1. The appellant and the co-accused were charged under sections 12 arid 23 of Foreign Exchange Regulation Act, 1947, and were tried before the learned Sessions Judge, and Tribunal FER Act Karachi, who found hint guilty under section 12 of the said Act, and has convicted and sentenced him under section 23, to suffer Imprisonment till rising of the Court, and 'to pay a fine of Rs.2,500 or in default to suffer S.I. For three months. The co-accused were also convicted for the same offence and sentenced to suffer Imprisonment till rising of the Court and to pay a fine of Rs.3,000 each .Or in default to suffer S.I. For three months vide judgment, dated 27th January, 1987.
2. The .Brief facts of the prosecution case are that on 25-5-83 Mr. Muhammad Sharif Director Exchange Control lodged a report which reads as under:-- BRIEF FACTS Received a written report from the State Bank of Pakistan, Karachi, vide their letter No.1156/ECF: Exp: 12(735)/82, dated 10-10-1982 which reads as under:-- <p.m> </p.m> Grpi form No.Commodities. Destination.Invoice valueAmount realisedAmount out standing.
3. BHL-226922Medium Green OnyxItaly. US dol. 25,827/20Nil US dol. 25,827/20 BHL-226923Blocks. - do -US dol.
4. 179.998/40Nil US dol. 179,998/40 <p.m>Under the rules they were required to realize the sale, proceeds within a period of four months from the date of shipment. They have, however; failed to realize full/part sale proceeds, and the full amount/balance as shown above is still outstanding.</p.m> A show-cause notice No.994/ECF: 12(735) Exp-82, dated 2nd Sept. 1982 was issued to the firm in respect of non-realization of export proceeds (copy of show-cause notice alongwith acknowledgement are enclosed). Their explanation has not been received.
5. We shall be glad if you will please make necessary investigation in the matter and let us have your report in due course.
6. The concerned GRPI form etc may be collected from us by the Investigating Officer as and when required.
7. Sd/- (Muhammad Sharif)
8. P. Director.
9. On receipt of the above report, enquiry No.70/82 was registered at this circle and after due enquiry it transpired that the above firm only repatriated the sale proceeds for US $ 25,827/20 against Form `E' No.0226922 but the full sale proceeds for US $ 179,988/40 against GRPI form No.226923 is still outstanding, which disclosed the commission of offence under section 12/23 FER Act 1947 punishable under section 23 of the said Act., hence under the order of Deputy Director, FIA S.B.C.
10. Karachi a case under section 12/23 PER Act, 1947 has been registered against the accused firm and investigation is taken up by the undersigned.
11. Sd/- (FAZAL AHMED JAT)
12. Inspector FIA S.B.C. Karachi.
13. After necessary investigation the appellant and the co-accused were challaned.
14. The following charge was framed against the accused to which they pleaded not guilty.
15. CHARGE 1, M.A. Junejo, Sessions Judge and Tribunal F.E.R. Act, Karachi do hereby charge you:--
(1) Malik Mustafa son of Malik Mir Hassan.
(2) Malik Mir Hassan son of Haji Yasin.
(3) Malik Mehboob son of Malik Mir Hassan.
(4) Muhammad Afzal Oureshi. as follows:-- That you in February 1981 exported Medium Green Onyx Blocks of the value of 25827 US Dollars and 20 cents under E(GRPI Form) No.HBL-226922 to Italy, and of the value of 1,79,998 US Dollars and 40 cents under E(GRPI) Form No.HBL-226923 in name of M/s. Green Marble Works Ltd. Of which you Malik Mustafa is Managing Director & you Malik Mir Hassan is Chairman, and you Malik Mehboob is Director, and you Muhammad Afzal is the Secretary, but failed to realise balance of the sale proceeds of the goods exported under P. Form No.226923 within a period of four months of the date of shipment and thereby committed offence under section 12 of the F.E.R. Act punishable under section 23 of the said Act, and within the cognizance of this Court.
