"The ancient idea of a perfect primitive society is a poetic fiction; the modern idea of a society growing more human, more just, more reasonable, is a reality . "1 TARIQ SALEEM SHEIKH, J.---This appeal under section 13(c) of the National Accountability Ordinance, 1999 ("NAO"), is directed against order dated 3.9.2020 passed by the learned Judge Accountability Court, Multan, whereby freezing order of Respondent No.2 (Director General NAB, Multan) dated 6.8.2019 was confirmed and appointment of receiver was upheld.
2. Brief facts of the case are that Muhammad Zahid and 27 others made a complaint to the NAB authorities against the Petitioner and his cohorts accusing them of launching a housing scheme by the name of Babar Town at Old Shujabad Road, Tehsil and District Multan, without statutory approvals, luring the general public to buy plots and misappropriating their deposits. An inquiry was initiated on that complaint which was subsequently upgraded to investigation. The NAB authorities found evidence of cheating and corrupt practices against the {{FOOT NOTE}} Colt, Le Baron B. "Law and Reasonableness", Annual Report of the American Bar Association. 26, 1903, p. 341-
362. HeinOnline. {{FOOT NOTE}} Petitioner and his co-accused whereupon they filed Reference No.28/2019 azainst them in the Accountability Court, Multan, on 25.11.2019. During the course of investigation, purportedly in exercise of the powers under section 12 of the NAO, Respondent No.2 vide order dated 6.8.2019 froze the Petitioner's land measuring 120 kanals 05 marlas situated in Mauza Lutfabad, Tehsil Saddar , District Multan (the "Property"), alleging that there were reasonable grounds to believe that he had purchased it from crime proceeds. Simultaneously he appointed the Assistant Commissioner , Saddar Multan, as receiver of the Property empowering him to exercise all the powers mentioned in Order XL of the Code of Civil Procedure, 1908 ("C.P .C."). On 8.8.2019 the NAB authorities made an application to the Accountability Court for confirmation of the said order . The Petitioner also filed an objection petition under section 13(a) of the NAO. The learned court, vide impugned order dated 3.9.2020, dismissed the objections and confirmed the freezing order and the appointment of receiver . Hence, this appeal.
3. During the hearing of this appeal the learned counsel for the Appellant abandoned his challenge to the freezing of the Property and restricted his objection to the appointment of receiver . He contended that it was unwarranted because there was no allegation that the Property was in danger of being wasted or destroyed in the Appellant's hands.
4. The learned Special Prosecutor for NAB controverted the above contention and supported the impugned order .
5. Arguments heard. Record perused.
6. Article 17 of the Universal Declaration of Human Rights (1948) enshrines the right to property in the following terms: Article 17
(1) Everyone has the right to own property alone as well as in association with others.
(2) No one shall be arbitrarily deprived of his property .
7. Article 21 of the American Convention on Human Rights recognizes the right to protection of property , including the right to just compensation. It states:
(1) Everyone has the right to the use and enjoyment of his property . The law may subordinate such use and enjoyment to the interest of society . (2) No one shall be deprived of his property except upon payment of just compensation, for reasons of public utility or social interest, and in the cases and according to the forms established by law .
(3) Usury and any other form of exploitation of man by man shall be prohibited by law .
8. Article 1 of the First Protocol to the European Convention on Human Rights provides:
(1) Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law .
(2) The preceding provisions shall not, however , in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.
9. The African Charter on Human and Peoples' Rights protects the right to property more explicity in Article 14 stating: The right to property shall be guaranteed. It may only be encroached upon in the interest of public need or in the general interest of the community and in accordance with the provisions of appropriate laws.
10. In Pakistan, Articles 23 and 24 of the Constitution of 1973 recognize the right to property as a fundamental right and declare that it cannot be syncopated without due sanction of law .
