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Petitioner: MUHAMMAD HANIF S. KALIAand others VS Respondent: THE STATE
Court Name: Sindh High Court Judge(s): Shahid Anwar Bajwa Title: MUHAMMAD HANIF S. KALIAand others vs THE STATE Case No.: Cr. Bail Applications Nos. 291, 292, 1123 and 1124 of 2009 Date of Judgment:2010-02-03 Reported As: 2010 YLR 1822 Result: Order accordingly
Judgment ORDER ' SHAHID ANWAR BAJWA, J.--F.I.R. No,76/2008 was registered at Police Station, F.I.A., Karachi on 15-11- 2008 for offences under sections 5,8 and 22/23 of Foreign Exchange Regulations Act, 1947, sections 7, 8 and 20 of Prevention of Electronic Crimes Ordinance, 2007 and under section 420, 467,471, 477-A read with Section 34, P.P.C. It was stated in the F.I.R. That consequent upon enquiry No,118/2008 of F.I.R. Crime Circle, Karachi on complaint of State Bank of Pakistan against illegal foreign exchange operators it had transpired that directors, partners and franchisees of Messrs Khanani and Kalia International being licensed exchange company besides their authorized exchange business have also been indulging in huge illegal transfers of money to the tune of billions of rupees, in collusion with different exchange companies, money changers, businessmen and private parties. ' It was further stated in the F.I.R. That enquiry had further revealed that in order to conduct this illegal business of foreign exchange racketeering the partners/ directors of Messrs Khanani and Kalia International besides their official website for transactions i.e, www.Remitton.Com and www . Kkionline .Com also created fraudulently with criminal intention replica website www.Click.Pk.Net without the knowledge of State Bank of Pakistan for effecting illegal transfers of money from and into Pakistan in a clandestine manner. This illegal exchange system worked side by side with their declared system being controlled from their head office network situated at 110-115 Samia Tower, I. I. Chundrigar Road, Karachi in collusion with their franchisees as well as number of further offices all over Pakistan. For this purpose very heavy computer system having sophisticated heavy duty machines were installed at the head office premises having a network of enormous clients stationed inside and outside Pakistan having direct automated access through internet codes and passwo rds. In order to facilitate the business of illegal exchange the accused persons used
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services of Messrs Al-Zarooni Exchange, U.A.E. Having Atif Polani and Javed Qasim as the focal persons to facilitate and execute all such transactions in the United Arab Emirates. 2. As per modus operandi discovered during the course of enquiry a large number of exchange companies/firms and agents outside Pakistan used to receive amounts from Overseas Pakistanis on behalf of accused persons for remitting the same to Pakistan but instead of transferring these amounts to Pakistan through the authorized banks duly declared through State Bank of Pakistan they either used to retain the same abroad or used to transfer them to any of the following currency accounts/benami accounts in Pakistan opened in collusion with the other persons/employees secretly and illegally, in order to conceal these remittances. These remittances were illegally held in these foreign currency accounts and were never sold/declared to State Bank of Pakistan while the equivalent amounts payable against these remittances were disbursed in Pakistani rupees to the relatives/recipients of such Overseas Pakistanis from their own resources in Pakistan. Thus the accused persons and their franchisees/agents deprived Government of Pakistan of Foreign Exchange to the tune of billions of dollars in past few years. 3. In order to further misuse this foreign exchange retained in these foreign currency accounts the accused persons with common objective and criminal intention in collusion with concerned bank officers and others, manipulated the transfer back of this foreign exchange to different foreign companies, individuals and exporters as "Hawala Transfers" on behest of large number of businessm en, to meet the under invoiced amounts required to be paid illegally to such foreign exporters in connection with their mis-declared exports to evade import duty and taxes. Besides, huge Hawala Transfers were made to different banks, construction companies and institutions abroad illegally, after taking substantial commission being illegal gains. Thus this huge foreign exchange which should have been earned by Pakistan was reversed back to other countries causing loss of billions of dollars to Pakistan in terms of foreign exchange to facilitate those who earned money in Pakistan through illegal means. 