1. ' As the common questions of facts and law are involved in both the above captioned writ.Petitions, therefore, both shall be disposed of through this single judgment.
2. ' The succinct facts forming the background of the instant writ petitions are that the petitioner No,1 is the Chief Executive and other petitioners are the Directors of Ghazi Vegetable Ghee and Oil Mills Limited, situated at Mangla Hamlet, Mirpur, A.K. Ghazi Ghee and Oil Mill is registered in Azad Kashmir and its registered office is situated at Mangla and the factory of the company is also working in Mangla. The said Ghazi Ghee and Oil Mills applied to the Muslim Commercial Bank Limited, Mirpur for the facility of loan in the shape of cash finance, FIM and L/C. The bank accepted the application and agreed to grant the facilities of loan. The agreement was executed between the Ghazi Ghee Mills and the bank. The loan. Arrangement was signed initially on 31-3-1988 and subsequently on 30-12-1989 at Mangla, Mirpur (A.K.). The agreement was signed and registered at Mirpur (A.K.). After the sanction of the loan, the dealing between the Ghazi Vegetable Ghee and Oil Mills and the Bank took place at Mirpur Azad Jammu and Kashmir. The petitioner also furnished the collateral and securities to the bank at Mirpur Azad Jammu and Kashmir. In the year, 1998, some dispute arose between the said Mills and the bank, upon which, the bank started coercive measures. The petitioners tried their level best to resolve the dispute amicably but the officials of the bank, with mala fide intention, moved baseless, frivolous and false applications to the F.I.A., Rawalpindi (Islamabad), through some persons. The F.I.A. Started the inquiry in the affairs of the company and also registered a case on 21-7-1999 at the Police Station, S.B.R. Rawalpindi, Pakistan. The F.I.A.
3. Applied to the Special Judge, Central Rawalpindi, for permission of investigation regarding the accounts and documents of the Ghazi Vegetable Ghee and Oil Mills. The initiation of the proceeding and the registration of the case by the non-petitioners against the petitioners have been challenged through the instant writ petition.
4. ' While the facts of the above captioned second writ petition are that the petitioners obtained the facility of the loan from the non-petitioner No,4. On the question of enhancement of the loan facilities, a dispute arose between the company and the said bank. The Officers of the hank became hostile and started harassing the petitioners through different tactics. On 30-3-1998, the bank refused to enhance the bank facilities for further period. The petitioners approached non- petitioner No,4 for the settlement of the dispute, but he was bent upon to damage the business of the said company. The bank, during June 1998, illegally and forcibly seized the RBD Palm Oil imported by the company at Karachi and sold it in the open market. Due to this act of the bank and respondent No,4, they incurred heavy loss to the tune of about 4.125 Millions of rupees. On 3-8-1998, respondent No,4 made a report to the Director Economic Crime Wing of Federal Investigating Agency, Islamabad (Pakistan), wherein it was alleged that the raw material of the quantity of 493.744 M.Tons, RBD Palm Oil imported through L/C No,0596/01/50/05/0102 was removed from the premises of the Mills without the prior approval of the bank and the proceed thereof were not deposited with the bank adjustment. It also contained the allegation, that the imported goods under L/C No,0596/01/50/05/0102 were sold and the amount received was not deposited in the bank, as it was required. On the basis of the aforesaid complaint, a case under sections 406, 409, 420, 468, 471, P.P.C. Read with section 5(2)/47 was registered against the petitioners by the F.I.A.
5. (Federal Investigating Agency), State Bank, Circle (SBC), Rawalpindi at the Police Station F.I.A. SBC Rawalpindi. Through the instant writ petitions, the petitioners have challenged the registration of the case.
6. ' These writ petitions were admitted for regular hearing Notices were issued to the non-petitioners.
7. The non-petitioners appeared before the Court and filed their respective written statements. Non- petitioners Nos.1 to 3 (F.I.A., Director Economic, (SHO), 5 and 6 absented without any reason, thus, on 20-5-1999, ex parte proceeding was ordered against them. Only Mir Khalid Mehmood, Advocate appeared on behalf of the Muslim Commercial Bank Limited, Mirpur, non-petitioner. While, in the other writ petition, non-petitioner No,1, F.I.A. No,3, Special Judge and respondent No,4 also remained absent, therefore, ex parte proceeding was ordered against them. Only Mir Khalid Mehmood, Advocate for the Muslim Commercial Bank Limited, appeared before the Court.
