1. MUHAMMAD MUJEEBULLAH SIDDIQUI, J.---This appeal under section 32 of the National Accountability Bureau Ordinance, 1999 (hereinafter referred to as the N.A.B. Ordinance) is directed against the judgment dated 30-10-2000, by the Accountability Court No,IV, Karachi, convicting the appellant under section 10(a) of the NAB Ordinance, for committing corruption and corrupt practices as defined in section 9(a)(iii) and (vi) of the said Ordinance and awarding sentence of rigorous imprisonment for 5 years and to pay fine of Rs,2,00,000 and in default of payment of fine to further undergo R.I. For one year. He has been further disqualified to contest elections and to hold public office for 21 years under section 15 of the NAB Ordinance. The benefit of section 382-B, Cr.P.C. Has been extended to the appellant. The relevant facts are that the appellant is a former Chairman, House Building Finance Corporation. He joined the Corporation on two years contract on 1-5-1998 and was arrested on 18- 10-1999 by military police. He remained in the custody of National Accountability Bureau from 25- 12-1999 and his whereabouts were not known. Ultimately a petition under Article 184(3) of the Constitution of Islamic Republic of Pakistan, 1973, was filed before the Hon'ble Supreme Court of Pakistan, for issuance of 'a writ of Habeas Corpus. The appellant was produced before the Hon'ble Supreme Court on 18-5-2000. Some material was produced before the Supreme Court in support of his detention and time was sought to file challan against him in Accountability Court. On 31-5-2000, the Chairman National Accountability Bureau filed a reference against the appellant before the Accountability Court No,4, Karachi, under section 18-G of the NAB Ordinance.
2. The reference reads as follows: "Reference No,2 of 2000 State-- -Complainant versus Siddique-ul-Farooque son of Faqir Muhammad Reference under section 18-G, NAB Ordinance No,XVIII of 1999 Brief facts of the case are that an investigation into the corruption/corrupt practices in respect of illegal appointments on the basis of contract/daily wages, misappropriation of entertainment funds in the shape of gifts by accused Siddique-ul-Farooque, the then Chairman, H.B.F.C. Was initiated by NAB_______ During the course of investigation, it was established that accused Siddique-ul-Farooque by abusing his official position as Chairman, H.B.F.C. Made illegal appointments on contract/daily wages during the period when the Government had imposed a ban on appointments. Besides, he also misappropriated the entertainment funds meant for the dignitaries and other guests visiting H.B.F.C. In connection with official business which he illegally, fraudulently and dishonestly gave in the shape of gifts to various Government officials, political figures of his own choice, and favorites, for which he was not authorized to do so. During his tenure of office as Chairman/MD, H.B.F.C. He got a resolution passed by the Board of Directors of H.B.F.C. In its meeting No,5/99 held on 26-6-1999 in which he obtained approval for:-- The right sizing in H.B.F.C. Of hiring the services or independent consultants of his own choice. To assess the number of employees ready to proceed on retirement, voluntarily To recruit professional from the market on merit. The accused officer recruited 88 persons without advertisement and complying with the mandatory laid down procedure without approval of the competent authority and thereby caused wrongful loss of Rs,56,88,525 to the State exchequer. The accused officer criminally misappropriated the entertainment funds placed at the disposal of H.B.F.C. To the tune of Rs,1,05,000 and thereby caused loss to the I-1.B F.C. From the above facts and evidence so far collected, it has been established that accused Siddique-ul-Farooque, in the capacity of Chairman by abusing his official position caused wrongful loss to the national exchequer by way of recruiting staff on the basis of contract and daily wages, without the approval/sanction of Government of Pakistan which he was legally bound to obtain from the Ministry of Finance as well as Prime Minister's Secretariat. Besides, this he also misused the Entertainment funds of H.B.F.C. Accused Siddique-ul-Farooque, the then Chairman/MD, H.B.F.C. Fraudulently and dishonestly with criminal intent and as holder of a public office has committed the offences under section 9(a)(iii)
3. (iv)(vi) punishable under section 10(a)(b) of National Accountability Bureau Ordinance, 1999. The investigation of the reference is still underway as it involves a number of transactions and criminal omissions and commissions on the part of accused Siddique-ul-Farooque and others connected with the transactions. A number of missing links are to be connected and number of witnesses are to be examined and relevant record is also to be collected. Hence this interim reference is submitted to proceed further against the accused by this Honorably Court. List of witnesses and documents are attached with the interim reference. The Accountability Court, framed the following charge on 16-8-2000:-- CHARGE I, Muhammad Jawaid Alam, Judge, Accountability Court No,IV, Sindh, Karachi do hereby charge you; Siddique-ul-Farooque son of Faqir Muhammad As under:-- "That you have been Managing Director/Chairman of House Building Finance Corporation, Karachi, from 2-5-1998 to October, 1999 and as such have been holding of a public office within the meaning of clause(m) of section 5 of NAB Ordinance, 1999. That you during the said period abused your official position, misused your authority and to gain benefits and to favour your men unauthorized and illegally made appointments in H.B.F.C. On contract/daily wages basis despite the ban on appointments imposed by the Government and about 88 persons were recruited without complying with mandatory procedure and without approval of the competent authority and thereby you caused wrongful loss amounting to Rs,56,88,525 to the Government Exchequer. And that you by abusing your official position and authority fraudulently and dishonestly misappropriated the entertainment funds of House Building Finance Corporation to the tune of Rs,1,05,000 which were meant for the dignitaries and other guests visiting H.B.F.C. In connection with the official business but .You illegally, fraudulently and dishonestly used it to send gifts to various political figures of your choice, your favourites, Government officials for which you were not authorised under the law. And that you have committed the abovesaid acts which come within the purview of offence of corruption and corrupt practices defined under section 9(a)(iii)(iv) and (vi) of NAB Ordinance, 1999 read with section 409, P.P C. Punishable under section 10 of NAB Ordinance, 1999, within the cognizance of this Court." The appellant/accused pleaded not guilty to the charge and stated as follows:-- "Whatever I have done I have done honestly, according to law, I have committed no offence whatsoever but I have been victimized politically because I have been close aid to the former Prime Minister Mian Nawaz Sharif. I do not plead guilty." The prosecution in support of its allegations and to establish the charge examined P.W.1, Muhammad Dawood, General Manager, H.B.F.C. Exh.7, P.W.2, Karamat Ali, Chief Manager (Services), H.B.F.C., Exh.8, P.W.3, Jawaid Ahmed Khan, Cashier, H.B.F.C. Exh.9, P.W.4, Abdul Qadir, General Manager (Personnel), H.B.F.C. Exh.10, P.W.5, Muhammad Wasim, Assistant Manager (Audit Division), H.B.F.C., Exh.11, P.W.6, Miss Nasreen Mehdi, General Manager (Audit and Instructions Division), H.B.F.C.
