The petitioners who are Directors of Mohib Textile Mills Ltd. Through this petition, have sought quashment of a case registered by the Federal Investigating Agency vide F.I.R. No, 35 of 1996, dated 1-9-1996 under sections 382 and 406, P.P.C. Police Station, F.I.A., Lahore.
2. Facts giving rise to this petition are that the petitioner-Company obtained credit facilities from various financial institutions including M/s. Societe General Bank (complainant-respondent). The security included pledge of stocks of cotton lying in company's premises in Muzaffargarh. The possession of these stocks was held by the creditors banks through "Muqaddams" appointed by them. According to petitioners on 13-8-1996, the American Express Bank one of the creditors of the company obtained an ex parte order from Chairman, Banking Tribunal No,1, Lahore for the attachment of cotton stocks which were lying in the petitioner's mill premises and were pledged with the respondent-Bank. On 14-8-1996, through a Bailiff of the Banking Tribunal, those stocks were sealed. Feeling defrauded the respondent-Bank got the case registered quashment of which is sought alleging that petitioners had misappropriated the cotton stocks/bales which were lying in Mills premises as security and thereby committed criminal breach of trust.
3. The prosecution story as given in the aforementioned F.I.R. Registered on a letter addressed to the Director-General, F.J.A. Is to the following effect:-- "I am the corporate Head of Societe General, the French and International Bank, 6th Floor P.I.A. Town Terminal Building, Egerton Road, Lahore.
On the request of M/s. Mohib Textile Mills Limited; its Chief Executive Directors viz. Mr. Arif Saigol and Mr. Abid Saigol (registered office at 6-F/P, Awami Complex Usmani Block New Garden Town, Lahore) we had allowed to Mohib Txtile Mills Limited; various finance facilities called as below: Description of Banking facilities Amount Societe Date facility extended
1. Inventory Financing 50 Pledge of cotton bales 4-1-1995
2. Export Finance 60 Ist paripassu hypothecation 25-4-1995
3. 1.3 Export documents -do- Total: 111.3 The pledge agreement and other documents were signed at Lahore. We appoint M/s. Harvested Services (Pvt.) Limited; 141-B, Phase I, LCCHS, Lahore Cantt; Lahore "Muqqadam" to act as custodian of the cotton bales delivered to us are pledged by Mohib Textile Mills Limited in our favour. On 14-8- 1996, 7225 cotton bales were in our possession and pleged in our favour and were stored in a building area enclosed by a feet high barbed wire fence within the boundary was walls of Mohib Textile Mills Limited situated at Muzaffargarh. M/s. Harvest Services (Pvt.) Limited intimated to us on 18-31997 that the Directors and Managers of Mohib Textile Mills Limited have refused entry of their staff into the mill premises since 14-8-1996. Despite our repeated requests the directors and factory managers of Mohib Textile Mills Limited have denied us access to the aforesaid 7225 cotton bales pledged in our favour and have forcibly and illegally evicted our supervisor and godown keepers of our custodian firm from the mills premises. In this manner, they have unlawfully ambezzled and removed 7225 pledged cotton bales from the mill premises, thus committing theft and misappropriated the bank's property, causing heavy wrongful financial loss to the bank.
It is requested that case be registered and action taken against the Directors and Manager guilty of offences under applicable laws.
4. As per the parawise comments submitted by the F.I.A., the respondent-bank is working under the control of State Bank of Pakistan, therefore, the F.I.A. Can register a case; that the petitioners allegedly misappropriated the bank security amounting to rupees five crores which were lying in the premises of petitioner's mill and that the F.I.A. Had jurisdiction to proceed with the matter.
5. On an application made by the Societe General (complainant in the aforereferred case) the Bank was also impleaded as party and its learned counsel as also the Deputy Attorney-General have been heard.
