TASSADUQ HUSSAIN JILANI, J.--Appellant was tried by the learned Judge Accountability Court, Lahore (constituted under the National Accountability Bureau Ordinance (XVIII of 1999) in Accountability Reference No,12 of 1999 (Reference No,17 of 1997) and vide the impugned judgment dated 24-3-2001 he was convicted under section 3(1), clause (d) of the Ehtesab Ordinance, 1997 and sentenced to imprisonment for a period of one year and six months. He was also burdened with a fine of Rs,20 million in default of which he was to further undergo imprisonment for a period of one year and six months. Benefit of section 382-B, Cr.P.C. Was extended and he was disqualified to contest elections and hold public office for a period of ten years in terms of section 15 of the NAB Ordinance, 1999.
2. Facts giving rise to the instant appeal are that in February, 1997 initially on the initiation of Ministry of Interior, Reference No,17 of 1997 was instituted by the then Chief Ehtesab Commissioner, Islamabad under section 14(1) of the Ehtesab Ordinance, 1997 which was taken cognizance of by a Division Bench of this Court but subsequently on the promulgation of the National Accountability Bureau Ordinance, 1999, the Reference was transferred to the Accountability Court (by operation of the latter Ordinance) which tried the appellant and passed the impugned judgment.
3. The case of the prosecution is that 4.5 acres of land situated in Survey No,721 National Park, Rawalpindi was leased out to Pakistan Tourism Development Corporation (on thirty years' lease renewable for ninety-nine years) for construction of a Tourist Village by the Cantonment Board Rawalpindi (lease agreement dated 24-9-1977 Exh.PW5/A). As the P.T.D.C. Could not complete the project it decided to explore the possibility of collaboration of private sector. It issued a proclamation in Press, inviting parties to participate in the project for construction of the Tourist Village. The group chaired by Hakim Ali Zardari appellant i,e, Zardari Group (Pvt.) Limited was finally selected for a joint venture. In terms of the agreement between the P.T.D.C. And the Zardari Group (Pvt.) Limited, a joint venture company was floated the former contributed land towards the capital of the company and shares worth Rs,18 lacs were issued in favour of the P.T.D.C. In lieu thereof and Zardari Group was to contribute Rs,54 lacs as equity equivalent to 75% shares of the company (this agreement between P.T.D.C. And the Zardari Group Private Limited is Exh.PW5/C). In order to contribute its equity of 25% share P.T.D.C. Sub-leased the land in favour of Tourist Village Limited, The Tourist Village thereafter applied for loan of Rs,86.789 million to the N.D.F.C. (National Development Finance Corporation). The loan was sanctioned and an amount of Rs,3 million was disbursed in the year 1990. It was alleged that on 30-6-1996 an amount of Rs,1,31,58,337.52 was outstanding against the appellant. Notwithstanding the pledge of land with the N.D.F.C. Appellant Hakim Ali Zardari, it was further alleged, entered into a sale agreement with Sh.Abdul Hameed of M/s. Bilz (Pvt.) Limited, Multan (P.W.1) for the sale of 27 Kanals of land being share of M/s. Zardari Group in the company named Tourist Village Ltd. For a sum of Rs,25 million. He also received an amount of Rs,5 million as earnest money through pay order. The sale could not materialize as the purchasing party came to know that the appellant owed Rs,one crore to N.D.F.C. Against this land and further that the latter failed to provide the requisite N.O.Cs. From the P.T.D.C. And the Cantonment Board, Rawalpindi. The appellant, however, it is admitted, refunded the earnest money in January, 1995. In September, 1994 the Zardari Group made an agreement with Zafar Mehmood Khan (P.W.2) for the 'sale of whole 4.5 acres of land for a sum of Rs,2,45,00,000 without the consent of the N.D.F.C. He even sold 25% share of P.T.D.C. Again without their consent. It was further alleged that the Pakistan Tourism Development Corporation, the second partner in the company, decided to disinvest their share worth Rs,2.7 million but the Zardari Group did not bother to respond to P.T.D.C. Letters vide which he was conveyed the conditions for disinvestment. The precise charge framed by the learned trial Court was as under:- "(i) That by means of an agreement deed dated 29-11-1983 and sub-lease dated 16-1-1986 you obtained a plot bearing Survey No,721 measuring 4.5 acres situated in Ayub National Park, Rawalpindi, from Pakistan Tourism Development Corporation for establishing Tourist Village in accordance with the approved building plan by the Cantonment Board, Rawalpindi;
(ii) that in your capacity as the Chairman of the Tourist Village (Pvt.) Ltd., you pledged this land with N.D.F.C. For obtaining a loan of Rs,86.789 million in the year 1989, the loan was sanctioned and an amount of Rs,30,00,000 (Rupees three million) was disbursed in the year 1990 but the same was not utilized till today and the said amount has allegedly arisen to Rs,1,40,00,000 (Rupees one crore and forty lacs only) inclusive of the interest;
(iii) that on the same plot, you obtained a sum of Rs,24,00,000 (Rupees twenty-four lacs only) from Pakistan State Oil on ten years' advance rent on 24-1-1990 for the installation of a petrol pump on the said plot;
(iv) that although the said plot was already pledged with the N.D.F.C. And it could not be sold/disposed of without the permission of the N.D.F.C. But you without such permission agreed to sell the entire project on 18-9-1994 by means of an agreement in favour of Zafar Enterprises through Zafar Mahmood Khan and received a sum of Rs,54,00,000 (Rupees fifty-four lacs only) out of the agreed sale price of Rs,2,45,00,000 (Rupees two crore forty-five lacs only) and also sold 25% shares of P.T.D.C. Without their consent;
(v) that the Board of P.T.D.C. Made a conditional decision on 1-12-1994 to disinvest their shares worth Rs,2.7 million but you even did not bother to respond to the P.T.D.C.'s letter conveying to you the conditions for disinvestment; and
(vi) that you by abusing your official position as holder, of a public office committed the aforesaid acts of commission and omissions falling within the ambit of corruption and corrupt practices as defined in section 3(1), clause (d) of the Ehtesab Ordinance, 1997 and obtained a pecuniary advantage to the tune of Rs,1,08,00,000 (Rupees one crore eight lacs only) without any investment which offence is punishable under section 4 of the said Ordinance."
4. The material evidence produced by the prosecution during the trial was as under:-- PROSECUTION WITNESSES:
(i) Sh. Abdul Hameed (P.W.1): He proved the lease agreement dated 6-3-1994. However, he submitted that the "agreement was reduced into writing which could not be materialized, therefore, in the year 1994 the agreement was cancelled. Rs,5 million were returned to him in two instalments."
(ii) Zafar Mehmood (P.W.2): He stated that the agreement dated 18-9-1994 was signed on behalf of Zardari Group by Mrs.Zarin Ara in terms of which 75% share of Tourist Village (Pvt.) Limited was sold for a sum of Rs,2 crore, 45 lacs and she also promised to get a petrol pump sanctioned in favour of Tourist Village Limited. He added' that as per agreement he was required to discharge the liabilities of N.D.F.C. And P.S.O. Amounting to Rs,45 lacs.
(iii) Sohail Shah Bokhari (P.W.3.): He was Ex-Vice President of N.D.F.C. Who proved the loan agreement between N.D.F.C. And Tourist Village (Pvt) Limited which is Exh.PC/1.
(iv) Afaq Hussain Shah (P.W.4): He was Senior Vice-President of N.D.F.C. He produced the record pertaining to the sanction of loan and other correspondence between the N.D.F.C. And the Tourist Village (Pvt.) Limited.
The documents that he produced are as under:--
(i) sanction letter dated 26-3-1989 (Exh.PX);
(ii) letter of request by the Tourist Village Private Limited through Hakim Ali Zardari regarding release of amount of Rs,1,50,00,000 (Exh.PX/1);
(iii) letter dated 16-11-1989 from Vice-President N.D.F.C. To the Manager, N.D.F.C. Clifton Branch (Exh.PX/2);
(iv) letter dated 18-1-1990 from Hakim Ali Zardari, Chairman TVL to Chairman, N.D.F.C. (Exh.PX/3);
(v) letter dated 24-1-1990 from Vice-President, N.D.F.C. To Branch Manager, Clifton Branch (Exh.PX/4);
(vi) report of the Chartered Accountant (Exh.PX5/1-2);
(vii) letter dated 21-7-1991 from the Senior Vice-President (PSD1) addressed to Senior Vice-President (PSD2) Exh.PX/6;
(viii) letter dated 6-11-1991 (Exh.PX/7);
(ix) certified copy of transfer voucher (Exh.PX/8, dated 18-11-1989;
(x) statement of Accounts up to 31-12-1989 (Exh.PX/9);
(xi) voucher dated 24-1-1990 (Exh.PX/10);
(xii) statement of Account (Exh.PX/11) up to 24-1-1990;
(xiii) copy of letter dated 8-8-1997 (Exh.PX/12);
(xiv) copy of letter (Exh.PX/13) dated 5-12-1997.
