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Petitioner: HAKIM ALI ZARDARI VS Respondent: THE STATE
Court Name: Lahore High Court Judge(s): Mian Saqib Nisar, Tasaddaq Hussain Jillani Title: HAKIM ALI ZARDARI vs THE STATE Case No.: Criminal Appeal No,468 of 2001 Date of Judgment:2002-05-14 Reported As: PLD 2002 Lahore 369 Result: Appeal allowed
JUDGMENT
JUDGMENT TASSADUQ HUSSAIN JILANI, J.--Appellant was tried by the learned Judge Accountability Court, Lahore (constituted under the National Accountability Bureau Ordinance (XVIII of 1999) in Accountability Reference No,12 of 1999 (Reference No,17 of 1997) and vide the impugned judgment dated 24-3-2001 he was convicted under section 3(1), clause (d) of the Ehtesab Ordinance, 1997 and sentenced to imprisonment for a period of one year and six months. He was also burdened with a fine of Rs,20 million in default of which he was to further undergo imprisonment for a period of one year and six months. Benefit of section 382-B, Cr.P.C. Was extended and he was disqualified to contest elections and hold public office for a period of ten years in terms of section 15 of the NAB Ordinance, 1999. 2. Facts giving rise to the instant appeal are that in February, 1997 initially on the initiation of Ministry of Interior, Reference No,17 of 1997 was instituted by the then Chief Ehtesab Commissioner, Islamabad under section 14(1) of the Ehtesab Ordinance, 1997 which was taken cognizance of by a Division Bench of this Court but subsequently on the promulgation of the National Accountability Bureau Ordinance, 1999, the Reference was transferred to the Accountability Court (by operation of the latter Ordinance) which tried the appellant and passed the impugned judgment. 3. The case of the prosecution is that 4.5 acres of land situated in Survey No,721 National Park, Rawalpindi was leased out to Pakistan Tourism Development Corporation (on thirty years' lease renewable for ninety-nine years) for construction of a Tourist Village by the Cantonment Board Rawalpindi (lease agreement dated 24-9-1977 Exh.PW5/A). As the P.T.D.C. Could not complete the project it decided to explore the possibility of collaboration of private sector. It issued a proclamation in Press, inviting parties to participate in the project for construction of the Tourist
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Village. The group chaired by Hakim Ali Zardari appellant i,e, Zardari Group (Pvt.) Limited was finally selected for a joint venture. In terms of the agreement between the P.T.D.C. And the Zardari Group (Pvt.) Limited, a joint venture company was floated the former contributed land towards the capital of the company and shares worth Rs,18 lacs were issued in favour of the P.T.D.C. In lieu thereof and Zardari Group was to contribute Rs,54 lacs as equity equivalent to 75% shares of the company (this agreement between P.T.D.C. And the Zardari Group Private Limited is Exh.PW5/C). In order to contribute its equity of 25% share P.T.D.C. Sub-leased the land in favour of Tourist Village Limited, The Tourist Village thereafter applied for loan of Rs,86.789 million to the N.D.F.C. (National Development Finance Corporation). The loan was sanctioned and an amount of Rs,3 million was disbursed in the year 1990. It was alleged that on 30-6-1996 an amount of Rs,1,31,58,337.52 was outstanding against the appellant. Notwithstanding the pledge of land with the N.D.F.C. Appellant Hakim Ali Zardari, it was further alleged, entered into a sale agreement with Sh.Abdul Hameed of M/s. Bilz (Pvt.) Limited, Multan (P.W.1) for the sale of 27 Kanals of land being share of M/s. Zardari Group in the company named Tourist Village Ltd. For a sum of Rs,25 million. He also received an amount of Rs,5 million as earnest money through pay order. The sale could not materialize as the purchasing party came to know that the appellant owed Rs,one crore to N.D.F.C. Against this land and further that the latter failed to provide the requisite N.O.Cs. From the P.T.D.C. And the Cantonment Board, Rawalpindi. The appellant, however, it is admitted, refunded the earnest money in January, 1995. In September, 1994 the Zardari Group made an agreement with Zafar Mehmood Khan (P.W.2) for