4. The enquiry further revealed that the accused persons for the purpose of illegal transfer of money had active connivance of some Director/Partners of other exchange companies and money changers and they used to facilitate, assist and accommodate each other in give and take of illegal foreign exchange as per market requirements. Supplementary challan was submitted on 24-2-2009 in which Muhammad Hanif S.Kalia, Abdul Munaf Kalia and Muhammad Javed Khanani (applicants in Crl. B.As. Nos.291 and 292/2009) were sent up for trial. For the same charge sheet Atif Aziz Polani was shown as one of the absconder accused persons. Said Atif Aziz Polani was subsequently arrested when he came back to Pakistan on 15-5-2009. Crl. Bail Applications Nos. 1123/2009 and 1124/2009 have been filed by the said Atif Aziz Polani. 5. Through order dated 4-9-2009 bail applications of applicants in Crl.B.As. Nos.291 and 292/2009 were dismissed by learned Sessions Judge, Karachi South while through another order, dated 17-9- 2009 Bail applications of Atif Aziz Polani applicant in Crl. B.As. Nos. 1123 and 1124/2009 were also dismissed by learned Sessions Judge, Karachi South. Bail Application No,291/2009 is in respect of offences under Foreign Exchange Regulations Act, 1947 and Bail Application No,292/2009 is in respect of offences under Prevention of Electronic Crimes Ordinance, 2008. Similarly Bail Application No,1124 of 2009 is in respect of offences under Foreign Exchange Regulations Act, 1947 and Bail Application No, 1123/2009 is in respect of offences under Prevention of Electronic Crimes Ordinance, 2008. 6. It is stated in the Bail Applications Nos.291 and 292 of 2009 that Messrs Khanani and Kalia International (Pvt.) Limited is being incorporated under the Companies Ordinance, 1984 and is authorized and licensed by State Bank of Pakistan to deal with Foreign Currency under the Foreign Exchange Regulations Act, 1947. It is further stated that on the night between 7th and 8th November, 2008 a team of FIA raided the offices of Messrs Khanani and Kalia International (Pvt.)
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Limited situated at Saima Trade Towers Parchi. It is further stated that during the jame night applicant Muhammad Javed Khanani was arrested from Lahore and applicant Abdul Munaf Kalia was arrested from Karachi. It is further stated that custody of Abdul Munaf Kalia was transferred to Lahore and investigation team of FIA adopted all coercive measures and pressurized the accused persons to confess their crimes and come to terms but on their refusal they have been involved in the case of F.I.R, lodged at Lahore. It is further alleged that F.I.A, in order to further humiliate and malign the applicants in the media registered a F.I.R, at Karachi being F.I.R. No,76/2008. Consequent upon registration of F.I.R, on 20-11-2008 the complainant/I.O of F.I.A. Crime Circle Karachi took custody of the accused Abdul Munaf and Muhammad Javed and obtained their physical remand. It is further stated that on 28-11-2008 applicant Muhammad Hanif Kalia is an old, infirm and sick person suffering from diabetes mellitus for last 20 years, hypertension for last 10 years and unstable angina as well as kidney and bladder complications and various other diseases, were claimed to be wrecking body of applicant Muhammad Hanif Kalia. It is further stated that applicant had been made a scapegoat by F.I.A. It is further stated that the allegations against the applicants are of general in nature. Regarding various grounds stated in the application, I will turn to them when I will refer to submissions made by the leamed counsel. 7. In case of applicant in Crl. B.As. Nos. 1123/2009 and 1124/2009 it is claimed that the applicant is neither Director nor Partner nor employee nor has any affiliation with Messrs Khanani and Kalia International (Pvt) Limited. It is further stated that applicant has been living in Dubai for the last 20 years and is running a business under the name of Atif Polani Trading LLC. It is also stated that besides the said business he was having part time employment with Messrs Al-Zarooni Exchange Company owned by a U.A.E. National, Mr. Sohail Al-Zarooni. 