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Petitioner: Muhammad Ahmad Zaheer etc VS Respondent: Federation of Pakistan etc
Court Name: Lahore High Court Judge(s): Tariq Saleem Sheikh Title: Muhammad Ahmad Zaheer etc vs Federation of Pakistan etc Case No.: Writ Petition No. 62575/2021 Date of Judgment:2022-03-31 Reported As: 2022 LHC 6041 Result: N/A
JUDGMENT
JUDGMENT Tariq Saleem Sheikh, J. Through this petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 (the "Constitution"), the Petitioners seek quashing of FIR No.C/393/ 2021 dated 11.09.2021 registered at Police Station FIA, Faisalabad, for offences under sections 161, 420, 468, 471, 109 PPC, section 5(2) of the Prevention of Corruption Act, 1947, and sections 8 & 23 of the Foreign Excha nge Regulation Act, 1947 (the "Impugned FIR"). The factual matrix 2. The Federal Investigating Agency (hereinafter referred to as the "FIA" or the "Agency") received source information that the customs officials, including those of the Directorate of Intelligence & Investigation, posted at the Faisalabad Dry Port were engaged in various corrupt practices in collusion with the importers and clearing agents and causing huge loss to the national exchequer . The source particularly accused them of clearing consignments containing mis-declared and contraband items. 3. M/s Ali Zain Traders (Respondent No.11) had imported Consignment No. FCSI-HC-84 from Singapore which arrived at Karachi and was then transhipped to the Faisalabad Dry Port and cleared by the customs authorities on 30.8.2021. It was loaded on Container No.00LU9479653 (1x40') and two Mazda trucks bearing registration Nos. FSD-124 and LEI-4204 and as soon as it egressed from the dry port it was intercepted by a squad of FIA. Respondent No.5 who was heading that team asked the customs officials to take it back into their premises but they refused arguing that the law did not permit re-entry of goods after they had left the place. He reported the matter to his superiors who talked to the senior officers of the Customs Department and on their intervention the goods were re-admitted to the dry port and sealed jointly by the of ficers of both the agencies. 4. The next day, i.e. on 31.8.2021, the FIA registered Enquiry No.425/2021 and requested Respondent No.8 [Collector of Customs, Model Customs Collectorate (Appraisement), Faisalabad Dry Port] through a written
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application for joint re-examination of the consignment by FIA and the customs. Respondent No.8 acceded to that request whereupon the goods were partially re-examined on 2.9.2021 and 3.9.2021 which revealed mis-declaration and import of contraband items. In the meanwhile, Respondent No.12 (the clearing agent of Respondent No.11) filed W rit Petition No. 52618/2021 in which this Court restrained further re-examination. 5. During the inquiry M/s Ali Zain Traders (Respondent No.11) did not produce any document regarding legal transfer of money abroad for purchase of the goods in question. The FIA estimates that the national exchequer has suffered a loss in the sum of Rs.12 million approximately in this transaction. On the conclusion of the said inquiry , it lodged the Impugned FIR No.C/393/ 2021 dated 11.09.2021 against the Petitioners (who are customs officials) and Respondents No.1 1 & 12. The Petitioners' case 6. According to the Petitioners, M/s Ali Zain Traders (Respondent No.11) imported Consignment No. FCSI-HC-84 which was received at the Faisalabad Dry Port. On 13.8.2021 their Clearing Agent (Respondent No.12) made an application to the Additional Collector (Customs) for its pre-declaration examination in terms of the first proviso of section 79(1) of the Customs Act, 1969 (the "Customs Act"), in order to ascertain the precise quantity and description of the goods as, according to them, it consisted of old and used machinery . The request was allowed. After fulfilling legal formalities the consignment was opened and the customs officials drew the inventory which was countersigned by the staff of Respondent No.8 who was duly authorized by the competent authority for that purpose. On 30.8.2021 Respondent No.12 filed the Goods Declaration on behalf of Respondent No.11 that was based on the transactional value in terms of section 25 of the Customs Act and deposited the applicable duties and taxes. The officers concerned examined the consignment and certified that it was in consonance with the said Goods Declaration. The matter was then placed before the Appraiser who opined that the assessed value was not congruous with the evidential data of similar and identical goods so he revised it upwards. Respondent No.11 deposited the differential amount of duties and taxes whereafter the goods were allowed out of charge and the gate pass was issued. On 30.8.2021 at 7:12 p.m. three vehicles of Respondent No.11 carrying the goods left the dry port. A team of FIA headed by Respondent No.5 was lying in wait who intercepted took the vehicles, took them into custody and drove them to an unknown place. After about six hours Respondent No.5 brought the container back and asked for it's readmission to the dry port which was denied as it was legally impermissible. However , on the intervention of the senior officials of the Customs Department the container was subsequently readmitted by making a manual entry on the gate pass issued earlier . The Mazda trucks were brought back to the dry port after 17 hours. 