(xv) Ehsan Oadir (P.W.5): He was an officer of the P.T.D.C. And brought the relevant record in Court.
(xvi) Malik Safdar Ali (P.W.6): He was a Deputy Director of F.I.A. Who investigated the case and submitted fmal report on the basis of which Reference was filed.
(xvii) Sameen Hussain (C.W.1): He was a Vice-President of the N.D.F.C. He also brought the relevant record pertaining to the loan advanced in favour of the Tourist Village Limited.
(xviii)Lal Sher Khan (C.W.2): He was the Superintendent of Land Cantonment Board, Rawalpindi and produced in evidence the relevant record regarding the permission of the Board to mortgage the property for obtaining loan, NOC issued by the Board and the application of one Shahnaz Zafar (Chief Executive of M/s. Tourist Village Private Limited).
5. Appellant could not appear in Court on account of sickness and with permission of the Court he was allowed to have his statement (under section 342, Cr.P.C.) recorded through Mr. Asif Bhatti, Advocate and also to file detailed written statement i,e, Mark-D. It was admitted on behalf of the appellant that the land was leased out to P.T.D.C. By the Cantonment Board, Rawalpindi for thirty years (renewable for 99 years); that pursuant to advertisement in Press inviting bids for a joint venture he participated and was selected whereafter P.T.D.C. And M/s. Zardari Group entered into an agreement for the establishment of a Tourist Village on the afore-referred land; that in the said joint venture, the Zardari Group was only required to invest 54 lacs as its equity share which was done but the project could not be completed due to factors beyond the control of Tourist Village Limited; that the site plan, for the establishment of Tourist Village was sanctioned on 3-12-1989 but in the year 1990, on account of Reference No,8/90 filed under the mala fide political pressure of the then President Mr.Ghulam Ishaque Khan, the National Development Finance Corporation unilaterlly terminated the financial facilities whereafter it was not possible for the Tourist Village to proceed with the plan. He admitted that he was elected as Member of National Assembly in November, 1988 and his daughter-in-law (Mohterma Benazir Bhutto) was also elected as M.N.A. He, however, denied the suggestion that he had obtained a financial assistance from N.D.F.C. To the tune of Rs,85.789 million on account of political influence. He maintained that none of the prosecution witnesses had said that the loan was got sanctioned on account of the alleged political influence.
It was denied that the loan was sanctioned without requisite securities. It was admitted in the statement that he had withdrawn an amount of Rs,1.5 million sanctioned by the N.D.F.C. In the year 1989 and another amount of Rs,1.5 million in January, 1990. He, however, denied the suggestion that the afore-referred amount of Rs,3 million was not spent on the project. It was maintained that the amount was disbursed by the N.D.F.C. Through Escrow Account and the financial facility was terminated by the N.D.F.C. On account of the political pressure. Nevertheless it was added in the statement that the total liability of N.D.F.C. Stood satisfied. He admitted that he was re-elected as member of the National Assembly in October, 1993 alongwith his son and daughter-in-law and he was appointed as Chairman, Public Accounts Committee of the National Assembly. The agreement with Sh. Abdul Hameed, Chairman M/s. Bilz Limited, Multan was not denied by the appellant but it was explained that vide the said agreement the intention was to sell the share and, in any case, the said agreement was never acted upon. A subsequent agreement with Zafar Mehmood was also admitted but it was clarified that the agreement was to sell 75% share of the Zardari Group in Tourist Village Limited, the company being a juristic person was a separate entity, was competent to do that and -no illegality was reflected in the said agreement. Appellant also did not deny having received payments pursuant to the agreement between the Tourist Village Limited and Zafar Mehmood. In the supplementary statement made by the appellant on 3-3--2001 when confronted with the query as to why the joint venture was not converted into a public limited company before the disbursement of the loan, he replied as under:-- "Since the company also needed Bridge Finance Facility from N.D.F.C., therefore, the sponsors expressed their intentions to implement the project under a public limited company to be floated by them. I was not the only sponsor. It was not my obligation alone to convert this intention into reality by floating a public limited company for Bridge Finance Facility and the stage for such floatation did not materialize."
' Giving an account of what he alleged as mala fides, the appellant concluded his detailed written statement in the following terms:- "The present prosecution is mala fide, launched by Nawaz Sharif Regime. Apart from this false Reference, no other case, despite best efforts could be established against me. I happen to be father-in-law of Benazir Bhutto and father of Asif All Zardari. This is why I am being victimized. I am 70 years of age. I am an ailing person suffering from serious medical disabilities, the Medical Board has established my infirmities that is why I am admitted as Indoor Patient in Dr.Ziauddin Medical University Hospital, for the last many months. I have since then been in judicial custody. I am innocent and thus I am entitled to be acquitted honorably by this Hon'ble Court."
6. Mr. Saleem Sehgal, learned counsel for Hakim Ali Zardari 'appellant, in support of this appeal, made following submissions:--
(i) That the material contained in the Reference and the evidence led during trial did not constitute any offence under the Ehtesab Act, 1997. The prosecution, it was contended, miserably failed to produce evidence which could bring the conduct of the appellant within the mischief of section 3 of the Ehtesab Ordinance, 1997;
(ii) that the appellant could not have been made to incur disqualification under the National Accountability Ordinance in view of sections 9, 33 and 35 of the said Ordinance;
(iii) that the loan transaction between Tourist Village Limited of which the appellant was a partner and N.D.F.C. Was a commercial transaction, entered into between two juristic entities and having complied with all the requirements of securitization there was no question of misuse or abuse of official position;
(iv) that the agreement executed between Zardari Group and Zafar Brothers was a contingent agreement i,e, subject to certain conditions, it was partly acted upon but it remained an inconclusive contract. Nevertheless it did not adversely affect the rights of either the P.T.D.C., N.D.F.C.
Or Cantonment Board. All the liabilities of N.D.F.C. Stood discharged and none of the afore-referred departments are a complainant;
(v) that the N.D.F.C. Had approved loan in favour of the joint venture which was sanctioned before the appellant became an M.N.A. i,e, the loan was sanctioned on 25-8-1988 whereas he was elected M.N.A. On 24-11-1988;
(vi) that the impugned judgment proceeds on incorrect assumptions with regard to Ehtesab Ordinance, Companies Act, Contract Act, Transfer of Property Act, Sale of Goods Act and various Constitutional provisions which makes it arbitrary and conjectural.
7. Mr.Muhammad Ghani, Advocate/learned Public Prosecutor appearing for the National Accountability Bureau supported the impugned judgment and submitted as under:--
(i) That the joint venture i,e, Tourist Village (Pvt.) Limited, headed by appellant Hakim Ali Zardari, was sanctioned loan by the National Development Finance Corporation in terms of an agreement which inter alia stipulated that the afore-referred Limited Company shall be converted into Public Limited Company before the loan was disbursed. This condition having not been fulfilled by the appellant, the loan could not have been disbursed. This disbursement of loan reflects the undue influence exercised by the appellant on the National Development Finance Corporation;
(ii) that P.W.3 Sohail Shah Bokhari, the then Vice-President of N.D.F.C. And P.W.4 Afaaq Hussain Shah, Ex-Vice-President of the N.D.F.C. As also Ehsan Qadir (P.W.5), an official of Pakistan Tourist Development Corporation had made dishonest concessions which were rightly taken note of by the learned trial Court and their evidence, to that extent, is worthy of no consideration;
(iii) That on 18-5-1986 the appellant applied for loan to N.D.F.C. For the limited company in question (application is C.W.1/A). No order was passed on the said application till 1988. On 24-11-1988 appellant's election as Member, National Assembly was notified and on 20-3-1989 the National Development Finance Corporation sanctioned the loan. This grant of loan by itself, according to him, would show that the sanction was obtained through improper means and undue influence exerted by him in his capacity as Member of the National Assembly;
(iv) that the sanction letter (Exh.PX) and the agreement to finance between the appellant's company and the N.D.F.C. (Exh.PC) stipulated certain conditions and the loan could be disbursed only on the fulfilment of those conditions. Condition Np.10 (k) of Exh.PC visualizes that the N.D.F.C.
