' RAHMAT HUSSAIN JAFFERI, J.---Brief facts giving rise to the present appeal are that on 9-9-1997 the complainant Agha Ziauddin Vice-president [Cr] MBL affairs wing, Treasury Division National Bank of Pakistan Head Office Karachi lodged the report before. Deputy Director, F.I.A. Commercial Bank Circle Karachi stating therein that under section 47 of the Banking companies Ordinance, 1962 the State Bank of Pakistan prepared a scheme for amalgamation of Messrs Mehran Bank Ltd. With National Bank of Pakistan.
' Consequently, the National Bank of Pakistan took over all the branches of Messrs Mehran Bank Ltd.
With its assets and liabilities. In the year 1992 Messrs Mehran Bank Ltd. Allowed running finance facility of Rs,14.830 Million and export running facility of Rs,77.571 million to Messrs Tawakkal Ltd.
(Company) on the basis of markup on security of hypothecated goods, being raw material/finished goods/ spares/machine etc. Both the facilities were secured against hypothecation of stocks. The charge on the stock was created and registered with the Registrar Joint Stock Companies. The Company had fully availed the aforesaid facilities from the Mehran Bank Ltd. After expiry of finance facility, Messrs Tawakal Ltd. And its Directors failed to adjust the liabilities, in spite of repeated demands and requests made by the Bank in this regard. On 23-10- 1996 total amount outstanding against the Messrs Tawakal Ltd. Came to Rs,156.723 million. It was alleged that Messrs Tawakal Ltd. Removed and sold the hypothecated stock without adjusting the amount and without the knowledge and consent of the bank. The acts of Messrs Tawakal Ltd. In removing the security for loan unauthorized and without the consent of the bank constitute an offence under the offences in respect of Banks, [Special' Courts] Ordinance, 1984.
2. On the above F.I.R. The police started the investigation and submitted interim challan on 22-11- 1997 before the Court of Special Judge Karachi against the Directors of. The Company and co- accused Younis Habib. The Deputy Prosecutor General Accountability moved an application under section 16-A [a], National Accountability Bureau Ordinance, 1999 before the said Court for transferring the case to the Accountability Court Karachi. The said Court transferred the case to the Accountability Court No,1 Karachi for trial.
3. "On 27-4-2001, the Accountability Court No,1 framed the charge against the appellant being one of the Directors of the Company and co-accused Younis Habib being Head of Mehran Bank, as the remaining Directors of the Company were absconders. The appellant and co-accused pleaded not guilty to the charge. The prosecution examined 10 witnesses and produced various documents. The co-accused Younis Habib denied all the allegations of the prosecution. The appellant admitted availing of the running finance facility to the tune of Rs,70 million. He also admitted furnishing security in the shape of hypothecation of stocks to secure the loan and a charge was created before the Registrar Joint Stock Companies on the said stock. In the first instance, he denied that they removed the stock or they were defaulters of the amount. Nevertheless, at later stage he admitted that the hypothecated stock was handed over to a buyer through steamer company and the documents were handed over to the Mehran Bank Ltd. He also admitted that the bank had filed the civil suit against the company for recovery of the said amount and the High Court decreed the suit in favour of the bank but he was unaware about the filling of execution application. In his further statement, he stated as under:- ' "I am innocent, not removed the hypothecated stock but handed over the same to the buyer through ship and the documents were handed over to the then. Mehran Bank Ltd. No amount is due against us on the contrary we have balance against bank"
4. The appellant produced written statement, examined himself on oath and produced certain documents. He did not examine any witness in his defence. The learned trial judge after considering the evidence and hearing the parties counsel acquitted the co-accused Younis Habib but convicted the appellant under section 409, P.P.C. And sentenced him to suffer R.I. For seven years and to pay a fine of Rs,22.389 million or in default thereof to suffer R.I. For three years. The learned trial judge further ordered that the appellant should stand disqualified for 10 years to be reckoned from the date he is released after serving the sentence, for seeking or from being elected, chosen, appointed or nominated as a member or representative of any public body or any statutory or local authority or in service of Pakistan or of any Province under section 15 of the NAB Ordinance, 1999 under the impugned judgment.
