CH. MUHAMMAD ARIF, J.---All the above appeals under section 7(3) of the Ehtesab Act (No.IX of 1997), hereinafter referred to as the Act, are directed against a common judgment rendered by an Ehtesab Bench, Lahore High Court, Lahore, in Criminal Miscellaneous -Nos.2 of 1998, 6 of 1998, 10 of 1998, 16 of 1998 and 17 of 1998 in E.R. No.26 of 1998, Criminal Miscellaneous Nos.3 of 1998, 4 of if 1998, 7 of 1998, 12 of 1998 and 13 of 1998 in E.R. No.27 of 1998, and d Criminal Miscellaneous Nos.3 ,of 1998, 5 of 1998, 7 of 1998, 13 of 1998 o and 14 of 1998 in E.R. No.28 of 1998 under section 7 of the Act, whereby appellants abovementioned Miscellaneous Applications seeking withdrawal of order of freezing the properties of the accused, their dependents, spouse and agents as also seeking clarification of freezing-order and appointment of Receivers for the Mills, were rejected.
2. Ehtesab References Nos.26, 27 and 28 of 1998 are pending against Ms. Benazir Bhutto, her husband Asif Ali Zardari and Begum Nusrat Bhutto, respectively, on the allegations that they, while functioning as Prime Minister, Minister and MNA, have amassed enormous properties both abroad and at home thereby incurring the wrath of section 4 of the Act. In all the 3 references the State moved applications under section 6 of the Act for freezing the properties of the accused, their dependents, spouse and agents as per schedule thereto. On 27-4-1998, a learned Division Bench of the High Court after hearing the Special Prosecutor for the State and after going through the record, proceeded with freezing of the properties of the accused etc. It was then that the appellants moved the abovementioned applications under section 7 of the Act seeking withdrawal/clarification of the freezing order dated 27-4-1998. After receiving replies from the State and after hearing the Special Prosecutor, the learned counsel for the appellant herein, and the learned counsel appearing in 2 other connected Ehtesab References in relation to Ansari Sugar Mills and Skarand Sugar Mills (not appellants here) proceeded with dismissing the same with the following observations:----- "26. We have already appointed Receiver for the management and administration of Ansari Sugar Mills and Sakrand Sugar Mills vide order dated 27-5-1998 as it was found in the interest of justice and of all the parties including accused, shareholders, DFIs, banks and State Exchequer. This was a consent order. The same reads as under: "It is argued that after the order dated 27-4-1998 the administration by misconstruing the order has brought the whole functional activities of the mills to standstill. This is not only causing loss to the Mills but also to the banks, who are majority shareholders; the employee will be punished for no fault for their and growers, who are entitled to receive the price of their sugarcane supplied to the mills, would be deprived or in any case there would be inordinate delay in settling their accounts. It is, therefore, proposed that it would be in the interest of justice and fair-play if a senior officer of any of the banks is appointed as receiver till the decision of this petition.
(2) The learned Special Prosecutor states that he has no objection to this proposal because this arrangement would be strictly in accordance with section 6 and in the interest of the exchequer.
(3) The Court has power under section 6 to appoint receiver and that would be deemed to be part of the process of freezing as per provisions of the section.
(4) In this view of the matter, we appoint SVP, I.D.B.P. (to be nominated by the Bank Authorities) as receiver, who is directed to immediately take over the management and control of the Mills. All financial responsibilities shall be incurred and discharged under his signatures. He would also be responsible for operating all accounts, dealing with all departments and private persons till further orders.
27. However, subsequently petitioners moved second set of applications mentioned in para. 1 of this judgment wherein it is prayed that order dated 27-5-1998 may be clarified that "the management will manage the Mills under the supervision of Receiver". This is not possible as it negates the very appointment of Receiver. The applications are without any merit and rejected."
28. We proceed to appoint SVP, N.D.F.C. (to be nominated by the Corporation) as Receiver also for all the remaining three Mills namely Bachani Sugar Mills, Mirza Sugar Mills and Pangrio Sugar Mills.
The receiver is directed to take over the management and control of the Mills. All financial responsibilities shall be incurred and discharged under his signatures. He will be also responsible for operating all accounts, dealing with all departments and persons till further orders.
"29. The upshot of above discussion is that all these petitions are dismissed with the above observations and directions."
