This petition sought post-arrest bail for a co-accused in a NAB Reference concerning a delayed commercial/residential project. The core legal question was whether the petitioner's actions constituted criminal breach of trust under Section 9(x) of the National Accountability Ordinance, 1999, read with Section 405 PPC, or if the dispute was primarily civil. The Supreme Court converted the petition into an appeal and allowed bail. The Court held that the dispute originated from a sale/purchase agreement of immovable property, rendering it predominantly civil. It was found that the money paid by allottees was for project construction, not an entrustment to be returned, thus not meeting the criteria for criminal breach of trust. Furthermore, the limited number of complainants (13-22) did not satisfy the "public at large" requirement of Section 9(x) of the Ordinance. The Court emphasized that a mere contractual breach does not automatically constitute criminal breach of trust and that NAB Ordinance provisions are not for settling civil disputes without criminal intent. Bail cannot be withheld as punishment in cases requiring further inquiry where the dispute is civil.
' MIAN SAQIB NISAR, J.---The petitioner is a co-accused along with three others in a NAB Reference No,20/2014 dated 24-12-2014 filed, inter alia, against him by the NAB before the NAB Court at Karachi. He was arrested on 10-10-2014. On the strength of Asfand Yar Wali and others v. Federation of Pakistan through Cabinet Division, Islamabad and others (PLD 2001 SC 607), the petitioner sought post-arrest bail which was disallowed to him vide impugned judgment dated 2-3-2015.
Hence this petition.
2. The factual backdrop of the case is quite simple, in that, Messrs Beach Developers, a partnership firm (the firm) presently comprising of three partners namely Haji Sikandar Karim who holds a 50% share, Mst. Nilofar Sikandar (his wife and Mst. Makia (his sister-in-law, wife of Haji Younis) who have a 25% share each in the said firm. The earlier constitution (of the partnership) was somewhat different but the position since 26-8-1998 is as mentioned above. The firm as a property developer had launched a commercial/residential plaza titled Silver Sands sometime during the year 1992 and offered the apartments/units of such constructed premises (units) for sale to the public. The promise made to those who booked the units against some advance payment was that upon periodical or full payment of the sale consideration, the possession shall be handed over to the allottees/purchasers within a period of 40 months, perhaps from the date of their respective booking along with the transfer of ownership rights. However, despite a lapse of more than twenty years, the possession was not delivered, resultantly out of 438 allottees/purchasers of the said residential and commercial units, some who had booked their shops/apartments moved to the NAB authorities on the ground that they had been cheated and defrauded. Pursuant thereto, the NAB notified through a public advertisement that anyone having similar grouse may come forth and we are told that in all 22 persons/allottees stepped forward. The petitioner who is the brother of Sikandar Karim, the accused No,1, in the NAB reference was alleged to be his front man and, therefore, he was reported to be involved in the matter. It may be pertinent to mention here that precise allegations against the petitioner as contained in paragraph 5 of the reference are as follows:- "That as per investigation report and evidence collected the accused No,4 was authorized representative of accused No,1 therefore, he has been receiving the installment payments from the affectees directly as well as he has also been operating the bank accounts of Messrs Beach Developers for which he has been given mandate by accused Nos.1 to 3. Furthermore the accused No,4 has siphoned off an amount of Rs, 11 million which has so far been detected, from the account No,2274-79001137-03 titled Messrs Beach Developers to this own accounts Nos. 2274- 79001257-03, 0014-01003523 and 2274-79001224-03."
' The petitioner before the filing of the reference by NAB had filed a constitution petition seeking some preventive relief against his involvement in the matter and also asked for grant of post arrest bail, which (petition) was dismissed by the High Court of Sindh. He approached this Court and while the matter was pending as the reference had been filed against him, in order to approach the High Court of Sindh afresh, the petition was disposed of.
