RAHMAT HUSSAIN JAFFERI, J.-The appellant has assailed the judgment dated 31-12-2005 passed in Reference No,30 of 2003 by the Accountability Court No,2 Sindh, Karachi whereby the appellant was convicted under section 10 of the NAB Ordinance, 1999 and sentenced to suffer R.I.. For 10 years and the fine of Rs,42,20,000 or in default thereof to suffer R.I. For one year with benefit of section 382-B, Cr.P.C. The appellant was also disqualified for a period of 10 years as provided under section 15 of the National Accountability Ordinance, 1999 (in short NAB Ordinance).
2. Brief facts of the prosecution case are that the appellant was Manager, Small Business Finance Corporation, now named as Small Medium Enterprises (SME) Bank, Larkana and Shikarpur Branches. It was alleged that during the years 1994 to 1995 the appellant obtained various loans in the names of other persons but actual beneficiary was the appellant. 8 cases of such loans were detected in which it was alleged that the appellant had obtained the loans in the names of Abdul Sattar, Muhammad Sultan, Ahmed Ali Memon, Faiq, Ali Khan, Behram, Shah Nawaz, Khair Muhammad and Abdul Rauf but utilized the amount for his own benefits.
3. The Chairman NAB, after receipt of inforihation, authorized the FIA authorities to hold inquiry and investigate the matter. After due investigation 'the matter was placed before the Chairman NAB who formed the opinion that the reference should be filed before the Court, hence on 15-11-2003 such reference was filed before the Accountability Court, Karachi. On 21-1-2004 a charge for offences as defined under section 9(a)(iii), (iv), (vi) & (ix) of NAB Ordinance and punishable under section 10 of the said Ordinance was framed against the appellant but he pleaded not guilty.
4. In support of the case the prosecution examined 11 witnesses. The appellant, in his statement recorded under section 342, Cr.P.C. Admitted that he was Manager at the relevant in the Bank. He took the plea that the loan was to be sanctioned by the Regional Manager after holding inquiry by the relevant time officers and after scrutinizing the case by Credit Committee. He denied the allegation that he had obtained loans in the names of above mentioned persons or that he had utilized the amounts for his own benefits. He further admitted that he had processed the cases in accordance with law and sent his findings to the relevant authorities for sanctioning the loan. He also took the plea that all the borrowers had cleared their loans, therefore, there is no loss to the Bank. The appellant did not examined himself on oath but examined two borrowers Muhammad Sultan and Ahmed Ali. They supported the case of the appellant. He further examined Ghulam Murtaza, the then Senior Assistant/Incharge Recovery on the point that he had received the payments from loanees Shah Nawaz, Behram and Faiq Ali.
5. The learned trial Judge, after considering the evidence and hearing the parties counsel convicted and sentenced the appellant as mentioned above.
6. We have heard the advocate for the appellant, DPGA NAB for the State and perused the record of this case very carefully.
7. The learned advocate for the appellant has stated that out of 8 borrowers the prosecution has examined only one borrower namely Faiq Ali; that he had enmity with the appellant and was pressurized by FIA authorities to depose against the appellant. Therefore, he had supported the prosecution case but further added that his evidence is unreliable as there are material contradictions and discrepancies in the evidence which are contrary to the documentary evidence. He has further stated that from the evidence it has been established that the other borrowers had received the amounts of their loans and then subsequently cleared their dues.
Therefore, the entire case hinges upon the evidence of Faiq Ali coupled with the evidence of Bank employees who have enmity, with the appellant.
8. The learned DPGA NAB has stated that the evidence of Faiq Ali is clear asspecific under which it has been established that the full amount of loan was not paid to him and he had not received the said amount from the appellant but the appellant, in violation of Rules and Regulations, had issued a consolidated cheques of Rs,2,70,000 in the name of Faiq Ali; that initially the said cheque was cross cheque but the appellant converted it into bearer cheque so as to be enchased by anybody, therefore, the mala fide intention of the appellant is clear which is supported by the Bank employees. He has further stated that three loanees namely Khair Muhammad, Shah Nawaz and Abdul Rauf are not traceable and their whereabouts are not known as they are not residing at the addresses mentioned in the application as per statement of P.W.4. Therefore, the appellant had misappropriated the amounts advanced to these three borrowers. He has supported the impugned judgment.