3. While detailing the 'Point of Law' in all these appeals, the appellants have raised 60 to 63 such points in the Memos. of Appeal. There is no need for making a detailed or even seriatim reference to the same. Suffice it to say that in essence the case of the appellants is that: (1) the provisions of section 6 of the Act do not cover the case of the appellants who are not accused in Ehtesab References Nos.26, 27 and 28 of 1998; (2) the appellant Mills being public limited companies are separate entities from their shareholders; (3) the Ehtesab Bench is in error in holding that simple naming of, one person as ' frontman' of the accused is legally sufficient, (a). to proceed against the appellants under the Act, (b) to dub him as 'Benami' and (c) without recording any evidence whatsoever in support of the prosecution case reflected in (a) and (b) above; (4) as the shareholding of Dr. Zulfiqar Ali Mirza does not exceed 2.7% of 14,100,000 shares of Mirza Sugar Mills, the impugned order cannot sustain itself; (5) the freezing order has no support of the provisions of the Act in so far as appellants are concerned; (6) the impugned order has been made without considering the fact that admittedly the initial order was sans notice to the appellants as also other shareholders and the confirmation of the same has come about without recording evidence and that too at a premature stage in the case and that (7) the learned Ehtesab Bench was not at all justified in refusing the relief to appellants.
4. On 3-11-1999 Mr. Aitzaz Ahsan, learned Senior Advocate Supreme Court appearing in support of these statutory appeals, reiterated some of the Points of Law taken in the memo. of Criminal Appeal No.200 of 1998 and by referring to the earlier history of Mirza Sugar Mills, it was contended by him that in no case the allegations in the Ehtesab References against the accused as also the material, allegedly appended to Criminal Miscellaneous Applications with a view to obtaining an order to freeze the properties and assets of the accused, could lead to passing the impugned orders against the appellants. His client's Criminal Miscellaneous Applications under section 7 of the Act having been held to be maintainable by the learned Ehtesab Bench, the same should have received a favourable consideration on the strength of the pleas raised by them but were dismissed by repelling the pleas that: (1) the Mills were owned by the company which fact is duly supported by the Memorandum and Articles of Association; (2) these Sugar Mills were not the property of the accused; (3) until requisite proof is led by the State with a view to proving that the properties belong to the accused or that Dr. Zulfiqar Ali Mirza is Mr. Asif Ali Zardri's 'frontman', no interference in the working of the appellant-Mills could be made; (4) Dr. Zulfiqar Ali Mirza holds, 2.7% shares in the Mills and it is yet to be established by the State that he is 'Benami' and therefore, the appellants and other shareholders, including DFIs and Banks, cannot be 'punished'. While dealing with the operation of the impugned orders on the ground through the Receiver, Mr. Aitzaz Ahsan pressed into service the past performance of appellants-Mirza Sugar Mills and Pangrio Sugar Mills in comparison with the working of these Mills by the Receiver and contended that every thing is amiss and there is no hope that the earnings during the crushing-seasons under the management of the Receiver will even reach anywhere near the meeting of Mills' liabilities to any substantial extent whatever. His precise plea was that in the event of the appellants being kept out of participation in the creative process of the Mills, their liabilities will most certainly increase rather than diminish. Towards the end of the working hours, the following order was made:-- "We have partly heard Mr. Aitzaz Ahsan, Advocate Supreme Court for the appellant and Mr. Tanvir Bashir Ansari, Deputy Attorney General is directed to obtain certified copies of the E-Forms from the Registrar, Joint Stock Companies, Karachi to produce before the Court on the next date of hearing.
He is also directed to produce the final accounts and balance sheets of the companies of least two years before the take-over by the Receiver and also for the period subsequent to the appointment of the Receiver. To come up for further proceedings on 5th November, 1999."
