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Official Citation: 2024 SHC 1166
Court / Jurisdiction: Sindh High Court
Petitioner: Const. P. 1465/2024 (D.B.) Sindh High Court, Circuit at Hyderabad - National Accountability Bureau (Petitioner)
Ruling Summary: This decision was rendered by the Sindh High Court, officially reported as 2024 SHC 1166. In this matter between Const. P. 1465/2024 (D.B.) Sindh High Court, Circuit at Hyderabad - National Accountability Bureau (Petitioner) and the Respondent, the court adjudicated key questions of statutory construction, procedural regularity, and legal precedent under Pakistani law.
Core Holding: The honorable bench evaluated governing statutory provisions and judicial authorities to establish the rights of the parties, delivering the binding reasoning set out below.
COURT: Sindh High Court CASE NO: Const. P. 1465/2024 (D.B.) Sindh High Court, Circuit at Hyderabad CITATION: 2024 SHC HYD 1166 PARTIES: National Accountability Bureau (Petitioner) ORDER DATE: 18-DEC-24 BENCH: Hon'ble Mr. Justice Amjad Ali Sahito(Author), Hon'ble Mr. Justice Khadim Hussain Soomro A.F.R: Yes ------------------------------------------------------------ IN THE HIGH COURT OF SINDH, CIRCUIT COURT HYDERABAD
C.P No.D-1465 of 2024
Present Mr. Justice Amjad Ali Sahito Mr. Justice Khadim Hussain Soomro
Petitioner/NAB: Through M /s. Zahid Hussain Baladi, Niaz Hussain Mirani Special Prosecutor s NAB & Sattar Muhammad Awan, D.P.G NAB.
Respondents: Through M/s. Prakash Kumar Deputy A.G & Bashir Ahmed Almani, Asst. A.G for Pakistan.
State: Through M/s. Allah Bachayo Soomro, Additional Advocate General Sindh and Muhammad Yousuf Rahpoto Assistant Advocate General Sindh.
Date of hearing: 20.11.2024
Date of Judgment: 18.12.2024
O R D E R. AMJAD ALI SAHITO, J.- Through this constitutional petition, the Petitioner/National Accountability Bureau (“NAB”) has assailed the order dated 29.08.2024 passed by National Accountability Court -II, Hyderabad in Reference No.01 of 2023 [Re: The State v. Adnan Rasheed & others ] by which the application of the Petitioner/NABclaiming 25% share against the embezzled funds of M -6 Motorway Project District Matiari & Noushero-Feroz was dismissed. 2. It is the case of the Petitioner/NAB, that during investigation, it came on record that a set of accused persons/main beneficiaries involved in the offence of embezzlement of funds of M-6 Motorway Projects in both districts i.e. District Matiari and District Noushero Feroz. The accused persons embezzled an amount of Rs.5.8 Billion in both the districts. After completing the investigation, Reference No.01 of 2023 [ The State v. Adnan Ra sheed& others ] was filed before Accountability Court -II, Hyderabad, wherein an application was
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filed by the Special Prosecutor , NAB, requesting that the amount deposited by accused Ashique Hussain Akhlaque through “Plea - Bargain” total amounting to Rs.878,1 18,000/-; hence, as per SOPs, NAB was entitled to get 25% share of the total amount so recovered from the accused persons i.e. 219,529,500/ -. However, after hearing the Special Prosecutor, the said application was dismissed vide order dated 18.01.2024 passed by Acc ountability Court-II, Hyderabad, which is impugned in these proceedings. 3. Before filing this petition , a Constitution Petition being C.P No.D-331 of 2024 was filed by the NAB Authorities and vide order dated 08.08.2024, the learned trial Court was directed to pass a fresh order after providing the opportunity of hearing to learned Special Prosecutor , NAB and the learned counsel appearing for Acquiring Agency/National Highway Authority (“NHA”) and the petition was disposed of accordingly. 4. The learned trial Court after hearing the parties, vide order dated 29.08.2024 dismissed the claim of the NAB and ordered that a 25% share, deducted by the NAB from the amount deposited by the accused through plea -bargain process , be remitted to NHA within a period of one (01) month. 5. Learned Special Prosecutor s, NAB duly assisted by Mr. Sattar Muhammad Awan, D .P.G NAB submits that as per Rules/SOPs, the NAB is entitled for 25% amount from the total recovery; that the learned trial Court had exceeded its jurisdiction by exercising Suo-Moto powers and issuing the order dated 18.01.2024 without any application from either of the parties which are not wi thin the mandate of Accountability Court. It is , however, very respectfully submitted that the points of legality or otherwise of Rules namely: “National Accountability Bureau (Recovery and Reward) Rules, 2002 ” (hereinafter referred to as “ Rules, 2002 ”) and or Notification /letter dated 6 th July 2000 issued by Federal Government of Pakistan Finance Di vision (Office of AFS (Exp) are/were neither subjudice before Trial Court nor before this Court. These rules and notification s/letters are legal having prope r statu tory and constitutional backing / support. 6. They further argued that the Honorable Supreme Court has observed in many decisions regarding the mandate of