9. We have given due consideration to the arguments and gone through the material available on the record. It is an admitted position that the procedure for grant of loan, under the scheme provided to the then Small Business Finance Corporation and SME, is that an application is to be filed by a borrower. The said application is to be verified by a team and the team submits its report to the Manager. The case is referred to the Credit Committee who also examines the same and after due recommendation from the Manager and the said Committee the matter is placed before the Regional Manager for sanctioning the loan. It is also admitted position that in all the 8 cases of above mentioned persons the required formalities were completed and the loan were sanctioned by the Regional Manager. Thus, there is no dispute with regard to authority and sanctioning of loan.
The case of the prosecution starts thereafter as they alleged that the rightful loanees did not receive the amount but it was misappropriated by the appellant and the amount was disbursed in violation of Rules and Regulations.
10. In order to support the case the prosecution examined 11 witnesses, some of the witnesses gave the procedure for advancement of loan which is as mentioned above. The evidence of P.W.2 Javed Ahmed Soomro, Senior Assistant, SME Bank reveals that appellant gave him 7 cheques for encashment from the Bank. Out of those 7 cheques two cheques were in the name of Khair Muhammad, two cheques were in the name of Behram and three cheques were in the name of Shah Nawaz, the borrowers. His evidence further reveals that he encashed the said cheques. The amounts were handed-over to the appellant who gave the said cheques to the borrowers.
Evidence P.W.3 Zahid Hussain Abro, the then Manager, SME, Larkana Branch disclosed that in the year 2001 he called the borrowers of the loan. He came to know that in their names, the loans were taken by the appellant and before the NAB authorities the said borrowers disclosed the said facts.
The witness did not disclose the source of information from which he received the information, as such, the above portion of his evidence is hearsay evidence which is inadmissible according to Qanun-e-Shahadat Order, 1984. His evidence further reveals that during the inquiry of NAB authorities the appellant approached him in his office and offered him to pay the amount of the loanees by disclosing that the said amounts of loans had been taken by him and then he paid the said amounts of loanees through his brother Munawar Ali Abbasi and has further paid Rs,40,00,000 towards the loans amount during three years' period but still an amount of Rs,40,00,000 was outstanding against him. This portion of the evidence comes within the ambit of extra-judicial confession. In the cross-examination he admitted that on the report of the appellant an inquiry was initiated against him. As such, there was enmity between the appellant and the witness.
Therefore, it is not excepted that the appellant would admit his guilt before his enemy, as such the above piece of evidence cannot be safely relied upon unless it is supported and corroborated by other pieces of evidence.
11. The evidence of P.W.4 Mukhtiar Ali the then Manager, SME Bank disclosed that he came to know that the cheque dated 27-10-1999 issued by the appellant in the name of borrower Faiq Ali was crossch eque but subsequently it was made bearer cheque. This witness did not disclose the source of information from which received the said information. As such, his above portion of evidence comes within the ambit of hearsay which is inadmissible evidence. His evidence further shows that he searched for loanees Khair Muhammad and Abdul Rauf but the said borrowers were not traceable. His evidence further reveals that the appellant made extra-judicial confession before him as he stated that he contacted the appellant for refund of the loan amounts in the names of fake loanees on which he assured to refund the loans amounts. Thereafter, the appellant contacted him and promised to refund the said amounts. He paid down payment of loanees Khair Muhammad, Rustam, Behram and Faiq Ali to bring the said loan cases under the remission scheme but at that time he did not pay the full payment. His evidence further reveals that he received payment of loan of Behram and Shah Nawaz from the medical centre run by the appellant. The above piece of evidence of the witness went unchallenged as the appellant did not cross- examine him. There is no enmity between the appellant and this witness though a suggestion was made that there was enmity between him and the appellant over some disbursement of loan to the relatives of P.W. But he denied the same. In the cross- examination this witness disclosed that Behram, Khair Muhammad, Shah Nawaz and Faiq Ali had made full and final payment and he issued final certificates. His evidence further disclosed that the Bank was interested in receiving the payment and it was immaterial from which source the amount was received. The combined effect of the evidence of this witness as disclosed by him in the examination-in-chief and the cross-examination is that it was the appellant who paid the down payment in respect of loans amounts of above mentioned three loanees and then full and final payments were made and final clearance certificates were issued. Obviously, the certificates were issued in the names of above named three persons because the loan accounts were in the names of said persons, therefore, after receipt of the amount the clearance certificates are bound to be issued in the names of said person irrespective of the fact as to who paid the said amounts.
