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Petitioner: INAMUR REHMAN VS Respondent: FEDERATION OF PAKISTAN and others
Court Name: Supreme Court of Pakistan Judge(s): Sajjad Ali Shah, Zaffar Hussain Mirza, Abdul Qadeer Chaudhry Title: INAMUR REHMAN vs FEDERATION OF PAKISTAN and others Case No.: Civil Appeal No,8-K of 1978 Date of Judgment:1991-07-29 Reported As: 1992 SCMR 563 Result: Appeal allowed
JUDGMENT
JUDGMENT ' ZAFFAR HUSSAIN MIRZA, J.---This appeal arises with the leave of this Court, from the judgment of a Division Bench of the High Court of Sindh at Karachi, in Constitutional Petition No,780 of 1973, dated 4th July, 1977 dismissing with costs the petition filed by the present appellant. ' The facts in brief which led to the filing of the aforesaid Constitutional petition may be stated. While the country was under Martial Law, on 13th January, 1972 the Chief Martial Law Administrator, promulgated the Foreign Exchange Repartriation Regulation, 1972 (MLR 104). Pursuant to the aforesaid Regulation the appellant declared and repatriated foreign exchange amounting to $ 1,70,000, through the Standard Bank Limited (subsequently having been merged in the Habib Bank Limited), respondent No,4, of which the appellant is said to have been the Managing Director at that time. As a result of this repatriation of foreign exchange, the Standard Bank received on behalf of the appellant a sum of Rs,20,90,486.77 (which shall be referred to as the 'principal amount'), being the rupee equivalent of the foreign exchange repatriated by the appellant. In addition, the Standard Bank received a further amount on behalf of the appellant in the. Sum of Rs,19,55,197.49 (to be referred to as the 'bonus amount'), to which the appellant was entitled under para.3(3) of the said Regulation. The latter amount was transferred, under the instructions of the appellant, by two separate entries, one dated 21st April, 1972 and the other dated 29th June, 1972, to the account of the Rawalpindi Engineering Company, a private limited company, owned and controlled by the appellant and his family. So far as the principal amount of Rs,20,90,486.77 is concerned, the same was withdrawn from the Standard Bank and transferred to the National and Grindlays Bank (hereinafter referred to as the `Grindlays Bank') in account No,230630215. The appellant then drew some cheques on Grindlays Bank, but the same were not cashed and the persons presenting the
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said cheques were verbally informed that the said Bank had been instructed by the State Bank of Pakistan (to be referred to as the 'State Bank') not to allow the operation of the appellant's account. This fact was verified subsequently by the Grindlays Bank in writing through their letter dated 30th June, 1972 addressed to the appellant. ' In the events that happened on 3rd August, 1972, the President promulgated the Foreign Exchange (Prevention of Payments) Ordinance (XXX of 1972)., which inter aim empowered the State Bank to direct any authorized dealer in foreign exchange through whom any person had repatriated any foreign exchange under MLR 104 to deposit with the State Bank the rupee equivalent of the amount so repatriated and any other amount payable on account of such repatriation. In purported exercise of the above power, the State Bank wrote to the Grindlays Bank, on 28th August, 1972 directing it to deposit the principal amount with the State Bank and also wrote to the Standard Bank to do the same in regard to the bonus amount issued to the appellant. In consequence of these directions, the Grindlays Bank deposited with the State Bank the said amount of Rs, 20,90,486.77 lying in the account of the appellant with it. However, so far as the Standard Bank is concerned, since it had transferzed the amount in the account of the M/s. Rawalpindi Engineering Company, it reversed the said entries and deposited the amount of Rs, 19,55,197.49 with the State Bank. The entries in favour of the said company were reversed at the request of the appellant. ' On 25th September, 1972, Ordinance XXX of 1972 was repealed and replaced by the Foreign Exchange (Prevention of Payments) Act (XXII of 1972), whereby the State Bank was empowered to direct not only an authorised dealer through whom any repatriated amount was received, but also any other person with whom such amount or any part thereof, and any other amounts payable in respect of such repatriation, had been deposited, to deposit the same with the State Bank. Subsequently, on 10th October, 1973, the Foreign Exchange (Prevention of Payments) (Amendment) Ordinance, 1973 was passed, which amended the aforesaid Act and gave it retrospective effect from 10th March, 1972. The said Ordinance, was in turn replaced on 8th February, 1974 by the Foreign Exchange (Prevention of Payments) (Amendment) Act, 1974, which contains a new section validating all directions or instructions issued by the State Bank, from the date of the commencement of the Act first named till 25th September, 1972, to