1. ' MUHAMMAD ROSHAN ESSANI, J.---The applicant/ accused Maqsood Ahmed Khan and other co- accused shown in the charge-sheet are Directors of Fateh Textile Mills Ltd. Hyderabad.
2. ' The proceedings against them are presently pending in the Court of Presiding Officer Special Court (Offences in Banks) Sindh at Karachi under sections 420, 468 and 471, 477-A, P.P.C. Read with section 34, P.P.C. The F.I.R. Was lodged by Syed Zaki Ahmed Hashmi Manager U.B.L. Station Road, Hyderabad and Masha Allah Khan Officer Grade-I/Attorney UBL Zonal Officer on 19-5-2000.
3. ' The brief facts of the prosecution case as disclosed in the ' F.I.R. Dated 19-5-2000 lodged at Police Station F.I.A. State Bank Circle are reproduced hereinbelow:- - "The letter of Complaint No, 0198/FTML/2000 dated 19-5-2000 of the two complainants named above has been treated as F.I.R. In the case which is reproduced below.
4. ' United Bank Ltd., Station Road, Hyderabad. 0198/FTML/2000, dated 19-5-2000.
5. ' The Director, ' Federal Investigation Agency, Banking Circle, ' Karachi.
6. ' Dear Sir, ' Complaint against Fateh Textile Mills Ltd. United Bank Limited, through its Station Road Branch, Hyderabad Complainant, against-- ' M/s. Fateh Textile Mills, Ltd. Having its office at 69, Hali Road, Hyderabad.
7. ' Mr. Inayatullah son of Barkat Bhai, Director, Fateh Textile Mills Ltd., Resident of Fateh House, Unit No,4, Latifabad Hyderabad.
8. ' Mr. Goharullah son of Inayatullah, Director, Fateh Textile Mills Ltd., Resident of Fateh House, Unit No,4, Latifabad Hyderabad.
9. ' Mr. Humayun Barkat son of Inayatullah Director, Fateh Textile Mills Ltd. Resident of Fateh House, Unit No,4, Latifabad Hyderabad.
10. ' Mr. Asadullah son of Inayatullah Director, Fateh Textile Mills Limited, Resident of Fateh House, Unit No,4, Latifabad Hyderabad.
11. ' Mr. Maqsood Ahmed Khan son of Zahoor Ahmed, Director Fateh Textile Mills Limited, Resident of Fateh Colony, Fateh Textile Mills Limited, Hyderabad.
12. ' Mr. Tanveer Arif son of Muhammad Ashraf, Director, Fateh Textile Mills Limited, Resident of Opposite Larosh Hotel, Auto Bhan Road, Unit No,3, Latifabad, Hyderabad'."
13. ' United Bank Limited (UBL) Station Road Hyderabad (complainant) submits as under:--
(1) That UBL is a banking company incorporated under the laws of Pakistan having its head office at State Life Building No,1., I. I. Chundrigar Road, Karachi, and the complainant is a branch of UBL.
(2) That Fateh Textile Mills Limited (FTML) is a company incorporated under the laws of Pakistan having its principal place of business at 69-Hali Road, Hyderabad.
(3) That FTML is, inter alia, carrying on the business of manufacturing and export of textile products.
(4) That FTML approached Hyderabad Branch of UBL for a finance facility by way of discounting of export bills on the basis of a Letter of Credit No,IMC, 99-024 (amended IMC 99-026), dated February 24, 1999 (I/C) opened by Canadinan Imperial Bank of Commerce (Switzerland) Limited, Lintheschergase, Zurich, Switzerland (CIBC).
(5) That the L/C presented to Hyderabad Branch of UBL showed the following:
(a) The L/C was opened by CIBC on behalf of Messrs Paynders Trading Limited for the benefit of FTML. The L/C was received by National Bank of Pakistan, Risala Road Branch, Hyderabad (NBP) through telex.
(b) Telex message was tested and verified by Faysal Bank Limited, Karachi with whom CIBC appears to have telex testing arrangements.