6. Learned counsel for the petitioners, in support of this petition, has made following submissions:-
(1) that the F.I.A. Has no jurisdiction to register and investigate a case in which private persons are arrayed as accused and that it can register and investigate a case only where an offence has been committed either in relation to a company owned by the Federal Government or the employees of the Federal Government are involved. In support of his submission he relied on PLD 1986 Lah. 429; PLD 1984 SC 385 and on a judgment of this Court rendered in Writ Petition No,12172 of 1997;
(ii) that the matter is of civil nature as the respondent-Bank has filed a civil suit in the Banking Court which is still pending;
(iii) that vide S.R.O. No,826-I-97 the Schedule attached with the F.I.A. Act has been substituted and sections 406 and 382, P.P.C. Under which the case has been registered have been deleted. The F.I.A.
On that score as well has no jurisdiction to proceed any further.
7. Learned Deputy Attorney-General assisted by Mr. Zahid Hamid,learned counsel for the respondent-Bank, on the other hand, has opposed the petition and submitted that the Scheduled Banks are controlled by the Federal Government; that in terms of section 27 of the Banking (Companies) Ordinance, a Bank can transact business in Pakistan only if a licence is granted by the State Bank of Pakistan and that no exception can be taken to the registration of the case by the F.I.A.
8. I have heard learned counsel for the parties and have given anxious thoughts to the arguments addressed at the Bar.
9. Before commenting on the issues mooted before this Court, it would be of advantage to refer to some of the provisions of the F.I.A. Act, 1974, hereinafter called the Act. The Preamble of F.I.A. Act, 1974 reads as under:-- "Whereas it is expedient to provide for the constitution of a Federal Investigating Agency for the investigation of certain offences committed in connection with matters concerning the Federal Government, and for matters connected therewith;".
Section 3 of the Act, provides for the constitution of the Federal Investigating Agency, "for inquiry into, and investigation of the offences specified in the Schedule, including an attempt or conspiracy to commit, and abetment of any such offence". Learned counsel for the petitioner while trying to interpret the import of the afore-referred provision submitted that the F.I.A. Can register cases only with regard to such companies in which the Government has propriety interest. The precedent case-law relied upon by the learned counsel does not support the argument being convassed. For instance, in Javed Iqbal and 2 others v. Federal Investigating Agency and 3 others PLD 1986 Lahore 424, Employees of the Sui Northern Gas Pipelines Limited, had allegedly committed certain offences and a case was registered under sections 420, 468, 471 and 379, P.P.C. Read with section 5(2) of the Prevention of Corruption Act, 1947 and the case was being investigated by the F.I.A. At page 427, it was held as under:-- "Respectfully following the view taken in the case cited above, I hold that in view of the admitted position that 90% shares of the respondent-Company are owned by the Federal Government or the Corporations set up by the Federal Government, the affairs of the respondent-Company are very much the concern of the Federal Government. That being so, offences allegedly committed in relation to the revenue of the respondent-Company are offences in connection with the matters concerning the Federal Government. F.I.A. Has, therefore, jurisdiction to inquire into and investigate the said offences."
However, in the same judgment while interpreting the word "concerning" appearing in the preamble, it was observed:-- "The word 'concerningis suspectable of a very wide connection. According to the Black's Law Dictionary (Fifth Edition) it means to pertain, relate, or belong to; be of interest or importance to; have connection with; to have reference to; to involve; to affect the interest of. Thus, any matter which is of some interest or importance to the Federal Government would be a matter concerning it."
The aforereferred judgment does not lay down that ownership by the Federal Government of an institution or company would be a condition precedent to bring the affairs of the said organization under the purview of the F.I.A. Act. Reference in the judgment to the meaning of the word 'concerningin Black's Law Dictionary is indicative of the fact that the Court did not want to limit the scope of the Act as being convassed by the learned counsel for the petitioner. The propriety interest could be one of the grounds or factors on account of which an institution and its affairs could become "matters concerning the Federal Government and for matters connected therewith".