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Judiciary, Executive and Legislature. The legislature is assigned the task of law -making, the executive to execute such laws and the Judiciary to interpret the laws, none of the organs of the State can encroach upon the field of the others ( PLD 2012 Supreme Court 917). They further submitted that the Honorable Supreme Court of Pakistan has also held in its judgment reported in 2024 SCMR 997, that the Judiciary can adjudicate upon the matter which is subjudice before it; that original section before amendment conferred powers on the President of Pakistan to frame rules, in consultation with the Chief Justice of Pakistan, to carry out the purpose of National Account ibility Ordinance (“NAO”); that it was further provided in the Rules so framed shall be read as part of NAO. They have relied upon (un- amended) section 34 of the NAO, 1999, which is reproduced as follows: “The President of the Islamic Republic of Pakistan in consultation with the Chief Justice of the High Court of the concerned Province may make Rules for carrying out the purpose of this Ordinance and the said Rules, shall o n promulgation be a part of this ordinance.”
7. They further argued t hat the rules were framed through SRO 655 (1) 2002 and, on 09.09.2002 SRO 655 (I)/2002, the President of the Islamic Republic of Pakistan in consultation with the Honorable Chief Justice of Pakistan had promulgated the rules that are called “National Accountability Bureau (Recovery and Rewards ) Rules 2002 and the same were published in Gazette of Pakistan on 26 th September 2002) ; that the Notification dated 6 th July 2000 issued by Federal Government of Pakistan also authorize NAB to retain portion of recovered/discovered amount for th e purposes as mentioned therein; that t he notification and the rules mentioned herein above are also protected under the provision s of sub-article (2) of Article 27AA of The Constitution of the Islamic Republic of Pakistan, 1973; that Rule 4 of above mentioned Rules, 2002 which were subsequently published in official Gazette, clearly mentioned about the sha re of NAB from recovered a mount; that the Accountability Court No.1 at Hyderabad has hastily passed an impugned ord er without applying judicial mind as the deduction of 25% share from the amount deposited by the
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accused through plea -bargain is legal and following law, Constitution of Pakistan and rules framed thereunder, and therefore, not contrary to the law; that High Court of Balochistan passed an order against NAB in an identic al matter which was reported in PLD 2016 Baluchistan 69; that NAB filed an Appeal against the decision of the Balochistan High Court which was set aside by the Honourable Supreme Court of Pakistan in Civil Appeal No.1004 of 2019 and re manded the matter for rehearing and nowt he issue is still pending before the Honorable High Court of Balochistan. They further submitted that identical matters ar e also pending before the High Court of Sindh at Karachi, the High Court of Islamabad and the High Court in Lahore. They submitted that the Accountability Court instead of passing impugned order should have wa ited fo r the decision of the High Court(s); that on 16.10.2024 this Honorable Court framed a question about the mechanism of distribution of the recovered amount by way of Voluntarily Return ( V.R) and Plea Bargain (P.B) by the NAB; that NAB does not keep 25% retained amount from VR/PB with NAB; that t he NAB has always deposited this amount in the Federal Consolidated Fund; thatt he NAB authorities do not utilize such recovered amoun t/retained amount via V.R / P.B; thato n the direction of this Court details submitted by the Additional Director Finance , NAB Islamabad through the Special Prosecutor state that the retained amount has already been deposited in the Government Treasury and NAB share in the Federal Consolidated Fund; that the NAB has been left with no amount in its hands after depositing in the Consolidated Fund. They submitted that the NAB has properly and duly complied with the mandate of Article 78 (2) (b) of the Constitution after depositing the amount in the Federal Consolidated Fund. Lastly, they prayed that the impugned order may be set aside. 8. On the other hand, Mr. Noorul Haq. N. Qureshi , learned Amicus Curi ae, argued that Rules promulgated by exercising powers conferred upon the Chairman to make rules and approval of the President t o carry out the purposes of Ordinance 1999 drawing powers U/S: 34 thereof; that Section 33-A, providing glaring feat ures for payment of bonuses or e x-
