2011 Y L R 337

[Lahore]

Before Sh. Ahmad Farooq, J

PAKISTAN ENGINEERING COMPANY LTD. through Managing Director and 2

others---Petitioners

Versus

DIRECTOR GENERAL, F.I.A. ISLAMABAD, and 3 others---Respondents

Writ Petition No. 16446 of 2010, heard on 29th October, 2010.

(a) Penal Code (XLV of 1860)---

----S. 406---Federal Investigation Agency Act (VIII of 1974), Preamble & S.2(e)---
Constitution of Pakistan, Art.199---Constitutional petition---Maintainability---
Criminal breach of trust---Notice for inquiry---Petitioner Company had called in
question the legality of a notice for enquiry issued by the Assistant Director, Federal
Investigation Agency; as well as the proceedings being conducted thereon---
Maintainability of constitutional petition had been challenged by respondent
contending that Federal Government having complete administrative control over
the affairs of the petitioner company, FIA had jurisdiction to register and investigate
the case and that offence of criminal breach of trust was made out against the
petitioner company and same was included in the Schedule of Federal Investigation
Agency Act, 1974---Validity---Held, there being business dealings of sale and
purchase between the parties, dispute between the parties was purely of civil nature
and F.I.A. had got no jurisdiction to conduct an inquiry/investigation in the matter---
Impugned notice and the proceedings conducted thereon, were declared to be
without jurisdiction and lawful authority.

(b) Constitution of Pakistan---

----Arts. 4 & 18---Right of individual to be dealt with in accordance with law and
freedom of trade, business or profession Every citizen has a right to be treated in
accordance with law---Freedom of trade, business or profession has been protected
under Art.18 of the Constitution subject to such qualifications as could be prescribed
by law in that respect.

Adam Jee Insurance Company Ltd. and others v. Assistant Director Economic Enquiry
Wing Federal Investigating Agency 1989 PCr.LJ 1921; Muhammad Irshad Khan v.
Chairman, National Accountability Bureau and 2 others 2007 PCr.LJ 1957; Chairman
National Accountability Bureau and another v. Muhammad Irshad Khan 2008 SCMR
1012 and Ghulam Sarwar Zardari v. Piyar Ali alias Piyaro and another 2010 SCMR 624
ref.

(c) Federal Investigation Agency Act (VIII of 1974)---

----Preamble, S. 2(e)---Object and applicability of Federal Investigation Agency Act,

1974---Scope---Object of Federal Investigation Agency Act, 1974 was to set up an
Investigation Agency for the offences committed in connection with matters
concerning the Federal Government; and matters connected therewith---Complaint
lodged in the case had no nexus with such object---Neither any employee of the Federal
Government was involved, nor the petitioner company was under the administrative
control of Federal Government; nor any loss had occurred to the Federal Government---
FIA, in circumstances had no authority and jurisdiction to take cognizance of the matter.

Iftikhar Hussain and others v. Government of Pakistan and others NLR 1996 AC 193;
Zafar Iqbal and 3 others v. Ghulam Abid and 2 others 1995 MLD 1285; Dr. Syed Rehmat
v. Deputy Director F.I.A. 1999 PCr.LJ 1549 and Printing Corporation of Pakistan v.
Province of Sindh and others PLD 990 SC 452 ref.
Muhammad Amjad Parvaiz for Petitioner.

Abdul Sami Qureshi for Respondent No.4.

Khalid Anees, Assistant Director, F. l A., Lahore/respondent No. 3 in person.

Date of hearing: 29th October, 2010.

JUDGMENT

SH. AHMAD FAROOQ, J.---Through the instant petition, under Article 199 of the
Constitution of Islamic Republic of Pakistan, 1973, the petitioners have called in question
the legality of a notice for enquiry, dated 8-7-2010, issued by respondent No.3/Assistant
Director, Federal Investigation Agency, Lahore as well as the proceedings, being
conducted thereon.

2. The brief facts, relevant for the disposal of the instant petition, are that the
petitioner/Pakistan Engineering Company Limited, Lahore, through its agents or
authorized representatives, has been purchasing certain articles/M.S. Angles from
respondent No.4 Q/M/s A.F. Steel, Re-rolling Mills from time to time, and at one stage, a
quantity of 226.760 M/Tons of the aforementioned articles/M.S Angles was rejected by
the petitioner company, being of inferior quality. The respondent No.4 was intimated to
lift back the aforesaid rejected material after final settlement of accounts through
authorized representative, vide letter dated 5-5-2010 and thereafter, the aforesaid 226.760
M/tons rejected M.S. Angles were lifted back. After 20 days of the aforesaid full and final
settlement of the accounts, the petitioner company was served with a legal notice on
behalf of respondent No.4 alleging therein that the aforesaid full and final settlement of
accounts was got signed from the authorized representative without allowing him to read
out the same and in fact, 457.59 M/ton of material, in addition to the lifted back material,
is lying with the petitioner company and a demand was made either to return 457.59
M/tons or payment of its price. The petitioner company gave a written reply of the said
legal notice, wherein, the claim of 457.59 M/tons was denied and it was stated that the
accounts have been settled finally and nothing is due against the petitioner company.
Thereafter, the respondent No.4 moved a complaint before respondent No.1 against the
petitioner company and others for recovery of 457.59 M/tons of material or the price
thereof. It was in pursuance of the said complaint that the petitioner company was served
with the impugned notice, dated 8-7-2010, by respondent No.3.

3. Respondents Nos.1 to 3 submitted their report and parawise comments, wherein they
contended that the Federal Government owns 33% shares of the petitioner company and
as such, F.I.A. has jurisdiction to take cognizance of the matter in dispute. The
respondents further contended that F.I.A. can take cognizance where wrongful gain or
wrongful loss has been caused by a Federal Government owned department/company.
However, the answering respondents did not conclusively deny that the matter between
the parties is of civil nature.

4. Learned counsel for the petitioners submitted that the filing of the complaint by
respondent No.4 and consequent proceedings by respondent No.3 are prompted by mala
fide intentions for the reason of rejection of material by the petitioner company. He
further contended that on the face of record, at the most, the dispute is of civil nature
between two companies, requiring rendition of accounts and exclusive jurisdiction to
adjudicate upon such matters vests with the civil court of competent jurisdiction and the
F.I.A. has no lawful authority to intervene in such matters. He argued that a civil dispute
has been converted into criminal proceedings so as to bring the weight of criminal law to
bear upon the shoulders of the petitioner company to compel it to accept the illegal
demand of respondent No.4. Learned counsel for the petitioners next argued that it is a
well settled that there is a tendency to enforce civil liability through the machinery of
criminal law, which tantamount to abuse of process of law. He maintained that the
petitioner company is governed by the Company's Ordinance, 1984. Its major
shareholding vests in the private public, and its affairs are administered and controlled on
the principle of majority, only three directors, out of a total 9 directors' are nominated by
the Government, therefore, the Federal Government is neither the administrative nor
controlling authority of the petitioner company. He maintained that the Federal
Investigation Act has been enacted to investigate into the offences in connection with
matters concerning the Federal Government and matters connected therewith and the
jurisdiction of F.I.A. only extends either to the public servant of Federal Government or
employees of those companies, whose administrative or controlling authority vests in the
Federal Government, hence, F.I.A. has no jurisdiction to register and investigate a case
against the petitioner company or its employees. He claimed that from the contents of
complaint, ho scheduled offence is made out against the petitioners. Lastly, he argued that
in any case, no loss has occurred to the public exchequer or the Federal Government.

5. Conversely, learned counsel for respondent No.4 submitted that the petitioner is a
Public Limited Company and the Federal Government is its major shareholder, holding
33% of the shares. Moreover, the Federal Government appoints three Directors and the
Chairman, out of total of 9 Directors, and the Chairman has a right to cast a second vote
in case of equality. Hence, the Federal Government has complete administrative control
over the affairs of the petitioner company and as such, the FIA has jurisdiction to register
and investigate a case. He further submitted that the offence of criminal breach of trust is
made out against the petitioner company and the same is included in the schedule to FIA
Act, 1975. Finally, he argued that no violation of any fundamental right is involved in this
case and as such, the instant petition is not maintainable.

6. I have heard the learned counsel for, the parties and given anxious consideration to the
arguments addressed by them, in addition to examining the record.

7. First of all, I would like to deal with the question of maintainability of the instant
petition. As per Article 4 of the Constitution of Islamic Republic of Pakistan, 1973, it is
an inalienable right of every citizen of Pakistan to be treated in accordance with law.
Similarly, Article 18 of the Constitution protects the freedom of trade, business or
profession, subject to such qualifications, if any, as may be prescribed by law. In this
respect, I would like to refer to the judgment reported in Adam Jee Insurance Company
Ltd. and others v. Assistant Director Economic Enquiry Wing Federal Investigating
Agency 1989 PCr.LJ 1921 wherein it has been held that High Court can invoke writ
jurisdiction qua a notice, which was found to be outside scope of powers of F.I.A.
Furthermore, it is a settled proposition of law that an investigation, launched beyond
jurisdiction, is mala fide and without lawful authority, which can be struck down by the
superior courts. In arriving at this conclusion, I am fortified by the views expressed in the
judgments reported in Muhammad Irshad Khan v. Chairman, National Accountability
Bureau and 2 others (2007, PCr.LJ 1957), Chairman National Accountability Bureau and
another v. Muhammad Irshad Khan (2008 SCMR 1012) and Ghulam Sarwar Zardari v.
Piyar Ali alias Piyaro and another (2010 SCMR 624).

8. Having decided the maintainability of the instant petition, I advert to the admitted
facts involved herein. There are business dealings of sale and purchase between the
parties and in this connection, I a letter was issued by the petitioner company to
respondent No.4, on 5-5-2010, intimating therein that a quantity of 226.760 M/Tons
rejected M.S. Angles is lying with it and respondent No.4 can lift the same at any
moment, after settling the account. Admittedly, the said letter is signed by the authorized
representatives of respondent No.4 in token of its receipt and thereafter, the authorized
representative has also signed a declaration of full and final settlement of accounts in
token of its correctness. After 20 days of the settlement of accounts, a legal notice on
behalf of respondent No.4 was sent to the petitioner company, wherein, the sum total of
the demand was either the return of 457.59 M/Tons or its price. The petitioner company
sent written reply, wherein, the claim was controverted, whereafter the respondent No.4
lodged the complaint with the F.I.A. and the crux of the prayer, made therein, is the
recovery, of 457.59 M/Tons of material or its price. The afore referred facts do not spell
out the commission of any offence, rather, the same go to prove that E the dispute, if any,
between the parties is purely of civil nature.

9. So far as, legal questions are concerned, it would be advantageous to refer to some of
the provisions of the F.I.A. Act, 1974 (hereinafter called the Act). The preamble of the
Act reads as under:

"Whereas it is expedient to provide for the constitution of a Federal Investigation

 Agency for the investigation of certain offences committed in connection with
matters concerning the Federal Government, and the matters connected therewith"

Section 2(e) of the Act reads as under: --

"Public Servant" Means a public servant as defined in section 21 of the Pakistan

Penal Code (Act XLV of 1860), and includes an employee of any corporation or
other body or organization set up, controlled or administered by (under the
authority of,) the Federal Government."