' It is now in the present scenario that the second constitution petition initiated by him stands dismissed. The learned High Court has primarily held that the applicant was involved in the project; he has posed himself to be the. Chief Executive of Messrs Beach Developers which is so evident from his visiting card; he has also made some application to the NAB authorities in which this status stands reflected; he was operating the bank/other accounts of the firm and that he has also transferred an amount of rupees 11 million from the account of Messrs Beach Developers to his own account and, therefore, there is close nexus between him and the project in question and the ostensible partners/owners of the project. Further reference has been made to some statements of the prosecution witnesses to opine that he was involved in the matter and it has been thus held that there is sufficient incriminating material against the petitioner.
3. Heard. It may be pertinent to mention here that in paragraph 12 of the impugned judgment, the learned High Court has categorically expressed "Though the petitioner is not partner in the firm but at the same time it cannot be ignored that the material produced by the prosecution sufficiently demonstrates that the petitioner was involved in the affairs of the project. Since 1992, the project is incomplete. Various violation of the approved building plan has been committed. Despite agreement with D.H.A., penalty and composition fee has not been paid for regularization even then the counsel for the petitioner argued that no case of cheating is made out and recourse should have been achieved through civil court and not by prosecution". It is further held "Due to delay in completion of project, a large segment of public is affected but the counsel argued that only 22 persons approached the NAB. Whether the other allottees have been given possession and they are satisfied? The answer is in the negative as the petitioner not only in this petition but in earlier one also accepted that possession has not been given to the allottees and belied the assertion of partners of the firm made in C.P. No,D-2563 of 2013 that 90% allottees had already taken possession". Learned counsel for the petitioner has argued that total number of persons who had sought booking in this project was 438, whereas complaint(s) were made by a very few before NAB to take action against the delinquents of the project. NAB widely advertised and notified that all those who have any grouse should come forward but out of the above sizeable number, only 22 people came forward to complain that they have not been handed over the possession within the stipulated time. From these 22 persons, the case has been settled with three, while six had raised their claims in various courts, three cases out of which have been dismissed as being time barred while others are pending adjudication. Therefore, it is a meager segment i,e, around 13 people who have any grouse and complaint against the petitioner.
' It is submitted that the dispute between the complainant side and the petitioner or his family is purely of civil nature and thus only civil remedies were available to the aggrieved persons under the law. It has also been argued that the firm i,e, the real owner and executor of the project had spent all that money which was received from the allottees for the purpose and no money has been squandered. However, it is only because of a dispute between Messrs Beach Developers and DHA on account of which the project could not be accomplished within time. The settlement was arrived at between DHA and Messrs Beach Developers and pursuant to such compromise, penalties were also paid to DHA by the firm which is evident from various documents placed on the record, but it is DHA which subsequently demanded more money and also raised the penalty amount and this is the basic impediment and the hindrance in the completion of the project by the firm. This factor is beyond the control of the firm and in any case the petitioner, who on behalf of the family was looking after financial affairs and cannot be said to have cheated anyone.
' It is submitted that the amount of rupees 11 million was needed for the project and was accordingly utilized for that purpose and that neither Messrs Beach Developers nor the complainants have been deprived of any amount in any way or manner. Above all it is argued that no case at all within the purview of section 9 of the National Accountability Ordinance, 1999 (the Ordinance) has been made out.
4. The learned Deputy Prosecutor General, when confronted, concedes that the dispute between the allottees with the firm or the petitioner has its genesis in a sale, purchase contract of an immovable property but it is argued that the petitioner and his family in fact had made a promise to raise construction within the given period of time, however, despite the lapse of twenty years neither the money has been returned to the affectees nor they have been compensated in any other way. It is also submitted that from the evidence on the record, it transpires that the petitioner was handling all the financial affairs of Messrs Beach Developers and, therefore, he is the key person who has cheated and defrauded the allottees/purchasers and resultantly the case squarely falls within the purview of section 9(x) of the Ordinance.
' From the record and the pleas raised before us, we are of the view that the issue between the purchasers/allottees and the petitioner or his family has genesis and nexus to the sale, purchase agreement of an immovable property. The firm which advertised the project in fact had offered to sell the premises/property/units which were to be constructed in due course of time. It is the firm which had received the money and had made the promise to construct and handover the constructed property within a specific period of time. The money paid by the purchasers was obviously meant to be used by the firm for the accomplishment of the project. It is neither the case of the complainants nor there are any allegations in the reference or any material available on the record that such money has not been expended in raising of the project, to whatever extent it has been built up till now.