the 'sale of whole 4.5 acres of land for a sum of Rs,2,45,00,000 without the consent of the N.D.F.C. He even sold 25% share of P.T.D.C. Again without their consent. It was further alleged that the Pakistan Tourism Development Corporation, the second partner in the company, decided to disinvest their share worth Rs,2.7 million but the Zardari Group did not bother to respond to P.T.D.C. Letters vide which he was conveyed the conditions for disinvestment. The precise charge framed by the learned trial Court was as under:- "(i) That by means of an agreement deed dated 29-11-1983 and sub-lease dated 16-1-1986 you obtained a plot bearing Survey No,721 measuring 4.5 acres situated in Ayub National Park, Rawalpindi, from Pakistan Tourism Development Corporation for establishing Tourist Village in accordance with the approved building plan by the Cantonment Board, Rawalpindi; (ii) that in your capacity as the Chairman of the Tourist Village (Pvt.) Ltd., you pledged this land with N.D.F.C. For obtaining a loan of Rs,86.789 million in the year 1989, the loan was sanctioned and an amount of Rs,30,00,000 (Rupees three million) was disbursed in the year 1990 but the same was not utilized till today and the said amount has allegedly arisen to Rs,1,40,00,000 (Rupees one crore and forty lacs only) inclusive of the interest; (iii) that on the same plot, you obtained a sum of Rs,24,00,000 (Rupees twenty-four lacs only) from Pakistan State Oil on ten years' advance rent on 24-1-1990 for the installation of a petrol pump on the said plot; (iv) that although the said plot was already pledged with the N.D.F.C. And it could not be sold/disposed of without the permission of the N.D.F.C. But you without such permission agreed to sell the entire project on 18-9-1994 by means of an agreement in favour of Zafar Enterprises through Zafar Mahmood Khan and received a sum of Rs,54,00,000 (Rupees fifty-four lacs only) out of the agreed sale price of Rs,2,45,00,000 (Rupees two crore forty-five lacs only) and also sold 25% shares of P.T.D.C. Without their consent; (v) that the Board of P.T.D.C. Made a conditional decision on 1-12-1994 to disinvest their shares worth Rs,2.7 million but you even did not bother to respond to the P.T.D.C.'s letter conveying to you the conditions for disinvestment; and (vi) that you by abusing your official position as holder, of a public office committed the aforesaid acts of commission and omissions falling within the ambit of corruption and corrupt practices as
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defined in section 3(1), clause (d) of the Ehtesab Ordinance, 1997 and obtained a pecuniary advantage to the tune of Rs,1,08,00,000 (Rupees one crore eight lacs only) without any investment which offence is punishable under section 4 of the said Ordinance." 4. The material evidence produced by the prosecution during the trial was as under:-- PROSECUTION WITNESSES: (i) Sh. Abdul Hameed (P.W.1): He proved the lease agreement dated 6-3-1994. However, he submitted that the "agreement was reduced into writing which could not be materialized, therefore, in the year 1994 the agreement was cancelled. Rs,5 million were returned to him in two instalments." (ii) Zafar Mehmood (P.W.2): He stated that the agreement dated 18-9-1994 was signed on behalf of Zardari Group by Mrs.Zarin Ara in terms of which 75% share of Tourist Village (Pvt.) Limited was sold for a sum of Rs,2 crore, 45 lacs and she also promised to get a petrol pump sanctioned in favour of Tourist Village Limited. He added' that as per agreement he was required to discharge the liabilities of N.D.F.C. And P.S.O. Amounting to Rs,45 lacs. (iii) Sohail Shah Bokhari (P.W.3.): He was Ex-Vice President of N.D.F.C. Who proved the loan agreement between N.D.F.C. And Tourist Village (Pvt) Limited which is Exh.PC/1. (iv) Afaq Hussain Shah (P.W.4): He was Senior Vice-President of N.D.F.C. He produced the record pertaining to the sanction of loan and other correspondence between the N.D.F.C. And the Tourist Village (Pvt.) Limited. The documents that he produced are as under:-- (i) sanction letter dated 26-3-1989 (Exh.PX); (ii) letter of request by the Tourist Village Private Limited through Hakim Ali