' State Bank of Pakistan instituted a private complaint under section 84 read with section 27-A and section 83(1-D) of the Banking Companies Ordinance, 1962 against Messrs Shaikh Sajjad Hussain and Sons (Pvt.) Limited and its Managing Director Shaikh Sajjad Hussain and its Directors Akhtar Saleem and Aijaz Ahmed. The later two are absconding and only Shaikh Sajjad Hussain was charged in the case. The accused were served with a show-cause notice on 31st July, 1987 for contravening the recently promulgated section 27-A of the Banking Companies Ordinance, 1962.
This section 27-A was inserted in the Banking Companies Ordinance, 1962 on 28-6-1987 through Finance Act, 1987. This new provision made it an offence for any 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 Controller of Capital Issues and Corporate Law Authority or the Registrar, Cooperative Societies, to invite deposits of money from the public through advertisement in the public media or by postal circulars, hand bills displays in public places etc. The allegation was that Messrs Shaikh Sajjad Hussain & Sons (Pvt.) Limited had invited deposits of money from the public through advertisements in dailies Mashriq, Nawa-i-Waqt and Jang, Lahore, dated 18-7-1987, 19-7-1987 and 20-7-1987 respectively and thereby contravened the provisions of recently promulgated section 27-A of the Banking Companies Ordinance which was made punishable under subsection (1-D) of section 83 of the said Ordinance. This subsection (1-D) was also inserted, alongwith section 27-A, by the 'Finance Act, 1987. Accused Shaikh Sajjad Hussain, as the Managing Director of the Company, submitted a reply (dated 3rd August, 1987) in which he disowned any advertisement in daily Mashriq but admitted that his company had inserted advertisements in daily Jang and Nawa-i- Waqt but denied that through these advertisements the company had solicited deposits of money from the public. It appears that the State Bank of Pakistan did not consider it worthwhile to prosecute the accused on the basis of these advertisements and the complaint was based, as earlier mentioned, on the advertisements which subsequently appeared in the daily Jang of Karachi, dated 5-12-1987, 6-12-1987 and 9-12-1987. On 8-5-1988, cognizance was taken by the Court and summons were issued to the accused but it appeared that they were avoiding service and on 30-6-1988 bailable warrants were issued against them. Even bailable warrants could not be served and on 1-11-1988 proclamation was ordered to be issued under section 87, Cr.P.C. Eventually, all the accused were declared absconders, prosecution evidence was recorded on 29-1-1989 for purposes of section 512, Cr.P.C. And the Court kept the case on dormant file. On 12-2-1992 accused Shaikh Sajjad Hussain moved application under sections 497, 498, Cr.P.C. And sought bail and explained that he had never avoided service of notices and of bailable warrants and the reports of the police in that regard were incorrect and that it was on 27-1-1992 when the Advocate of accused appeared in Court in connection with Criminal Miscellaneous Applications Nos.26 and 27 of 1991, that he learnt that the accused had been declared absconder in the present Criminal Miscellaneous Application No,53 of 1988. On 27- 2-1992 bail was granted to the accused and the same was confirmed on 27-5-1992. On 20-8-1992 charge was framed against the accused in the following terms:-- "I, Justice Qaiser Ahmed Hamidi, the Judge of the High Court of Sindh, hereby charge you Sh. Sajjad Hussain son of Fayyaz Hussain resident of Karachi as follows:-- ' That you being one of the directors and chief executives of Messrs Sh. Sajjad Hussain & Sons (Pvt.)
Limited having its office at 216, Sea Breeze Plaza, Shahrah-e-Faisal, Karachi, inserted/got inserted advertisement in daily Jang, Karachi, dated 5-12-1987, 6-12-1987 and 9-12-1987 inviting deposits of money from the public, without being authorized in this behalf by any competent authority, in contravention of section 27-A of the Banking Companies Ordinance, 1962 punishable under section 83(1-D) of the said Ordinance and within the cognizance of this High Court. And I hereby direct that you be tried by this High Court on the said charge'."
2. The accused pleaded not guilty to the charge. In support of its case, State Bank examined P.W.1 Muhammad Rafique, Regulating Officer of Banking Control Department, P.W.2 Jamil Ahmed, Senior Assistant (Advertisement) of daily Jang, Karachi and P.W.3 Aftab Ahmed Khan, Proprietor of Khurram Advertisement Agency, Karachi. In his statement recorded under section 342, Cr.P.C., the accused admitted that he was the Managing Director of Messrs Shaikh Sajjad Hussain and Sons (Pvt.) Limited but denied that he had invited any deposits from public. He also denied having inserted advertisement in daily Jang of 5-12-1987, 6-12-1987 and 9-12-1987 for the purpose of inviting deposits. He, however, also stated that he did not know whether the deposits were invited by his company. He also stated that he was out of the country during the period when the three advertisements had appeared in the daily Jang. He further stated that he never transacted any Banking business but in his company some persons had invested money as partners. He declined to examine any defence witness but offered himself to be examined on oath under section 340(2), Cr.P.C. In this statement on oath, he stated that although the three advertisements did appear in daily Jang on 5-12-1987, 6-12-1987 and 9-12-1987 but he had not inserted those advertisements. He also stated that one Zafarullah was Manager of his company but he had resigned on 1-11-1986 and he produced his resignation letter as Exh.15. He also produced copy of daily Jang, dated 12-2-1987 in which he had inserted an advertisement declaring that the said Zafarullah had ceased to be their employee with effect from 1-11-1986 and since then the Company had nothing to do with him.