4. Exh.12, P.W.7, Syed Sohail Fahmi, Manager, Allied Bank of Pakistan, F.T.C. Branch, Karachi, Exti.14, P.W.8, Rahila Anwar, Private Secretary to Chairman, H.B.F.C, Exh.15, P.W.9, Muhammad Akram Tariq, Manager, H.B.F.C., Exh.16, P.W.10, Mian Habib Ahmed, Assistant Director F.I.A., Investigating Officer, Exii.17 and P.W.11, Ghulam Farooque, Assistant Director, F.I.A., the Second Investigating Officer, Exh .18. The appellant/accused was examined under section 342, Cr.P.C. The appellant stated that he was appointed Chairman, H.B.F.C. On 2-5-1998 and his services were terminated on 8-2-2000. In reply to a question that during the period 1996-99 there was ban on fresh appointments imposed by the Federal Government, in the Government Departments, organizations and corporations, including the H.B.F.C. The appellant stated that "ban was only on regular appointment/fresh appointment but it was not on daily wages and contract basis appointments made for three months period". In reply to another question that as Managing Director/Chairman of H.B.F.C. The appellant misused his authority and official position to favour his men unauthorisedly in violation of the rules and regulations and made appointments in H.B.F.C. On contract and daily wages basis and thereby caused wrongful loss to Government exchequer, he stated that he did not misuse any power and authority. He further stated that he did not favour any person who was either related to him or in any way was his favorite. He took the plea that he made all the appointments on merits, against vacancy and according to the budgetary provisions. He further stated that the Ministry of Finance and Board of Directors of H.B.F.C., have also approved these appointments. The appellant has admitted all the appointments alleged to have been made by him on contract/daily wages basis and has stated that all the appointments are according to rules and the law. In respect of misappropriation of funds by abuse of official position and authority and use of entertainment funds for sending gifts/fruits to the political figures of appellant's choice and favorite Government officials in order to gain benefits and pecuniary advantages, the appellant has stated as follows:-- "I have not gained any personal benefits from any one. I did not misuse any authority nor did I commit any distrust regarding entertainment fund. The said items of gift were sent to improve the image building of H.B.F.C. And all the persons to whom the gifts were sent were directly or indirectly concerned in improvement of H.B.F.C. I have already got audited the said funds on calling special audit/inquiry team of State Bank of Pakistan." The appellant further stated that he is innocent and is a victim of political rivalry of the present regime. He has produced a report dated 2-9-1999, which he had sent to Governor, State Bank of Pakistan and to Wafaqi Mohtasib. He produced a copy of report sent to the President of Pakistan, in the year 1998, Exh.20/2. The appellant did not examine himself on oath and did not produce any witness in defence.
5. However at the request of learned counsel for the appellant, C.W. Jalis-ur-Rehman, Assistant Manager (Personnel) Exh.23, was examined, as a Court witness, who produced certain documents maintained by H.B.F.C. Including the attested photo copies of the minutes of Board of Directors of H.B.F.C. Meeting dated 12-2-2000 and copy of the minutes of meeting dated 29-11-1986 and administrative circular dated 29-11-1986, Exh.23/4. The learned trial Court has narrated the statements of prosecution witnesses in detail, in the impugned judgment and has framed the following points for determination: POINTS FOR DETERMINATION Whether the appointments made in H.B.F.C. On contract/daily wages basis were on the orders of accused Siddique-ul-Farooque in violation of rules and regulations by misusing his official authority? Whether the accused misappropriated the entertainment funds of House Building Finance Corporation by sending gifts to his favourite personalities to obtain gains and benefits? What offence, if any, the accused has committed? The learned trial Court after referring to the various provisions of law pertaining to the appointments, specifically referred to some appointments which are as follows: "Exh.11/1 is an application of one Muhammad Ismail addressed to Managing Director, H.B.F.C. For employment as Manager. A note sheet speaks that this application was received and on the reason that the candidate holds a Master's Degree, he was appointed as Manager, Grade-II Zonal Office, Lahore on contract basis on monthly salary of Rs,8,000 per month. Exh.11/2 is an application of Habibullah addressed to Chairman, H.B.F.C. For suitable job, the order on note sheet discloses that on the reason of holding a B.Com. Degree this candidate was appointed as Manager Grade-II for 90 days on monthly remuneration of Rs,12,000 per month. Exh.11/3, in this case Ch. Muhammad Ishaque applied to the M.D., H.B.F.C. For the post of Computer Programmer and on the reason that the candidate appears to be a suitable helping hand in Urdu Computer Program he was appointed as Assistant Manager on contract basis on monthly remuneration of Rs,9,000. Exh.11/4, in this case the application of Syeda Amber Kamal was directly given to the accused for his appointment in a suitable position, the accused passed the orders on the application straightaway "please evaluate the applicant report back. She will contact you on 8-7-1999 at 9-00."
6. She was appointed as Computer Programmer on fixed remuneration of Rs,7,000 per month. Exh.11/5, in this case, Tehmina Urooj had applied for a suitable post and on the reason that she will be helpful for future planned. Computerization, she was appointed as Computer Programmer on fixed remuneration of Rs,7,000 per month. Exh.11/6 is a case of Altaf Hussain Junejo, he made an application direct to the accused Siddique- ul-Farooq who straightaway passed orders: "Please appoint at the rate of Rs,8,000 per month for a period of three months on contract basis". Neither in the orders nor in the application the post applied for is mentioned; however, he was appointed as Assistant Manager. Exh. 11/7 is a case of Jawaid Mehdi, he applied for a suitable post and he was appointed on the orders of Managing Director accused being beneficial to H.B.F.C. As Manager in Finance Department on monthly salary of Rs,12,000. Exh.11/8 is an application of one Abdul Sattar Mughal Advocate for legal consultant, he was appointed as consultant on monthly fee of Rs,10,000 for two hours a day from 1-00 p.m. Exh.11/9 is an application of Rabia Basri of Rawalpindi for a suitable post, she was appointed on fixed remuneration of Rs,5,000 per month as Assistant. Exh.11/10 is a case of Jamil Ahmed, he applied for Assistant and he was taken on fixed remuneration of Rs,5,000 per month. Exh.11/11 is a case of M. Iftikhar Raza, he applied for suitable post direct to the accused and he was taken on monthly remuneration of Rs,5,000 per month. Exh.11/12 to Exh.11/47 are similar cases, the applications have been given direct to the Chairman, H.B.F.C. For suitable post without referring any advertisement and as per office notes on mere reason that they are qualified persons have been appointed in different cadre from Assistant to drivers and Class-IV employees. Some of the applications bear the direct orders on the application of M.D. For their recruitment/appointment." The learned trial Court thereafter observed that in all the above-referred cases neither any post had been advertised nor any Selection Committee constituted and it appeared that the appointments were made at the will of accused. The trial Court further observed that there is nothing on the record to show that there was any demand or requirement from any department of H.B.F.C. To the appointing authority for any particular post and the appointees were accommodated in the H.B.F.C. On the orders of accused and thereafter their cases were processed.
7. The learned trial Court further observed that in the case of Syeda Amber Kamal, her contact address is of an Assistant Editor Daily Jang, which reflects that she was appointed to please the said Assistant Editor of newspaper. The learned trial Court further observed that there appear no criteria for fixing the remuneration of the employees on the similar posts as one person has been appointed at the salary of Rs,7,000 and others at Rs,12,000 or 8,000. The learned trial Court further held that from the perusal of record of appointments it cannot be said that appointments were made as per rules or against the existing vacancies but it is crystal clear that the appointments were made to please either the candidates or the persons who referred them to the accused and such appointments were on the orders of accused like an emperor of a kingdom. A plea was taken before the learned trial Court that the rules and regulations of Civil Servants do not apply to the employees appointed on contract and daily wages. The learned trial Judge repelled the contention and held that the term employee on daily wages has not been referred in the rules and regulations applicable to civil servants. The term of ad hoc appointment is available in the rules and regulations for which a different criteria is prescribed. The trial Court further held that, "the appointments on contract basis are subject to prior approval of the President of Pakistan on such terms and conditions of the contract and in that case also the necessities of such appointments must be explained for seeking such prior approval". The learned trial Court ultimately held that accused made appointments in violation of rules and regulations during the period of ban imposed by the Government and consequently the Point No,1 was decided in affirmative. Regarding the Point No,2, the learned trial Court held that admittedly the gift items were sent to the different persons on the orders of accused. A list was produced by P.W.3, Javaid Ahmed Khan, containing the names of the persons to whom gift items were sent. The learned trial Court referred names of certain persons to whom gifts were sent which are as follows:--
(1) Senator Saifur Rehman.