11. Despite all the reverence for the right to property there is consensus that it is not an absolute right. International law and municipal law of every country allows imposition of reasonable restrictions on it in the public interest. "The test of reasonableness", writes Justice Fazal Karim, "is to be applied in every case individually and not with reference to any abstract standard or general pattern. The proposition that emerges from decided cases is that in deciding whether any particular law provides for reasonable restrictions on a fundamental right, not only the substantive portion of the law but also the procedural part by which the eventu al result is secured has to be scrutinized. The court in such cases has to consider the nature of the restrictions , the manner in which they are imposed and -their extent both territorial and temporal. "2 The following excerpt from the judgment of Lord Toulson in Barnes v . The Eastenders Group and another [2014] UKSC 26 , is also instructive: "However , in order for a taking of private property to be compliant with [Article 1 of the First Protocol to the European Convention on Human Rights], not only must the measure under which the property is taken pursue a legitimate aim in the public interest, but there must be a reasonable relationship of proportionality between the means employed and the aim sought to be realized. The court in James'; repeated its statement in Sporrong4 that a 'fair balance' must be struck between the demands of the general interest of the community and the requirements of the' protection of the individual's fundamental rights, and it added that the requisite balance will not be found if the person concerned has had to bear an individual and excessive burden."
12. Barnes also affirmed the holding in the James' case that any law which imposes restrictions on the right to property must be compatible with the rule of law and not arbitrary .
13. In Pakistan the courts have iterated in a cornucopia of cases that any law that limits fundamental rights must be strictly construed and the authority exercising powers thereunder must act reasonably . Reference in this regard may usefully be made to Pakistan Broadcasters Association and others v. Pakistan Electronic Media Regulatory Authority and others (PLD 2016 SC 692 ) in which the Hon'ble Supreme Court held: "Undoubtedly no one can be deprived of his fundamental rights. Such rights being incapable of being divested or abridged. The legislative powers conferred on the State functionaries can be exercised only to regulate these rights through reasonable restrictions, and that too only as may be mandated by law and not otherwise. The authority wielding statutory powers conferred on it must act reasonably (emphasis supplied) and within the scope of the powers so conferred."
The apex Court added: "It is certainly not easy to define 'reasonableness' with {{FOOT NOTE}} 2 Fazal Karim, Judicial Review of Public Actions (Second Edition) p.1120, citing Bazal Ahmad Ayyubi v. The West Pakistan Province (PLD 1957 Lah. 388) and Saiyyid Abut A'la Maudoodi and 2 others v. The Government of West Pakistan and another ( PLD 1964 SC 673 )
3 James and others v . United Kingdom, (1986) 8 EHRR 123 4 Sporrong and Lonnroth v . Sweden, (1982) 5 EHRR 35 {{FOOT NOTE}} precision. It is neither possible nor advisable to prescribe any abstract standard of universal application of reasonableness However , factors such as the nature of the right infringed, duration and extent of the restriction, the causes and circumstances prompting the restriction, and the manner as well as the purpose for which the restrictions are imposed are to be considered. The extent of the malice sought to be prevented and/or remedied, and the disproportion of the restriction may also be examined in the context of reasonableness or otherwise of the imposition. It needs to be kept in mind that 'reasonable' implies intelligent care and deliberation, that is, the choice of course that reason dictates. For an action to be qualified as reasonable, it must also be just, right and fair, and should neither be arbitrary nor fanciful or oppressive."
14. "Freezing order" is now a common practice in many countries in both civil and criminal cases. In England, in civil matters it is often referred to as Mareva injunction and is issued to prevent a debtor from disposing of his assets or removing them from the country before the conclusion of the trial with a view to defeat his creditor's claim.
On the other hand, in criminal cases the freezing order is issued as an interim measure to preserve the property while the proceedings are pending so that it is available if the court makes a confiscation order at the end. Lately , there is an increasing realization that criminals take steps to conceal their profits from crime and often make investments in real estate. Therefore, legislatures in various countries have enacted laws to strip them of such profits. In R v. Rezvi [2003] 1 AC 1099, Lord Steyn observed: "It is a notorious fact that professional and habitual criminals frequently take steps to conceal their profits from crime. Effective but fair powers of confiscating the proceeds of crime are therefore essential. The provisions of the 1988 Act are aimed at depriving such offenders of the proceeds of their criminal conduct. Its purposes are to punish convicted offenders, to deter the commission of further offences and to reduce the profits available to fund further criminal enterprises. These objectives reflect not only national but also international policy ."