any person or authorised dealer in foreign exchange. ' As the appellant was aggrieved with the directions of the State Bank resulting in the two Banks depositing the amounts in question with the State Bank, on 9th July, 1973 he filed a Constitutional petition in the High Court of Sindh (Constitutional Petition No, 780 of 1973) questioning the actions of the respondents herein. As during the pendency of this petition the aforesaid Act of 1972 and the Amending Ordinance of 1973 were promulgated, consequently an amended petition was filed with the leave of the Court on 25th February, 1975. Eventually by the impugned judgment the learned Judges of the Division Bench of the High Court of Sindh dismissed the Constitutional petition. Being aggrieved the appellant filed a petition for leave to appeal which was accepted by this Court, in orer to consider, inter alia, the following points: (i) Whether the High Court had misread section 6-A of Amending Act VI of 1974 in holding that the orders of the State Bank against the appellant had been duly validated thereunder, although the validation clause only covered directions issued from the date of the said Act, namely 8th February, 1974, when admittedly the State Bank's orders had been given as far back as May, 1972; and, ' whether the State Bank was competent to issue such directions after the appellant had disposed of the bonus amount in favour of the Rawalpindi Engineering Company, although this was done by a credit entry in the books of the Standard Bank, which was in accordance with the ordinary banking practice. ' Now the salient features of ML1 104 issued on 13th January, 1972 may be stated. Paras 3 and 4 of this Regulation are relevant for the present purpose which may be set forth as under:
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"3. (1) Any person who holds outside Pakistan, otherwise than under any specific or general authorities of the State Bank of Pakistan, any foreign exchange, howsoever acquired, shall declare it on or before the 15th January, 1972, to the State Bank in such form as the State Bank may specify. (2) The person declaring foreign exchange under sub-paragraph (1) shall repatriate it to Pakistan on or before the 25th day of January, 1972, through an authorised dealer in foreign exchange. (3) A bonus of forty-five per cent shall be allowed by the State Bank of Pakistan on the foreign exchange repatriated under sub-paragraph (2). (4) The rupee equivalent of any amount repatriated under subparagraph (2) shall not be chargeable to any tax to which would, but for this Regulation, have been liable. 4. (1) Whoever makes a full and true declaration of foreign exchange under paragraph 3 shall not be required to disclose how he acquired it nor shall any prosecution lie against him for having kept the foreign exchange abroad. (2) All declarations made under paragraph 3 shall be treated as confidential and no Court or other authority shall be entitled to require the production of any such declaration in any proceedings before." Disobedience of this Regulation was made punishable with transportation for life and also with confiscation of property of the person contravening the provisions of the Regulation. Para 6 of the Regulation conferred upon the Central Government plenary power to make rules and issue directions not inconsistent with the provisions of the Regulation for carrying out its purposes and to provide for matters not provided for therein. All such rules or directions, when issued were to form part of the Regulation itself and have effect accordingly. The next piece of legislation which requires to be noted is section 2 and section 6-A of the Foreign Exchange (Prevention of Payments) Act, 1972 as amended by Act VI of 1974 (hereinafter referred to as the 'Ace) which are as hereunder:-- "2. Power to direct State Bank to stop payment: (1) Notwithstanding anything contained in the Foreign Exchange Repatriation Regulation, 1972 (M.L.R.104), as continued in force by Article 280 of the Interim Constitution of the Islamic Republic of Pakistan, the State Bank of Pakistan may, and if so required by the Federal Government by order in writing shall direct: (a) an authorised dealer in foreign exchange through whom any person has repatriated any amount of foreign exchange to Pakistan in pursuance of the said Regulation; or (b) any other person with whom the whole or part of the rupee equivalent of the amount so repatriated and other amount payable in respect of such repatriation is or has been deposited, to deposit with the State Bank, within the time specified by it, the amount representing the aggregate of the rupee equivalent of the amount so repatriated and any other amount payable in respect of such repatriation or, as the case may be, the part thereof so deposited. (2) Any person or authority to whom any amount of money is payable by the person repatriating the amount of foreign exchange or who has against such person any claim the value of which can be expressed in terms of money may, within such time and in such manner as the Federal Government may, by notification in the Official Gazette specify, apply to the Federal Government for payment of the amount so payable or, as the case may be, of the amount, representing the value of such claim. (3) Upon the receipt of an application under subsection (2) an officer authorised by the Federal Government in this behalf may, after making such inquiries as he may consider necessary, make such order as he may deem fit. Provided that, while making ouch an order, the officer shall have due regard to an order of the Federal Government, if any, specifying the person or authority whose claim against the person repatriating the amount of foreign exchange shall be paid in priority to all other debts and claims:
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' Provided further that no order for the payment of money to any person or authority shall be so made unless the person repatriating the amount of foreign exchange has had an opportunity of showing cause against it. (4) The officer making an order under subsection (3) shall forward a copy thereof to the State Bank who shall make to the person or authority specified in the order the payment required by the order, if any. (5) The deposit by an authorised dealer of foreign exchange or any other person referred to in subsection (1) of any amount of money he is required to deposit with the State Bank under subjection (1), and the payment by the State Bank of any amount of money in pursuance of an order under subsection (3), shall be a full discharge of the authorised dealer or that other person or, as the case may be, of the State Bank from all liabilities in respect of the amount so deposited or paid." All directions or instructions issued by the State Bank of Pakistan "6-A. Validation: ' from the date of the commencement of this Act till the 25th day of September 1972, to any person or authorised dealer in foreign exchange as specified in clauses (a) and (b) of subsection (1) of section 2 of the said Act to withhold payment to any person of any amount repatriated under the Foreign Exchange (Repatriation) Regulation, 1972, and of any amount payable in respect of such repatriation, shall be deemed to have been validly issued under this Act." ' It would also be advantageous to mention that in exercise of powers conferred by subsection (2) of section 2 of the Act, the Federal Government issued a notification on 29th December, 1972 calling applications within the time prescribed therein in regard to any claim payable by the appellant, which teals as under: "S.R.O.1297(I)/72.--Whereas a direction under subsection (1) of section 2 of the Foreign Exchange (Prevention of Payments) Ordinance, 1972 (XXX of 1972) has been issued in respect of the foreign exchange repatriated to Pakistan by Mr. Inam-ur-Rehman AM, Managing Director, Standard Bank Limited, in pursuance of the Foreign Exchange Repatriation Regulation, 1972 (M.L.R. 104): Now, therefore, in exercise of the powers conferred by subsection (2) of section 2 of the Foreign Exchange (Prevention of Payments) Act, 1972 (XXII of 1972) the Federal Government is pleased to direct that an application under the said subsection may be made, within ninety days of the publication of this notification, to the Government of Pakistan, Finance Division (External Finance Wing), Islamabad, staling the amount of money payable by the said Mr. Inam-urRehinan AM or, as the case may be, the amount representing the value of the claim against him and accompanied by documents, if any, in support of the application." ' By another notification of the same date under subsection (3) of section 2 of the Act the Federal Government nominated Mr. N.M. Qureshi, PTS, Securities and Exchange Authority of Pakistan as the Authorised Officer for disposal of applications of claim against the appellant in the following terms: "S.R.O.1298(I)72.--In exercise of the powers conferred by subsection of section 2 of the Foreign Exchange (Prevention of Payments) Act, 1972 (XXII of 1972), the Federal Government is pleased to authorise Mr. N.M. Qureshi, PTS, Securities and Exchange Authority of Pakistan, for the purposes of the said subsection." ' It appears that Fauji Foundation and some others had preferred claims against the appellant before the Authorised Officer which were pending adjudication at the time of the institution of Constitutional Petition by the appellant before the High Court and by order dated 11th July, 1973 the said Authorised Officer was restrained from passing any order on the pending claims. It has been stated by the learned counsel for the appellant that the aforesaid stay was continued throughout the proceedings before the High Court and when the matter was brought before this Court by