(2) Pir Zafarullah Khan, Secretary Housing, Government of Pakistan.
(3) Khawaja Zaheer, Additional Secretary, P.M. Secretariat.
(4) Col. Mushtaq Fazli.
(5) Qamar Zaman Khan P.S. To P.M. Secretariat.
(6) Tariq Warsi, Resident Editor Nawa-e-Waqt.
(7) Mrs. Maliha Lodhi, The News.
(8) Hamid Mir, daily Ausaf.
(9) Tahir Khalil, daily Jang.
(10) Masood Malik, Chief Reporter, Nawa-e-Waqt.
(11) Saood Safir, daily Ummat.
(12) Farooq Faisal, Editor Daily Din.
(13) Secretary Defence, Government of Pakistan.
(14) Nazar Abbas Siddiqui, Secretary Information, Government of Pakistan.
(15) Secretary Communication, Government of Pakistan.
(16) Inspector-General of Police, Islamabad.
(17) Nisar Cheema M.S. Holy Family Hospital, Rawalpindi.
(18) Dr. Mutiullah Khan/Dr. Rizwan. The learned trial Court further examined the evidence which proved purchase of gift items on the orders of accused, which consisted of 144 packets of Mixed Nimco, which were dispatched to the Prime Minister's House Islamabad, 20 coconuts, sent to P.M. House, Islamabad, 3 petties of cherry and one of mango sent to Secretary Defence, Additional Secretary Finance, Government of Pakistan, 16 crates of fresh cherry, 3 crates ofmango, 1 crate of Chikoo, 17 cartes of mango Chosa and several crates of coconuts, which were sent to private persons and officials including Prime Minister Muhammad Nawaz Sharif, Mian Muhammad Sharif, father of the then Prime Minister, Muhammad Shahbaz Sharif, Chief Minister of Punjab, N.-W.F.P., Chief Secretary and other Federal Secretaries, Speaker, Punjab Assembly, Speaker National Assembly and other officers of Ministry of Finance, Interior Minister and other Federal Ministers. The 'learned trial Court further observed that it was contended by accused that the said gifts were sent to improve the image building of House Building Finance Corporation and it was the discretion of M.D. To utilize the said funds in this manner and that the expenditure has been approved by the audit team of State Bank of Pakistan. The learned trial Court did not accept the plea taken by the appellant and held that the funds were required to be utilized for specific purpose only for which the same is allocated and the entertainment of the guests visiting the office of that particular department or organization. The discretionary powers do not mean that the authority to whom the discretionary powers are given can utilize it at his own will without any criteria. All powers are subject to some principles and wisdom 'behind such allocation of funds. The learned trial Court held that the appellant utilized entertainment funds in sending fruits and Nimco items to the political figures and to those Government officers who were neither the visitors of H.B.F.C. Nor they were directly concerned in transaction of the business of H.B.F.C., but those were the persons and authorities which were helpful to the accused in his retention in H.B.F.C. As M.S/Chairman. Trial Court further observed that Mian Muhammad Sharif, father of ex-Prime Minister, Muhammad Nawaz Sharif, was amongst those persons to whom gifts were sent, which amounts to political bribe just to seek favour from the ruling party and high officials. With these observations, the learned trial Court decided the Point No,2, in affirmative. Thereafter, the learned trial Court proceeded to examine if the above acts on the part of appellant amount to corruption. He held that, "the corruption is generally defined as abuse of the public office for private gain. However, the scope of corruption has become widened and it also includes the abuse of all offices of trust. It has far-reaching effects on the society. He observed that the culture of corruption and bribe has embodied in the society to the extent that even routine works which should be done without any approach of influence are not done without influence. This bribe culture has plagued the society that it has become a way of life and such corruption in political and official circle made the entire administration and society crippled and paralyzed". The learned trial Court asserted that it should be uprooted. He held that an act done in violation of rules and regulations even if it is in good faith cannot be justified and it is to be presumed that the same have been done with mala fide intention and consequently such acts come within the purview of corruption. The learned trial Judge further observed that the corruption can be eradicated only when it is dealt with deterrent with iron hands. He further opined that a holder of public office when is posted, it is always a trust upon him that he will use his authority in that office to protect the rights of the citizen and the public money and will act as per rules and regulations and if the said person uses his authority just to gain and benefit for him or to provide favour to any other person it amounts misusing his authority and offence of breach of trust. With the above observations and findings, the learned trial Court concluded that the acts of accused are within the purview of offence of corruption and corrupt practices as defined under section 9 (a) (iii) and (vi)of the National Accountability Bureau Ordinance. The contention that during his period as MD/Chairman, H.B.F.C., he restored financial discipline and improved its working as admitted by all the prosecution witnesses, did not impress the learned trial Court and it was observed that good performance of holder of a. Public office does not give him licence to commit irregularities and to cross his limits. The learned trial Court ultimately convicted the appellant under section 10(a) of National Accountability Bureau Ordinance, 1999 for commission of corruption and corrupt practices as defined under section 9(a)(iii) and (vi) of the NAB Ordinance and awarded sentence as narrated in the opening part of this judgment. Mr. Choudhary MuhamMad Ikram, learned counsel for the appellant contended that the appointments admittedly made by the appellant do not amount to commission of offence and do not fall within the definition of corruption and corrupt practices defined in section 9(a)(iii) and (vi) of the NAB Ordinance. He has submitted that the prosecution witnesses have admitted that all the appointments have been made by the competent authority under the relevant laws and that very few appointments have been made by the appellant. He has submitted that mostly the contract appointments were for a period of 90 days and daily wages appointments were continuing even prior to the taking over of the post of MD/Chairman by the appellant and the appellant merely continued the appointments in the interest of justice, as mostly daily wages appointees were drivers, Naib Qasid, etc. He has submitted that some fresh appointments were made by the appellant but all of them were in the interest of justice and that the ban on appointments by the Federal Government pertains to the permanent, temporary or ad hoc appointments. He has referred to the statement of P.W.1, Muhammad Dawood, General Manager, H.B.F.C., to the effect that according to an amendment in Banking Ordinance, the Board of Directors of the H.B.F.C., was empowered to determine the personnel policies of the bank including appointment and removal of the officers and the employees. This witness produced a Circular issued by the Finance Division, Government of Pakistan, dated 29-7-1998, imposing a ban on creation of new posts, Exh.7/3. The witness further stated that the appellant appointed about 60 persons on daily wages and contract basis, who were mostly Naib Qasid and drivers and some persons were appointed on contract. He has admitted in cross-examination that the minutes of the Board of Directors dated 20-6-1990 powers were delegated to the Executive Committee and the Managing Director, to appoint persons up to General Manager and the appointments of daily wages and on contract basis, who were otherwise authorized for appointment but because of ban they were not authorized. The witness has stated that ban was applicable to the contract and daily wages appointments but the scheme of "appointment" on daily wages was adopted prior to the appointment of appellant, as M.D. The learned counsel has referred to the statement of P.W.4, Abdul Qadir, General Manager(Personnel) who has stated that during the period of posting of the appellant, over all working of the H.B.F.0 was improved and there were instructions from M.D. To all of them not to violate the rules and regulations in the work of H.B.F.C. The learned counsel has further referred to the following statement of this witness who remained General Manager (Personnel), H.B.F.C.: "I cannot say anything about the suggestion that the instructions of the Government were not for the work-charge basis and 3 months contract basis appointments as the word 'work-charge' is not available in the instructions. The word 'contingence' has been used. The employees on contract basis for 3 months were actually employees like daily wages. It is correct that before the period of Siddiq-ul-Farooq the procedure of appointment on daily wages was being followed. Some of the old employees on daily wages were allowed to continue to work on daily wages and their period were extended and some were appointed fresh on daily wages basis. According to my knowledge this sort of the appointments continued till 2000. Voluntarily says that the period of daily wages allowed to continue and extended but the persons were not appointed fresh. Again says that it is not in my knowledge, if any fresh appointment was made on daily wages after the departure of Siddique-ul-Farooq. It is correct that on the expiry of 3 months' period of an employee on daily wages basis a fresh letter usually issued for their further period." The learned counsel has further referred to the statement of P.W. Muhammad Waseem, who has admitted that the persons appointed on the orders of Siddiq-ul-Farooq were qualified persons as per requirement of the posts. This witness has further admitted that during the period of Siddiq- ulFarooq, efficiency of working of H.B.F.C. And financial discipline was improved and corruption was eradicated. The learned counsel has further referred to the statement of P.W.6, Mst. Nasreen Mehdi, who was General Manager, Audit and Instructions Division, and worked as Executive Director, Northern region and had performed duties of acting M.D., during the period between November, 1999 to 25-5-2000.