Zardari regarding release of amount of Rs,1,50,00,000 (Exh.PX/1); (iii) letter dated 16-11-1989 from Vice-President N.D.F.C. To the Manager, N.D.F.C. Clifton Branch (Exh.PX/2); (iv) letter dated 18-1-1990 from Hakim Ali Zardari, Chairman TVL to Chairman, N.D.F.C. (Exh.PX/3); (v) letter dated 24-1-1990 from Vice-President, N.D.F.C. To Branch Manager, Clifton Branch (Exh.PX/4); (vi) report of the Chartered Accountant (Exh.PX5/1-2); (vii) letter dated 21-7-1991 from the Senior Vice-President (PSD1) addressed to Senior Vice-President (PSD2) Exh.PX/6; (viii) letter dated 6-11-1991 (Exh.PX/7); (ix) certified copy of transfer voucher (Exh.PX/8, dated 18-11-1989; (x) statement of Accounts up to 31-12-1989 (Exh.PX/9); (xi) voucher dated 24-1-1990 (Exh.PX/10); (xii) statement of Account (Exh.PX/11) up to 24-1-1990; (xiii) copy of letter dated 8-8-1997 (Exh.PX/12); (xiv) copy of letter (Exh.PX/13) dated 5-12-1997. (xv) Ehsan Oadir (P.W.5): He was an officer of the P.T.D.C. And brought the relevant record in Court. (xvi) Malik Safdar Ali (P.W.6): He was a Deputy Director of F.I.A. Who investigated the case and submitted fmal report on the basis of which Reference was filed. (xvii) Sameen Hussain (C.W.1): He was a Vice-President of the N.D.F.C. He also brought the relevant record pertaining to the loan advanced in favour of the Tourist Village Limited. (xviii)Lal Sher Khan (C.W.2): He was the Superintendent of Land Cantonment Board, Rawalpindi and produced in evidence the relevant record regarding the permission of the Board to mortgage the property for obtaining loan, NOC issued by the Board and the application of one Shahnaz Zafar (Chief Executive of M/s. Tourist Village Private Limited).
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5. Appellant could not appear in Court on account of sickness and with permission of the Court he was allowed to have his statement (under section 342, Cr.P.C.) recorded through Mr. Asif Bhatti, Advocate and also to file detailed written statement i,e, Mark-D. It was admitted on behalf of the appellant that the land was leased out to P.T.D.C. By the Cantonment Board, Rawalpindi for thirty years (renewable for 99 years); that pursuant to advertisement in Press inviting bids for a joint venture he participated and was selected whereafter P.T.D.C. And M/s. Zardari Group entered into an agreement for the establishment of a Tourist Village on the afore-referred land; that in the said joint venture, the Zardari Group was only required to invest 54 lacs as its equity share which was done but the project could not be completed due to factors beyond the control of Tourist Village Limited; that the site plan, for the establishment of Tourist Village was sanctioned on 3-12-1989 but in the year 1990, on account of Reference No,8/90 filed under the mala fide political pressure of the then President Mr.Ghulam Ishaque Khan, the National Development Finance Corporation unilaterlly terminated the financial facilities whereafter it was not possible for the Tourist Village to proceed with the plan. He admitted that he was elected as Member of National Assembly in November, 1988 and his daughter-in-law (Mohterma Benazir Bhutto) was also elected as M.N.A. He, however, denied the suggestion that he had obtained a financial assistance from N.D.F.C. To the tune of Rs,85.789 million on account of political influence. He maintained that none of the prosecution witnesses had said that the loan was got sanctioned on account of the alleged political influence. It was denied that the loan was sanctioned without requisite securities. It was admitted in the statement that he had withdrawn an amount of Rs,1.5 million sanctioned by the N.D.F.C. In the year 1989 and another amount of Rs,1.5 million in January, 1990. He, however, denied the suggestion that the afore-referred amount of Rs,3 million was not spent on the project. It was maintained that the amount was disbursed by the N.D.F.C. Through Escrow Account and the financial facility was terminated by the N.D.F.C. On account of the political pressure. Nevertheless it was added in the statement that the total liability of N.D.F.C. Stood satisfied. He admitted that he was re-elected as member of the National