QAISAR AHMAD HAMIDI, J.- The charged against the accused is that they not being a banking company or a corporation or authority established by the Federal Government or a company duly authorised in this behalf by the Controller of Capital Issues and Corporate Law Authority or the Registrar Cooperative Societies, invited deposits of money from the public through advertisements, in violation of section 27-A and thereby committed an offence punishable under section 83(1-D) of the Banking Companies Ordinance, 1962.
2. The accused No. 1 is the partnership firm with accused Saleem Raza and Riaz Kausar as its partners. The accused No. 1 inserted/got inserted advertisements in Daily1 Jang', Karachi, dated 16- 8-1987 and in Daily 'Dawn' Karachi, dated 13-9-1987 and 24-1-1988, inviting deposits of money from the public in contravention of the provisions of section 27-A of the Banking Companies Ordinance, 1962. They were served with a show cause notice against the proposed action. The accused furnished explanation which was not found satisfactory and consequently on 3.4.1988, a complaint for the said offence was filed against them, which was brought on regular file on 10-4-1988.
3. Charge under section 27-A, read with section 83(1-D) of the Banking Companies Ordinance, 1962, was framed against the accused and they were asked whether they plead guilty to the same or claim a trial. The accused pleaded not guilty.
4. The prosecution has examined Mr. Saeed Hyder Bhatti, Deputy Director (P.W-1), and Mohiuddin Khan, Inspector (P.W-2) and then closed the side.
5. The accused disputed the allegations in their statements recorded under section 342 Cr.P.C.
They admit the insertion of advertisements (Ex 1/D to 1/F). It is, however, their case that they did not solicit deposits of money. The defence of accused Saleem Raza which is supported by accused Riaz Kausar reads as follows:- "I respectfully deny the charge, and submit that M/s Raza Enterprises was registered as business concern in July, 1986. The firm obtained Import/Export Licence from the Government of Pakistan, and obtained membership of Chamber of Commerce. Then, we obtained dealership of M/s Datamate of Japan, for sale, supply and distribution of computers, manufactured by the said Japanese Company and commenced the import of computers. Besides above we set up a computer training institute, which is duly registered with Sind Technical Board of Education, and the said Institution is still imparting education in technology to the students of schools and colleges.
Besides above, our firm set up Rent-A-Car business under the name of Greyhound International, and the advertisements of said businesses appeared in newspapers.
Obviously we needed finance for running above projects, and hence our firm sought partnerships on the basis of partnership agreements. In any case my firm never invited deposits 'nor indulged in business of banking. The first advertisement of our firm appeared in March, 1987 seeking partnerships but no Government agency ever raised any objection. We had duly replied the notice of State Bank of Pakistan, which is on Court record. Later on, we suspended our business and offered to return the money sought from partners. We tendered our assets at the disposal of Mr. Abdul Sattar Edhi. Our offices are still open and we have been refunding the capital invested by partners.
In the last, I submit that the entire business was done and handled by me alone, and I still bear responsibility for all liabilities and acts, deeds of the firm M/s Raza Enterprises Karachi. The other accused in present case, Riaz Kauser, is my real younger brother, who was all along, a sleeping partner, taking no active part, in the affairs of M/s Raza Enterprises."
6. The accused did not examine themselves on oath. They also led no defence.
7. The points for my determination are as follows:
(i) Whether the accused inserted advertisements in Daily 'Jang' Karachi, and Daily Dawn Karachi (Ex. 1/D to 1/F)?
(ii) Whether the accused invited deposits of money from public through (Ex. 1/D to 1/F), in contravention of the provisions of section 27-A of the Banking Companies Ordinance, 1962 ?
8. My findings on the above points are as follows:-
(i) Affirmative
(ii) Case is doubtful.
REASONS
9. POINT No. 1.
Mr. Saeed Hyder Bhatti, Deputy Director, State Bank of Pakistan (P.W-1) has produced the newspapers (Ex. 1/D to 1/F) containing the advertisements made by accused No. 1. The- accused have not disputed this position. I have, therefore, no difficulty in answering this point in affirmative.
10. POINT No. 2.
The accused have admitted the insertion of advertisements. It is, however, their case that they did not invite deposits of money, but had in fact sought partnerships in business. The translation of advertisement appeared in Daily 'Jang' Karachi, dated 16-8-1987 (Ex. 1/D) is as follows:- " RAZA GROUP OF UNITS From the business point of view Contractors, General Orders Supplier, Government of Sind.
Importers Exporters.
Sole distributors Data make Computer, Japan.
Data make Institute of Computer, approved by Sind Technical Board of-Education.
Grey-hound International Rent-a-Car - Biggest fleet of Cars in Pakistan Panjtan Construction Housing Projects.
You can also become a partner/sleeping partner by investing in our units Raza Enterprises (Regd)
32-B, phase 2, Main Defence Korangi Road, Defence Housing Society, Karachi.
Tel. 544 490 - 545745."
11. The advertisements made in Daily 'Dawn' Karachi (Ex. 1/E and 1/F) are also on the same lines. Ex.
1/F reads as follows:- "For a reasonable monthly income join Raza Group and strengthen the country's economy."
12. It is now to be seen whether the accused by making advertisements (Ex. 1/D to 1/F) have contravened the provisions of section 27-A of the Banking Companies Ordinance, 1979. Admittedly accused No. 1 is a partnership firm registered with the Registrar of Firms at Karachi. According to section 4 of the Partnership Act, 1932, partnership is the relation between persons who have agreed to share the profits of business carried on by all or any of them acting for all. From the definition of 'partnership' as contained in the above section the following are three essential elements in partnership:
(i) There must be an agreement entered into between two or more persons;
(ii) such agreement must be to share the profits of a business;
(iii) such business must be carried on by all or any of them acting for all.