12. The most important witness in this case is Faiq Ali who, in his statement, admitted that he had applied for the loan of Rs,300,000 which was sanctioned as per rules and he received first instalment of Rs,30,000 through a cheque which he had deposited in his account. His evidence further reveals that after some time Bank employees came to his village and obtained an application for Cancellation of loan he had given to them and thereafter he did not received the remaining amount of loan. On the contrary, he received a notice of recovery of Rs,30,000 loan. The said notice (Exh.34) was produced before the trial Court and then he refunded part of the said amount. He stated that he had not received Rs,270,000, the remaining amount of his loan. But subsequently he came to know that the said amount, was outstanding against him. He further stated that he had not availed the loan of Rs,270,000 nor he had received the said amount from the Bank. He was cross-examined by the appellant but nothing came on record to discredit his evidence. He denied the suggestion of the appellant that he had received the said amount.
13. The evidence of P.W.6 Manager of First Women Bank reveals that the appellant had a personal account in the said Bank. So is the evidence of P.W.7 Manager, Muslim Commercial Bank, Lahori Mohallah Branch, Larkana. The evidence of P.W.8 Manager, Muslim Commercial Bank, Shikarpur Branch reveals that he produced 7 cheques in the names of a borrowers Shah Nawaz, Behram and Khair Muhammad.
14. The evidence of P.W.9 Manager, RDFC Bank reveals that appellant requested him to become a guarator of loanee Abdul Sattar Soomro as he wanted to utilize the loan for his own personal use.
Therefore, he stood guarantor for the said loanee. His evidence further reveals that the appellant had a personal account bearing No, 114 in RDFC Bank in which the appellant used to deposit recoveries of Small Business Finance Corporation. His evidence further reveals that in his Bank there was Government account of the Bank also.
15. The evidence of P.W. 10 Bandey Ali, Manager, Allied Bank reveals that he received a cheque of Account No,HP-15 dated 27-10-1999 issued by Small Business Finance Corporation, Shikarpur Branch in the name of Faiq Ali for Rs,270,000. The cheque was crossed but subsequently it was changed with the signature of the appellant and was made as bearer cheque which was encashed on 28-10-1999. The evidence of P.W.11 Ghulam Abbas Baloch, Assistant Director, FIA reveals that he conducted the investigation of the case and seized the record of the case.
16. From the scrutiny of above evidence it is clear that the loanees Khair Muhammad and Abdul Rauf were not traceable as per statement of.P.W.4.Though the loan was advanced to them. It is further clear that the loanees Faiq Ali did not received Rs,270,000 being the remaining amount of loan. According to' the sanction order of the loan the appellant was not required to issue the cheques of Rs,270,000 at one time but it was to be distributed as per clause 6 of the sanction order (Exh.18), that reads as under:--
6. MODE OF DISBURSEMENT
(i) 1st instalment of Rs, 30,000 will be disbursed direct to the supplier/ borrower for purchase of machinery/stock.