8. She has stated that during her tenure as acting-M.D. Of H.B.F.C, there was exchange of correspondence between Ministry of Finance and H.B.F.C. Regarding appointments in H.B.F.C. On daily wages and contract basis. She has admitted that it was made clear by Ministry of Finance that the Board of Directors of H.B.F.C, was competent to appoint persons on daily wages and contract basis. She produced copies of letters dated 16-12-1999 and 1-1-2000 from Finance Division to H.B.F.C. As Exh.12/1 and Exh.12/2. The letter Exh.12J1, is on the subject of contract appointments and states that House Building Finance Corporation Act, 1952,authorises Board of Directors of the Corporation to exercise all powers and do all acts and things which the Corporation may require.
9. Through this letter the Board of Directors of H.B.F.C. Was empowered to take a decision accordingly vide letter Exh.12/2, the Finance Division has informed H.B.F.C., that the Finance Division has no objection to extending the period of daily wages employees for 90 days as per provision of section 13 of H.B.F.C, Act, 1952 and the Service Rules of the Corporation. This witness has further produced Exh.12/3, which is a BRIEF FOR THE BOARD, pertaining to re-engagement of contract/daily wages employees, stating therein that the H.B.F.C. Engaged 18 personnel possessing good academic, technical and professional qualifications with adequate past experience in order to run the day to day .Business of the offices against vacant posts of those employees who retired during the year 1998-99 or were dismissed/removed from services due to disciplinary proceedings. Due to ban on the fresh recruitment/appointments from the Federal Government, these contracts were being extended after a break for a further period of 90 days. It however, contained that in addition to the engagement of these 18 contract employees, 68 personnel were engaged in non-clerical cadre on daily wages basis whose performance has been found satisfactory and beneficial for Corporation, as such their services are being re-engaged for further 90 days. It is further stated that the Finance Division was requested to allow this office to extend the contract after break, in respect of these contract employees and to engage daily wages employees. The Board of Directors in its minutes dated 12-2-2000 granted approval for the retention of the employees in both categories of contract and daily wages till the proper recruitment of the staff against vacancies, subject to satisfactory performance. Learned counsel for the appellant has vehemently argued that in the light of material available on record, no offence has been committed by the appellant as defined under section 9(a)(vi) of the N.A.B. Ordinance. On the other hand the learned D.G.P.A., Mr. Muhammad Anwar Tariq, has fully supported the impugned conviction and sentence under section 9(a)(vi) of the N.A.B. Ordinance. He has submitted that admittedly there was ban on appointments by the Federal Government and the appointments on contract basis and daily wages have been made by the appellant which amounts to misuse of authority. The learned D.G.P.A., has further submitted that the appointments have been made to gain favour of the influential persons and for the benefit of employees therefore, the trial Court has rightly convicted and sentenced the appellant under section 9(a)(vi) of the N.A.B. Ordinance. In order to appreciate the contentions raised by the learned advocates for the parties, it would be appropriate to reproduce section 9(a)(vi) of the N.A.B. Ordinance, which defines the offence alleged to have been committed by the appellant by misuse of authority, by making appointments on contract basis and daily wages during the period when there was ban on the appointments. It is also necessary to reproduce the relevant part of the charge. Section 9 (a) (vi) reads as follows:-- "(vi) misuses his authority so as to gain any benefit or favour for himself or any other person, or to render or attempt to do so [or willfully fails to exercise his authority to prevent the grant, or rendition of any undue benefit or favour which he could have prevented by exercising his authority." The relevant part of the charge framed against the appellant reads as follows:-- "That you during the said period abused your official position, misused your authority and to gain benefits and to favour your men unauthorisedly and illegally made appointments in H.B.F.C. On contract/daily wages basis despite the ban on appointments imposed by the Government and about 88 persons were recruited without complying with mandatory procedure and without approval of the competent authority and thereby you caused wrongful loss amounting to Rs,56,88,525 to the Government Exchequer." A perusal of section 9(a)(vi) above shows that a holder of a public office or any other person is said to commit or have committed the offence of corruption and corrupt practices if he misuses his authority in order to gain any benefit or favour for himself or any other person or to render or attempt to do so. A perusal of charge shows that according to prosecution the appellant abused his official position as Chairman, H.B.F.C., and in order to favour his men made appointments in H.B.F.C. On contract/daily wages basis despite the ban on appointments imposed by the Government and 88 persons were recruited without complying with mandatory procedure and without approval of the competent authority, thereby causing wrongful loss amounting to Rs,56,88,525 to the Government Exchequer. Thus a combined reading of the relevant provision of law and the charge shows that in order to substantiate the conviction, the prosecution is required to establish that the appellant misused his authority, so as to gain any benefit or favour for himself or any other person and in doing so he did any favour to his men unauthorisedly and illegally thereby causing wrongful loss amounting to Rs,56,88,525 to the Government Exchequer.
10. The learned trial Court has referred to some appointments which according to learned trial Court establish the commission of offence of corruption and corrupt practices as defined in section 9(a)
(vi) of the NAB Ordinance. We have already reproduced the findings of learned trial Court and therefore, we need not to repeat the same. The learned trial Court has observed that in all above cases neither any post was advertised nor any Selection Committee was constituted. It has been further observed that there is nothing on record to show that there was any demand or requirement from any department of H.B.F.C. To the appointing authority for any particular post but it appears that the appointments were on the orders of the appellant. The learned trial Court has expressed the view that there was no criteria for fixing remuneration of the employees for the similar posts as one person has been appointed at the salary of Rs,10,000 and the other at Rs,12,000 or Rs,8,000. According to learned trial Court, perusal of record shows that the appointments were not made as per rules or against the existing vacancies and the appointments were made to please either the candidates or the persons who referred them to the appellant and the appointments were made on the orders of the appellant who acted like an emperor of a kingdom.