15. The NAO is one of the statutes in Pakistan with similar objectives. It targets those involved in corruption and corrupt practices.
16. Section 12(a) of the NAO empowers the Chairman NAB and the Accountability Court to freeze an accused's property at any time if there appear reasonable grounds for believing that he has committed an offence punishable under the NAO. The said power may be exercised whether the property is in his own possession or of his relative, associate or some other person. Section 12(c) stipulates that if the property ordered to be frozen is immovable, the freezing shall, in the case of land paying revenue, be made through the District Collector concerned, and in all other cases -
(i) by taking possession; or
(ii) by appointment of receiver; or
(iii) by prohibiting the payment of rent or delivery of the property to the accused or to any other person on his behalf; or
(iv) by all or any such methods as the Chairman NAB or the Court may deem fit.
Section 12(e) adds that where a receiver is appointed, his powers, duties, and liabilities shall be the same as those of a receiver appointed under Order XL of C.P .C.
17. Section 12 of the NAO has to be read in conjunction with clause (1) of section 5 thereof as it defines the term "freezing". It says:
(1) "Freezing" includes attachment, sealing, holding, controlling or managing any property either through a Receiver or otherwise as may be directed by the Court or Chairman NAB, and in case it is deemed necessary the disposal thereof, by sale through auction or negotiation subject to confirmation by the Court or by Chairman as the case may be after public notice.
18. Any person aggrieved of a freezing order under section 12, ibid, may file his claim or objection thereagainst before the Accountability Court within 14 days extendable for a period not exceeding 14 days. The accused or any other aggrieved party whose claim or objection has been dismissed by the Accountability Court may appeal to the High Court.
19. The powers conferred on the Chairman NAB and the Accountability Court by section 12 are not unfettered.
They can make a freezing order only if "there appear reasonable grounds for believing" that the accused has committed an offence under the NAO. True, the NAO does not define this express ion but section 26, P.P.C. gives us a cue about what it connotes. It reads:
26. "Reason to believe".--- A person is said to have "reason to believe" a thing if he has sufficient cause to believe that thing but not otherwise.
20. It is thus evident that law recognizes the distinction between "belief' and "suspic ion" which is also understood in the English language. The former connot es "conviction of the truth of some statement or the reality of some being or phenomenon especially when based on examination of evidence"' In contrast, "suspicion" means "the act or an instance of suspecting something wrong without proof or on slight evidence."6 In Shaaban bin Hussien and others v. Chong Fook Kam and another [1969] 3 All ER 1626 (PC), the Privy Council explained that "suspicion in its ordinary meaning is a state of conjecture or surmise when proof is lacking; 'I suspect but I cannot prove,' " while in Hunter et al v. Southern inc., [1984] 2 SCR 145, the Supreme Court of Canada ruled that "reasonable ground to believe" is "the point where credibly-based probability replaces suspicion."
'
21. Halsbury's Laws of India' explains: "A person is said to have 'reason to believe' a thing, if he has sufficient cause to believe that thing but not otherwise. The term 'reason to believe' is not a matter of purely subjective satisfa ction. The belief must be of an honest and reasonable man. It must be held in good faith and this faith must not be merely pretense. There must be relevant material to sustain such a belief and must not be based on mere suspicion, gossip or rumour . 'Reason to believe' suggests that there must be prima facie material even if such material is not precise or absolutely certain without any possibility of doubt. However , the belief must be that of an honest and reasonable person based upon relevant materials and circumstances ... Suspicion or doubt may not be raised to the level of 'reason to believe'.
Whether there was suf ficient cause to have reason to believe is a question of fact."
22. In K. Munivelu v. The Government of India and others (AIR 1972 AP 318) the Andhra Pradesh High Court held that "reasons to believe' means coming to a final conclusion on the basis of the information that a thing, condition, statement or a fact exists."
23. The Federal Court in Pakistan considered the phrase "reason to believe" in (Moulvi) Fazlul Qader Choudhury v. Crown (PLD 1952 FC 19 ) and approved the following observations of the High Court: "I think it is not enough to show that there is reason to suspect that the articles found have been stolen or fraudulently obtained. Something more is required and that something is 'reason to {{FOOT NOTE}} 5 Merriam-W ebster Online Dictionary 6 Ibid. 7 Volume 5(1) {{FOOT NOTE}} believe', 'belief' being a conviction of the mind arising not from the actual perception or knowledge but by way of inference of evidence received or informa tion derived from others. It falls short - of an 'absolute' certainty because the accused, in accounting for his possession, may be able to show that the grounds upon which it is based are unsubstantial."