Could withhold training in case of violation. As those conditions had not been fulfilled, the N.D.F.C.
Vide letter dated 29-7-1981 (Exh.PK/14) recalled the loan facility. In October, 1993, his son and daughter-in-law were elected as Members of the National Assembly. On 6-3-1994 appellant entered into an agreement to sell his shares in the private limited company with Sh.Abdul Hameed and received a sum of Rs,50 lacs as earnest money. In the said agreement the company was shown as the public limited company and the appellant was shown as the owner. Although this agreement did not materialize but it reflects an attempt on his part to obtain pecuniary advantage through dishonest means. On 18-9-1994, appellant entered into yet another agreement with Zafar Mehmood (P.W.2) in terms of which the appellant's share in the Tourist Village (Pvt.) Limited was sold for a sum of Rs,2,45,00,000 and the said agreement also visualized that the appellant would obtain a sanction for installing a petrol pump in favour of the Tourist Village on the land in question (agreement is Exh.PA). On 4-10-1994, the Pakistan Tourist Development Corporation decided to disinvest its 25% share in the Tourist Village (Pvt.) Limited, a letter was addressed to the appellant on 11-11-1994 (Mark-B) offering him to purchase the said share but appellant's lack of response indicated that he was content with money that he had made out of the project and was no longer interested to continue with the project which besides being violative of the initial agreement reflected criminal intent on his part;
(v) that although the entire liability of the National Development Finance Corporation was cleared on 5-12-1997 (Exh.DA), through the incentive scheme issued by the State Bank of Pakistan, yet the commissions and omissions of the appellant constituted offence under the Ehtesab Ordinance and he has rightly been convicted on charges framed against him;
(vi) That the evidence led by the prosecution has proved the case against the appellant beyond reasonable doubt; that he had obtained loan in his capacity as Member of the National Assembly and Chairman of the Public Accounts Committee; that he sold his share to third party illegally; that he got substantial profits out of those transactions and the strong presumption would arise against the appellant and the burden to prove that the afore-referred transactions were transparent and bona fide transactions shifted on him. Since he failed to produce any evidence which Would lead to an unrebuttable presumption that he had obtained favours and pecuniary advantages by using corrupt and illegal means within the meaning of the Ehtesab Ordinance, 1997.
In support of the submissions he relied on the following precedent case-law and opinion of jurists:- -
(i) The President v. Mr. Justice Shaukat Ali (PLD 1971 SC 585);
(ii) The Registrar of Companies, Pakistan through Joint Registrar of Companies v. Taj Company Limited and 8 others (1993 CLC 1413);
(iii) Khan Asfandyar Wali and others v. Federation of Pakistan through Cabinet Division, Islamabad and others (PLD 2001 Supreme Court 607);
(iv) Jag Prasad Rai v. Singari (AIR 1925 Privy Council 93);
(v) Kanshi Ram v. Shankar Das (AIR 1928 Lahore 397);
(vi) Padamraj v. Gopikisan (56 Indian Cases 129);
(vii) Deonarain Singh v. Emperor (AIR 1934 Patna 132); (viii)Barada Prosad Saha v. Krishna Chandra Saha ( 1934 Calcutta 414);
(ix) Dip Chand Golo Mal v. Kishni Bai (AIR 1928 Sindh 133);
(x) Debendra Narayan Singh v. Narendra Singh (54 Indian Cases 636);
(xi) Chidambaram Chettiar v. Ayyappa Chettiar (AIR 1935 Madras 152);
(xii) American Jurisprudence, Second Edition, Volume 29, and (xiii)Cropus Juris Secundum by Francis, J. Ludes (Volume 31A), on Presumptions.
8. Mr. Ahmer Bilal Soofi, the learned Deputy Prosecutor-General for National Accountability Bureau
(NAB) submitted that the white collar crime is on the increase; that the misuse of authority by public functionaries assumes different nodes; some are overt while the others are covert; that to meet the challenge of this nature of crime the countries from diverse jurisdictions have taken measures including amendment in procedural and substantive law; that the requirement of mens rea to prove such offences is no longer necessary and that the Government of Pakistan, in a working paper addressed to the United Nations General Assembly, has recommended that the requirement of mens rea should be dispensed with in corruption cases as sometimes the crimes are committed in very subtle ways. He added that in offences creating strict liability, the requirement of mens rea already stands dispensed with. Referring to the principle of "res ipsa loquitor" which has been recognized and applied by our Courts, he contended that the evidence led by the prosecution and the chain of circumstances reflected therein, would speak for themselves that an undue influence was used by the appellant to obtain loan and to ensure its disbursement, to sell out the shares to 3rd party and to make money. In the face of these facts, he submitted, it was for the appellant to rebut the evidence led. As he did not lead any evidence, he further submitted, appellant miserably failed to discharge the onus which laid heavily on him. The precedent case-law to which reference was made by the learned Deputy Prosecutor-General
(NAB) is as under:-- O Government of Pakistan v. Ishrat Begum (1999 MLD 768);
(ii) Pakistan Steel Mills v. Malik Abdul Habib (1993 SCMR 848);
(iii) Messrs Jehangir Services (Pvt) Limited v. Mst. Bibi Rukhsana Begum (PLD 1995 Karachi 329);
(iv) Muhammad Ismail Qureshi v. Pakistan (PLD 1991 FSC 10);
(v) Sheikh Mujibur Rehman v. The State (PLD 1964 Dacca 330);
(vi) Daluram Bahani v. The State (PLD 1958 Dacca 188), and
(vii) Sohail v. Badam (1996 PCr.LJ 555).
9. Heard.
10. Having gone through the impugned judgment, the evidence on record, the charge framed, the relevant law and having given anxious considerations to the submissions by counsel from both the sides, we are of the view that the points Mooted for our considerations, in the case, are as under:--
(i) Whether the appellant's selection by the Pakistan Tourist Development Corporation to join the joint venture named as Tourist Village (Pvt.) Limited and the agreement executed between them on 29-11-1983 was on account of his influence as holder of public office (Exh.PW5/C)?
(ii) Whether the appellant in his capacity as Chairman, Tourist Village (Pvt.) Limited procured loan from the N.D.F.C. (application dated 18-5-1986 (Exh.CW1/A)), got its disbursement for the joint venture but failed to utilize the same and incurred a liability of Rs,one crore, 40 lacs inclusive of interest by using corrupt, dishonest, improper and illegal means within the meaning of section 3(1)
(d) of the Ehtesab Ordinance, 1997?
(iii) Whether the agreement dated 18-9-1994 between Zafar Mehmood (P.W.2) and Mrs. Zareen Ara (wife of the appellant), selling 75% share of the appellant group to the said Zafar Mehmood, was on account of appellant's influence as holder of public office in terms of the penal provisions of the Ehtesab Ordinance, 1997?
(iv) Whether the appellant's omission to respond to the Pakistan Tourism Development Corporation's letter/offer (dated 11-11-1994 which is Mark-B) for sale of its share constituted an offence under any provision of law?
(v) Whether the appellant had derived any pecuniary advantage illegally and by exploiting his position as holder of public office?
11. Learned counsel appearing for both the sides made their submissions with reference to the afore-referred questions as well and the learned counsel for NAB Mr. Muhammad Ghani, Advocate has placed on record his written reply/comments with regard to each. For the sake of clarity we propose to discuss and decide the questions separately.
Question No,1 Whether the appellant's selection by the Pakistan Tourist Development Corporation to join the joint venture named as Tourist Village (Pvt.) Limited and the agreement executed between them on 29- 11-1983 was on account of his influence as holder of public office (Exh.PW5/C).
12. Learned counsel for the NAB frankly conceded that in 1982 the Bored of Directors of P.T.D.C.
Approved the proposal of Zardari Group for the joint venture, a formal agreement was executed on 29-11-1983 between them and at that time the appellant did not hold any public office. The said agreement, therefore, did not reflect any influence of a holder of a public office and the finding of the learned trial Court are also to the same effect.