11. The learned trial Court ultimately held that "appointments on contract basis are subject to prior approval of President of Pakistan on certain terms and conditions of the contract and in that case also the necessities of such appointments must be explained for seeking such prior approval". The learned counsel for the appellant has urged that the observations and findings are merely surmises and conjecture not supported with, the unimpeachable evidence on record. He has submitted that the learned trial Court has confused the daily wages appointments and the contract appointments for 90 days with the regular appointments on which there was ban by the Federal Government and for which purpose prior approval of the Federal Government was required. Mr. Ch. M. Ikram, has taken us through the evidence of the prosecution witnesses to show that neither there was any misuse of authority on the part of appellant nor there was anything on the record to establish that the appointments resulted in any benefit to the appellant or any favour to his own men. He has further contended that all the appointments were made in the interest of H.B.F.C. And for the efficient day to day working of the institution which fact stands established from the evidence of prosecution witnesses. On perusal of the evidence brought by the prosecution on record, we are persuaded to agree with the submissions of Mr. Ch. Ikram, learned counsel for the appellant. P.W.1, Muhammad Dawood, General Manager, H.B.F.C, has stated that although the ban by the Federal Government was applicable to the contract and daily wages appointments but the scheme of appointments on daily wages was adopted prior to the appointment of appellant as M.D. P.W.4, Abdul Qadir, General Manager (Personnel) has stated that during the tenure of appellant, instructions were issued to all concerned not to violate the rules and regulations in the working of H.B.F.C. This witness who was occupying the important post of General Manager (Personnel), H.B.F.C., has stated that he cannot say anything about the suggestion that the instructions of the Government were not applicable to the appointments for work-charge basis and three months' contract basis appointments as the word "work-charge" is not available in the instructions. He has further stated that the employees on contract basis for three months were actually employees like daily wages. He has further conceded that even before the appointment of appellant as M.D., H.B.F.C., the appointments on daily wages were being made and some of the old employees on daily wages were allowed to continue to work on daily wages and their period were extended and some were appointed fresh on daily wages basis. He has further stated that according to his knowledge such appointments continued till the year 2000.
12. P.W.5, Muhammad Waseem, who was working in Personnel Division during the tenure of appellant has stated that while making 47 appointments the record whereof he produced at trial, the departmental procedure was followed but the appointments were during the ban period and were made without approval of Board of Directors and without prior approval of Prime Minister. He has further stated that in January, 2000, the Board of Directors approved appointments. He further conceded that the persons appointed on the orders of appellant were qualified persons and as per requirements of the posts. P.W.6, Mst. Nasreen Mehdi, who was General Manager, Audit and Instructions Division and worked as Executive Director as well as acting M.D. During the period between November, 1999 to 25-5- 2000, has stated that during her tenure as Chairman, there was exchange of correspondence between Ministry of Finance and H.B.F.C. With regard to appointments in H.B.F.C. On daily wages and contract basis. She has admitted that it was made clear by Ministry of Finance that the Board of Directors of H.B.F.C., was competent to appoint persons on daily wages and on contract basis.
13. The Finance Division, clarified in the letter Exh.12/1 that the House Building Finance Corporation Act, 1952 authorizes Board of Directors of the Corporation to exercise all powers and do all acts and things which the Corporation may require and that the Board of Directors was empowered to take a decision accordingly. The Finance Division has further informed vide letter Exh.12/2, dated 1-1- 2000 that the Finance Division has no objection for extending the period of daily wages employees for 90 days as per provision of section 13 of the H.B.F.C. Act, 1952 and the Service Rules of the Corporation. She has further produced Brief for the Board, Exh.12/3, in which it is stated that H.B.F.C.
14. Had engaged 18 personnel possessing good academic, technical and professional qualifications; with adequate past experience in order to run the day-to-day business of the offices against vacant posts of those employees who retired during the year 1998-99 or were dismissed/removed from services due to disciplinary proceedings. It is further stated that due to the ban on fresh recruitment/appointments from the Federal Government, these contracts were being extended after break for a further period of 90 days. It is also stated in the brief that in addition to engagement of these 18 contract employees, 68 personnel were engaged in non-clerical cadre on daily wages basis whose performance has been found satisfactory and beneficial for Corporation, as such their services are being re-engaged for further 90 days after break. It is also stated in the brief which has been prepared by the prosecution witness Nasreen Mehdi, in the capacity of Executive Director, that the Finance Division was requested to allow the extension of contract after break and the Finance Division advised the matter before the Board of Directors. In the meeting of Board of Directors dated 12-2-2000 approval was accorded for the retention of employees in both categories till the proper recruitment of the staff against vacancies. The evidence of the prosecution witnesses establishes beyond any shadow of doubt that the policy of appointments on contract basis/daily wages was not formulated by the appellant. The policy was formulated prior to the appointment of appellant as M.D. And it continued even after the removal of appellant. The prosecution allegation that the appointments were made by misuse of authority for extending benefit to his own men and/or giving any favour, resulting in loss to the public exchequer is belied by the brief prepared by P.W. Mst. Nasreen Mehdi, wherein it is clearly stated that the appointments were made in order to run the day-to-day business of the offices against vacant posts and that all the appointees were possessing good academic/technical and professional qualifications. The Ministry of Finance, accorded approval for extension of the contractual/daily wages appointments and did not raise any objection whatsoever either regarding the qualifications of the appointees or the want of vacancies against which they were appointed. The Ministry of Finance did not raise any objection to the salaries allowed to the contract/daily wages employees. All the appointments made/renewed/extended by the appellant were approved subsequently by the Board of Directors of the H.B.F.C, which shows that the appellant did not make even a single appointment which was not in the interest of institution and therefore, we are not persuaded to agree with the impugned findings of the trial Court that the appointments were made on the orders of appellant who acted like an emperor of a kingdom. The findings of the learned trial Court that the posts against which appointments were made were not required is also unfounded. Merely because one appointee namely Syeda Amber 'Carnal, has written her address, care of Mr. M. Jawed, Assistant Editor, Daily Jang, is not sufficient to hold that the appointment was made to please the said Assistant Editor of newspaper. We are not persuaded to, agree with the observation of learned trial Court that the impugned appointments were made to please either the candidates or the persons who referred them to the appellant and that there was no criteria for fixing remuneration of the employees. We have very carefully scrutinized the entire material available on record and we have found that no appointee was allowed any fantastic pay or fabulous emoluments and perquisites. The learned trial Court has referred to application for appointment as Exh.11/1. The record shows that the candidate holds Masters Degree in Physics and Maths. He had a very bright academic carrier having obtained first class throughout. A package of Rs,8,000 was allowed to him. It cannot be said that it was a very high salary for a person possessing Masters Degree in Physics and Maths in first class. Likewise in the application Exh.11/2 it is shown that the applicant had cleared 5 parts of A.C.M.A. And had sufficient orientation packages of utilities. It is stated in the office note that there is a need for accounting professional at the Finance Division, Head Office. He was allowed a package of Rs,12,000. Looking to the qualification of the candidate it cannot be termed as a very high salary.
15. The learned trial Court has made reference to the appointment of Tehmina Urooj, vide application Exh.11/5, at the fixed remuneration of Rs,7,000 per month. Perusal of record shows that she did her B.Sc. (Math's, Physics and Statistic) and then obtained B.E. Degree in Computer System Engineering.
16. Looking to the qualification of this female candidate it cannot be said that she was offered any undue salary. On the contrary it appears to be on lower side. Mr. Jawed Mehdi was appointed by the appellant on contract basis on fixed remuneration of Rs,12,000 per month. The record shows that he is foreign qualified having Master's Degree in Business Management. By no stretch of imagination it can be said that the appointment was with intention to extend any undue benefit or to cause any loss to the public exchequer.
17. Almost all the appointments made by the appellant appear to be on merit, and offering reasonable salary, in accordance with the policy already in existence prior to his appointment as M.D., H.B.F.C, in the interest of day-to-day working of the Institution, against the existing vacancies and all the appointments were approved even after the arrest of appellant and during the present Government, therefore, we are of the opinion that the prosecution has utterly failed to establish that the appellant made any appointment to gain benefit or favour for himself or any other person.
18. The prosecution has not been able to bring any material to show that the appellant appointed any of his relatives or near and dear ones during his tenure. The prosecution has further failed to prove the charge that any wrongful loss was caused to the Government exchequer with the appointments made by the appellant on contractual/daily wages appointments.
19. It is also to be kept in view that a head of the department or an Institution, may sometimes exceed his normal administrative powers in the interest of Institution and under some wrong impression about his authority on the basis of a practice in vogue or on account of a policy framed by the predecessors and continuance thereof without any objection more particularly when it is in the interest of smooth working of the Institution. Every such irregularity is not to be treated as misuse of authority and more particularly is not to be treated as criminal offence. It is established principle of the criminal administration of justice that before convicting any person the prosecution is required to establish beyond any reasonable doubt, all the ingredients constituting an offence and if there is any lacuna, infirmity or doubt it has always to be resolved in favour of an accused person.
