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Petitioner: HAKIM ALI ZARDARI VS Respondent: THE STATE
Court Name: Sindh High Court Judge(s): Rehmat Hussain Jaffery, Munib Ahmed Khan Title: HAKIM ALI ZARDARI vs THE STATE Case No.: Accountability Appeal No, 60 of 2002 Date of Judgment:2007-02-22 Reported As: 2007 MLD 910 Result: Appeal accepted
JUDGMENT
JUDGMENT ' RAHMAT HUSSAIN JAFFERI, J.---The present appeal is directed against the judgment, dated 11-7- 2002 passed by the learned Judge, Accountability Court No,5 Sindh Karachi, by which the Learned Judge convicted the appellant for offence punishable under section 10 of the National Accountability Bureau Ordinance, 1999 (hereinafter referred to as the Ordinance) and sentenced him to suffer imprisonment for five years and fine of Rs,1,85,00,000 or in default thereof to suffer R.I. For two years. The trial Court further disqualified the appellant as provided under section 15 of the said Ordinance and forfeited the property, which was the subject-matter of the case. ' Brief facts giving rise to the present appeal are that the Chairman NAB filed Reference against the appellant alleging therein that the appellant had purchased the property viz. Cheatu De La Reine in Le Mensil-Leiubray in Normandy, France, worth French Francs 48 lacs, equivalent to Pakistani Rs,1,81,32,482 on 12-4-1990 in his name and in the name of his wife that is disproportionate to his known source of income and acquired the property from illegal source of income. The Chairman NAB showed the source of income of the appellant which the appellant had showed in his income returns from the years, 1976 till 1990 that comes to Rs,15,15,355. It was alleged that this amount was much less than the value of the property on which the appellant had purchased it. ' At the trial the prosecution examined 11 witness to prove the case. The appellant in his statement recorded under section 342, Cr.P.C. Admitted the purchase of the property in his name, and in the name of his wife in the above-mentioned amount, but took the plea that the same was purchased from legitimate sources of income as he was Zamindar, successful businessman of Film World, owner of big Cinema Building in Karachi, remained Director of Eastern Federal Union Insurance Company and Commerce Bank, which was subsequently, merged in United Bank Ltd. He further
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took the plea that he owned properties worth crores of rupees. He was selling and purchasing the agricultural properties. With regard to the purchase of bungalow in question. He took the plea that he pledged EFU shares before the United Bank Ltd., obtained loan, and thereafter, purchased the said property. He further took the plea that his daughter-in-law Mohtrama Benazir Bhutto was the then Prime Minister of Pakistan; that there was political rivalry between the government and his daughter-in-law, therefore, he has been involvedin the case falsely. He also took the plea that the Government had filed Ehtisab Reference in the year, 1998 against his daughter-in-law on the allegation that the property in question was owned by her through her husband and the appellant. In his support he examined nine (9) witnesses. ' The Learned Judge after going through the evidence and hearing the parties' counsel, took the view that the appellant failed to explain sources, of income from which he purchased the property, therefore, convicted and sentenced him as mentioned above under the impugned judgment. ' We have heard advocate for the appellant, DPGA for NAB and perused the record of this case very carefully. ' The learned advocate for the appellant after taking us to statements of the prosecution witnesses particularly P.W.4 Freddy Rusthomjee, Head of Operation Deutsch Bank, P.W.5 Abdul Wasi, Assistant Director, Foreign Exchange Department of State Bank of Pakistan and D.W.3 Muhammad Amin OG- II, United Bank Ltd. Argued that the EFU shares were pledged with UBL and after obtaining loan from it, US dollars were purchased for the required amount and then the property was purchased. He has further argued that the appellant was Director of EFU, therefore, for becoming a Director it was necessary to have sufficient numbers of its shares to qualify to become the Director; that the units were purchased from the income of agricultural, film business and selling of agricultural properties; that the observation of the trial Court that the appellant was pauper is not supported from the record, but on the contrary, he owned large numbers of properties and cash. He has further stated that the appellant has satisfactorily explained legitimate sources of income from which the property was purchased and it was not difficult for him to purchase the said property because he was owner of properties worth crores of rupees. ' Conversely, the learned DPGA has stated that the appellant has failed to explain as to from where he purchased EFU shares from which the property was purchased; that the appellant was required to explain such source