However, even in absence of direct propriety interest, there could be statutory and administrative control of the Federal Government over an institution or an Organization could "relate" to "be of interest" or "importance" "have connection" or involved the interest of the Federal Government to bring it, within the ambit of the aforereferred provision. In Ghulam Rasool v. Muhammad Hayat PLD 1984 Supreme Court 385, the point in issue was as to whether an employee of the Pakistan Oil Fields Limited Company can be disqualified under Article 10(2) of the Houses of Parliament and Provincial Assemblies (Election) Order, 1977 which stipulates that: "A person shall be disqualified from being elected or chosen as, and from being, a member of Parliament... ... ...(as) if he is in service of any statutory body or anybody which is owned or controlled by the Government in which the Government has a controlling share or interest". The expression used in the preamble to the F.I.A.
Act is not similar to the aforereferred underlined provision of Houses of Parliament and Provincial Assemblies (Election) Order, 1977, therefore, the said case is not relevant. In Haji M. Yousaf v. Abbas Khan and others PLD 1968 Lahore 482 it was held that since the property in question, qua which the offence had allegedly been committed was no longer evacuee property, the Special Police Establishment had no jurisdiction to investigate into the case. In the unreported judgment in Mukhtar Hussain etc. v. Federation of Pakistan etc. Passed in Writ Petition No,12172 of 1997, the proceedings pending before the trial Court were quashed as it was not denied that no wrongful loss had been caused to any person nor any wrongful gain had occurred to any one of the petitioners on account of alleged opening of "fake accounts'; that the bank or the accounts holders had not lodged any complaint and in those circumstances, it could not be said that such offences had been committed in connection with matters concerning Federal Government.,
10. The case in hand is distinguishable on more than one counts. It has been got registered on the complaint of Societe General a French Bank alleging misappropriation and breach of trust.
Admittedly, the said Bank is a scheduled bank by virtue of a Notification issued by the State Bank of Pakistan on 12th of November, 1991. The scheduled banks are controlled by the State Bank of Pakistan and more than 50% shares of the State Bank of Pakistan are owned by the Federal Government, Section 27 of the Banking Companies Ordinance, stipulates that no scheduled bank can transact business in Pakistan without licence issued by the State Bank of Pakistan. Under section 40 of the Banking Companies Ordinance, the State Bank carries out the Inspection of a Scheduled Bank. Section 41 empowers the State Bank to give directions. Section 47 of the Ordinance, empowers the State Bank to recommend to the Federal Government for an order of moratorium with regard to a scheduled bank. Section 83 of the Ordinance prescribes penalties for violation of the Ordinance and section 84 of the Ordinance mandates that no Court shall take cognizance of offence under section 83 except on a complaint in writing made by an Officer of the State Bank generally or specially authorised in writing in this behalf by the State Bank and no Court other than the High Court shall try any such offence. Similarly, the State Bank of Pakistan Act, 1956 also carries various provisions which envisages control of the Federal Government of the State Bank and the role which the State Bank has to play in regulating the affairs of the scheduled banks.
By virtue of section 9 of the State Bank of Pakistan Act, a Central Board is constituted which is headed by the Governor State Bank and its Members are Secretary Finance and seven Directors to be nominated by the Federal Government. The functions of the Board are stipulated in section 9-A of the Act which inter alia include, formulation of credit policy by taking into accounts the Federal Government's targets for growth and inflation; determining and enforcing the limit of credit to be extended by the Bank to the Federal Government; to approve the credit requirements of the private sector; tender advice to the Federal Government on the interaction of monetary policy with fiscal and exchange rate policy; to analyse and advise the Federal Government on the impact of various policies on the state of the economy and to submit a quarterly report to the Majlis-e-Shoora on the state of economy. Section 36 of the State Bank of Pakistan provides that, "Every scheduled Bank shall maintain a balance-sheet with the State Bank in terms stipulated thereunder".
