' This order will decide Criminal Miscellaneous No,373/B of 1997, Criminal Miscellaneous No,374/B of 1997 and Criminal Miscellaneous No,375/B of 1997, entitled Jaffar Mehmand v. The State; Criminal Miscellaneous No,381/B of 1997, Criminal Miscellaneous No,382/B of 1997 and Criminal Miscellaneous No,383/B of 1997, entitled Najam-ul-Hassan Naqvi v. The State; Criminal Miscellaneous No,388/B of 1997, Criminal Miscellaneous No,389/B of 1997 and Criminal Miscellaneous No,390/B of 1997, entitled Raheel Jalal Qureshi v. The State, and Criminal Miscellaneous No,407/B of 1997 entitled Muhammad Khalid Subhani and Nazir Ahmad Jadoon v.
The State. Affar Mehmand, aged about 55 years, (petitioner in Criminal Miscellaneous Nos.373/B of 1997, 374/B of 1997 and 375/B of 1997), was employed as Executive Director by Oil and Gas Development Corporation, a Statutory Corporation set up under the Oil and Gas Development Corporation Ordinance of 1961, (Ordinance No,XXXVII of 1961). The petitioner was arrested on the 6th of January, 1997, along with other petitioners and also some others in pursuance of three cases registered against them vide F.I.R. No,2 of 1997, dated the 5th of January, 1997 under section 409/420/468/471 of the Pakistan Penal Code read with section 5, subsection (2) of the Prevention of Corruption Act of 1947, at Police Station F.I.A./S.B.C./Rawalpindi. The second case registered against Jaffar Mehmand petitioner along with Raheel Jalal Qureshi and Najam-ul-Hassan Naqvi petitioners is vide F.I.R. No,3 of 1997, dated the 5th of January, 1997, under section 409/420/468/471, P.P.C. Read with section 5, subsection (2) of the Prevention of Corruption Act, 1947 at Police Station F.I.A./S.B.C./Rawalpindi. The third case registered against Jaffar Mehmand petitioner along with Raheel Jalal Qureshi, Najaml-ul-Hassan Naqvi, Muhammad Khalid Subhani and Nazir Ahmad Khan Jadoon, petitioners is vide F.I.R. No,4 of 1997, dated the 5th of January, 1997, under section 409/420/ 468/471, P.P.C. Read with section 5, subsection (2) of the Prevention of Corruption Act, 1947, at Police Station F.I.A./S.B.C./Rawalpindi.
2. The case of the prosecution according to the F.I.R. No,2 of 1997 is to the effect that during an inquiry conducted by the Federal Investigation Agency, Headquarter Islamabad, regarding Surface Production Facilities and H2S plant, it was found that a Gas Sales Agreement was executed between Uch Power Ltd. And the Oil and Gas Development Corporation on the 4th of August, 1994, whereby, the Corporation undertook to supply before the 1st March, 1997, certain amount of low B.T.U. Gas from its Uch field to Uch Power Limited, situated at Dera Murad Jamali. Under this agreement, time was the essence of the contract because in case of failure to supply the said Gas within the stipulated period heavy penalties would be entailed by the Corporation. It is alleged in F.I.R. No,2 of 1997, that Riffat Askari, the then Chairman of the Oil and Gas Development Corporation, who, I am told by the learned Deputy Attorney-General for Pakistan, died while in custody along with the petitioners and also some others caused a loss by awarding the contract at exorbitant prices to the tune of US $ 92 million in favour of Messrs Gregory and Cook an American Company whereas according to the prosecution the most reasonable estimated cost was US $ 38 million.
Thus, according to the prosecution a loss of US $ 54 millions was caused to the Oil and Gas Development Corporation. It is further alleged that Riffat Askari deceased the former Chairman of the Oil and Gas Development Corporation in connivance with others also approved acceptance of Messrs Gregory and Cook for H2S removal plant in the sum US $ 25 million, although this item was not included in the tender documents and Messrs Gregory and Cook alone had made an unsolicited additional offer on this account. It is finally asserted that the accused officers misused their official powers and provide pecuniary advantage to the Firm and, therefore, caused substantial loss to the national exchequer.
3. At this stage, it is pertinent to mention the exact position occupied by the various petitioners in the Oil and Gas Development Corporation.
