' RUSTAM ALI MALIK, J.-- ' Through this judgment we intend to dispose of (1) Criminal Appeal No, 1511 of 2002 titled Chaudhry Abdul Majeed v. The State, (2) Criminal Appeal No, 1355 of 2002 titled Makhdoom Salah-ud-Din Gillani etc. v. The State, (3) Criminal Appeal No, 1391 of 2002 titled Mujahid Zia Butt v. The Chairman, National Accountability Bureau and others, (4) Criminal Appeal No, 1393 of 2002 titled Chaudhry Ghulam Rasool v. The Chairman, National Accountability Bureau and (5) Criminal Appeal No, 1394 of 20021 titled Sheikh Muhammad Munir v. The Chairman, National Accountability Bureau.
2. The brief facts are that Accountability Reference No, 40 of 2002 was filed in the learned Accountability Court on 5-11-2001 by the Chairman, N.A.B. Under sections 18(g) and 24 of the N.A.B.
Ordinance, 1999 against (1) Chaudhry Tajamal Hussain son of Chaudhry Nazir Ahmad, (2)
Chaudhry Abdul Majeed son of Chaudhry Khair Din, (3) Major (Rtd.) Barkat Ali Khan son of Chaudhry Muhammad Khan, (4) Mehr Khuda Dad Khan Luk son of Muhammad Yar Khan Luk, (5)
Sheikh Muhammad Munir son of Sheikh Muhammad Hussain, (6) Chaudhry Ghualm Rasool, Advocate son of Khan Muhammad, (7) Mujahid Zia Butt son of Zia-ud-Din Butt, (8) Syed Makhdoom Salahuddin son of Syed Muhammad Ramzan Shah Gillani, (9) Muhammad Ejaz son of Muhammad Younas, (10) M.A. Hamid Faizi son of Haji Muhammad Din, (11) Syed Muhammad Usman Khan Abbasi son of Muhammad Daud Khan, (12) Muhammad Hafeez Abbasi son of Haji Mehboob Khan,
(13) Syed Ali Ashgar Shah son of Syed Bilawal Shah.
3. The reference was filed on the plea that the National Industrial Cooperative Finance Corporation Limited (N.I.C.F.C.) was registered by the Registrar, Cooperative Societies, Lahore Region Lahore, under the Cooperative Societies Act, 1925 and that respondents Nos.1 to 13 were the President, Executive Director and Directors of the said Corporation respectively. There were reports that the management of N.I.C.F.C. Had caused grave loss to the N.I.C.F.C. Through fraud and embezzlement of funds. It was also reported that the Lone Commission which was constituted to make detailed inquiries in defalcation of funds in the N.I.C.F.C. Had prepared a report and had placed the responsibility of loss on the management of the N.I.C.F.C. Besides that, the Registrar, Cooperative Societies had also instituted special audit and inquiries and as a result of which it was revealed that the aforesaid accused persons had dishonestly and fraudulently misappropriated funds of N.I.C.F.C. Thereby causing a loss of approximately 1.8 billion rupees to the Corporation. Considering the gravity of allegations and inquiry reports it was deemed proper and appropriate to refer the matter for formal investigation under the N.A.B. Ordinance. Accordingly the Anti-Corruption Establishment, Punjab, was directed to investigate the matter. The Investigating Officer submitted his interim report and it revealed that a loss of an approximate amount of rupees 1.8 billion had been caused by accused Nos.1 to 13 to the It was further stated in the reference that the investigation was in progress and on the conclusion of which a complete reference would also be filed. The Chairman, N.A.B./Referring Authority observed that he had appraised the evidence placed before him and was of the opinion that the accused persons had committed a scheduled offence under the N.A.B. Ordinance and so he had decided to refer the matter to the Accountability Court.
Hence the reference.
4. The accused aforesaid were formally charged by the learned trial Judge. Accountability Court, Lahore, to the effect that in furtherance of their common intention they had caused a loss of Rs, 1.8 billion to N.I.C.F.C. By indulging in corruption and corrupt practices fraudulently and had thus committed an offence under sections 9 and 10 of the N.A.B. Ordinance, 1999 and the Schedule thereof. All the accused pleaded not guilty and the prosecution was thus asked to produce its evidence.
5. It may be mentioned here that Mehr Khuda Dad Luk and Ch. Tajamal Hussain were released on 15-12-2001 and 15-1-2001 respectively on the basis of plea bargain while proceedings against Syed Asghar Ali Shah abated on account of his death.