5. On 5-11-1999, the learned Law Officer produced for perusal copies of a report each regarding Mirza Sugar Mills and Pangrio Sugar Mills pertaining to season 1998-99 for Ehtesab Bench, Lahore High Court, respectively appending thereto copies of unaudited balance sheet as on September 30, 1998 and a balance sheet as on September 30, 1997. On the other hand, Mr. Aitzaz Ahsan also produced for perusal an 'additional paper--book' in relation to Mirza Sugar Mills providing 'documents' in support of his contentions that continuation of the present arrangement is not in the interest of the management. He has also supplied a couple of sheets of paper with a view to providing information in relation Co Mirza Sugar Mills about the position of its shareholding which make the following reading:-- "MIRZA SUGAR MILLS LIMITD LIST OF SHAREHOLDING "(A) OWNED BY SPONSORS/DIRECTORS S.No,Folio No, Name Shareholding Upto 30-9-99 %
1. 3 Dr. Mrs. Fehmida Mirza 308,000 2.70
2. 54 Mr. Sajid Hussain Naqi 20,000 0.14
3. 2 Dr. Fawad Hussain Mirza 380,000 2.70
4. 2066 Mr. Arshad Abid Abbasi 100,000 0.71
5. 165 Mrs. Farnaz Mirza 25,000 0.18
6. 6 Mir Ghulamullah Talpur 200,000 1.42
7. 2067 Ms. FAriha Abid Kazi 100,000 0.71 1,205,000 8.55
(B) OWNEDBY SPONSORNOMINIEES
1. 1 Dr. Zulfiqar Ali Mirza 308,000 2.70
2. 4 Qazi Amjad Abid Abbasi 308,000 2.70
3. 169 Mrs. Husna Amjad 50,000 0.35
4. 245 Mohammad Dawood 262,090 1.80
5. 246 Saudi-Pak Ind. & Agr, (Pvt.) Ltd. 748,800 5.31
6. 247 First Int. Invest. Ltd. 1,261,060 8.94
7. 248 Smith Int, Securities Ltd, 4,99,200 3.54
8. Various Names (List attached) 4,295,800 30.47 7,876,970 55.87 Total Sponsors Holding 9,081,970 64.41 (C)FINANCIAL INST/INSURANCECORD/INVESTMENT COMPANIES
1. 77 M/s, Asonix Ind, (Pvt.) Ltd, 233,500 1.66
2. 244 Muslim Comm. Bank Ltd. 748,830 5.31
3. 300 National Bank of Pakistan 705,000 5.00
4. 913 State Life Insurance 150,000 1.06
5. 919 National Insurance Corpn. 100,000 0.71
6. 1198 The Bank of Punjab 20,000 0.14
7. 1304 EFU General Insurance 100,000 0.71
8. 1305 Investment Corpn. of Pakistan 250,000 1.77
9. 1837 N. D. F. C. 1,000,000 7.09 Total Financial Institutions: 3,307,330 23.46 GENERAL PUBLIC Public 1,658,200 11.76 Cane Growers 52,500 0.37 Total General Public 1,710,700 12.13 Total Owned by Outsiders 5,018,030 35.22 GRAND TOTAL 14,100,000 100"
By referring to the copies of the judgment of Sindh High Court, Karachi, in C.P. No.D-293 of 1991 and the judgment of this Court in CPLA,303-K of 1991 (having arisen out of the judgment of the High Court) in the abovementioned 'additional paper-book', it was, among others, contended by efforts made by the Management of the Mills were to the entire satisfaction of all concerned including the shareholders and that due to the change of scenario on account of freezing of the assets of the Mills the position has further worsened and demands for payment of the outstanding are being made from his clients by treating the re-scheduling (done in the year 1991) as inconsequential.
According to him, the holding of Annual General Meeting/s is in order as the same will result: (1) in resurrection of proper management-bodies of these Mills in accordance with law; (2) in passing over the charge of the Mills to the Board of Directors from the Receiver and (3) in saving these Mills from complete ruination,
6. Contrarily, Mr. Tanvir Bashir Ansari, learned Deputy Attorney General representing the State, have vehemently contended that the present arrangements do not require any change in that the criticism of the learned counsel for the appellants on the working of the two-Mills, Bachani Sugar Mills is not even in production as yet, to the effect that there has been some slight decrease in the production of sugar, stands duly explained on account of the late commencement of the season by some days in November, 1998. He was also critical of the learned counsel for the appellants arguing: (1) for the Management of two Mills to pass on to the Board of Directors after election and holding of Annual General Meeting and that (2) the same treatment should be meted out to appellant-Bachani Sugar Mills so that its prospects of going into production in due course are not marred by its remaining under the management of the Receiver, According to him nothing would turn on the fact that neither the accused have claimed any share in these 3 Mills not even Dr.Zulfiqar Ali Mirza is a shareholder in pangrio Sugar Mills and Bechani Sugar Mills and that his only association with Mirza Sugar Mills in his capacity as a shareholder to the extent of 2.7%Further, the Ehtesab Bench has rightly relied upon the affidavits of (1) Ahmad Sadiq (2) M.B.Abbasi and (3)
Zafar Iqbal to hold that the appointment of Receiver could not be interfered which.
