1. ' SAEEDUZZAMAN SIDDIQUI, J.--- The above direct appeal under Article 7 of the Parliament and Provincial Assemblies (Disqualification for Membership) Order, 1977 (President's Order No,XVII of 1977), hereinafter to be referred to as "the Order" only, is filed by the appellant to challenge the judgment of Special Court of Punjab consisting of Justice Akhtar Hussain of Lahore High Court, hereinafter called the "Special Court" only, dated 30-6-1991, disqualifying the appellant for a period of seven years from being elected or chosen as a member of Parliament or Provincial Assembly.
2. ' The appellant was elected as a member of National Assembly of Pakistan, from NA.105, Sheikhupura, on 16-11-1988 on the ticket of Pakistan People's Party. The appellant was nominated on the Board of Directors of Agricultural Development Bank of Pakistan (A.D.B.P.), hereinafter to be referred as "the Bank" only, as a non-official Director. By virtue of his office of Directorship of the Bank the appellant also became a member of the Debt Write-off Committee of the Bank, hereinafter to be referred as "the Committee only. On 6-8-1990, the President of Pakistan made Reference No,1 of 1990 to the Special Court on the allegations that the Committee during the period from December, 1988 to August 1990 wrote off 50% amount in 48 cases, 90% in 39 cases and 100% in 48 cases in excess of its power. It was alleged in the reference that the appellant as member of the Committee was also responsible for writing off the accumulated interest on the loan obtained by his wife Mst. Shamshad Begum amounting to Rs,2,28,098 in contravention of Rules 18(1) and 18(8) of the A.D.B.P. Rules, 1961. The above acts on the part of appellant, according to reference, amounted to "misconduct" as defined in the Order. The reference was contested by the appellant and on the pleadings of the parties following issues were framed by the Special Court:-- "(1) Did the respondent commit misconduct by abusing his authority as Director of the Agricultural Development Bank in granting remission to his own wife about the interest amounting to Rs,2,28,098 by taking part in the meeting dated 13-12-1989 dealing with the subject? O.P.P.
(2) Did the respondent leave the said meeting after item No,15 of the Agenda was disposed of and thereby did not take part in the decision relating to remission of his wife's interest? If so, its effect?
3. O.P.R.
(3) Is Article 4 of the P.P.O. 17 of 1977 ultra vires of the Constitution? O.P.R.
(4) Has the said Article been applied to the respondent in a discriminatory manner? Its effect?
4. O.P.R."
5. ' After recording evidence of the parties, the Special Court decided all the issues against the appellant and consequently held the appellant guilty of misconduct under the Order and debarred him from being elected or chosen as a member of Parliament or a Provincial Assembly for a period of 7 years. The learned counsel for the appellant has raised the following contentions in support of the appeal:--
(1) The alleged act of misconduct if at all committed by the appellant was done in his capacity as the member of the Board of Directors of the Bank and not as a member of National Assembly and as such the Special Court had no justification to hold the appellant guilty of `misconduct' under the Order.
(2) The allegations in the reference against the appellant, even if proved, did not constitute misconduct within the meanings of the Order,
(3) That the P.Ws. In the case admitted that the appellant's wife was entitled to remittance of interest on the amount of loan and as such there was no evidence on record to support the allegations of `misconduct' against the appellant in the case, and
(4) The rebuttal evidence in the case was led through P.Ws. Who remained present in the proceedings which prejudiced the defence of the appellant in the case. The learned Attorney- General and the Deputy Attorney-General supported the judgment of Special Court.