20. Coming to the facts of the present case we find that the prosecution has at the most established some irregularity in making appointments by not taking prior approval of the Finance Division.
21. However, the offence under section 9(a)(vi) shall be made out if a holder of a public office, misuses his authority, so as to gain any benefit or favour for himself or any other person. Mere irregular use of authority may attract disciplinary action under the Service Rules, but in order to establish the offence of corruption and corrupt practices, mere irregularity on the part of holder of a public office or any other person is not sufficient. The prosecution must establish misuse of authority coupled with the intention to gain any benefit or favour for himself or any other person or to render or attempt to do so. Here, we are not dilating on the latter part of the definition given in section 9(a)
(vi) of the N.A.B. Ordinance, because the first part only is relevant for the purpose of the matter before us. It is also established principle of the criminal administration of justice that if there are more than one ingredient for constituting a criminal offence, all of them are to be established any if any one or more ingredients are not established then an accused person cannot be convicted for the commission of offence merely on committing one part of the act which in itself does not constitute the totality of act amounting to an offence.
22. For the foregoing reasons, we are of the considered opinion that the prosecution has failed to establish the commission of offence as defined under section 9(a)(vi) of the N.A.B. Ordinance, by the appellant and consequently it is held that the trial Court was not justified in convicting the appellant on account of making appointments on contract/daily wages basis and therefore, the conviction and sentence on this count is hereby set aside This brings us to the second part of the charge which relates to the criminal breach of trust on the part of appellant and conversion use of funds entrusted to him for the use of the persons who were not entitled to it, by sending gifts to the high officials, political and other influential persons. The appellant has admitted to have sent the gifts in the form of Mangoes, Cheekos, Nimco, Coconuts etc., to the persons named in the earlier part of this judgment. The persons to whom gifts were sent included Mian Muhammad Nawaz Sharif, the then Prime Minister of Pakistan, Mian Muhammad Shahbaz Sharif, the then Chief Minister of Punjab, Mian Muhammad Sharif, father of Mian Nawaz Sharif. The appellant has explained in his statement under section 342, Cr.P.C. As follows:-- "I have not gained any personal benefit from any one. I did not misuse any authority nor did I commit any distrust regarding entertainment fund. The said items of gift were sent to improve the image building of H.B.F.C. And all the persons to whom the gifts were sent were directly or indirectly concerned in improvement of H.B.F.C. I have already got audited the said funds on calling special audit/enquiry team of State Bank of Pakistan." The appellant has produced written explanation which he had furnished probably during the course of investigation in which he has stated as follows:-- "I have as a gesture of good will given gifts of fruits, sweets, Nimco and other eatables of the value varying from Rs,200 to Rs,400 to various elite, chief executives and senior executive officers of DFLs, banks etc., members of Parliament, and scholars, poets who called on me and presented me souvenirs and books I had to reciprocate I also presented eatables to officers of H.B.F.C. From General Manager to the level of Senior Executive Director to encourage them I also distributed sweets, among staff members. Similarly I presented gifts to retiring H.B.F.C. Officers. All this was done with good intention and promoting love and better understanding. I, as Managing Director, have Rs,5,00,000 as discretionary funds. As compared to my predecessors, I utilized 1/3rd. During current calendar year I have utilized less than 1 lac of rupees from this fund I think it is nothing less than 'Zulm' to interpret this gesture of goodwill as giving gifts for getting something illegal or undue."
23. The learned trial Court has considered the contentions and explanation given by the appellant and has observed that the appellant held funds which were required to be utilized for specific purpose only. The entertainment funds were meant for the guests visiting the office. The learned trial Court further held that the appellant utilized entertainment funds in sending fruits and Nimco items to the political figures and those Government officers who were neither the visitors of H.B.F.C.
24. Nor they were directly concerned in transaction of the business of H.B.F.C. The trial Court further observed that Mian Muhammad Sharif, father of ex-Prime Minister, to whom gifts were sent, amounts just to seek favour from the ruling party and high officials. The other observations made by the learned trial Court have already been reproduced by us. The learned counsel for the appellant has not addressed any argument whatsoever on the paint of criminal breach of trust pertaining to the entertainment funds by sending the gifts to high officials, editors of the newspapers, and the political figures including father of the then Prime Minister. As already stated earlier the sending of gifts from the entertainment funds is admitted and the explanation furnished by the appellant is that the gifts were sent to the persons who were directly or indirectly concerned in improvement of H.B.F.C. We are not impressed with the reason assigned for sending the gifts to the high officials of the Federal as well as Provincial Government.
25. We are inclined to agree with the views of the learned trial Court that the entertainment funds are provided to department or organization in connection with entertainment of the guests visiting the offices of that particular department or organization. We further endorse views of the learned trial Court that all powers are subject to some principles and wisdom behind such allocation of funds.
26. The learned trial Court has rightly held that the appellant utilized the entertainment funds for sending fruits and Nimco items to the political figure and to those Government officers who were neither the visitors of H.B.F.C. Nor they were directly concerned in transaction of the business of H.B.F.C. But those were the persons who were helpful to the appellant in his retention in H.B.F.C. As M.D/Chairman. The learned trial Court was very right in holding that the father of then Prime Minister Mian Muhammad Sharif, was amongst the persons to whom gifts were sent and it was nothing but a political bribe just to seek favour from the ruling party and high officials. We would like to add that there was absolutely no justification or nexus between official business of the H.B.F.C. And sending of gifts to the Chief Minister of Punjab, and N.-W.F.P, Chief Secretaries of the Provinces, Federal Secretaries, Speaker Punjab Assembly, and National Assembly, Secretary, Ministry of Finance and Interior and other Federal Ministries. We further deprecate the practice of sending such gifts to the editors of the newspapers, Inspector-General of Police and some doctors out of entertainment funds. There is nothing to show as to how, Senator Saifur Rehman, the then head of the Ehtesab Bureau was in any manner connected with the business of H.B.F.C. It is abundantly clear that the gifts were sent by the appellant out of entertainment funds of the H.B.F.C.
27. Not for the image-building of H.B.F.C. Or improving its business but for improving personal relations with the men-in-authority and to strengthen the personal rapport with them. In the explanation given by the appellant alongwith his statement under section 432, Cr.P.C, appearing at page 691 of the Paper Book, it has been contended as follows:-- "I, as Managing Director, have Rs,5,00,000 as discretionary funds. As compared to my predecessors, I utilized 1/3rd. During current calendar year I have utilized less than 1 lac of rupees from the fund. I think it is nothing less than 'Zulm' to interpret this gesture of good will as giving gifts for getting something illegal or undue." It appears that the appellant is not aware as to what is meant by Zulm. It has been defined as {{ARABIC TEXT}} (Keeping of a thing at other than its place) In the context of sending gifts to men-in-authority and- from public exchequer, we will examine its status in an Islamic polity.
28. It is narrated in Sahih Al-Bukhari as follows:-- "Umar-bin-Abdul Aziz said: A gift was a gift during the lifetime of Allah's Apostle, but today it is bribe."