7. The Petitioners admit that on 31.8.2021 Respondent No.8 allowed re-examination of the consignment by a joint team of the FIA and the customs and consequent thereupon the goods were partially re-examined. 8. The Petitioners view the FIA's action as without jurisdiction. They also question the competence of Respondent No.8 to order re-examination of the consignment and the legality of the consequent report of the joint team. Notice under Order XXVII-A CPC 9. Considering that this case involves important questions requiring interpretation of the Constitution and statutory law, this Court issued notice to the Attorney General for Pakistan in terms of Order XXVII-A CPC. The submissions 10. The counsel for the Petitioners, Mr. Mansoor Usman Awan, Advocate, contend s that the Federal Investigation Agency Act, 1974 (the "FIA Act"), and the Customs Act are two special statutes which have their own sway . Resultantly , subject to the hierarchy given in section 3 and other provisions of the Customs Act, the officers of the customs have exclusive jurisdiction to determine and collect the amount of duties and taxes leviable on any goods or class of imported and exported goods, and to prevent smuggling. Therefore, it is their mandate to conduct raids and searches, seize goods and prosecute the offenders and no other agency can interfere in these matters. According to Mr. Awan, the FIA's raid on Consignment No.FCSI-HC-84 was illegal and unjustified. Even if it was assumed that it contained mis-declared and contraband items (as alleged in the Impugned FIR), only an officer of the customs was competent to determine that fact under section 80 of the Customs Act. He also assails the order of Respondent No.8 regarding constitution of a joint team of the FIA and the customs officials for re-examination of
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the goods and all the proceedings held by it. Mr. Awan further contends that section 27(1) of the Customs Act stipulates that no investigation or inquiry can be initiated by any government agency against any officer of the customs in respect of anything done in his official capacity without the prior approval of the Federal Board of Revenue (the "Board"). Inasmuch as the FIA did not seek the requisite approval, the Impugned FIR is void abinitio. 11. Mr. Asad Ali Bajwa, Deputy Attorney General for Pakistan, contends that the FIA has vast powers under section 5 of the FIA Act and it was competent to check Consignment No.FCSI-HC-84 and lodge the Impugned FIR when it found that it contained contraband goods . According to him, the FIA has not overstepped its jurisdiction and the suggestion to the contrary is misconceived. As regards the approval of the Board contemplated by section 217(1) of the Customs Act, Mr. Bajwa submits that it is a lapse on the part of FIA but it would not vitiate the Impugned FIR because private persons are also nominated as accused therein. 12. Ch. Muhammad Zafar Iqbal, Advocate, who appeared on behalf of Respondents No.8 & 9 (Collector of Customs and the Federal Board of Revenue), has opposed the Deputy Attorney General and supported this petition. He submits that the FIA must perform its functions in accordance with the FIA Act. It cannot be permitted to assume the role of a "super police". He maintains that the Customs Act provides a comprehensive mechanism for checking any mis-declaration of goods, tax evasion and smuggling which is enforced through a chain of customs authorities, the Directorate General of Intelligence & Investigation, and the Directorate General of Post-Clearance Audit. The FIA cannot be permitted to encroach upon their domain as it would cause imbalance and adversely affect the collection of revenue. Mr. Iqbal further submits that the Petitioners and their other colleagues in the Customs Department cleared the aforementioned consignment in due course of their duty and in good faith so their acts are protected under section 217 of the Customs Act. Even otherwise, the Impugned FIR is liable to be quashed right away as it has been lodged without the Board' s sanction. 13. Respondents No.1 1 & 12 are proforma . They have not put in appearance. The amicus curiae 14. This Court appointed Khawaja Haris Ahmad, Advocate Supreme Court, as amicus curiae in this case. He contends that the FIA was competent to check Consignment No.FCSI-HC-84 under section 5 of the FIA Act as it had left the dry port and was on the public road at the relevant time. He maintains that it was not necessary for the FIA to request Respondent No.8 for re-examination of the goods by a joint team and if he has allowed it no exception can be taken to its proceedings because it advances the ends of justice. As regards the immunity under section 217 of the Customs Act, the learn ed amicus curiae submits that it is availab le only to the acts done in good faith and the Petitioners would have to show that they did not play foul. He agrees with Mr. Iqbal that the Petitioners cannot be interrogated or investigated without the prior approval of the Board which the FIA has not even applied for to-date. However , Mr. Haris states that the impugned FIR cannot be quashed on that ground because private persons (the constituent partners of Resp ondents No.11 & 12) have also been nominated. He points out that the law does not allow partial quashing of the FIRs. Opinion 15. In order to appreciate the contentions of the learned counsel it is necessar y to examine the scope of the Customs Act and the FIA Act. The Customs Act 16. At the time of the partition of India three statutes relating to customs were in force, namely , the Sea Customs Act, 1878 (VIII of 1878), the Land Customs Act, 1924 (XIX of 1924), and the Air Ships Act, 1911 (XVII of 1911). Considering the fact that the law was scattered and inconsistent and inadequate to effectively check smuggling, the Parliament enacted the Customs Act, 1969, to revise and consolidate the customs law - the levy and collection of customs duties, fee and service charges and to provide for other allied matters. 