6. ' Before considering the appeal on merits it appears appropriate to determine the nature of proceedings under President's Order 17 of 1977 and the manner in which the evidence recorded in the case is to be treated. This Court in a very recent pronouncement in the case of Sardar Muhammad Muqeem Khoso v. President of Pakistan (Civil Appeal No,262-K of 1991 decided on 11-8- 1993) commented on the nature of proceedings under President's Order 17 of 1977, as follows:- "16. Before touching the merits of the case, it may be pertinent first to dilate upon the question, as to the nature of the proceedings before the Tribunal. In this regard, it may be pertinent to point out that on 25-11-1977, two President Orders were issued, namely, President Order 16 of 1977 under the caption 'Holders of Representative Offices (Punishment for Misconduct) Order, 1977', which makes misconduct on the part of holder of a representative office a criminal offence punishable with imprisonment for a term which may extend to seven years or with fine or with both under clause (1) of Article 3 and it also disqualifies a convicted holder of a representative office for a period or seven years from being elected or chosen as a member of Parliament or a Provincial Assembly under clause (4) of above Article 3 of the Order. The above President Order 16 of 1977 also contemplates setting up of Special Courts. Article 6 of it provides that a Special Court shall have all the powers conferred by the Code of Criminal Procedure, 1898, on a Court of Session exercising original jurisdiction. Whereas, Article 7 lays down that any person charged with an offence punishable under Article 3 shall be a competent witness for the defence and may give evidence on oath in disproof of the charges made against him or any person charged with may at the same trial, but sub-clause (a) of the proviso provides that the accused shall not be called as a witness except on his own request. The President also issued the Order i,e, President Order No,17 of 1977, which was invoked in the present case. It provides only disqualification for a period of seven years but does not contemplate imposition of any sentence of the nature provided for in P.O. No,16 of 1977. Article 6 of the Order provides that a Special Court shall have the powers of a Civil Court trying a suit under the Code of Civil Procedure, 1908, in respect of the matters mentioned in sub-clauses (a) to (e), namely, summoning and enforcing attendance of any person and examining him on oath, requiring the discovery and production of any document, receiving evidence on affidavit, issuing commission for the examination of witnesses or documents and requisitioning any public record or copy thereof from any Court or office.
17. It may also be pertinent to mention that at the time of issuance of the above President Orders 16 and 17 of 1977, we had in the field Holders of Representative Offices (Prevention of Misconduct) Act, 1976 (Act (IV of 1977) and Parliament and Provincial Assemblies (Disqualification for Membership)
7. Act, 1976 (Act V of 1977), both gazetted on 9-1-1977, which corresponded with President Orders Nos.16 of 1977 and 17 of 1977, respectively. In other words, section 3 of Act IV of 1977 made misconduct on the part of any holder of representative office punishable with imprisonment for a term which may extend to seven years or with fine or with both. It also under subsection (4) of section 3 provided that upon conviction, the convict shall be disqualified until holding of the next general elections to the National Assembly from being elected or chosen and from being member of the Parliament or a Provincial Assembly. Whereas, section 5 of Act V of 1977 provided that upon conviction the person shall stand disqualified until the holding of the next general elections to the National Assembly from being elected or chosen as, and from being a member of Parliament or of a Provincial Assembly. However, section 6 of above Act V of 1977 lays down that an enquiry under the above Act shall be held as nearly as may be in accordance with the procedure provided in the Code of Criminal Procedure, 1898, for trial before a High Court, as if reference in the Court to the accused were a reference to the respondent and reference to conviction were omitted. This provision is in contradiction to Article 6 of the Order which provides that a Special Court shall have the power of a Civil Court trying a suit under the Code of Civil Procedure, 1908, in respect of the matters mentioned in sub-clauses (a) to (e) already referred to hereinabove.
24. However, the question arises, whether the above principles enunciated in the case of Muhammad Saeed and 4 others (supra) can be pressed into service in the present case as the law-makers consciously made a distinction between President Order No,16 and President Order No,17 as to the nature of the proceeding by incorporating Article 6 in the above two Orders couched in different language, whereas in the former, it has been provided that a Special Court shall have all the powers conferred by the Code of Criminal Procedure, 1898, as a Court of Session exercising original jurisdiction, whereas in the latter by providing that Special Court shall have the powers of a Civil Court trying a suit under the Code of Civil Procedure, 1908, for the matters mentioned in sub- clauses (a) to (e) as highlighted hereinabove in para.
16. This conscious distinction made by the law-makers is to be viewed with the factum that in Act V of 1977 which corresponded to the Order (i,e, President Order No,17 of 1977) and which was holding the field before the issuance of the Order, section 6 provided that an enquiry under the Act shall be held as nearly as may be in accordance with the procedure provided in the Code of Criminal Procedure, 1898, for trial before High Court, as if reference in the Court to the accused were a reference to the respondent and reference to conviction were omitted as pointed out hereinabove.