5. We have heard the Advocate for the appellant, DPGA and perused the record of this case very carefully. From the evidence and statement of the appellant, it is clear that the company had availed 70 million running finance facility against security of hypothecated stock of the company. It has also become an admitted fact that the company had handed over the said hypothecated stock to a buyer through Steamer company. The appellant has also admitted that the bank had filed the suit for recovery of the said amount before the High Court and the decree was passed against the company for the said amount. The Bank's witnesses have categorically stated that they had no knowledge of removing the hypothecated stock from the godowns of the company. The complainant in his statement Exh.18 has categorically stated that one of the officers was appointed to visit the godowns of the company in order to verify the said stock. In the beginning, the appellants did not co-operate with the said officer and then the officer was successful in inspecting the godowns and reported non-availability of the said stock in the godowns. The said statement of the complainant went unchallenged. The prosecution also examined the said officer P.W.6 Muhammad Amir Khan who, in spite of non-cooperation of the appellant visited various godowns of the company where the hypothecated stock was kept but the same was not available there. The evidence has also come on the record that the said stock was removed without the authority or consent of the bank as the physical possession of the stock was with the company and it was required that the availability of the stock should be reported to the bank periodically that was not done by the company. From the evidence, it has been established that the company removed the stock without the consent and authority of the bank. However, the appellant took the stand that the stock was sold to a buyer of steamer ship and the documents were handed over to Mehran Bank Ltd. The appellant did not file any proof in support of his claim. As such, the appellant has failed to prove the defence, which he took in the statement under section 342, Cr.P.C., written statement and statement on oath. Thus, the prosecution has established that without clearing the amount due against the company the hypothecated stock, which was kept as security for the said loan, has been removed and sold without authority, A consent and knowledge of the bank, which was in the possession, and control of the company and as such the company had misappropriated the said stock.
6. The learned Advocate for the appellant has stated that the appellant was not personally responsible for removing the hypothecated stock, therefore, he cannot be convicted for the said offence. It is pointed out that all the directors of the company including the appellant executed personal guarantee in respect of amount availed by the company. The company failed to repay the said amount, therefore, the bank filed the suit for recovery of the said amount, which was decreed in favour of the bank and against the directors of the company under which all the directors, jointly and severally, were liable to pay the said amount. The appellant himself admitted that the hypothecated goods were shipped and export papers were handed over to the bank but did not produce the said documents. If the definitions of "accused" and "person" as defined in the NAB Ordinance, 1999 are read together then it will be clear that the directors of the company are coming within such definitions. The arguments of the learned Advocate for the appellant are not sound.
7. The learned Advocate for the appellant has stated that the offence would fall under section 19(a) of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 (herein after referred to as 'the Act, 1997'), therefore, the NAB Court had no jurisdiction to try the applicant.
Whereas, the learned DPGA has stated that the appellant had committed criminal breach of trust as defined under section 405, P.P.C. Which is a distinct offence from the offence of the Act, 1997, therefore, the NAB Court had jurisdiction to try the appellant.
8. It will be advantageous to reproduce section 19(1)(a) of Act, 1997 and section 405, P.P.C. They are:
19. Provisions relating to certain offences.---(1) Whoever---
(a) dishonestly commits a breach of the terms of a letter of hypothecation or trust receipt or such other instrument or document executed by him whereby the possession of the property offered as security for the loan or finance is not with banking company but is retained by, or entrusted to him, for the purpose of effecting sale and depositing the same with the banking company; or
405. Criminal breach of trust.--- ' Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other persons so to do, commits "criminal breach of trust".
9. From bare perusal of the section 19(1)(a) of Act, 1997 it is clear that offence would be attracted if a person commits breach of terms of any instrument including letter of hypothecation whereas the essential ingredients of section 405, P.P.C. Are (1) Entrustment; (2) Dishonest misappropriation or conversion to his own use by the person in whom the confidence reposed; (3) Dishonest use or disposal of the property in violation of any direction of law; and (4) Dishonest use or disposal of property in violation of any legal contract. As such the main ingredients of both the offences are quite different from each other. Hence, they are distinct offences. For trial of both the offences separate forums are provided. For the trial of offence as defined under section 405, P.P.C. And punishable under section 409, P.P.C. The NAB Court has jurisdiction to take cognizance of offence and try the offender. The said offence cannot be tried by the Banking Court as it has no jurisdiction to take its cognizance, hence the arguments of the learned Advocate for the appellant are without force.
10. After considering the material available on the record, we are of the considered view that the prosecution has proved the case against the appellant beyond any reasonable doubt. There is no illegality or irregularity in the impugned judgment. There is no misreading or non-reading of the evidence as such the impugned judgment does not require any interference.
11. Above are the reasons of our short order dated 1-11-2005 by which we had dismissed the appeal.