Questions Nos.2 and 3
(ii) Whether the appellant in his Capacity as Chairman, Tourist Village (Pvt.) Limited procured loan from the N.D.F.C. (application dated 18-5-1986 (Exh. CW1/A)), got its disbursement for the joint venture but failed to utilize the same and incurred a liability of Rs,one crore, 40 lacs inclusive of interest by using corrupt, dishonest, improper and illegal means within the meaning of section 3(1)
(d) of the Ehtesab Ordinance, 1997?
(iii) Whether the agreement dated 18-9-1994 between Zafar Mehmood (P.W.2) and Mrs. Zareen Ara (wife of the appellant), selling 75% share of the appellant group to the said Zafar Mehmood, was on account of appellant's influence as holder of public office in terms of the penal provisions of the Ehtesab Ordinance, 1997?
13. As per the learned trial Court in terms of sanction letter (Exh.PX) dated 26-3-1989, two kinds of loans were sanctioned i,e, (i) Local Currency Term Financing of Rs,85.789 million on mark-up basis; and (ii) Bridge Financing of Rs,31.196 million. The said letter included a condition i,e, D(10) to the effect "the sponsor to convert the company into public limited company before the disbursement of N.D.F.C. Funds". The learned trial Court has held that without fulfilling this condition, the loan was disbursed on account of a letter issued by the appellant (Exh.PX/15) on 1-11-1989 which bore the official rubber stamp of the appellant in his capacity as Chairman, Public Accounts Committee, National Assembly Secretariat, Islamabad. The Court further found that the only inference which can be drawn from the disbursement of loan by N.D.F.C. Without compliance to the afore-referred condition is that the funds were released on account of his influence as holder of public office.
14. With regard to appellant's agreement to sell its share with Sh. Abdul Hameed (P.W.1) and subsequent agreement with P.W.2 Zafar Mehmood and the Balance Sheets maintained by the appellant, the learned trial Court observed as under:-- "I would not like to comment much about the balance-sheet. It is to say that the travelling expenses during the year 1989-90 that is from 1st July, 1989 to 30-6-1990 have been shown as Rs,10,59,000. And a sum of Rs,24 Lacs which was received from the P.S.O. Is shown to have been advanced to Directors. I have gone through the balance-sheet minutely which is bogus at the face of it. It is, therefore, established that the accused obtained pecuniary advantage not only from the N.D.F.C. But also from other persons by entering into sham transactions. It is strange that the accused and his wife both entered into contract despite the fact that their shares were pledged with N.D.F.C. It is not understandable as to why the second agreement was executed by Mrs. Zareen Ara Zardari on behalf of Zardari Group. When she 'did not possess the requisite authority. The only conclusion which can be drawn is that Sh.Abdul Hameed and Zafar Mehmood simply wanted to make payment to the accused without taking into consideration the nature of the transactions which in my opinion were without lawful authority. The sole object of which was to enter into the corridor of powers through obliging."
13. Admittedly, none of the prosecution witnesses appearing for the P.T.D.C. (P.W.5) or N.D.F.C. (P.W.3, P.W.4 and C.W.1) and the private individuals (P. W.1 and P.W.2) have alleged pressure, corruption, illegal act or improper conduct against the appellant. The learned trial Court has drawn conclusions and raised presumptions against the appellant primarily on the basis of the documentary evidence led. These findings have put on focus serious issues regarding presumptions and when those can be raised, the onus of burden of proof and mens rea in criminal law. We propose to briefly dilate on these issues for a better appreciation of the evidence led by the prosecution before the learned trial Court to prove the charges framed.
16. Presumptions constitute an important part of the law of evidence. "A Presumption is an inference of the existence or non-existence of some fact which Courts or Juries are required or permitted to draw from the proof of other's facts". It has been said to be in the nature of evidence but has also been considered as a rule of law as to which party shall first proceed and go forward with the evidence. (M.O.---Jones v. Phillips Petroleum Co., App., (186 S.W. 2nd 868, 874) [quoted at page 193, Part-IV--Presumptions (Definition and Nature) in Corpus Juris Secundum by Francis, J.
Ludes-Volume 31A, published by St.Paul, Minn., West Publishing Co.)].
17. Broadly speaking there are three classes of presumptions i,e, (i) presumption of law, (ii) presumption of facts and (iii) mixed presumption of 8 law and fact.
18. Article 129 of the Qanun-e-Shahadat stipulates that "The Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case". The said section lists nine various situations in which the Court may presume any fact in relation thereto. In all the nine illustrations the presumption is raised on the existence of a certain fact and not otherwise. Those illustrations are as under:--
(a) That a man who is in possession of stolen goods soon after the theft is either the thief or has received the goods knowing them to be stolen, unless he can account for his possession;
(b) that an accomplice is unworthy of credit, unless he is corroborated in material particulars.
(c) that a bill of exchange, accepted or endorsed, was accepted or endorsed for good consideration;
(d) that a thing or state of things which has been shown to be in existence within a period shorter than that within which such things or states of things usually cease to exist, is still in existence;
(e) that judicial and official acts have been regularly performed;
(t) that the common course of business has been followed in particular cases;
(g) that evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it;
(h) that, if a man refuses to answer a question which he is not compelled to answer by law, the answer, if given, would be unfavourable to him, and
(i) That when a document creating an obligation is in the hands of the obliger, the obligation has been discharged.
19. Article 129 of the Qanun-e-Shahadat is old section 114 of the Evidence Act. Commenting on the nature and scope of presumptions raised under this provision Sarkar, in his famous commentary, said:-- "Perhaps the most important rule as to presumptions is that they must be based upon facts and not upon inferences or upon other presumptions. No presumption can with safely be drawn from a presumption (U.S. v. Ross, 92 US 281.) The fact presumed should have direct relation with the fact from which the presumption is drawn; but, when the facts are established from which presumptions may be legitimately drawn, it is the province of the jury to deduce the presumption or inference of fact (Ham v. Barrett, 28 Mo 388). If the connection is too remote or uncertain, it is the duty of the Court to exclude either the testimony from which the presumption is sought to be deduced or to instruct the jury that the evidence affords no proper foundation for any presumption (Manning v. Ins. Co., 100-US 693). If, however, the facts are clearly established, forming a proper basis for a presumption of law, the jury has no right to disregard the presumption which the law raises. The presumption in such case is one deriving its force from the law and not merely from processes of reasoning (Graves v. Clowell, 90 III 612; Jones S 104)."
19. To raise presumption against the accused in a criminal trial, the initial onus to prove a fact would be on the prosecution and not vice versa. The principle of "res ipsa loquitor" which learned counsel for the NAB wanted to press into service is a principle of tort and of civil law. It has mostly been invoked in civil claim of damages arising out of negligence. It literally means, "the thing speaks for itself". In Broom;s Legal Mixims--- 10th Edition published by Pakistan Law House, at page 204, this doctrine is explained as under:-- "The onus of proving negligence lies upon the party who alleges it, for ei qui affirmat, non ei qui negat, incumbit probatio; and, to establish a case to be left to the jury, he must prove the negligence charged affirmatively, by adducing reasonable evidence of it. As a rule, the mere proof that an accident has happened, the cause of which is unknown, is not evidence of negligence."
' In Words and Phrases Judicially Defined, Volume IV (under the General Editorship of Rolland Burrows, Esq., K.C., Edition 1944, printed at Butterworth & Co. (Publishers) Limited London), the ambit of this doctrine was explained as under:-- "In all cases where an action is based on negligence a plaintiff has to prove that there was negligence on the part of the defendant, and that by reason of that negligence he has suffered damage. A good deal has been said, quite properly, about the doctrine of res ipsa loquitur, but when it is invoked it is necessary to be sure what precisely the doctrine is. The words res ipsa loquitur are hardly themselves a proposition of law though they allude to one. They are a figure of speech. What this figure of speech sometimes means is that certain facts are so inconsistent with any view except but that the defendant has been negligent, that any jury which, on proof of those facts, found that negligence was not proved would be giving a perverse verdict. Sometimes the proposition does not go so far as that but may be stated thus: that on proof of certain facts an inference of negligence may be drawn by a reasonable jury although the precise circumstances are not fully known." In Waldie v. Cook (1988) 91 ELR 413), a conviction was set aside and it was held that the civil doctrine of res ipsa loquitur has no application in criminal law and the mere happening of an accident does not give rise to a presumption of driving without due care (Sarkar on Evidence Act, page 1478, 15th Edition).