An analysis of the various provisions of the F.I.A. Act, 1974; Banking Companies Ordinance, 1962 and the State Bank of Pakistan Act, 1956 referred to above, would show that the respondent-Bank being a scheduled Bank is under the control and supervision of State Bank of Pakistan, and therefore, the authority of the Federal Government extends to the said Bank. Any offence committed in relation to a scheduled bank, would, therefore, be an offence", committed in connection with matters concerning Federal Government and for matters connected therewith", within the mischief of preamble of the Federal Investigation Agency, Act, 1974. In the Schedule attached with the F.I.A. Act bedsides certain offences under the Pakistan Penal Code offences under the Banking Companies Ordinance are also scheduled offences. In Iftikhar Hussain etc. v. Government of Pakistan etc. PLJ 1996 Lahore 82 (DB), the jurisdiction of the F.I.A. To register and investigate a case was challenged, a Division Bench of this Court affirmed the order of the learned Single Judge and observed as under:-- "Admittedly, the Banking Companies Ordinance, 1962 as also the Offences in Respect of Banks (Special Courts) Ordinance, 1984 are Federal Statutes and also included in the Schedule to the Federal Investigation Agency Act, 1974. We are, therefore, unable to agree with the learned counsel that F.I.A. Has no jurisdiction in the matter."
11. The argument of the learned counsel for the petitioner that the allegations levelled disclose civil liability is prima facie against record a premature as the F.I.A. Has yet to finalize the investigation. In letter dated 6-9-1996 (a photo copy of which has been placed on record by respondent) sent by petitioners to the respondent-Bank contents of which have been admitted by the petitioners, it has been stated as under:-- MOHIB Our Ref.No, Restructuring-02 Friday, September 6, 1996 Mr. Nauman Ahmed, Corporate Head, Societe General The French & International Bank, 6th Floor, P.I.A. Town Terminal Building, Egerton Road, Lahore, Pakistan.
SUBEJCT: F.I.R. No,35 of 1996, dated September 1, 1996, with the Federal Investigating Agency of Pakistan.
Dear Sir, With reference to your abovementioned report filed with the F.I.A. Lahore, we acknowledge and confirm that we had pledged to you 7,225 cotton bales as security for finance facilities allowed by you to Mohib Textile Mills Limited, and that on August 14, 1996, the supervisor and Godown Keepers of your Muqaddum Messrs: Harvester Services (Pvt.) Ltd. Were evicted from our premises and the possession of your 7,225 cotton bales was subsequently taken over by other banks.
We are deeply appreciative of your acceptance of our request for restructuring of the finance facilities allowed to us on the basis of the existing securities, excluding pledge of the 7,225 cotton bales.
While acknowledging your rights to institute civil and criminal proceedings in this matter we undertake not to institute any civil or criminal proceedings of any kind whatsoever against your in this regard. We also hereby hold you indemnified and harmless against any and all claims and demands that may be made against the bank or any of its employees by any person in respect of or arising out of the said F.I.R.
Yours failthfully 1............................. 2................................
Mohib Textile Mills Limited M. Asif Saigal 3............................ 4...............................
M. Arif Saigol M. Abid Saigol
12. M. Abid Saigol" The contention that S.R.O. 826(1)/97, dated 29-9-1997, sections 382 and 406, P.P.C.
Having been deleted from the schedule the F.I.A. Has no jurisdiction to proceed with the investigation is not tenable for two reasons. Firstly, the matter is still under investigation and it would be for the Investigating Officer to finally conclude as to what specific offences are made out and secondly, when the alleged offences were committed, the aforereferred Sections were in the Schedule of the F.I.A. Act.
13. For aforereferred reasons, and subject to the observation made in para.14 (which follows), I see no merit in this petition which is hereby dismissed.
14. Before parting with the Judgment, this Court takes serious notice of the fact that the case was registered on 1-9-1996 and notwithstanding the mandatory provisions of section 173, Cr.P.C. Neither the investigation has been concluded nor the report submitted in the Court. In this view of the matter and without commenting on the merits of the respective pleas to be taken by both the parties during the investigation, lest it may prejudice the case of either side. I am persuaded to direct the Investigating Officer in this case to conclude the investigation strictly on merit and submit report under section 173, Cr.P.C. In the Court concerned within a month.
A copy of this order shall be sent to Director-General, F.I.A. (Islamabad) for information and necessary compliance.