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Petitioner: Mian MUHAMMAD ABBAS SHARIF and 2 others VS Respondent: FEDERATION OF PAKISTAN JUDGMENT
Court Name: Lahore High Court Judge(s): Raja Afrasiab Khan, Raja Abdul Aziz Bhatti Title:Mian MUHAMMAD ABBAS SHARIF and 2 others vs FEDERATION OF PAKISTAN
JUDGMENT
Reported As: 1995 P Cr. L J 1224 Result: Order accordingly Judgment JUDGMENT ' RAJA ABDUL AZIZ BHATTI, J.--- This order will dispose of Writ Petitions Nos.1361 of 1994, 1362 of 1994, 1376 of 1994 and 1377 of 1994 filed by the petitioners. 2. Through the aforesaid petitions and criminal miscellaneous the petitioners have sought: (a) Quashment of F.I.R. No,12/94, dated 10-11-1994 registered at Police Station F.IA./S.I.U., Islamabad, under sections 419, 420, 468, 471 and 109, P.P.C., under section 5(2)47 of Prevention of Act and Article 3 of Holders of Representative Offices (Punishment for Misconduct) Order, 1977; (b) F.I.R. No,13. Of 1994, dated 12-11-1994 registered at Police Station F.IA./S.I.U., Islamabad, under sections 419, 420, 468, 471 and 109, P.P.C. Section 5(2) 47, P.CA. And Article 3 of Holders of Representative Offices (Punishment for Misconduct) Order 1977; (c) The petitioners have also sought pre-arrest bail in these cases. 3. Brief facts of case F.I.R. No,12/94, dated 10-11-1994 are that an inquiry was held by the F.IA./S.I.U., Islamabad, under Federal Investigation Agency Act, 1974, during which transpired:-- (i) that on 26-8-1992 fake account in the name of one Sulman Zia, resident of Main Bazar, Sahiwal, was opened in Habib Bank Limited, AG. Zurich, Lahore, with an initial deposit of US $ 168; (ii) that fake account in the name of Muhammad Ramzan resident of House No,5, Street No,6 of Sant Nagar, Lahore was opened in Habib Bank Ltd., AG Zurich, Lahore, with initial deposit of US $ 300. Subsequently, both of them were issued dollars bearing certificates worth US $ 7,50,000 cash by Union Bank Ltd. Against cash proceeds of Travellers Cheques encashed through American Express, New York;
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(iii) that a fake account was also opened in the name of Kashif Masood Qazi (Account No,260133- 91) in the Bank of America by having transferred the amounts of aforesaid two fake accounts; (iv) that another fake Account No,199936-091 in the name of Mrs. Nuzhat Gohar Qazi wife of Gohar Masood Qazi, resident of Nisbat Road, Lahore was opened in the Bank of America. Ultimately, approximately an amount of US $ 0.5 million was transferred to the account of Kashif Masood Qazi from the account of Mrs. Nuzhat Gohar Qazi. ' The aforesaid accounts were found to be fictitious. The Directors of Messrs Hudabiya Engineering (Pvt.) Ltd. In collaboration with the bank officials of Habib Bank Limited, AG Zurich, Lahore and Bank of America, Lahore, under the influence of Mian Muhammad Nawaz Sharif (former Prime Minister), dishonestly and fraudulently managed to open aforesaid fake accounts/ benamis for subsequent creation of loan amount to Rs,60 millions by the Bank of America, Lahore, in favour of the said Company, against the fake account of Kashif Masood Qazi. All these under hand methods were adopted to utilize their black money for securing wrongful gains. ' As a result of the aforesaid enquiry, the accused committed offence punishable under the aforesaid penal sections of law and the case was registered against the directors of Messrs Hudabiya involving the following persons: ' Mian Muhammad Sharif. ' Mian Muhammad Abbas Sharif. Mian Hussain Nawaz. ' Abdul Hameed Butt. ' Mukhtar Hussain and some others. 4. Brief facts of F.I.R. No,13/94 are that it was registered on 12-11-1994 at Police Station F.IA./S.I.U., Islamabad, under sections 419, 420, 468, 471 and 109, P.P.C. Under section 5(2) 47, P.CA. And Article 3 of Holders of Representative Offices (Punishment for Misconduct) Order, 1977. The investigation of this case is in progress which is yet to be completed. However, before the registration of this case allegedly an inquiry was conducted against the accused in connection with Messrs Hudabiya Paper Mills (Pvt.) Ltd. And about fake Accounts Nos.202120-1065 and 202120-106585 etc. Which were opened in Habib Bank Ltd. AG Zurich, Lahore, in the name of Muhammad Ramzan and Asghar Ali by depositing traveller cheques amounting to US $ 0.2 million each in these accounts. Later on, at the request of these so-called accounts-holders, Dollar Bearer Certificates US $ 0.2 million each were issued by the Bank. 5. After some time, another fake foreign currency account No,5816279102 was opened in Citibank, Lahore in the name of one Mrs. Sikandara Masood Qazi by depositing DBCs (Dollars Bearing Certificates) amounting to US $ 0.150 million in the said account. Later on, D.B.Cs. Amounting to US $ 1.00 million were also deposited in this account. 6. The important fact in this case is that Citibank, Karachi, created a loan of Rs,40 million in favour of Messrs Hudabiya Paper Mills in view of account of Mrs. Sikandara Masood Qazi but against inadequate security including hypothecation. This loan in the Citibank, Karachi, is still outstanding. 