10. The perusal of the aforesaid provisions in juxta position shows that the object of the
Act was to set up an Investigating Agency for the offences committed in connection '
with matters concerning the Federal Government and matters connected therewith.
Admittedly, the complaint lodged in the instant case has no nexus with the object cited
above. Moreover, neither any employee of the Federal Government is involved nor the
petitioner company is under the administrative and controlling of the Federal
Government nor any loss has occurred to the Federal Government. Hence, F.I.A. has no
authority and jurisdiction to take cognizance in this case. In this connection, a reference
could be made to the judgments, reported in the cases of Iftikhar Hussain and others v.
Government of Pakistan and others (NLR 1996 AC 193), Zafar Iqbal and 3 others v.
Ghulam Abid and 2 others (1995 MLD 1285), Dr. Syed Rehmat v. Deputy Director F.I.A.
(1999 PCr.LJ 1549) and Printing Corporation of Pakistan v. Province of Sindh and others
(PLD 990 SC 452).

11. The upshot of the above discussion is that the dispute between the parties is purely of
civil nature and F.I.A has got no jurisdiction to conduct an enquiry/investigation in the
matter. Consequently, the impugned notice, dated 8-7-2010, and the proceedings, being
conducted thereon, are declared to be without jurisdiction and lawful authority. Hence,
the instant petition is, accordingly, accepted.

H.B.T./P-32/L Petition accepted.

2006 Y L R 3142

[Karachi]

Before Saiyed Saeed Ashhad, C.J.

MUHAMMAD FAROOQ UMAR---Petitioner

Versus

GOVERNMENT OF PAKISTAN and others---Respondents

C.P. No.D-1015 of 2003, decided on 18th August, 2003.

Penal Code (XLV of 1860)---

----Ss. 406, 408 & 471---Federal Investigation Agency Act, 1974 (VIII of 1975),
Sched.---Constitution of Pakistan (1973), Art.199--- Constitutional petition---Plea of
fraud, forgery and embezzlement---Respondent/complainant had alleged that
petitioner had received/borrowed disputed amount from his brother and issued post-
dated cheques, which were dishonoured by the Bank---Respondents had alleged that
petitioner had cheated the public through fraud, forgery and embezzlement and
committed offences under Ss.406, 408 & 471, P.P.C. which were Scheduled offence of
Federal Investigation Agency Act, 1974---Neither any details relating to commission
of said offences were provided nor Law Officers of Federal and Provincial
Government were able to give details as to what act of commission or omission, had
been committed by petitioner which would make him liable for offences alleged---
Action of F.I.A. in summoning petitioner repeatedly and holding inquiry into the
alleged offences on basis of complaint filed by complainant on behalf of his brother,
was without jurisdiction as dispute if any was basically between two private parties---
High Court allowed constitutional petition and held that investigation/inquiry
conducted by F.I.A. against petitioner on the basis of complaint, was without
jurisdiction and illegal and directed that respondents should refrain from inquiry,
investigation and stop summoning petitioner to their office.

Mian Hamza Shahbaz Sharif v. Federation of Pakistan and others 1999 PCr.LJ 1584
ref.

Khalid Mahmood Siddiqui for Petitioner.

Sajjad Ali Shah, A.A.-G.

Sarwar Khan, Addl. A.-G., Sindh.

ORDER

SAIYED SAEED ASHHAD, C.J.---In this constitutional petition the petitioner has
sought the following reliefs:

(i) Declare that the impugned notice dated 16-5-2002 and the action taken
thereunder by the respondents are arbitrary, void and of no legal effect.

(ii) Declare the impugned actions of the respondents as violative of the

constitutional mandates/guarantees vis-a-vis the petitioner.

(iii) Restrain the respondents from taking any coercive action against the
petitioner.

(iv) Grant any other relief(s) which this Honourable Court deems just and
proper in the circumstances of the case.

The brief facts of the case requisite for disposal of this constitutional petition as per
memo. of petition are as under:
The petitioner was the Chairman of Bhoja Air, Private Limited Company (hereinafter
referred to as "the Airline") carrying on the business of operating air service in
Pakistan and had also opened a branch office in Dubai. The licence of the airline was
cancelled arbitrarily by the Civil Aviation Authority but was restored by this Court.
Due to the sudden and illegal act of Civil Aviation Authority, the branch of Dubai
office of the Airline was also sealed by the Civil Aviation Authority, Dubai in
October, 2000. One Mahmood Yousuf Mandviwala managed to obtain a letter from
the authorities in UAE recommending action against the petitioner. In the compliant
respondent No.2 alleged that petitioner had received/borrowed UAE DHS 330,000
from complainant's brother Azeem Mandviwala and issued post-dated cheques, which
were dishonoured by the bank. Respondent No.4 summoned the petitioner on 16-3-
2002 for enquiry/investigation, wherein his statement was recorded, where-after
respondent No.1 accorded permission for processing the case further against the
petitioner holding that the offence fell within the purview of FIA. The petitioner
stated that the dispute, if any, was between the two private parties and it did not fall
within the purview of FIA. As the respondents did not pay any heed to the objection
raised by the petitioner, he filed a constitutional petition being C.P. No. D-949 of
2001, whereby respondent No.3 was restrained from taking any action against the
petitioner, whereupon the respondents stopped from harassing the petitioner.
However, the petition was dismissed for non-prosecution and as the respondents have
stopped harassing the petitioner, the petitioner did not move an application for
restoration of the case. Upon knowledge of dismissal of the petition, the respondents
again started summoning the petitioner and harassed him which forced him to file the
above petition. He further stated that vide letter dated 14-5-2004 he was summoned
for recording of his statement though such statement had already been recorded
earlier. It was further stated that neither the complainant nor his brother ever appeared
before the enquiry officer nor the alleged cheque was even produced or shown to him.
The petitioner also stated that he had come to know that red warrant has been issued
against him.

We have heard the arguments of Mr. Khalid Mahmood Siddiqui, Advocate on behalf
of the petitioner, Mr. Sajjad Ali Shah, learned D.A.-G., Mr. Sarwar Khan, learned
Addl. A.-G., and have also perused the material on record.

For deciding this constitutional petition paragraphs 7 and 9 of memo. of petition are
very material and for the sake of convenience they are reproduced as under:

(7) That it is pointed out that the petitioner has no relationship or even
acquaintance with the complainant or his brother. The complainant has neither
presented any document acknowledging receipt of the amount in question of
the said cheques nor even disclosed as to where, when and on what account
were these cheques issued or the bank on which the said cheques were drawn
or even the signatory of the said cheques. The complainant has also not
disclosed when the said cheques were presented to the bank. The complainant
has not provided any supporting agreement spelling out the terms and
conditions or even correspondence of the alleged transaction. The complainant
has not even disclosed the nationality, location or the identity of Mr. Azeem
Mandviwala of whom the complainant claims to be brother.

(8) That in view of the above facts, it is clear that the complainant has made a
bogus complaint without any supporting documents, facts or circumstances.
However, on 11--2-2002 respondent No.3 addressed a letter to respondent
No.4 to "to confirm availability of the petitioner discretely at the given
address". The petitioner was summoned on behalf of respondent No.4 on 16-3-
2002 in connection with the said case. The petitioner was asked to record a
statement and provide a copy of his NIC and address. During the said
"inquiry", the petitioner was not confronted with any cheques or documents
but only on verbal allegations, the petitioner was forced to record a statement.
In his statement, the petitioner made the same submissions as in the foregoing
paras. The said "inquiry report" was sent by respondent No.4 to respondent
No.3 on 16-4-2002. Thus, the respondents moving with surprising efficiency
and haste are bent upon acting in an arbitrary and illegal manner."
Parawise comments were filed on behalf of respondent No.4. In relation to the
contents of paragraphs 7 of the memo. of petition the statement made in the parawise
comments was as under:--

"that the contents of para.7 have no nexus with the issues raised in the
enquiry."

Relating to the reply of the contents of paragraph 9 of the memo. of petition the
statement made in parawise comments was as under:

"That the contents of para.9 no comments as the enquiry has been initiated by
the respondent on 29th May, 2002, the complainant and the petitioners have
been contacted to join the enquiry. The petitioner has informed to respondent
during the course of enquiry that the Interpol Abu Dhabi has also taken up the
matter with NCB Interpol, Islamabad."

The respondents have alleged that the petitioner had cheated the public through fraud,
forgery and embezzlement and committed offences punishable under sections 406,
408 and 471, P.P.C. which are in the Schedule of F.I.A. Act, 1974. However, neither
any details relating to the commission of offences of fraud, forgery and embezzlement
punishable under sections 406, 408, 471, P.P.C. were provided nor the law officers of
the Federal and the Provincial Government were able to give details as to what acts of
commission or omission had been committed by the petitioner, which would make
him liable for offences of fraud, forgery and embezzlement. According to the
petitioner, the entire case of the respondents is that he had issued a cheque purporting
to be towards repayment of an alleged loan obtained by him from the brother of the
complainant. It is pertinent to note that complainant Mahmood Yousuf Mandviwalla,
who was the affected party, who had lodged a complaint on behalf of his brother
Azeem Mandviwalla stating therein that the petitioner had obtained a sum of DHS
3,30,000 from Azeem Mandviwalla for business purpose, which were to be repaid in
due course of time and as security for return of the amount the petitioner had
allegedly issued post dated cheques covering the amount in question but when such
post dated cheques were presented to the bank on the due dates were dishonoured for
lack of sufficient amount in the account of the petitioner. The question which agitates
one's mind is as to what prevented Azeem Mandviwalla from lodging the complaint
himself and why complainant Mahmood Yousuf Mandviwalla was required to submit
a complaint to the above effect. It is also pertinent to note that the respondents never
called upon the actual person Azeem Mandviwalla to appear before them to establish
the factum of providing a sum of DHS 3,30,000 to the petitioner and execution of post
dated cheques by the petitioner towards repayment thereof. It is also pertinent to note
that a single cheque alleged to have been signed by the petitioner, which according to
complainant Mahmood Yousuf Mandviwalla was dishonoured was summoned by the
respondents along with the slips/memo. witnessing dishonouring of the cheques prima
facie establishing the allegations made in the complaint.

Apart from the above shortcomings and omissions on the part of the respondents, it is
absolutely clear from the perusal of the memo. of petition and the parawise comments
that the dispute, if any, is between the two private parties, i.e., the petitioner and one
Azeem Mandviwalla ever alleged non-payment of loan of DHS 3,30,000 allegedly
provided by Azeem Mandviwalla to the petitioner for assistance and support of his
business. It was vehemently submitted by Mr. Khalid Mahmood Siddiqui that the
jurisdiction of FIA did not extend to investigate disputes between two private parties
even if the alleged illegal act of the erring party was committed in a foreign country
cognizance thereof was taken on the complaint of an aggrieved party by the
Government of that country. His contention was that the act of the affecting party by
submitting a complaint to the Government or Department of a Government would not
change the nature of transaction from a dispute between the two private parties to a
dispute between Government or a department of Government and such was done with
mala fide intention and ulterior motive to harass, pressurize and intimidate the
petitioner into submission for fulfilment of their illegal and ulterior motives. He
further submitted that the absence of Azeem Mandviwalla and non-production of the
alleged dishonoured cheques together with the relevant slips/memo creates serious
doubts with regard to the veracity and truth of the allegation and lends support to the
contention of the petitioner that through his complaint, complainant Mahmood Yousuf
Mandviwalla was seeking the help of FIA for harassing, coercing and intimidating the
petitioner into submission for recovery of alleged DHS 3,30,000, which would
amount to a civil dispute and for that purpose he seemingly on account of his social
status and position managed to obtain a letter from the Government/Governmental
authorities of UAE for forwarding the complaint to the respondents with
recommendation to take action against the petitioner.