Assembly in October, 1993 alongwith his son and daughter-in-law and he was appointed as Chairman, Public Accounts Committee of the National Assembly. The agreement with Sh. Abdul Hameed, Chairman M/s. Bilz Limited, Multan was not denied by the appellant but it was explained that vide the said agreement the intention was to sell the share and, in any case, the said agreement was never acted upon. A subsequent agreement with Zafar Mehmood was also admitted but it was clarified that the agreement was to sell 75% share of the Zardari Group in Tourist Village Limited, the company being a juristic person was a separate entity, was competent to do that and -no illegality was reflected in the said agreement. Appellant also did not deny having received payments pursuant to the agreement between the Tourist Village Limited and Zafar Mehmood. In the supplementary statement made by the appellant on 3-3--2001 when confronted with the query as to why the joint venture was not converted into a public limited company before the disbursement of the loan, he replied as under:-- "Since the company also needed Bridge Finance Facility from N.D.F.C., therefore, the sponsors expressed their intentions to implement the project under a public limited company to be floated by them. I was not the only sponsor. It was not my obligation alone to convert this intention into reality by floating a public limited company for Bridge Finance Facility and the stage for such floatation did not materialize." ' Giving an account of what he alleged as mala fides, the appellant concluded his detailed written statement in the following terms:- "The present prosecution is mala fide, launched by Nawaz Sharif Regime. Apart from this false Reference, no other case, despite best efforts could be established against me. I happen to be father-in-law of Benazir Bhutto and father of Asif All Zardari. This is why I am being victimized. I am 70 years of age. I am an ailing person suffering from serious medical disabilities, the Medical Board
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has established my infirmities that is why I am admitted as Indoor Patient in Dr.Ziauddin Medical University Hospital, for the last many months. I have since then been in judicial custody. I am innocent and thus I am entitled to be acquitted honorably by this Hon'ble Court." 6. Mr. Saleem Sehgal, learned counsel for Hakim Ali Zardari 'appellant, in support of this appeal, made following submissions:-- (i) That the material contained in the Reference and the evidence led during trial did not constitute any offence under the Ehtesab Act, 1997. The prosecution, it was contended, miserably failed to produce evidence which could bring the conduct of the appellant within the mischief of section 3 of the Ehtesab Ordinance, 1997; (ii) that the appellant could not have been made to incur disqualification under the National Accountability Ordinance in view of sections 9, 33 and 35 of the said Ordinance; (iii) that the loan transaction between Tourist Village Limited of which the appellant was a partner and N.D.F.C. Was a commercial transaction, entered into between two juristic entities and having complied with all the requirements of securitization there was no question of misuse or abuse of official position; (iv) that the agreement executed between Zardari Group and Zafar Brothers was a contingent agreement i,e, subject to certain conditions, it was partly acted upon but it remained an inconclusive contract. Nevertheless it did not adversely affect the rights of either the P.T.D.C., N.D.F.C. Or Cantonment Board. All the liabilities of N.D.F.C. Stood discharged and none of the afore-referred departments are a complainant; (v) that the N.D.F.C. Had approved loan in favour of the joint venture which was sanctioned before the appellant became an M.N.A. i,e, the loan was sanctioned on 25-8-1988 whereas he was elected M.N.A. On 24-11-1988; (vi) that the impugned judgment proceeds on incorrect assumptions with regard to Ehtesab Ordinance, Companies Act, Contract Act, Transfer of Property Act, Sale of Goods Act and various Constitutional provisions which makes it arbitrary and conjectural. 