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Petitioner: NASEEM ABDUL SATTAR and 6 others VS Respondent: FEDERATION OF PAKISTAN and 4 others
Court Name: Sindh High Court Judge(s): Sajjad Ali Shah, Naimatullah Phulpoto Title:NASEEM ABDUL SATTAR and 6 others vs FEDERATION OF PAKISTAN and 4
others Case No.: Constitutional Petition No,D-720 of 2013 Date of Judgment:2013-05-07 Reported As: PLD 2013 Sindh 357 Result: Petition allowed Judgment ORDER SAJJAD ALI SHAH, J.---The petitioners who are the Shareholders and Directors of M/s. Al Abid Silk Mills (Pvt.) Limited have filed the instant petition containing the following prayers:-- (i) to hold that notices dated 13-2-2013 issued by respondents to the petitioners and notices dated 4-2-2013 issued to the respondents Nos.4 and 5 are mala fide, without lawful authority and of no legal effect as such; (ii) to restrain the respondents from taking any coercive action against the petitioners; (iii) to quash the notices dated 4th February 2013 and 13th February, 2013 issued to the petitioners and respondents Nos.4 and 5 by the respondent No,3; (iv) direct the respondents not to place the names of the petitioners on the exit control list as threatened; (v) direct the respondents not to harass or humiliate the petitioners under the cloak of the NAB Ordinance, 1999 as the entire proceedings are tainted with mala fide; (vi) declare that the Respondents or any other NAB official is not permitted under the law to direct/compel attendance under the garb of impugned notices and the proceedings are without lawful authority and jurisdiction; (vii) Any other relief(s), which this Honourable Court may deem just and proper in the circumstances of the case. Briefly, Messrs Al Abid Silk Mills (Pvt.) Limited (hereinafter referred to as "Borrower" were offered Running Finance Facility and Export Re-finance Facility to the extent of Rs,200 Million and Rs,100 Million respectively by the J.S. Bank (hereinafter referred to as "Complainant") vide facility offer
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letter No, JSBL/CAD/2011/11/191 dated 29th November 2011 on certain terms and conditions which were duly accepted and acknowledged by Borrower and consequently such facility was disbursed into the account of Borrower on 14-12-2011. The facility was to expire and the amount outstanding was to be repaid by 31st November, 2012. It is the case of the petitioners that on account of depressed market condition coupled with deteriorating law and order situation in Pakistan, the petitioners could not repay their liabilities in terms of the agreement and consequently approached various financial institutions including the complainant for rescheduling and restructuring of their existing liabilities. It is the case of the petitioners that instead of rescheduling the existing outstanding liability of the petitioners, the complainant moved an application to the Chairman, National Accountability Bureau asserting therein that the finance facility was allowed to the Borrower keeping in view their audited account for the period from 1-7-2010 to 30-6-2011 showing huge profits as well as unaudited accounts from July to September 2011 showing income of Rs,17 Million but soon after disbursement complainant was shocked to find out from the unaudited account of the Borrower's for the next quarter i,e, from 1-10-2011 to 30-12-2011 that the company has shown heavy losses and according to the complainant, borrower in fact had hatched a plan to make a deliberate misrepresentation through fudged accounts with the sole objective of defrauding and embezzling the public funds and to obtain wrongful gain and benefit for themselves. The Chairman, NAB took cognizance of such complaint and directed initiation of inquiry and consequently the Investigating Officer vide its letter dated 4-2-2013 directed Secretary, SITE Ltd. To keep the property of the petitioners in ban list and thereafter on 13-2-2013 issued call up notice upon the Directors of Messrs Al Abid Silk Mills (Pvt.) Limited asserting therein that the competent authority has taken the cognizance of an offence of willful loan default of JS Bank Ltd. Committed by the Directors of Messrs Al Abid Silk Mills and others under National Accountability Ordinance 1999 (hereinafter referred to as "Ordinance 1999"), giving rise to the filing of instant petition. ORDER ON C.M.A. NO,5218/2013 After notice to DPG NAB, Messrs JS Bank has moved Misc. Application No,5218 of 2013 for their implement as respondent, which application was taken up before the main petition at joint request was taken up for final hearing at Katcha Peshi stage. Messrs Muhammad Ashraff Kazi and Shahab Sarki, pleaded the implement of the complainant financial institution as respondent on the ground that the financial institution being an aggrieved party be allowed to become a respondent in order < to bring true facts on record. However, the application was vehemently opposed by Ms. Ismat Mehdi, learned counsel for the petitioner, who while placing reliance on an order of this