Mr. Khalid Mahmood Siddiqui further submitted that even if the contents of the
complaint are taken to be true for the sake of argument then at the most the petitioner
could be held liable only for an offence of issuing a bogus cheque punishable under
section 489-F, P.P.C. and by no stretch of imagination offences of fraud, forgery or
embezzlement could be made out. He further submitted that the offence punishable
under section 489-F has not been included in the schedule of the offences which fall
within the jurisdiction of FIA and any enquiry/investigation forwarded by the FIA
relating to the above offence is absolutely without jurisdiction, illegal and void. In
support of his above contention he referred us to the case of Mian Hamza Shahbaz
Sharif v. Federation of Pakistan and others reported in 1999 PCr.LJ 1584, wherein a
learned Division Bench of the Lahore High Court while dealing with the question of
jurisdiction of FIA to investigate the cases observed that FIA could investigate only
those cases, which were given in the Schedule attached to the Act and the same were
alleged to have been committed either by a public servant or were allegedly
committed in connection with matters pertaining to Federal Government or by
employees of the Corporation set up, controlled and administered by the Federal
Government. It has further been observed that the jurisdiction of FIA did not extend
to investigate into cases between the private persons or offences committed by private
limited companies. Investigation carried on and challan submitted in Court by FIA in
such cases was declared to be without jurisdiction.

For the foregoing discussions and reasons we find that the action of FIA in
summoning the petitioner repeatedly and holding the enquiry into the alleged offence
on the basis of the complaint filed by complainant Mahmood Yousuf Mandviwalla on
behalf of his brother Azeem Mandviwalla is without jurisdiction as the dispute is
basically between the two private parties namely, the petitioner and the said Azeem
Mandviwalla, wherein complainant Mahmood Yousuf Mandviwala has managed to
obtain a letter from concerned department of the Government of UAE for forwarding
the compliant to FIA for investigation for causing harassment, intimidation and
coercion to the petitioner for submitting him to fulfil their mala fide and ulterior
motives.

Accordingly, this constitutional petition is allowed and it is held that the

investigation/enquiry being conducted by the F.I.A. against the petitioner on the basis
of the complaint of Mahmood Yousuf Mandviwalla and the letter of the UAE
Government is without jurisdiction and illegal. They should refrain from such enquiry
and investigation and stop summoning the petitioner to their office in future. It will be
open to complainant Mahmood Yousuf Mandviwalla and Azeem Mandviwalla to
proceed against the petitioner in accordance with law.

H.B. T. /M-125/K Petition allowed.

2005 C L D 20

[Lahore]

Before M. Bilal Khan and Sh. Abdur Rashid, JJ

AAMER KHURSHID MIRZA---Petitioner

Versus

THE STATE---Respondent

Crl. Misc. No.98-Q of 2004, heard on 26th July, 2004.

Banking Tribunals Ordinance (LVIII of 1984)-----

----Ss.5 & 7---Offences in Respect of Banks (Special Courts) Ordinance (IX of 1984),
Preamble & S.7---Criminal Procedure Code (V of 1898), S.561-A---Penal Code (XLV of
1860), Ss.406/420---Recovery of loan---Bank made a complaint to Federal Investigation
Agency (Commercial Circle) against the borrower company and its directors alleging
therein that they had misappropriated and removed the hypothecated goods or had caused
some one else to do the same/or converted the same to their own use; F.I.R. was
registered under Ss.406/420, P.P.C. against the company and its Directors---Application
under S.561-A, Cr.P.C. was brought by the petitioner (Director of the Company) for
quashing of proceedings as challan was pending before the Special Court, Offences in
Respect of Banks (Special Courts) Ordinance, 1984---Validity---Banking Tribunals Act,
1984 was a complete Code unto itself and provided machinery for dealing with the matter
of recovery of money and it related to matters including offences created with regard to
an effort at thwarting the recovery---Provisions of Banking Tribunals Act, 1984 would
prevail over any other law and any criminal act falling within the definition of offence
contained in S. 7 of the said Ordinance, would fall within the exclusive domain of the
Banking Tribunals Act, 1984 and that too in the manner provided i.e. that the offence
would not be cognizable and that the cognizance thereof would be taken by the Banking
Tribunals on a written complaint by the Bank which would be bailable as also
compoundable ---Principles---High Court, in circumstances, allowed the petition and the
proceedings against the petitioner arising out of F.I.R. under Ss.406 & 420, P.P.C.,
pending before the Special Court in Respect of Offences in Banks, were ordered to be
quashed.

In the present case the occurrence is alleged to have taken place, according to the F.I.R.
itself in 1991 and according to the State counsel in 1993. The Bank filed the suit for
recovery in 1995 and the same was decreed on 31-1-1996. The complaint was made by
the Bank on 27-7-1998 i.e. 2-1/2 years after the suit had been decreed.

The Offences in Respect of Banks (Special Courts) Ordinance, 1984 is a law which
essentially provides for speedy trials for offences mentioned in its schedule. The said
provisions do not create any new offence except the one contained in its section 7 which
prohibits transfer or creation of a charge over property owned by an accused without the
permission of the Special Court. On the other hand the Banking Tribunals Ordinance
(Ordinance No.LVIII of 1984) was promulgated on 31-12-1994 which was much later
than the Offences in Respect of Banks (Special Courts) Ordinance, (Ordinance No.IX) of
1984.

Section 5(3), Banking Tribunals Ordinance, 1984 goes on to say that no Court other than
a Banking Tribunal shall have or exercise any jurisdiction with respect to any matter to
which the jurisdiction of a Banking Tribunal extends under this Ordinance, including a
decision as to the existence or otherwise of finance and the execution of a decree passed
by the Banking Tribunal.

The wisdom of providing machinery for the recovery of money under the Banking
Tribunals Ordinance, 1984 becomes evident by a joint reading of the sections 5 and 7.
The legislature was cognizant of the fact that in some of the cases there would be
customers who would try to defeat the Bank's efforts for recovery of its money. This is
why this offence had been created and the same forum which was involved in
adjudication of the matter of recovery had been vested with the powers to punish. The
legislature is presumed to be cognizant of the existing law, therefore, one cannot lightly
and easily ignore the expression of legislative will as has been manifestly expressed in
the provisions of the Banking Tribunal Ordinance. The presumption is that the legislature
does not make any mistake. The Banking Tribunal Ordinance is a special law relating to
the recovery of money from delinquent/ defaulting borrowers. It is a complete Code unto
itself and provides machinery for dealing with the matter of recovery of money and it
relates to matters including offences created with regard to an effort at thwarting
recovery. The provisions of the Banking Tribunals Ordinance, 1984 will prevail over any
other law and any criminal act falling within the definition of offence contained in section
7 of the Ordinance will fall within the exclusive domain of the Banking Tribunal and that
too in the manner provided i.e. that the offence will not be cognizable and that the
cognizance thereof will be taken by the Tribunal on a written complaint by the Bank. It
will be bailable as also compoundable.

Petitioner in the present case was being sought to be prosecuted under the general law but
only before the special Forum. Offences in Respect of Banks (Special Courts) Ordinance,
1984 only provided a different forum and did not create a new offence as was the case
under Banking Tribunals Ordinance, 1984.

So far as the import of the words "without prejudice to any other action which may be
taken against him under this Ordinance or any other law for the time being in force"
which occur in section 7 of the Banking Tribunals Ordinance, 1984 is concerned, the
Legislature cannot be presumed to have envisioned punishing an offender under this law
and then to allow proceedings against him under the general law as well. Attending to the
facts of the case F.I.R. having been recorded even after the suit by the complainant Bank
was decreed on 31-1-1996 it is noticed that it was admitted and accepted by the counsel
for the complainant Bank and the State that the suit was decreed on 31-1-1996.

It is not the Bank's case that their rights have not been finally adjudicated by the decree in
their favour. It thus follows that the Bank was satisfied by what is contained in the decree.
Even otherwise the Bank never wanted the Banking Tribunal to have proceeded against
the Company and the petitioner. The Bank appears to have deliberately chosen not to
proceed against the petitioner. The decree dated 31-1-1996 put an end to all matters
regarding recovery.

The provisions of the Banking Tribunals Ordinance, 1984 will prevail over the general
law, therefore, it was held that the offence complained of had to be dealt with in the
manner provided in the Banking Tribunals Ordinance, 1984 and that the registration of
F.I.R. by F.I.A. and the consequent prosecution of the case before the Special Court was
without jurisdiction.

Petition was allowed and the proceedings against the petitioner arising out of F.I.R. under
sections 406 and 420, P.P.C., now pending before the Special Court in Respect of
Offences in Banks, were quashed and the petitioner was acquitted of the charges against
him.

Nayyar Islam's case PLD 2001 Lah.533 fol.

Naveed Rasool Mirza for Petitioner.

Muhammad Jahangir Wahla Standing Counsel.

Tariq Saleem Sheikh for U.B.L.

Date of hearing: 26th July, 2004.

JUDGMENT

M. BILAL KHAN, J.---This petition under section 439 read with section 561-A, Cr.P.C
has been brought by the petitioner Aamir Khurshid Mirza for quashing of proceedings
against him emanating from F.I.R. No.28-98 F.I.A., SEC/LC28/98 registered under
sections 406 and 420, P.P.C. The challan is pending before the Special Court, Offences in
Respect of Banks (Special Courts) Ordinance, 1984.

2. The petitioner was one of the Directors of M/s. Shah Din Limited which had obtained
some financial facility from UBL McLeod Road Branch, Lahore. On 2-6-1992 the
Company resolved to approach the Bank for getting the outstanding liabilities
restructured and authorized Salah-ud-Din Sahaf and Qamar Javaid Bokhari to approach
the Bank and to negotiate, sign and to execute documents for this purposes. The Bank
agreed to reschedule the facility at the request of the Company on 6-10-1992 against the
security inter alia of hypothecation of goods.

3. It appears from the record that the petitioner resigned as a Director of the Company;
his resignation was accepted by M/s. Shah Din Limited and all his financial and other
liabilities were taken over by the Company w.e.f. 30-6-1996, however, it appears that his
resignation was neither communicated to the Bank nor to the Registrar of the Companies.

4. The finance facility was governed by the Banking Tribunals Ordinance, 1984,
therefore, in February, 1995 in the event of default committed by M/s. Shah Din Limited
the Bank filed a suit for recovery of Rs.134.576 Million before the Banking Tribunal
constituted under the Ordinance. Admittedly the suit was decreed on 31-1-1996 but no
information of any kind was ever laid before the Banking Tribunal under section 7 of the
Banking Tribunals Ordinance regarding any shortage/ defalcation of hypothecated goods.