8. Mr. A. Q Halepta, learned counsel for the applicants in Crl. B.As. Nos.291 and 292/2009 and made the following submissions: 8. Mr. A. Q Halepta, learned counsel for the applicants in Crl. B.As. Nos.291 and 292/2009 and made the following submissions: IN RESPECT OF OFFENCES UNDER PREVENTION OF ELECTRONIC CRIMES ORDINANCE, 2007 (THE PECO) (1) Learned Counsel referred to section 25 of PECO to contend that the Federal Investigation Agency had no authority to investigate and prosecute the offence under PECO. (2) Section 31 of the PECO provides for constitution of Information and Communication Technologies Tribunal (hereinafter referred to as the Tribunal). Thereafter learned counsel referred to section 23 of the PECO to contend that the offence is only cognizable and triable by the Tribunal. Therefore, Sessions Judge, Karachi South had no jurisdiction whatsoever to try the offence. (3) F.I.A. Is constituted under the Federal Investigation Agency Act, 1975. Federal Investigation Agency had no jurisdiction to register F.I.R. Or investigate and prosecute any offence under the PECO because the offence is not a scheduled offence under the Federal Investigation Agency Act, 1975 and it has to be police who can act in this regard in terms of provisions contained under section 154 to section 173, Cr.P.C. (4) Under section 193(1), Cr.P.C. Sessions Judge in any case cannot directly take cognizance. Sessions Judge is not Tribunal under section 31 of PECO, therefore, Sessions Judge could not even have taken cognizance. Thereafter, as far as PECO is concerned, Sessions Judge is corum non judice. 10. Learned counsel in this regard relied upon State v. Hamtho 1971 SCMR 686, Sabir Ali v. Khalil Ahmed Bajwa and others 2005 MLC 1127, Chaudhry Abid Saeed v. The State 2002 PCr.LJ 1818. ' IN RESPECT OF OFFENCES UNDER THE FOREIGN EXCHANGE REGULATIONS ACT, 1947 (THE FERA) (1) Under section 23-A of the FERA every Sessions Judge for the area within the territorial limits of his jurisdiction is to be a Tribunal for trial of an offence punishable under section 23. In terms of provisions contained in subsection (3) of section 23-A, a Tribunal under FERA has all the powers of
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a Magistrate of first class and under section 32 of the Cr.P.0 a Magistrate of first class can award the maximum sentence of imprisonment for a term not exceeding three years including such a solitary confinement as authorized by law and fine not exceeding Rs,45,000. (2) Applicant Muhammad Javed Khanani and Abdul Munaf Kalia were arrested on 20-11-2008 and applicant Muhammad Hanif Kalia was arrested on 28-11-2008. They have remained behind the bars since then. Maximum sentence under section 23 of FERA is two years. During their incarceration the applicants have earned remission of 30 days granted on 27-10-2008, another remission of 60 days granted by I.-G. Prisons on 12-1-2009% under jail rules every prisoner is given remission of 8 days every month and for last 13 months of imprisonment he has earned remission of 104 days, on 27-12-2008 Home Office of Province of Sindh gave remission of 60 days and special remission of 30 days was granted by the Superintendent Jail on 26-11-2009. Therefore, the applicant has practically completed much more than half of maximum possible sentence under FERA. The applicant, in any case, is entitled to the benefit of section 382-B, Cr.P.C. The applicants have almost served their sentence. Learned counsel in this connection relied upon Shah Hussain v. State PLD 2009 SC 460. (3) More than one year has elapsed since their arrest and the trial Court is still busy in proclamation proceedings under section 87 Cr.P.C. Because out of absconding accused only one has been arrested while seven are still absconding. In support of this contention that in such like cases delay in trial is a valid ground for grant of bail learned counsel relied upon PLD 2005 Kar. 255. (4) Under section 23(4) of FERA only a Director etc. Of a company is to be charged with an offence by the company if he is "knowing" party to the offence. Learned counsel in this regard referred to statements of P.W.9, Fayyaz, P.W.8, Sindhu, P.W.7, Shuja and P.W.6 Razzak recorded under section 161 Cr . P. C . (5) Learned counsel referred to S.R.O. 890(1)/2008 issued by the Finance Division, Government of Pakistan and published in the Federal Gazette on August 28, 2008 and submitted that the Federal Government has no jurisdiction or power to declare an offence under section 23 of FERA to be non- bailable. Learned counsel submitted that such declaration by the Federal Government is an act mala fide in law. He referred to PLD 1997 Lahore 38. Relying on 1999 PCr.LJ 53 learned counsel argued that the offences alleged are bailable and his clients are entitled to concession of bail. (6) Learned counsel that apprehension has been expressed by the Court below that if the applicants are granted bail they are likely to flee the country. In presence of power with the Federal Government to place a person on Exit Control List (ECL) this apprehension is not at all well founded, the learned counsel submitted. (7) That all the evidence is either in shape of documents or electronic record and it has already been taken over by the F.I.A. And business licence of the applicants' company has also been cancelled. Therefore there cannot be any question of the applicants tampering with evidence. Learned counsel relied upon Tariq Bashir and 5 others v. The State, PLD 1995 SC 34. (8) The fact that amounts involved are large cannot be a ground for refusal of concession of bail. Learned counsel relied upon Ijaz Akhtar v. The State, 1978 SCMR 64; Mir Akhtar Khan Khattak v. The State PLD 1982 Pesh. 128; Abdul Hay-uz-Zafar v. The State1983 PCr.LJ 2010 and Abdul Hai Siddiqui v. The State 1993 PCr.LJ 446. In support of his proposition that the benefit of doubt entitled applicants to bail learned counsel relied upon Sikandar A. Karim v. The State, 1995 SCMR 387 at page 408. 