Court in the case of The. State v. Fazal Ahmed and others (SBLR 2013 489) and of the apex Court in the case of Capt. (Retd.) Nayyar Islam v. Judge, Anti-Terrorism Court No,III and others (2012 SCMR 669) prayed for the dismissal of complainant's request for impleadment by contending that under the Ordinance 1999 there is no scope for a complainant on whose request Chairman NAB has set "the law on motion to become a party. In response Mr. Ashraf Kazi, learned counsel appearing for the complainant bank states that at least the financial institution be allowed to assist the prosecution. Heard. In the case of Capt. (Retd.) Nayyar Islam (supra) relied upon by the learned counsel for the petitioner, Accountability Court No,III at Rawalpindi dismissed an application of a complainant seeking transfer of NAB reference under section 16-A from one Accountability Court to another by holding that the right to seek transfer under section 16-A of Ordinance 1999 was only conferred upon the Chairman NAB and the Prosecutor General. It was contended before the apex Court that the application of general law viz. Section 526, Cr.P.C., which permits the complainant to seek such transfer, was not excluded in the Ordinance 1999, as section 17 of Ordinance 1999 provides mutates mutandis application of the Criminal Procedure Code. The apex Court while rejecting the submissions held as follows:-
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"3. We find that it is by now a settled principle of interpretation of statutes that the provisions of especial law exclude the application of general law in-the context in which the former provision has been enacted. In the instant case, a bare reading of the various provisions of NAB Ordinance reflect that the law makers intended to provide a special dispensation/legal framework for investigation, trial and otherwise dealing with the cases under the NAB Ordinance. For instance, section 25 of the NAB Ordinance provides for voluntary return and plea bargain;. Section 25-A stipulates payment of loans by the defaulter and section. 26 authorize the Chairman NAB to grant pardon in circumstances envisaged in the said provision. There are no analogous provisions in the general law. Similarly, in the case in hand; the insertion of section 16-A brought about by Ordinance No,IV of 2000 dated 3-2-2000 was intended to lay down a special procedure and thereby provide a right to the Chairman NAB, as also to the Special Prosecutor-General Accountability and the accused in a given case to seek transfer on grounds stipulated therein. The rationale or the intent appears to limit this right to those who are directly involved in a case so as to prevent and avoid vexatious proceedings and frivolous petitions. If petitioner feels strongly about the grounds agitated in the constitutional petition, he can always move the Chairman NAB and the latter has to proceed as mandated in law. Likewise, in the case of the State v. Fazal Ahmed and others (SBLR 2013 Sindh 489) this Court after examining the provisions of section 32 in conjunction with section 8(d) of Ordinance 1999 while dismissing the appeal filed by a person other than the persons described in section 32 of Ordinance 1999 held that under the Ordinance 1999 right of appeal has been conferred only on a convict or the Prosecutor General, Accountability, if so directed by the Chairman NAB. It was pleased that the analogical deduction of this judgment would reflect that the NAB laws limits the rights to only those who are directly involved. Perusal of section 18(b) (ii) of the Ordinance 1999 reflects that though Chairman NAB or an officer of the NAB duly authorized by the Chairman NAB is empowered to initiate proceedings against any person "on receipt of a complaint" but the entire Ordinance does not confer any right upon the complainant to take charge of the proceedings initiated by the Chairman NAB or to effect representation independently. The law in this respect is so rigid that it does not even permit the Accountability Court to take cognizance of any offence except on a reference made by the Chairman NAB or an officer of the NAB duly authorized by the Chairman NAB. Additionally, perusal of section 32 of Ordinance 1999 which provides for a right of appeal reflect that no right of appeal has been conferred upon the complainant and even in those cases which are initiated on the basis of private complaint the right of appeal has been exclusively conferred upon the Chairman NAB or the convict, which leads us to hold that NAB laws limits its application only to those who are provided with right of appeal. In the circumstances, we do not see any scope for the applicant to be impleaded as respondent and, therefore, decline their request for independent representation by dismissing listed application, however, would allow the counsel to assist the prosecution. ORDER ON MAIN PETITION Ms. Ismat Mehdi, learned counsel appearing for the petitioners, contends that the petitioners Nos.I to 6 are the directors of petitioner No,7, a public limited company which was established in 1968 and has provided employment to more or less 5,000 individuals. The petitioners on the terms and conditions detailed in the facility letter dated 29-11-2011 had availed finance facility to the extent of Rs,300 Million from the complainant Bank i,e, Rs,200 Million as Running Finance Facility (RFF) to meet the working capital requirement of the company and a sum of Rs,100 Million against export contracts. Per counsel, the economic conditions in the country coupled with depressed market conditions and deteriorating law and order situation had compelled the petitioners to request all the financial institutions including the complainant Bank from whom the petitioners had availed