and without such evidence it cannot be said that the property was purchased from legitimate source of income. He has further stated that the impugned property was not declared before the Election Commission and Income Tax Department, as such, he had concealed the same, which clearly shows the guilty mind of the appellant. He has supported the impugned judgment. ' From the facts of the case, the appellant has been tried for offence as defined under section 9(a) (v) and punishable under section 10 of the Ordinance. The offence was allegedly committed in the year, 1990 and the reference was filed in the year, 2001, as such, the provisions of law, which were applicable in the year, 2001, would be applicable. At the relevant time section 9(a)(v) of the NAB Ordinance, 1999, was as under:-- "A holder of a public office, or any other person, is said to commit or to have committed the offence of corruption and corrupt practices:-- (v) if he or any of his dependents or benamidars owns, possesses, or has (acquired) right or title in any (movable or immovable property) or pecuniary resources disproportionate to his known sources of income, which he cannot account for or" ' In order to prove the case, the prosecution is required to prove the ingredients of the offence, which are (1) it must establish that the accused was holder of a public office, (2) the nature and extent of the pecuniary resources of property which were found in his possession, (3) it must be
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proved as to what were his known sources of income, i,e,, known to the prosecution after thorough investigation and (4) it must prove, quite objectively, that such resources or property found in possession of the accused were disproportionate to his known sources of income. Once these four ingredients are established, the offence as defined under section 9(a)(v) is complete, unless the accused is able to account for such resources or property. Thus, mere possession of any pecuniary resources or property is by itself not an offence, but it is failure to satisfactorily account for such possession of pecuniary resources or property that makes the possession objectionable and constitute offence. If he cannot explain, presumption under section 14(c) of the Ordinance that accused is guilty of corruption and corrupt practices is required to be drawn. Reference is invited to a case Biswa Bhushan Naik v. State (AIR 1954 SC 350) in which identical provision in Prevention of Corruption Act, 1947 were interpreted. ' In the present case, the prosecution alleged that the appellant was holder of a public office being Member of National Assembly in the years, 1988 and 1993. The appellant has admitted such position, as such, first ingredient of the offence is proved. ' As regards the second ingredient, the prosecution alleged that the appellant had acquired a property viz. Cheatu De La Reine in Le Mensil-Leiubray in Normandy, France, Worth French Francs 48 lacs, equivalent to Pakistani Rs,1,81,32,482 on 12-4-1990. The said aspect of the case has also been admitted by the appellant not only during the course of cross-examination, but in his statements recorded undersections 342 and 340(2), Cr.P.C. And by leading oral and documentary evidence. Apart from above property, the appellant has shown various other properties, but the prosecution did not show such properties in the reference, however, the prosecution requested the Court to try the appellant in respect of one Bungalow in France only. Thus, it is an admitted fact' that the appellant owns the impugned property. By not adding the other properties owned and possessed by the appellant, the prosecution apparently is of the view that the said properties were acquired from legitimate sources of the income of the appellant except the impugned bungalow. ' As regards the third and fourth ingredients of the offence and about the known sources of income, the expression "known sources of income" must be taken to the sources known to the prosecution on a thorough investigation of the case. It does not mean sources known to the accused for the simple reason that the prosecution cannot, in the very nature of things, be expected to know the affairs of an accused person. Those will be matters "specially within the knowledge" of the accused, within the meaning of Article 122 of Qanun-e-Shahadat Order, 1984, which reads as under:- "When any fact is specially within the knowledge of any person burden of proving that fact is upon him." ' This also does not mean that the prosecution is absolved from holding any enquiry or investigation about the sources of income. There are two types of persons within the scope of holder of public office under the Ordinance; public servant and other persons holding public office. The cases of public servants and other persons are required to be dealt with separately and differently, as in the former case his known source of income would be salary and for other sources he is required to declare them in the annual declaration of assets