7. This inquiry further reveals that Messrs Muhammad Ramzan, Asghar Ali and Mrs. Sikandara Masood Qazi were not traceable at the given addresses. It has been brought to the notice of the Court that Muhammad Ramzan is a fake person who does not exist. As far as Mrs. Sikandara Masood Qazi and Asghar Ali are concerned, since prior to the opening of the aforesaid fake accounts, they never came to Pakistan. Thus, their names have been used for wrongful gain. The F.IA. Is of the view that the Directors of Messrs Hudabiya Paper Mills with the blessing of the former Chief Executive of the country (Mian Muhammad Nawaz Sharif) not only involved themselves in money loundering but also cheated the Government for their personal wrongful gain. As such, under the aforesaid penal sanctions of law, this case F.I.R. No,13/94 was registered against the Directors of Messrs Hudabiya Papers Mills involving the following persons as accused:- (i) Mian Muhammad Sharif.
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(ii) Mian Shahbaz Sharif. Mian Abbas Sharif. (iv) Mian Hussain Nawaz. (v) Mian Humza Shahbaz, two ladies and some other persons. 8. The cases are still under investigation. The Investigating Agency is presently probing into the matter and collecting evidence with a view to prepare challan against the accused for their trial by the Court of competent jurisdiction. In these cases Mian Muhammad Sharif was arrested by F.IA. On 17-11-1994. He was later on released on bail because of his sickness. No other accused has so far been arrested. The present petitioners filed writ petitions with a prayer that F.I.Rs, Nos.12/94 and 13/94, dated 10-11-1994 and 12-11-1994 respectively, be declared to be mala fide, illegal, without lawful authority and of no legal effect. It has further been prayed that pending final decision of these petitions the proceedings/investigations by F.IA. Be stayed for the ends of justice. ' Alongwith the Constitutional petition, criminal miscellaneous have also been filed for seeking pre- arrest bail. 9. On 7-12-1994, the Honourable Single Judge of this Court passed an order for placing these petitions before the Division Bench and granted ad interim relief to the effect that the petitioners should not be arrested till then. On 8-12-1994, the matter came up for hearing before the D.B. Notice was issued to the Investigating Officer to produce record of the case for disposal with further direction that the petitioners would not be arrested meanwhile. 10. All these matters pertaining to F.I.Rs, Nos.12 and 13 of 1994 were heard together, hence being disposed of through this single order. Learned counsel for the petitioners addressed the Court and put forward the following contentions for quashment of both the F.I.Rs,:--- (a) that the very registration of the case is mala fide, in facts as well as in law; (b) that sections 3, 4 and 5 of the Protection of Economic Reforms Act, 1992 bar the registration of these cases; (c) that the cases are of no evidence. There is no material with the Investigating Agency to make out any criminal case against the accused. The matter is purely of a civil nature involving transaction of granting and obtaining loan; (d) that the counsel for the petitioners are of the view that if the aforesaid money transaction involves any breach of Income Tax Law, the matter at the most can be enquired into by the Income Tax Authority and not by F.I.A.; (e) the petitioners/accused were not associated with the enquiry proceedings conducted by F.IA. For the registration of case. Their non-association has vital importance. It resulted into miscarriage of justice and thereby edifice of legal mechanism built by the prosecution of involve the petitioners falls down. It has denied the opportunity of being heard. 11. In support of the aforesaid contentions, he vehemently tried to refer certain facts and documents. We would like to make full efforts to enumerate and discuss these submissions to find out the pith and substance thereof and their effect with reference to the prayer made before this Court. 12. The first contention of the learned counsel for the petitioners is that there are no complainants in these cases. Both the cases have been registered by F.I.A. On their own accord having no cognizable complaint from anyone. F.I.A. Was directed by superior authorities to take cognizance and hold an enquiry with a view to register these cases. According to him, it can be said that the child had taken birth without mother as the cases had been registered without complainants. He maintained that non-disclosure of the complainant would mean that the Federal Government specially, its higher authorities were interested to involve the leader of opposition and his family members for political ends. Otherwise, there was no need to adopt an abnormal method for the registration of cases.