6. In this case the prosecution has examined P.W.1 Syed Zawar Hussain Zaidi who in April, 2000 was Executive Incharge of N.I.C.F.C. (Defunct) Punjab, P.W.2 Mian Ahmad Sher, P.W.3 Muhammad Javed Iqbal Khan, Chartered Accountant and P.W.4 Shehzada Rasool, Inspector/ Circle Officer, Kasur who had conducted the investigation in this case.
7. On the conclusion of the prosecution evidence the statements of the accused were recorded under section 342, Cr.P.C. None of the accused appears to have produced any evidence in defence nor any of them made statement on oath under section 340(2), Cr.P.C. On the conclusion of trial the learned trial Court convicted and sentenced the accused under section 9(a) (vi) read with section 10 of the National Accountability Bureau Ordinance, 1999 as under:--
(1) Ch. Abdul Majeed 14 years' R.I. And a fine of Rs,50 crores.
(2) Major (Rtd.) Barkat Ali Khan,
(3) Sheikh Muhammad Munir,
(4) Ch. Ghulam Rasool,
(5) Mujahid Zia Butt,
(6) Makhdoom Salahuddin,
(7) Muhammad Ejaz, and
(8) M.A. Hamid Faizi 3 years' R.I.. And a fine of Rs, one crore each.
(9) Hafeez Abbasi and Sahabzada Muhammad Khan Abbasi were ordered to be released, if they pay the agreed amount mentioned in the last para. Of the judgment (on the basis of their plea bargain).
8. Aggrieved of the aforesaid judgment, the present appeals were filed by the appellants and the same are being disposed of through this judgment.
9. So far as the prosecution evidence is concerned, P.W.1 Syed Zawar Hussain Rizvi stated that in April, 2000 he was the Executive Incharge of N.I.C.F.C. (Defunct), Punjab Cooperative Board for Liquidation, Lahore. He had scrutinized the record of the Defunct Cooperative Society and had also checked the record of N.I.C.F.C. And had prepared the complaint Exh. P.W. 1/1-C. He had also joined the investigation of this Reference. He had prepared the report about the assets and liabilities of N.I.C.F.C. Which is Exh.P.W. 1/2/1-3. He had handed over to the Investigating Officer the inquiry report under section 43 of the Punjab Cooperative Societies Act, 1925 (Exh. P.W. 1/3) and had also handed over to him the audit report alongwith its annuxure (Exh. P.W.1/4). He had handed over to him the extract from Justice Lone Commission Report relating to N.I.C.F.C. (Exh.P.W.1/5) as well. He had also signed the seizer memo. Exh. P.W. 1/6 which was attested by the Investigating Officer He stated that according to the record of N.I.C.F.C. The following persons were the Directors of the Defunct Corporation:--
(1) Ch. Abdul Majeed, Executive Director;
(2) Makhdoom Salahuddin, Director;
(3) Mr. Mujahid Zia Butt, Director;
(4) Major (Rtd.) Barkat Ali, Director;
(5) Mr. M.A. Hamid Faizi, Director;
(6) Ch. Ghulam Rasool, Director;
(7) Sheikh Muhammad Munir, Director;
(8) Mehar Khuda Dad Khan Luk, Director;
(9) Mr. Muhammad Usman Khan Abbasi, Director;
(10) Mr. Muhammad Hafeez Abbasi, Director;
(11) Syed Ali Asghar Shah, Director;
(12) Haji Rehmat Khan, Director;
(13) Mr. Muhammad Ejaz, Director; and
(14) Ch. Tajamal Hussain (President of the Defunct Corporation).