8. ' Arguments have been heard.
9. Mr. Umer Mehmood Qasoori, the learned counsel for the petitioners contended that Ghazi Vegetable Ghee and Oil Mill is installed at Mangla, Mirpur Azad Kashmir. Its head office is situated at Mirpur. The transaction of the loan also took place at Mirpur, therefore, the F.I.A. Has no jurisdiction to register the case against the petitioners. It was further contended by the learned Counsel that during the pendency of the writ petitions, the Bank entered into an agreement with the petitioners and renewed the facilities of the loan. In this respect, he referred the agreement executed between the Bank and the petitioners. He submitted that when the facility of loan was given to the petitioner Ghazi Vegetable Ghee and Oil Mills at Mirpur and the Factory is also situated at Mangla (AK), then the F.I.A. Has no jurisdiction to register the case against the petitioners. It was next contended by the learned counsel that although the jurisdiction of the F.I.A. Has been extended to Azad Jammu and Kashmir through Act of the Council in 1978, but the Council has no jurisdiction to extend the jurisdiction of an institution of Pakistan to Azad Jammu and Kashmir, therefore, the F.I.A. Has no jurisdiction to register the case against the petitioners at Islamabad. In this respect, he referred an unreported judgment of the Supreme Court of Azad Jammu and Kashmir titled "Jabeer Hotel Mirpur v. Azad Jammu and Kashmir Council and others decided on 24- 4-2000. It was next contended by the learned Counsel that the Banking Tribunal established at Rawalpindi (Pakistan) has only the jurisdiction to the extent of the amount, not exceeding thirty millions. In this respect, he referred section 2-B clauses (i) and (ii) of the Banking Tribunal Court Act, 1988 and submitted that in the instant case, the amount involved was 1.84 millions of rupees, therefore, non-petitioner No,3, Special Judge, Rawalpindi has no jurisdiction to allow the F.I.A. To investigate into the affairs of the company. It was also contended by the learned counsel for the petitioners that according to 3rd Schedule of the Azad Jammu and Kashmir Interim Constitution Act, 1974, the Council can only extend the jurisdiction of the Police force established in Pakistan for investigation of the offences committed in connection with the matters concerning the Government of Pakistan. In the instant case, the Council has no jurisdiction to extend the functions of the F.I.A. To Azad Jammu and Kashmir territory regarding the affairs of Azad Jammu and Kashmir Government. It was also contended by the learned counsel that the bank has compromised with the petitioners and another agreement has been executed between the petitioners and the said bank, therefore, the F.I.A. Is also not appearing in this Court. When the matter has been resolved between the parties then, there remains no justification for the registration of the case against the petitioners with the F.I.A. It was further submitted by the learned counsel that even otherwise, F.I.A. Has no jurisdiction to probe into the instant matter and the Council has wrongly extended the function of the F.I.A. In Azad Jammu and Kashmir without any justification.
10. ' While controverting the arguments of the learned counsel for the petitioners, Mir Khalid Mehmood, the learned counsel for the Muslim Commercial Bank Limited, non-petitioners, contended that no doubt, an agreement was executed between the petitioners and the non-petitioners under the Revival Package dated 12-12-1998 but that has not been completed yet, and the F.I.A. Has the jurisdiction to register the case because the functions of the F.I.A. Have been extended to Azad Jammu and Kashmir by the AJK Council.
11. ' I have heard the arguments advanced by the learned counsel for the parties and have given my utmost muse to the respective arguments advanced by the learned counsel for the parties.
12. ' In the instant case, the F.I.A. Appeared before the Court and filed the written statement, but after filing the written statement, no one appeared on behalf of the F.I.A., therefore, ex parte proceeding was ordered against them.
13. ' It would not be out of place to mention here that on 17-2-1999, the parties sought adjournment on the ground that they are negotiating for the compromise, therefore, the cases were adjourned. On 14-6-1999, again, an adjournment was sought on the ground that a compromise is being finalised, so, a short adjournment was allowed and the cases were adjourned. On 27-9-1999, the copy of the registered compromise was placed on the record. The learned counsel for the parties stated that the compromise has been effected between the parties, but certain other formalities are yet to be completed, therefore, the cases may be adjourned. The cases were adjourned on various occasions, and after the compromise, no one appeared on behalf of the F.I.A. Only Mir Khalil Mehmood, Advocate for the said bank appeared in the Court. Various adjournments were obtained on the ground that they want to submit a joint application, but ultimately, no joint application was moved. The arguments have been heard.