21. The precedent case-law to which reference was made by the learned Deputy Prosecutor- General NAB i,e, Government of Pakistan v. Ishrat Begum (1999 MLD 768), Pakistan Steel Mills v. Malik Abdul Habib (1993 SCMR 848) and Messrs Jehangir Services (Pvt.) Limited v. Mst. Bibi Rukhsana Begum (PLD 1995 Karachi 329) arose out of civil claims of damages on account of negligence resulting in accidents. Similarly this doctrine was commented upon by the Indian Supreme Court in Gobald Motor Service Limited and another v. R.M.K. Veluswami and others (AIR 1962 Supreme Court 1) and the matter again arose out of a civil claim.
22. So far as the argument of dispensing with requirement of mens rea in the class of cases like the one in which appellant was tried is concerned, we may observe that in criminal law the existence of mens rea is a sine qua non. However, there could be statutory exceptions. For instance in offences where certain acts are forbidden by law and entail a penalty, imprisonment or fine and if such acts are committed then the offender would be punished irrespective of the fact whether there was any mens rea or not. These kinds of offences can be classified as offences of strict liability. The question of mens rea whether it can be dispensed with and if so in what form was considered by United States Supreme Court Reports (October Term 1977, Lawyer's Edition, Second Series, Volume 57) in the case of United States v. United States Gypsum Company (438 US 422, 57 L Ed 2nd 854, 98 SCt 2864) at page 869, it was observed as under:-- "(5) We start with the familiar proposition that '[t] the existence of a mens rea is the rule of, rather than the exception to, the principles of Anglo-American Criminal Jurisprudence'. Dennis v. United States, 341 US 494, 500, 95 L Ed 1137, 71 S Ct 857 (1951). See also United States v. Fareed, 401 US 601, 613, 28 L Ed 2d 356, 91 S Ct 1112 (1971) (Brennan, .J., Concurring in judgment); United States v. Balint, 258 US 250, 251-253, 66 L Ed 604, 42 S Ct 301 (1922). In a much cited passage in Morisette v. United States, supra, at 250-251, 96 L Ed 288, 72 S Ct 240, Mr. Justice Jackson speaking for the Court observed: The contention that an injury can amount to a crime only when inflicted by intention is no provincial or transient notion. It is as universal and persistent in mature systems of law as belief in freedom of the human will and a consequent ability and duty of the normal individual to choose between good and evil. A relation between some mental element and punishment for a harmful act is almost as instinctive as the child's familiar exculpatory 'But I didn't mean to', and has afforded the rational basis for a tardy and unfinished substitution of deterrence and reformation in place of retaliation and vengeance as the motivation for public prosecution. Unqualified acceptance of this doctrine by English Common [438 US 437] law in the eighteenth century was indicated by Blackstone's sweeping statement that to constitute any crime there must first be a ' vicious will' . ' Although Blackstone's requisite 'vicious will' has been replaced by more sophisticated and less colourful characterizations of the mental state required to support criminality, see Ali, Model Penal Code 2.02 (Prop of Draft 1962), intent generally remains an indispensable element of a criminal offence. This is as true in a sophisticated criminal antitrust case as in one involving any other criminal offence.
This Court, in keeping with the common-law tradition and.With the general injunction that 'ambiguity concerning the ambit of criminal statutes should be resolved in favour of lenity', Rewis v.
United States, 401 US 808, 812, 28 L Ed 2d 493, 91 S Ct 1056 (1971), has on a number of occasions read a state of mind component into an offence even when the statutory definition did not in terms so provide. See, e.g. Morisette v. United States (supra). Cf. Lambert v. California, 335 US 225, 2 L Ed 2d 228, 78 S Ct 240 (1957). Indeed the holding in Morissette can be fairly read as establishing, at least with regard to crimes having their origin in the common law, an interpretative presumption that mens rea is required. '[M]ere commission... ...Of intent [in the statute] will not be construed as eliminating that element from the crimes denounced: 'instead Congress will be presumed to have legislated against the background of our traditional legal concepts which render intent a critical factor', and 'absence of contrary direction [will] be taken as satisfaction with widely accepted definitions, not as a departure from them'. 342 US, at 263, 96 L Ed 288, 72 S Ct 240.
(6) While strict-liability offences are not unknown to the criminal law and do not invariably offend Constitutional requirements, see Shevlin Carpenter Co. v. Minnesota, 218 US 57, 54 L Ed 930, 30 S Ct 663 (1910), the limited circumstances in which Congress has created and this Court has recognized such offences, see e.g. [438 US 438] United States v. Balint, (supra); United States v. Behrman, 258 US 280, 66 L Ed 619, 42 S Ct 303(1922); United States v. Dotterweich, 320 US 277, 88 L Ed 48, 64, SCt 134 (1943); United States v. Freed (supra), attest to their generally disfavourd status. See generally Ali, Model Penal Code, Comment on 2.05, p 140 (Tent Draft No,4, 1955); W. LaFave and A. Scott, Criminal Law 222-223 (1972). Certainly far more than the simple omission of the appropriate phrase from the statutory definition is necessary to justify dispensing with an intent requirement."
23. The ratio laid down in the afore-cited judgment would indicate that even in countries where the concept of "white collar crime" originated, the requirement of mens rea in Criminal Law has not been dispensed with. Coming to the specific provision of the law under consideration we are of the view that a bare reading of section 3(1)(d) of the Ehtesab Ordinance, 1997 would show even that the law maker did not want to dispense with the element of mens rea. The expressions "seeks for himself or for any other person, property, valuable thing, a pecuniary advantage or undue favour are qualified" and preceded by the expressions "by corrupt, dishonest, improper or illegal means".
All these acts and modes of behaviour would require an effort, or in jurisprudential terminology mens rea and actus reus on the part of a person to constitute an offence unless it is an offence of strict liability.
24. The reliance of the learned Deputy Prosecutor-General for NAB on Sheikh Mujibur Rehman v. The State (PLD 1964 Dacca 330) is of no avail to the prosecution as the dictum laid down therein is supportive of the view that unless it is otherwise directed by the Legislature mens rea in criminal law cannot be dispensed with.
25. This brings us to the issue of burden of proof and statutory presumption raised in section 8 of the Ehtesab Ordinance, 1997 and section 14 of the National Accountability Bureau Ordinance, 1999.
Under Article 129 of the Qanun-e-Shahadat Order, it is open to the Court to draw or not to draw a presumption as to the existence of one fact from the proof of another fact. However, in offences of strict liability the Legislature may create statutory presumptions. Some of the examples are section 4 of the Prevention of Corruption ' Act, section 178-A of the Sea Customs Act, section 24 of the Foreign Exchange Regulation Act and section 5 of the Hoarding and Black Marketing Act etc. In 'such offences, the Court presumption is mandatory. But this statutory presumption arises only when statutory facts have first been reasonably proved. It is only then that the burden of proof shifts to the accused. The burden may be discharged by the accused by bringing the case within the exceptions as laid down in Article 121 of the Qanun-e-Shahadat Order. The accused may satisfy the burden by merely giving proof of circumstances which raise a doubt. Raising of such a doubt is enough to dispel the statutory presumptions. We note that this issue came up for consideration before the august Supreme Court in Khan Asfandyar Wali and others v. Federation of Pakistan through Cabinet Division, Islamabad and others (PLD 2001 Supreme Court 607), wherein at page 921, the august Supreme Court held as under:-- "For safer administration of justice and in the interest of good governance, efficiency in the administrative and organizational setup, we deem it necessary to issue the following directions for effective operation of section 14(d):
(1) The prosecution shall first make out a reasonable case against the accused charged under section 9(a)(vi) and (vii) of the NAB Ordinance.
(2) In case the prosecution succeeds in making out a reasonable case to the satisfaction of the Accountability Court, the prosecution would be deemed to have discharged the prima facie burden of proof and then the burden of proof shall shift to the accused to rebut the presumption of guilt."
26. It was on account of the afore-mentioned directions that National Accountability Ordinance was amended (by Ordinance No,XXXV of 2001) and a proviso was added to section 14 which reads as under: "Provided that the prosecution shall first make out a reasonable case against the accused charged under clause (vii) of subsection (a) of section 9."
