' This is a petition for pre-arrest bail on behalf of Sardar Khalid Umar, Chairman Zila Council, Lahore.
2. The allegations against him are that he caused loss of about 1,65,00,000 to the Zila Council by having favoured Mimrez Khan and Company which had taken the contract of collecting the Export Tax of the Zila Council.
3. It is stated that Mimrez Khan and Company in open auction had obtained the contract for collecting Export Tax for a sum of Rs,3,30,000.00 for the year 1986-87. The contractor after paying two instalments of 27 lacs each sought 50$ reduction in the auction money on the ground that he was delivered charge of only 11 octroi posts out of 21 octroi posts and during the month of August and September 1986, there were disturbances in the city and curfew had been imposed and, therefore, he. Could not collect the Export Tax in full. This application was still under process when the contractor made another application praying that he be allowed to deposit half of the instalment in his earlier application was decided, which was allowed by the petitioner. The contractor asked the Commissioner to act as arbitrator in the matter as provided in the agreement but he refused. Consequent upon it he approached the Civil Court. Learned Civil Judge vide his order dated 13-12-1986 appointed Retired Mr.Justice Shaukat Ali as Arbitrator in the matter who has delivered his award saying that the contractor is entitled to get rebate of Rs,1,63,39,927. It may be stated that in view of less receipts, the District Council in a specially conveyed meeting on 26-5- 1987 curtailed certain development projects. It is worth mentioning that the Civil Court which is seized of the arbitration matter has issued a stay order, in favour of the contractor restraining the recovery of contract money from him, which is still in force.
4. The petitioner states that he has since filed the objections {{PAGE CUT}} against the award given by Mr.Shaukat Ali because the rebate allowed to the contractor is exorbitant.
5. Ft is contended that the petitioner did not dishonestly act to the disadvantage of the District Council muchless to have been a party with the contractor in causing loss to 'the District Council. It is further contended that he is being victimised for political differences.
6. In view of the fact that a sum of Rs,1,67,60,730 out of auction money having already been deposited and that the matter is sub judice in civil Court, wherein the petitioner has filed objections against arbitrator's award which is not yet made rule of the Court, the question whether the petitioner is being victimised or that whether he has committed any offence needs consideration?.
7. After the petitioner's counsel and the Addl.A.-G. Had concluded their arguments on 29-6-1987 on the main petition for pre-arrest bail filed by Sardar Khalid Umar, Mr.Munir Ahmad Bhatti, Advocate for the complainant, stood up for addressing this Court in the matter to which learned Addl.A.-G., took strong exception saying that since he is incharge of the case being public prosecutor, therefore, Mr. Munir Ahmad Bhatti can address this Court only under his directions as envisaged in section'493, Cr.P.C., and that because he has presented the case on behalf of State fully, therefore, he does not feel the necessity to direct complainant's counsel to address this Court on the matter any further. He has relied on National Bank of Pakistan v. Mumtaz Ahmad (1984 SCMR 1436) and Asad Khan v. State (1969 P Cr.L J 1058) in this regard. Replying, Mr. Munir Ahmad Bhatti, learned counsel for the complainant, submitted that a public prosecutor becomes incharge of a case in the meaning of section 493 Cr.P.C., only when such case is at the "inquiry, trial or appeal" stage a Court and not while it is at bail stage, therefore, he as a complainant's counsel can act-plead in the instant petition independent of any direction by the public prosecutor. Learned counsel has referred to a number of cases where private counsel had- moved and presented application in the High Court seeking cancellation of bail granted to the accused by the lower Courts. Further, submitted that complainant is always treated as interested party in criminal cases and are often heard on behalf of prosecution by the subordinate/superior Courts in the interest of justice.
8. I have carefully considered the arguments of learned counse for the parties in the light of case- law cited at the Bar. I agree with Mr.Bhatti that ',proceedings in a bail application" in the instan case which is still under investigation with police cannot be called as a "case under inquiry" as the inquiry starts before a Court afte police investigation ends and before its trial commences, therefore, the instant proceedings in bail petition are not covered by sectio 423, Cr.P.0 , as such a complainant's counsel would not be acting under instructions of public prosecutor. The precedents cited b A learned Addl.A.-G., are not applicable as they relate to the cases al 'nquiry or trial stage.