16. AND I hereby direct that you be tried by me on the said charge.
17. This 9th day of January 1985 at Karachi."
18. At the trial prosecution examined Muhammad Sharif Assistant Director Exchange Control Department State Bank of Pakistan Karachi P.W.1, he has produced `E' Form No.HBL-0226923 as Exh.9, copy of notice issued to the accused, as Exh.10, and registered A/D receipt as Exh.10-A. He has also produced the complaint as Exh.11, Abdul Aziz Oureshi Manager Habib Bank, Saddar Branch, P.W.2, he has produced a letter issued to F.I.A. As Exh.13, he has also produced copies of three letters issued by Habib Bank as Exh.14/1 to Exh.14/3, Syed Imtiaz Hussain, the then Chief Manager Habib Bank Saddar Branch P.W.3, Muhammad Shafi Inspector F.I.A. He has produced the F.I.R. Registered by Inspector Fazal Ahmed as Exh.17, Muhammad Riaz Gondal Sub---Inspector F.I.A. State Bank Circle, he was given warrants (process) to serve on P.W. Fazal Ahmed which he has produced as Exh.18-A and Exh.18-B.
19. After close of prosecution case the statements of the appellant and co--accused were recorded in which Malik Mustafa has admitted that he was Managing Director of M/s. Green Marble Works Ltd., Karachi, and that he and the co-accused had exported Green Onyx Blocks to Italy on 14-2-1981 of total invoice value of US Dollars 1,90,000. He has further stated that he had realized over one lac Dollars, but for remaining amount the consignee is remitting amount in instalments, according to him only 49,000 dollars remain outstanding for which he was making his best efforts to realize the amount. Accused Malik Mir Hassan has denied the allegations, and has further riled his written statement which reads as under:-- "In this case I am not guilty because I have not done anything actively in this transaction.
20. At all material times and even when I was Chairman, the active management of the Company has been in the hands of the other accused persons who arc Directors and my sons. I was a Chairman in name only. The deal in question was negotiated and settled completely by the other accused and my signature may have been obtained on some documents so that the other accused can avoid responsibility. I cannot be saddled with the responsibility of the crime merely because signed some papers of Company without any criminal intention on my part.
21. It is to be noted that relations between me and other accused persons (Directors) (who happen to be my sons) have been not only strained but positively inimical for a long time past. And I was driven out of the Company for good in May, 1982. Even before that I was only a nominal Chairman.
22. My sons did not allow me even to enter the premises of the Company. It may also be taken into consideration that I am permanently residing at Quetta and come to Karachi only occasionally. My said sons have filed numerous cases against me at Karachi, Quetta, and Rawalpindi, to harass me and to cause loss to me, Some of the pending cases are as follows:-- (1)Contempt application in Suit No.378/79 in High Court, Karachi.
23. (2)Suit No.27/84, for Rendition of Accounts at Quetta.
24. (3)Suit No.133/85 under Lunacy Act at Rawalpindi.
25. (4)G.W. Case No.416/85 at Karachi.
26. (5)Suit No.89/85 for declaration and injunction at Quetta.
27. Moreover I am an old man of about 76 years of age, and. Have been suffering from heart trouble for the last 11 years.
28. Medical Certificates of my doctors arc already on record of this Court.
29. My sons, the other accused persons have been acting against me all the time, and even in this case they have never missed a chance to cause me serious loss vide their applications, dated 17- 2-1985 and dated 11-10-1985 which are on the record of this Court. They even withdrew the surety given in this case.
30. The rest of the accused have denied the allegations, however, accused Malik Mustafa has also filed his Written Statement which reads as under-- "It is respectfully submitted on behalf of accused No.1 & 3 Malik Mustafa and Malik Mchboob that the true facts of the case are as under:-- (1)That the accused No.2 Malik Mir Hassan was not the Chairman, but the Managing Director of the Company. On 14-2-1981 when the shipment was made he was wholly and safely Incharge of the affairs of the Company as per Articles of Association and Memorandum of the said company, a copy of which is submitted herewith as Annexure-A. Its Articles of Association para. 71, page 17 refers & relevant portion is reproduced below:-- "71-The Managing Director ---------shall have power and control over the management of the business of the Company, and all receipts for monies paid to the Company, shall be signed by the Managing Director---------.."