7. Mr.Muhammad Ghani, Advocate/learned Public Prosecutor appearing for the National Accountability Bureau supported the impugned judgment and submitted as under:-- (i) That the joint venture i,e, Tourist Village (Pvt.) Limited, headed by appellant Hakim Ali Zardari, was sanctioned loan by the National Development Finance Corporation in terms of an agreement which inter alia stipulated that the afore-referred Limited Company shall be converted into Public Limited Company before the loan was disbursed. This condition having not been fulfilled by the appellant, the loan could not have been disbursed. This disbursement of loan reflects the undue influence exercised by the appellant on the National Development Finance Corporation; (ii) that P.W.3 Sohail Shah Bokhari, the then Vice-President of N.D.F.C. And P.W.4 Afaaq Hussain Shah, Ex-Vice-President of the N.D.F.C. As also Ehsan Qadir (P.W.5), an official of Pakistan Tourist Development Corporation had made dishonest concessions which were rightly taken note of by the learned trial Court and their evidence, to that extent, is worthy of no consideration; (iii) That on 18-5-1986 the appellant applied for loan to N.D.F.C. For the limited company in question (application is C.W.1/A). No order was passed on the said application till 1988. On 24-11-1988 appellant's election as Member, National Assembly was notified and on 20-3-1989 the National Development Finance Corporation sanctioned the loan. This grant of loan by itself, according to him, would show that the sanction was obtained through improper means and undue influence exerted by him in his capacity as Member of the National Assembly; (iv) that the sanction letter (Exh.PX) and the agreement to finance between the appellant's company and the N.D.F.C. (Exh.PC) stipulated certain conditions and the loan could be disbursed only on the fulfilment of those conditions. Condition Np.10 (k) of Exh.PC visualizes that the N.D.F.C. Could withhold training in case of violation. As those conditions had not been fulfilled, the N.D.F.C.
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Vide letter dated 29-7-1981 (Exh.PK/14) recalled the loan facility. In October, 1993, his son and daughter-in-law were elected as Members of the National Assembly. On 6-3-1994 appellant entered into an agreement to sell his shares in the private limited company with Sh.Abdul Hameed and received a sum of Rs,50 lacs as earnest money. In the said agreement the company was shown as the public limited company and the appellant was shown as the owner. Although this agreement did not materialize but it reflects an attempt on his part to obtain pecuniary advantage through dishonest means. On 18-9-1994, appellant entered into yet another agreement with Zafar Mehmood (P.W.2) in terms of which the appellant's share in the Tourist Village (Pvt.) Limited was sold for a sum of Rs,2,45,00,000 and the said agreement also visualized that the appellant would obtain a sanction for installing a petrol pump in favour of the Tourist Village on the land in question (agreement is Exh.PA). On 4-10-1994, the Pakistan Tourist Development Corporation decided to disinvest its 25% share in the Tourist Village (Pvt.) Limited, a letter was addressed to the appellant on 11-11-1994 (Mark-B) offering him to purchase the said share but appellant's lack of response indicated that he was content with money that he had made out of the project and was no longer interested to continue with the project which besides being violative of the initial agreement reflected criminal intent on his part; (v) that although the entire liability of the National Development Finance Corporation was cleared on 5-12-1997 (Exh.DA), through the incentive scheme issued by the State Bank of Pakistan, yet the commissions and omissions of the appellant constituted offence under the Ehtesab Ordinance and he has rightly been convicted on charges framed against him; (vi) That the evidence led by the prosecution has proved the case against the appellant beyond reasonable doubt; that he had obtained loan in his capacity as Member of the National Assembly and Chairman of the Public Accounts Committee; that he sold his share to third party illegally; that he got substantial profits out of those