9. In bail petitions, however, the prosecution is entitled to notice under section 497, Cr.P.C. This being a State case; learned Addl. A.-G., in response to the notice appeared on behalf of State. He complainant is not entitled to notice in this case under the law, therefore, he cannot address the Court as of right. He plays the second fiddle. Proceedings in bail petition are judicial in nature and a Court can call upon complainant's counsel for placing the fact before it in case it is considered proper and desirable in a particular case. It may be observed that where there is conflict between the public prosecutor and the complainant's counsel, the right of State would prevail. In this case, however,, their interests do not clash. I would therefore hear complainant's learned counsel in the interest of justice and then decide the main petition for pre-arrest bail.
10. The petitioner is chairman of Zila Council, Lahore. He is charged for having allowed 50% rebate to Mimrez Khan, the export tax contractor, in lease money amounting to approximately Rs,1 crore 65 lacs by abusing his official position and thereby caused wrongful corresponding loss to the Zila Council. He has moved this petition for giant of pre-arrest bail after this relief had been declined to him by learned Senior Special Judge, Anti-Corruption, Punjab, Lahore, on 14-6-1987 with the following observation made on merits of the case: -- "After the request of the contractor for remission in lease money, what the petitioner was under obligation in law was to take the House of Zila Council into confidence and get its approval and then send the minutes to the Commissioner, Lahore Division, Lahore, for confirmation and only then the rebate was allowable to the contractor. The petitioner instead had allowed the contractor huge rebate on 6-10-1986 without any lawful authority by simply writing 'allowed' without observing the rules on the subject and keeping the interest of Zila Council out of his mind. Mala fide of the petitioner is manifest from the illegal manner in which he unabashedly caused colossal wrongful gain to the contractor and corresponding loss to Zila Council. Mens rea on the part of the petitioner, therefore, is deducible from his acts and omissions. He is, therefore, not entitled to extraordinary privilege of bail before arrest."
' I may say here that learned Senior Special Judge conveniently omitted to mention how the things moved after the petitioner had "allowed" the contractor's application dated 6-10-1986 and ultimately culminated into registration of this case. He did not mention as to which rule on the subject had been violated by the petitioner And above all, he did not mention what was contended on behalf of the petitioner in his defence. I would, therefore, mention the facts in some detail which are almost admitted by the parties as it would help understanding the controversy.
11. Mimraiz Khan and Company obtained contract, for the rights to collect export tax, from Zila Council, Lahore, for the year 1986-87 (July 86-June 87) on 17-5-1986 in open auction for a consideration of Rs,3 crore 30 lac: An agreement was executed between the parties on 15-7-1986. It was stipulated therein that the contractor shall pay monthly instalment of Rs,27 Lac on first of every month and if he commits default in paying the instalment the contract shall be liable to cancellation. It was further agreed (clause (22-a) of agreement) that in case of dispute between the parties the matter shall be referred to the arbitration of Commissioner, Lahore Division, as the sole arbitrator whose decision shall be final and shall not be questioned in any Court of law.
12. It so happened that the contractor after paying two instalments i,e,, for August and September 1986 asking for 50% reduction in the lease money for he experienced certain difficulties in collecting the tax and also due to wide spread disturbances in the city on account of Muharram and imposition of curfew which resulted in heavy short-fall I of export of goods from Lahore to other stations. Further, submitted that if his request was not considered favourably, he shall be obliged to seek legal recourse. The petitioner marked this application to Tax Officer for report. This application was still being processed when the contractor submitted another application on 6-10-1986 requesting that he be allowed to "immediately" deposit half the amount of monthly instalment assuring that as soon as decision on his application is taken he shall deposit the balance money.
This application was "allowed" by the petitioner same day and sent both applications to Commissioner Lahore Division, under covering Letter No,3835 dated 21-10-1986 for consideration and early action informing him that he had "allowed" the contractor to deposit half the amount of monthly instalment "on the condition that if Commissioner, Lahore Division, did not accept his request he will be bound to make full payment". The Commissioner treated this reference as a request to act as arbitrator and referred the matter to Secretary to the Government of Punjab.
Local Government and Rural Development, under Letter No,PA /86/524 on 22-10-1986 requesting that some senior officer be appointed as arbitrator as he "would not prefer to act as an arbitrator".