' Mr. Jaffar Mehmand, petitioner, was employed as an Executive Director. He is not a specialist but a generalist. Mr. Najam-ul-Hassan Naqvi (petitioner in Criminal Miscellaneous Nos.381, 382 and 383-B of 1997) is a Geologist by profession and was employed as Project Coordinator.
' Mr. Raheel Jalal Qureshi4, (petitioner in Criminal Miscellaneous Nos.388, 389 and 390/B of 1997) was employed as Manager Petroleum Engineering.
' Mr. Muhammad Khalid Subhani (petitioner in Criminal Miscellaneous No,407/B of 1997) was the Acting Manager (Processing), and the second petitioner namely Nazir Ahmad Khan Jadoon (petitioner in Criminal Miscellaneous No,407/B of 1997) was the Incharge of Local Procurement.
4. The second case registered vide F.I.R. No,3 of 1997 relates to the setting up of Surface Production Facilities, Dehydration Plant and Gas Transport Pipelines from the Uch field to the Uch Power Project, wherein, the following persons are named as accused:--
(i) Riffat Askari, Former Chairman, O.G.D.C.
(ii) Jaffar Mehmand, Former Executive Director (P&S) O.G.D.C.
(iii) Ain-ud-Din Siddiqui, Former Finance Director, O.G.D.C.
(iv) Khalid Rahim G.M. Production, O.G.D.C.
(v) Raheel Qureshi, Acting Manager (Pet. Engg.) O.G.D.C.
(vi) Najam-ul-Hassan Naqvi, Former Manager Uch Plant.
(vii) Messrs Clough Engineering and others.
' Messrs Clough Engineering, I am informed by the learned Deputy Attorney-General for Pakistan, is a concern incorporated in Australia. In this second case, registered vide F.I.R. No,3 of 1997, it is alleged that the work was awarded to Messrs Clough Engineering by accepting their bid in the sum of US $ 64 millions at excessively exorbitant prices and a loss of US $ 35 million was caused to the national exchequer by the accused by abusing their official powers to the pecuniary advantage to the Firm.
5. The third case registered vide F.I.R. No,4 of 1997, relates to the award of contract to Messrs Petrosin of Singapore and gain all the petitioners are mentioned as accused persons along with Messrs Petrosin which I am told by the learned Deputy Attorney-General for Pakistan is a concern incorporated in Singapore. According to the prosecution, the award of contract to the said Messrs Petrosin (Singapore) resulted in the loss of US $ 50 million.
' According to the learned Deputy Attrorney-General for Pakistan, the total loss comes to US $ 128 million, while according to the learned counsel for the petitioners, the total loss allegedly worked out to US $ 106 million.
6. Before making an in depth examination of the allegations against the petitioners in order to find odt whether reasonable grounds to believe that the petitioners are guilty of the offences allegedly committed by them, it is essential to examine the legal status of the Oil and-Gas Development Corporation and its employees.
7. The Oil and Gas Development Corporation was set up under the Oil and Gas Development Corporation Ordinance of 1961. (Ordinance XXXVII of 1961).
' Section 3 of the Ordinance provides that:--
3. Establishment and incorporation.--- (1) As soon as may be after the commencement of this Ordinance, the Central Government shall establish a Corporation to be called the Oil and Gas Development Corporation.
(2) The Corporation shall be a body corporate having perpetual succession and a common seal with power, subject to the provisions of this Ordinance, to acquire, hold and dispose of property, both movable and immovable, and shall by the said name sue and be sued.
' Section 4 of the Ordinance provides that:- "4. Management.--- (1) The general direction and superintendence of the affairs and business of the Corporation shall vest in a Board of Directors which, with the assistance of a General Manager, may exercise all powers and do all acts and things which may be exercised or done by the Corporation.
(2) The Board shall act on commercial considerations having due regard to public interest generally.
(3) In discharging its functions, the Board shall be guided by such instructions on questions of policy as may be given to it from time to time by the Central Government which shall be the sole Judge as to whether any instructions are on a question of policy or not.
(4) If the Board fails to carry out any instructions given to it under subsection (3), the Central Government may supersede the Board and appoint any person or body to function in its place until a new Board is constituted in accordance with the provisions of this Ordinance, and no such supersession or appointment shall be called in question in any Court."
' A bare reading of sections 3 and 4 of the Ordinance clearly reveals that the Corporation is a legal person having its own independent legal existence and its management lies with the Board of Directors which in its own turn is under the total control of the Central Government and may be replaced by the Central Government at its pleasure and such suppression or appointment shall not be called in question in any Court.