(c) NBP was requested to forward the L/C to FTML as an advising bank only and accordingly NBP advised FTML vide Its Letter No,FE:EVP:LC:ADV:014/992551, dated March 4, 1999 enclosing the original copy of the telex message received by NBP.
(d) The L/C contained the payment clause in the following terms:-- "Upon receipt of credit conform documents, we shall undertake to cover you at your convenience at maturity."
14. ' Copies of the L/C submitted to UBL and covering letter of NBP are attached herewith and marked as Annexures A and All respectively.
(6) That on the basis of the aforesaid payment clause. The complainant negotiated the L/C and allowed a finance facility by way of discounting of foreign, currency export bills. A total number of 34 bills amounting to US Dollar 4,943,798.06 (United States Dollars four million nine hundred forty three thousand seven hundred ninety and six cents) were discounted under the L/C and the rupee equivalent amounts of 2 the discounted value were disbursed to FTML. A statement of account showing the details of the bills discounted their US dollar amount and the Rupee amounts disbursed to FTML, is attached as Annexure II.
(7) That the Directors of FTML namely Mr. Goharullah son of Inayatullah, Mr. Humayurr Barkat son of lnayatullah Mr. Maqsood Ahmed Khan son of Zahoor Ahmed and Mr. Tanweer Arif son of Muhammad Ashraf also executed personal guarantees to secure the payment of the amounts due on account of negotiation of the L/C.
(8) That after negotiating the L/C, the complainant forwarded the documents to CIBC for acceptance and confirmation of their undertaking to pay the amounts due under the discounted bills on their maturity. Copies of the letters/telexes forwarding the document to CIBC are attached and marked as Annexure D respectively.
(9) That upon receipt of the aforesaid documents CIBC accepted the documents and informed the complainant that it shall pay the amounts due under the aforesaid documents upon receipt of funds from its customers namely Poynders Trading Limited. This acceptance being against the terms of the L/C, UBL Hyderabad Branch immediately wrote back to CIBC to clarify the same as the L/C's payment clause did not mention the condition of receipt of funds from their customers, CIBC, however, responded that the L/C opened by them contained the said clause. Copies of the correspondence exchange, between the complainant and CIBC are attached and marked as Annexure E respectively.
(10) That the complainant contacted NBP for confirmation of the true facts. NBP forwarded copy of the L/C received by them from their record. This copy showed the payment clause as follows:-- "Upon receipt of credit conform documents, shall undertake to cover you at your convenience at maturity, however, after receipt of the funds."
15. ' Copy of the L/C provided by NBP is attached herewith and marked as Annexure V.
(11) That the copy of the L/C provided by NBP also showed that the signatures of the Officials of Faysal Bank Ltd. Were different from the signatures on the L/C earlier provided by FTML to the complainant. Both the copies were, therefore, forwarded to Faysal Bank Limited for verification and it was confirmed by Faysal Bank Ltd., vide their letter, dated October 8, 1999 that signature on the L/C provided by FTML were forged. Copy of letter, dated 8-10-1999 alongwith its enclosures is attached herewith and marked as Annexure G.
(12) That in the meanwhile the bills discounted by the complainant became overdue and the complainant contacted FTML in this regard. After long drawn negotiations FTML undertook to ensure that all the bills discounted by the complainant shall be paid in time.
16. ' Copy of FTML's letter, dated 23-9-1999 alongwith its enclosure is attached herewith and marked as Annexure II.
(13) That from the above facts it is clear that the payment clause of the L/C was tempered by FTML to remove the uncondition of receipt of funds in order to show the L/C as conditional uncommitment of CIBC, FTML, therefore, induced the complainant to allow them a facility on the basis of a forged document which could not have been allowed to them otherwise and cheated the complainant of the amounts of the L/C which are now long overdue.
(14) That on account of the aforesaid acts of omission and commission on the part of FTML the complainant has suffered a loss of earning on the overdue amounts of the bills discounted by the complainant. A statement showing the estimated losses suffered by the complainant is attached herewith and marked as Annexure I.