In view of what has been stated in the preceding para. The burden of proof in the instant case was initially on the prosecution to prove that the appellant in terms of section 3(1)(d) of the Ehtesab Ordinance, 1997 had sought or had acquired any property, valuable, thing, pecuniary advantage or undue favour by "Corrupt, dishonest, improper on illegal means". The Explanation to the afore- referred section amplifies that reference to "property acquired by improper means" shall be construed as reference to property acquired by accused through means which are contrary to law, usage or instructions having the force of law or by abuse of official position or by coercion, undue influence, fraud or misrepresentation within the meaning of Contract Act, 1872". The standard of proof required to discharge the initial burden of proof under section 14 of the National Accountability Ordinance, 1999 is a "reasonable case". The word "reasonable" (as per Black's Law Dictionary) means "Fair, proper, just, moderate, suitable under the circumstances... ... ... ...Not immoderate or excessive, being synonymous with rational, honest, equitable, fair, suitable, moderate, tolerable". Thus the prosecution shall have to first make out a reasonable case through evidence which satisfies a prudent, reasonable and just man about the guilt of the accused. It is only then that a presumption shall be raised against the accused and onus would shift on him.
27. The expression "illegal" would of course connote anything done against the express provision of law. The term "Corrupt, dishonest and improper" are overlapping and have not been defined in the Ordinance under which the appellant was tried. These are terms of a Penal Statute and have to be construed in the light of the explanation contained in the section itself and in the manner in which, they are used in the ordinary parlance. Because as per Crawford: "Criminal and Penal Statutes must be strictly construed, that is, they cannot be enlarged or extended by intendment, implication, or by any equitable considerations. In other words, the language cannot be enlarged beyond the ordinary meaning of its terms in order to carry into effect the general purpose which the statute was enacted". (Page 460 of Crawford's Interpretation of Laws by Earlt T. Crawford, Saint Louis Thomas Law Book Company, 1940).
28. It would, therefore, be in accord with this doctrine of interpretation of Penal Statutes if we adhere to the Dictionary meanings of the terms in question. The Black's Law Dictionary (6th Edition) defines the above expressions as under:- Corrupt .--Spoiled ; tainted; vitiated; depraved, debased; morallydegenerate. As used as a verb, to change one's morals and principles from good to bad. Dishonesty.--Disposition to lie, cheat, deceive, or defraud; untrustworthiness; lack of integrity; lack of honesty; probity or integrity in principle, lack of fairness and straightforwardness; disposition to defraud, deceive or betray.
Improper.--Not suitable; unfit, not suited to the character, time and place.
29. In English Law the expression "dishonesty" which is anonymous with "fraud" (as per Black's Law Dictionary) has been a subject of immense debate. For Alridge and Parry, the basic elements of dishonesty are as under:-- "It is commonly and conveniently referred to as 'dishonesty', and in the case of many offences is expressly so described. However, the use of this untechnical terms should not be allowed, to obscure the fact that the concept it represents is a highly complex one. It embraces at least three, and arguably four, distinct requirements: viz. That the defendant's conduct should fail to conform to--
(1) generally accepted standards of honest conduct, both
(a) as they actually are, and
(b) as he believes them to be; and
(2) the limits of what he is legally entitled to do----at any rate
(a) as he believes them to be, and arguably also
(b) as they actually are."
(Alridge and Parry on Fraud Second Edition, page 1002)
' In Regina v. Ghosh (1982 Q.B. 1053), Lord Lane. C.J. Commented on what constitutes "dishonesty" as under:-- "In determining whether the prosecution has proved that the defendant was acting dishonestly, jury must first of all decide whether according to the ordinary standards of reasonable and honest people what was done was dishonest. If it was not dishonest by those standards, that is the end of the matter and the prosecution fails. If it was dishonest by those standards, then the jury must consider whether the defendant himself must have realised that what he was doing was by those standards dishonest. In most cases, where the actions are obviously dishonest by ordinary stands, there will be no doubt about it. It will be obvious that the defendant himself knew that he was acting dishonestly. It is dishonest for a defendant to act in a way which he knows ordinary people consider to be dishonest, even if he asserts or genuinely believes that he is morally justified in acting as he did."
30. To prove the charge relating to the sanction of loan from the N.D.F.C. And its disbursement, the prosecution had produced Exh.CW1/6 which is an application dated 18-5-1986 moved by the appellant in his capacity as Chairman, Tourist Village (Pvt.) Limited addressed to the N.D.F.C., the notification dated 24-11-1988 (Exh.PW6/A) vide which the appellant and his daughter-in-law Mohterma Benazir Bhutto were elected members of the National Assembly from Sindh, the sanction letter issued by the N.D.F.C. Dated 26-3-1989 (Exh.PX), the agreement to finance dated 9-7-1989 (Exh.PC) between the appellant and the N.D.F.C., the letter dated 1-11-1989 (Exh.PX) from the appellant for release of funds and its disbursement through letters Exh.PX/2 dated 16-11-1989 and Exh.PX/4 dated 24-1-1990.
31. The agreements and letters placed on record by the prosecution prima facie, reflect business transactions between two juristic entities i,e, Tourist Village (Pvt.) Limited (of which the appellant was the Chairman having 75% shares and the P.T.D.C. Having 25% share) and the N.D.F.C. A presumption of regularity is attached to the afore-referred agreements and documents in terms of Article 129 (e) and (f) of the Qanun-e-Shahadat Order and the onus was on the prosecution to prove that the sanction and its disbursement reflected conduct falling within the penal provision.
To prove the afore-referred documents two officials of the N.D.F.C. i,e, P.W.3 Sohail Shah Bokhari (Ex- Vice President) and P.W.4 Afaaq Jamal Hussain (Senior Vice-President) appeared in Court. None of these witnesses alleged that the agreement to Finance Tourist Village (Pvt.) Limited, the sanction letter for the loan in question and its disbursement was on account of any pressure or any corrupt, dishonest or improper mode was adopted to facilitate the grant of loan. P.W.3 admitted in cross- examination that "the Cantonment Board, Rawalpindi had issued NOC allowing the Tourist Village Private Limited to create mortgage in favour of N.D.F.C. Over the lease loan relating to lease loan... .. ...I got all these security documents prepared in accordance with letter. It is correct that on getting all the documents completed as per sanction advice I had prepared a report to the effect that all the legal formalities had been completed and that no requirement was to be fulfilled".
32. P.W.4 Afaaq Jamal Hussain (Ex-Vice-President of N.D.F.C.) appeared to state that he had dealt with the case of M/s. Tourist Village Private Limited in his capacity as Vice-President, Project Supervision Division P.S.D., that the project was sanctioned by the competent Authority; that the Escrow account is an account maintained by the N.D.F.C. To which funds were transferred and subsequently released to another account which is called the operative account and that the operation of the Escrow account is subject to the satisfaction of the condition attached thereto. He candidly admitted that while issuing the sanction letter, the Corporation was satisfied with the condition attached to the Escrow Account. He admitted that there was nothing outstanding against the borrower company and that there was no receipt of the statement showing utilization of the said amount on this project except the report of the Chartered Accountant. He, however, admitted in cross-examination that Exh.PX.5/1 shows the expenditures by the company.
33. It is not denied that the site plan for the project in question was sanctioned on 3-12-1989.
Appellant wrote three letters for the release of the funds (Exh.PX/1) dated 6-11-1989, Exh.PX/3 dated 18-1-1990 (both these letters do not bear any rubber stamp of M.N.A.) and finally Exh.PX/15. The last letter bore a rubber stamp of M.N.A. And Chairman, Public Accounts Committee. Could this singular use of rubber stamp be classified as a corrupt, illegal; improper and dishonest act? If he wanted to use his influence as holder of public office he could merely give a telephonic call or even get a meeting arranged with the competent Authority in the N.D.F.C. Appellant's conduct can be examined in the light of the parameters of "dishonesty" laid in 'Alridge and Parry on Fraud" and the test propounded in Regina v. Ghosh (supra). The judgment lays down a twin test i,e, subjective and objective. If subjective test is applied it is repellent to common sense that a person of appellant's age and social standing, acting in his capacity as Chairman of a company, in which his wife, son and his three daughters are Directors and 25% share was held by P.T.D.C., would enter into agreement with a Governmental Institution (N.D.F.C.) with intent to defraud or with dishonest intentions. And going by the objective test he would have been dishonest (a) if he had no intention of developing the project and had not got sanctioned the site plan, (b) if the allegation was that there was no proper scrutinization of loan, (c) if the joint partner in the company i,e, P.T.D.C. Had made such a complaint. No complaint was ever made, (d) if he had sold away his share to a third party through misrepresentation or without protecting the interest of P.T.D.C. Or N.D.F.C. Which is not the case. In terms of the sanction of loan letter two types of loans were sanctioned i,e, (i) Local Financing and (ii) Bridge Financing. As per statement of P.W.4 the first type of loan/finance was transferred from Escrow Account to Company's Account (Tourist Village Private Limited) only when the requisite conditions stood fulfilled. The bridge financing was contingent on conversion to a Public Limited Company. Since the latter conditions was not fulfilled the Bridge finance facility, it is in evidence, was never availed. So far as the delay or non-completion of the project is concerned to begin with this is relatable to a civil contract and unless it discloses any criminal transaction in terms of the Ordinance appellant cannot be held guilty on that ground. Secondly, it is a matter of common knowledge that many a times business projects fail on account of market forces or factors beyond one's control despite honest intentions. The introduction of incentive scheme by the Government whereby the State Bank approves cases of re-scheduling or writing off loans is acknowledgement of some of these factors. Thirdly, it is not denied that notwithstanding the fact the site plan of the project had been sanctioned on 3-12-1989, after the change of Government in 1990 Reference No,8 of 1990 was filed against the appellant and in 1991 without issuing him a notice, the N.D.F.C., withdrew the sanction of loan. The said reference was rejected by Mr. Justice Munir A.