8. Keeping in view the above conscious distinction made by the law-makers, I am inclined to hold that the proceeding before the Tribunal under the Order is of civil nature. The factum that Rule 9 of the Rules empowers the Tribunal to examine a respondent charged with misconduct, in my view, would not change the nature of the above proceedings. But I may add that since recording of a finding by the Tribunal against a respondent entails disqualification for a period of seven years from being elected or chosen as a member of Parliament or a Provincial Assembly, the Court while appraising the evidence, will extend the benefit of doubt, if any, to him notwithstanding my above finding."
9. ' It is, therefore, quite clear that in deciding the issues in the case the Special Court will be guided by the preponderance of evidence, however, as the findings of the Special Court entail disqualification of the person proceeded against under P.O. No,17 of 1977 all benefits of doubt arising in the case will be extended to him.
10. ' Keeping in view the abovestated principles we have gone through the evidence. In the above case with the assistance of learned counsel for the appellant. The learned Special Court on appraisal of oral and documentary evidence in the case reached the conclusion that the appellant attended the meeting of the Committee on 13-12-1989, in which decision was taken on the application of his wife for writing off the interest on loan which constituted violation of Rules 18(1) and 18(8) of the A.D.B.P. Rules, 1961 and thus he was guilty of "misconduct" as defined in Article 2(a) of the order. In arriving at the above conclusion, the Special Court relied on the minutes of the meeting of the Committee held on 13-12-1989 and the oral testimony of P.W.1 Anwar Mubashir, a Director of the Bank who attended the meeting of the Committee held on 13-12-1989. The conclusion of the learned Special Court that the appellant attended the meeting of the Committee on 13-12-1989 and that he was present in the meeting when the application of his wife, for writing off the interest on the loan, was taken up for consideration, is fully supported by the evidence on record. The learned Special Court rightly observed that in the minutes of the meeting of 13-12-1989, there is no mention that the appellant left the meeting after presenting the application of his wife to the Chairman. The learned Special Court also rightly took into consideration that the minutes of the meeting of the Committee held on 13-12-1989 were confirmed in the subsequent meeting of the Committee, which was attended by the appellant as well, without any objection to its contents. We find nothing wrong in the above reasoning of the Special Court. Even otherwise, in the admitted circumstances of the case, it would not make any difference if the appellant succeeded in showing that he was not present at the time when his wife's application for remission of interest on the loan was taken up for consideration' by the Committee. It is not necessary, in order to prove exercise of influence by one person on the decision of another that the former must be present before the latter physically ;in order to influence the latter's decision. It is quite possible that the former rainy be absent at the time of decision by the latter but because of the circumstances created by the former the decision of the latter is effectively influenced by the former. Therefore, in our opinion, what is z elevant is the capacity of a person to influence the decision of another and not his presence or absence at the time of decision. The real question falling for determination in the case before us, therefore, is, whether the decision to write off the interest on the loan of appellant's wife was taken by the Committee in its meeting held on 13-12-1989 under the influence exercise by the appellant and if so, whether it amounted to "misconduct" as defined in the Order.
11. ' In the case before us the admitted position on record is that Mst. Shamshad Begum, wife of appellant, had obtained a loan of Rs,75,000 in the year 1976-77 from the Bank which was repayable with interest within 6 years. It is also an admitted position on record that until 13-12-1989, when the interest on the above loan was remitted by the Committee, Mst. Shamshad Begum had repaid to the Bank out of the loan amount only a sum of Rs,25,000 and the interest outstanding on the loan as on 13-12-1989 was Rs,2,28,098. It is also not disputed that on the agenda of the meeting of the Committee scheduled for 13-12-1989 the application of the appellant's wife for remission of the interest on the loan was not listed. The application for remission of the interest on the loan of appellant's wife was produced by the appellant personally before the Chairman of the Committee during the course of the meeting which was attended by the appellant as member of the Committee. The application of the appellant's wife was not accompanied by any other document such as the report of the Field Staff of the Bank certifying the genuineness of the claim, which according to the practice followed by the Bank was necessary for decision of such an application.