(15) That further in order to deceive and cheat two post dates Cheques No,414864, dated November 23, 1999 for Rs,10,000.000 (Rupees ten million) and Cheque No,414866, dated November, 18, 1999 for Rs,10,000.000 (Rupees ten million) respectively, were given by FTML as part payment. On the date(s) of maturity the cheques were presented but were returned dishonoured due to lack of funds in FTML's account. Hence, FTML, induced the complainant to prolong taking any action for recovery on the fraudulent promise of the post dated cheques which were dishonoured thereby constituting a further criminal offence. In view of the above it is respectfully submitted that the matter may kindly be investigated and appropriate action in accordance with law be initiated against FTML and its directors responsible for the loss caused to the complainant bank. Yours faithfully, For and on behalf of the Complainant.
17. (Sd.)
18. Mr. Mashallah Khan Son of Nasrullah Khan Officer, Grade-1 Attorney, UBL Zonal Officer, Hyderabad (Sd.)
19. Syed Zaki Ahmed Hashmi Son of Syed Wasi Ahmed Hashmi Assistant Vice- President/ Attorney, Manager, UBL Station Road Branch, Hyderabad.
20. ' Registered Case F.I.R. No,21 of 2000, dated 19-7-2000 under sections 420/ 468/ 471/ 477-A/34, P.P.C.
21. Against (1) Inayatullah Son of Barkat Bhai, (2). Goharullah son of Inayatullah, (3). Humayun Barkat son of Inayatullah, (4), Asadullah son of Inayatullah , (5). Maqsood Ahmed Khan son of Zahoor Ahmed, (6). Tanveer Ahmed son of Muhammad Ashraf, all Director of Messrs Fateh Textile Mills, Hyderabad and (7). Ahtesham Ansare representative of Messrs Fateh Textile Mills, Hyderabad and have taken up investigation as ordered.
22. (GUL SHER MUGHERI) INSPECTOR, FIA, CBC, KARACHI."
23. ' The applicant Maqsood Ahmed Khan has approached this Court under section 561-A, Cr.P.C., for quashment of proceedings pending in the above said Court. This matter was admitted to regular hearing on 25-5-2001 by a D.B. Of this Court. The proceedings pending in the trial Court were initially suspended by another D.B. Of this Court on 19-6-2001. Today the matter has came up before us for hearing of stay application as well as main case.
24. ' We have heard Messrs A.Q. Halepota, Muhammad Ilyas Khan learned counsel for the applicant and Syed Zaki Muhammad learned Deputy Attorney-General for Pakistan on behalf of State and Mr. Nafis Ahmad Siddiqui learned counsel for the complainant Bank.
25. ' At the very outset Mr. Nafeez Ahmed Siddiqui leaned counsel for the complainant Bank stated that both the above named complainants are on record as having informed the Deputy Director F.IA., CBC, Karachi through two separate letters that as a result of statement arrived at between the complainant bank and the above named Directors of M/s. Fateh Textile Mills Ltd., the bank has received the due amounts mentioned in. F.I.R. And settled all the liabilities with the accused. Mr. Nafees Ahmed Siddiqui further submitted that the complainant Bank has thus nothing to recover from the accused wh are Directors of M/s. Fateh Textile Mills Ltd. Hyderabad. In the circumstances he frankly conceded to the prayer for quashment of proceeding pending against the accused.
26. ' Mr. A.Q. Halepota, learned counsel for the applicant who was assisted by Mr. Muhammad Ilyas Khan, Advocate submitted that the charge under sections 420, 468, 471 and 477-A, P.P.C. Is not substantiated by material collected by the Investigating Agency. In the circumstances he submitted that the continuation of proceedings against all the accused amounts to abuse of process of Court.
27. ' Syed Zaki Muhammad the learned Deputy Attorney-General for Pakistan submitted that since complainant Bank has received its dues and nothing is outstanding against the accused who are all Directors of M/s. Fateh Textile Mills Ltd., Hyderabad as stated by Mr. Nafees Ahmad Siddiqui, Advocate for complainant Bank, the proceedings pending against the accused in the trial Court may be quashed.
