The charge against accused Nos.2 to 4 is that they being the partners of Messrs Investors, having their office at Karachi, on or about 6th April, 1987, 19th June, 1988 and 3rd August, 1988, when called upon by the State Bank of Pakistan, under section 43-A of the Banking Companies Ordinance, 1962, to supply the information/produce the relevant record regarding the business carried out by them for the purpose of determining whether they were doing any banking business in contravention of section 27(1), failed to supply the requisite information and produce the relevant record, and thereby committed an offence punishable under section 83(1-C) of the Banking Companies Ordinance, 1962.
2. Messrs Investors having its- office at (1) 1140/4, 1st Floor, Opposite Erum Cinema, Liaquatabad, Karachi, (ii) A-409, Block `D', North Nazimabad, Karachi and (iii) The Syeda Chambers, SB-4, Block 13/C, Gulshan-e-Iqbal, Karachi, is a partnership firm with accused Jawaid Akbar, Raees Akbar and Mrs. Nasreen Saeed as its partners. As it appeared to the State Bank of Pakistan that the accused were transacting business of banking in contravention of the provisions of the said Ordinance, the State Bank of Pakistan, in exercise of the powers under section 43-A of the Banking Companies Ordinance, 1962, issued .a notice; dated the 6th April, 1987, requiring the accused to furnish/produce to the authorised representatives of State Bank of Pakistan documents/records/information mentioned therein and to let the said authorised representatives do and exercise the acts and the powers mentioned therein. In response to the said notice, the accused furnished certain information which was insufficient. The, State Bank of Pakistan, therefore, issued a memo, dated 19th June, 1988, requiring the accused to produce the documents mentioned therein. The accused, however, did not comply with the said memo. Consequently, the State Bank of Pakistan' required the accused, by a directive published in Daily ---Dawn---, Karachi, dated 3rd August, 1988, to make available, not later than seven days from the publication thereof, all books and records concerning their business for inspection by the State Bank of Pakistan. Since the said directives were not complied with, a complaint for the offence under section 43-A, read with section 83(1-C) of the Banking Companies Ordinance, 1962, was filed against the accused before this Court which was brought on regular file on 14-5-1989.
3. Charge under section 43-A, read with section 83(1-C), of the Banking Companies Ordinance, 1962, was framed against the accused and they were asked whether they plead guilty or have any defence to make. The accused pleaded not guilty and claimed a trial. At the trial the, prosecution examined Mr. Khursheed A. Majeed, Deputy Director (P.W.1), and then closed its side.
4, In their statements recorded under section 342, Cr.P.C., the accused have disputed the case of the prosecution by pleading that the requisite information was supplied and the required documents were produced. . According to them they were doing the business of hire and purchase. Accused Jawaid Akbar (D.W.i) examined himself on oath. The rest of the accused did not step into the witness-box. None of the accused led any defence.
5. The points for my determination in this case are as follows:-- (i)Whether the State Bank of Pakistan had reason to believe that the accused were transacting illegal banking business?
(ii)Whether the accused when called upon by the State Bank of Pakistan to supply information, documents and records respecting their business, failed to do so?
6.My finding on both the above points is in affirmative for the following reasons:-- REASONS Point No.1
7. A bare perusal of section 43-A of the Banking Companies Ordinance, 1962, makes it clear that where it appears to the State Bank of Pakistan 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 issue directive calling upon the company, firm or the person to supply requisite information or documents concerning business. The word `appears' used in section 43-A denotes that there should be prima facie material before the State Bank of Pakistan to indicate that a company, firm or a person was transacting, in any manner or form, the business of banking in contravention of law. The advertisement (Exh.5), which was admittedly got inserted by the accused no doubt speaks of advisory role of accused, but according to Mr. Khursheed A.
Majeed, Deputy Director (P.W.1), it gave an indication to him that the accused were transacting the business of banking in contravention of the provisions of the Banking Companies'', Ordinance, 1962.
Therefore, the State Bank of Pakistan had every reason to issue directives to accused calling upon them to furnish particulars of their business. The point No.1 is, therefore, answered in affirmative.
8. Mr. Khursheed A. Majeed, Deputy Director (P.W.1) has testified about the circumstances leading to the prosecution of the accused. He has produced the relevant record. According to him the accused have furnished incomplete information and record and the accounts book were not produced although the accused had undertaken to produce the same vide'(Exh.8). The record produced alongwith (Exh.7) makes it clear that the accused persons were receiving deposits from investors. The lists of investors are also placed on record which are self-explanatory. The clearly indicated that the accused were' involved in illegal business of banking and it was not a simple business of hire/purchase. From the evidence of Mr. Khursheed A. Majeed, Deputy Director (P.W.1), it is clear that the directives (Exh.12 and Exh.13) were not responded by the accused who failed to produce the most important record relating to their business. They had, therefore, contravened the provisions of section 43-A of the Banking Companies Ordinance,1962.
9. Admittedly all the accused are partners of accused No.1. The certificate issued by Registrar of Firms is on record (Exh.4). They have, therefore, committed the offence punishable under section 83(1-C) of the Banking Companies Ordinance, 1962. The accused had produced most of the record available to them. They have also suffered an ordeal of prosecution for about tree years. One of them appears to be a house wife. Taking all these D factors into consideration they are convicted and sentenced till rising of the Court -and to pay an aggregate fine of Rs.10,000 (Rupees Ten Thousand) each I or in default to suffer S.I. For two months. They are allowed one month's time to deposit fine in the Nazarat.
N.H.Q/S-837/K Accused convicted.