8. Section 5 of the Ordinance provides that:-- "5. Board of Directors.--- (1) The Board of Directors of the Corporation shall consist of not less than three and not more than five Directors, one of whom shall be a representative of the Ministry of Finance.
(2) The Directors shall be appointed by the Central Government, and shall hold office during the pleasure of the Central Government.
8. Section 30 of the Ordinance empowers the Corporation with the approval in writing of the Central Government to make regulations providing for such matters as are not provided for and for carrying out the purposes of the Ordinance and finally section 31 of the Ordinance empowers the Central Government by notification in the official gazette to dissolve the Corporation as may be specified by the Central Government.
Thus, the Corporation is a person brought into existence by the Central Government and its existence can be brought to an end at any time by the Central Government.
9. The Corporation has its own regulations made by itself and known as the Oil and Gas Development Corporation Employees (Service) Regulations of 1994.
10. Although the employees of the Corporation are not public servants stricto senso yet by means of a deeming clause contained in section 27 of the Ordinance, they are deemed to be the public servants.
' Out of all the petitioners none was a Member of the Board of Directors. Mr. Jafar Mehmand who was the Executive Director and whose duty it was to implement and execute the decisions taken by the Board of Directors which in its own turn is controlled by the Central Government. None of the petitioners including Mr. Jaffar Mehmand was a member of the Board of Directors which consisted of the Chairman of the Board, the Director Finance, the Director Petroleum and Gas and Joint Secretary of the Ministry of Finance of the Government of the Pakistan.
11. Haji Rabnawaz Noon, Advocate, learned counsel for Jaffar Mehmand petitioner submitted that the petitioner was from the Secretariat Service of Pakistan and not a technical hand; that he was an Executive Director; his job was to execute the decisions taken by the Board; that a gallop tender was called by a Committee of Experts set up by the Board; that the tenders were opened in the presence of the bidders; that the job of the Committee was to see if the tenders were technically responsive and to accept the lowest tender; that the technical Members of the Committee certified that both these requirements had been complied with; that a unanimous recommendation was prepared by the Committee and submitted to the competent authority which was the Board of Directors consisting of the Chairman, the Director Finance, the Director Petroleum and Gas and a Joint Secretary Ministry of Finance, Government of the Pakistan; that the recommendations were accepted by the Board and the then Secretary, Ministry of Gas and Petroleum, Government of Pakistan and finally that Mr. Jaffar Mehmand petitioner did not make any disbursement. Therefore, there was no entrustment of the property to Jaffar Mehmand petitioner and, thus, on the prosecution's own showing, the ingredients of the section 409 of the Pakistan Penal Code were not attracted, while the other offences allegedly committed by the petitioner did not fall within the prohibition contained in subsection (1) of section 497, Cr.P.C. Therefore, the petitioner was entitled to be released on bail.
12. Learned counsel relied upon the case Muhammad Sarfraz v. The State 1976 SCM R 178, and the case of Saeed Ahmad v. The State reported in 1995 SCM R 170.
The contention of the learned counsel for the petitioner is that section 409, P.P.C. Has been added with the mala fide intention to bring the case of the petitioner within the prohibition contained in subsection (1) of section 497, Cr.P.C. And that the case of the prosecution depended entirely upon documentary evidence which was in possession of the prosecution and there was no possibility of tampering with such evidence, therefore, the petitioner was entitled to be released on bail, as was done by the Supreme Court of Pakistan in the case of Saeed Ahmad.
13. Barrister Bacha Khan, submitted that the contract in question was executed on the 4th of July, 1995 in pursuance of the recommendation made by the Committee on the 21st of June, 1995 with the approval of the competent Authority i,e, the Ministry concerned and that Mr. Jaffar Mehmand petitioner was not involved in this entire process and is, therefore, entitled to be released on bail. He places reliance upon the case of Khalid Javed Gillan v. The State PLD 1978 SC 256 and the case of Muhammad Aslam and others v. The State PLD 1967 SC 539.