31. (2)That the accused No.2 Malik Mir Hassan took over as Managing Director of the said company vide Resolution, dated 5-6-1979. In the said Resolution, the accused No.1 Malik Mustafa was authorized for documentation of Import & Export business of the Company only, and copy acknowledged by Bank. .
32. (3)That accused No.1 Malik Mustafa and accused No.3 Malik Mahboob were allowed to operate the Company's accounts as per resolution of the Company, dated 23rd Feb., 1981 which was sent to the Bankers and which Resolution was acknowledged by the Bank on 24-2-1981.
33. (4)That the shipment was made on 14-2-1981 by the Co. On Trust Receipt Basis as advised by the Buyers. Habib Bank Limited, Saddar Branch, Karachi were instructed to deliver the documents to the Buyers against Trust Receipt which was effected.
34. (5)That the Italian Buyer failed to repatriate the Foreign Exchange within the stipulated time and extended time sanctioned by the State Bank of Pakistan, clue to' the devaluation of the Italian Currency, slump in market, and other facts including force majure.
35. (6)That the further efforts to repatriate the Foreign Exchange, the applicants wrote to the Ministry of Finance, Government of Italy, Rome on 19-3-1983 but unfortunately, there was no response from the said Ministry. In order to seek repatriation, the applicants apprised our Embassy in, Italy by writing them vide our letter, dated 22-5-1983 requesting them to intervene in the said matter.
36. (7)That in reply to a notice; dated 30-7-1983, the applicants explained their position fully to Deputy Director, F.I.A. Stale Bank Circle, Karachi, vide their reply, dated 7-8-1983 emphasising that (a) goods were sent on 90 Days Trust Basis; (b) applicants had referred the matter to Government of Italy, Ministry of Finance, Rome, Italy on 19-3-1983, and (c) to their Embassy in Rome, Italy, and applicants arc trying their host to get the Foreign Exchange repatriated.
37. (8)That the applicants received an encouraging reply, dated 24-12-1983 from the Government of Pakistan, Ministry of Commerce, Islamabad (Annexure-B) that the Commercial Counsellor, Embassy of Pakistan, in Rome, Italy, has discussed their case with the Italian' Buyers. Through these efforts, the Italian Buyers came to Karachi and-entered into an agreement with the Company on 21-3-1984 agreeing to make the outstanding payment in instatments. Attested copy enclosed as Annexure-C.
38. (9)That in compliance thereof, the Italian Buyers have been remitting payments in instalments. Out of the total dues of US $ 1,79,998.40 the Company has now received a total sum of US $ 1,30,310.63 leaving a balance of US $ 49,687.77 only. Ten payment vouchers received from the Bankers are enclosed as Annexures D to M.
(10) That Italian Buyers are making payments in instalments as is evident from Bank records.
(11) That documents which are necessary and upon which the accused persons rely are in possession of the witnesses whose list has already been filed in the Court. Only some copies of the documents are in possession of the accused persons. As stated above the applicants be allowed to produce the documents through the witnesses.
(12) In view of the explanation made above and the documents filed in support of the above assertions, it would be no doubt very clear that the applicants in no way are connected with the failure of the principals to repatriate the amount within the stipulated time, thus the applicants are innocent and have been implicated only to cover the formalities required.
39. The applicants in order to support the above statements have filed a list of witnesses who will be in a position to testify that at no stage whatsoever the applicants are to be blamed for the non- repatriation on the Foreign Exchange, but it would be seen that the money had been repatriated and a nominal amount is only yet to be repatriated.
40. Sd/-- Advocate for the Applicants/ Accused Malik Mustafa and Malik Mehboob."
41. Muhammad Sharif Assistant Director, Exchange Control Department, State Bank of Pakistan, P.W.1 has produced `E' Form No. HBL-0220923 as Exh.9. Under this Form M/s Green Marble Works Limited exported medium Green Onyx Blocks to Italy of the value of 1,79,998 US Dollars and 40 cent.