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13. He further argues that since from the date present Government came into power, number of F.I.Rs, have been registered in different police stations in which directly or indirectly this family has been involved. The only motive is to harass them with a view to compel them to surrender before the wishful desires of the present Federal Government/Ruling persons and to restrain from criticising the national and international issues of the present Government. He maintains that the alleged fake enquiry depicts rare phenomenon. In reality no enquiry was held. 14. Regarding mala fide, the learned counsel Ch. Muhammad Farooq stated that Messrs Hudaybia had an agreement with the account-holders for the creation of loan. At that moment, when this sentence was used by the learned counsel, he was directed by the Court to submit the copy of the agreement. On which he immediately made little departure and said that the same arrangement existed between these account-holders and Messrs Hudabiya, since there was no written agreement, the copy whereof could not be placed before the Court. Here it may be mentioned that a note about this admission of having arrangement with the aforesaid account-holders was recorded with a prior caution to the learned counsel and with his consent. In spite of that he repeated that there was an arrangement of Messrs Hudabiya with the alleged account-holders. By this admission he wanted to make out a point to support the contention of mala fide that loan amounting to crores of rupees was obtained by Messrs Hudabiya lawfully. According to him it was a money transaction and the contractual liability between certain persons, having not caused by wrongful gain a wrongful loss to anyone. He vehemently stated that the accounts-holders and the concerned bank are the consenting parties in the matter. Hence there could be no fraud, dishonesty or cheating on the part of any accused. There is no mens rea, hence criminal proceedings are not only bad in law but also it is a case of harassment pure and simple, which can be termed as unauthorised action based on mala fide. 15. As regard the mala fide in law, the learned counsel referred to sections 3, 4 and 5 of the Protection of Economic Reforms Act, 1992. He is of the view that the Protection of Economic Reforms Act, 1992 is a special law which overrides other laws including Customs Act, Income Tax Ordinance etc. Sections 3, 4 and 5 of the Protection of Economic Reforms Act, 1992 are reproduced as under:-- (3) Act to override other laws. "The provisions of this Act shall have effect notwithstanding anything contained in the Foreign Exchange Regulation Act, 1947 (VII of 1947), the Customs Act, 1969 (IV of 1969), the Income Tax Ordinance, 1979 (XXXI of 1979), or any other law for the time being in force." (4) Freedom to bring, hold, sea land take out foreign currency. "All citizens of Pakistan resident in Pakistan or outside Pakistan and all other persons shall be entitled and free to bring, hold, sell, transfer and take out foreign exchange within or out of Pakistan in any form and shall not be required to make a foreign currency declaration at any stage nor shall anyone be questioned in regard to the same." (5) Immunities to foreign currency accounts. "(1) All citizens of Pakistan resident in Pakistan or outside Pakistan who hold foreign currency accounts in Pakistan, and all other persons who hold such accounts, shall continue to enjoy immunity against any enquiry from the Income Tax Department or any other taxation authority as to the source of financing of the foreign currency accounts. (2) The balances in the foreign currency accounts and income therefrom continue to remain exempted from the levy of wealth tax and income-tax and compulsory deduction of Zakat at course. (3) The banks shall maintain complete secrecy in respect of transactions in the foreign currency accounts. (4) The State Bank of Pakistan or other banks shall not impose any restrictions on deposits in and withdrawals from the foreign currency accounts and restrictions, if any, shall stand withdrawn
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forthwith. 16. He read out repeatedly the aforesaid three sections of the Act and made full use of his professional skill to convince the Court. According to him Bars the registration of the cases against the petitioners etc. (i) Vests with the right to deal in the foreign exchange as they like. (ii) They are at liberty to open foreign exchange account in the bank, deposit the amount or withdraw it with complete facility of bringing in and taking away from Pakistan. 17. He submits that section 5 provides complete liberty having wide scope for anyone in lending and borrowing amount under the terms and conditions agreed upon between the parties. No inquiry whatsoever can be made, what to say the registration of the cases like the present. 