769. Narrated Abu Humaid' Al-Saidi: The Prophet (s.a.w.) appointed a man from the tribe of Al-Azd, called Ibn Utbiyya for collecting the Zakat. When he returned he said, 'This (i,e, the Zakat) is for you and this has been given to me as a present'. The Prophet (s.a.w.) said, 'Why had not he stayed in his father's or mother's house to see whether he would be given presents or not? By the Name of Him in Whose hands my life is, whoever takes something from the resources of Zakat (unlawfully) will be carrying it on his neck on the Day of Resurrection; if it be a camel, it will be grunting; if a cow, it will be mooing; and if a sheep, it will be bleating. The Prophet (s.a.w.) then raised his hands till we saw the whiteness of his armpits, and he said thrice, '0 Allah! Have I not conveyed Your Message (to them)? (Sahih Al-Bukhari, Arabic English, Vol III, by Dr. Muhammad Mohsin Khan, Islamic University Al-Medina Al-Munauwara)." It is narrated from Abi-Humed Saadi in (Al-Sunnan Kubra LilBahaqi, Vol.10, page 138) that the Holy Prophet (s.a.w.) said, {{ARABIC TEXT}} "The gifts given to rulers is misappropriation/breach of trust." The word "Ghulool" means misappropriation and breach of trust. It is said in the same book as above, at page 138 that Hazrat Umar Farooq (r.a) issued a circular to all the executive and judicial officers in a State not to accept any gift as it is a bribe in the garb of gift. The issue has been dealt with in detail by Abdullah bin Abdul Mohsin Al-Mansoor Al-Teraqi, in his research work named JARIMATUL RISHWAH, published by Jamiatul Imam Muhammad Bin Saood, in the year 1400 Hijrah. The discussion spreads from pages 76 to 81. After discussing the two Hadith, narrated above, it is said that taking of gift by the rulers resembles to taking something from public exchequer which is Harram (prohibited) by consensus of opinion andtherefore, taking of gifts by the rulers/public servants is not permitted. The learned author has cited another Hadith narrated by Huzaifa (r.a) from theHoly Prophet (s.a.w.) that gift given to ruler/public servant is Harram (Ref. Kanzul-Amal, Vol.6, page 56). Another Hadith has been cited which has been narrated by Hazrat Ali (r.a.) that taking of gift by the ruler (Executive Officer) is Harram and taking of gift by a judge is bribe and Kufur. This Hadith is reported in Kanzul-Amal, Vol.6, page 56. It has been narrated in Al-Mabsoot Lil Sarkhasi, Vol.16, page 82, that Hazrat Umar Farooq (r.a.) appointed Hazrat Abu Hurrarah (r.a.) for collection of Zakat and on return he brought some amount other than Zakat. On query from Hazrat Umar Farooq (r.a.) as to the source of amount retained by him it was replied that he has been receiving gifts. Hazrat Umar Farooq (r.a.) retorted, Oh you enemy of Allah, why you did not stay in your house to see if gifts were presented to you or not. Thereafter, Hazrat Unaar Farooq (r.a.) took the said amount from him and deposited in Baitulmal. Receiving of gifts by the rulers, public servants, judicial officers and all men-in-authority as well as their relatives is unanimously prohibited and it is stated in Akhamul. Qur'an, Lil Jasas, Vol.4, page 87, that Hazrat Umar Farooq (r.a.) did not allow his wife Ume-Kulsoom, daughter of Hazrat Ali (R.A) from accepting gift sent by daughter of Emperor of Roman Empire.
29. From the above discussion, there is no room for any doubt that sending of gifts to men-in- authority, administrative, judicial, political, civil and military or the persons wielding the scepter, is strictly prohibited. It is not a gift but is a bribe. No emphasis is required on the point that bribe is an offence/crime in which the giver and acceptor both are equally guilty and therefore, a Hadith is reported, to the effect that the acceptor and giver of bribe both are deprived of the mercy of Allah.
30. After coming to the conclusion that giving of gifts to the rulers and men-in-authority is bribe simpliciter, we would like to lay further emphasis on the point that if so-called gift is extended from public exchequer it is not only a bribe but is misappropriation of the public exchequer and the criminal breach of trust. We have already observed above that the word 'Ghulool' means misappropriation and breach of trust. Thus if a gift is extended to men-in-authority and influence out of public exchequer, it is not only an act prohibited because of being bribe but is an act of misappropriation and criminal breach of trust, which aggravates the gravity of offence. For the foregoing reasons we are of the opinion that on the appellant's own admission, the charge in respect of offence defined under section 9(a)(iii) of the N.A.B. Ordinance, that a holder of public office or any other person is said to commit or to have committed the offence of corruption and corrupt practices, if he dishonestly or fraudulently misappropriates or otherwise converts for his own use, or for the use of any other person, any property entrusted to him, or under his control, or willfully allows any other person to do, stands established beyond any doubt. The conviction under section 10(a), N.A.B. Ordinance, for the commission of corruption and corrupt practices as defined under section 9(a) (iii), is therefore, upheld. However, while maintaining the conviction we are of the opinion that the sentence should be in consonance with the gravity of offence committed by an accused person. The learned trial Court convicted the appellant on both the counts i,e, causing loss to the Government Exchequer in the sum of Rs,56,88,525 by making appointments on contract/daily wages which is an offence under section 9(a)(iii) and for dishonestly misappropriating the entertainment funds to the tune of 1,05,000 by sending gifts to the dignitaries and Government officials which offence is defined under section 9(a) (iii) of the NAB Ordinance.
31. The sentence for the combined conviction was awarded to R.I. For 5 years and to pay a fine of Rs,2,00,000. In default of payment of fine the appellant was to undergo R.I. For one year. We have acquitted accused/appellant of the charge of offence defined under section 9(a)(vi) of the NAB Ordinance and have upheld conviction for the offence defined under section 9(a)(iii) of the NAB Ordinance. Thus we are of the considered opinion that the sentence is required to be reduced looking to the ordeal through which the appellant had to undergo, i,e, after his arrest on 18-10-1999, the appellant was dumped and forgotten till his production on 18-5-2000 by Prosecutor-General, N.A.B., before the Hon'ble Supreme Court under the directive of the apex Court. We are of the opinion that it would be appropriate to reduce the sentence to the imprisonment already undergone and we do accordingly. The fine is also reduced to Rs,1,05,000 only which is equal to the amount spent in sending so-called gifts by the appellant to the politicians, bureaucrats, journalists etc. In default of payment of fine he shall further undergo R.I. For 3 months. The direction disqualifying the appellant to contest election and to hold public office for 21 years under section 15 of the N.A.B. Ordinance is hereby upheld. If the appellant deposits the amount of fine imposed by us, he should be released frothwith if not required in any other case. In case of nonpayment of the fine he should be released after three months from today if not required in any other case. The appeal is partly allowed as above. (Sd.)
