MUHAMMAD FARRUKH IRFAN KHAN, J. --- Through this petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 the petitioner calls in question the validity of impugned letter/memorandum dated 12.11.2012 whereby his name was. placed on Exit Control List (ECL) by respondent No, 1.
2. Learned counsel for the petitioner submits that impugned letter is illegal, without lawful authority, void abinitio having no legal effect on the rights of the petitioner that impugned letter is silent as to the ground on which the petitioner's name was placed on ECL at the instance of respondent No, 3, who was having fiscal relationship with Trust Investment Bank Ltd.. (TIBL); that the petitioner was Chairman of said TIBL; that respondent No, 3 got registered a criminal case bearing F.I.R. No, 13/2012, dated 21.11.2012, u/Ss. 409/489-F, PPC against TIBL and its management at police station FIA, Islamabad; that during investigation, FIA found the petitioner innocent and submitted challan in the Court by placing his name in column No 2 that after this development, there remains no justification for placing his name on the ECL; that the petitioner is a law abiding citizen and to travel abroad is his fundamental right guaranteed by the Constitution and he cannot be deprived of this right at the whims of the respondents; that the impugned letter is non-speaking as such it is hit by Section 24-A of the General Clauses Act, 1897. Relies on Messrs United Bank Ltd. v. Federation of Pakistan (2014 CLD 544), Mian Ayaz Anwar v. Federation of Pakistan (PLD 2010 Lahore 230), Jehangir Mehmood Cheema v. Government of Pakistan, Ministry of Interior through Secretary and .2 others (PLD .2015 Lahore 301) Munir Ahmad Bhatti v. Government of Pakistan, Ministry of Interior through Secretary and others (PLD 2010 Lahore 697).
3. Conversely, learned counsel for respondent No, 3. submits that the petitioner has an alternate remedy of filing review petition/representation under Section 3 of Exit from Pakistan (Control)
Ordinance, 1981 before the Ministry of Interior, as such this writ petition is not maintainable; that the petitioner was Chairman of Board of TIBL and without disclosing his interest with TIBL he also managed to join Privatization Commission (PC) as its Board Member; that the petitioner by misusing his authority as Member Board of PC managed to get invested Pakistan Rupees Five Hundred Million (PKR 500/- Million) with TIBL without taking into consideration interest of PC; that TIBL is not a scheduled bank and did not have the requisite rating for taking public deposits from bodies owned and controlled by the government as such the transaction was in violation of Section 19 of the Privatization Commission Ordinance, 2000 (Ordinance); that the petitioner being the member of Board of PC by using his influential position violated the provisions of Ordinance while influencing PC in investing large amount of money with TIBL; that public money equal to Rs, 396,546,868/- is still outstanding against TIBL; that Hon'ble apex Court has taken notice of a news article in the daily "The News" and during investigation the petitioner admitted his liability to pay outstanding amount; that in order to effect recovery of public money, management/ shareholders of TIBL was given a chance to return the money through settlement agreement dated 28.07.2011, however, the petitioner did not abide by the terms and conditions of the said settlement agreement inasmuch as cheques given pursuant to the terms of the agreement were dishonoured; that in compliance of the direction of the Hon'ble Supreme Court of Pakistan in Suo Motu Case HRC No, 4498-G/2012 to the Secretary Finance for making effort to recover the remaining amount a meeting was held, wherein respondent No, 3 put an offer to reschedule the principal amount and interest for a period of one year if the TIBL furnished bank guarantee; that the petitioner being Chairman of TIBL refused to accede to this offer which shows that he is not willing to return the public money; that during investigation of criminal case by FIA, the petitioner admitted his liability and he was never declared innocent by the FIA; that the matter is subjudice before the Hon'ble Apex Court as such this Court should not intervene with the same; that if the petitioner is allowed to escape from Pakistan then public money will not be recovered; that if the petitioner's name is removed from the ECL it would be prejudicial to the interest of the respondent/PC.
4. I have heard the arguments advanced by the learned counsel for the parties and gone through the record.
5. The name of the petitioner was placed on ECL at the instance of Privatisation Commission which is constituted by the government under the Privatisation Commission Ordinance, 2000 for fair and transparent process of privatisation through sale of assets owned by the State and to provide utilization of the proceeds of privatisation for the retirement of Federal Government deb' and poverty alleviation. Sections -18 of the Ordinance ibic reads as under:- "18. Investment.--- The Commission may, insofar as its money. are not required to be expanded under this Ordinance, invest in such manner as set out Section 20 of the Trusts Act, 1882 (II of 1882)
19. Bank accounts.--- The Commission may open and maintain it accounts at such scheduled banks as it may from time to time determine in consultation with the Federal Government."