For taking expeditious decision in the matter the petitioner sent two reminders on 3-11-1986 and 21- 11-1986 to the Government but with no effect. It appears from Commissioner's Letter No,PA/86/612 dated 25-11-1986 sent to the petitioner that the Government had at one stage appointed Additional Secretary, Rural Development, to act as arbitrator but subsequently revised its decision and asked Commissioner, Lahore Division, to act as such who had again declined. On 29-11-1986 the petitioner issued a notice to the contractor to immediately deposit the balance lease-money otherwise action for cancelling his contract shall be taken, who sent a reply thereto on 2-12-1986 to the effect that he had applied to Court for appointment of arbitrator (under section 5/20 of Arbitration Act, 1940) and the Court has also issued temporary injunction allowing him to deposit only half the instalment every month till the disposal of his case. The Court appoint Mr.Shaukat All as arbitrator with consent of the parties who filed his award on 19-2-1987 holding that the contractor was entitled to a rebate of Rs,1,63,39,927. The petitioner filed objections against the award and also filed a civil revision against interim injunction issued in favour of contractor in the High Court. I am told that the High Court has dismissed petitioner's civil revision (C.R.No,772/87). The award, however has not been made rule of the Court as yet.
13. As the receipts/income of Zila Council had considerably decreased obviously due to non- payment of full lease money by Mimraiz Khan, contractor, therefore, petitioner submitted revised budget for approval of the House by curtailing certain development projects. It was approved on 20-4-1987 in a special meeting of Zila Council but some councilors protested to the Commissioner that it was passed by a house which lacked quorum. The Commissioner, therefore, suspended proceedings of 20-4-1987, however, on 26-5-1987 the same budget was approved and the decrease in the income was specially noticed and it was resolved that in view of the financial position presently obtaining the development works should be carried out. It was in this background that about 8 councilors had approached the Commissioner and complained to him that the petitioner had illegally allowed 50% rebate to the contractor which resulted in loss of Rs,2 crore to the Zila Council. These councilors threatened the administration that if a case against petitioner was not registered they would submit their resignations and go on hunger strike in front of the office of Chief Minister, Punjab. Consequently, the instant case was registered on 26-5-1987.
14. I have heard learned counsel for the petitioner, learned Additional Advocate-General and also Mr.Wazir All Bhatti Advocate (complainant) and perused the record.
15. Realising that since no property/amount whatever had been entrusted to the petitioner, therefore, it could not be said that petitioner had criminally misappropriated it, learned Additiona Advocate-General conceded and rightly so, that no offence under section 409, PPC or abetment thereof had been committed by the petitioner, but referring to section 5(1) (d) of the Prevention of Corruption Act, 1947, which reads as under,--
5. Criminal misconduct.--(1) A public servant is said to commit the offence of criminal misconduct,
(a) to (c).
(d) If he, by corrupt and illegal means or by otherwise abusing his position as public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage, or
(e) ****, ' Learned Additional Advocate-General emphasized that the petitioner by his following acts of commissions and omissions had obtained "pecuniary advantage" for the contractor by abusing his officiall position and caused corresponding wrongful loss to Zila Council:--
(i) The petitioner had no authority under the law to grant rebate to the contractor, yet he "allowed" the contractor on 6-10-1986 to deposit 40% amount of the monthly instalment instead of depositing the full amount;
(ii) the petitioner got the revised budget approved in a specially convened meeting on 10-4-1987 which lacked quorum, in a bid to conceal his illegal act of allowing the contractor to pay half the amount of monthly instalment; and
(iii) the petitioner according to terms of the agreement was empowered to rescind the contract on contractor's failure to deposit full amount of monthly instalment within prescribed time but the petitioner did not do so, which fact speaks him mala fide intention.
' All these circumstances show that the petitioner by abusing his official position had passed order dated 6-10-1986 in favour of the contractor and thus granted him undue "pecuniary advantage" and on the other hand caused corresponding loss to the Zila Council, hence he is guilty of "criminal misconduct" which constitutes an offence punishable under section 5 (1)(d) of the Prevention of Corruption Act, 1947. He next submitted that as huge monetary loss has been 3198 Monthly Law Digest [Vol. V aused to the Zila Council, therefore, the petitioner is not entitled to extraordinary concession of pre-arrest bail.
16. Mr.Wazir Ali Bhatti Advocate, Vice-Chairman of Zila Council, added that the petitioner and his son have amassed wealth and purchased number of properties with ill-gotten money and, therefore, he should not be allowed bail as it would stiffle the investigation and also the recovery of misappropriated money would not be possible.