17. Chapter II of the Act provides for the appointment of officers of customs and establishment of various directorates which inter alia include the Directorate General of Intelligence & Investigation and the Directorate General of Post Clearance Audit. The essential duty of the customs officers is to prevent smuggling and to ensure that every amount of customs duty is correctly levied and realized. Some of their legal powers under the Act are enumerated below:1 2 3
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(i) To search and arrest any person on reasonable ground and belief with or without warrant (see sections 158, 161, 162, 163 and 167); (ii) To screen or X-Ray bodies of suspected persons for detecting secreted goods (see section 160); (iii) To stop and search conveyances (see section 164); (iv) To compel aircraft to land for examination and search of goods (see section 164); (v) To break open the lock of any door , fixture or package for making search (see section 164); (vi) To summon persons to give evidence and produce documents or things and to examine persons (see sections 165 and 166); (vii) To seize or detain things liable to confiscation; or certain publications (see sections 168 & 172); and (viii) To impose penalties and to confiscate goods (see sections 179, 156 and 157). 18. Section 6(1) of the Customs Act empowers the Board to entrust, either conditionally or unconditionally , any functions of any officer of customs under the Act to any other officer of the Federal Government, the Provincial Government, State Bank of Pakistan or the Scheduled Banks. Section 6(2), howev er, stipulates that such persons shall not interfere in the functioning of the customs officers in the places notified under section 9 - the customs- ports, customs-airports etc. The FIA Act 19. The Parliament has established the FIA through the Federal Investigation Agency Act, 1974 (the "FIA Act"), for inquiry and investigation of certain offences committed in connection with matters concerning the Federal Government. Section 3 of the Act read with the Schedule thereto lists those offences and adds that it would include an attempt or conspiracy to commit any such offence and the abetment thereof. Section 4(2) stipulates that administration of the FIA shall vest in the Director General who shall have the same powers as the Inspector General of Police under the Police Act, 1861. Section 5 of the FIA Act is very significant as it describes the powers of the Agency . The relevant provisions thereof are reproduced below for ready reference: 5. Powers of the members of the Agency .- (1) Subject to any order which the Federal Government may make in this behalf, the members of the Agency shall, for the purpose of an inquiry or investigation under this Act, have throughout Pakistan such powers, including powers relating to search, arrest of persons and seizure of property , and such duties, privileges and liabilities as the officers of a Provincial Police have in relation to the investigation of offences under the Code or any other law for the time being in force. (2) Subject to rules, if a member of the Agency not below the rank of a Sub-Inspector may, for the purposes of any inquiry or investigation under this Act, exercise any of the powers of an officer-in-c harge of a police station in any area in which he is for the time being and, when so exercising such powers, shall be deemed to be an officer-in- charge of a police station discharging his functions as such within the limits of his station. (3) Without prejudice to the generality of the provisions of the sub- section (1) and sub-section (2), any member of the Agency not below the rank of a Sub-Inspector authorized by the Director-General in this behalf may arrest without warrant any person who has committed, or against whom a reasonable suspicion exists that he has committed, any of the of fences referred to in sub-section (1) of section 3. (4) For the purpose of the exercise by the members of the Agency of the powers of an officer-in-charge of a police station, "Police Station" includes any place declared, generally or specially , by the Federal Government to be a police station within the meaning of the Code. (5) ... (6) ... 20. It may be appreciated that section 5(1) of the FIA Act invests the members of the Agency with all the powers that the provincial police have in relation to search, arrest of person and seizure of property and investigation of offences which may, subject to any order of the Federal Government, be exercised throughout the country . Section 5(2) empowers a member of the Agency , who is not below the rank of a Sub-Inspector to exercise any of the powers of an officer in-charge of a police station for the purposes of any inquiry or investigation under the Act. In this view of the matter , the FIA is a police force for all legal and practical purposes.