14. ' The compromise deed was placed on the record. According to it, a Revival Package was given to the Company, and the parties entered into a subsequent agreement on 9-7-1999.
15. "(1) The total earlier Fund Based Liability/outstanding due, amounting to Rs,114,285 millions thereinafter called as Fixed Liability of Ghazi towards MCB, is hereby settled and accepted by Ghazi."
16. ' The mode for the repayment of the fixed liability has been provided in the agreement which is on the file.
17. Now, the question requiring determination in this case is, whether F.I.A. Was competent to register the case against the petitioners in the instant case, particularly, when the Mills is situated at Mangla (Mirpur A.K.) and its Head Office is at Mirpur (AJ&K), the facility of loan was provided at Mirpur and the dealing between the parties took place at Mirpur?
18. It is an admitted fact that the F.I.A. Is not an Institution of Azad Jammu and Kashmir. It is an Institution of Government of Pakistan.
19. ' Now, the question arises whether by the Act of Council, the functions of an Institution of Pakistan set up under an Act of Parliament of Pakistan, can be extended to Azad Jammu and Kashmir and powers could also be conferred on its employees to invoke their jurisdiction in Azad Jammu and Kashmir?
20. ' The Azad Jammu and. Kashmir has its own Constitution known as Azad Jammu and Kashmir Interim Constitution Act, 1974.
21. ' The aforesaid Interim Constitution Act contains that there shall be two Legislative Bodies in Azad Jammu and Kashmir:--
(i) Azad Jammu and Kashmir Council headed by the Prime Minister of Pakistan which also includes the Chief Executive; and
(ii) Azad Jammu and Kashmir Legislative Assembly.
22. ' The Azad Jammu and Kashmir Council has power to enact laws under section 31(2) in respect of the subjects which are included in the Council Legislative List. The Assembly has also power to make laws on all other residuary matters which are not included in the Council Legislative List. The Council has the executive authority which vests in the Chairman. It is provided in subsection (7) of section 21 of the said Constitution Act, which is as under:-- "The executive authority of the Council shall extend to all 'matters with respect to which the Council has power to make laws and shall be exercised, in the name of the Council, by the Chairman who may act either directly or through the Secretariat of the Council of which a Federal Minister nominated by the Chairman from amongst the members of the Council and not more than three Advisors appointed by the Chairman shall be incharge: ' Provided that the Council may direct that in respect of such matters as it may specify, its authority shall be exercisable by the Vice-Chairman of the Council, subject to such conditions, if any, as the Council may specify."
23. ' Under section 21(13) of the said Act, the executive functions of the Council can be delegated to its Officers, while Government of Azad Jammu and Kashmir enjoys the executive powers in respect of the subjects which are within the Legislative competency of the Assembly. It is provided in section 19 of the said Constitution.
24. ' Section 12 of the Azad Jammu and Kashmir Constitution Act contains that the executive authority of Azad Jammu and Kashmir; shall be exercised by the Government consisting of the Prime Minister and the Ministers. The executive authority of the Council and the Government can be delegated to the officers of the Council and Azad Jammu and Kashmir Government. Such authority can be extended to the Officers subordinate to the Council or Azad Jammu and Kashmir Government. The Interim Constitution Act does not recognise that the executive authority of the Azad Jammu and Kashmir Council will be exercised by the functionaries or officers of the Government of Pakistan. This view finds support from an unreported judgment of Supreme Court, Azad Jammu and Kashmir, titled" Jabeer Hotel Mirpur v. Council and others. For having proper perception, I would like to reproduce the relevant portion of the judgment which reads as under:-- "17. Now we take up the main point that the functions of the EOB Institution set up under the 1976 Act enacted by the Parliament of Pakistan could not be extended to Azad Kashmir and powers cannot be conferred on its employees by the Azad Jammu and Kashmir Council or t the Assembly. In other words, the objection is that the Institution cannot function in Azad Jammu and Kashmir.