He also produced copy of his Passport as Exh.17 showing that he had gone out of the country on 21- 11-1987 and had returned on 7-1-1988.
3. The following points arise for the determination of the Court:
(i) Whether the accused Shaikh Sajjad Hussain or the Firm of Shaikh Sajjad Hussain (Pvt.) Limited inserted the three advertisements in the daily Jang on 5-12-1987, 6-12-1987 and 9-12-1987 (Exh.4, Exh.5 and Exh.6)?
((ii) Whether the advertisements amounted to inviting deposits from public?
(iii) Whether the accused had committed an offence under section 27-A of Banking Companies Ordinance?
4. Before I deal with these points, I would like to dispose of the argument of learned defence counsel that the complaint was not filed by a properly 11 authorised person and that the complainant had not been examined by the Court under section 200, Cr.P.C. Before it took cognizance of the offence and therefore, the proceedings are void and illegal. As for the first objection (that the complaint was not filed by an officer properly authorised in that behalf), the complaint was filed through the Banking Officer. Banking Control Department of the State Bank of Pakistan who was P.W.1 Muhammad Rafiq Khan who had signed the complaint. He stated that he was generally authorised to file complaints in the Court and produce copy of notification, dated 7th September, 1987, Exh.2. Under this notification, the State Bank of Pakistan had authorised the Director, Additional Director, Senior Deputy Director, Deputy Directors, Assistant Directors and Banking Officers of the Banking Control Department of the State Bank of Pakistan to file complaint under section 84 of the Banking covered by the last of the categories mentioned in the notification.
He is a PCr.0 Companies Ordinance, 1962 in the Courts of competent jurisdiction. Muhammad Rafiq, being the Regulating Officer in the Banking Control Department isBanking Officer of the Banking Control Department and is, therefore, authorised to file complaints on behalf of the State Bank. The complaint was, therefore, filed by an officer competent to do so. As for the second objection (that the complainant had not been examined by the Court under section 200, Cr.P.C.), it appears that the learned defence counsel did not take note of the proviso (b) to the said section which provided that when the complaint is made in writing by a public servant, acting in the discharge of his official duties, he need not be examined in Court under section 200, Cr.P.C. In fact the provisions of section 200, Cr.P.C. Are not applicable to a complaint which is filed by a public servant. As such, there was no necessity for the Court to examine the complainant under section 200, Cr.P.C. Both the objections are rejected as being untenable.
5. I shall now take up the points for consideration. My findings thereon are as follows:-- Point No,1: On this point the prosecution has examined two witnesses. P.W.2 Jamil Ahmed is the Senior Assistant (Advertisement) of daily Jang and he stated that these three advertisements Exhs.4, 5 and 6 had been inserted in the newspaper by Shaikh Sajjad Hussain & Sons (Pvt.) Limited through Messrs Khurram Advertisement Booking Agency. The second witness on the point is P.W.3 Aftab Ahmed Khan, Proprietor of Khurram Advertisement Agency. He stated that he had received these advertisements from Zafatullah Khan, Manager of accused company Shaikh Sajjad Hussain & Sons and he had forwarded them to the daily Jang for publication. He added that Zaffarullah Khan often used to send advertisements for the newspapers through his (witness') agency. In cross- examination he stated that no written note for advertisement was sent by the accused to him but the accused often dictated the advertisements on telephone and since he knew the accused he had no reason to doubt the genuineness of such advertisements. He also stated that Zafarullah Khan used to dictate the advertisements on telephone and in those days he had no direct dealing with Shaikh Sajjad Hussain (accused). It is thus sufficiently proved that Zafarullah Khan was the Manager of the company of the accused and he had sent these advertisements to Aftab Ahmed Khan of Messrs Khurram Advertisement Agency for publication in the daily Jang, that Khurram Advertisement Agency was the duly approved concern of the daily Jang and was authorised to receive advertisements from the general public and it was this agency which had inserted the advertisements in the daily Jang. Both these witnesses are totally disinterested and independent witnesses. There is no reason why they should have spoken lie on oath. The defence plea that Zafarullah Khan was no more in their employment and they had terminated his services with effect from 1-11-1986 and since then he had no concern with the company of the accused has not been sufficiently proved. No doubt, the accused has produced letter of resignation of Zafarullah Khan, which is dated November 1, 1986 (Exh.15) and has also produced a photo copy of daily Jang of 12-2- 1987 in which the accused had given an advertisement informing the general public that Zafarullah Khan had ceased to be in their service since 31st December, 1986 but the factum of the resignation has not been proved. It was incumbent upon the accused to examine Zafarullah Khan as a witness in support of his claim that Zafarullah had resigned from the service of the accused company and had not thereafter rejoined his services nor the accused has explained as to why he had not examined Zafarullah Khan in his defence. The presumption therefore, is that had Zafarullah Khan been examined by the accused as a defence witness, he would not have supported the defence story on this point. Besides, there is no guarantee that after termination of his employment with effect from 1st December, 1986, he had not rejoined the service in the company of the accused. He could have clarified this position had he been examined by the accused as a defence witness and the presumption, again, would be that had he been examined in the Court as a defence witness, he would not have denied his subsequent rejoining the firm of the accused. Besides, the advertisements are clearly in the name of the company of the accused and give its address and telephone number. It was the accused and his company which were the beneficiary of these advertisements. There is no reason why some one else might have inserted these advertisements in the newspapers. He could not gain anything from these advertisements. The company of the accused was the beneficiary of these advertisements and therefore, there is no escape from the conclusion that it was the company of the accused which had inserted the advertisements.