17. Replying, learned counsel for the petitioner submitted that,--
(i) the petitioner did not have any power to grant rebate nor did he do so. He only allowed the contractor to deposit half instalment temporarily as prayed for by him and sent his applications seeking rebate in lease-money, to the Commissioner for consideration and decision which is the competent authority as the contractor had clearly assured in his application that he would pay up the balance when his application would be decided and that the petitioner had apprised the Commissioner about it, to which neither the Commissioner nor the Government had taken any exception;
(ii) the petitioner's bona fides are further proved as he issued reminders on 3-11-1986 and 21-11-1986 to the authorities pressing for early decision but the Commissioner persistently declined to act as arbitrator in clear violation of the terms of agreement and had instead repeatedly asked the Government to appoint somebody else to act as arbitrator;
(iii) it was due to inaction on the part of the Commissioner and the Government to take a prompt decision in the matter that the contractor found opportunity to approach the civil Court and obtain stay order against payment of full lease money to the Zila Council, therefore, full amount of monthly instalment was not paid by the contractor under Court's stay order;
(iv) The Zila Council in its special meeting dated 16-5-1987 took' note of this litigation and in view of income having decreased had approved the revised budget in its original form (as was tabled and approved earlier on 20-4-1987) in the presence of complainants (members of the opposite group) and that no mala fides were imputed to the petitioner in that meeting;
(v) no tangible evidence showing that petitioner had any connection whatsoever or a secret deal with the contractor has been collected so far to prove existent of mens rea on his part;
(vi) the arbitrator has filed his award holding the contractor as entitled to about 50% rebate in the lease' money but the petitioner has filed objections against it and also filed civil revision in the High Court praying for vacation of stay. Order issued in favour of the contractor but that having failed the petitioner could not in the presence of stay order proceed for cancelling the contract or recovering the outstanding lease money from the contractor;
(vii) the petitioner has joined investigation and produced all relevant record required by the police for investigation;
(viii) there being no misappropriation by the petitioner as conceded by learned Additional Advocate-General, nothing is to be recovered from him; and lastly
(ix) the contractor applied for rebate not due to secret arrangement with the petitioner. He did so following previous practice. In previous two years also the export tax contractor was allowed about 50% rebate amounting to nearly 1.50 crore in each case and the complainants herein were a party to grant of that concession.
(x) there is grouping among the members of Zila Council and those belonging to opposite group (complainants) are beat upon getting the petitioner arrested for ulterior motives, i,e, to humiliate and disgrace him and further by involving him in false cases like this, they want to get him disqualified from contesting the coming local bodies election, hence the petitioner who is well- reputed, aged and ailing person, in the aforementioned circumstances, is entitled to the grant of pre-arrest bail.
18. I have carefully considered the contention of learned counsel for the parties, and prima facie I find' as under:--
(i) the petitioner forwarded the contractor's application dated 1-10-1986, seeking rebate in lease money within a fortnight to the Commissioner for consideration and decision in whom the power to accept or reject the request of the contractor vested. The petitioner allowed deposit of half amount of monthly instalment on 6-10-1986 subject to Commissioner's decision. He reminded the Commissioner and the Government time and again to immediately decide contractor's application; and
(ii) Civil Court has taken cognizance of the dispute and the arbitrator appointed by it has filed his award so the questions whether the contractor is entitled to any rebate or not; and if entitled to what extent, are subjudice and the petitioner is opposing the contractor before the relevant forums; and
(iii) permission for depositing half the amount of instalment granted to the contractor by the petitioner on 6-10-1986 received tacit approval of the competent authority "Commissioner". It is essential to prove mens-rea on the part of accused to bring home charge of "criminal misconduct" successfully. It is well-settled that existence of mensrea cannot be automatically presumed merely because an illegal order has been passed by a public functionary, very strong evidence is needed to prove unfairness and want of good faith on the part of the accused. As the matter is subjudice therefore it cannot be said at this stage and in face of the material collected by Investigating Agency so far that the contractor had obtained any "pecuniary advantage" muchless due to "criminal misconduct" of the petitioner. Petitioner's grievance that his opponents have brought this case against him with ulterior motive to get him humiliated and also get him disqualified from contesting coming election of Local Bodies, is not wholly without basis Political difference between the complainant and petitioner are too obvious to be mentioned. DSP who is investigating the case stated that the petitioner has joined the investigation and also produced before him the record he needed for investigation, therefore, the investigation would not be hampered if this application is allowed.
19. For what has gone above, I find it a fit case for grant of pre-arrest bail to the petitioner.
Consequently Interim bail granted to him earlier is hereby confirmed.