12. The decision on the application of the appellant's wife was taken then and there by the Committee at the behest of the Chairman without even waiting for the report of field staff of the Bank. The appellant at the relevant time was the sitting Member of National Assembly of the Parliament, besides being one of the Directors of the Board of Directors of Bank and a member of the Committee. The former Chairman of the Bank, who was produced by the appellant as his witness in the case before the Special Court, stated that he was known to appellant since 1961, and that he had suggested to the appellant to depart from the meeting of 13-12-1989 because of his friendship with him and the affiliation of appellant with P.P.P. In the above admitted circumstances of the case it could not be argued successfully that the decision to write-off the interest on the loan of appellant's wife stemmed from the merits of the case. It was evidently a decision to show favour to appellant because of his position and status and above all his connection with the former Chairman. The fact that the appellant was not attributed any express word which would have indicated that he attempted to influence the decision of the Committee on the application of his wife, was not of much significance in the circumstances of the case. It was not necessary to prove exercise of undue influence by the appellant over the Committee that he should have said so in express words. The exercise of influence by the appellant over the Committee in taking the above decision could be legitimately inferred from the circumstances created by the appellant in which the Committee was not left free to decide on merit save to take a decision favourable to appellant.
13. The presentation of the application of his wife by the appellant to the Chairman of the Committee on 13-12-1989, when the matter was not listed on the agenda of the meeting; the acceptance of the same by the Chairman then and there and directing the Committee to write-off the entire interest on the loan bypassing the normal procedure followed by the Bank to call for the report of field staff on such application before deciding the same were circumstances sufficient to establish that the decision was the result of influence exercised by the appellant over the Committee through its Chairman.
14. ' The next question which arises for consideration in the case is whether the appellant while presenting the application of his wife to the Chairman of the Committee, for writing-off the interest on the loan acted as a Director of the Bank or he was also acting in his capacity as a member of National Assembly. To determine this question it will be appropriate to look into the circumstances under which the appellant was appointed as the Director on the Board of Directors of the Bank. The appellant was elected as a member of National Assembly on 16-11-1988. The notification of the Government dated 30-8-1989 appointing him as a non-official Director on the Board of Directors of the Bank reads as follows:-- "To be published in the Gazette of Pakistan, Extraordinary, Part II Government of Pakistan Finance Division (Internal Finance Wing)
15. ' Islamabad, the 30th August, 1989.
16. ' Notification ' SRO.(I)/88.--In exercise of the powers conferred by clause (iv) of subsection (1) section 9 of Agricultural Department Bank Ordinance, 1961 (IV of 1961), read with subsection (1) of section 11 thereof, the Federal Government is pleased to appoint Rai Rashid Ahmed Khan M.NA. (Sheikhupura) to be a non-official Director of the Board of Directors of the Agricultural Development Bank of Pakistan.
17. (Sd.)
18. ' Muhammad Iqbal Rao Section Officer (IF-II)
19. ' No,F.1(9)IF, 1/87."
20. The above notification clearly indicated that the appointment of appellant as Director of the Bank was not on account of any other qualification except for his status as M.NA. In fact the position of the appellant as nonofficial Director of the Bank was secondary to his status as M.NA. The former Chairman of the Bank examined by the appellant as his witness in the case also stated before the Special Court that he advised the appellant to leave the meeting because of his relations with him and affiliation to a political party. The appellant while presenting application of his wife to the Chairman of the Committee seeking remission of interest on loan was not discharging any function in his capacity as the Director of the Bank. In these circumstances, it could not be said that the appellant while seeking decision of the Committee on the application of his wife acted as Director of Bank and not in his capacity as the M.NA. No such line of demarcation could be drawn in the circumstances of the case to attribute the action of appellant as falling only under one of his abovementioned two capacities. We are, therefore, in agreement with the view taken by the Special Court that in the circumstances of the case it could not be said that the appellant while seeking decision of the Committee on the loan application of his wife was not acting in his capacity as an M.NA. The influence exercised by the appellant over the Committee for getting decision on the application of his wife for remission of interest on loan, was therefore, as much in his capacity as an M.N.A. As it could be considered in his other capacity as the Director and member of the Debt Write-Off Committee.
21. ' The next contention of the appellant is that the act attributed to appellant did not amount to misconduct as defined in the Order. The definition of misconduct in Article 2(a) of the Order is as follows:- "'misconduct' refers to conduct after December, 1970, and includes bribery, corruption, jobbery, favouritism, nepotism, wilful maladministration, wilful misapplication or diversion of public moneys or moneys collected, whether by public subscription or otherwise, and any other abuse of whatsoever kind of power or position, and any attempt at, or abetment of, such misconduct:"
22. ' During the course of hearing of above appeal we pointedly asked both the learned counsel for the appellant as well as the learned Attorney-General and Deputy Attorney-General to place before us the Rules governing the exercise of power to remit the interest on loans advanced by the Bank, but none were produced though promised by both the sides. We ourselves also made attempts to find out if any such Rule, regulation, bye-law, or guideline existed but could not find any, on the subject.