Learned counsel for the defence argued that Zafarullah Khan might have inserted these advertisements out of malice for the accused because of the termination of his service. There is no three in this argument and I do not subscribe to this plea. Even according to the accused, Zafarullah Khan had himself resigned and his services were not terminated by the accused. There was, therefore, no reason why Zafarullah Khan should bear any grudge against the accused.
Besides, no question was put to P.W.3 Aftab Ahmed Khan in his cross-examination that the company of the accused had not paid for the advertisements and since Aftab Ahmed Khan would not have accepted the advertisements without payment it follows that the company of the accused had made payment for these advertisements. I would, therefore, hold that it was the company of the accused which had inserted these advertisements in the daily Jang through Zafarullah Khan and P.W.3 Aftab Ahmed Khan. The point is decided in the affirmative.
Point No,2: ' Section 27-A of Banking Companies Ordinance was introduced in the said Ordinance through Finance Act, 1987 which came into effect on 28-6-1987. It was totally replaced by the Banking Companies (Amendment) Ordinance 1988 and apart from some charges in the language, an explanation was added which defines the scope of the phrase "deposits of money" as used in the said section and provided that this term would be deemed to include "money called, invited or collected for the purpose or declared objection of investment or borrowing in any business".
Learned counsel for the defence referred me to the judgment in the case of State Bank of Pakistan v. Messrs Raza Enterprises 1990 PCr.LJ 317 and argued that this substituted section 27-A had come into existence on 24-9-1988, after the commission of the alleged offence in December 1987, and this substituted section 27-A was not retrospective in its application and, therefore, could not be applied to the present case. This argument was totally uncalled for and irrelevant because the prosecution has not launched the prosecution of the accused on the basis of the substituted and new section 27-A of the Banking Companies Ordinance. The prosecution was launched on the basis of the original section 27-A which was brought on the Statute Book through Finance Act, 1987 on 28-6-1987. There is no denying the fact that the substituted section 27-A is not retrospective in its effect, as held in the case of Messrs Raza Enterprises 1990 .PCr.LJ 317. The case of the accused shall be governed by the original section 27-A.
8. The defence had, firstly, denied that these advertisements were inserted by the accused and his firm and had, alternately, argued that the contents of these advertisements did not amount to "inviting deposits of money from the public" as contemplated in original section 27-A and the accused company, through these advertisements, had only sought to procure some partners who could invest some money in the business of the accused company. All the three advertisements are in identical language. One of them is reproduced below {{URDU TEXT}}
9. The accused company is not a partnership firm and as such it cannot be stated that the accused-company was seeking partners. No project has been given by the accused nor any offer was made in the advertisement that the details of the project would be given to the intending ir.Vestors. A plain reading of these advertisements shows that the accused company had invited cash deposits (which may be called investment). As such, without referring to the explanation as to what may be called "deposits of money", as given in the substituted section 27-A, it can be safely stated that the accused company was "inviting deposits of money" from the public through advertisements in the public media. Point No,2 is, therefore, decided in the affirmative.
Point No,3: 10.
It has been held above that the firm of the accused had inserted the three 9-12-1987 respectively and that the advertisements amounted to inviting deposits from public. The accused, as the Managing Director of the company is responsible for the acts of omission and commission of the company. Even otherwise, it cannot be stated that the Manager of the company would insert the offending advertisements and pay for them from the funds of the company without the approval and consent of the accused. I would, therefore, hold that the accused has committed an offence under section 27-A of Banking Companies Ordinance and decide the point in the affirmative.
11. Inviting deposits of money from the public through advertisements in Public Media was made an offence on 28-6-1987 with the insertion of section 27-A in the Banking Companies Ordinance. The accused committed this offence in December 1987, that is to say, within six months of the insertion of section 27-A. I would, therefore, take a lenient view as the accused and his Manager may have remained ignorant of the insertion of section 27-A although they cannot escape their liability because ignorance of law is not an excuse. I would, therefore, convict the accused under section 27-A of the Banking Companies Ordinance and sentence him to pay fine of Rs,25,000. In default of payment of fine, he shall undergo simple imprisonment for three months.
Accused convicted.