Sheikh of the Lahore High Court (as his Lordship then was) vide order dated 6-7-1994, in the operative part of which it was held as under:-- "A perusal of the record shows that it was merely a commercial transaction/contract between P.T.D.C., Tourist Village Limited on the one hand and Tourist Village Limited and P.S.O. On the other hand. The witness who was examined by the afore-referring authority did not state that the rate of rent was higher than the normal rent which a similar piece of land situated similarly would have attracted. The respondent in order to bind himself by the promises made by him executed Indemnity Bond and Promissory Note in his personal capacity because in such commercial transaction he being a Managing Director of TVL was to execute as a surety to fulfil his commitments. This speaks of the bona fides of the transactions. According to the record the assertion made in the Reference that the plot had not been allotted to construct a petrol pump is not correct because according to the plan submitted by the TVL to the Cantonment Board for construction of a Tourist Village include establishing of a petrol pump for the said Village over a specified plot. The respondent executed the said agreement on behalf of TVL as its Managing Director. I am at loss to understand as to how a contract executed by the respondent as a Managing Director of TVL with PSO could be termed and treated as an act of misconduct and misuse of power in any manner as member of National Assembly. The PSO was at liberty to enforce the Indemnity Bond and the Promissory Note if the respondent had failed to fulfil his commitment."
' In the said Reference also a business transaction was sought to be proved as dishonest deal allegedly entered into on account of appellant's influence as M.N.A. If the loan was withheld by the financial Institution and appellant was being criminally prosecuted how could he proceed with the project and complete it?
34. Appellant's conduct in the light of the foregoing analysis of the evidence led does not fall within the mischief of section 3(1)(d) of the Ehtesab Ordinance, 1997. The answer to question No,2 therefore, would be in the negative.
35. Coming to question No,3 i,e, the agreement between the appellant and P.W.2 Zafar Mehmood (Exh.PA) dated 18-9-1994 a bare reading of the said agreement to sell would show that the group which' the appellant represented had 75% shares in the company Tourist Village Private Limited and it had agreed to sell those shares to P.W.5 for a sum of Rs,2.45 crore and in terms of the agreement, the liability to pay the loan. Was also of the purchasing party. The agreement was signed on behalf of the Group by Mrs.Zareen Ara (wife of the appellant). Neither the agreement nor having received the sale price was denied by the appellant but this document by itself would not bring the case of the appellant within the mischief of a penal clause under which he was tried.
P.W.2 Zafar Mehmood with whom the agreement was entered into appeared as a prosecution witness. In his examination-in-chief, he proved the agreement and admitted to have purchased 75% share of the appellant group in the Tourist Village (Pvt.) Limited alongwith its liabilities. Entire liability of the N.D.F.C. Was discharged by him pursuant to the Incentive Scheme introduced by the State Bank of Pakistan. In cross-examination he candidly admitted that the agreement was a voluntary commercial transaction; that nothing was concealed by the sellers of the Tourist Village Private Limited; has satisfied ,himself prior to the execution of this agreement with the P.T.D.C. In its meeting of Board of Directors had already decided to disinvest its 25% shares held by the P.T.D.C.
For a sum of Rs,27 lacs; that he had sent copies of the agreement to N.D.F.C., P.T.D.C. And did not receive any objection from them and that he was prepared and bound to fulfil all of his obligations arising out of the agreement. He further admitted in cross-examination that he had engaged a Consultant and after satisfying himself with regard to the financial record of the company, he executed the agreement. Explaining the reason for delay in completion of the project he conceded that the project could not be started because of injunction order passed by the Lahore High Court, Rawalpindi Bench, Rawalpindi. He was prosecution's own witness and he was never declared hostile and no suggestion was put to him by the Special Public Prosecutor that he had entered into agreement on account of undue influence, corrupt, dishonest or improper conduct on the part of the appellant. P.W.5 Ehsan Qadir, an official of the P.T.D.C. Produced in evidence the relevant record.
He submitted that in terms of the agreement dated 11-9-1983 between P.T.D.C. And Zardari, the company (Tourist Village Private Limited) was formed. About the extent of authority of the latter group in the joint venture he frankly added that "Zardari Group was not under obligation'to consult because the P.T.D.C. Had share in the form of the lease of land". In cross-examination he admitted that 25% share of P.T.D.C. Was intact and it never made any complaint against Zardari Group qua the issue which is subject-matter of this Reference. He further admitted that a sum of Rs,6,00,000 was paid to P.T.D.C. By. Tourist Village Private Limited out of the rental amounting to Rs,24,00,000 received from PSO on 15-1-1990. The 25% shares of P.T.D.C., he candidly admitted, were intact.
36. In the face of the evidence discussed referred to above, the irresistible answer to question No,3 is in the negative.
37. There is yet another agreement dated 6-3-1994 (Mark-A) between the appellant and P.W.1 Sh.Abdul Hameed with regard to which no charge was framed but evidence was let to demonstrate that in the said agreement appellant was shown as owner of the land although he was a shareholder in the lease of the land in the company styled as Tourist Village Private Limited.
38. The learned trial Court notwithstanding the non-framing of charge with regard to afore- mentioned allegation proceeded to give a fmding and held that Sh. Abdul Hameed (P.W.1) had entered into an agreement without satisfying himself about the title of the seller qua the land and it was improper for the appellant to have received Rs,50 lacs as earnest money on this count. The said Sh.Abdul Hameed, while appearing as P.W.1, admitted that the agreement (Mark-A) was executed between two private limited companies; that in terms of clause (xiv) of the said agreement the total share owned by six Directors, namely, 75% share of the Tourist Village Private Limited were agreed to be transferred by the appellant to him. He candidly added that this agreement was made of his own free-will and "there was absolutely no pressure whatsoever exerted by Hakim All Zardari, M.N.A. The cancellation of the agreement was also made with mutual free-will and consent of the parties". This prosecution witness was also neither declared hostile nor he was cross-examined by Special Public Prosecutor NAB. The lease in favour. Of P.T.D.C. Was thirty years renewable to ninety-nine years. With such a long lease, the description of the land to be owned by the appellant in the first part of the agreement could be a bona fide mistake and in any case this was clarified in clause (xiv) of the agreement which does not talk of ownership but only sale of shares. Even otherwise this document by itself would not advance the prosecution case because no charge was formed regarding this, and no offence is made out either.
There is yet another angle. "Bribe" and "corruption" are generally consensual transactions. In a sense the difference between "bribe" and "extortion" is the same which is between "adultery" and "rape". Direct evidence on "corruption" may not be always available. That is why Legislatures from diverse jurisdictions, have raised presumptions in law and cases are built on circumstantial evidence. The agreements of sale of shares referred to above, could be declared "corrupt" or "improper" transactions notwithstanding the depositions of P.W.1 or P.W.2 to the contrary if there was circumstantial evidence to that effect. The evidence could be that the shares were sold at a price higher than the market value or the vendees (P.W.1 and P.W.2) had received any favour or had been promised any favour by the appellant in lieu thereof. There is not an iota of evidence regarding this.
Question No,4 Whether the appellant's omission to respond to the Pakistan Tourism Development Corporation's letter/offer (dated 11-11-1994 which is Mark-B) for sale of its share constituted an offence under any provision of law?'
39. So far as this question is concerned, the learned Special Public Prosecutor has very frankly conceded in the written reply submitted to the queries that no offence is made out.