23. The appellant in his evidence before the Special Court in cross-examination stated that he was not aware if there was any rule, regulation or bye-law fixing the criteria for remission of interest on loan.
24. The Director of Bank Mr. Anwar Mubashir, examined by the Referring Authority in reply to a Court question stated as follows: "Procedurally speaking such an application whenever received has to be sent to the field staff in order to verify if the prayer for remission of interest was genuine and if the circumstances of each individual applicant required such a benevolent treatment."
25. ' The former Chairman of the Bank Mr. Ch. Ahmed Saeed produced as a witness by the appellant before the Special Court though stated in his evidence that the application of appellant's wife was included in the agenda as it was found in accordance with the criteria for writing off the interest but neither this statement was further elaborated nor the learned counsel for the appellant during the course of argument was able to refer to any document containing any such guideline. The evidence in the case, therefore, is also of no assistance in this regard. According to material on record before us Debt Write-off Committees were constituted from time to time under the directions of the Board of Directors of the Bank which in their discretion wrote-off interest on loans on case to case basis, without following any seer procedure or criteria. This is reflected in the minutes of the meetings of Debt Write-off Committee placed on record before us. For instance, the Debt Writ-off Committee in its meeting held on 13-12-1989 took up about 20 cases to consider the remission of interest of loan and allowed remission in all cases without stating any reason for remission except in two cases where it was boldly stated that they were distress cases. In one of the cases considered in the above meeting, the Committee even reviewed its previous decision of 50% remission of interest and allowed 100% remission without stating the reason for the change of its view. Similarly, in the meetings of Debt Write-off Committee held on 21-7-1990 and 11-2-1991 interest on loans in a large number of cases was remitted without disclosing any reason for remission. Such arbitrary exercise of power by the Debt Write-off Committee finds no support either from any statutory provision, rule, regulation, by-laws or any policy guideline framed by the Bank or State Bank of Pakistan in this behalf. Needless to say, that the Bank was created as a Banking Company under the Agricultural Development Bank Ordinance, 1961 (hereinafter to be referred as the Ordinance only). The management of affairs of the Bank vested in the Board of Directors created under section 8 of the Ordinance. The Board under the provisions of the Ordinance is required to act on commercial considerations in discharging its functions and on question of credit and monetary policy according to directions of State Bank of Pakistan. Fifty-one per cent. Of the share capital of the Bank is subscribed by the Federal Government or by financial institutions owned or controlled by it while the rest of the share capital is raised by offering the same to the Provincial Government, the cooperative societies and members of the public. The functionaries charged with the authority to administer the affairs of the Bank were thus dealing with the public money and as such were expected to act with great circumspection and strictly in accordance with law. The examination of the minutes of meetings of Debt Write-off Committee on record, however, revealed that while dealing with the cases of writing-off interest on Bank loans, the Committee neither kept in view the interest of the Bank nor it acted on commercial considerations which was the requirement under the Ordinance. We have carefully examined various provisions of the Ordinance and Agricultural Development Bank of Pakistan Rules, 1961 (hereinafter to be called "the Rules" only) framed thereunder and find that under the Ordinance besides constitution of Board of Directors which was made generally responsible to control and manage the affairs of the Bank, another body known as Executive Committee of the Bank was also contemplated under section 12 of the Ordinance which consisted of the Chairman and 3 others Directors of the Bank.
26. This body in the hierarchy of Bank ranked next to the Board of Directors in so far its power to administer the affairs of the Bank was concerned. The powers to be exercised by the Executive Committee of Bank are mentioned in Rule 22 of the Rules. As follows:-- "22. Powers of the'Executive Committee--The Executive Committee shall have power--
(a) to sanction, in any one case non-recurring expenditure up to R&.50,000 and recurring expenditure up to Rs,20,000 a year within the sanctioned budget;
(b) to write-off losses, including those pertaining to irrecoverable loans and interest (on return) up to Rs,10,000 in any case;
(c) to finally sanction loans up to a maximum of five lakh of rupees irrespective of the amount of loan applied for Subject to such directions as may be issued by the Board."
