IRSHAD HASAN KHAN, J.- The Federation of Pakistan and the State Bank of Pakistan have filed a petition under Article 185 of the Constitution of Islamic Republic of Pakistan, 1973, against the judgment dated 27.01.1999, passed by the Full Bench of the Lahore High Court, Lahore in Intra Court Appeal No.679/1998, arising out of 68 writ petitions challenging the legality of BPRD Circular No.23, dated 2nd July, 1998, issued by the State Bank of Pakistan, Banking Policy & Regularizations Department, Central Directorate Karachi, whereby it has been decided that encumbrance or lien of any kind upon any foreign currency deposits/foreign currency certificates as a cover against any direct or indirect liability of the depositors must be removed by July 31, 1998 through set off or direct liquidation of the liabilities so covered by the borrowers. No new encumbrance or lien should thereafter be created against foreign currency deposits/certificates held on May 29, 1998.
A challenge has also been made to the freezing of foreign currency accounts in various Banks, pursuant to Section 2 of Foreign Exchange (Temporary Restriction) Act 10 of 1998.
2. A learned Single Judge of the High Court dismissed the writ petitions holding that the Circular dated 2.7.1998 was neither violative of provisions of the protection of the Economic Reforms Act, 1992 nor of Article 2-A or any other provision of the Constitution or any other law. However, a Full Bench of the High Court comprising three Honourable Judges allowed the Intra Court Appeals, inter alia, holding therein that Section 2 of Foreign Exchange (Temporary Restriction) Act IV of 1998, was ultra vires of Article 4 and Article 2-A of the Constitution and Circular No.23 (supra) was confiscatory in nature, being violative of equality protection clause and also repugnant to Article 4 and Article 2-A of the Constitution.
3. The learned Attorney General sought suspension f the operation of the impugned judgment of the High Court through an application under Order 20 Rule 1 read with Order 33 Rule 6 of the Supreme Court Rules, 1980.
4. The learned Attorney General submitted that on 28.05.1998 after the Atomic Explosion, the President of Pakistan issued a Proclamation of Emergency in exercise of his powers under Article 232 of the Constitution. This proclamation was upheld by this Court on 28.7.1998 in the case of Sardar Faruq Ahmed Khan Leghari v. Federation of Pakistan (1998 SCM R 1616). He submitted that the President in exercise of his powers under Article 89 of the Constitution promulgated Foreign Exchange (Temporary Restriction) Ordinance VII of 1998, whereby under Section 2, the various protections contained in the Economic Reforms Act, 1992 or any other law for the time being in force or in any agreement or contract for or in relation to foreign exchange or the right to bring, hold, sell withdraw, transfer by or take out foreign exchange was suspended and that the National Assembly of Pakistan passed the Foreign Exchange (Temporary Restrictions) Act IV of 1998, whereby the above referred Ordinance was repealed, in consequence, the foreign currency accounts were kept in tact and right was given to the account holders to convert the foreign exchange held as above into Pak rupees at the official notified rate of exchange. The protection granted by Economic Reforms Act, 1992 were also kept in tact. However, on 2.7:1998, the State Bank of Pakistan issued Circular No.23 whereby all Banks were directed to remove the encumbrances or lien of any kind upon any foreign currency account deposits/foreign currency certificates as cover against any direct or indirect liability of the depositors must be removed by July 31, 1998, through set off or direct liquidation of the liabilities so covered by the borrowers, it was further directed that no new encumbrances or lien should thereafter be created against foreign currency deposits/certificates held on 29th May, 1998; and that in compliance with the Circular No.23 dated 2.7.1998 all Banks directed their account holders who had obtained loans against foreign currency accounts to liquidate their loans or replace the securities.
5. The learned Attorney General very respectfully pointed out that irrespective of the validity or otherwise of the impugned legislation which will ultimately be decided by this Court on merits, the fact remains that the temporary restrictions were placed on the operation of the foreign currency accounts by Foreign Exchange (Temporary Restrictions) Act IV of 1998, in the wake of Emergency and purely in the national interest. The economic sanctions imposed on the country after the Nuclear explosion on 28th May, 1998 have created an extra-ordinary situation which is being controlled by the Federal Government after numerous steps and efforts. The impugned judgment whereby the foreign currency accounts have been restored in complete disregard of the settled law on the subject is likely to create chaos and a serious law and order situation which is likely to endanger the security of Pakistan. On these premises he prayed that in the interest of justice and to safeguard the economic frontiers of Pakistan, the operation of the impugned judgment be suspended.
6. Suleman Akram Raja, Advocate High Court, who also appeared in the High Court in these petitions, was also permitted to contest the stay application although he is not an advocate of this Court. Suleman Akram Raja, pointed out that as regards Circular No.23 dated 2.7.1998 the grievance urged by the respondents/petitioners/appellants before the High Court, was that the said Circular attempted to appropriate property in an unlawful manner, contrary to the law laid down by this Court that appropriation of property can only take place in circumstances of extreme necessity and that too on payment of compensation at the rate of market-rate. Support was sought from the case of Jibendra Kishore Achharyya Chowdhury v. The Province of East Pakistan (PLD 1957 S.C.(Pak)
9) and also the case of Qazalbash Waqt v. Chief Land Commissioner, Punjab, Lahore (PLD 1990 SC 99). It was also submitted that the said Circular was bad in law, in that, it sought to give retrospective effect to an executive direction contrary to a law laid down by this Court in its judgment cited as Hashwani Hotels Limited v. Federation of Pakistan (PLD 1997 SC 315). He finally argued the giving effect to the Circular would amount to grant of full relief to the petitioners, in that, the accounts of the respondents would stand irrevocably liquidated.
7. After hearing the learned Attorney General and Suleman Akram Raja, Advocate at some length, it would be in the interest of justice that implementation of the impugned judgment is stayed till the hearing of the petition for leave to appeal, otherwise the petition will become infructuous. The balance of convenience also lies in favour of the petitioners and they would suffer irreparable loss if in anticipation of hearing of the petition for leave to appeal, the implementation of the impugned judgment is not stayed. Furthermore, the learned Attorney General and the Deputy Governor, State Bank of Pakistan, present in Court, have frankly made a statement before the Court that no foreign exchange reserves are available to cater the implementation of the impugned judgment of the High Court. This being so, if the impugned judgment is not stayed at this stage, pending the petition for leave to appeal, it will create complicated problems including initiation of contempt proceedings by the account holders, in view of the above, the implementation of the impugned judgment of the High Court is stayed till hearing of the petition for leave to appeal.
8. At this stage, the Deputy Governor, State Bank of Pakistan, the learned Attorney General and Suleman Akram Raja, Advocate agreed to the following consent order:- "The enforcement of the directions given under B. P.R.D. Circular No.23 dated the 2nd July, 1998 was held in abeyance by the State Bank of Pakistan during the pendency of I.C. As and writ petitions before the Lahore High Court. State Bank is agreeable to continue to defer the enforcement of the provisions of the said Circular till the final judgment by the Honourable Supreme Court."
I am also inclined to hold that the above arrangement would be in aid of justice and shall protect the rights of both the sides pending disposal of the petition for leave to appeal, in consequence, the implementation of the impugned judgment is stayed subject to the aforesaid consent order.
9. Since questions of great public importance of far reaching consequences, concerning the economic frontiers of Pakistan, are involved in this petition for leave to appeal, it would be appropriate that the file be placed before the Honourable Chief Justice of Pakistan, to consider the desirability of hearing of the petition by a larger Bench of not less than seven senior Honourable Judges of this Court.