(ii) 2nd instalment of Rs, 170,000 will be disbursed direct to the supplier/borrower to the purchase of machinery/stock.
(iii) 3rd instalment of Rs, 100,000 will be disbursed direct to the supplier/borrower for purchase of machinery/stock.
17. The borrower Faiq Ali had received the first instalment but the remaining two instalments were to be paid as per above mode but the appellant did not comply' with the said sanction order. The said amount was in the trust of the appellant which the appellant was to discharge as per above mode, but he had violated the said mode of disbursement and issued a consolidated cheque of Rs,270,000. The evidence of P.W, 10 further reveals that the said cheque, which was a cross-cheque, was presented in the Allied Bank for encashment but subsequently the appellant converted it into bearer cheque which clearly demonstrates the intention of the appellant that the amount should not be deposited in the account of Faiq Ali but it should be paid to a bearer of the cheque. The above act of the appellant coupled with the other evidence, available on the record, of extra- judicial confession of the appellant before P.W.4 clearly shows that the said cheques was issued with mala fide intention in order to usurp the amount. Thus, the appellant had misappropriated the said amount. No doubt,, subsequently the amount of Faiq Ali was cleared by depositing the amount with the Bank but Faiq Ali did not state that he had deposited the said amount with the Bank. This clearly shows that the amount was deposited by someone else than P.W. Faiq Ali. Thus the prosecution has established that the appellant had misappropriated the loan amount of borrower Faiq Ali, Khair Muhammad and Abdul Rauf.
18. The appellant Examined three witnesses in his defence. Out of them two witnesses namely Muhammad Sultan and Ahmed Ali are loanees. Their evidence reveals that they took the loan from the Bank and repaid the said amount. These are the two borrowers for whom the prosecution alleged that the appellant had misappropriated their amount but they have disproved the allegation of the prosecution.
19. The third witness examined by the appellant was Ghulam Murtaza. He was brother-in-law of the appellant and was Senior Assistant/Incharge Recovery, SME Bank, Shikarpur during the period from 2002 to 2003. His evidence reveals that loanees Faiq Ali had deposited loan amount of Rs, 11,500 with SME Bank on 27-10-2003. His evidence further reveals that other loanees Shah Nawaz and Behram had also deposited the amounts. As regards the deposit of Rs, 11,500 by P.W. Faiq Ali, the outstanding loan against Faiq Ali was more than that amount, P.W. Faiq Ali did not state that he had deposited the said amount nor such question was put to him. The receipt produced by the witness does not disclose anything else except that amount was received in the same account.
P.W.4 has already admitted that Bank is interested in receipt of the amount whosoever pay the same. The P.W.3 Ghulam Murtaza is closely related to the appellant as he is his brother-in-law and the possibility of deposit of amount by someone else in the name of Faiq Ali cannot be ruled out in view of the overwhelming evidence produced by the prosecution in this case. Therefore, the solitary statement of D.W. Ghulam Murtaza on the above aspect of the case cannot be safely relied upon.
20. After considering the material available on the record we are of the considered view that the prosecution has provided the case in respect of above mentioned three borrowers out of alleged eight borrowers against the appellant. Therefore, the appellant is liable to be convicted in respect of amounts of those three borrowers. Thus, the appellant has committed an offence punishable under section 10 of the NAB Ordinance, therefore, the learned trial Judge has rightly convicted him.
As regards the sentence the prosecution has failed to prove the five loan cases but they have been able to prove there loan cases. Therefore, the sentence of the appellant is liable to be reduced.
21. Consequently, while maintaining the conviction we had reduced the sentence of 10 years to 7 years and fine from Rs,42,20,000 to Rs,20,00,000 with benefit of section 382-B, Cr.P.C., while passing the short order. We had also maintained the disqualification of the appellant within the meaning of section 15 of the NAB Ordinance.
22. Above are the reasons of our short order dated 2-12-2005 by which we had dismissed the appeal with the modification in the sentence.