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finance facilities for an overview of the petitionersfinancial conditions and to restructure its outstanding liabilities. Per counsel, some of the financial institutions at the request of petitioners restructured their outstanding liabilities, but the Complainant Bank instead of conceding to the request of the petitioner or adopting remedy provided under the Financial Institutions (Recovery of Finances) Ordinance 2001 unfortunates in blatant violation of the law filed a complaint before the National Accountability Bureau, which was entertained, notwithstanding, the fact that no offence punishable under the Ordinance was committed by the petitioner. Per counsel, in terms of Section 18(c) of the Ordinance, 1999 an inquiry or investigation can only be directed by the Chairman NAB or an officer of the NAB duly authorized by the Chairman, once they form an opinion that an offence. Punishable under the Ordinance 1999 was committed by any person so as to empower them to initiate inquiry or investigation in the matter, whereas in the instant case there is nothing on record to reflect that the Chairman NAB or an officer authorized by him directed initiation of inquiry after forming an opinion that an offence punishable under the Ordinance 1999 was committed by the petitioners, therefore, the call-up notices issued by the Investigating Officer are liable to be quashed. Per counsel, the call-up notices even otherwise were in clear violation of the principles laid down by this Court as well as by apex Court in its various pronouncement as the notices did not specify the required details. It was next contended that even prior to issuance of call-up notices the Investigating Officer on 4-2-2013 without any authority in purported exercise of power conferred on him by virtue of section 19 of the Ordinance 1999 directed the Secretary, SITE Limited, to keep the petitionersimmovable property viz. Plot No,A-39, SITE, Karachi in ban list. Per counsel, there is no provision in the Ordinance 1999 which empowers the Investigating Officer to direct agencies maintaining the land record to keep the immovable property of the petitioners in ban list. It was next contended that the investigating officer has issued notices asserting therein that the competent authority has taken cognizance of an offence of wilful loan default of JS, Bank Ltd, whereas sections 5(r) and 31(d) of the Ordinance 1999 if read in juxtaposition would make it abundantly clear that NAB has no authority whatsoever to take cognizance in respect of defaulted loans cases unless a reference is made by the Governor, State Bank of Pakistan and per counsel in the instant case no reference whatsoever was made by the Governor, State Bank of Pakistan, therefore, the proceedings being incompetent, abuse of process are liable to be quashed. In support of her contention counsel has placed reliance on the judgment of apex Court in the case of Dr. Arsalan Iftikhar v. Malik Riaz Hussain and others (PLD 2012 Supreme Court 903) as well as Judgments of Division Bench of this Court in the case of Mian Munir Ahmed v. The State (2004 PCr.LJ 2012) Asim Textile Mills Ltd. And others v. National Accountability Bureau and others (PLD 2004 Karachi 638), Ghulam Hussain Baloch and another v. Chairman, National Accountability Bureau, and others (PLD 2007 Karachi 469) and Messrs Kaloodi International (Pvt) Ltd v. Federation of Pakistan and others (PLD 2001 Karachi 311). Mr. Noor Muhammad Dayo, learned ADPG assisted by Messrs Muhammad Ashraff Kazi and Shahab Sarki, learned counsel for the complainant, contended that it is not a case of wilful default, though notices due to bona fide mistake were issued by the Investigating Officer alleging wilful default on the part of the petitioners, but in fact it was a case of defrauding the complainant bank and embezzling public funds for obtaining wrongful gains and benefits for themselves by deliberate misrepresentation and submission of forged and fudged statement of account. It was contended that a complaint was received from the financial institution which in terms of Section 18 of Ordinance 1999 was scrutinized and the Chairman after coming to the conclusion that a case punishable under the Ordinance 1999 was made out directed initiation of inquiry. Mr. Dayo while referring to Section 19 of Ordinance 1999 contended that the NAB has ample power to call information from the accused persons or any other persons required during inquiry or