filed with the department or income received from any lawful sources, the receipt of which has been intimated in accordance with the provisions of any law, rules or order for the time being applicable to public servant, therefore, such sources can easily be obtained by examining such documents. Secondly, he can earn income from his properties and investments that are also required to be mentioned in such statement. Whereas the case of other persons holding public office is quite different and distinguishable from the public servant, as the source of income of a particular individual depends upon his position in life with particular reference to his occupation or avocation in view. Thus, known source of income in the case of other persons, the prosecution is required to hold a detailed enquiry and investigation to ascertain the said sources of income. Furthermore, the word "income"
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used in the above provision is also a very mignificant; its meaning has been defined in Chambers 21st Century Dictionary as"money received over a period of time as payment for work, etc., or as interest or profit from shares or investments." Further, for the word "income" it would be primary to observe that in the capacity of public servant the income would be what is attached to his office or post, commonly known as remuneration or salary. The term "income" by itself, is classic and has a wide connotation. Whatever comes in or is received, is income. But, however wide the import and connotation of the term "income", it is incapable of being understood as meaning receipt having a nexus to one's labour, or expertise, or property, or investment, and being further a source which may or may not yield a regular revenue. These essential characteristics are vital in understanding the term "income". Therefore, it can be said that, though "income" is receipt in the hand of the recipient, every receipt would not partake into the character of income. Qua the public servant, whatever return he gets of his service, will be the primary item of his income. Other income which can conceivably be income qua the public servant, will be in the regular receipt from (a) his property, or (b) his investment. A receipt from windfall, or gains of graft, crime or immoral accretions .By persons prima facie would not be receipt form the "known sources of income" of a public servant or a person holding public office as mentioned in the above provision of law. ' In the present case, what the prosecution did that during the investigation they called the Income Tax Returns of the appellant and relied upon the said returns. In the Income Tax returns of the appellant from the years, 1976 and onwards the appellant claimed exemption of certain amounts in respect of agricultural income. The prosecution relied upon the said figures and took the said income tax returns as conclusive proof of income of the appellant and formed the opinion that the amount mentioned by the appellant in the Income Tax Returns was the only source of income. The said amount was calculated at Rs,15,15,355. The prosecution took the said amount to have been earned by the appellant as full source of income and then formed opinion that from that amount property worth Rs,1,81,32,482 could not have been purchased, therefore, the said property was disproportionate to the known source of income. It will be advantageous to reproduce some portions of cross-examination of Income Tax Officers P.Ws.8 and 9:-- ' Cross-examination of P.W.8:-- "The above stated details are for individual assessee Mr. Hakim Ali Zardari and not of Messrs Zardari Group of (Pvt.) Ltd., The record did not show any other exemptions from tax claimed by the assessee. This is the exempted income shown in the declaration; there can be other taxable income. There can betaxable income alsoIn the income tax returns, the said assessee had not declared the total value of the EFU certificates, and only declared the amount of income earned therefrom, and claimed exemption thereof. It was not necessary for an assessee to declare in the return of income tax the total value of the property , out of which a particular earning or profit is claimed by him. The details of the agriculture property, and otherwise were not shown in the returns, for the reason that there was no such requirements It is correct to say that the returns come within the meaning of public record, I do not remember if Mr. Tatari Investigating Officer had demanded the certified copies of the said returns from me. I do not remember the value of EFU certificates. (Question to the witness "I say that the total worth of the EFU certificates out of which exempt income is shown by the assessee is worth Rs,3 crores". It may be possible or may not be so possible, but it is not relevant for the purposes of the information asked for from me. I did not hold any enquiry pertaining to the actual value of the EFU certificates, out of which the profits/income was claimed by the assessee. The witness voluntarily states that the scrutiny of the returns had already been finalized. I cannot say if my predecessor held any such enquiry. I cannot comment on the question if the grand total income of Rs,12,16,490 mentioned by me can only be drawn out of agriculture land, worth millions of Rs," ' Cross-examination of P.W.9:--