5. However, on 28-7-1998 the Bank made a complaint to Deputy Director, F.I.A.

(Commercial Circle) against M/s. Shah Din Limited and its Directors Salah-ud-Din
Ahmad Sahaf, Khawja Waheed-ud-Din Mehmood Sahaf, Syed Qamar Javed Bokhari and
Aamir Khurshid Mirza alleging therein that they had misappropriated and removed the
hypothecated goods or had caused some one else to do the same/or converted the same to
their own use. On 29-7-1998 F.I.R. No.28/98/FIA/SBNC/L(C-28/98/Fla/CBC) was
registered at Police Station FIA/CBC, Lahore under sections 406/420, P.P.C. against M/s.
Shah Din Limited and the aforementioned 4 persons including the petitioner showing that
the occurrence had taken place in the year 1991.

6. The petitioner applied for his bail before arrest before the Special Court and on 6-11-
1998 during the course of hearing of the said bail application it was mentioned for the
first time by the. Investigating Officer that the occurrence had taken place in 1993 and
not in 1991. The I.O. on the said occasion stated before the Special Court that no specific
role had been assigned to the petitioner and that there was no material on record to show
that the petitioner had taken any part in the removal/ misappropriation of the
hypothecated goods. The Special Prosecutor on instructions of the I.O. confirmed that the
petitioner had resigned from the directorship of the Company in 1995 and that Salah-ud-
Din Sahaf and Syed Qamar Javed Bokhari were the active Directors of the Company. The
F.I.A. completed the investigation and submitted challan in which the petitioner had also
been arrayed as an accused. In February, 2003 the petitioner made an application under
section 249-A, Cr.P.C. for his acquittal. The said application had been turned down by the
learned Sessions Judge on 26-5-2004. The petitioner has assailed the said order dated 26-
5-2004 and has prayed for his acquittal from the case under section 249-A, Cr.P.C.

7. The learned counsel for the petitioner has contended that in view of the clear language
of sections 5(1)(b), 5(3) and 7 of the Banking Tribunals Ordinance, 1984 it is clear that
the Banking Tribunal has exclusive jurisdiction with regard to any offence created under
the said Ordinance; that no other Court or authority could have exercised its jurisdiction
with regard to the same; that when a thing is required to be done in a particular manner, it
ought to be done in that manner or not at all; that if the allegation made in the F.I.R.
amounted to any offence and the same was not brought to the notice of the Banking
Tribunal, then the same cannot be agitated before any other forum meaning thereby that if
the act complained of is not an offence under the special law it cannot be an offence
under any other law; that it is absolutely crucial that the complainant did not even make a
mention of the alleged removal of hypothecated goods in its suit for recovery filed before
the Banking Tribunal in February, 1995 which had been decreed on 31-1-1996; that the
complainant waited for another 2-1/2 years to file its complaint which made the
allegation contained in the F.I.R. highly doubtful; that in fact in this manner a civil
liability is being transformed into a criminal offence; that the decree in the suit for
recovery being the final and the formal adjudication of the rights of the parties with
regard to all matters and the controversy between the parties in the suit, the Bank cannot
be permitted to agitate indirectly by way of criminal proceedings what it cannot do
directly. The learned counsel finally argued that the allegations contained in the F.I.R. and
in the statements of witnesses available on the record are vague, non-specific, bereft of
even the slightest details necessary for framing or sustaining a criminal charge and for
proceeding with the case. He concluded by arguing that the F.I.R. mentioned the
occurrence to have taken place somewhere in the year 1991, therefore, the very act of
rescheduling of loan in the year 1992 was to destroy the allegation of removal of the
hypothecated goods.

8. Mr. Muhammad Jahangir Wahla the learned Standing Counsel for Federal Government
appearing for the State on the other hand contended that the language of section 7 of
Banking Tribunals Ordinance itself provided for action to be taken under any other law
and, therefore, it was absolutely within the Province of F.I.A. to have registered the case
and to have proceeded with the trial.

9. Mr. Tariq Saleem Sheikh the learned counsel for the complainant has adopted the
arguments advanced by the learned Standing Counsel.

10. We have considered the arguments advanced by the learned counsel for the parties at
considerable length.

11. It is admitted by the learned counsel for the State as also by the learned counsel for
the complainant that the alleged occurrence had taken place when the Banking Tribunals
Ordinance, 1984 was in force (the actual date being unknown), therefore, there is no
doubt in our mind that to decide the question of jurisdiction, as canvassed by the learned
counsel for the petitioner we will have to look at the provisions of Banking Tribunals
Ordinance, 1984. We must make a particular note about the peculiarity of the facts in this
case even before we proceed to examine the question of jurisdiction raised by the learned
counsel for the petitioner and opposed by the State Counsel.

In this case the occurrence is alleged to have taken place according to the F.I.R. itself in
1991 and according to the learned State counsel in 1993. The Bank filed the suit for
recovery in 1995 and the same was decreed on 31-1-1996. The complaint was made by
the Bank on 27-7-1998 i.e. 2-1/2 years A after the suit having been decreed.

12. We have noticed that the Offences in Respect of Banks (Special Courts) Ordinance,
1984 is a law which essentially provides for speedy trials for offences mentioned in its
schedule. The said provisions do not create any new offence except the one contained in
its section 7 which prohibits transfer of or creation of a charge over property owned by an
accused without the permission of the Special Court. On the other hand the Banking
Tribunals Ordinance (Ordinance No. LVIII of 1984) was promulgated on 31-12-1994
which is much later than Offences in Respects of Banks (Special Courts) Ordinance
(Ordinance No.IX) of 1984.

13. Examining the question of jurisdiction of a forum other than the Tribunal established
under the Banking Tribunals Ordinance we find that section 5 of the said Ordinance deals
with the powers of a Banking Tribunal. Subsection (1) of section 5 provides that a
Banking Tribunal shall--

(a) in the exercise of its civil jurisdiction, have in respect of a claim filed by a
banking company against a customer in respect of, or arising out of, finance,
provided by it, all the powers vested in a Civil Court under the Code of Civil
Procedure, 1908 (Act V of 1908);

(b) in the exercise of its criminal jurisdiction, try the offences punishable under this
Ordinance and shall, for this purpose, have the same powers as are vested in the
Court of Session under the Code of Criminal Procedure, 1898 (Act V of 1898):

Provided that a Banking Tribunal shall not take cognizance of any offence
punishable under this Ordinance except upon complaint in writing made by a
 person authorized in this behalf by the Banking Company in respect of which the
offence was committed; and

(c) exercise and perform such other powers and functions as are or may be, conferred
upon, or assigned to it, by or under this Ordinance;

(d) a Banking Tribunal shall, in all matters with respect to which procedure has not
been provided for in this Ordinance, follow the procedure laid down in the Code
of Civil Procedure, 1908 (Act V of 1908), and. the Code of Criminal Procedure,
1898 (Act V of 1898).

Section 5(3) goes on to say no Court other than a Banking Tribunal shall have or exercise
any jurisdiction with respect to any matter to which the jurisdiction of a Banking Tribunal
F extends under this Ordinance, including a decision as to the existence or otherwise of
finance and the execution of a decree passed by the Banking Tribunal. Section 7 of this
Ordinance provides:

7. Provisions relating to certain offences (1) whoever intentionally destroys or

removes, or reduces the value of the property on the security of which finance
was provided to him, or, without the prior approval in writing of the Banking
Company which provided finance, transfers such property or any part thereof
otherwise than in accordance with the terms of approval shall, without prejudice
to any other action which may be taken against him under this Ordinance or any
other law for the time being in force, be punishable with imprisonment of either
description for a term which may extend to five years, and ,shall also be liable to
fine and shall be ordered by the Banking Tribunal trying tile offences to deliver up
or refund, within a time to be fixed by the Banking Tribunal, the property or the
value of the property so destroyed, removed or reduced in value or transferred as
the case may be.

(2) All offences under this Ordinance shall be bailable, non-cognizable and
compoundable.

(3) Where the person guilty of an offence under this Ordinance is a company or
other body corporate, the Chief Executive by whatever name called, and every
director, other than a non-executive director, manager, Secretary and other officer
thereof shall, unless he proves that the offence was committed without his
knowledge or that he exercised all due diligence to prevent the commission of
such offence, also be deemed to be guilty of the offence and shall be liable to be
proceeded against and punished accordingly.

The wisdom of providing machinery for the recovery of money under the Banking
Tribunals Ordinance, 1984 becomes evident by a joint reading of the sections reproduced
above. The legislature is cognizant of the fact that in some of the cases there would be
customers who would try to defeat the Bank's efforts for recovery of its money. This is
why this offence has been created and the same forum which is involved in adjudication
of the matter of recovery has been vested with the powers to punish. The legislature is
presumed to be cognizant of the existing law, therefore, we cannot lightly and easily
ignore the expression of legislative will as has been manifestly expressed in the above
quoted provisions of the Banking Tribunal Ordinance. The presumption is that the
legislature does not make any mistakes. The Banking Tribunal Ordinance is a special law
relating to the recovery of money from delinquent/defaulting borrowers. We have no
doubt in our mind that it is a complete Code unto itself and provides machinery for
dealing with the matter of recovery of money and it relates to matters including offences
created with regard to an I effort at thwarting recovery. This compels us to conclude that
the provisions of the Banking Tribunals Ordinance, 1984 will prevail over any other law
and any criminal act falling within the definition of offence contained in section 7 of the
Ordinance will fall within the exclusive domain of the Banking Tribunal and that too in
the manner provided i.e. that the offence will be not cognizable and that the cognizance
thereof will be taken by the Tribunal on a written complaint by the Bank. It will be
bailable as also compoundable. Our attention has also been drawn to case of Nayyar
Islam (PLD 2001 Lahore 533) wherein in a similar situation arising out of section 19 of
the Banking Company (Recovery of Loans, Advances and Finances) Act, 1997 this Court
came to the conclusion that the Act being a special law would prevail over the general
law. We are in agreement with the conclusion arrived at in the said case and may add that
the petitioner too is being sought to be prosecuted under the general law but only before
the special Forum. We have already observed that Ordinance IX of 1984 only provides a
different forum and does not create a new offence as is the case under Banking Tribunals
Ordinance, 1984.

14. We now advert to the import of the words "without prejudice to any other action
which may be taken against him under this Ordinance or any other law for the time being
in force" which occur in section 7 of the Banking Tribunals Ordinance, 1984. In our view
the Legislature cannot be presumed to have envisioned punishing an offender under this
law and then to allow proceedings against him under the general law as well. Attending to
the facts of F.I.R. having been recorded even after the suit by the complainant Bank was
decreed on 31-1-1996 we notice that it is admitted and accepted by the counsel for the
complainant Bank and the State that the suit was decreed on 31-1-1996 The expression
"decree" has been defined in C. P. C. 1908 in the following manner:

"Decree means the formal expression of an adjudication which so far as regards

the Court expressing it, conclusively determines the rights of the parties with
regard to all or any of the matters in controversy in the suit and may be either
preliminary or final. It shall be deemed to include the rejection of a plaint, the
determination of any question within section 144 and an order under rules, 60, 98,
99, 101 or 103 of Order XXI but shall not include."

It is not the Bank's case that their rights have not been finally adjudicated by the decree in
their favour. It thus follows that the Bank was satisfied by what is contained in the decree
Even otherwise the Bank never wanted the Banking Tribunal to have proceeded against
the Company and the petitioner. The Bank appears to have deliberately chosen not to
proceed against the petitioner. We feel that the decree dated 31-1-1996 put an end to all
matters regarding recovery.