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order dated 20th June, 1977 the proceedings before the said officer were stayed, with the result that no orders have been passed determining the claims so preferred until today. ' It may be stated, at this stage, that the Interim Constitution was promulgated on 21st of April, 1972 and Martial Law was lifted. However, MLR 104 was duly protected under the Interim Constitution. Then came the Permanent Constitution which was promulgated on 14th August, 1973 and once again MLR 104 received due protection (See Schedules I and VI of 1973 Constitution). The result of these Constitutional provisions is that no provision of MLR 104, which has been continued in force as existing law is liable to be called in question under Article 7 of the Interim Constitution or Article 8 of the Permanent Constitution on the ground of inconsistency with or contravention of the Fundamental Rights guaranteed under the Constitution. The Fundamental Rights conferred by Chapter I of Part II of the Permanent Constitution were restored after the imposition of the Martial Law, in July, 1977 for the first time on 31st December, 1985 and since then have continued to remain in operation. ' Mr. S.M. Zafar, learned counsel for the appellant has raised the following three main contentions: (1) The action taken against the appellant commencing from 22nd May, 1972, when the Grindlays Bank on oral instructions of the State Bank, refused to encash the cheques drawn by the appellant, until the appointment of one-man tribunal under Notification dated 29th , December, 1972 and proceedings thereafter were all tainted with mala fides, and were therefore void on that score. (2) The proceedings at present pending under the Act are liable to be declared without lawful authority, in that, (i) since restoration of Fundamental Rights on 31st December, 1985 the Act has become void in terms of Article 8 of the Constitution, being discriminatory and arbitrary. In other words, the Act is violative of Article 25 of the Constitution guaranteeing equality before law and equal protection of law to citizens of Pakistan. (ii) since the lifting of Emergency on 31st December, 1985 and the expiry of six months thereafter, i.e, 30th June, 1986, the Act has ceased to have effect in terms ofclause (6) of Article 234 of the Constitution,because the Act was inroad by the Parliament into the Provincial field of legislation. (3) The Supreme Court is bound to decide the appeal in accordance with the changed legal position, particularly because it is based on the enforcement of Fundamental Rights and in order to give effect to the Federal structure enshrined in the Constitution, because an appeal is a continuation of the earlier proceedings. ' So far as the first contention regarding mala fides of the actions taken against the appellant is concerned, the learned counsel wanted us to look at a photo-copy of the Summary for the President dated 24th June, 1972, which according to him provided the background for enabling the State Bank to withhold the amount which was due to the appellant on account of repatriation of foreign exchange and the bonus for ulterior motives. However, Mr. Naeemur-Rehman, learned counsel for the Federal Government, respondent No,1, objected to the consideration of this background on the ground that it was a privileged document which cannot be looked at. On this Mr. Zafar submitted that no privilege has been formally claimed under the signature of the competent authority and besides the document has already been produced in legal proceedings in the case of Fauji Foundation v. Shamim-ur-Rehman PLD 1983 SC 457. In this case the very same allegations of mala fides were made based on certain remarks attributed to the then President on this document. Learned counsel for respondent No,1, however, referred us to page 554 of the aforesaid report on which in para 82 of the judgment a finding was recorded that no mala fides was involved in the action taken. ' Be that as it may, we pointed out to the learned counsel that the ground of mala fides does not seem to have either been pleaded in the Constitutional petition before the High Court or raised as a ground of attack on the impugned actions of the Government and its agencies or the legislative
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measures adopted. These allegations have also not been specifically pleaded in the memo of the petition, filed in this Court nor raised at the time of the hearing of the petition for leave to appeal. On being pointed out this position, Mr. S.M. Zafar did not press the first contention. ' The remaining two contentions hereinabove mentioned are indeed relatable to the point whether the provisions of the Act and the executive action taken thereunder is violative of the Fundamental Right relating to equality before law. It would therefore be convenient to take up these two contentions together. But before adverting to the respective contentions advanced by the learned counsel for the parties, it would be convenient to dispose of first the preliminary objection taken by Mr. Saeed A. Shaikh, learned counsel for the State Bank. He submitted that the question of violation of Fundamental Rights cannot be agitated on behalf of the appellant at this stage. It is in this context that Mr. S.M. Zafar put a great