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21. The legislature has used two terms in section 5 of the FIA Act, i.e. "inquiry" and "investigation", but has not defined them. These terms are ordinarily taken as synonymous but in law they are distinct. The Black' s Law Dictionary defines "inquiry" as "(a) a question someone asks to elicit information; (b) the act or process of posing questions to elicit information." On the other hand, it describes "investigation" as "the activity of trying to find out the truth about something, such as a crime, accident, or historical issue; esp., either an authoritative inquiry into certain facts, as by a legislative committee, or a systematic examination of some intellectual problem or empirical question, as by mathematical treatment or use of the scientific method." The Code of Criminal Procedure, 1898 (hereinafter referred to as the "Code" or "Cr .P.C."), defines the two terms as follows in section 4(1): (k) "Inquiry" .- "Inquiry" includes every inquiry other than a trial conducted under this Code by a Magistrate or Court. (l) "Investigation" .- "Investigation" includes all the procee dings under this Code for the collection of evidence conducted by a police- officer or by any person (other than a Magistrate) who is authorized by a Magistrate in this behalf. 22. The diction of section 5(1) of the FIA Act and the context in which the terms "inquiry" and "investigation" appear in it indicates that the legislature also intended to give them different meaning. In Adamjee Insurance Company Ltd. v. Assistant Director , Economic Enquiry Wing (1989 PCr.LJ 1921 ) a Divisional Bench of the Sindh High Court stated: "We are inclined to hold that the fact that the respondent did not record the FIR upon the receipt of written complaint containing allegation of commission of a cognizable offence, does not render the initiation of the inquiry illegal. We are in respectful agreement with the view expressed in the above-cited Privy Council case namely , that an investigation may commence even without recording FIR. We may also point out that subsection (1) of section 5 refers to two terms, i.e. 'inquiry' or 'investigation'. The use of these two terms in the above sub-section indicates that they connote two dif ferent meanings. In our view inquiry can be termed as the first step towards investigation." 23. In exercise of the powers conferred by section 9(1) of the FIA Act the Fede ral Government has framed the Federal Investigation Agency (Inquiries and Investigations) Rules, 2002 (the "FIA Rules), which the Agency has to follow in the performance of its functions. Rule 4 prohibits action on anonymous and pseudonymous complaints and empowers the Deputy Director or an officer above that rank to ascertain the identity of the complainant or informer and verify genuineness of the complaint or information when it is against a public servant. Rule 5(1) enjoins that the FIA shall obtain prior permission of the authority stipulated in the table given in that sub-rule to initiate inquiry against an accused public servant. Rule 5(2) states that unless the public servant is caught as a result of a trap arranged by the FIA under the supervision of a Magistrate of the First Class, a criminal case shall not be registered against him without the prior permission of the authority mentioned in that sub-rule. In Universal Cables Industries Limited v. Federation of Pakistan and 3 others (PLD 2020 Sindh 601) a Divisional Bench of the Sindh High Court held that the FIA cannot undertake fishing/roving inquiry or investigation against a public servant. For the sake of completeness it may be added that Rule 10 enjoins that after the completion of investigation if the case is found fit for prosecution, the Agency shall submit it to the Federal Government for sanction if required under section 197 Cr .P.C. 24. It is important to point out that section 156 of the Customs Act lists the offences punishable under the Act and prescribes the punishment therefor . Section 3 of the FIA Act read with Item No.10 of the Schedule thereto expressly empowers the FIA to inquire into and investigate those offences. Further , SRO 913(I)/86 dated 5.10.1986 issued under section 6 of the Customs Act confer s powers of seizure and arrest contemplated by section 161(2) thereof on all police officials. The FIA being a police force in terms of section 5 of the FIA Act is also competent to exercise those powers. In Khalid Mehmood v. Collector of Customs, Customs House, Lahore (1999 SCMR 1881 ), on a secret information, the FIA officials stopped a passenger at the Lahore Airport Immigration Check Post when he had booked his luggage and obtained boarding card for a flight to Dubai. His lugga ge was off loaded and searched and PKR 50,00,000/- were recovered. Consequent thereupon a case under section 156(l)(8)(81)(82) of the Customs Act, 1969, read with section 5 of the Prevention of Corruption Act, 1947, was lodged. It was argued that4 5 6 7 8