6. Para No,3(a) of Finance Division Office Memorandum No, F.4(1)/2002-BR-II, dated 2nd of July, 2003 reads as under:--- "For the sake of the safety and security of deposits, bank/financial institutions taking a deposit should have a minimum "A" rating (long-term) as appearing on the web-site on the State Bank of Pakistan. This "A" rating refers to the rating scale used by Pakistan Credit Rating Agency and JCR VIS Credit Rating Company for banks incorporated in Pakistan and Moody's, Fitch's and Standard & Poor's rating for foreign banks operating in Pakistan. Rating scales of other agencies acceptable to the State Bank should be equivalent to the rating of the above mentioned companies.
Information and clarification on this matter may be obtained from Banking Policy Department of the State Bank of Pakistan;"
7.This para was further amended by the Finance Division vide office memorandum No, F.4(1)2002- BR.II-460, dated 22nd of September, 2005 in the following terms:-- "For the sake of the safety and security of deposits, the banks/financial institutions taking a deposit should have a minimum "A" rating as appearing on the web-site of the Credit Rating Agency. This "A" rating refers to the rating scale used by Pakistan Credit Agency and JCR-VIS Credit Rating Company for banks incorporated in Pakistan and Moody's, Fitch's and Standard & Poor's rating for foreign banks operating in Pakistan. Rating scales of other agencies acceptable to the State Bank should be equivalent to the rating of the above mentioned companies. Information and clarification on this matter may be obtained from Banking Policy Department of the State Bank of Pakistan;"
8. PC made placement of funds of Rs, 500 Million with TIBL, which was a non-banking financial institution through two separate Certificates of Deposits of one year tenure, amounting to Rs, 300 million and Rs, 200 million on 26th May, 2010 and 28th June, 2010 respectively and at that time the TIBL had "A3". and "BBB" ratings on short term and long terms basis respectively as evaluated by Pakistan Credit Agency. It is thus quite evident that the said placement is in clear contravention of the aforesaid Sections including Section-14 of the Ordinance as well as the office memorandums reproduced supra.
9. Now the question which arises is, as to why the PC decided to place such a huge sum of public money in a non-banking institution in clear contravention of the provisions of the Ordinance and Circulars of the Finance Division. While going through the record minutely it came to surface that the petitioner in the present case was Chairman of TIBL but simultaneously, during the same period, he was also holding the post as a Member of the Board of Directors of PC which was in sheer disregard to sub-section (9) of Section 7 of the Ordinance which provides as under:-- "(7)(9) The Chairman, Secretary or a member shall not have any direct or indirect financial interest, or have any connection with any person engaged in privatisation for so long as he .holds office and for a period of two years thereafter."
Similarly, Section 13 of the Ordinance requires that a person who is attending the meeting was required to disclose his direct or indirect financial interest in the subject under consideration in the meeting. For ready reference said Section is reproduced as under:-
(13) "Disclosure of Interest.---
(1) Where a person is present at a meeting of the Board or committee of the Board and that person or his family or his professional or business partner or associate has direct or indirect interest in the subject of consideration in that meeting, that person shall---
(a) forthwith disclose such an interest; and
(b) not take part in any consideration on that matter unless the Board or the committee thereof otherwise directs
(2) Where a member of the Commission, staff or other employee of the Commission, including an advisor, consultant or his family has a direct or indirect interest in any matter relating to privatisation such person shall forthwith disclose that interest to the. Commission and the Commission shall have the right to take such action as it considers appropriate."
10. No such disclosure was made by the petitioner at the relevant time rather he by using his influence as Member of the PC succeeded to get invested such amount of rupees five hundred million in the TIBL without having regard to the interest of the PC. Section-12 of the Ordinance reads as under:--- "The Chairman, Secretary, members, officers, employees and other persons authorized to perform or exercise any function or power under this Ordinance or rendering services to the Commission as agents, advisers or consultants shall be deemed to be public servants within the meaning of Section 21 of the Pakistan Penal Code, 1860 (Act XLV of 1860)."