11. Dr. Faroogh Nasim supplemented submissions of Mr. A.Q. Halepota and made the following submissions. 1. If a person is prosecuted under two statutes, for the purpose of bail the statute which prescribes lower punishment is to be considered. He relied upon Muhammad Younus and another v. The State,
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2001 PCr.LJ 157; Liaqat Ali v. The State, 1998 PCr.LJ 1955; Akhtar Hussain Shah v. The State, 1999 PCr.LJ 225 and 1992 PCr.LJ 568. 2. For the offences under PECO applicable Article would be Article 164 of Qanoon-e-Shahadat, 1984 and it is settled that under Article 164 most stringent proof is required. He relied upon Haji Sirajuddin v. Haji G.M. Khan, 1990 CLC 331 and Arif Hashwani and 3 others v. Sadaruddin Hashwani and 3 others, PLD 2007 Karachi 448. 3. None of the documents alleged against the applicants have been shown to them. He relied upon Muhammad Luqman v. Bashir Ahmed, PLD 1994 Karachi 492, and Miss Haleema Banker and another v. Haji Ghulam Rasool Soomro, 1994 CLC 2422. 4. Seriousness of charge is no ground for denying facility of bail. He relied upon Chaudhry Muhammad Aslam v. The State, 1992 MLD 880. 5. It is alleged that there had been benami transactions. No person on whose behalf the alleged transactions were executed has been named. Learned Counsel relied upon Makhdoom Javed Hashmi v. The State and 2 others, 2003 PCr.LJ 266. 12. Mr. Shaukat Hussain Zubedi learned counsel for the appellant and Crl. Bail Applications Nos.1123 and 1124 of 2009 made the following submissions:- 'IN RESPECT OF OFFENCES UNDER PREVENTION OF ELECTRONIC CRIMES ORDINANCE, 2007 (THE PECO) 1. The applicant was arxested when he returned from Dubai on 15-5-2009. Applicant is not the main accused. He is only shown in the F.I.R. As focal person who in Duabi facilitated execution of all the alleged transactions. 2. The main accusation is that applicant in Crl. Bail Application Nos. 291 and 292 of 2009 being life and soul behind M/s. Khanani and Kalia International had dealt with Messrs Al-Zarooni Exchange United Arab Emirates. The applicant in Crl. Bail Applications Nos.1123 and 1124 of 2009 had nothing to do with Messrs AlZarooni Exchange U.A.E. He is not even alleged to have been involved in any deal in any manner whatsoever. 3. Date and period of occurrence is shown in the F.I.R. As "20072008" . Since 2001 applicant in Crl. Bail Applications Nos.1123 and 1124 of 2009 has been continuously residing in Dubai. Learned counsel referred to page 33 of the bail application which shows that Atif Polani Trading (LLC) was registered under the Commercial Registrar of Department of Economic Development, Government of Dubai on 24-6-2001. 4. That the said applicant is neither a director nor an employee of Messrs Khanani and Kalia International (Pvt.) Ltd. He has neither opened nor operated any FC Account of Khanani and Kalia International nor has been involved in any benami transaction. 5. The applicant has been resident in Duabi all along an no witness had stated that he received remittance from any one or paid to any one in Duabi. 6 Learned counsel referred to definition of data, electronic system, electronic device contained in clauses (e), (1) and (i) of subsection (1) of section 2 of PECO and submitted that there has been no evidence that he has any access to an such data, electronic system or electronic device. No witness has come forward to state in the statement under section 161 Cr.P.C. Even with an iota prima facie evidence linking the applicant with any such offence. Similarly learned counsel referred to section 8 of PECO and submitted that section 8 is attracted only when there is an interference with data, electronic system or electronic device. No prima facie evidence of any such interference has been stated in any statement. 7 Sections 7 and 8 have been added with mala fide intention for to making the offence non- bailable. 8. Learned counsel referred to section 20 of PECO and submitted that if there is no evidence about use, misuse or illegal use of data, electronic system or electronic device. Section 20 in any case cannot be attracted.