42. According to him this consignment was shipped on 14-2-1981. Original consignment to be shipped was of the value of 1,90,000 US Dollars but there was a short shipment. The sale proceeds of the exported goods were to be repatriated within four months from the date of shipment. The above firm had failed to repatriate the sale proceeds within the statutory period. Three notices were given to the firm. Final notice was given on 2-9-1982 by registered post A.D., copy of notice has been produced as Exh.10, A/D receipt as Exh.10-A. The accused did not reply. On 10-10-1982 he sent complaint to the Deputy Director, F.IA. S.B.C. For legal action. He has produced the complaint as Exh.l1. In cross-examination he has deposed that he does. Not remember if Italian currency was devalued in 1981-82 to the extent of fifty per cent. He did not have any document with him to suggest that M/s. Green Marble Works Ltd. Were granted extension of time, for repatriation of the sale proceeds, till end of 1982. According to him there was nothing on his record to suggest that about one lac US Dollars have been repatriated out of the sale proceeds. He was shown copies of letters sent by the firm from ltaly, but he could not say if copies of these letters were received by the State Bank of Pakistan.
43. Mr. Abdul Aziz Oureshi the then Manager Habib Bank Ltd. Sadar Branch P.W.2 has deposed that in Feb. 1981 M/s. Green Marble Works Ltd. Had current account No.11849 in the said branch. Malik Mir Hassan was Chairman, Malik Mustafa was Managing Director, Malik Mehboob was Director and Muhammad Afzal was Secretary of the said Firm. The account was being operated by Malik Mustafa. `E' Form Exh.9 was signed by accused Malik Mustafa on behalf of the Firm. The sale proceeds of the goods exported under E Form Exh.9 were not repatriated within the statutory period of four months, from the date of shipment. Subsequently certain payments were received. On 17-4- 1984, 10-5-1984, 9-7-1984, 16-9-1984 and 30-10-198.1 a sum of 15.000 US Dollars was received on each of the above dates for crediting in the Account of M/s. Green Marble Works Ltd. For the goods exported under `E' Form Exh.9. Likewise 124011 US Dollars were received on 7-1-1985 and 11780 US Dollars were received on 9-4-1985 for crediting in the account of the above firm. Presently an amount of 80,818 US Dollars and 40 cents remains, to be repatriated in respect of the goods exported under `E' Form Exh.9. In cross-examination he has admitted that there is a separate department of Habib Bank Ltd. Which deals with exports. He was shown a copy of letter issued by Habib Bank Ltd. Saddar Branch on 21-12-1981, which he has produced as Exh.14: He has produced three more copies of letters as Exh.14/1 to Exh.14/3. He did not recollect if any of the said letters was replied. He admitted a suggestion that about one lac US Dollars have been repatriated in Account of M/s. Green Marble Works Ltd. Out of sale proceeds, but after the expiry of 4 months from the date of shipment. "Lira" Italian currency was devalued either in 1981 or in 1982. He did not `know if letter, dated 19-3-1983 from Green Marble Works Ltd. Was received in his branch.
44. Syed Imtiaz Hussain P.W.3 the then Chief Manager, Habib Bank Limited, Saddar Branch, has deposed that he knows all the accused. That the accused had opened current account in Saddar Branch in the name of Green Marble Works Limited, Karachi. Accused Malik Mir Hassan was Chairman, Malik Mustafa was Managing Director, Malik Mchboob was Director while accused Muhammad Afzal was General Manager of the said Firm.
45. Muhammad Shari Inspector P.W.4 has deposed that in August, 1983 he was Inspector F.I.A. In S.P.C.
46. He was entrusted' with the investigation of this case because Inspector Fazal Ahmed had left the services of F.I.A. His whereabouts were not known. The F.I.R. Was registered by Fazal Ahmed with whose signature he was familiar. He has produced the F.I.R. As Exh.17. He had examined Muhammad Sharif and .Abdul Aziz. He (witness) recorded statement of P.W. Imtiaz Hussain on 13-5- 1983 and submitted the challan in the Court.
47. Malik Mohammad Riaz Court witness No.1 was examined on the point that P.W. Fazal former Inspector had left the services, and his whereabouts were not known.
48. After close of the prosecution case statements of the accused were recorded under section 342, Cr.P.C. In which they admitted the allegations and is was further stated by Malik Mustafa that only 49,000 US Dollars remain outstanding for which they have been making their best efforts to realise the amount.