32. Muhammad Mujeebullah Siddiqui, Judge S. AHMED SARWANA,have had the benefit of reading the judgment proposed to be delivered by my learned 'brother Muhammad Mujeebullah Siddiqui, J., and agree with his reasoning and conclusions fully. However, I would like to add a few words in furtherance of the judgment which are as follows: "House Building Finance Corporation (the Corporation) is a statutory body established under the House Building Finance Corporation Act, 1952 (the Act) for the purpose of providing financial facilities for the construction of houses in the towns and cities in Pakistan. The general direction and administration of the Corporation and its affairs vests in a Board of Directors which with the assistance of an Executive Committee and a Managing Director exercises all powers and do all acts and things which may be exercised or done by the Corporation (section 6 of the Act). The Managing Director (who is also the Chairman of the Committee) is appointed by the Central Government as the Chief Executive Officer who directs and controls the whole affairs of the Corporation (section 8 of the Act). The appellant/accused was appointed Managing Director and Chairman of the Board of Directors of the Corporation on 2-5-1998. The liabilities and responsibilities of the Directors and the Managing Director of the Corporation are not specified in detail in the House Building Finance Corporation Act. The Companies Ordinance, 1984 contains several provisions relating to the responsibilities and liabilities of directors and officers of companies incorporated under the said Ordinance. In addition there are several judgments of superior Courts which contain detail discussion on the subject. It would, therefore, be appropriate to look at the provisions relating to the liabilities and responsibilities of the Directors of Companies incorporated under the Companies Ordinance, 1984, reported judgments and the commentaries by the modern day authorities on corporate law to examine the seriousness, gravity and culpability of the charge of criminal breach of trust against the appellant/accused." The directors of a company carry out the management function collectively at board meetings which are held periodically. As it is normal for companies to delegate the day-to-day management of the business to a full time managing or executive director, section 198(2) of the Companies Ordinance requires the directors of every company to appoint not later than 15 days after the date of its incorporation any individual to be the Chief Executive of the Company. Under section 200(2) the Chief Executive shall, if he is not already a director of the company, be deemed to be a director and be entitled to all the rights and privileges and subject to all the liabilities of that office. 'The Companies Ordinance and the Act do not state all the duties of the directors but on the basis of reported judgments and opinions of authorities on the subject, it is well established that directors owe a fiduciary duty to their company. The fiduciary duty is basically similar to that applicable in other fiduciary relationships e.g., agent and principal or trustee and beneficiary. It is based upon the principal that since the company places its trust with the directors, they must display utmost good faith towards the company while dealing with or on its behalf and act in the best interest of the company which means that they must consider purely the economic interests of the company and must not make a personal profit at the company's expense. (The Responsible Director by Peter Souster, published by The institute of Chartered Accountants in England and Wales, London, 1986 Edition, page 21). The directors must therefore use their powers for the purpose of the company's business and must not use them for some purpose other than those for which they were conferred or for some improper purpose. An improper purpose would be where the directors are primarily motivated by their desire to further their own personal interests. They must not also act for any collateral purpose i,e, the moving cause of the act must be the benefit of the company and nothing else. If the directors use their authority for purposes other than the company's business, ulterior motive, collateral purpose or personal interest, they would be in breach of their duty to the company. To restrain and check the abuse of the fiduciary duties by the directors, the Companies Ordinance, 1984 has granted plenary powers to the auditors of the company to check all the books, papers, accounts and vouchers of the company and seek such information and explanation as they think necessary for the performance of the duty of the auditors. Section 255(3) of the Companies Ordinance, 1984 has imposed, among others, the following specific duty on the auditors:-- "The auditors shall make a report to the members of the company on the accounts and books of accounts of the company and on every balance-sheet and profit and loss account or income and expenditure account and on every other document forming part of the balance-sheet and profit and loss account or income and expenditure account, including notes, statements or schedules appended thereto, which are laid before the company in general meeting during his tenure of office and the report shall state-- (a).......
(e) whether or not in their opinion--
(i) the expenditure incurred during the year was for the purposes of the company's business; and
(ii) the business conducted, investments made and expenditure incurred during the year were in accordance with the objects of the company."(Emphasis. Added). Pursuant to aforesaid provision, the Companies Ordinance has prescribed Form 35-A for the Auditors' Report which is submitted to the members annually which is as follows: "(FORM 35-A)
33. THE COMPANIES ORDINANCE, 1984 [Section 255 (3) and Rule 17-A] AUDITORS' REPORT TO THE MEMBERS We have audited the annexed balance-sheet of... ...As at... ... And the related profit and loss account and statement of changes in financial position, together with the notes forming part thereof, for the year then ended and we state that we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and, after due verification thereof, we report that:
(a) in our opinion, proper books of account have been kept by the company as required by the Companies Ordinance, 1984;
(b) in our opinion--
(i) the balance-sheet and profit and loss account together with the notes thereon have been drawn up in conformity with the Companies Ordinance, 1984, and are in agreement with the books of account and are further in accordance with accounting policies consistently applied except for the changes as stated in note(s)... With which we concur;
(ii) the expenditure incurred during the year was for the purposes of the company's business; and
(iii) the business conducted, investments made and the expenditure incurred during the year were in accordance with the object of the company; (c)..........
34. (d).........
35. Signature (Name (s) of Auditors).
36. (Emphasis added) It would not he out of place to mention here that in the last few years a practice had developed in the corporate circle to distribute gifts like diaries, lunch boxes and souvenirs etc. To the shareholders who attended the annual general meetings of the companies. The reason put forward for the practice was to attract a large number of shareholders at the meeting. However, it was found that the directors/officers of the company in the garb of gifts were misusing the company funds for the benefit of their coterie of friends and sycophants and to divert the attention of the shareholders from the main business of the meeting to evaluate the performance of the company was lost. In order to stop such abuse and breach of trust by the directors, the Corporate Law Authority (CLA) by Circular No,1 of 1991 restrained all the Companies Ordinance, 1984 has imposed, among others, the following specific duty on the auditors: "The auditors shall make ar(sic) of the company who is a party to the default shall be liable to a fine not exceeding five hundred thousand rupees." Besides the benefit of evaluating the performance of the company for the achievement of its object, the funds of the companies were saved from wastage which resulted in further check on other unnecessary expenditure of the companies which were being incurred by the directors.
37. Keeping in view the CLA Circular No,1 of 1991 and section 199-A of the Companies Ordinance, the appellant/accused who was the Managing Director and Chairman of the Board of Directors of the Corporation should have abstained from sending any gift to any person who was not in any way connected with the business, object or economic interest of the company because doing so was a violation of his fiduciary duty to the corporation under the general principles of Company Law practiced in civilized States. The above narration of the law relating to the fiduciary duty of the directors to the company and reproduction of the provisions of the Companies Ordinance, 1984 clearly state in very positive terms that the directors must ensure that the expenditure incurred is in accordance with the object of the company, for the purposes of the company's business and the company auditors after due investigation and inquiry are statutorily bound to certify in their report to the members that they are satisfied that the expenditure was so incurred. If the directors incur any expenditure in violation of the above requirements they 'would be guilty of criminal breach of trust liable to punishment.
38. The question then arises whether the responsibilities of the directors of a statutory corporation though not specified in Act would be the same as those of the directors of a company incorporated under the Companies Ordinance, 1984 whose shares are held by a few persons in case of a private limited company and a few thousand shareholders in case of a public company.
39. In my opinion, the standard of responsibility and liability of a director of a statutory corporation would be much higher than that of an ordinary company as the said statutory Corporation is financed by the Government from the public fund in which every citizen of the country has an interest and has the right to challenge, if it is abused or misused. A perusal of the names and designations of the donees of the gifts which include the Prime Minister, Chief Ministers, and Chief Secretaries of the Provinces, Ministers, Secretaries of various Ministries, Officers and Members of the National and Provincial Assemblies and Inspector-General of Police etc., prima facie, indicate that the said gifts were neither made in good faith nor for the objects of or in the best interest of Corporation bin were motivated by the desire of the appellant/accused to display his gratitude and please his benefactors who were responsible for his appointment and to please his politician friends to ensure continuance of his assignment in the Corporation or from whom he wished to seek some favour in future. All the persons who were the beneficiaries of the gifts from the appellant/accused had no direct or indirect connection with the object and business of the Corporation and were not in a position to bestow any benefit or advantage to the Corporation except to the appellant/accused. The appellant/accused has not stated or indicated anywhere that the gifts were sent for the object, purpose and business of the Corporation. By sending the gifts for his personal benefit to the aforesaid persons from the funds of the Corporation which were placed at his disposal to be used for the benefit, interest, business and object of the Corporation, being a public servant, the appellant/accused committed the offence of criminal breach of trust which is liable to punishment under P.P.C. As well as the NAB Ordinance, 1999. It may be noted that the provisions of the Companies Ordinance, 1984 and the law relating to the directors' fiduciary duty to the company discussed above are not new concepts and are a reproduction of the edicts and the principles of law employed in the administration of justice and state hundreds of years ago by the Muslim rulers and Kazis as discussed above by my learned brother. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.