18. Azad Jammu and Kashmir has a written Constitution. Azad Jammu and Kashmir Interim Constitution Act was enacted, as is laid down in its preamble, to provide for the better Government and Administration of Azad Jammu and Kashmir until such time as the status of Jammu and Kashmir is determined through a plebiscite to be held under the auspices of the United Nations. As is stated in the preamble, it was enacted with concurrence of the Government of Pakistan. Interim Constitution Act postulates that there will be two legislative bodies in AJK. One is the Azad Jamu and Kashmir Council which is headed by the Prime Minister of Pakistan, which term includes Chief Executive of Pakistan, and consists of six members who are elected by the Azad Jammu and Kashmir Assembly and five other members who are nominated by the Prime Minister of Pakistan.
25. President and Prime Minister of Azad Jammu and Kashmir are also members of the Council. The Azad Jammu and Kashmir Council has power to enact laws under section 31(2) in respect of the subjects which are included in the Council Legislative List. The other legislative body is the Azad Jammu and Kashmir Legislative Assembly consisting of forty-eight elected members. The Assembly has to power to make laws in all the residuary matters which are not included in the Council Legislative List. The Council also has executive authority which vests in its Chairman. It is provided in subsection (7) of section 21 of the Constitution Act as follows:--
(7) The executive authority of the Council shall extend to all mattes with respect to which the Council has power to make laws and shall be exercised, in the name of the Council, by the Chairman who may act either directly or through the Secretariat of the Council of which a Federal Minister nominated by the Chairman from amongst the members of the Council and not more than three Advisors appointed by the Chairman shall be Incharge.
26. ' Provided that the Council may direct that, in respect of such matters as it may specify, its authority shall be exercisable by the Vice-Chairman of the Council, subject to such conditions, if any, as the Council may specify."
19. It is provided in subsection (13) of section 21 that the executive functions of the Council can be delegated to its officers. It reads as under:- "13. The Chairman may regulate the allocation and transaction of the business of the Council and may, for the convenient transaction of that business, delegate any of its functions to officers and authorities subordinate to it".
20. Unlike Azad Jammu and Kashmir Council, the Legislative Assembly does not have any executive powers. The Azad Government of the State of J&K enjoys executive powers in respect of the subjects which are within the legislative competence of the Assembly. It is provided in section 19 of the Constitution Act as follows:--- "19. Extent of Executive Authority of Government.---(I) Subject to this Act, the executive authority of the Government shall extend to the matters with respect to which the Assembly has powers to make laws.
27. (2).....
28. (a)...
29. (b)...
(3) Notwithstanding anything contained in this Act, the Government may, with the consent of the Council, entrust either conditionally or unconditionally, to the Council, or to its officers functions in relation to any matter to which the executive authority of the Government extends."
21. It is provided in section 12 that executive authority of Azad Jammu and Kashmir shall be exercised by the Government consisting of the Prime Minister and the Ministers. Subsection (5) lays down as follows:-- "(5) The Government may regulate the allocation and transaction of its business and may for the convenient transaction of that business delegate any of its functions to officers or authorities subordinate to it."
22. It is clear from the provisions noticed above that executive authority of the Council and the Government; can be delegated to officers and authorities subordinate to them. The Interim Constitution Act does not postulate that executive authority of Azad Jammu and Kashmir Council will be exercised by the functionaries or officers of the Government of Pakistan although the Prime Minister of Pakistan is the Chairman of the Council. It is equally clear that while performing functions as Chairman of the Council, the Prime Minister of Pakistan cannot delegate any functions of the Council to an officer or authority in the Government of Pakistan, although they arc subordinate to him, as Prime Minister.
23. According to the Constitution of Pakistan of 1973, and Azad Jammu and Kashmir Interim Constitution Act, 1974, Azad Jammu and Kashmir is not a part of Pakistan and laws of Pakistan are not applicable to the liberated territory of Jammu and Kashmir. Thus, the functionaries appointed under a particular law which is in force in Pakistan, do not have the jurisdiction to function in Azad Jammu Kashmir. It is provided in subsection (4) that the Federal Government shall establish an Institution called the Employees of Old-age Benefit Institution which shall be a body corporate. The employees Old-age Benefit Act, 1976 contains a provision in subsection (2) of section 1 that the said Act was to extend to the whole of Pakistan. The Act does not visualise that it will perform functions in Azad Jammu and Kashmir. Section 7 lays down that there will be a number of trustees appointed by the Government and that four members shall be those who have been nominated by the Provincial Governments. There is no mention that it will also have a member from Azad Jammu and Kashmir. It is thus clear that the EOB Institution is performing functions in connection with the Federation. It is set up by the Federal Government and is under its control. The functions which it performs are entrusted to it by the Federal Legislative and the Federal Government. Clearly it is not functionary subordinate to the Azad Jammu and Kashmir Council. It follows that Azad Jammu and Kashmir Council could not delegate its functions to the said Institution.