transactions and the strong presumption would arise against the appellant and the burden to prove that the afore-referred transactions were transparent and bona fide transactions shifted on him. Since he failed to produce any evidence which Would lead to an unrebuttable presumption that he had obtained favours and pecuniary advantages by using corrupt and illegal means within the meaning of the Ehtesab Ordinance, 1997. In support of the submissions he relied on the following precedent case-law and opinion of jurists:- - (i) The President v. Mr. Justice Shaukat Ali (PLD 1971 SC 585); (ii) The Registrar of Companies, Pakistan through Joint Registrar of Companies v. Taj Company Limited and 8 others (1993 CLC 1413); (iii) Khan Asfandyar Wali and others v. Federation of Pakistan through Cabinet Division, Islamabad and others (PLD 2001 Supreme Court 607); (iv) Jag Prasad Rai v. Singari (AIR 1925 Privy Council 93); (v) Kanshi Ram v. Shankar Das (AIR 1928 Lahore 397); (vi) Padamraj v. Gopikisan (56 Indian Cases 129); (vii) Deonarain Singh v. Emperor (AIR 1934 Patna 132); (viii)Barada Prosad Saha v. Krishna Chandra Saha ( 1934 Calcutta 414); (ix) Dip Chand Golo Mal v. Kishni Bai (AIR 1928 Sindh 133); (x) Debendra Narayan Singh v. Narendra Singh (54 Indian Cases 636); (xi) Chidambaram Chettiar v. Ayyappa Chettiar (AIR 1935 Madras 152); (xii) American Jurisprudence, Second Edition, Volume 29, and (xiii)Cropus Juris Secundum by Francis, J. Ludes (Volume 31A), on Presumptions. 8. Mr. Ahmer Bilal Soofi, the learned Deputy Prosecutor-General for National Accountability Bureau (NAB) submitted that the white collar crime is on the increase; that the misuse of authority by public functionaries assumes different nodes; some are overt while the others are covert; that to
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meet the challenge of this nature of crime the countries from diverse jurisdictions have taken measures including amendment in procedural and substantive law; that the requirement of mens rea to prove such offences is no longer necessary and that the Government of Pakistan, in a working paper addressed to the United Nations General Assembly, has recommended that the requirement of mens rea should be dispensed with in corruption cases as sometimes the crimes are committed in very subtle ways. He added that in offences creating strict liability, the requirement of mens rea already stands dispensed with. Referring to the principle of "res ipsa loquitor" which has been recognized and applied by our Courts, he contended that the evidence led by the prosecution and the chain of circumstances reflected therein, would speak for themselves that an undue influence was used by the appellant to obtain loan and to ensure its disbursement, to sell out the shares to 3rd party and to make money. In the face of these facts, he submitted, it was for the appellant to rebut the evidence led. As he did not lead any evidence, he further submitted, appellant miserably failed to discharge the onus which laid heavily on him. The precedent case-law to which reference was made by the learned Deputy Prosecutor-General (NAB) is as under:-- O Government of Pakistan v. Ishrat Begum (1999 MLD 768); (ii) Pakistan Steel Mills v. Malik Abdul Habib (1993 SCMR 848); (iii) Messrs Jehangir Services (Pvt) Limited v. Mst. Bibi Rukhsana Begum (PLD 1995 Karachi 329); (iv) Muhammad Ismail Qureshi v. Pakistan (PLD 1991 FSC 10); (v) Sheikh Mujibur Rehman v. The State (PLD 1964 Dacca 330); (vi) Daluram Bahani v. The State (PLD 1958 Dacca 188), and (vii) Sohail v. Badam (1996 PCr.LJ 555). 9. Heard. 10. Having gone through the impugned judgment, the evidence on record, the charge framed, the relevant law and having given anxious considerations to the submissions by counsel from both the sides, we are of the view that the points Mooted for our considerations, in the case, are as under:-- (i) Whether the appellant's selection by the Pakistan Tourist Development Corporation to join the joint venture named as Tourist Village (Pvt.) Limited and the agreement executed between them on 29-11-1983 was on account of his influence as holder of public office…
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