'The above transaction between the complainants/purchasers/ allottees and the firm for all intents and purposes was/is in the nature of an agreement to sell/contract for the sale of immovable property as mentioned above and according to the settled law the consequences of violation of such an agreement are prescribed through civil remedies available to an aggrieved party; such as to seek the specific enforcement of the agreement, if the same is capable of enforcement or to ask for the damages. But in any case the relationship inter se the parties carries the implications of a civil dispute giving rise to rights and obligations of the civil nature. Therefore, where the element of fraud, deceit etc. Or a specific provision of any law which constitutes a criminal offence is not attracted and made out and there also is no material available on the record in this context, the exercise of discretion for granting bail by the courts in appropriate cases should not be withheld as a punishment. However it should not be understood that if a clear case of criminal offence has been made out, only for the reason that there also is some element of civil dispute involved that the bail should be granted as a matter of course; rather what shall be seen and evaluated in such cases would be what is the predominate factor, criminal or the civil. It may also be added here that the matter having some tinge of civil dispute simpliciter and/or singularly shall not be a ground by itself for the grant of bail. But this factor should be relevant along with other grounds raised entitling the petitioner (in a bail) matter for the said concession.
'We are also of the opinion that the provisions of the NAB Ordinance are neither meant nor attracted/applicable for the purposes of settling scores of civil nature or the disputes emanating out of the contract between the few individuals and the delinquents (who allegedly violated the contract) having no criminal intent and motive behind it. The person aggrieved of the contractual breach of a civil contract, must resort to the civil remedies as has been mentioned above. But subject to what has been opined in the preceding paragraph.
' Furthermore it is not a case where the money has been taken from the public in large number and scale and not utilized for the purposes of building of the project as has been mentioned earlier, it is only 22 people out of 438 who have come forward and out of these, three have patched up the matter with the firm, six have gone to the Court of law where the matter is pending regarding three, while three cases have been dismissed as being time barred or on some legal issue (these facts are not controverted by the Prosecutor NAB). In case of certain persons (out of these 22) the contract of sale, we are told, have also been cancelled by the firm, and there is no material on the record in relation to them whether they had taken any legal action about the cancellation of the contract. In essence, only thirteen persons are left who have grouse against the firm or the petitioner and the challenge obviously is that the terms and conditions of the contract which was entered into between them and the firm have not been fulfilled.
' These admitted facts conspicuously show that the matter at hand seemingly does not fall within the concept of breach of trust as defined in section 405 of the Pakistan Penal Code which has been embodied in section 9(x) ibid. Section 405 ibid deals with entrustment of property upon a person who commits criminal breach of trust by dishonestly misappropriating the property entrusted to him or converting it to his own use. For comprehending the scope of the offence stipulated it is expedient to reproduce the provisions of section 9(x) of the Ordinance and section 405, P.P.C. To which reference has been made m the former provision; these read as tinder:- "9(x) if he commits the offence of criminal breach of trust as defined in section 405 of the Pakistan Penal Code, 1860 (Act XLV of 1860) with regard to any property including money or valuable security entrusted- to him by members of the public at large.
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 willfully suffers any other person so to do, commits "criminal breach of trust ".