24. In fact the Constitutional position is that the Azad Jammu and Kashmir Council and the Azad Jammu and Kashmir Legislative Assembly are not empowered to legislate in respect of officers of the EOB Institution. Legislative powers of the Council and the Assembly are laid down in section 31.
30. Subsection (1) is relevant here.
31. "31. Legislative Powers.---(1) Subject to the succeeding provisions of this section, both the Council and the Assembly shall have the power to make laws.
(a) for the territories of Azad Jammu and Kashmir;
(b) for all Sate Subjects wherever they may be; and
(c) for all officers of the Council or as the case may be, the Government, wherever they may be."
25. This provision manifestly lays down that the powers to make laws outside Azad Jammu and Kashmir is restricted only to State subjects wherever they may be and to officers of the council and of the Government wherever they may be. The officers of the EOB Institution are not officers of the Council or the Government. Therefore, the Council or the Assembly cannot legislate for them. It means in other words that law cannot be framed so as to confer powers or functions on the employees of the EOB Institution by the legislative bodies of Azad Jammu and Kashmir.
26. It follows that the Azad Jammu and Kashmir Employees Old-age Benefits (Extension of.
32. Functions to Azad Jammu and Kashmir Act, 1980 (Act X of 1980) was not competently enacted by the Azad Jammu and Kashmir Council, and was, therefore, void from its inception. The Azad Jammu and Kashmir Council (Validation of Laws) Act, 1995 also suffered from the same illegality so far as it purported to validate Act X of 1980. Consequently, Act X of 1980 as well as the provisions in the aforesaid Validation Act relating to Act X of 1980 are struck down for want of legislative competence. The result is that all actions taken and orders passed by the EOB Institution in respect of Jabeen Hotel and step/actions taken by the functionaries in Azad Jammu and Kashmir under direction of the EOB Institution were also without lawful authority and of no legal effect."
33. The same like proposition also arose before the Supreme Court of Azad Jammu and Kashmir in the aforesaid case and it has been held by the Supreme Court Azad Jammu and Kashmir that EOB is an Institution of Pakistan. Its functions could not be extended to Azad Jammu and Kashmir. The powers and the functions available to the officers of EOB, under the Act of Parliament of Pakistan, could not be extended to Azad Jammu and Kashmir because they are not subordinate to the Council or the Government of Azad Jammu and Kashmir. The F.I.A. Is an Institution of Pakistan Government. It is neither subordinate to the A.J.K. Council nor to the Government of Azad and Kashmir, therefore, the Council was not competent to extend the jurisdiction of F.I.A. To Azad Jammu and Kashmir, thus, the F.I.A. Has no jurisdiction to register the case against the petitioners at Rawalpindi (Pakistan) regarding the affairs of the company registered at Mirpur.
34. ' It would also not be out of place to mention her that Special Judge Banking Court has also without any jurisdiction allowed F.I.A, to investigate the affairs of the petitioners-company. The Banking Tribunal established at Rawalpindi (Pakistan) had only the jurisdiction to the extent of the amount of loan not exceeding thirty million rupees. For having proper perception, I would like to reproduce section 2-B clauses (a) and (b) which contain the definition of the' Banking Tribunal and the same reads as under:-- "Banking Court" means:--
(i) in respect of a case in which the outstanding amount of claim based on a loan or finance does not exceed thirty million rupees or the trial of offences under this Act, the Court established under section 4; and
(ii) in respect of any other case, the High Court."
35. ' In the instant case, theo amount involved was rupees 184 millions, therefore, the Banking Tribunal established at Rawalpindi (Pakistan) was not competent to allow the F.I.A. To investigate the accounts of the petitioners-company.
36. The upshot of the above discussion is that the writ petitions are accepted and the cases registered with the F.I.A. Against the petitioners at Rawalpindi (Pakistan) are hereby declared to be without lawful authority.