7. It appears that after filing the references against Ms. Benazir Bhutto, Asif Ali Zardari and Begum Nusrat Bhutto, the State proceeded with filing applications praying for orders to freeze the properties and assets of the accused on 27-4-1998. It was on the same day that prayed for orders were made and a direction issued to the effect that the assets of the accused/respondents, including of those mentioned in the schedule with the exhibits, shall remain freezed. The appellant sought withdrawal/recall of freezing order and, subsequently a clarification by laying emphasis on the assertion that they do not come within the category of persons who can be proceeded against under the Act. The learned Ehtesab Bench did not consider it appropriate to clarify that "... the management will manage the Mills under the supervision of Receiver." (Underlining is for emphasis). Further, the appellants have extended whatever help they could to the Receiver and their such conduct has been extolled by the Receiver/present Management of the Mills.
8. We have considered the arguments advanced at the Bar by the learned counsel for the appellants and the learned Law Officer. There is no need for resolving of the points raised by the former as we are of the view that the questions regarding (1) capability or otherwise of the accused and/or anybody else in E.Rs. Nos.26, 27 and 28; (2) admissibility or otherwise of the evidence/material to be brought on the record by the parties; (3) culpability or otherwise of persons similarly placed as the appellants, and (4) extent of the powers of the Ehtesab Benches in relation to both the substantive and the procedural laws relevant to the dispute before it will be taken due notice of during the conduct of the case as also at the time of rendering final judgments in the said References. We hasten to add that the learned Ehtesab Bench is not denuded of the powers to consider the feasibility of making interim orders under the Act and that "frontmen and cronies" of the accused in the Ehtesab Reference can also be included therein. However, what meets the eye in the instant case is that the impugned orders have proceeded on the ground that continuation of the working of the Mills under the management of the Receiver will advance the interest of law. It may also be noticed that the impugned order is based upon another order made by the Ehtesab Bench on 27-5-1998 in Kelation to Ehtesab References about Ansari Sugar Mills and Skrand Sugar Mills. The abovementioned order was the result of some sort of a compromise having emerged when the learned Special Prosecutor therein agreed to a suggestion/proposal made by and on behalf of those Mills. (Reference may be made to para.26 of the impugned judgment reproduced in para.2 above). It is not the case of either side that any such compromise was arrived at between the appellants and the Special Prosecutor in these causes. There is no cavil with the proposition that the Act does confer the requisite jurisdiction on the Ehtesab Benches to make/issue orders to freeze the accounts etc. of the accused in Ehtesab References and that further target/s of the import of the law can also be discerned/located. Similarly, it cannot be denied that "frontmen and cronies" of the accused in Ehtesab References Nos.26, 27 and 28 can be taken to task in line with the provisions of the Act. In these circumstances, in our view, without expressing any opinion on the merits of the case, it would be in the interest of justice that annual general meetings of the three concerns may be called and after electing the new board of directors, the management may be transferred to the respective board of directors of the Companies for management of the affairs.
9. It may be observed that, as directed by this Court, Mr. Aitzaz Ahsan has obtained the information that the learned Ehtesab Bench has permitted the Receiver to summon the over due Annual General Meeting and that neither the Court fixed any date nor the Receiver has done to the needful in that behalf so far. His Fax message shall be placed on the record.
10. In this view of the matter, the instant appeals are allowed, the impugned judgment is set aside to the extent of appellants and the Receiver is directed to fix a date for holding of General Body Meetings of the appellants --Mills with a view to electing the Board of Directors of all the three Mills in accordance with the provisions of the Companies Ordinance, 1984, As regards Dr. ZuIfiqar Ali Mirza, his accounts shall remain frozen till the decision of Ehtesab Reference No.26 of 1998 and he shall not be allowed to vote in the process of election of Board of Directors of Mirza Sugar Mills, as he is claimed to be a frontman and a crony of accused Asif Ali Zardari. After the Election of the Board of Directors as above, the Management of the respective Mills shall stand transferred to the respective Board of Directors of the Companies with the condition that the immovable assets of the Mills shall not be disposed of until further orders in that behalf from the learned Ehtesab Bench.
The Receiver shall continue to operate as heretofore, until the transfer of the Management to the newly Elected Bodies.