13. The agreements on introduction of a new partner are on record (Ex. 2/l to 2/89). The accused had also made it clear in their reply to show cause notice (Ex. 1/H) that they had not invited any deposits of money from general public but the advertisements speak of a partner. The relevant extract of the reply made by accused vide (Ex. 1/H) reads as follows: "We are a partnership firm registered by the authority of Registrar of Firms. Neither we are Banking Company or a Corporation as defined under section 27-A of the Banking Companies Ordinance, 1962, nor we are in the investment business. We are not inviting deposits of money from the public.
You would appreciate that our. Advertisement in the issues of pipers stated by you speak of becoming a partner. You would also appreciate that Inspection Team,s for State Bank of Pakistan have duly inspected our records twice and found the same is order and a third inspection team is currently busy in inspection. W s have also supplied the copies of partnership agreements to the inspection Teams. Our advertisement nowhere invites deposits from general public. Our business is a fast growing enterprise which is quite evidence from the record. Since we have not invited any deposit hum the general public, provisions of section 27-A of the banking Companies Ordinance, 19(52 are not attracted in our case."
14. Section 27-A of the Banking Companies Ordinance, 1962, as it stood prior to amendment introduced by the Banking Companies (Amendment) Ordinance, 1988, published on 24th September, 1988, reads as under:- "Restriction on advertising for deposits- No company, firm or person, not being a banking company or a corporation or authority established by the Federal Government or a company duly authorised in this behalf by the Controller of Capital Issues and Corporate Law Authority or the Registrar Cooperative Societies, shall invite deposits of money from the public through advertisements in the public media or by postal circulars, hand-bills, displays in public places or by any other means."
15. A bare perusal of this section makes it clear that it restricted on advertising for deposits of money. The deposit of money means entrustment of money which is quite distinct from investment in a firm as partners. The 'deposit account' used in banking terminology means deposits of money with bankers withdrawable under the specified manner. The deposit of money with a bank is perhaps, the most important function of almost all modern banks, as it is largely by means of deposit that the bank prepares the basis for several other activities. The invitation to invest money as active partners or sleeping partners, hem ever, cannot be equated with the invitation of deposits of money. Again to constitute a partncrship' it is not necessary that partners should agree to share the losses of the Iii m, though agreement to share profits is necessary.
16. Mr. Muhammad Shibly, learned counsel for complainant has invited my attention to the provisions of section *27-A of the Banking Companies Ordinance, 1962, as substituted by the Banking Companies (Amendment) Ordinance, 1988, which-lays down:- "Prohibition of advertising for deposits and collection.- Notwithstanding anything contained in any other law for the time being in force, no company, firm or person, not being a banking company or a corporation or authority established by the Federal Government or a company duly authorised in this behalf by the Controller ol C anil J Issues or the Corporate Law Authority or the Registrar Coop, mou. Societies, shall solicit or invite deposits of money from the public through advertisements in the public media or by postal circulars, handbills, displays in public places or by any other means, or collect or receive any deposits of money in pursuance thereof. Explanation.- For the purpose of- the section, "deposits of money" shall be deemed to include money called, invited or collected for the purpose, or declared object, of investment or borrowing in any business carried on, or proposed to be carried-on, by the company, firm or person by whom, or on whose behalf, such money is called, invited, collected or received, irrespective of the nature of the relationship, arrangement or terms offered or provided by such company, firm or person to the person making the investment, deposits of money or payment or of the basis or understanding on which the money is so called, invited, collected or received."
17. Admittedly this amendment came into force on 24.9.PASS. The offence with which the accused are charged was allegedly committed much earlier. The question that directly arises whether the provisions of section 27-A of the Banking Companies Ordinance, 1962, providing an explanation to the words "deposit of money" which was added by the Banking Companies (Amendment)
Ordinance, 1988, have retrospective effect so as to cover the case of present accused, which otherwise did not fall within the mischief of section 27-A of the Banking Companies Ordinance, 1962. The case of Hafiz Abdul Karim Vs. The State. Reported in PLD 1959 Lahore 883, may be referred wherein it was observed:- "In accordance with the general principles the statutes which create new liabilities in connection with the past transactions should not be given a retrospective operation, that is to say, if an act when committed, is not an offence, then it should not be made punishable after it has been committed, but if a certain offence is an offence as the case here, then the punishment provided therefor cun be altered and it can take effect in pending cases."
18. With respect for the learned Single Judge, I am unable to share the view taken by him. Article 12 of the Constitution of Islamic Republic of Pakistan, 1973, is relevant in this behalf. Every legislature has the power of enacting law's both prospective as well as retrospective, but, whenever a retrospective law is enacted, the law stales so. But where its powers are subject to constitutional restrictions, it must act within those restrictions. Article 12 of the Constitution of Islamic Republic of Pakistan, 1973, contains such restriction, viz, the legislator cannot punish an act that was not an offence when it was committed. Therefore, the 'explanation' added by the Banking Companies (Amendment) Ordinance, 1988, which made the act of accused punishable, which was not punishable when committed, being in violation of constitutional provisions relented to above, cannot be given retrospective effect.
19. Having regard to the above factual and legal position. I am of the view that the accused did not contravene the provisions of section 27-A of the Banking Companies Ordinance, 1962, as it stood earlier. The accused are. Thus entitled to acquittal and are acquitted accordingly.