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9. It has been alleged in the F.I.R. That the applicant used services of Messrs Al-Zarooni Exchange, U.A.E. But no owner, director or employee of Messrs Al-Zarooni Exchange, U.A.E. Has been cited as an accused in this matter. Not even any person from Messrs AlZarooni Exchange, has been cited witness in the case. ' IN RESPECT OF OFFENCES UNDER THE FOREIGN EXCHANGE REGULATIONS ACT, 1947 (THE FERA) 13. Learned counsel submitted that the applicable sections are 5, 8,22 and 23. Learned counsel referred to section 5 and contended that this is applicable only to person resident in Pakistan and the applicant was never resident in Pakistan. Thereafter learned counsel referred to section 8 and stated that is in respect of gold, sliver or currency notes and there is no such allegation against the applicant. In any case, case against the applicant is case of further inquiry. While concluding the learned counsel submitted that he has been implicated merely because one of the main accused is his relative and the applicant refused to become a witness. It is for this reason that applicant is being forced to face the music. 14. Mr. Shahab Sarki, learned Standing Counsel made the following submissions: - ' Section 31 of PECO is answered by section 45 of PECO. The present proceedings being before Sessions Judge and since the Tribunal has not yet been constituted, proceedings before Sessions Judge are competently filed and maintained. 2. In respect of jurisdiction of F.I.A. Learned counsel referred to S.R.O. No, 2006(1)/2008, dated 12-2- 2008 and contended that jurisdiction has been conferred upon F.I.A. In respect of offences under PECO. 3. Although Messrs Khanani and Kalia International has reported website for transactions i.e, www. Remitton.Com to State Bank, they surreptitiously made another website www . Clickpk. Net. This website was not reported to the State Bank and 70% of the remittances took place through this website and such action on part of the applicant constituted 'suppression of date' under section 8. Therefore sections, 7, 8 and 9 of PECO are completely attracted to the offences committed by the applicants. Severely affected due to illegal acts of applicants. State Bank has reported that this crackdown on inward remittances into Pakistan from Overseas Pakistanis have increased remittances by 26%. Therefore, the argument that the punishment is less than 10 years and therefore bail is a right is not a tenable argument. 6. In respect of applicant in Crl. Bail Applications Nos.1123 and 1124 of 2009, the learned counsel submitted that the applicant is real nephew of the main accused/ applicant in two other bail applications. He has been working with Messrs Al-Zarroni Exchange, in Duabi. Dubai is hub of remittances all over the world. He submitted that applicant was the focal person. He further submitted that father of the applicant in Crl. B.As. Nos.1123 and 1124/ 2009 is himself running an exchange company in the name of Polani Exchange Company and there was agreement between Messrs Khanani and Kalia International and Polani Exchange Company. Learned counsel further submitted that brother and father of applicant in Crl. B.As. Nos.1123 and 1124/ 2009 are still absconders. 4. Learned counsel referred to S.R.O. No,890(I)/2008, dated 26-8-2008 to contend that offences under FERA are cognizable and non-bailable. 5. Bail has to be deiced on case to case basis. In this case entire economy of the country has been that no malice has been pleaded or established on part of the government against any of the applicant. The case involves reputation of the country and the economy and the Court should read the law according to the circumstances. 15. Mr. Ibrar Hassan learned counsel for the State Bank referred to statements of witnesses Ghulam Rabbani, Muhammad Furqan, Muhammad Hussain, Asif Maqbool and Kamal Mumtaz recorded under section 161 Cr.P.C. And contended that according to these statement applicant in Crl. Bail Applications Nos.1123 and 1124 of 2009 is directly and clearly implicated and alleged to be directly
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responsible for 104 Billion of inward Hawala. Learned counsel submitted that it was Altaf Khanani who was running AlZarooni Exchange. He further submitted that father and brother of applicant in Crl. B.As. Nos.1123 and 1124 of 2009 are still absconders. 16. Exercising his right of reply Mr.A.Q. Halepota made the following submissions:- 1. Learned counsel referred to supplementary charge-sheet No,20/ 2009 dated 24-2-2009 which is stated to be submitted before "Court of District and Sessions Judge (PECO Tribunal) South Karachi." Learned counsel submitted that this is incompetently filed because the Sessions Judge is not the PECO Tribunal because firstly no such Tribunal has yet been constituted and secondly each bench of the Tribunal is required to consist of at least two members. Learned counsel submitted that even under section 45 of PECO the Sessions Judge is not competent. Learned counsel submitted with reference to section 29, Cr.P.C. And its Second Schedule that since under PECO maximum punishment is 7 years and Sessions Judge is not competent to try such offence, it has to be a Magistrate First Class. 2. In any case State has filed prosecution not before the Sessions Judge per se but before the Sessions Judge claiming him to be the Tribunal. 3. F.I.A. Has no jurisdiction to investigate unless a special cell is constituted. In this regard he referred to section 25 of PECO and submitted that no such cell has been constituted and therefore the offence had to investigated by police. 4. As far as website www.Clickpk.Net it was opened by Mr. Taha employee of Messrs Khanani and Kalia International and the applicant in Crl. B.As. Nos.291 and 292/2009 had no knowledge of it. 5. Khanani and Kalia International (Pvt.) Limited is a company incorporated under the Companies Ordinance, 1984. Learned counsel referred to section 21 of the PECO to contend that a company can be punished only with fine and if offence is punishable with fine only then section 67…
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