' This order shall dispose of two applications for bail (Cr. Bail Applications Nos.1184 and 1194 of 1999) whereby accused Inamul Haq has sought bail in the cases arising out of F.I.Rs, No,37 of 1999 and 38 of 1999 of Police Station F.I.A./ C.B.C./ Karachi, under section 409/ 420/ 468/ 471/ 477-A/34, P.P.C.
And 409/420/ 477-A/34, P.P.C. Respectively. The applicant was arrested on 31-8-1999 and on 15-9- 1999 an interim challan was submitted in the Special Court (Offences in Banks) Sindh, Karachi. He applied for bail which was declined by the trial Court on 15-9-1999 through separate orders and his subsequent applications also met the same fate vide common order, dated 12-10-1999 of the trial Court, therefore, he has applied to this Court for bail.
2. The F.I.Rs, were lodged on written complaint, dated 31-8-1999 of Majeeduddin Khan, Chief Executive, Bankers Equity Limited Karachi. The text of complaint in F.I.R. No,37 of 1999 is reproduced hereinbelow:--- "The Deputy Director, ' Federal Investigation Agency, (Commercial Banking Circle), Block 6, P.E.C.H.S., Karachi.
' Dear Sir, ' Complaint against Mr. Rauf B. Kadri, Working Director, Mr. Inamul Haq, President and Chief Executive of Bankers Equity Limited and others.
' Pursuant to the directive issued by the State Bank of Pakistan under section 41-D of Banking Companies Ordinance, 1962 and on the basis of evidence provided by the State Bank of Pakistan gathered by them during inspection of the affairs of Bankers Equity Limited, it had been revealed that prima facie M/s. Rauf B. Kadri, Inamul Haque and others in league with each other have committed various offences in violation of banking and other laws. It has been specifically reported that during the period from 28th July, 1998 to 24th February, 1999, a loss of Rs,23.733 million was booked by B.E.L. Purportedly on account of 45 transactions of sale/purchase of shares carried out through stock brokers M/s. Sadiq Ali and Fida Hussain of Room No,143, Stock Exchange Building, Karachi. The record of the brokers confirmed that only 15 out of the 45 recorded transactions were actually undertaken by Bankers Equity Limited (BEL) through the brokers on which a loss of Rs,6.078 million was accordingly paid to the broker. It was accordingly established that the remaining 30 transactions were fictitious transactions fraudulently engineered by Rauf B. Kadri, Inamul Haq in collaboration with the other persons thereby misappropriating an amount of Rs,17.656 million. The novel modus operandi adopted for executing the clandestine transaction is indicated from one transaction in which a bearer Cheque No,0113537, dated 6-11-1998 for Rs,234,746, issued with account Payee Crossing on account of loss purportedly booked on sale/purchase transaction was subsequently converted into cash cheque indicating the name of Sadiq Ali Fida Hussain by cancelling the crossing on it and utilize the cash received for payment of a KESC bill of Rs,76,746.
Rs,58,000 cash received by accused Rauf B. Kadri No,1 and Rs,100,000 withdrawn in cash in the name of broker by the accused persons, thus, they misappropriated the amounts belonging to B.E.L. For their personal use and benefited illegally and unauthorisedly by abusing their official position and betraying the trust reposed in them. Through commissioning the aforesaid acts, the accused have cause wrongful loss to B.E.L. And corresponding wrongful gain for themselves. You are, therefore, requested to institute appropriate criminal proceedings for criminal breach of trust and cheating against Rauf B. Kadri, Inamul Haq and others. It is requested that the F.I.R. May be registered and appropriate investigations may be initiated for booking the functionaries concerned for being dealt with in accordance with law.
(Sd.)
(MAJEEDUDDIN KHAN), Chief Executive."
3. It would be pertinent to mention here that on the same day, i,e,, 31-8-1999, F.I.R. No,38 of 1999 was drawn 10 minutes later, on the basis of a similar complaint the substance whereof related to embezzlement of Rs,15.225 million. The specific allegation in this F.I.R. Is as under:--- "An amount of Rs,15.225 million was paid by B.E.L. By requesting Habib Bank Limited, F.T.C. Branch, Karachi, for issuing State Bank Cheque favouring broker namely Dawood Jan Muhammad on 1st August, 1997. The Cheque of Rs,15.225 million was deposited in the account of Jan Muhammad with M.C.B. Stock Exchange Branch on 2nd August, 1997 who simultaneously advised M.C.B. Stock Exchange Branch who issue a State Bank of Pakistan's cheque for Rs,15.175 million in favour of Rauf B. Kadri which was duly created to his personal account No,1100- 435163-001 in Emirates Bank International, Deen Arcade Branch, Clifton, Karachi. On 4-8-1997 through a clearing Cheque No,1023604 Rauf B. Kadri withdrew a sum of Rs,15 million and pocketed the amount instead of depositing the same in the account of B.E.L. The accused persons namely Rauf B. Kadri, Working Director, and Inamul Hach President and Chief Executive in league with each other have caused wrongful loss to B.E.L. And obtained corresponding wrongful gains for themselves by abusing their official position in violation of directions of laws, rules, and regulations and committed various cognizable offences by committing breach of trust and various other unlawful acts."