11.This Court as well as the Hon'b(e apex Court has time and again emphasized upon reinforcement of' good governance and strict observance of rules by the public functionaries. The public functionaries are required to exercise their authority in particular while dealing with the public property, public funds in fair, transparent, just and reasonable manner and for safeguarding the rights of the people of Pakistan. In case reported as Habibullah Energy Limited and another v.
WAPDA through Chairman and others (PLD 2014 Supreme Court 47), the Hon'ble apex Court held as under:-- "At the outset, it is important to clarify a fundamental principle regarding the nature of public sector enterprises which seems to have eluded learned counsel for the respondents. Public sector enterprises, such as the power plant at Lakhra, are public assets which belong beneficially to the people of Pakistan. While the state is entrusted with the management of such enterprises, the state agencies responsible for management do not thereby become owners of the enterprise and its assets. While public sector enterprises do not have shareholders like private corporations, this does not mean that the agency responsible for the management of the enterprise can exercise unbridled discretion in managing the enterprise.
3. In order to ascertain the proper role of State agencies in the management of public sector enterprises, it is of critical importance to understand the nature of government as defined by our constitutional government, whereby power is delegated by the people to the government in accordance with the terms of the Constitution. The preamble to the Constitution stipulates, inter alia, "that it is the will of the people of Pakistan to establish an order." State agencies responsible for the management of publicly owned, companies are part of the order established by the will of the people, and thereby possess merely delegated authority.
4. Rather than being owners of public sector enterprises, State agencies stand in a fiduciary relationship to the people who are the beneficial owners of the publicly owned assets. The idea that rulers owe a fiduciary obligation to the ruled is at least two millennia old. The Roman philosopher and politician Cicero defined the nature of government as follows in De Offices, "The guardianship of the state is a kind of trusteeship which should always be managed to the advantage of the person [or body which has] entrusted rather than of those to whom it is entrusted." We have on numerous occasions emphasized the fiduciary nature of the interaction between the State and the citizen. In Muhammad Yasin v. Federation of Pakistan (PLD 2012 SC 132), we held that "holders of public office are first and foremost fiduciaries and trustees for the people of Pakistan..... And when performing the functions of their Office, they can have no interest other than the interests of the honourable people of Pakistan." The basis of fiduciary relations is the exclusive benefit principle, according to which the fiduciary has a duty to act solely the interest of the beneficiary.
Fiduciary obligations depend on the complete commitment of the fiduciary to act in the best interest of the principal.
5. It is important to note that a fiduciary obligation is not merely an ethical precept. As a legal imperative, fiduciaries must act in the best interests of the principal, performing their functions with care and complete fidelity. In the private law context, where fiduciary duties are routinely enforced by the Courts, elections alone are not considered sufficient to hold company directors responsible to shareholders and align their interests. Instead, in the area of corporate law, there is a recognition that the interests of elected directors and shareholders may diverge. Given that shareholders are numerous and diffuse, it may be difficult for them to effectively monitor the decisions taken by the board. Further because of collective action problems, the shareholders may find it difficult to coordinate and respond to abuse of discretionary authority by the directors.
Hence, corporate law employs a judicial mechanism, the enforcement of fiduciary duties, to align the interests of the shareholders and their agent, the board of directors. The structure of the principal agent problem is the same in the case of state agencies, such that public officials may have an incentive to advance their own interests at the expense of the citizens' interests. In fact, the need for a judicial mechanism is even more acute in the case of state agencies, since the principal, the people, is even more numerous and diffuse than the shareholders of a company.
6. At this point, it is important to note that not all decisions by state functionaries are to be subjected to an exacting judicial oversight. This is because the principal, (the people), has in fact vested state agencies with discretionary power of an administrative nature. Such delegation of authority by the principal is essential to the efficient functioning of the government. However, given the possibility of the agent's deliberate or negligent deviation from the best interests of the beneficiary, the Court will enforce fiduciary obligations under certain circumstances. A breach of the duty of loyalty, such as in the case of a self-dealing transaction or one involving conflict of interest, will trigger heightened scrutiny by the court. Further, if public officials fail to exercise the duty of care that is expected of a prudent manager, the Court will assess the underlying action or transaction to ascertain whether the state functionaries have breached their fiduciary obligations to the people of Pakistan."