15. Sardar Muhammad Ishaque Khan, Advocate, learned counsel for Najam-ul-Hassan Naqvi (petitioner in Criminal Miscellaneous Nos.381, 382 and 383-B of 1997) and Raheel Jalal Qureshi (petitioner in Criminal Miscellaneous Nos.388, 389 and 390-B of 1997) submitted that the petitioner was a geologist by profession and employed as a Project Coordinator; that the petitioner was not a party to the Gas Sales Agreement which was executed on the 4th of August, 1994; that there were direct instructions from the then Prime Minister of Pakistan for a gallop tender because in case of default about US $ 6,75,000 were to be paid as penalty per day; that the contract was awarded to the lowest bidder in accordance with law; that the proposals of the Committee were only advisory and not binding upon the competent Authority; that although the case was registered on the 5th of January, 1997, till todate, no challan complete or incomplete has been submitted in Court which was in violation of section 173, Cr.P.C. And, finally that reasonable grounds to believe that the petitioner is guilty of an offence punishable with death or imprisonment for life or imprisonment for 10 years do not exist and the case against the petitioners may be a matter of further inquiry within the meaning of subsection (1) of section 497., Cr.P.C. Which would entitle the petitioners to the grant of bail. Learned counsel lastly submitted that the amount involved was no consideration for the grant or refusal of bail and placed reliance upon the following cases;--
(1) Ijaz Akhtar v. The State 1978 SCM R 64.
(2) Abdul Hayee-uz-Zaffar v. The State 1983 PCr.LJ 2010.
(3) Khurshid Ahmad v. The State 1987 M LD 1982.
16. Hafiz S.A. Rahman, Advocate, learned counsel for Muhammad Khalid Subhani and Nazir Ahmad Khan Jadoon (petitioners in Criminal Miscellaneous No,407/B of 1997) submitted that Muhammad Khalid Subhani was an Acting Manager (Processing) in the Corporation while Nazir Ahmad Khan Jadoon was Incharge of local procurement; that they are not even named in the F.I.R.; that they are not civil servants stricto senso but employees of the Corporation which has its own service regulations and, therefore, do not fall within the mischief of section 409 of the Pakistan Penal Code.
17. Mr. Sher Zaman Khan learned Deputy Attorney-General for Pakistan stated at the Bar that the investigation as far as the present petitioners were concerned is complete, thus, on the prosecution's own showing, the petitioners are no longer required for the purpose of investigation.
18. Learned Deputy Attorney-General stated that the petitioners had committed "lapses" in connivance with the former Chairman late Mr. Riffat Askari, who according to the learned Deputy Attorney-General was the "main actor". The exact argument of the learned Deputy Attorney- General was that the late Mr. Riffat Askari was the approving Authority and the petitioners acted in conspiracy with the said Mr. Riffat Askari. When asked to show reasonable grounds for believing the alleged conspiracy the learned Deputy Attorney-General repeated the contents of the three First Information Reports.
19. The words "reasonable grounds" appearing in subsection (1) of section 497, Cr.P.C. Are words of higher import than mere allegation or suspicion as held by the Supreme Court of Pakistan in the case of Ch. Muhammad Abdul Malik v. The State PLD 1968 SC 349.
' The Court has to see and satisfy itself whether "reasonable grounds" at least, prima facie, exist for believing that an accused has been guilty of an offence punishable with death or imprisonment for life or imprisonment for 10 years as held in the case of Nadara v. The State PLD 1968 SC 310.
' In order to do so, the Court is bound to make a tentative assessment of the case of the prosecution as held by the Supreme Court of Pakistan in the case of Khalid Javed Gillan v. The State PLD 1978 SC 256.
' In case such reasonable grounds do not seem to exist then the grant of bail is the rule and refusal is an exception as held by the Supreme Court of1 C Pakistan in the case of Tariq Bashir v. The State PLD 1995 SC 34.
20. The very first document produced by learned Deputy Attorney-General begins by stating that "in pursuance of the directives of the Prime Minister on the eve of the ground breaking ceremony of Uch Power Plant on the 26th of April, 1995, the Chairman O.G.D.C. Issued instructions to issue gallop tenders for the Gas Pipelines Project and Gas Gathering Facilities".
' Another Letter of Oil and Gas Development Corporation bearing No,C-216 of 1995, dated 16th March, 1995 begins by stating that "pursuant to the decision taken in the meeting on the 1st of March, 1995, chaired by Honourable Minister for Petroleum and Natural Resources the subject plants will be gallop tenders and the case will have to be finalised within month's time".