4. Learned counsel for applicant submitted that the alleged embezzlement of money in both the cases spreads over 41 cheques drawn from time to time but not a single cheque out of them has been signed by the applicant. He submitted that the applicant being President/Chief Executive of the Bank dealt with administrative/policy matters and had to perform functions on top level in connection with State Bank of Pakistan, Federal Government and other organizations and he had nothing to do with drawing of cheques, therefore, the loss caused or offence committed by drawing these cheques could not' be ascribed to him. He vehemently submitted that the applicant was not actually involved in the embezzlement of money in the instant case. He explained that in fact all cheques are usually affixed the stamp "Payees Acc. Only" for the security purpose and when the cheques are used by the Bank itself, the stamp is cancelled and a signature in token thereof is put by the concerned officer of the Bank, but no such signature is attributed to the applicant. He contended that there is absolutely no evidence to establish that the applicant was beneficiary, in any manner, of the amounts drawn and embezzled. He submitted that the applicant is a retired Government officer and during his service tenure he earned high reputation and enjoyed some top slots including the post of Federal Secretary and on account of his unblemished career he was re- employed against the instant post, and he would never tarnish his image at this fag-end of his career. He submitted that in fact a meeting was called on 31-8-1999 wherein rescheduling of some loan was insisted upon during the last regime and on refusal not only the entire organization was taken over, the applicant and other persons were also put under arrest. He further submitted that since the submission of interim challan on 15-9-1999 the accused persons including applicant are being produced in the Court on the dates of hearing and returned to custody but no progress has been made as regards the trial, ostensibly for the reason that the final challan is not forthcoming.
He contended that there seems to be no end to this process. In support of his contentions he placed reliance on the cases, Manzoor and 4 others v. The State (PLD 1972 SC 81), Brig. (Retd.) Sahib Dad Khan v. The. State and 2 others (1977 PCr.LJ 676), Abid Rashid and others v. The State (1995 M LD 1829) and Saeed Ahmed v. The State (1996 SCM R 1132).
5. The learned Standing Counsel who was assisted by the Investigating Officer and the Acting Deputy Director, FIA submitted that the applicant was empowered to appoint officers and delegate powers to them but he collusively delegated the powers to the Director of Bank namely Rauf B.
Kadri, the co-accused, who drew the cheques and embezzled the moneys to the tune of more than Rs,32 millions in both the cases, therefore, he is constructively liable for the commission of the offence within the meaning of section 34, P.P.C. However, he conceded, after consulting the Investigating Officer present in the Court, that so far the Investigating Agency has not been able to lay hands on such evidence as to establish that the applicant was a beneficiary of the amounts drawn during the commission of the aforesaid offence. He could not controvert the contentions raised on behalf of the applicant that the cheques involving these transactions do not bear signature of the applicant.
6. We have anxiously considered the arguments for and against the bail plea. The only serious aspect of the case that appears on surface is that a huge amount has been embezzled and the loss caused to the bank in both cases falls to the tune of over Rs,32 million. But it is significant to mention that the gravity of the offence looked from the point of view of the quantum of amount embezzled is not the sole determining factor for deciding the bail plea. The criterion for grant of bail in such offences has been laid down by the Hon'ble Supreme Court in the leading case of Ch. Shujat Hussain v. The State (1995 SCM R 1249) in the following words:--- "The criterion for grant of bail as laid down by the Ordinance is not the quantum of sentence provided by P.P.C. The bailable or non-bailable nature of an offence on the basis of punishment is a creation of Code of Criminal Procedure. This part of the provision of section 497 being in conflict with the provision of the Ordinance, the bail can be granted only if section 5(6) of the Ordinance is satisfied. In Allied Bank's case, while considering sections 497 and 498, Cr.P.C., with reference to section 5(6) of the Ordinance, it was observed as follows:--- "In short, the difference appearing in section 5(6) of the Ordinance is the fetter on the Special Court's discretion to first find as a fact that there appear no reasonable grounds for believing that the accused is guilty of a scheduled offence, even where the punishment is not severe, such as death, imprisonment for life or imprisonment for ten years; leaving the condition contained in the second proviso to subsection (1) of section 497 of the Code."