24. Similarly , in Ch. Abdul Malik v. The State (PLD 1968 SC 349), the Hon'ble Supreme Court of Pakistan observed: " 'Reasonable grounds' is an expression which connotes that the grounds be such as would appeal to a reasonable man for connecting the accused with the crime with which he is charged, 'grounds' being a word of higher import than 'suspicion'. However , strong a suspi cion may be it would not take the place of reasonable grounds. Grounds will have to be tested by reason for their acceptance or rejection."
25. Again, in Chaudhry Shujat Hussain v . The State (1995 SCMR 1249 ), the Supreme Court held: "The term 'reason to believe' can be classified at a higher pedestal than mere suspicion and allegation but not equivalent to prove evidence. Even the strongest suspicion cannot transform in 'reason to believe' ."
26. The importance of distinguishing between "reasonable suspicion" and "reasonable grounds to believe" lies in the fact that "they set different standards for judicial assessment of whether a legal threshold has been met in a particular case. In the former it suffices if the concerned person thinks that there is a possibility , which is, more than fanciful, that the relevant facts exists." On the other hand, the standard applicable to "reasonable grounds to believe" has both an objective and subjective facet. "The person concerned must not only subjectively believe that the standard has been met, but the grounds must be objectively justifiable in the sense that an ordinary prudent person in his place would conclude that there were indeed reasonable grounds. "9
27. In the instant case, the learned Special Prosecutor referred us to various docum ents to show that the Chairman NAB had reasonable grounds to believe (within the meaning explained above) that the Appellant had committed an offence punishable under the NAO and purchased the Property from crime proceeds. He relied upon Crown Prosecution Service v . Compton [2002] EWCA Civ 1720 , to argue that {{FOOT NOTE}} 8 Da Silva v . Regina, [2006] 4 All. ER 900 9 Ronald Percy Storrey v . Her Majesty the Queen, [1990] 1 SCR 241 {{FOOT NOTE}} since freezing was an interim measure, the said documents were sufficient to justify it. Inasmuch as the learned counsel for the Appellant has abandoned his challenge to the freezing of the Property , we need not go into its vires.
However , we do emphasize that a freezing order under the NAO would be valid only if it fulfills the conditions stipulated in section 12 thereof, particularly the one relating to 'reasonable grounds to believe'.
28. The moot point is whether appointment of receiver was justified on the facts and in the circumstances of the present case. In Capewell v. Her Majesty's Revenue and Customs [2007] UKHL 2, Lord Walker observed that "the court's power to appoint a receiver , as part of its auxiliary equitable jurisdiction, is of very ancient origin. It was described in Hopkins v. Worcester and Birmingham Canal Proprietors, (1868) LR 6 Eq 437, 447, as one of the oldest remedies in the Court of Chancery . It was used in a variety of situations in which there was a need for the interim protection of property (and the income of property), including dispute s about partnerships, sales or mortgages of land, and administration of estates. Receivers could also be appointed by way of equitable execution.
The receiver , being appointed by the court, was an officer of the court. His duty was to act impartially , and in accordance with the directions of the court, in administering the property to which the receivership extended. In short, the appointment of a receiver was in many cases the most effective way of 'holding the ring' between warring litigants until the disputed issues could be finally determined. Because it is a useful procedure, the Parliament has from time to time extended the range of situations in which a receiver or manager could be appointed." The latter are sometimes called statutory receivers.10
29. The first issue that needs to be addressed is whether the appointment of receiv er is mandatory under clause (c)
(ii) of section 12 of the NAP when a freezing order is made. The learned Special Prosecutor contends that it is because the word "shall" has been used in that clause.
30. Ordinarily the words "shall" or "must" show that the legislature intended to make the provision mandatory while use of the word "may" would indicate that it wanted to make it directory but they are often used interchangeably .