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gratia payments to the officers of the staff of the NAB, other government servants, public servants and rewards to members of the public for rendering com mendable services in detection and does not include levy of 25% amount ; that t he rules have been formulated contrary to wisdom and powers so exercisa ble. Hence rule-making by itself without statutor y powers having no legal force. 9. Learned Amicus Curi ae further submitted that t he NAB being a statutory body bound to investigate and prosecute all those cases falling within their domain defined as offences under NAB Laws; Section 10 of NAO depicts assets and pecuniary sources of public holder office to be disproportionate to non -source of income, which otherwise obtained on acquire through the corruption shall be forfeited to the appropriate government; that Section 25 of the NAO enunciates that if the assets or gain s acquired by a holder of public office or by any other person are voluntarily returned or enters into Plea Bargain; that the Chairman may accept such offer and then such amount has to be deposited with the NAB of permission of Court U/S: 25 (a) by following the procedure laid down under sub-section (c). 10. He further submitted that Article 78 and Article 118of the Constitution of Pakistan specifying the glaring legal position of Federal consolidation funds and public accounts; that similarly, Article 118 provides Provincial consolidated funds and public accounts; that b y virtue of R ules, 2002 the instruction by the Finance Department referred is a proposal for rewarding NAB officials for their statutory duties in such eventuality it amounts sort of levy of the tax dealing Art. 77 of the Constitution. Therefore, except for promulgation of the Act by Parliament or Provincial Assembly, it cannot be levied as depicted. Hence the letter issued by the Finance Division dated 06 .07.2000 without such legal backing as enunciated by Article 77 for deduction of 25% out of the recovered amount would be contrary to Article 77 of the Constitution. 11. He further argued t hat b esides the above legal and factual position, hereferred letter dated 04.05.2000 issued by the Chief of S taff of the Chief Executive of Pakistan addressed to Chairman NAB disclosing approval of NAB proposal for retaining
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a certain portion from the recovered amount through NAB operations having no legal backing Under Article 270-AA of Constitution which defining all President Orders, Ordinances, Martial Law Regulations, Martial Law Orders including Referendum Order, 1984 and other President Order of like nature, not in cludes Chief Exec utive approval; hence not fall within such affirmatio ns guaranteed by Article 270-A and therefore declaration and confirmation of those laws defined Under Article 270- AA of the Constitution, hence, the power drawn and continuously exercised by the NAB aut horities having no legal backing as such same is not warranted by law. 12. Mr. Ishrat Lohar, learned Amicus Curi ae argued that the recovery of ill-gotten money was effected through due process of law as envisaged under section 25 of the NAO; that the trial Court was fully competent under section 25(c) of NAO to order that the amount deposited with NAB be transferred to the Federal Government, Provincial Government, or the concerned authority within one (01) month from the date of deposit; that the directions given were within the spirit of the Law and the Court has a authority to order for disposal of property or recovery effected through the process of plea bargaining. He further argued that Section 33 -A of NAO only provides for payment of bonuses or ex-gratia payments to NAB officers, government servants and reward to members of the public for rendering commendable service in detection, investigation, and prosecution of offences under the Ordinance, and that detection of 25% from the recovered amount is therefore, illegal. Lastly , he supported the impugned order passed by the trial Court. 13. Notices were also issued to the Attorney General for Pakistan and Advocate General, Sindh to assist this Court on the legality or otherwise of the aforesaid notificat ion issued by the Finance Division and as to whether legally the NAB can claim any amount recovered under the NAO, from the accused persons towards the corruption money. Further , it was informed that this notice be treated in terms of Order XXVII -A of CPC. However, the parties were directed to come prepared on the issue involved in this petition and the petition shall be heard and decided at Katcha Peshi stage. In pursuance of the notice Mr. Parkash
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Kumar Deputy Attorney General for Pakistan & Mr. Bashir Ahmed Almani Assistant Attorney Generalfor Pakistan show ed their appearance and argued that the amount originated fro m NHA for the purpose of acquiring land for the construction of the M-6 project, intended to facilitate the public at large, however due to corruption, the project was subsequently abolished; that without lawful justification the 25% amount was deducted by NAB. The funds were granted to the Federal Government for the purpose of construction of the M-6 project. They lastly supported the impugned order. 14. Mr. Allah BachayoSoomro Learned A dditional Advocate General, Sindh supported the arguments advanced by Mr.NoorulHaq, learned Amicus Curiae. 15. Heard the learned counsel for the respective parties and learned Amicus Curiae and perused the material available on record. 