18. A legal objection has also been raised that allegedly an inquiry was held in the present case before the registration of cases F.I.Rs, Nos.12 and 13. He maintains that it is compulsory for the respondents to associate the petitioners with the inquiry proceedings with a view to provide them opportunity to be heard and to prove their innocence but they have not been associated intentionally as the so-called inquiry has been designed to involve the members of Minn Nawaz Sharif family. In support of these contentions the following judgment was relied upon by the learned counsel:-- ' Rees and others v. Crane 1994 SCMR 1682. 19. Contentions the cases are of no evidence. The learned counsel for the petitioners contended that Messrs Hudabiya obtained loan of a few crores of rupees against the accounts opened in the name of Kashif Masood and other in case F.I.R. No,12/94 and Mrs. Sikandara Masood Qazi and other in case F.I.R. No,13/94. According to him this was a simple money transaction between the parties that is to say Messrs Hudabiya, aforesaid account-holders and the bankers voluntarily and with each other's consent. There is no question of committing fraud and cheating in the affairs. Federal Government or Investigating Agency has no right to interfere therein. The petitioners are at liberty to utilize their wealth in the manner as they like. If there is any objection to some Governmental authority with regard to the income tax affairs, the matter can be looked into by the income-tax authority, but only after adopting the procedure prescribed and laid down therefor in the Act. According to him, no notice was ever issued by the income-tax department to ' the accused. The registration of cases is bad in law. With this background, he submits that no document or oral evidence can be made basis for initiating criminal action. According to him, the transactions are of civil nature. He states that these cases are of no evidence and for that the F.I.Rs, are liable to be quashed. He relied upon the following judgments:-- ' Muhammad Akber v. The State PLD 1968 SC 281, Shahnaz Begum v. Honourable Judges of the High Court of Sindh and Balochist in PLD 1971 SC 677, Ameer and others v. Station House Officer 1988 PCr.LJ 2032, Falak Naz v. The State 1990 PCr.LJ 798, Muhammad Haroon v. Federation of Pakistan 1991 MLD 397, Mst. Shabana Chaudhry v. Station House Officer, Police Station Akbari Gate, Lahore and 4 others PLD 1993 Lah. 416, Muhammad Azam v. Fazal Haq Raja and others 1994 MLD 1875, Allied Bank of Pakistan Limited v. Khalid Farooq 1991 SCMR 599, Altaf Hussain v. The State PLD 1985 Lah. 10, Muhammad Yaqoob All v. The State PLD 1985 Lah. 48. 20. Regarding last contention, he has stated that penal sections mentioned in the F.I.Rs,, are not applicable as no cheating, dishonesty and fraud has been committed. The transactions were bona fide, having complete legal protection provided by law. 21. In reply to the contentions raised by the petitioners' counsel, the learned DA.-G. Submits the following propositions for consideration:-- (a) He has produced and shown to this Court account opening form for foreign currency Saving Account No,202120-1065, dated 26-8-1992. It has certain columns and paragraphs. In column 'Full
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Name' Muhammad Ramzan is written and in column of 'Address' his address is mentioned as House No,5 Street No,6, Sant Nagar, Lahore. In the form there is column to be signed by the introducer with name and address which is vacant, besides the column wherein the applicant's Passport number and other particulars are to be written, is also lying vacant. The portion meant for bank use, the initial deposit received US $ 300 and cheque book bearing Cheques Nos.003151 to 003175 was also issued. But on the top of it in block letters words 'No Correspondence' is written. The contents of this form and the signature thereon have been alleged to be in the name of Muhammad Ramzan providing reasons to say that entries are fake and forged, Muhammad Ramzan is a fake person. The agency tried to search him out on the given address but according to information and report of the agency the so-called Muhammad Ramzan, never lived at the given address and has no concern whatsoever there. (b) Similar is the case Account No,202120-106-651 in the name of one Sulman Zia. The address is only Main Bazar Sahiwal. The form bears Urdu signature and other columns have been left vacant. From the particulars of address as mentioned in the form speaks volume of its fake and forged nature. The account has been found not only fake but Sulman Zia is also like Muhammad Ramzan, a fake person. This version of fakeness gets further support from the letter, dated 26-101992. The address as given Habib Bank AG Zurrich, 99-Madison Avenue, New York, U.SA. Which contains the advice and credit for US $ 7,50,000 to Union Bank Ltd., Lahore for issuance of D.B.Cs. From Lahore Branch. This letter supports the nature of the allegations made in the F.I.R. Identical facts are mentioned in another letter, dated 25-10-1992 addressed to Messrs Union Bank Ltd., Egerton Road, Lahore by Habib Bank AG Zurich, Lahore. Both these letters were read and considered with reference to Habib Bank AG Zurich letter of dated 