are wholly irrelevant and inconsequential. 21. Secondly , it is alleged that while the approval for Paragon City was obtained by the accused from TMA Aziz Bhatti, Lahore in 2005 for an area of 7002 Kanals, they only held 1085 Kanals of land at that time. It is thus alleged that the approval, to the extent of the remaining land was based on forged docu ments. However , no documents were referred to in this regard, nor were any particulars mentioned. It is also not claimed that the TMA or any other department, took cognizance of the alleged fraud, or whether any action was ever initiated against anyone including the functionaries of the TMA, who could have been responsible for the same. It is also not alleged that any portion of the land comprising Paragon City, except the purported Shaamalat lands, or those which allegedly belonged…
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