28. ' We have considered the submissions made by the learned counsel for he parties and we have also perused the material on record.
29. The applicant and other directors of M/s. Fateh Textile Mills Ltd., who are co-accused in the case have been sent up under sections 420, 468, 471 and 477-A, P.P.C. Read with section 34, P.P.C. Now whereas no material in the shape of opinion of handwriting expert or specimen signature of the Directors or any other material was pointed to us so as to substantiate for the charge of forgery for cheating and/or for fabrication of accounts as envisaged by sections 468, 471 and 477-A, P.P.C. The only question for consideration is whether the act omission of the accused amounted to cheating within the meaning of section 415 of P.P.C.
30. ' The dividing line between a case of breach of contract and a case of cheating is often very difficult to draw. The ingredients of offence under section 420, P.P.C. Are to a substantial extent available in most cases of breach of contract. The tendency to view a criminal action as a handy means to constrain a person conduct cannot be underscore. We are still left with people in this country who are prepared to pay a price, for their fair name and the spectre of a criminal prosecution can often compel them easily to relent on a stand which is otherwise well-founded in law and equity. It this growing abuse of process of criminal Court that is to be guarded against.
31. The distinction between a case of mere breach of contract and one of cheating depends upon the intention of accused at the time of alleged inducement, which may be judged by his subsequent act, but of which the subsequent act is not the sole criterion. To establish case under section 420, P.P.C. There should be clear evidence to the effect that the accused and a guilty mind from the very outset which evidence is lacking in this case, which is merely a case of delayed payment to the complainant Bank. There is no evidence that the accused in this case had a guilty mind from the very outset. The accused have paid all the dues of the complainant Bank and there remains nothing to be paid by them. This subsequent conduct of the accused clearly shows that they had no intention to cheat the complainant Bank and cause any wrongful loss to it. We think that general proposition of law is well-settled that a broken promise by itself does not bring the case within the mischief of cheating. In this regard we would like to quote a passage from the judgment in case of M.M.S.T Chidambaram Chettiar v. Shanmugham Pillai reported in AIR 1938 Madras 129:- "In the world of business things are often done which are betrayals of confidence and deceptions which arouse moral indignation but are nevertheless civil wrongs which can be righted by Civil Courts and are not crimes which can be punished by a Criminal Court. Not every immoral act is criminal and it is an abuse of the process of a Court to attempt to create new crimes in order to compel men to conform to a high standard of probity in business dealings or to force them to execute their promises."
32. In view of what we have stated above, we are of the considered view that the continuation of further proceedings pending against the accused in the trial Court will be an exercise in futility. In the words of the late Tufail Ali Abdul Rehman the late Chief Justice of the Court in the case of Mst.
33. Hamida v. The State and another reported in 1973 PLD Karachi page 478:-- "Obviously to permit a prosecution to continue upon allegations which do not constitute an offence can only be an abuse of process of Court..... I cannot but think that if a case which cannot possibility succeeded is allowed to continue this must result in harassment of the accused person whose acquittal is in any way certain and that this would be an abuse of the process of the Court and that in any event under section 561-A an order to quash the proceedings would be one which would secure the ends of justice: The ends of justice do not I think contemplate the trace of a trial which can result in an equittal only."
34. We, therefore, come to the conclusion that the case against the applicant must be quashed. The other co-accused, however, are parties in this case and we have given our most anxious consideration to the question whether the proceeding should be quashed generally or in respect only of the applicant. In the circumstances of the case however, we think that the cases are really inseparable and it would be anomalous to permit prosecution to continue against the co-accused while it is quashed against the applicant. The power under section 561-A, Cr.P.C. Is not dependent upon the application of any particular person. The fact that the other co-accused have not been impleaded does not in our view matter, as an order of' quashment can hardly be to their prejudice.
35. We accordingly quash the entire proceedings of Case No,49 of 2000 in respect whereof F.I.R. No, 21 of 2000 was lodged by the complainants mentioned in the said F.I.R. And which are presently pending in the Special Court (Offence in respect of Banks) Sindh at Karachi and direct that these proceedings be terminated forthwith.