15. In the earlier part of this judgment we have come to the conclusion that the provisions
of the Banking Tribunals Ordinance, 1984 will prevail over the general law, therefore, we
hold that the offence complained or had to be dealt with in the manner provided in the
Banking Tribunals Ordinance, 1984 and that the registration of F.I.R. by F.I.A. and the
consequent prosecution of the case before the Special Court is without jurisdiction.

16. As a result of what has been discussed above this petition 'is allowed and the
proceedings against the petitioner arising out of F.I.R. No.28/98/FIA/SBC/LC-
28/98/FIA/CBC dated 29-7-1998 under sections 406 and 420, P.P.C. at Police Station
F.I.A., CBC, Lahore now pending before the Special Court in Respect of Offences in
Banks. Lahore are quashed. The petitioner is acquitted of the charges against him.

M.B.A./A-301/L Proceedings quashed.

2004 C L D 246

[Karachi]

Before Zahid Kurban Alvi and Zia Perwaz, JJ

ADAMJEE INSURANCE COMPANY LIMITED through Attorney Syed Ziauddin

Ahmed ---Petitioner

Versus

FEDERAL INVESTIGATION AGENCY (F.I.A.) through Deputy Director, F.I.A.,

Karachi---Respondent

Constitutional Petition No.D-1181 and Miscellaneous No.2969 of 2002, decided on 21st

November, 2003.

Insurance Ordinance (XXXIX of 2000)---

----Ss.59 & 60---Securities and Exchange Commission of Pakistan Act (XLII of 1997),
S.29---Penal Code (XLV of 1860), Ss.406, 468 & 471---Federal Investigation Agency
Act, 1974 (VIII of 1975), S.3 & Sched.---Constitution of Pakistan (1973), Art. 199---
Constitutional petition---Notice by Federal Investigation Agency to the petitioner
Insurance Company, alleging that it had caused huge losses to the national exchequer
through fake, fraudulent and bogus insurance claims which were submitted by the
officials of the company to the Pakistan Insurance Corporation, and thus the officials of
the Company committed offences punishable under Ss.406/468 & 471, P.P.C. which were
given in the Schedule of the Federal Investigation Agency Act, 1974--Validity---Held,
Schedule attached to the Federal Investigation Agency Act, 1974 had excluded the
Insurance Companies and S.29, Securities and Exchange Commission of Pakistan Act,
1997 had provided the powers to the Security and Exchange Commission of Pakistan for
investigation into the matters of Insurance Companies which powers had also been given
under Ss. 59 & 60 of the Insurance Ordinance, 2000--Federal Investigation Agency, in
circumstances, had no jurisdiction in the matter to issue the notice to the Insurance
Company because there was no complaint of any nature against the said Insurance
Company---Principles.

Schedule attached to the Federal Investigation Agency Act, 1974 excludes the Insurance
Companies. Section 29 of the Securities and Exchange Commission of Pakistan Act,
1997 clearly provides powers to the Commission for investigation into the matters of
Insurance Companies. The same powers are also given in the Insurance Ordinance, 2000.

In the present case no complaint of any nature had ever been lodged against the Insurance
Company by any individual or company for fraud or embezzlement etc. The Federal
Investigation Agency or the Police had powers only in respect of complaints. The
Securities and Exchange Commission of Pakistan had the jurisdiction in the matter to
look into any fraud etc. in the business of Insurance. No material had been placed on
record to prove that the Insurance Company was involved in such type of business. The
letters addressed by the F.I.A. had questioned the losses suffered by the Insurance
Company on account of Motor Car claims. Surely it was beyond the jurisdiction of the
F.I.A. A loss no matter howsoever high or low should be a matter of concern to the
shareholders of the Company. A public limited company had its accounts audited and
these being public documents were open to question and scrutiny by the
members/shareholders at the Annual General Meeting. The Securities and Exchange
Commission oversees the activities of the Insurance Companies and, therefore, could
check any illegal activity as the guiding law was the Insurance Ordinance, 2000.

Sections 60 and 61 onwards of Insurance Ordinance, 2000 dealt with the powers of the
Commission to give directions to the insurer etc.

Record showed that the Insurance Company was one of the largest Insurance Companies
in Pakistan and it had been recognized for its performance both in Pakistan and abroad.
The recognition of a Company's achievement at the highest level reflected the integrity of
the working of the Company. Apparently the Company had enjoyed, right from its
inception, an unblemished record.

Federal Investigation Agency had no jurisdiction in the matter to issue the notice to the
Insurance Company because there was no complaint of any nature against the Company.

The notice was issued without any lawful authority and was of no legal effect.

Kamal Azfer for Petitioner.

Nadeem Azhar, D.A.-G.

ORDER

ZAHID KURBAN ALVI, J.-Through this petition, the petitioner has prayed for the
following reliefs:--

(i) Declare that the impugned notice dated 29-6-2002 is without lawful authority
and of no legal effect.

(ii) Grant injunction restraining the respondents from acting on the impugned
notice dated 29-6-2002 and/or from taking any action, coercive and/or otherwise
under the head of impugned notice."

Briefly the facts giving rise to this petition are that the petitioner is a Public Limited
Company and is carrying on Insurance business in Pakistan and abroad. It is the case of
the petitioner that as required by law the petitioner has submitted its annual accounts to
the Securities and Exchange Commission of Pakistan who reported heavy losses
including the losses in motor car claims amounting to Rs.500 Millions in respect of motor
car claims in the United Arab Emirates and called upon the petitioner to explain such
losses. Correspondences were exchanged between the petitioner and the Commission. It
is further the case of the petitioner that in the meantime respondent (FIA) also started to
conduct the enquiry and investigation on the same subject and issued letter dated
11-6-2002 to the petitioner to provide certain details which was dully replied to by the
petitioner. It is the case of the petitioner that thereafter the respondent through its notice
dated 29-6-2002 for enquiry in the matter which was also replied to by the petitioner and
pointed out to them that the Securities and Exchange Commission of Pakistan has the
exclusive jurisdiction in the matter and they should cease to conduct enquiries, into the
same. Hence this petition.

Notices were issued to respondent for filing parawise comments and accordingly the
respondent filed comments and contended that the petition is not maintainable inasmuch
as the petitioner-Company has caused huge losses to the national exchequer. The said loss
has been caused through fake, fraudulent and bogus insurance claims which were
submitted by the officials of the Company to the PIC. Thus the officials of the Company
committed offences punishable under sections 406/468/471, P. P. C. which are in the
Schedule of the F.I.A. Act, 1974. The F.I.A. can enquire into and investigate these
offences of fraud, cheating and embezzlement.

We have heard the learned counsel for petitioner and learned D.A.-G. at length and also
perused the law on the subject. It is contended by the counsel for petitioner that under the
Act of 1997 the Securities and Exchange Commission enjoys exclusive jurisdiction to
investigate the matters relating to the Companies. The same powers also expressed in
sections 59 and 60 of the Insurance Ordinance, 2000. Learned counsel has further pointed
out that Insurance Companies are not included in the ambit of the Schedule of the Federal
Investigation Agency Act of 1974.

As against this learned D.A.-G. has contended that the respondent has powers to
investigate and enquire into the matters of fraud and bogus insurance claims etc.

In order to appreciate the respective contentions of the learned counsel for the parties it
would be appropriate to reproduce the relevant provisions of law. Section 3 of the Federal
Investigation Agency Act, 1974 reads as under:--
 "3. (1) Notwithstanding anything contained in any other law for the time being in
force, the Federal Government may constitute an Agency to be called the Federal
Investigation Agency for inquiry into, and investigation of, the offences specified
in the Schedule, including an attempt or conspiracy to commit, and abatment of,
any such offence."

It may be mentioned here that the Schedule attached to this Act excludes the Insurance
Companies. Section 29 of the Securities and Exchange Commission of Pakistan Act,
1997 clearly provides powers to the Commission for investigation into the matters of
Insurance Companies. The same powers are also given in the Insurance Ordinance, 2000.

It is an admitted position that in the instant case no complaint of whatsoever nature has
ever been lodged against the petitioner by any individual or company for fraud or
embezzlement etc. The F.I.A. or the Police has powers only in respect of complaints. The
Securities and Exchange Commission of Pakistan has the jurisdiction in the matter to
look into any fraud etc. in the business of Insurance. No such record has been placed on
record to prove that the petitioners are involved in such type of business. The letters
addressed by the F.I.A. have questioned the losses suffered by the Company on account
of Motor Car claims. Surely it is beyond the jurisdiction of the F.I.A. A loss no matter
howsoever, high or low should be a matter of concern to the shareholders of the
Company. A public limited company has its accounts audited and these are public
documents open to question and scrutiny by the members/shareholders at the Annual
General Meeting. The Securities and Exchange Commission oversees the activities of the
Insurance Companies and, therefore, can check any so-called illegal activities as the
guiding laws is the Insurance Ordinance, 2000. It may be advantageous to reproduce
section 59 of the Insurance Ordinance, 2000 which deals with investigation and directives
etc. which reads as under:--

"59. Power of Commission to order investigation.---(1) If the Commission

believes upon reasonable grounds that an insurer is or is likely to become unable
to meet its liabilities or that there has been or is likely to be a contravention of the
provisions of the Ordinance or the rules made thereunder by the insurer, it may
investigate the affairs of an insurer and wherever necessary employ an auditor or
actuary or both for assisting it in any such investigation.

(2) An investigation under subsection (1) shall be commenced and carried out in
accordance with the provisions of Part VIII of the SECP Act:

Provided that for the purposes of this section, the words `the Court referred to in
Part II of the Ordinance' contained in subsection (1) of section 34 of the SECP Act
shall be read as though they were omitted and replaced with the words `the
Tribunal'.

(3) When an investigation is made under this section, the Commission may, after
giving an opportunity to the insurer to make a representation in writing or be
heard in person, by order in writing require the insurer to take such action in
respect of any matter arising out of the investigation as it may consider on
reasonable grounds to be necessary to secure compliance with the provisions of
this Ordinance."

Sections 60 and 61 onwards of this Ordinance deals with the powers of the Commission
to give directions to the insurer etc.

We have seen from the record that the petitioner is one of the largest Insurance
Companies in Pakistan and it has been recognized for its performance both in Pakistan
and abroad. The recognition of a Company's achievement at the highest level reflects the
integrity of the working of the Company. Apparently according to learned counsel for the
petitioner the Company has enjoyed right from its inception an unblemished record.

For the foregoing reasons we hold that the Federal Investigation Agency has no
jurisdiction in the matter to issue the impugned notice to the petitioner because there is no
complaint of any nature against the petitioner.
We by our short order dated 13-11-2003 had allowed the petition and declared that the
impugned notice is issued without any lawful authority and no legal effect. Foregoing are
the reasons for the same.

M.B.A./A-524/K Petition allowed.

1999 P Cr. L J 1025

[Lahore]

Before Sh. Ghiclarn Sanvar, J

MUHAMMAD IDREES and 2 others---Petitioners

Versus

CHAIRMAN, GHEE CORPORATION OF PAKISTAN LTD.

and 2 others---Respondents

Writ Petition No.3823 and Criminal Revision No. 172 of 1993, decided on 23,rd October,
1998.