12. The petitioner being public servant has failed to perform his duty under the law and apparently with his active connivance TIPL succeeded to procure substantially large sum of public funds illegally and which it was not authorized under the law to secure. Despite being given several opportunities neither the petitioner nor TIPL is willing to repay the same.
13. Now coming to the question under what circumstances the name of a person could be placed on Exit Control List (ECL). Before proceeding further it is expedient to reproduce sub-rule (1) of Rule 2 of Exit From Pakistan (Control) Rules, 2010 which reads as under:---
2. Grounds to prohibit persons from proceeding from Pakistan to a destination outside Pakistan.---(1) The Federal Government may, by an order in writing under sub-section (1) of Section 2 of the Exit from Pakistan (Control) Ordinance, 1981 (XL VI of 1981), prohibit any person from proceeding to a destination outside Pakistan notwithstanding the fact that any person is in possession of valid travel documents if he is involved in:
(a) corruption and misuse of power or authority . causing loss to the government's funds or property;
(b) economic crimes where large 'government funds have been embezzled or institutional frauds committed.
(c) acts of terrorism or its conspiracy, heinous crimes and threatening national security;
(d) case of key directors of a firm, in default of tax or liabilities of not less than ten million rupees;
(e) Case of two or more key or main directors of a firm, in default of loan or liabilities exceeding one hundred million rupees;
(t) any case and his name forwarded by the registrar of a High Court, Supreme Court of Pakistan or Banking Court only; or
(g) drug trafficking.'
14. The petitioner by misusing his authority as Member of the PC firstly managed to get invested huge amount of public money in a non-banking institution i,e, TIBL which was chaired by him and then expressed its inability to return the amount upon maturity of the terms of the Certificates of Deposits. In order to secure public money PC entered into Settlement Agreement dated 28th, July, 2011 with TIBL pursuant to which TIBL deposited eight post dated cheques spanning over twelve (12) months period for repayment of the principal outstanding amount of Rs, 500 million and also agreed to pay service mark-up @ 14% per annum on the outstanding amount. However, on presentation of the cheques for payment the same were dishonoured due to insufficient funds and a criminal case bearing F.I.R. No, 13/12, dated 21.11.2012, u/Ss. 489-F & 409, PPC was registered against the petitioner and other management of TIBL at police station FIA SIU, Islamabad. It is thus quite evident that not only the petitioner misused his authority as a Member of PC but also failed as a public functionary to perform his fiduciary duty by failing to protect the interest of PC, of which he was a member to invest in a financial institution, TIBL, of which he was the Chairman when the said investment was being made in it. He also failed to disclose and bring on record his interest in TIBL but rather used his position as a Board Member of PC to procure the investment for his financial institution which is in direct conflict of Section 7(9) and Section 13 of the Ordinance. Further, prima facie he has also committed criminal breach of trust by handing over cheques which could not be encashed therefore, the rules reproduced supra clearly permitted respondent No, 1 to place the name of the petitioner on the ECL.
15. The Hon'ble apex Court also took notice of the matter vide HRC No, 4498/12 in February, 2012 and on 30th of December, 2013 passed the following order:-- "Beside criminal liability as the recovery of remaining huge public amount is the main consideration, Secretary Finance Division be directed to convene a meeting with all concerned (keeping in view the financial position, assets and capacity of TIBL) and to make an effort, if a schedule amount could be settled by the parties which can ensure recovery of the remaining amount and the mark-up accrued, amicably, within a year or so and to submit report in this regarding within 30 days."
16. In compliance with the aforesaid order Finance Secretary arranged a meeting on 21st January, 2010 whereby the petitioner being the Chairman of TIBL admitted its liability towards respondent No,
3. Secretary of PC put an offer for rescheduling the printamount and interest for a period of one year subject to furnishing of bank guarantee by the TIBL but the petitioner refused to accede to this proposal. This conduct of the petitioner speaks volumes about his attitude and treatment , of dealing with public money, by trying to usurp it through illegal and clandestine means, Matter is subjudice before the Hon'ble apex Court in a Suo Motu notice and under constant supervision of the Apex Court, TIBL has repaid Rs, 230 Million but still according to the learned counsel for respondent No, 3 more than Rs, 400/- million is outstanding on the part of TIBL. President of TIBL 'has already absconded from the country, therefore, in case the name of the petitioner is excluded from the ECL, stance of PC has full merit in it that there would remain a zero percent chance for recovery of the outstanding public money.
