' The charge against the accused is that he on or about 31st August, 1987, 22nd October, 1987 and 11th November, 1987, when called upon by the State Bank of Pakistan, under section 43-A of the Banking Companies Ordinance, 1962, to supply the information regarding the business carried out by him for the purpose of determining whether he was doing any banking business in contravention of section 27(1), failed to supply the requisite information and thereby committed an offence punishable under section 83(1-C) of the Banking Companies Ordinance, 1962.
2. Messrs Zaheer Paper Cutting, Karachi, is a proprietorship, concern, with accused Zaheer Ahmed as its proprietor. The State Bank of Pakistan in exercise of its powers under section 43-A of the Banking Companies Ordinance, 1962, issued a directive dated 31-8-1987 to the accused in order to inquire into the affairs and business of the said accused for the purpose of determining whether the said accused was doing any banking business in contravention of section 27(1) of the aforesaid Ordinance, as it appeared to the State Bank in view of advertisement in Daily `fang' Karachi, dated 14-8-1987, and otherwise that the said accused was transacting illegal banking business in some form or other. The said directive was served upon the accused and was replied by him through letter dated 1-9-1987, whereupon another directive was issued to the accused, dated 22-10-1987, calling upon him to support his statement through an affidavit. Since the accused had failed to comply with the said requisitions, another directive was issued through Daily 'Dawn' dated 11-11- 1987. As the accused failed/avoided to co-operate with the State Bank, a complaint for the offence under section 43-A, read with section 83(1-C) of the Banking Companies Ordinance, 1962, was filed against him before this Court which was brought on record on 8-3-1988.
3. Charge under section 43-A, read with section 83(1-C) of the Banking Companies Ordinance, 1962, was framed against the accused and he was asked whether he pleads guilty or claims a trial.
The accused has pleaded not guilty and wanted to be tried.
' Director (P.W.1) and Mohiuddin Khan, Inspecting Officer (P.W.2) and then closed the side.
5. In his statement recorded under section 342, Cr.P.C. The accused has denied the case of the prosecution. His defence in his own words is as follows:-- "I have got a small shop by name Zaheer Paper Cutting. I myself work with no employee. I was indebted. I had gone to State Life for pledging my policy and on their suggestion I made advertisement Exh.8. No deposit was received by me. I then sold away my shop. I am having a rented shop now. I am innocent."
6. The accused did not examine himself on oath. He also led no defence.
7. Points for my determination in this case are:--
(1) Whether the State Bank of Pakistan had reason to believe that the accused was transacting illegal banking business?
(2) Whether the accused when called upon by the State Bank of Pakistan to supply information, documents or records respecting his business, failed to do so?
(3) What offence, if any, is committed by accused?
8. My findings on the above points are as follows:--
(1) Yes.
(2) As under.
(3) No offence.
9. REASONS. Point No.1.
' Section 43-A of the Banking Companies Ordinance, 1962, provides as follows:-- "Power to call for certain information etc.-- ' Where it appears to the State Bank that a company, firm or any other person is transacting, in any manner or form, whatsoever the business of banking in contravention of subsection (1) of section 27 or is receiving or has received deposits of money in contravention of section 27-A, the State Bank may---
(a) direct the company, firm or such other person, or any person who is; or has at any time been, dealing, doing business or associated in any manner with the company or such other person, to give or furnish to the State Bank, within such time as the State Bank may specify in its requisition, such information, documents or records respecting any business carried on by the company or such other person as may be within its or his knowledge or in or under its or his possession, custody or control;
(b) authorise any person to enter and search any premises and seize books, accounts or other documents or records respecting any business carried on by the company or such other person as may be in or under possession, custody or control of the company or such other person or a person who is, or has at any time been, dealing, doing business or associated in any manner with the company or such other person, or any officer or employee of the company or such other person or of the person dealing, doing business or associated with the company or such other person.
(c) inspect or examine, or cause to be inspected or examined, the company or such other person, or a person who is, or has at any time been, dealing, doing business or associated with it or him as aforesaid, or any officer or employee of the company or such other person or of the person dealing, doing business or associated with the company or such other person, and any of its or his books, accounts or other documents or records referred to in clause (b); and
(d) exercise, as far as may be applicable, in relation to the company or such other person, or any person who is, or has at any time been, dealing, doing business or associated with it or him as aforesaid the powers conferred on the State Bank of subsections (1), (2), (4) and (5) or section 40.
10. A bare perusal of section 43-A of the Ordinance, makes it clear that where it appears to the State Bank that a company, firm or any other person in transacting, in any manner or form, whatsoever the business of banking in contravention of subsection (1) of section 27 or is receiving or has received deposits of money in contravention of section 27-A the State Bank may issue directives calling upon the company, firm or the person to supply requisite information or documents concerning that business. The word 'appears' used in section 43-A denotes that there should be prima facie material before the State Bank to indicate that a company, firm or a person was transacting, in any manner or form, the business of banking in contravention of law. Section 7 of the Banking Companies Ordinance, 1962, deals with the business of banking companies. The word 'banking' means 'accepting for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawal by cheque; draft, order or otherwise'. The advertisement (Exh.8) which was admittedly got inserted by accused speaks of investment of money in the following words:-{{URDU TEXT}}
11. According to Mian Abdul Qadir, Senior Deputy Director (P.W.1) it appeared to him from advertisement (Exh.8) that the accused was transacting the business of banking in contravention of the provisions of the Banking Companies Ordinance, 1962. Therefore, the State Bank had every reason to issue directives to accused calling upon him to furnish particulars of his business. The point No.1 is, therefore, answered in affirmative.
12. Points Nos.2 and 3.
Both these points are inter-connected, hence for the sake of convenience they are being discussed together.
13. Both Mian Abdul Qadir, Senior Deputy Director (P.W.1) and Mohiuddin Khan, Inspecting Officer (P.W.2) have testified about the issuance of directives to accused and his reply to directive, dated 31-8-1987 which is on record, (Exh.4) and reads as follows:--{{URDU TEXT}}
14. The accused liad denied the allegations in specific terms. He made a clear statement that he had a petty business and was not maintaining any accounts book or register. Clause (b) of section 43-A of the Banking Companies Ordinance, 1962, empowers the State Bank to authorise any person to enter and search any premises and seize books, accounts or other documents or records respecting any business carried on by the company or such person. Admittedly Mohiuddin Khan (P.W.2) Inspecting Officer was authorised to inspect the record of the accused. The evidence of Mohiuddin Khan (P.W.2), however, leads us nowhere. He does not speak about any effort made by him to search the premises owned by the accused for the purpose of seizing record. There is also nothing on record to show that the accused had resisted any such attempt of search of his premises. The accused had all along pleaded that he had no such records. In fact he was prosecuted only because of the fact that he could not file affidavit in support of his statement. The filing of an affidavit is not a legal requirement and the accused cannot be penalized for the same.
15. On overall appraisement of the entire evidence in the case and on considering all the surrounding circumstances, I am of the view that the accused has not contravened the provisions of section 43-A of the Banking Companies Ordinance, 1962. He is, therefore, found not guilty and is acquitted under section 265-H, Cr.P.C. The accused who is on bail is discharged from his bail bond.