(a) Constitution of Pakistan (1973)---

----Art. 199---Quashing of criminal case---Constitutional jurisdiction of High Court---

Scope---Where case is of no evidence, its registration is proved to be mala fide; case is of
purely civil nature; there is serious jurisdictional defect or there is exceptional delay in
the disposal of the case causing deplorable, mental, physical and financial torture to the
person proceeded against, such case can be quashed in exercise of Constitutional
jurisdiction.

Ch. Pervez Ellahi v. The Federation of Pakistan through Secretary Ministry of Interior,
Islamabad and 3 others 1995 MLD 615 rel.

(b) Penal Code (XLV of 1860)---

----Ss. 420, 409, 468, 471, 109, 204 & 406---Prevention of Corruption Act (II of 1947),
S.5(2)---Constitution of Pakistan (1973), Art.199---Constitutional petition---Quashing of
F.I.R.---Accused persons were wholesale dealers of Ghee---Complainant was Ghee
Corporation, manufacturing Ghee---Credit facility, against security m shape of cash and
immovable property was advanced to the accused persons by the Corporation---
Corporation due to mismanagement of accounts claimed certain excessive amount from
the accused persons---Civil suit for rendition of accounts was filed by the accused
persons---Matter was sub judice when the Corporation got a criminal case registered
against the accused persons and the same was cancelled by Magistrate---Corporation
lodged another F.I.R. which also met the same fate---Lastly, the Corporation got a case
registered with Federal Investigation Agency on the same subject-matter against the
accused persons---Police commenced proceedings of arrest in haste, to harass, humiliate
and coerce the accused persons---Validity---Had the Corporation been purely a private
concern, facility to launch extraordinary and coercive measures and criminal proceedings
could never be thought of---Action and proceedings were perfunctory and was misuse of
official position by repeated endeavours wherefrom no positive outcome would be
entailed--Action was palpably fallacious, based on wrong notions, patently misconceived,
unwarranted and could not be countenanced, allowed to perpetuate and continue---
Petition was allowed and F.I.R. was quashed in circumstances.

Mahmood-ul-Hassan v. Imtiaz Khan and another PLD 1963 (W.P.) Lah. 481; Fazal
Muhammad and others v. Collector, Lyallpur District and another PLD 1963 (W.P.) Lah.
485; Muhammad Siddiq and 5 others v. Mst. Badar Munir and another 1993 SCMR 233;
Ghulam Siddique v. S.H.O. Saddar, Dera Ghazi Khan and 8 others PLD 1979 Lah. 263;
Yaqoob Khan and another v. The State and 3 others 1971 PCr.LJ 266; Mian Bakhsh Elahi
and others v. The State and others 1993 PCr.LJ 856; Saeed-ud-Din Qureshi v. The State
PLD 1963 (W.P.) Kar. 54; Anand Ram v. Moti Ram and 3 others PLD 1987 Quetta 230;
Syed Allah Dost v. Haji Muhammad Alam and 12 others PLD 1987 Quetta 235; N.
Manak Ji v. Fakhar Iqbal and another 1969 PCr.LJ 411; Mushtaq Ahmad v. Station House
Officer, Police Station Munawan, Lahore 1984 PCr.LJ 1454; Dyram D. Avari and others
v. The State 1989 PCr.LJ 817 and Muhammad Moosa and another v. The State and
another 1987 SCMR 601 rel.
Syed Muhammad Ahmad v. The State 1972 SCMR 85 and Marghoob Alam and another
v. Shamas Din and another 1986 SCMR 303 ref.

Mian Bakhsh Ellahi and others v. The State 1993 PCr.LJ 856 fol.

(c) Constitution of Pakistan (1973)---

----Art. 199---Jurisdiction of High Court---Where criminal prosecution was launched

after the start of round of civil litigation and registration of case was patently reflective of
mala fides and was simply to achieve ulterior motives in such-like cases, High Court
could not stay back, and had no option but to exercise its Constitutional jurisdiction.

Ch. Qadir Bakhsh, Malik Asif Majeed Awan and Ijaz Feroz for Petitioners.

Dr. Shaukat Hussain Syed for Respondent No. l

Yawar Ali Khan, Dy. Attorney-General for Respondents Nos.2 and 3.

Dates of hearing: 22nd to 24th September, 1998.,

JUDGMENT

This judgment will govern Criminal Revision No. 172 of 1993 and instant petition under
Article 199 of Constitution of Islamic Republic of Pakistan, wherein quashment of F.I.R.
No.62 of 1993 under sections 420/409/ 468/471/109/204 and 406, P.P.C. read with
section 5(2) of Prevention of Corruption Act of 1947, registered at Police Station F.I.A.,
Faisalabad and investigation proceedings initiated thereunder has been prayed.

2. Compendium of facts, leading to the institution of this petition is, that the petitioners
Nos.l and 2 were "wholesale dealers" of different types of Ghee prepared by Ghee
Corporation of Pakistan. Statedly the petitioner's firm "Messrs Saeed Brothers" had a
documented sale of Ghee to the tune of about Rs.80 lac a month. For assurance of
payment of usual business dealings, petitioners not only, deposited a sum of Rs.60,000 as
"security", but also pledged building structure of minimum value of Rs.35,00,000
(Rupees thirtyfive lac) in lieu of credit facility with the Ghee Corporation. In the year
1991, due to mismanagement of accounts, as averred in the petition, the Corporation
claimed certain excessive amount allegedly due from the petitioners 1 and 2. who,
accordingly, knocked at the door of Civil Court for rendition of accounts in order to get
the controversy and dispute resolved and set at rest. Such "Civil Action" is still "sub
judice", and, has yet to see the light of the day.

3. About 4/5 months after institution of the suit, and during pendency thereof, a criminal
case under section 420/406, P.P.C. was got registered against the petitioners and others by
means of F.I.R. No.422, dated 17-10-1991 at Police Station Nishatabad. On the report of
S.P. City, same was cancelled by a learned Magistrate by an order, dated 5-1-1992. After
inclusion of offences under sections 406/409/420 and 109, P.P.C. read with section 5(2)
of Prevention of Corruption Act, an amended F.I.R. was, however, lodged at the same
police station. This case too met the same fate by virtue of an order, dated 8-4-1993
passed by a learned Magistrate. But the matter did not come to an end and its logical
culmination, because, a third case embodying the same facts was got registered against
the petitioners and others by respondent No.l vide F.I.R. No.62, dated 8-4-1993, this time,
however, at Police Station F.I.A., Faisalabad under sections 420/409/468/471/109/204
and 406, P.P.C. read with section 5(2) of Prevention of Corruption Act, 1947.

4. As a sequel thereto, police commenced proceedings of arrest in haste, allegedly, to

harass, humiliate and coerce the petitioners, who, were thus, constrained to resort to this
petition.

5. Factors, aspects, points and grounds enumerated in the petition have been reiterated to
impress that:--
(i) Registration of repeated F.I.Rs., is, by itself, a proof of the fact that same are based on
ill-will, mala fides and misuse of official position.

(ii) Criminal proceedings have been launched to pressurize the petitioners to deter them
from pursuing the civil suit, with a design to conceal their own mismanagement of
accounts.

(iii) Such proceedings are not sustainable in face of pending civil litigation.

(iv) In wake of successive orders, dated 5-1-1992 and 8-4-1993, impugned F.I.R. could
not be registered or investigation undertaken on the same facts and against same patties.

(v) At the best, it is a case of rendition of accounts, and so vividly reflected by contents of
all F.I.Rs.

(vi) Sole object is to insult, humiliate and coerce the petitioners for collateral purposes.

(vii) It is a clear case of double jeopardy.

6 On these premises, quashment, asked for, has been urged. Reliance has been placed
upon Mahmood-ul-Hassan v. Imtiaz Khan and another PLD 1963 (W.P.) Kar. 481, Fazal
Muhammad and others v. Collector, Lyallpur District and another PLD 1963 (W.P.) Lah.
485, Muhammad Siddiq and 5 others v. Mst. Badar Munir and another 1993 SCMR 233,
Ghulam Siddique v. S.H.O. Saddar, Dera Ghazi Khan and 8 others PLJ 1979 Cr.C. Lah.
32, Yaqoob Khan and another v. The State and 3 others 1971 PCr.LJ 266, Mian Bakhsh
Elahi and others v. The State and others 1993 PCr.LJ 856, Saeed-ud-Din Qureshi v. The
State PLD 1963 (W.P.) Kar. 54, Anand Ram v. Moti Ram and 3 others PLD 1987 Quetta
230, Syed Allah Dost v. Haji Muhammad Alam and 12 others PLD 1987 Quetta 235, N.
Manak Ji v. Fakhar lqbal and another 1969 PCr.LJ 411, Mushtaq Ahmad v. Station House
Officer, Police Station Munawan, Lahore 1984 PCr.LJ 1454, Dyram D. Avari and others
v. The State 1989 PCr.LJ 817 and Muhammad Moosa and another v. The State another
1987 SCMR 601 in support of the contentions.

7. Conversely, impugned action, has been acclaimed to be in consonance with law and
correct in all respects with the assertion that the petitioners and others joined hands and
acted in connivance against the interests of the Corporation and, thus, rendered
themselves liable and prone to criminal liability. Syed Muhammad Ahmad v. The State
1972 SCMR 85 and Marghoob Alam and another v. Shamas Din and another 1986 SCMR
303 have been referred and quoted to emphasize that there is no invariable rule and
principle to postpone criminal proceedings pending civil litigation. Accordingly, rejection
of the petition has been vigorously demanded.

8. On following grounds, a criminal case can be quashed in exercise of Constitutional

jurisdiction as observed/held and laid down in Ch. Pervez Ellahi v. The Federation of
Pakistan through Secretary Ministry of Interior, Islamabad and 3 others 1995 MLD 615:--

(a) when the case is of no evidence;

(b) when the very registration of the case is proved to be mala fide on the face of record;

(c) when the case is of purely civil nature, criminal proceedings are not warranted in law,
especially to harass the accused;

(d) when there is serious jurisdictional defect; and

(e) when there is unexceptional delay in the disposal of the case causing deplorable
mental physical and financial torture to the person proceeded against.

Same, accordingly, are liable to be analysed and adverted to in perspective of facts of

case in hand.

9. In this context, it goes without saying that liability of petitioners Nos. l and 2, if any,
has not been determined with exactitude by competent forum. Without establishing any
claim by having recourse to prescribed procedure, no rope, can be put around the neck of
the petitioners. Resort to coercive measures and even recovery as arrears of land revenue
of vague or unascertained claim is hardly justified under any canon of law. Needless to
observe that such claim can be conveniently tailored and prevaricated with impunity. In
no way, such like claim, can be taken to be apodictic and spoken or advanced as an
oracle. The petitioners also deserve same solemnity in speech and claim viz-a-viz the
complainant, who, is to be taken at par with them and both claims are liable to be
juxtaposed to arrive at a definite conclusion. Had Ghee Corporation been purely a private
concern, facility to launch extraordinary and coercive measures and criminal proceedings
could never be dreamt of. As such action and proceedings are perfunctory on this count
and, thus, liable to be struck down on this score alone.