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investigation. He while referring to section 9(a)(xi) of Ordinance 1999 has contended that the petitioners have committed offence of cheating as defined in section 415, P.P.C. By dishonestly inducing the financial institution to grant loan to the petitioner. Mr. Dayo further while referring to Entry No,5 to the Schedule II appended to the Ordinance, 1999 contends that the petitioners had deceitfully, fraudulently and dishonestly caused loss to the complainant by submitting pre-audited fudged accounts for the first quarter of financial year 2011-2012. It was further contended that facility of Rs,200 Million was provided to the petitioner to meet the working capital requirement, whereas facility of Rs,100 Million was against exports and the non-utilization of the facility in terms of Clauses 13 and 20 of the offer letter was nothing but an offence as envisaged in section 415, P.P.C. Mr. Dayo further referred to the audited and unaudited accounts of the petitioner No,7 company and contended that, its perusal would reflect that the company's account up to 30-6-2011 reflected profit of Rs,77 Million and the first quarter for account year 2011-2012 from July to September 2011 reflected profit of Rs,17 Million and once Rs,300 Million facility was disbursed in December 2011, the next quarter from July to December 2011 reflected loss of Rs,145 Million which supports the stance of the complainant that the accounts were deliberately falsified to cheat the bank out of the public funds. In response, Ms. Ismat Mehdi while referring to the complaint filed by the financial institution before the NAB contended that the NAB in connivance with the complainant has tried to change the course of prosecution realizing that no case of willful default is made out and consequently has pleaded deception, dishonest concealment and cheating, whereas the complaint filed before the NAB by the financial institution itself reflects that the petitioners had obtained finance facility in the ordinary course of business. She while referring to the statement of account has contended that letter of credit facility of Rs,100 Million was availed by the petitioner by opening letter of credit through the complainant Bank, whereas running finance facility admittedly was transferred from the complainant Bank to the account of petitioners maintained in Standard Chartered Bank from where it was disbursed to various financial institutions from where letter of credit for local purchase was established, therefore, there was no question of cheating or dishonestly inducing the Complainant Bank for availing finance facility. In the end, she has contended that the stance of the NAB that the petitioners have falsified the account in order to cheat Complainant Bank out of the public funds is belied from the fact that the Complainant Bank itself in December 2012 had offered further finance facility of Rs,600 Million and has placed on record an e-mail, per counsel since the terms and conditions on which further facility of Rs,600 Million was offered were not acceptable to the petitioner, therefore, the virtual owner of the Complainant Bank by using his influence has misused the machinery of NAB. After conclusion of submission we in the open Court asked the officer of the complainant Bank as to whether in December 2012 the complainant Bank through e-mail produced in Court by the learned counsel for the petitioner had offered additional facility of Rs,600 Million to the petitioner No,7 company and the officer simply responded in positive and acknowledge the issuance of email. We have heard the learned counsel for the respective parties in detail perused the record with their able assistance and the case-laws cited at bar. It appears to be an admitted position that the complainant Bank on 27-11-2012 filed an application before the Chairman, National. Accountability Bureau, and as contended by the ADPG the Chairman after thoroughly scrutinizing the allegations leveled in the complaint and upon forming an opinion in terms of section 18 of Ordinance 1999 directed initiation of inquiry and the Investigating Officer in consequent to such authorization on 13-2-2013 served call-up notices upon the petitioner requiring presence of the petitioner before the Investigating Officer on 19-2-2013. The first paragraph of the call-up notices reads as follows:--