16. From the record, the factual position appears to be that the Petitioner/NAB during investigation discovered that a set of private accused persons who were made beneficiaries were involved in the offense of embezzlement of funds of M -6 Motorway Project in both the districts that is District Matiria and District Noushero-Feroz. Th e charge of embezzlement against the accused persons was Rs.5.8 Billion in both districts. On completion of the investigation, the NAB filed Reference No. 01 of 2023 ( State v Adnan Rasheed and others) before the Accountability Court No-II, Hyderabad. An application was made in the reference by the Special Prosectuor , NAB, praying therein that the amount deposited by the accused Ashique Hussain Kaleri and Ikhlaque Hussain Shah under the “Plea-Bargain”, the total of which was Rs. 878,118,000/ -. It was prayed that as per the SOPs , NAB was entitled to get 25% of the total amount recovered from the two accused under “Plea -Bargain” which according to the NAB was Rs. 219,529,500/ -. However, NAB Court after hearing the parties dismissed the application of NAB Prosecutor by the impugned order which is the subject matter of these proceedings. 17. Prior to these proceedings, a Constitution Petition being C.P No.D-331 of 2024 was also filed by the NAB Authorities
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in which by an order dated 08.08.2024, the learned trial Court was directed to pass a fresh order after providing the opportunity of hearing to the learned Special Prosecutor NAB and the learned counsel appearing for Acquiring Agency/NHA and the said petition was disposed of in those terms. The present proceedings are the outcome of the fresh order which was passed by the Accountability Court after hearing the parties in compliance with the order in C.P No.D -331 of 2024 and had dismissed the application of NAB. 18. The objectionby the learned Special Prosecutor, NAB, in regard to the jurisdiction of the trial Court inter alia on the ground that the tr ial Court passed the impugned order by exceeding its jurisdiction by exercising Suo-Moto powers is not substantiated by the material which has been placed by the parties before this court . The record reflects that the accused Ashique Hussain Kaleri and Ikhlaque Hussain Shah voluntarily entered into the process of “Plea -Bargain” as provided un der section 25(b) of NAO which was forwarded to the Regional Board of Management (RBM) and after appropriate legal sanction by the NAB authorities the same was placed before the trial Court with an application. A report in detail mentioning the disbursement of the deposited amount was submitted by the Investigating Officer on 18.01.2024 before the Registrar of the trial Court who placed it before the court along with a submission note . The Statement/Report disclosed the amount deposited by the accused Ashique Hussain Kaleri through “Plea-Bargain” was Rs.875,138,000/- while the amount deposited by Ikhlaque Hussain Shah under "Plea-Bargain” was Rs. 20,980,000/-, total amounting to Rs. 878,118,000/ -. Out of the aforesaid amount, the NAB authorities claimed to have deducted 25% as their share which is Rs. 219,529,500/ - as per their SOP and the remaining recovered amount after deducting the aforesaid amount of 25% share, which comes to Rs. 658,588,500/-, was returned to NHA. Upon this material, the NAB court, after examining the quantum of amount unilaterally deducted by the NAB agency from the recovered amount of the plea bargain was justified , sought an explanation from the NAB authorities as this was the public money which was owned by the NHA for a public project. Such
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an exercise, by the NAB court cannot be equated as a Suo-Moto power more so when such power was conferred not only by the inherent jurisdiction of the NAB court but was further under a directive given by this Court in C.P No. D-331 of 2024. 19. Therefore, the objection that the NAB Court did not have the power to examine the legality or otherwise of the 25% share claimed and de ducted by the NAB authorities under the garb of SOP was without any substance . Section 25(b) of N AO provides that at any stage of the investigation before or after the commencement of the trial or during the pend ency of the appeal if the accused offers to return to the asse ts or gains acquired or made by him in the course or as a consequence of any offence under this ordinance then the NAB authorities after taking requisite approval from the competent authority will approach the trial Court and/or the Appellate Court as the case may be and the trial Court or Appellate Court may in the public interest accept such a “Plea-Bargain” and on deposit of such amount in terms of 25(c) of NAO, the NAB shall transfer it to the Federal or Provincial government or to any statutory or concerned department within one month from the date of such deposit. For the sake of conven ience, section 25(c) of NAO is reproduced as under: “The amount deposited by the accused with the NAB shall be transferre d to the Federal Government or, as the case may be, a Provincial Government (as the case may be) or the concerned Bank or Financial institution, company, body corporate, co -operative society, statutory body, or authority concerned within one month from the date of such deposit”.