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the FIA was not competent to register the FIR but the Hon'ble Supreme Court of Pakistan disagreed. Besides referring to SRO 913(I)/86 dated 5.10.1986, supra, it held: "[T]he Federal Investigation Agency Act, 1974, has interacted with a variety of other laws, including the Customs Act, 1969. Thus, broad-based powers have been conferred by section 3 of the Act on the Federal Investigation Agency for inquiry into an investigation of large array of offences, specified in the Schedule to the enactment. Such, inter alia, include offences under the Prevention of Corruption Act, 1947 and under section 156 of the Customs Act, 1969, each the subject-matter of the current FIR. Besides, under section 5 of the same Act, members of the Agency throughout Pakistan, for the purposes of inquiry and investigation under the Act have been accorded such powers, including powers relating to search, arrest of any person and seizure of property and such duties, privileges and liabilities as the officers of a Provincial Police have in relation to investigation of offences under the Code of Criminal Procedure or any other law for the time being in force." 25. In Khalid Mehmood' s case, supra, the apex Court also nixed the contention that the FIA being an organization neither qualifies as an "appropriate officer" under section 2(b) nor as the "officer of customs" under section 2(o) of the Customs Act so it' s officers were not competent to exercise any power under that Act. It held: "[A]s to the specific powers conferred by the FIA Act per sections 3 and 5 thereof, such do not appear to be in any manner restricted by the Customs Act, and the correct position seems to be that the FIA enactment being later in time, the new dispensation introduced by it is a graft on the Customs Act but only so far as it goes. Thus, even if an officer of the FIA does not qualify as an 'appropriate officer' for seizure of goods under section 168 of the Customs Act, he manifestly qualifies for so doing under section 5(I) etc. of the FIA Act." 26. Both the Customs Act and the FIA Act are special laws. It is the duty of the court to interpret them harmoniously and prevent a conflict. In Syed Mushahid Shah and others v. Federal Investigation Agency and others (2017 SCMR 1218 ) the Hon'ble Supreme Court held that in the event of conflict between two special laws the later in time will generally prevail over the other . However , this presumption is not automatic and while making any determination the court should also take other factors into consideration, including the object, purpose and policy of both the enactments and the legislature' s intention. In Federal Government Employees Housing Foundation and others v. Malik Ghulam Mustafa and others (2021 SCMR 201) it was held that the doctrine of implied repeal should not be invoked mechanically . Legality of the FIA 's raid in the present case 27. The Petitioners challenge the FIA's jurisdiction to intercept Consignment No. FCSI-HC-84 on a number of grounds. I agree with their contention that the customs authorities, subject to section 3 and other provisions of the Customs Act, have exclusive power to determine and collect the duties and taxes leviable on any goods or class of goods, imported and exported. The said Act provides a complete mechanism to assess the value of goods and check untrue statements. The FIA cannot examine the legality of the assessm ents approved by the customs hierarchy unless, as we shall see in the later part of this judgment, the Board has sanctioned a formal inquiry or investigation under section 217(1) of the Customs Act. It follows that the FIA cannot search or seize any property or arrest a person at will for filing an…
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