N.S. Bindra's Interpretation of Statutes (T enth Edition) says: "The word 'shall' in its ordinary signification is mandatory though there may be considerations which influence the court in {{FOOT NOTE}} 10 Hughes and others v . HM Customs and Excise Commissioners [2002] EWCA Civ 734 {{FOOT NOTE}} holding that the intention of the legislature was to give discretion. But this word is not necessarily mandatory , not always mandatory . Whether the matter is mandatory or directory only depends upon the real intention of the legislature which is ascertained by carefully attending to the whole scope of the statute to be construed."
31. Crawford in The Construction of Statutes (2014 Edition) states: "If the language of the statute, considered as a whole and with due regard to its nature and object reveals that the Legislature intended the words 'shall' and 'must' to be directory , they should be given that meaning. Similarly , under the same circumstances, the word 'may' should be given a mandatory meaning, and especially where the statute concerns the rights, and interests of the public, or where third persons have a claim de jure that a power shall be exercised, or whenever something directed to be done for the sake of justice or the public good, or is necessary to sustain the statute's constitutionality ."
32. In Muhammad Saleh v. The Chief Settlem ent Commissioner , Lahore and 2 other s (PLD 1972 SC 326), the Hon'ble Supreme Court of Pakistan observed: "It is now well settled that the words 'may' and 'shall' in legal phraseology are interchangeable, depending on the context in which they are used, and are not to be interpreted with the rigidity which is attributed to them in ordinary parlance."
33. In The State through Regional Director ANF v. Imam Bakhsh and others (2018 SCMR 2039 ) the Hon'ble Supreme Court ruled: "Our Court has held while determining the status of a mandatory or directory provision that 'perhaps the cleverest indicator is the object and purpose of the statute and the provision in question.' And to see the 'legislative intent as revealed by the examination of the whole Act."1 1
34. From the above it follows that there is no principle of universal application to classify a provision as mandatory or directory . It depends upon the intent of the legislature rather than the phraseology used. {{FOOT NOTE}} 11 Internal citations omitted. {{FOOT NOTE}} S.M. Zafar fully supports this postulation in his book " Understanding Statutes" (Fourth Edition). He writes: "To sum up, in determining the mandatory or directory nature of the command of the statute, the form of words used may give initial indication but finally the interpreter must ascertain the intention of the legislature ... There is a long catalogue of such words which are used in enabling statutes such as 'may', 'must', 'it shall be lawful', 'shall', 'shall be the duty', 'authorized', 'ought', 'shall have power', 'thinks necessary', 'consider necessary', 'fairly', 'bona fide', 'having regard to', 'should', 'as he deems fit', etc. In interpreting these words in the context of they being permissive or compulsory the objective of the statute, the purpose and the nature of things required to be done which are indicated by the legislature have to be taken into consideration."
35. The objective of the NAO is well-identified. It aims to eradicate corruption and corrupt practices, to hold accountable all those people who are accused of such practices and recover State money and other assets which they may have misappropriated.2 Section 9 describes what practices are tainted and criminalizes them and section 10 prescribes punishment therefor which includes rigorous imprisonment for a term which may extend to 14 years, fine and forfeiture of ill-gotten assets. Section 11 further stipulates that the fine shall not in any case be less than the gain derived by the convict. Thus, as discussed earlier , the NAO not only punishes the offenders but also deprives them of the proceeds of their crime. Section 23 prohibits an accused from transferring any of his properties after the Chairman NAB has initiated an inquiry or investigation of any offence against him and declares that such alienation would be ipso facto void. Section 12 confers additional powers on the Chairman NAB and the Accountability Court to freeze an accused 's property . The legislative intent behind sections 12 and 23 is to preserve the assets and ensure that the accused does not thwart the process of law .
36. Appointment of receiver is always considered to be oppressive and searing. In Lala Roshan Lal and others v.
Ch. Muhammad Afzal and others (PLD 1949 Lahore 60 ), this Court held: "The court by taking possession at the instance of the plaintif f may be doing a wrong to the defendant; in some cases an irreparable wrong. If the plaintif f should eventually fail in establishing his right against the defendant, the court may by its {{FOOT NOTE}} 12 Preamble of the NAO {{FOOT NOTE}} interference have caused mischief to the defendant for which the subsequent restoration of the property may afford no adequate compensation."