' Letter No,O.G.D.C./I&P-4(24)/95-V of the Government of the Pakistan Ministry of Petroleum and Natural Resources, Islamabad, 16th October, 1995, addressed to the Chairman, Oil and Gas Development Corporation, Islamabad, states that "the competent authority has no objection to the award of contracts for Uch Gas Transport Pipelines and Production/Surface Facilities to Messrs Clough Engineering and Messrs Gregory and Cook respectively".
' All this clearly indicates that the decision making in the matter of awarding the contract was done at the highest level i,e, the Prime Minister and the Minister for Petroleum and Natural Resources and that the petitioners did not figure anywhere.
21. According to the Deputy Attorney-General, the most serious "lapse" of all the "lapses" committed by the petitioners and in particular, Jaffar Mehmand petitioner is that the time schedule was ignored. This argument is actually belied by documentary evidence. In particular, the letter, dated 7th of March, 1996, written by Mr. Jaffar Mehmand petitioner to the Chairman which reads as follows:-- "Surface Gathering Facilities.
' This is the biggest project costing US $ 114 million. It was awarded to an American Company, Messrs Gregory & Cook. They have not taken up the work at site so far because they also want the Letter of Credit to be opened first. Until last month, O.G.D.C. Was not in a position to finance this project. Upon arranging the necessary funds, Gregory & Cook were immediately informed to come forward and take up the work. Extensive negotiations were held with their representatives as Gregory & Cook wanted to discuss the former of the Letter of Credit and the modalities of implementing the contract. However, the single factor that has caused delay implementing this contract on the part of the contractors is their requirement to confirm the L.C. To be opened by Faysal Bank Islamabad by another International Bank.
' We have made abundantly clear to Gregory & Cook that this contract has been very badly delayed and we cannot afford this any longer. This requirement is neither our responsibility .Nor it is a part of the contract. They must take up the work immediately. We have reached a critical stage.
In case, the contractor delays this work on this or any other pretext any longer, we should not hesitate to terriiinate the contract and look for other alternatives. Though the next higher bidder in this case was Clough Engineering Group of Australia, their offer was much higher, they could be asked to come forward and match with the price of Gregory & Cook, if it is possible for them to execute this contract as well.
' Chairman (Sd.)
Jaffar Mohmand Executive Director (P&S)
7-3-1996."
22. The case against the petitioners involved lengthy investigation and examination of record which is in the possession of the State. The presence of the petitioners is no longer required by the Investigating Agency and there is no possibility of their tampering with the record if they are enlarged on bail.
' Out of all the offences allegedly committed by the petitioners, the only one which is punishable with imprisonment for life or imprisonment for 10 years, is section 409 of the Pakistan Penal Code.
The other offences allegedly committed by petitioners are punishable with 7 years' R.I. And, therefore, do not fall within the prohibition contained in subsection (1) of section 497, Cr.P.C.
' The addition of section 409, P.P.C. Smacks of mala fide in order to bring the case of the petitioners within the prohibition contained in subsection (1) of section 497, Cr.P.C.
23. Section 409 of the Pakistan Penal Code lays down the punishment when criminal breach of trust has been committed by a public servant, or by a banker, merchant or agent.
Admittedly the petitioners are not public servants stricto senso but shall be deemed to be public servants by virtue of a deeming clause contained in section 27 of the Ordinance which says that all Directors, Officers and servants of the Corporation shall be deemed to be public servants within the meaning of section 21 of the Pakistan Penal Code (Act No,XLV of 1860), whether they shall also be deemed to be public servant for purpose of section 409 of the Pakistan Penal Code, still remains in the grey area.
24. In order to prove an offence under section 409, P.P.C. It is necessary to prove that (i) the accused belonged to one of the categories enumerated in the section and that (ii) he had been entrusted with property or with dominion over property in that capacity and that (iii) he dishonestly misappropriated or converted to his own use that property or dishonestly used or disposed of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged.
On the prosecution's own showing there was no entrustment of property in the present case as far as the petitioners are concerned. Thus, the very first ingredient for making out an offence under section 409 of the Pakistan Penal Code, prima facie, seems to be missing.
' Resultantly, the petitioners are granted bail provided they furnish bail bonds in the sum of Rs,1,00,000 (rupees one lac) each with two sureties each in the like amount to the satisfaction of the learned Special Judge, Central (Anti-Corruption), Rawalpindi.