7. The Hon'ble Supreme Court further referred to the principle of law declared in the case, Government of Sindh v. Raisa Farooq (1994 SCM R 1283) which is in following terms:--- "Section 5(6) though not a complete Cod provides fetter on the power of the Special Court to grant bail but the principles enunciated in section 497, Cr.P.C., and judicial authorities interpreting these provisions which do not come in direct conflict with section 5(6).Can be pressed in service for grant of bail. A comparative study of sections 5(6) and 497 will show that bail can be refused if there appear reasonable grounds for believing that accused has been guilty of the offence. This is one of the grounds in section 497 for grant of bail. Therefore, to that extent there does not seem to be any conflict in both the provisions. We will, thus, consider whether there appear reasonable grounds for believing that the petitioner has been guilty of a scheduled offence.
' In order to appreciate and apply these provisions of law, it is necessary to look to the facts which have been relied upon by the parties."
8. In view of the above a cautious tentative assessment is to be made by the Court while examining the bail plea without probing into the merits of the case, restricting itself to the material placed before it by the prosecution to see whether some tangible evidence is available against the accused which if left unrebutted may lead to inference of his guilt. Further as observed at para.22 of the order in Shujat Hussain's case, discretion exercised while considering the bail should not be based on whims, inferences, suspicion and mere allegations.
9. As regards the case-law relied upon by learned counsel for applicant, it has been held by Hon'ble Supreme Court in Manzoor and 4 others v. The State (PLD 1972 SC 81), that bail is not to be withheld as punishment. The relevant observations of the Honourable Supreme Court are as under:--- "It is important to remember that bail is not to be withheld as a punishment there is no legal or moral compulsion to keep people in jail merely on the allegation that they have committed offences punishable with death or transportation, unless reasonable grounds appear to exist to disclose their complicity."
10. In Saeed Ahmed's case (1996 SCM R 1132) the Hon'ble Supreme Court granted bail in a case relating to an offence in respect of Banks on the ground that there was no possibility of tampering with the evidence which was entirely documentary in nature and was in possession of the prosecution. In 1995 M LD 1829 it was observed that the ground that the Government property or national interest is involved in the case, is not by itself sufficient to warrant refusal of bail. In the case reported as 1977 PCr.LJ 676 the matter related to an investigation required for rendition of accounts and scrutiny of documents from the Government department, which was to consume some time; this was considered to be the weighing factor for confirmation of earlier.
11. In principle, the observations made in the cases cited by the learned counsel, do advance the case of applicant to a limited extent but, as discussed earlier, the bail plea is to be assessed in the light of guidelines laid down in Shujat Hussain's case (supra) and a tentative view is to be formed, if there appear reasonable grounds for believing that the applicant has been guilty of the offence alleged.
12. Admittedly, no evidence has so far been discovered to indicate that the applicant was beneficiary of the embezzled money. Apart from that it is also an admitted position that the cheques do not bear signature of the applicant in any capacity whatsoever. Apparently, the investigating agency has not as yet been able to collect tangible evidence direct in nature to involve the applicant in drawing these cheques and disbursing the amount or receiving it. The role assigned to him is that being the President/Chief Executive of the Bank, the delegated powers to the co-accused namely Rauf B. Kadri who is allegedly involved, directly in the commission of the offences. The allegation in F.I.R. No,37 of 1999 pointedly refers to the role of Rauf B. Kadri and accuses him of receiving Rs,58,000 in the specimen case but it is no where alleged that the applicant also received any amount. So also in F.I.R. No,38 of 1999 it is specifically alleged that through a clearing Cheque No,10203604 Rauf B. Kadri, the co-accused withdrew a sum of Rs,15.00 million and pocketed the amount instead of depositing the same in the account of B.E.L., but it is not alleged that any amount was drawn by the applicant. Learned counsel rightly argued that it would hardly appear to reason to make the President of Bank liable for defalcation/fraud etc., committed by the Branch Manager or an Officer unless there is unassailable nexus and positive evidence to show collusion of the delinquent Officer with the person holding the top rank.
13. Learned State Counsel was not able to state firmly that the documentary evidence collected against co-accused Rauf B. Kadri disclosed direct participation of applicant. The interim challan was submitted in mid-September but despite passage of ample time no progress could be made in the trial, apparently, owing to non-submission of the final challan. The State Counsel could not anticipate when would such state of affairs come to an end and so also the Investigating Officer could not spell out a reasonable answer.
14. In the circumstances enumerated above and in the light of case-law discussed earlier, we are of the considered opinion that the applicant's role towards commission of the offence calls for further inquiry as at present the evidence ,collected by the Investigating Agency is not sufficient to furnish the reasonable ground within the meaning of section 5(6) of the Offences in Respect of Banks (Special Courts) Ordinance, 1984 for declining release of the applicant on bail.
15. As a result we allow the application and grant bail to applicant in the sum of Rs,9 million with one surety and P.R. Bond in the like amount in each case. However, if at any stage prosecution comes in possession of more material connecting the applicant with the offences alleged, it would be entitled to apply for cancellation of the bail. By a short order the applications were disposed of on 24-11-1999, these are reasons for the same.