deal of emphasis on the provisions of clause (3) of Article 184 of the Constitution which has the effect of preserving the original jurisdiction of the Supreme Court to entertain a petition directly, in case a question of public importance with reference to the enforcement of Fundamental Rights is involved. Although, the present case is a case on the appellate side of the jurisdiction of this Court, it was urged that Constitution charges the Supreme Court with the overriding responsibility and function of preserving the Fundamental Rights of the citizens by making the highest forum in the country available directly in case where there is a threat of the invasion of Fundamental Rights guaranteed by the Constitution. It is therefore urged that the objection raised on behalf of respondent No,2 is per se technical and places no legal embargo on this Court to consider the contention advanced in support of the present appeal on the basis of the violation of Fundamental Rights. Mr. S.M. Zafar has referred us to the exposition of law on this aspect of the matter by.Hamoodur Rahman, J (as he then was) in Abul A'la Maudoodi v. Government of West Pakistan PLD 1964 SC 673, where he observed as hereunder: "This brings me to the question as to whether, if the provisions of the Constitution are not retrospective, can an act done before the commencement of the Constitution (First Amendment) Act be still called into question on the ground that it now affects a fundamental right. There can be no doubt that acts done and completed before the coming into existence of the fundamental rights cannot be re-opened on the ground of inconsistency, nor can proceedings already commenced be stopped. Thus if a person has been convicted and sentenced prior to the coming into existence of the fundamental rights under a law which now contravenes a fundamental right, his conviction cannot be set aside on that ground, because, the right had already been taken away and extinguished before the constitutional guarantee became available. But the position, in my view, would be different if the right was to be found to be still subsisting and capable of being enforced or there was something still left to be done to complete the extinction of the right even after the conferment of the fundamental rights. Thus if a person is detained under a law, which provides for preventive detention without trial, before the incorporation of the fundamental rights, he would certainly be entitled to challenge the order then made for his detention if the detention continues even after the coming into force of the fundamental rights on the ground that the law under which his detention was ordered is inconsistent with the security of person guaranteed to him. In other words, if a right which arose prior to the Constitution is still subsisting after the coming into force of the Constitution and is guaranteed thereunder, then a continuing infringement thereof may be redressed by invoking the provisions of paragraph (c) of clause (2) of Article 98 of the Constitution on the ground that a right in praesenti is being infringed contrary to the provisions of the Constitution." ' We feel that in view of the fact that fundamental rights have remained in a state of suspension since the actions impugned in the Constitutional petition and until the decision of the same by the High Court, nay indeed even until the filing of the petition for leave to appeal in this Court, it will not
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be proper to refuse permission to the appellant to raise the Constitutional question at this stage, particularly when the decision thereon is not dependent on any question of fact. ' There is yet another reason for overruling the preliminary objection which may be stated. Although, as observed, on the date of hearing of the Constitutional petition by the Division Bench of the High Court die fundamental rights remained suspended, the question now sought to be raised was in a way raised before the High Court. In paragraph 8 of the impugned judgment the learned Judges have dealt with an argument raised on behalf of the present appellant questioning the conferment of powers under the said Act upon the Federal Government to refer claims against the appellant to a non-judicial forum, placing reliance on the case of Waris Meah v. The State PLD 1957 SC (Pak.) 157. The said case of Waris Meah dealt with the question of a statute being discriminatory and in violation of Article 5 of the 1956 Constitution, which preserved the fundamental right of equality before law in that Constitution. The learned Judges of the Division Bench in the impugned judgment repelled this contention on the following reasoning: "It may, however, be pointed out that the said Act, unlike the impugned Legislation in Waris Meah's case, neither provides for different forums for adjudication of identical matters nor does it confer any discretion upon the Federal Government to refer a claim to one or the other forum.…
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