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Whereas the Competent Authority has taken the cognizance for an offence of wilful loan default of JS Bank Ltd committed by the director of M/s. Al-Abid Silk Mills Ltd. And others under the National Accountability Ordinance, 1999." However, contrary to the stance taken by NAB in call-up notices the ADPG duly assisted by the counsel for complainant while referring to the provisions of Section 9(a)(ix) of Ordinance 1999 has argued before us that the petitioners have committed offence of cheating as defined in section 415, P.P.C. Read with Entry No,5 to the Schedule of Ordinance 1999 by dishonestly inducing the financial institution by submitting pre-audited fudged accounts for the first quarter of financial year 2011-2012 for the grant of loan to the petitioners with the definite intention of not returning the same as it has been used for business purposes other than the purpose for which it was granted. However, in our opinion such contention appears to be afterthought, frivolous and contrary to the record for the following reasons:-- Firstly, it is not the case of the complainant that the petitioners had siphoned off the facility so availed, though in paradise comments word siphoned off is used but perusal of comments filed on behalf of the National Accountability Bureau reflects that the grievance actually was that "the amount was utilized for some other business purpose other than one for which the loan was sanctioned". However, perusal of the facility offer letter of the complainant Bank dated 29-11-2011 reflects that finance facility of Rs,100 Million was allowed against foreign bill purchase, whereas Rs,200 Million were allowed as running finance facility to meet the working capital requirement of the company. As to the first Rs,100 Million, it is an admitted, position that it was utilized through complainant Bank against foreign hill purchase, whereas remaining Rs,200 Million admittedly were utilized for opening local letter of credit from different banks or repayment of their outstanding liability. We further are of the view that though no restriction whatsoever could be imposed by a financial institution on utilization of running finance facility to meet the working capital requirement, as the borrower is the best judge of its application and even if any restriction is imposed its violation may lead to recalling the entire facility on account of breach of the terms of grant/sanction, but by no stretch of imagination can be termed as an offence as pleaded by the ADPG on the instructions of complainant institution. Secondly; the comments filed on behalf of the NAB itself reflects that the complaint was entertained as a case of willful loan default, as on the second page it states that: "on 19th February, 2013 petitioner namely Naseem Abdul Sattar and Azeem Ahmed put their appearance and they were treated gently will all respects, even Banks were made to sit together to resolve the issue... ... ... Prima facie the allegation made against the petitioners, who being the director of the company failed to Repay outstanding dues 91 On the third page, it is mentioned: "The nonpayment of dues is recurrence offence continues day to day which must be repaid, as this loss is loss to the public." The deliberate withholding of order of Chairman NAB authorizing initiating of inquiry and denial of the cause stated in call up notices negates the afterthought plea now raised before us. Thirdly, that paradise comments filed on behalf of the NAB do not state that the investigation officer has wrongly issued call up notice by treating the inquiry as a case of wilful loan default nor the order of Chairman NAB has been produced reflecting that the Chairman NAB had dealt with the subject matter of the complaint and had formed an opinion that any offence punishable under the Ordinance 1999 was committed by the petitioners so as to empower him to initiate inquiry or investigation in the matter. Consequently, such omission appears to be fatal to the very authorization as has been held by this Court in the case of Ghulam Hussain Baloch (supra) in following terms:-
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"In the present case, there is no material before this Court whether the Chairman NAB had dealt with the above subject and had formed the opinion that any offence punishable under the Ordinance was committed by any person so as to empower him to initiate the inquiry or investigation in the matter. If such opinion would have been formed by the Chairman NAB then the comments should have disclosed such fact by specifying the said offence. The silence on the part of the respondents on this very important aspect of the matter adversely affects the entire process of inquiry and investigation. If there is no foundation of any allegation of commission of offence under the Ordinance then the super-structure made on such foundation is bound to collapse without any further action. In the comments, it has simply been mentioned that the Chairman NAB had ordered for inquiry or investigation which by itself is not sufficient to order for inquiry unless it is mentioned that inquiry or investigation is required to be conducted in an offence, which is punishable under the Ordinance." Fourthly, even if we assure that the petitioners are guilty of an offence of cheating as defined in section 415, P.P.C. Still they cannot be tried under the provisions of NAB Ordinance by an Accountability Court as the scope of…
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