20. From the plain reading of the aforesaid section , it is clear that the amount recovered under a “Plea-Bargain” by the NAB authorities shall be transferred to the Federal or Provincial government or any other authority concer ned within one month . It is the prime duty of the NAB court to ensure that the entire recovered amount under “Plea-Bargain” shall be transferred to the concerned department or agency which was being cheated or who’s amount was being embezzled. This by itself is sufficient to overrule the objections of the learned Special Prosecutor , NAB that the law does not permit any share of the NAB authority.
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21. The next submission of the learned Spe cial Prosecutor NAB was a reference to Rules, 2002 and submitted that in the said rule, it is clearly menti oned about the share of the NAB. Rule 4 states that bonus or ex -gratia to the officers, staff of the NAB, and other government servants and public servants, the given rewards for their commendable in dete ction, investigation and prosecution of any offence under NAO . The contention so raised by the Learned Special Prosecutor is relatable to section 33-A of NAO which is produced hereunder:-
“33A. [Payment of bonuses etc. -There may be paid bonuses or ex-gratia to the officers and staff of the NAB, other Government servants, public servants and rewards to the members of public for rendering commendable services in detection, investigation and prosecution of [any offence under this Ordinance as may be prescribed by rules]”.
22. The provisions regarding bonus or ex-gratia payment for extraordinary performance, as outlined in Rule -4 (d) of the Rules, 2002, spells out that the bonus is capped at a maximum of “one year's basic salary” of the awardee and not 25% of each recovered amount. It further has a rider that it can only be awarded once a year, and therefore, it can neither be claimed as a right nor be awarded for each recovery. Even otherwise, bonus or ex-gratia payment as contemplated in the rules could only be given to those officers and/or staff members whos e performance on evaluation was found as extra ordinary shall be given to those officers and staff members whose performance has been extraordinary. The amount so awarded shall ordinarily be at the maximum of equivalent to basic salaries of one year and that too once in a year on the recommendation of the committee. It further provides that the amount of the award shall be decided on the basis of (1) the Nature of the work performed. (2) Size of recovery made. (3) Risk and initiative involved; and (4) Rank and status of the awardee. This limitation ensures that the reward remains special and not a regular feature. Such payments are to be awarded to officers and staff members based on their exceptional contributions, under the recommendation of the Committee constituted under Rule 3, with the NAB Chairman holding the authority to approve them.
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23. TERM “EX-GRATIA & BONUS” INTERPRETED BY APEX COURTS: In the case of “ (M/S) The National Embroidery Mills Ltd. and Others vs. Punjab Employees Social Security Institution and Others, 1993 SCMR 1201” August Supreme Court ruled that; 8. The amount paid by the employer is in discharge of his legal duty and contractual obligat ion for service rendered by the employee. Such payment the employee gets as matter of rights and entitlement under the contract or law and not as ex gratia, charity, dole, grace, reward, gift or compensation on compassionate grounds at the mercy and will of the employer.
24. There is unanimity of view that any payment ex-gratia to an employee does not fall within the definition of "wages". The ex-gratia payment is not made under any contract or law but at the sweet will of the employer. The w age is remuneration for service and therefore, the payment has a direct nexus with the services rendered and cannot be termed to the ex -gratia payment or merely a reward or gift to the employees. 25. It is also important to observe over here that the amount payable means anything which was due on account of any legal/ vested right expressed or implied but ex -gratia grant being discretionary in nature cannot be claimed as of right. The amount paid by the employer is in the discharge of his legal and contractual obligation for the services rendered by the employee. Such payment, the employee gets as a matter of right and entitlement under th e contract or law and not as ex -gratia, charity, dole, grace, reward, gift or compensation on compassionate grounds a t the mercy and will of the employer. The other characteristic is that the payment should not be irregular in character and must have a direct nexus with the actual perf ormance of work. Any payment ex -gratia to an employee does not fall within the definition of "wages". The ex - gratia…
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