37. Similarly , in Norgulf Holdings Limited v. Michael Wilson and Partners Limited , the Court of Appeal of the British V irgin Islands held:"
"The appointment of a receiver is more intrusive, more expansive, and less reversible than the grant of an injunction [It] is usually more draconian than issuing a freezing order because of the expenses and inconvenience which often arise with that appointment."
38. The object of freezing is to keep the assets available to satisfy the final order of confiscation if one is made. The NAO defines the term "freezing" quite expansively and it includes holding controlling and managing any property through a receiver or otherwise. Inasmuch as appointment of receiver is an extremely harsh step, the Legislature could not have intended that the Chairman NAB and the Accountability Court should invoke clause (c)(ii) of section 12 of the NAO in routine. Instead, it wanted them to act judiciously and balance the competing interests of the society and the accused in every case. Hence, the aforesaid provision must be taken as permissive or enabling rather than being mandatory . We are persuaded to draw this conclusion also from two other factors: first, clause (b) of section 12 of the NAO does not make appointment of receiver compulsory where the property ordered to be frozen is a debt or other movable property . Secondly , clause (e) of section 12 uses the words "receiver , if any, appointed under the section" while describing the powers, duties and liabilities of a receiver .
39. But was the appointment of receiver really necessary in the instant case? The State must satisfy the "rule of fair balance." In Jahn v . Germany , (2006) 42 EHRR 1084, the European Court of Human Rights said: "The Court reiterates that an interference with the peaceful enjoyment of possessions must strike a 'fair balance' between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental rights ... In partic ular, there must be a reasonable relationship of proportionality between the means employed and the aim {{FOOT NOTE}} 13 www .worldcourts.com /acsi/eng/decisions/2007.10.29_Norgulf_holdings_v_Michael_wilson_&_Partners.pdf {{FOOT NOTE}} sought to be realised by any measure depriving a person of his possessions."
"In determining whether this requirement is met, the Court recognizes that the State enjoys a wide margin of appreciation with regard both to choosing the means of enforcement and to ascertaining whether the consequences of enforcement are justified in the general interest for the purpose of achieving the object of the law in question."
40. In England Hughes and others v. HM Customs and Excise Commissioners [2002] EWCA Civ 734: [2003] I WLR 177, is the leading authority that inter alia describes the position with regard to receivers appointed under Part-VI of the Criminal Justice Act, 1988, and the Drug Trafficking Act, 1994, with a view to conserving and realizing the assets of an accused which may become subject to a confiscation order . Lord Justice Simon Brown observed: "Statutory receivers are to be treated precisely as their common law counterparts save to the extent that the legislation expressly provides otherwise. The statute is not to be regarded as an entirely self-contained code incorporating nothing from the common law ."
He further held: "Given that restraint and receivership orders can, as perhaps these very cases show , bear heavily upon the individuals involved and may leave acquitted defendants with substantially depleted assets, the court should, in deciding whether initially to make, and whether thereafter to vary or discharge, such orders, weigh up the balance of competing interests with the greatest care. The Crown's concern to safeguard an accused's property against dissipation or removal abroad must alway s be weighed against the possibility that the price to be paid will fall upon an innocent man. It is important that this legislation continues to be operated to strip criminals of their ill-gotten gains. But it is important too that the court keeps a close control over those it appoints to act as receivers on its behalf and that costs are not too readily incurred, particularly before any confiscation order is made."
41. A wade through section 12 of the NAO shows that it only describes the powers, duties and liabilities of a receiver but does not specify the conditions under which he may be appointed. In the absence of any guidelines the above-mentioned principles which are based on equity and good conscience can be legitimately followed. We can also seek guidance from Order XL, C.P.C. as section 12 of the NAO has adopted a part thereof by legislative reference. Rule 1 of the said Order stipul ates that a court should appoint a receive r when it appears to it "just and convenient." The jurisprudence developed on this provision holds that although the decision depends on the facts of each case, the court is generally inclined when there is evidence that the property is in danger of being misappropriated, wasted or dissipated.14
42. In the instant case, Respondent No.2 passed the receivership order mechanically . He has not stated why receiver was required. He has not said a word from which it could be determined whether the means employed were proportional to the aim sought to be realized. There is a violation of not only section 24-A of the General Clauses Act, 1897, but also the law of discretion. When the legislature confers discretion on a court of law or an administrative authority it is obligated to exercise the same honestly , fairly and reasonably . In Union of India v.