27. From reading of various provisions of the Ordinance and Rules framed thereunder, it is quite clear that besides the Board and the Executive Committee of the Bank no other authority of the Bank was competent to write off losses including those pertaining to irrecoverable loans and interest. It is also quite clear that the Executive Committee of the Bank under Rule 22(b) could write off the loan and interest only up to Rs,10,000 in any one case and that too if the loan and the interest had become irrecoverable. We are, therefore, quite clear in our mind that unless the loan or the interest was found to be irrecoverable by the Bank, it could not be remitted or written off by it. In the scheme of the Ordinance, the power to write off interest on Bank loans exercised by the Debt Write- off Committee created under the directions of the Board of Directors was open to serious doubt, and in any case the power if any available in this regard could not be exercised by the Committee except on commercial considerations which meant that the loan or the interest had become irrecoverable.
28. ' Examined in the above context, we find that the remission of interest on loan granted to appellant's wife was wholly unjustified and illegal and was the result of undue influence exercised by the appellant over the Committee and its Chairman in abuse of his position as the sitting M.NA.
29. The action of appellant in obtaining remission of interest on the loan of his wife from the Committee therefore, amounted to 'misconduct' within the meaning of Article 2(a) of the Order both for the reason that it was an act of favouritism and also amounted to abuse of the position of appellant as M.NA.
30. ' The last contention of the appellant is that the defence of the appellant in the case was seriously prejudiced as the Referring Authority examined a witness in rebuttal who remained present throughout the period the evidence of appellant's witnesses was recorded by the Court. The contention of the appellant was disposed of by the; Special Court as follows:- "Presence of the witness in the Court on each hearing was explained away on the ground that he had to I there almost as a representative of the Agricultural Development Bank of Pakistan to instruct the learned Standing Counsel, and secondly that what he deposed to was nothing more than contents of the record. There was little to doubt the plea that the witness as representative of the Bank was supposed to attend proceedings on each date almost as a party. No rule was cited to preclude a party from attending the hearing on each date. This limp of objection, therefore, fails."
31. ' Apart from the fact that the reasoning of the Special Court did not suffer from any infirmity, the main question before us is whether any real prejudice was caused to the appellant in his defence in the case because of the presence of the witness (P.W.1) during the recording of the evidence of appellant's witness. The learned counsel for the appellant was unable to show as to how his client's defence was prejudiced in the case because of the presence of P.W.1 during the recording of the evidence of appellant's witnesses in the circumstances of the case. P.W.1 had sworn an affidavit in the case which is dated 6-10-1990. The appellant, therefore, knew beforehand that what is likely to be deposed by this witness in Court. The evidence of this witness recorded before the Court on 29- 4-1991, does not show any improvement in substance over and above his sworn statement dated 6-10-1990. In these circumstances, merely contending that the defence of the appellant was prejudiced without pointing out particular reason for the alleged prejudice, was not sufficient. We find no merit in the appeal which is, accordingly, dismissed.
32. ' Before parting with the case, we would like to state that there appears to be no statutory Rule or Regulation or any expressed policy guideline issued by the State Bank of Pakistan regulating and controlling the powers of Financial Institutions to write-off loans and interest with the result the power to write-off loans and interest is being exercised by these institutions arbitrarily without keeping in view the commercial considerations which is the guiding principle in such cases and the interest of Banks and the depositors. It is, therefore, desirable that in order to curb and control the prevailing financial indiscipline in the Financial Institutions immediate measures be taken to control and regulate their powers to write-off loans and interest either through statutory provisions or through strict policy guidelines prescribed by the State Bank of Pakistan in exercise of its supervisory jurisdiction over Banking Institutions under Banking Companies Ordinance, 1962. This is necessary to prevent the mismanagement and misuse of public money. We are also of the view that the above subject is fit one to be taken up by this Court in exercise of its jurisdiction under Article 184(3) of the Constitution as it is matter of great public importance. The office is accordingly directed to register a separate case for chamber processing in the first instance and issue notices to State Bank of Pakistan and other major Banking institutions to appear before the Court and place before it list of written-off loan and interest cases and the rules, regulations, by-laws and policy decision followed in this behalf.