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"I own the contents of para. No,1 of my 161, Cr.P.C. Statement, whereby I stated that Mr. Hakim Ali filed his revised wealth tax returns on 31-12-1999 for the assessment years 1990-91 to 1997-98, thereby declaring the property purchased abroad in the joint name of his wife Mrs. Zarin Ara. I also stated therein that she was not coming as an assessee within myincome tax circleIrrespective as to the legal embargo, if within time or beyond time, an assessee is at liberty, by law, to file the revised wealth tax returns, at any time. The assessment was still pending, whenthe revised wealth tax returns were filed, on 31-12-1996I do not know if the appeal in this respect of Hakim Ali is still pending in the competent forum. It is correct to say that for the purpose of exemption from income tax, the foreign exchange bearer certificates are exempted. (The income tax, and that he had charged the tax against a foreign asset). It is incorrect to say that if FEBC are exempt from the declaration in the wealth tax returns. It is correct to say that under the Finance Act of 1996, foreign exchange bearer certificates are exempt from declaration in the wealth tax returns. It is correct to say that the Foreign Exchange Bearer Certificates Rules 1995 direct exemptions from declaration of FEBC in the Wealth Tax Returns. It is correct to say that in the amendment made in the Wealth Tax Act, 1963, by Finance Act, 1996, a relaxation is provided in penalty proceedings for voluntarily filing of the returns, detailed thereunder. Only new tax payers who had not filed wealth tax return were provided immunity from payment of wealth tax, against a jointly owned house, by two or more persons. It is correct to say that old tax payers were also given the facility to avail immunity for past defaults, for any reason, by similarly filing returns and paying tax for past years, latest on December, 31, 1996. From such an angle, the revised wealth tax returns filed on 31-12-1996 by Hakim Ali Zardari were within time." ' Thus, it is clear that the income tax returns were not portraying correct picture of the income of the appellant as they showed exemption obtained on certain amounts without disclosing the total income. ' We have already pointed out that the case of the appellant is to be examined differently from the case of public servant keeping in view his position in life with particular reference to his occupation, business or avocation. In the case of the appellant the prosecution was required to hold a detailed enquiry to ascertain the sources of income, but it appears that the Investigating Officer did not perform his duties diligently and properly as he did not conduct any sort of investigation to know the other sources of income as is clear from his own admissions. In the cross-examination the Investigating Officer P.W.11 Muhammad Ahmed stated as under:-- "I had a discussion with accused Hakim All Zardari, and did not record his statement. He is neither my friend nor related to me. I held the said discussion about the allegations of this case. It is correct to say that I did not reduce his replies into writings. I did not ask him -to give his witnesses in his defence, to the allegations made against him. I started enquiry 1st or 3rd March, 1998. It may be suggesting that the enquiries were already going on upto the level of DG, FIA, Islamabad, I did not record 161, Cr.P.C. Statement of D.G. It is correct to say that evidence regarding the income, exempt from the tax, have been produced, and that the income which is taxable has not been produced. I do not know if the income-tax return, pertaining to the agricultural income, is not to be submitted before the Income Tax Department. I do not know if theagricultural income was free from tax, of what-so-ever extents, it might have been. It is incorrect to suggest that I was given the instructions to send a report against accused Hakim Ali Zardari and, therefore, I did not feel it necessary to ask from the Income Tax Department about the actual income shown by him in his other returns. It is incorrect to say that the actual numbers of Foreign Exchange Bearer Certificates are available with the Deutche Bank, Karachi, and I failed to seek such details from them. I do not know about the EFU shares, owned by the accused. I did not conduct any enquiry, to have such details from any relevant quarter. I do not know that the accused earned amount of Rs,2 crore by selling out his petrol Pump of Rawalpindi, and a big plot called "Tourist Village ' I did not approach