Ouestion No,5 Whether the appellant had derived any pecuniary advantage illegally and by exploiting his position as holder of public office?
39. In the impugned judgment the appellant has been found guilty for obtaining pecuniary advantage from the financial Institutions and from private individuals. The precise finding is given at page 25 of the judgment wherein having held the balance sheets of Tourist Village Private Limited to be bogus, the Court observed that "it is, therefore, established that the accused obtained pecuniary advantage not only from N.D.F.C. But also from other persons by entering into sham transactions".
40. Learned counsel for the NAB relied on The President v. Mr. Justice Shaukat Ali (PLD 1971 Supreme Court 585) and The Registrar of Companies, Pakistan through Joint Registrar of Companies v. Taj Company Limited and 8 others (1993 CLC 1413) to canvass that the veil of corporation can be lifted to expose appellant's allegedly corrupt and dishonest conduct, In the said case a former learned Judge of this Court was proceeded against on charges inter alia that he was a shareholder of private company and had incurred financial and other obligations which were likely to embarrass him in the performance of his duties. It was in that context that the veil of the company was lifted.
The august Supreme Judicial Council in the said case classified those proceedings as "neither a criminal indictment nor even a quasi-criminal proceedings but it is, in our opinion, mainly an administrative proceeding conducted by a domestic forum to examine the professional fitness of a Judge". The said judgment, therefore, would not be relevant in a purely criminal trial.
' In: The Registrar of Companies, Pakistan through Joint Registrar of Companies v. Taj Company Limited and 8 others (1993 CLC 1413), the Joint Registrar of the Companies had moved the learned Company Judge of this Court to assess the damage against the delinquent Directors under section 412 of the Companies Ordinance, 1984 as the Company had gone into liquidation. In the instant case neither the Company had gone into liquidation nor the Joint Registrar had moved a petition of the kind referred to above.
42. Learned counsel for NAB also referred to eight reported' judgments from the Indian Jurisdiction, referred to in para. 7 above, to contend that since the appellant had not produced Books of Accounts an inference should be drawn against the appellant that if he had produced the Books of Accounts those would not have supported his case. We have gone through these judgments. In all those cases from the 'Indian Jurisdiction except one (AIR 1934 Patna 132), the judgments were rendered in civil suits/appeals and the issues raised were whether it was a joint Hindu Family business or partnership, whether the property was joint or that of an individual, matters relating to partnership which stood dissolved and the liability of a partner in a partnership deed. The non- production of Books of Accounts in the afore-referred circumstances, it was held, would lead to an adverse presumption against the defendant.
43. Admittedly, there is no civil dispute of partners of the private limited company in the instant case. The precedent case-law would not, therefore, be relevant in these criminal proceedings. In AIR 1934 Patna 132, a servant of Maksudpur Estate was convicted under section 408 of the Indian Penal Code for dishonestly converting into his own use a sum of Rs,2,920 His contention before the High Court was that the Estate was in possession of Books of Account; that only those Books could have furnished evidence qua his guilt or innocence and as those were not produced, a legitimate inference would be that if those had been produced, they would not have supported the allegations levelled against him. The conviction was set aside by the High Court and it was observed that "the convict had taken up the defence that he had counterclaims for a larger amount against the Estate and it was held that the conviction was bad in law for non-compliance with the provision of section 22 of the Cr.P.C.". The ratio laid down in the said judgment was that it was for the prosecution to prove its case and since the prosecution had failed to produce the Books of Accounts of the estate, the conviction was set aside. '
44. The balance-sheets of the Tourist Village Private Limited which were placed on record as Exh.CA to Exh.CK were prepared by Chartered Accountants Gul Hameed & Company, pertained to the years 1985 to 1995 wherein the Chartered Accountants consistently found the accounts to be in order and there was no adverse observation' regarding the affairs of the company. No effort was made to summon the auditor, no question was put to the three witnesses who appeared for the P.T.D.C. And N.D.F.C. Regarding those reports, no charge was framed regarding those and even the appellant when examined under section 342, Cr.P.C. Was not asked to explain audit reports in question. Section 342 of the Cr.P.C. Enjoins that "for the purpose of enabling the accused to explain any circumstances appearing in the evidence against him, the Court may, at any stage of any inquiry or trial without previously warning the accused, put such questions to him as, the Court considers necessary".
45. There is no cavil to the proposition that non-compliance to the afore-referred provisions of law would not per se vitiate the trial and is curable under section 537, Cr.P.C. However, if this omission pertains to a material point in issue and if any piece of evidence has been used to condemn a person and the same was not put to him during trial, this omission would not be a curable defect and would vitiate the trial. This is in line with the law laid down in Jafar Alam Choudhary v. The State (1969 PCr.LJ 259) and The State v. Abdul Samad and another (PLD 1984 Quetta 72) wherein at page 79 it was held as under:-- "In M.A. Nur Mian v. Mokhlesur Rehman Almansuri and another, it is observed that the purpose of examination of accused under section 342, Cr.P.C. Is not intended merely for his benefit. It is a part of a system for enabling the Court to discover the truth, and it constantly happens that the accused's explanation, or his failure to explain, is the most incriminating circumstance, against him.
From the perusal of the record it is clear that some incriminating pieces of evidence have not been put to the accused. The non-examination of the accused on such material points prejudiced the prosecution. In our view this irregularity is not curable."
45. No other witness except P.W.6 Malik Safdar Ali, Deputy Director, F.I.A., who investigated the case, alleged that the loan of rupees three million was disbursed in two instalments because the appellant, his son and daughter-in-law had become M.N.As.; that he decided to sell property initially to Sh.Abdul Hameed (P.W.1) and Zafar Mehmood (P.W.2); that the agreement with the latter was without N.O.C. From the P.T.D.C. And that he found the appellant to have abused his official position as holder of public office. This opinion cannot take the place of the evidence required in law to prove a charge. Admittedly, there was no loss to the P.T.D.C., to the N.D.F.C., to the Rawalpindi Cantonment Board or to any individual. None of them was even a complainant before any forum whatsoever notwithstanding the fact that the appellant or any of his relatives to which reference has been made by the Investigating Officer seized to be hold6rs of public office since long when the National Assembly was dissolved.
The answer to Question No,5 in the light of the foregoing analysis is also in the negative.
47. There is yet another aspect of the case. The prosecution, basing its case on circumstantial evidence has come up with theory that the appellant was not serious in the project right from the beginning, had procured sanction of loan, its disbursement through corrupt, dishonest, illegal and improper influence, sold its share to a third party, left the project in the lurch and thereby made undue profit. But the appellant's defence/version is that he entered into partnership with P.T.D.C.
And formed a Private Limited Company by the name of Tourist Village; that the said company in turn entered into an agreement to finance with N.D.F.C., the loan was disbursed purely for the project and even site plan of the project was sanctioned; that on account of pressure by a hostile Government, the loan facility was withdrawn by the N.D.F.C.; that he had to sell his shares in the afore-referred circumstances and the project could not be completed, no wrongful loss was caused to the P.T.D.C., N.D.F.C. Or to the Cantonment Board; that acts of the appellant, the agreements and contracts made were purely business transactions reflecting no dishonesty, corrupt, illegal or improper conduct on the part of the appellant. Having considered the evidence on record, we are of the view that the plea or the theory raised in defence, if not more, is equally plausible.
48. It is by now a settled principle of criminal law that in cases of circumstantial evidence if the evidence led is Capable of a reasonable alternative theory, the Court shall lean in favour of the said alternative theory and grant benefit of doubt to the accused. If any precedent case-law, supportive of this principle is needed, the same is as under:--
(i) Siraj v. The Crown (PLD 1956 Federal Court 123);
(ii) Hurjee Mull v. Imam Ali Sircar (8 Calcutta Weekly Notes 278), and
(iii) Mujibur Rehman v. The State (PLD 1964 Dacca 330).
49. For what has been discussed above we are of the considered view that the prosecution has failed to prove its case against the appellant to sustain conviction under the Ehtesab Ordinance or the Ehtesab Act of 1997. Resultantly, Criminal Appeal No,468 of 2001 filed by appellant Hakim All Zardari is allowed, the impugned judgment dated 24-3-2001 passed by the learned Accountability Court Lahore (constituted under the National Accountability Bureau Ordinance XVIII of 1999) is set aside; the appellant is acquitted of the charges levelled against him and he shall be released forthwith if not required in any other case.