Kuldeep Singh [(2004) 2 SCC 590], the Supreme Court of India held: "The word 'discretion' standing single and unsupported by circumstances signifies exercise of judgment, skill or wisdom as distinguished from folly, unthinking or haste; evidently therefore a discretion cannot be arbitrary but must be a result of judicial thinking. The word in itself implies vigilant circumspection and care; therefore where the legislature concedes discretion it also imposes a heavy responsibility ."
43. In Abdul Wahab and another v. Secretary , Government of Balochistan and another (2009 SCMR 1354 ), the Hon'ble Supreme Court of Pakistan ruled: "Discretionary power conferred on government should be exercised reasonably and subject to existence of essential conditions, required for exercise of such powers within the scope of law. All judicial, quasi-judicial and administrative authorities while exercisin g mandatory or discretionary jurisdiction must follow the rule of fair exercise of power in a reasonable manner and must ensure dispensation of justice in the spirit of law. Seven instruments that are the most useful in structuring of discretionary power are open plans, open policy {{FOOT NOTE}} 14 See: Benoy Krishna Mukerjee v. Satish Chandra Giri and others (AIR 1928 PC 49), M. Ataur Rehman Alvi v.
Mana Rahman, 1974 SCMR 54), Ch. Naseer Ahmad v. Rehman Dad and others (2002 SCMR 1306 ), Motherwell Bridge Contracting and Trading Co. Ltd. v. Riaz Ali Khan and others (PLD 1978 Karachi 1093), Iqrar Muhammad Siddiqi v. Mst. Shahid Zareen (PLD 1997 Karachi 409) and Muhammad Usman v. Muhammad Shahbaz and 7 others ( 2007 MLD 1 121). {{FOOT NOTE}} statement, open rules, open findings, open reasons, open precedents and fair informal procedure. Power to exercise discretion would not authorize such authorities to act arbitrarily , discriminately and mala fide. They have to act without any ulterior motives."
44. In Muhammad Amin Muhammad Bashir Limited v. Government of Pakistan through Secretary Ministry of Finance, Central Secretariat, Islamabad and others (2015 PTD 1100 = 2015 SCMR 630), the apex Court held: "The exercise_ of any discretionary powe r must be rational and have a nexus with the objective of the underlying legislation. Arbitrariness is the antithesis of the rule of law. The legislature, when it confers a wide ranging power , must be deemed to have assumed that the power will be, firstly ,, exercised in good faith, secondly , for the advancement of the objects of the legislation, and, thirdly in a reasonable manner . Section 24A of the General Clauses Act, 1897, reiterates the principle that statutory power is to be exercised 'reasonably , fairly, justly and for the advancement of the purpose of the enactment' and further clarifies that an executive authority must give reasons for its decision. Any action by an executive authority which is violative of these principles is liable to be struck down. No other view is permissible."
Further reliance is placed on Aman Ullah Khan and others v. The Federal Government of Pakistan through Secretary , Ministry of Finance, Islamabad and others (PLD 1990 SC 1092 ), Chairman, Regional Transport Authority , Rawalpindi v. Pakistan Mutual Insurance Company Limited, Rawalpindi (PLD 1991 SC 14), Director Food, N. W.F.P. and another v. Messrs Madina Flour and General Mills (Pvt.) Ltd. and 18 others (PLD 2001 SC 1), Chief Secretary Punjab and others v. Abdul Raoof Dasti (2006 SCMR 1876 ) and Muhammad Ashraf T iwana and others v . Pakistan and others (2013 SCMR 1 159).
45. In our considered opinion Respondent No.2 had no reasonable cause to appoint receiver of the Appellant's property and the learned Accountability Court has erred in upholding his action. Hence, -this appeal is partly accepted and the impugned order to the extent of appointment of receiver is set aside.