25-10-1992 which contains the Subject "Issuance of D.B.Cs. For US $ 7,50,000 Account Messrs Muhammad Ramzan and Sulman Zia for US $ 7,50,000 (Total 1.5 million)". According to prosecution, the signatures on this letter, dated 25-10-1992 are different as compared to the signatures of the aforementioned two letters and the account opening forms. The prosecution has further produced table containing the details of traveller cheques Nos. Issued in respect of Muhammad Ramzan and Sulman Zia, which bears signatures of Syed Wajahat Hussain for Habib Bank AG Zurich, dated 31-10-1994. The cheque numbers, foreign currency account US dollars and the amount deposited by the aforesaid alleged account-holders in their Foreign Currency Account. The collection of the travellers cheques made through American Express Bank Ltd., New York. All these connected affairs make the matter further clear that all these letters and table were fabricated in the name of fake or unknown person with a design and that could be nothing else but plundering amount by unfair means. (c) The learned Deputy Attorney-General has further placed account opening forms, allegedly issued in the name of Kashif Masood bearing No,260133-091 with some particulars involving US $ 15,00,000. Particulars and address mentioned in the forms does not disclose the complete identity of Kashif Masood. Thus, it is not possible to find out as to whether he is a person in existence or not. However, the investigation so far carried out, reveals that `Kashif Mehmood' name has been used in a fake manner. This form, placed on record deals with the D.B.Cs. Of Kashif Masood issued on 26- 10-1992. It shows that Union Bank issued/made D.B.Cs. Deposit and an amount of US $ 15,00,000. Photostat copy of the first page of passport has been placed before the Court by the prosecution, which was issued by United Kingdom in the name of Kashif Masood Qazi. But the signatures on this passport (photo copy) and the signatures on the account opening form are totally different. Even report of the Handwriting Expert supports the prosecution version as the signatures have no similarity with each other. A few other documents have also been shown to the Court including telex message from Deputy Director, F.I.A. To the Director F.IA., Islamabad regarding Kashif Masood Qazi and Mrs. Sikandara Masood Qazi stating that these persons never entered in Pakistan since 1- 1-1992 to 5-11-1994. The learned D.A.-G. Emphasized that from these reports and documents it has
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become evident that either these persons are fake and simply their names have been used by the miscreants or at least Kashif Masood Qazi and Mrs. Sikandara Masood Qazi never came to Pakistan during the period in question i,e, period of opening of accounts till the date of registration of the cases. The contention of the learned counsel for the petitioners that Messrs Hudabiya had either an agreement or some arrangement with the aforesaid account-holders looses any sanctity obviously for the reasons that account-holders are fake persons and account opening forms were filled in by committing forgery in the names of aforesaid persons. He emphasizes that these fake and dummy drill of opening accounts with a view to show lawful money transaction of foreign exchange is a grab under which black money valuing crores of rupees has been made white under the influence and in collusion with others by the accused. All these acts indeed are punishable under the penal sections of law as mentioned in the F.I.Rs, Account opening form issued by Habib Bank AG Zurich, dated 26-8-1992 in the name of Asghar Ali has also been shown to this Court. The address of Asghar Ali as mentioned in the form is, 1-Fane Road, Lahore. The investigation reveals that Asghar Ali never lived in this house and came to Pakistan. According to him fake name has been used for the commission of crime. In addition to this, another account opening form, dated 26-10-1992 showing the name of Muhammad Ramzan has also been placed with reference to F.IA. No,12. This form pertains to the transactions made by the Directors Messrs Hudabiya Paper Mills, Ltd., who opened the Account bearing No,0819802017 in Citibank. This account number was used for obtaining the loan by Messrs Hudabiya Paper Mills, Ltd. Under the veil and garb of fake accountholders. He has also placed on record an account opening application of Citibank, allegedly in the name of Mrs. Sikandara Masood Qazi. The address as written is only C/o 7-H, Gulberg-III, Lahore. The amount stood deposited is the same which has been referred above. The signatures on all these papers, allegedly in the names of fake account-holders are not identical. It shows that all the measures were adopted by Messrs Hudabiya Paper Mills Ltd. (the Directors and share-holders) to commit fraud and cheating with a view to have wrongful gain for themselves and loss to the State. To achieve this criminal end they used fake names. The ample proof whereof is the admission of the learned…
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