'From the above it is clear that an essential element for making out and establishing a case of criminal breach of trust is the entrustment of property or money or with any dominion over property, which is dishonestly misappropriated or dishonestly used or disposed in violation of any direction prescribed by law or the mode in which such trust was to be discharged or in the context any contract etc., however the promise to sell the property for which consideration/money is paid or an agreement to sell is entered upon and the money has been paid pursuant to such an agreement, it shall not the same as entrustment of property - within the concept of noted provision. In case of entrustment, the money/property received is to be retained for return to the giver at a later time as opposed to a promise or contract where investment is made or money is paid for the purposes of fulfillment of a specific agreed upon purpose/contract. In such a case where money/property has been entrusted to a person, using such amount/property for any other purpose would not attract the penal consequences of section 405 ibid. For the purposes of above view, we draw support from the judgment of this Court reported as Shahid Imran v. The State and another (2011 SCM R 1614), wherein it has been held "The law clearly recognizes a distinction between payment/investment of money and entrustment of money or property as in the former case the amount of money paid or invested is to be utilized for some purpose whereas in the latter case that sum of money or property is to be retained and preserved for its return to the giver and the same is never meant to be utilized for any other purpose...a mere breach of a promise, agreement or contract does not ipso facto attract the definition of criminal breach of trust contained in section 405, P.P.C. And such a breach is nor synonymous with criminal breach of trust without there being a clear case of entrustment". Besides for section 9(x) of the Ordinance mandate (as has been conceded by the learned Deputy Prosecutor General NAB, for the only provision applicable to the case), the money or valuable security should have been entrusted by the "member of the public at large". We are of the view that 13 persons would hardly constitute public in its literal and ordinary sense; furthermore meaning of the word large i,e, "considerable or relatively great size, extent or capacity having wide range and scope" does not bring 22 or 13 persons as the case may be within its concept and fold. Thus from this angle as well the said section seemingly perhaps can be held not attracted to the instant case. It is trite law that the provisions of law which constitute criminal offences shall be strictly construed and applied, thus prima facie we have not been persuaded by the plea made by the learned Deputy Prosecutor General that in such a case section 9(x) ibid shall be attracted.
'In light of the above law and the facts and circumstances of the instant case, it is clear that the money was not entrusted to the petitioner or the firm for the purposes of return at a later time in the nature of amanat, rather the money was at the best given by the purchasers/allottees for the purposes of using such money for the construction of the property/building and it is not their case that, the money has not been used in the construction of the building.
5. As far as the question that amount of rupees 11 million had been withdrawn by the petitioner from the bank account of the firm, suffice it to say that when questioned if the petitioner is prepared to deposit the said amount with the NAB Court' as a security for the purposes of its payment to anybody who is found entitled on account of the final outcome of the reference, the learned counsel for the petitioner candidly conceded to that, therefore, a direction has been given in the short order of even date for the deposit of this amount as a further condition of bail.
6. There is another angle to examine the case that as per the documents placed on record vide C.M.A. No,2464 of 2015, it is clear that the construction of the plaza could not primarily take place on account of dispute between the firm and DHA and DHA had certain reservations about the violations committed by the firm in raising the construction or some other issues. However, the matter was settled and pursuant thereto the firm had also paid some penalty to DHA which was imposed upon the firm but seemingly further amount was demanded by DHA and it is on that account that the project had come to a halt.
7. In view of the above facts and circumstances of the case, as it is a settled law that bail cannot be withheld as a matter of punishment, as has been even held by the High Court, we find that the present case being of civil nature and requiring further inquiry, the case not falling strictly within the purview of the noted provisions, the petitioner is entitled to bail, therefore, this petition is converted into an appeal and allowed in terms of our short order of even date which is reproduced as below:- "For the reasons to be recorded later, this petition is converted into an appeal and allowed. The petitioner is allowed bail subject to furnishing his bail bonds in the sum of Rs,25,00,000 each with two sureties each in the like amount to the satisfaction of the NAB Court in NAB Reference No,20/2014 pending in the NAB Court, Karachi and on the furnishing of bail bonds, the petitioner shall be released on bail. However, as a further condition for bail, the petitioner shall deposit an amount of Rs,1,10,00,000 with the NAB Court within a period of 45 days, which amount shall be invested by the. NAB Court in some profit bearing scheme ultimately to be given/disbursed to anyone who is found lawfully entitled or returned to the petitioner as the case may be. If the amount is not deposited by the petitioner within 45 days, the bail shall stand cancelled."
' However, before parting, we observe categorically that any comment or observation made in this judgment shall only be tentative in nature and shall not cause prejudice to the case of either of the parties in the proceedings of reference.