17.One of the main purpose of establishment of Privatisation Commission is to utilize its fund for alleviation of poverty but due to the aforesaid illegal act of the petitioner a substantial amount of Rupees Four Hundred Million is still yet to be recovered and utilized for the said purpose. Thus the said act of the petitioner also tantamounts to be a contributory factor in adding miseries in the lives of the poor. Even before this Court, during the course of arguments learned counsel for the PC put an offer that if the financial institution of the petitioner i,e, TIBL furnishes a bank guarantee of the remaining outstanding amount, he would have no objection for excluding his name from the ECL, but the learned counsel for the petitioner on instructions refused to accept this offer. This also shows that the petitioner is holding on to the funds illegally acquired by his financial institution thus leaving PC unsecured in terms of its ability to recover the amount in compliance with the guidelines of the Hon'ble apex Court.
18. In the case of collapse of a Fly Over in Karachi names of certain responsible were placed on ECL and the Sindh High Court ordered for exclusion of their names, however, in appeal the Hon'ble apex Court in case reported as Prime Minister Inspection Team National Highway Authority v. Zaheer Mirza and others (2011 SCMR 371) while suspending the operation of the judgment of the Sindh High Court observed as under:--- "Operation of the impugned judgment dated 29-5-2009 passed by the High Court is suspended.
The names of the respondents shall continue to be on Exit Control List and Mr. Shahadat Awan, Prosecutor General, Sindh, if considers that names of any other person/persons connected directly or indirectly with the collapse of Fly Over at Peracha Chowk, Northern Bye-Pass, Karachi, shall recommend to the Secretary Interior, Government of Pakistan for placing his/their names on ECL, pending decision of the cases before the competent forums till finalization of the matter."
Ratio decidendi in the aforesaid case is fully applicable in the circumstances of the present case, as here also the petitioner is directly involved in misusing his authority as Member of PC and causing loss to public money for which criminal as well as civil litigation is pending against him before the competent forums.
18-A. The learned counsel for the petitioner during the course of arguments while referring to incomplete challan submitted by the FIA in the aforesaid criminal case has laid a lot of emphasis that during the investigation of said case the petitioner has been declared innocent as such there remains no justification for retaining the name of the petitioner on the ECL. I have minutely gone through the aforesaid report u/S. 173 of Cr.P.C. and have not found anywhere opinion of the I.O. that the petitioner is innocent in the said case rather he has opined that the petitioner alongwith one Awais .Yasin committed through their written undertaking that they will pay back remaining amount as per Settlement Agreement dated 28.07.2011. (which was not later on honoured by the petitioner). Learned counsel for respondent No, 3 on the contrary has placed on record copy of supplementary challan of the aforesaid criminal case, where, during re-investigation, the petitioner was found fully involved with the commission of alleged offences and supplementary challan was submitted by declaring him guilty. It is thus apparent that the plea of being declared innocent in the investigation of the criminal case is no more available to him.
19. This Court is well cognizant of the fact that to travel abroad is a fundamental right of a person enshrined in the Constitution but at the same time it is also to be borne in mind that no fundamental right guaranteed by the Constitution is absolute and the State is empowered to impose certain "reasonable" restrictions to regulate this right. There is no bar in exercising such right but the interest of public at large should be guarded as public policy. Prima facie, the petitioner has been instrumental in illegally misappropriating a large amount of public money and is still not ready to return the same, therefore, in order to safeguard the interest of public, this Court is not inclined to interfere in the action taken against him of placing his name on the ECL.
20. The case-law relied upon by the petitioner is entirely on different footings as almost in all these cases bank safeguarded its interest against the loan by acquiring necessary securities and by mortgaging property of the debtor but this case is of a very unique nature, where, no adequate steps to obtain an appropriate security to safeguard the public money invested in the institution of the petitioner, i,e, TIBL were taken and even when the dispute arose and the parties arrived at a Settlement Agreement the petitioner deliberately and belligerently fails to honour the same.
21. In the above backdrop, this Court is fully convinced with the argument of learned counsel for respondent No, 3, that if the name of the petitioner is removed from the ECL it would be prejudicial to the rights of PC as well against the public interest. Resultantly, this petition is dismissed. No order as to costs. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.