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any revenue mukhtiarkar to get the details, regarding the agricultural land owned by the accused. I did not feel it necessary to conduct inquiry as to whether the accused could have other legal sources of income, for acquiring the amount, for purchasing the property. It is incorrect to suggest that I did not hold such an enquiry, only because it was previously determined to submit a report against the accused, to implicate him in this case. I did not enquire, nor do I know, as to how much wealth-tax was paid by accused Hakim Ali Zardari. I do not know the extent of income from per acre agricultural-land, and pertaining to different corps and different fruit-farms. I do not know if per acre income from Banana comes to Rs,50,000 to 60,000. I do not know if the accused and his wife are having cultivated lands of 50 hundred acres, comprising of banana, sugarcane and other fruits. It is incorrect to say that I have ignored mala fidely the fact that Hakim Ali Zardari was having cultivated lands of 2000 acres under different costly-crops, during the year, 1990, and onwards, and even before the year 1990. It is incorrect to suggest that I have concealed the shares of EFU and of other companies, the legitimate assets of the accused, and the income from the same. It is incorrect to suggest that I have prepared the documents dishonestly, while sitting in my house, and that I failed to conduct honest-investigation. It is incorrect to suggest that I did so, having received such instructions from the higher authorities. It is incorrect to suggest that I have acted dishonestly against the accused, under the instructions of high-dignitaries, due to their political-hostilities to the accused, and to Ms. Benazir Bhutto." ' From the above statement of the Investigating Officer, it is clear that the prosecution did not hold proper enquiry or investigation to ascertain the known sources of income of the appellant, therefore, theprosecution has failed to prove third and fourth parts of the ingredients of the offence. If the Investigating Officer had conducted proper and thorough enquiry or investigation, then he would have come to know about the other sources of the income of the appellant. Therefore, the prosecution was required to calculate the said income and determine whether the impugned property was disproportioned to the known sources of income of the appellant. It is pertinent to point out that the appellant apart from the impugned property has various other properties, which have not been mentioned in the reference, out of the properties, the prosecution choose the property, which was subject-matter of Ehtisab Reference filed against Mohtarma Benazir Bhutto in the year, 1998 alleging that the property was owned by her through her husband and the appellant. Apparently, it shows the mala fides on the part of the prosecution. Thus, the prosecution has not established all the ingredients of the offence, therefore, the burden to account for property has not been shifted upon the appellant. However, the appellant has explained his position in his detailed statement recorded under section 342, Cr.P.C., which was recorded by his advocate with permission of the Court. The said statement reads as under:-- "The accused has authorized me to state that the accused is facing conditions pertaining to the Court-atmosphere, jail-atmosphere. Sir, the accused is not a free-man being confined in jail. He is unable to contact built and owned one of the best Cinema Houses of Karachi, called "Bambino Cinema". In 1964, project was developed and constructed 45 offices, showrooms and another Theatre named "Scala" were constructed and then accused started business of film-distribution and formed one of the biggest film distribution company in Asia at that time under the banner of "Bambino Films". Again accused constructed "Star Cinema" adjoining Bambino Cinema. Accused was one of the Directors of "Commerce Bank of Pakistan" and Director of Eastern Union Federal Insurance Company, which is largest Insurance Company of Asia. Accused had owned following lands in various places, some of those which accused remember are in the 28 properties of details duly signed by me, which are produced as Exh.92 to Exh.119. I am unable to produce originals of these documents as they are not with me. I will request this Hon'ble Court to call the following witnesses:-- (1) Mukhtiarkar, Tando Allahyar
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(2) Tapedar, Tando Allahyar (3) Sub-Registrar, Tando Allahyar (4) Mukhtiarkar, Sinjhore (5) Tapedar, Sinjhore (6) Tapedar of Tappa Ritaniabad (7) Sallam Khan Zardari R/o Nawabshah (8) Muzaffer Hussain Sayed R/o Karachi (full address not known) (9) Mr. Rasheed Ahmed Razvi, Advocate, Karachi. (10) Senior Vice-President, Executive Circle, UBL, Karachi. (11) Mqasood Ahmed, the then Assistant Vice-President, Banking, UBL, Karachi. ' I also produce the photocopies of relevant papers in 37 leaves regarding the Scala, Theatre and Bambino Cinema as Exh.120. ' In the present case, the allegations against the accused are that in the end of March, 1990 he…
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