10. There can be no cavil with the proposition that the matter is essentially of "civil
nature and liability". Undoubtedly, civil suit, is pending adjudication before competent
Court, no matter, it has not yet reached the brink of conclusion. Earlier two endeavours of
identical nature have already ended in smoke as indicated above. Third attempt in the
same fashion and direction with embellishment cannot give a new lease of life to the
jeopardy, to which, the petitioners, were already subjected not only once, but also, twice
in the past. Seemingly it looks a contrivance, to ensnare the petitioners on one pretext or
the other. Such exercise spread over a span of two years. Respondent No.1 well knew,
from the beginning, that without intervention of civil Court, the matter would hang in
balance. Thus, approaching the police repeatedly by initiating criminal proceedings and
prosecution is vividly to deter petitioners Nos. l and 2 to get the civil liability adjudicated
by a competent forum. Apparently, criminal prosecution was launched after the start of
round of civil litigation. As a necessary corollary, very registration of the case is patently
reflective of mala fides and simply to achieve ulterior motives. In such like situation, this
Court cannot stay back, and feels no option, but, to exercise its Constitutional
jurisdiction.

11. In Criminal Miscellaneous No. 132/Q of 1986; in re: Haji Dilmir Khan and others v.
The State it was held that where the dispute between the parties was purely of civil
nature, criminal case was malicious prosecution and such proceedings could not be
permitted to continue. Consequently, F.I.R. was quashed. Similar view was expressed in
another unreported judgment, dated 8-6-1987 in Criminal Miscellaneous No.327/Q of
1986 in re: Faqir Muhammad v. The State. Following illuminating observations made in
Mian Bakhsh Ellahi v. The State 1993 PCr.LJ 856 put last nail in coffin of prosecution
case:--

"suffice it to say that the matter being purely of civil nature, resort to criminal jurisdiction
was a clear abuse of process of law."

12. Principle of law, enunciated and expounded in aforementioned cases, is applicable on

all tours to the facts of instant case, which, can be termed to be classic example of misuse
of official position by repeated endeavours despite orders, dated 5-1-1992 and 8-4-1993
of cancellation of successive cases.

13. In wake of such orders, impugned F.I.R. is nothing but to flog dead horse, and catch
at a straw. Even an exercise of serious ratiocination in this behalf, cannot, entail and
positive outcome. Action in this regard in palpably fallacious, based on wrong notions,
patently misconceived, unwarranted and cannot be countenanced, allowed to perpetuate
and continue as held in Ameer and others v. Station House Officer 1988 PCr.LJ 2032.

14. Vide an order, dated 13-4-1993, this Court took "suo motu" notice, of the order, dated
8-4-1993, reported in daily "Pakistan", by which, accused including petition No.2, named
therein, were discharged. Such order does not suffer from any lacuna, muchless serious
sizzling and bristling infirmities, so as, to call for interference in exercise of revisional
jurisdiction. Rather the same is to complete conformity with previous order, dated 5-1-
1992 on the subject and no other inference and view was possible. Matter, accordingly, is
dropped.

15. For the foregoing reasons and above discussion, writ petition is allowed and
impugned registration of criminal case vide F.I.R. No.62 of 1993 against all the
petitioners is declared to be without lawful authority and of no legal effect, significance
and proceedings thereunder are quashed.

Q.MH./M.A.K./M-890/L F.I.R. quashed.

P L D 1998 Lahore 287

Before Tassaduq Hussain Jilani, J

ASIF SAIGOL and 2 others---Petitioners

versus

FEDERATION OF PAKISTAN through the Interior Secretary Pakistan Secretariat,

Islamabad and 2 others---Respondents

Writ Petition No. 17966 of 1997, decided on 24th November, 1997.

Constitution of Pakistan (1973)--

----Art. 199---Penal Code (XV of 1860), Ss. 382 & 406---Federal Investigation Agency
Act (VIII of 1975), Preamble & S.3---Banking Companies Ordinance (LVI1 of 1962), Ss.
27, 40, 41, 47, 83 & 84---State Bank of Pakistan Act (XXXIII of 1956), Ss. 9, 9-A &
36---Constitutional petitibn---Quashing of case---Case was registered by Federal
investigating Agency against petitioner under Ss.382 & 406, P.P.C. for theft and
misappropriation of cotton stock lying in mill premises of petitioners as bank security---
Quashing of the case had been sought by petitioner contending firstly, that Federal
Investigating Agency had no jurisdiction to register and investigate a case in which
private persons were arrayed as accused and that it could register and investigate a case
only where an offence was committed in relation to a company owned by Federal
Government; secondly, that matter was of civil nature as respondent-Bank had filed a
civil suit in Banking Court which was pending and thirdly, that vide S.R.O. No.826-I-97,
the Schedule attached with Federal Investigation Agency Act, 1975 had been substituted
and Ss.382 & 406, P.P.C. under which case was registered, had been deleted, thus, leaving
Federal Investigating Agency with no jurisdiction to proceed in the matter---Contentions
of petitioners were repelled because respondent-Bank, being a scheduled Bank, was
under control and supervision of State Bank of Pakistan, and authority of Federal
Government would, thus, extend to respondent-Bank---Any offence committed in relation
to scheduled Bank, thus, would be an offence committed in connection with matters
concerning Federal Government and for matters connected therein which would fall
within mischief of Preamble of Federal Investigation Agency Act, 1975---In the Schedule
attached with Federal Investigation Agency Act, 1975, besides certain offences under
Penal Code offences under Banking Companies Ordinance, 1962 were also scheduled
offences---Contention of petitioners that allegations levelled against them disclosed civil
liability, prima facie, was against record and premature as Federal Investigating Agency
had yet to finalize investigation---Argument that Ss.382 & 406, P.P.C. having been
deleted from Schedule of the Federal Investigation Agency Act, 1975, Federal
Investigating Agency had no jurisdiction to proceed with investigation, was also not
tenable for two reasons, firstly, that matter was still under investigation and it would be
for Investigating Officer to finally conclude as to what specific offences were made out
and secondly, when alleged offences were committed, Ss.382 & 406, P.P.C. were in
Schedule of Federal Investigation Agency Act, 1975---Petition for quashing of case was
dismissed having no merit.

PLD 1986 Lah. 429; Javed Iqbal and 2 others v. Federal Investigating Agency and 3
others PLD 1986 Lah. 424; Ghularn Rasool v. Muhammad Hayat PLD 1984 SC 385; Haji
M. Yousaf v. Abbas Khan and others PLD 1968 Lah. 482 and Iftikhar Hussain etc. v.
Government of Pakistan etc. PLJ 1996 Lah. 82 ref.

Sardar Ahmed Jamal Sukhera and Tahir Atiq Paroch for Petitioners Sher Zaman Khan,
Dy. A.-G. for Respondent No. L. Zahid Hamid for the Complainant.

Date of hearing: 13th November, 1997

JUDGMENT

The petitioners who are Directors of Mohib Textile Mills Ltd. through this petition, have
sought quashment of a case registered by the Federal
Investigating Agency vide F.I.R. No. 35 of 1996, dated 1-9-1996 under sections 382 and
406, P.P.C. Police Station, F.I.A., Lahore.

2. Facts giving rise to this petition are that the petitioner-Company obtained credit
facilities from various financial institutions including M/s. Societe General Bank
(complainant-respondent). The security included pledge of stocks of cotton lying in
company's premises in Muzaffargarh. The possession of these stocks was held by the
creditors banks through "Muqaddams" appointed by them. According to petitioners on
13-8-1996, the American Express Bank one of the creditors of the company obtained an
ex pane order from Chairman, Banking Tribunal No.l, Lahore for the attachment of
cotton stocks which were lying in the petitioner's mill premises and were pledged with
the respondent-Bank. On 14-8-1996, through a Bailiff of the Banking Tribunal, those
stocks were sealed. Feeling defrauded the respondentBank got the case registered
quashment of which is sought alleging that petitioners had misappropriated the cotton
stocks/bales which were lying in Mills premises as security and thereby committed
criminal breach of-trust.

3. . The prosecution story as given in the aforementioned F.I.R. registered on a letter

addressed to the Director-General, F.I.A. is to the following effect:-

"I am the corporate Head of Societe General, the French and International Bank, 6th
Floor P.I.A. Town Terminal Building, Egerton Road, Lahore.

On the request of M/s. Mohib Textile Mills Limited; its Chief Executive Directors viz.
Mr. Arif Saigol and Mr. Abid Saigol (registered office at 6-F/P, Awami Complex Usmani
Block New Garden Town, Lahore) we had allowed to Mohib Txtile Mills Limited;
various finance facilities called as below:

Description of Amount Societe

Date facility
Banking facilities extended

1. Inventory 50 Pledge of 4-1-1995

Financing cotton bales

2. Export Finance 60 Ist paripassu 25-4-1995

hypothecation

3. 1.3 Export documents -do-

Total: 111.3

The pledge agreement and other documents were signed at Lahore. We appoint M/s.
Harvested Services (Pvt.) Limited; 141-B, Phase I, LCCHS, Lahore Cantt; Lahore
"Muqqadam" to act as custodian of the cotton bales delivered to us are pledged by Mohib
Textile Mills Limited in our favour. On 14-8-1996, 7225 cotton bales were in our
possession and pleged in our favour and were stored in a building area enclosed by a feet
high barbed wire fence within the boundary was walls of Mohib Textile Mills Limited
situated at Muzaffargarh. M/s. Harvest Services (Pvt.) Limited intimated to us on 18-
31997 that the Directors and Managers of Mohib Textile Mills Limited have refused entry
of their staff into the mill premises since 14-8-1996. Despite our repeated requests the
directors and factory managers of Mohib Textile Mills Limited have denied us access to
the aforesaid 7225 cotton bales pledged in our favour and have forcibly and illegally
evicted our supervisor and godown keepers of our custodian firm from the mills
premises. In this manner, they have unlawfully ambezzled and removed 7225 pledged
cotton bales from the mill premises, thus committing theft and misappropriated the bank's
property, causing heavy wrongful financial loss to the bank.

It is requested that case be registered and action taken against the Directors and Manager
guilty of offences under applicable laws.
4. As per the parawise comments submitted by the F.I.A., the respondentbank is working
under the control of State Bank of Pakistan, therefore, the F.I.A. can register a case; that
the petitioners allegedly misappropriated the bank security amounting to rupees five
crores which were lying in the premises of petitioner's mill and that the F.I.A. had
jurisdiction to proceed with the matter.

5. On an application made by the Societe General (complainant in the aforereferred case)

the Bank was also impleaded as party and its learned counsel as also the Deputy
Attorney-General have been heard.

6. Learned counsel for the petitioners, in support of this petition, has made following
submissions:-

(1) that the F.I.A. has no jurisdiction to register and investigate a case in which private
persons are arrayed as accused and that it can register and investigate a case only where
an offence has been committed either in relation to a company owned by the Federal
GOVernment or the employees of the Federal Government are involved. In support of his
submission he relied on PLD 1986 Lah. 429; PLD 1984 SC 385 and on a judgment of this
Court rendered in Writ Petition No. 12172 of 1997;

(ii) that the matter is of civil nature as the respondent-Bank has filed a civil suit in the
Banking Court which is still pending;

(iii) that vide S.R.O. No.826-1-97 the Schedule attached with the F.I.A. Act has been
substituted and sections 406 and 382, P.P.C. under which the case has been registered
have been deleted. The FXA. on that score as well has no jurisdiction to proceed any
further.

Learned Deputy Attorney-General assisted by Mr Zahid Hamid, learned counsel for the
respondent-Bank, on the other hand, has opposed the petition and submitted that the
Scheduled Banks are controlled by the Federal Government; that in terms of section 27 of
the Banking (Companies) Ordinance, a Bank can transact business in Pakistan only if a
licence is granted by the State

Bank of Pakistan and that no exception can be taken to the registration of the case by the
F. I. A.