49. They have also examined Ghulam Abbas, Export Officer, Export Department, Habib Bank Limited, Saddar, Karachi D.W.1 and Muhammad son of Hashimuddin Clearing and Forwarding Agent D.W.2 in their defence.
50. Ghulam Abbas D.W.1 has deposed that he was serving as Export Officer in Export Department Habib Bank Limited Saddar Branch, Karachi. M/s. Green Marble have an account in their branch. They are doing export business, According to the resolution Exh.27 the account was to be operated by Malik Mir Hassan Managing Director of the Firm. For the purposes of repatriation of the amount their Bank had written to the Foreign Bank and he has produced photostat copies of two letters as Exh.28 & Exh.29 but they did not receive any reply. He has produced statement of account regarding realisation of amount from the Foreign Consignee as Exh.30. This shows that 1,40,993.63 US Dollars have so far been realized. There are still 39004.66 outstanding. The amount which has so far been realized was after the Firm wrote to the Foreign Consignee and the negotiations took place between them, and such information was sent to their Bank by the Firm which he has produced as Exh.31. He has produced photostat copy of the resolution, dated 23-2-1981 passed by the Firm which was sent to them, and. The same has been exhibited as Exh.32. By this resolution the Firm had authorized Malik Mustafa and Malik Mehboob to operate the Bank account individually.
51. Muhaminad s/o Hashimuddin, Clearing and Forwarding Agent for the accused's Firm D.W.2, has deposed that the name of his Firm is M.I. Bajwa and Co. Green Marble Works have been exporting marble to Italy from time to time. Since the consignee at Italy had failed to make payment to Exporter at Karachi, he was sent by Malik Mchboob as his representative to go to Italy for settlement of-claim. HC went therein 1982 and met Mr. Felice Alari who was the owner of the Firm.
52. He told the witness that the market was going had and the goods were lying unsold. He, however, promised that he would come to Pakistan arid settle the claim because there was some dispute about weight due to devaluation in Italian currency. He came to Pakistan in March, 1984 and entered into an agreement with Exporter on 24-3-1984 which agreement has been produced as Exh.35. According to him, sale proceeds were repatriated except 15000 US Dollars which were still outstanding. In cross-examination he has admitted that the Firm of the accused did not obtain any permission from State Bank of Pakistan for entering into agreement. The copy of agreement was not sent to the State Bank of Pakistan nor any approval was obtained subsequently. He denied a suggestion that because the contracted quantity of goods was not supplied by Exporter to the consignee, hence this agreement Exh.35 was executed.
53. It has been contended by the learned counsel for the appellant, that the appellant and the co- accused have deposited the entire sale proceeds except 15,000 Dollars which was beyond their control. That the prosecution evidence, defence evidence, and the documents produced by the appellant clearly show that the appellant & co-accused were not at fault, and they had made their best efforts to see that the remaining amount was also repatriated. That it was an admitted position that the `Lira' Italian currency was devalued at the relevant relevant time,' and therefore the amount outstanding. Against the Italian Firm could not be paid by them.
54. The learned counsel for the State has contended that no doubt the appellant and co-accused were not at fault but it was their duty to make further efforts to sec that the remaining amount was repatriated. However, he was of the view that since, the appellant and co-accused have made their best efforts for repatriation of the amount, their intentions were clear, and therefore he does not support the conviction.
55. I have considered the contentions of the learned counsel. The evidence led by the prosecution does not conclusively prove that the appellants and the co--accused, had deliberately or intentionally failed to repatriate the amount' in question. From the evidence produced by the appellants and the co-accused in defence, it is clear' that only 15,000 Dollars remain to be repatriated. The appellants and the co-accused had even approached the Italian Government as well as the Commercial Councillor, Embassy of Pakistan at Rome, which is clear from Exh.31. The evidence of Muhammad D.W.2 was not seriously challenged in cross-examination, and therefore, it has been proved that only 15,000 Dollars were to be repatriated.
56. However, I would like to make it clear that if the above amount of Rs.15,000 Dollars or more which has not yet been repatriated, is repatriated at any time, the appellants and the co-accused shall deposit the same in the Bank as usual.
57. I had decided the above appeal by a short order on 29-9-88 and these are the reasons for the same.