8. 1 have heard learned counsel for the parties and have given anxious thoughts to the
arguments addressed at the Bar.

9. Before commenting on the issues mooted before this Court, it would be of advantage
to refer to some of the provisions of the F.I.A. Act, 1974, hereinafter called the Act. The
Preamble of 'F.I.A. Act, 1974 reads as under:-

"Whereas it is expedient to provide for the constitution of a Federal Investigating Agency

for the investigation of certain offences committed

in connection with matters concerning the Federal Government, and for matters
connected therewith;".

Section 3 of the Act, provides for the constitution of the Federal Investigating

Agency, "for inquiry into, and investigation of the offences specified in the Schedule,
including an attempt or conspiracy to commit, and abetment of any such offence".
Learned counsel for the petitioner while trying to interpret the import of the afore-
referred provision submitted that the F.I.A. can register cases only with regard to such
companies in which the Government has propriety interest. The precedent case-law relied
upon by the learned counsel does not support the argument being convassed. For
instance, in Javed Iqbal and 2 others v. Federal Investigating Agency and 3 others PLD
1986 Lahore 424, Employees of the Sui Northern Gas Pipelines Limited, had allegedly
committed certain offences and a case was registered under sections 420, 468, 471 and
379, P.P.C. read with section 5(2) of the Prevention of Corruption Act, 1947 and the case
was being investigated by the F.I.A. at page 427, it was held as under:
"Respectfully following the view taken in the case cited above, I hold that in view of the
admitted position that 90 % shares of the respondent Company are owned by the Federal
Government or the Corporations set
up by the Federal Government, the affairs.of the respondent-Company are very much the
concern of the Federal Government. That being so, offences allegedly committed in
relation to the revenue of the respondent-Company are offences in connection with. the
matters concerning the Federal Government. F.I.A. has, therefore, jurisdiction to inquire
into and investigate the said offences."

However, in the same judgment while interpreting the word "concerning" appearing in
the preamble, it was observed:-

"The word 'concerning' is suspectable of a very wide connection. According to the

Black's Law Dictionary (Fifth Edition) it means to pertain, relate, or belong to; be of
interest or importance to; have connection with; to have reference to; to involve; to affect
the interest of. Thus, any matter which is of some interest or importance to the Federal
Government would be a matter concerning it. "

The afore referred judgment does not lay down that ownership by the Federal
Government of an institution or company would be a condition precedent to bring the
affairs of the said organization under the purview of the F.I.A. Act. Reference in the
judgment to the meaning of the word 'concerning' in Black's Law Dictionary is indicative
of the fact that the Court did not want to limit the scope of the Act as being convassed by
the learned counsel for the petitioner. The propriety interest could be one of the grounds
or factors on account of which an institution and its affairs could become "matters
concerning the Federal Government and for matters connected therewith". However, even
in absence of direct propriety interest, there could be statutory and administrative control
of the Federal Government over an institution or an Organization could "relate" to "be of
interest" or "importance" "have connection" or involved the interest of the Federal
Government to bring it, within the ambit of the aforereferred provision. In Ghulam
Rasool v. Muhammad Hayat PLD 1984 Supreme Court 385, the point in issue was as to
whether an employee of the Pakistan Oil Fields Limited Company can be disqualified
under Article 10(2) of. the Houses of Parliament and Provincial Assemblies (Election)
Order, 1977 which stipulates that: "A person shall be disqualified from being elected or
chosen as, and from being, a member of Parliament ... ... ...(as) if he is in service of any
statutory body or anybody which is owned or controlled by the Government in which the
Government has a controlling share or interest". The expression used in the preamble to
the F.I.A. Act is not similar to the aforereferred underlined provision of Houses of
Parliament and Provincial Assemblies (Election) Order, 1977, therefore, the said case is
not relevant. In Haji M. Yousaf v. Abbas Khan and others PLD 1968 Lahore 482 it was
held that since the property in question, qua which the offence had allegedly been
committed was no longer evacuee property, the Special Police Establishment had no
jurisdiction to investigate into the case. In the unreported judgment in Mukhtar Hussain
etc. v. Federation of Pakistan etc. passed in Writ Petition No.12172 of 1997, the
proceedings pending before the trial Court were quashed as it was not denied that no
wrongful loss had been caused to any person nor any wrongful gain had occurred to. any
one of the petitioners on account of alleged opening of "fake accounts'; that the bank or
the accounts holders had not lodged any complaint and in those circumstances, it could
not be said that such offences had been committed in connection with matters concerning
Federal Government.,

10. The case in hand is distinguishable on more than one counts. It has been got
registered on the complaint of Societe General a French Bank alleging misappropriation
and breach of trust. Admittedly, the said Bank is a scheduled bank by virtue of a
Notification issued by the State Bank of Pakistan on 12th of November, 1991. The
scheduled banks are controlled by the State Bank of Pakistan and more than 50 % shares
of the State Bank of Pakistan are owned by the Federal Government, Section 27 of the
Banking Companies Ordinance, stipulates that no scheduled bank can transact business in
Pakistan without licence issued by the State Bank of Pakistan. Under section 40 of the
Banking Companies Ordinance, the State Bank carries out the Inspection of a Scheduled
Bank. Section 41 empowers the State Bank to give directions. Section 47 of the
Ordinance, empowers the State Bank to recommend to the Federal Government for an
order of moratorium with regard to a scheduled bank. Section 83 of the Ordinance
prescribes penalties for violation of the Ordinance and section 84 of the Ordinance
mandates that no Court shall take cognizance of offence under section 83 except on a
complaint in writing made by an Officer of the State Bank generally or specially
authorised in writing in this behalf by the State Bank and no Court other than the High
Court shall try any such offence. Similarly, the State Bank of Pakistan Act, 1956 also
carries various provisions which envisages control of the Federal Government of the
State Bank and the role which the State Bank has to play in regulating the affairs of the
scheduled banks. By virtue of section 9 of the State Bank of Pakistan Act, a Central
Board is constituted which is headed by the Governor State Bank and its Members are
Secretary Finance and seven Directors to be nominated by the Federal Government. The
functions of the Board are stipulated in section 9-A of the Act which inter alia include,
formulation of credit policy by taking into accounts the Federal Government's targets for
growth and inflation; determining and enforcing the limit of credit to be extended by the
Bank to the Federal Government; to approve the credit requirements of the private sector;
tender advice to the Federal Government on the interaction of monetary policy with fiscal
and exchange rate policy; to analyse and advise the Federal Government on the impact of
various policies on the state of the economy arid to submit a quarterly report to the
Majlis-e-Shoora on the state of economy. Section 36 of the State Bank of Pakistan
provides that, "Every scheduled Bank shall maintain a balance-sheet with the State Bank
in terms stipulated thereunder".

An analysis of the various provisions of the F.I.A. Act, 1974; Banking Companies
Ordinance, 1962 and the State Bank of Pakistan Act, 1956 referred to above, would show
that the respondent-Bank being a scheduled Bank is under the control and supervision of
State Bank of Pakistan, and therefore, the authority of the Federal Government extends to
the said Bank. Any offence committed in relation to a scheduled bank, would, therefore,
be an offence", committed in connection with matters concerning Federal Government
and for matters connected therewith", within the mischief of preamble of the Federal
Investigation Agency, Act, 1974. In the Schedule attached with the F.I.A. Act bedsides
certain offences under the Pakistan Penal Code offences under the Banking Companies
Ordinance are also scheduled offences. In Iftikhar Hussain etc. v. Government of Pakistan
etc. PLJ 1996 Lahore 82 (1313), the jurisdiction of the F.I.A. to register and investigate a
case was challenged, a Division Bench of this Court affirmed the order of the learned
Single Judge and observed as under:-

"Admittedly, the Banking Companies Ordinance, 1962 as also the Offences in Respect of
Banks (Special Courts) Ordinance, 1984 are Federal Statutes and also included in the
Schedule to the Federal Investigation Agency Act, 1974. We are, therefore, unable to
agree with the learned counsel that F.I.A. has no jurisdiction in the matter."

11. The argument of the learned counsel for the petitioner that the allegations levelled
disclose civil liability is prima facie against record a premature as the F.I.A. has yet to
finalize the investigation. In letter dated 6-9-1996 (a photo copy of which' has been
placed on record by respondent) sent by petitioners to the respondent-Bank contents of
which have been admitted by the petitioners, it has been stated as under:-

MOHIB

Our Ref.No. Restructuring- 02 Friday, September 6, 1996

Mr. Nauman Ahmed,

Corporate Head, Societe General
The French & International Bank,
6th Floor, P.I.A. Town Terminal Building
Egerton Road, Lahore, Pakistan.

SUBEJCT:
F.I.R. No.35 of 1996, dated September 1, 1996, with the Federal Investigating
Agency of Pakistan.

Dear Sir,
With reference to your abovementioned report filed with the F.I.A. Lahore, we
acknowledge and confirm that we had pledged to you 7,225 cotton bales as security for
finance facilities allowed by you to Mohib Textile Mills Limited, and that on August 14,
1996, the supervisor and Godown Keepers of your Muqaddum Messrs: Harvester
Services (Pvt.) Ltd. were evicted from our premises and the possession of your 7,225
cotton bales was subsequently taken over by other banks.

We are deeply appreciative of your acceptance of our request for restructuring of the
finance facilities allowed to us on the basis of the existing securities, excluding pledge of
the 7,225 cotton bales.

While acknowledging your rights to institute civil and criminal proceedings in this matter
we undertake not to institute any civil or criminal proceedings of any kind whatsoever
against your in this regard. We also hereby hold you indemnified and harmless against
any and all claims and demands that may be made against the bank or any of its
employees by any person in respect of or arising out of the said F. I. R.

Yours faithfully

1…………………….. (2) ……………………………..

Mohib Textile Mills Limited M. Asif Saigal

3…………………… (4)……………………………….

M. Arif Saigol M. Abid Saigol"

12. The contention that S.R.O. 826(1)/97, dated 29-9-1997, sections 382 and 406, P.P.C.
having been deleted from the schedule the F.I.A. has no jurisdiction to proceed with the
investigation is not tenable for two reasons. If Firstly, the matter is still under
investigation and it would be for the Investigating Officer to finally conclude as to what
specific offences are made out and secondly, when the alleged offences were committed,
the aforereferred Sections were in the Schedule of the F.I.A. Act.

13. For aforereferred reasons, and subject to the observation made in para.14 (which
follows), I see no merit in this petition which is hereby dismissed.

14. Before parting with the Judgment, this Court takes serious notice of the fact that the
case was registered on 1-9-1996 and notwithstanding the mandatory provisions of section
173, Cr.P.C. neither the investigation has been concluded nor the report submitted in the
Court. In this view of the matter and without commenting on the merits of the respective
pleas to be taken by both the parties during the investigation, lest it may prejudice the
case of either side. I am persuaded to direct the Investigating Officer in this case to
conclude the investigation strictly on merit and submit report under section 173, Cr.P.C.
in the Court concerned within a month.

A copy of this order shall be sent to Director-General, F.I.A.

(Islamabad) for information and necessary compliance.

H.B.T./A-214/L Petition dismissed.