' He i.e, P.W.1 stated that according to the record the total liabilities of the Defunct Corporation were Rs,5,40,83,19,628 while the assets of N.I.C.F.C. Were of the value of Rs,3,35,31,17,448 and the deficit comes to Rs,2,05,52,02,180. When cross-examined by the learned counsel for Major (Rtd.) Barkat Ali, Mujahid Zia Butt, Muhammad Ejaz and M.A. Hamid Faizi, he stated that he was not fully aware of all affairs of the N.I.C.F.C. And he knew only those decisions relating to N.I.C.F.C. Which were conveyed to him and that he had not been the decision making authority. He stated that he had not consulted any other document/record except the record of the report under section 43 of the Punjab Cooperative Societies Act. 1925, Lone Commission Report and latest audit report. In the cross-examination, he further stated that the contents of the complaint were correct and complete according to the record which was finalized and approved by the officers of the Board. He admitted that in paras. Nos. 6 to 13 Major (Rtd.) Barkat Ali Khan, Mujahid Zia Butt, Muhammad Ejaz and M.A. Hamid Faizi do not figure and no role is specifically assigned to them., He also admitted that the aforesaid four persons were elected as Directors of N.I.C.F.C. On 29-7-1991. He did-not know if any of the aforesaid four persons had participated in any meeting in their capacity of Directors of N.I.0 C.F.C. After their election on 29-7-1991. He stated that only Recovery Section could positively explain whether there were some outstanding dues against the aforementioned four persons and only Property Cell could explain whether the aforesaid four persons were ever concerned in any type of transaction of the property of N.I.C.F.C. Or not. He did not remember if any property was purchased by N.I.C.F.C. After the election a above mentioned four persons (as Directors) and he did not know if the Board had sanctioned any loan or not after 29-7-1991. He stated that he was not aware if Punjab Cooperative Board for Liquidation (P.C.B.L.) after holding an inquiry in 1992 had found that the aforesaid persons were not liable and consequently had recommended the withdrawal of orders under section 44-E of the Cooperative Societies Act, 1925 and their names from the Exit Control List (E.C.L.). In his cross-examination P.W.1 further stated that in his knowledge there was no specific instance of misfeasance, malfeasance, embezzlement, fraud, misappropriation, dishonesty, illegal means, pecuniary advantages, corruption and corrupt practices against the aforesaid persons. He did not know if there was any evidence of providing any benefit to himself or to any other person by the said four persons. He did not know if there was any evidence of breach of trust by the aforesaid four persons. He also did not know if any of the aforesaid four persons had indulged in any corruption or corrupt practices.
10. When cross-examined by the learned counsel for Makhdoom Salahuddin appellant, P.W.1 admitted that in the inquiry report it was held that the Directors were responsible/liable but therein their names were not specifically mentioned. He also admitted that the separate and distinct roles of all accused were not assigned in the report. He admitted that in para. 10 of the report, only seven persons were shown as directly involved for misappropriation and embezzlement of funds of the Corporation and wherein the name of Makhdoom Salahuddin did not figure. P.W.1 also stated that he did not collect any evidence except considering Lone Commission Report and report under section 43 of the Punjab Cooperative Societies Act, 1925.
11. In his cross-examination P.W.1 further stated that Makhdoom Salahuddin became the Director of the Corporation on 5th of October, 1989 and he had not specifically mentioned in the complaint submitted by him about attending/ participation of Makhdoom Salahuddin in any General or Special Meeting of the Board of Directors. He did not know if he i.e, Makhdoom Salahuddin had arranged loan for any member of this family, any of his relatives or friends. He, however, added that Makhdoom Salahuddin had himself availed loan and although its principal amount was paid, its interest was still outstanding. He admitted that in his report as well as the inquiry report he had not mentioned the same but he then added that the complaint was concerning the irregularities and corruption by the Corporation. He stated that he had not mentioned about other Directors and, hence he had not mentioned about Makhdoom Salahuddin as well. During cross-examination he also stated that he had not associated Makhdoom Salahuddin in his inquiry before submitting the report. He admitted that in the case of Makhdoom Salahuddin as well there was no specific instance of misfeasance, malfeasance, embezzlement, fraud, misappropriation, dishonesty, illegal means, pecuniary advantages, corruption and corrupt practices. He admitted that concerning outstanding interest against Makhdoom Salahuddin he had not made mention in his report.
12. During cross-examination by the learned defence counsel on behalf of Sheikh Muhammad Munir, he stated that he did not know if P.C.B.L. Had sought permission for prosecution of 14 Directors. He admitted that his complaint/Reference appears different from audit report. He further admitted that the name of Sheikh Muhammad Munir was not mentioned (in his report) concerning corruption, corrupt practices and financial affairs and that his name did not figure in para. 7-A, para. 8-A or in paras. Nos.9 to 14 of the complaint. When cross-examined by the learned counsel for Ch. Ghulam Rasool, P.W.1 admitted that the name of Ch. Ghualm Rasool did not figure in paras.Nos.6-A to 13 of the complaint. He further admitted that his name did not appear in para. No,5 of the inquiry report. He did not know if any of the Directors was associated in proceedings of those inquiries, as a result whereof audit report and report under section 43 of the Punjab Cooperative Societies Act, 1925 had been prepared.
13. P.W. 2 Mian Ahmad Sher stated that he had conducted inquiry in the affairs of N.I.C.F.C. Under section 43 of the Punjab Cooperative Societies Act, 1925 and had submitted report to the Registrar, Cooperative Societies on 23-1-1992 which is Exh. P.W.1/3 and that he had prepared the report after consulting relevant record whichever was available at that time. During cross-examination by the learned defence counsel for Ch. Ghulam Rasool accused, he stated that he had never joined Ch. Ghulam Rasool in his inquiry and he had nowhere specifically fixed his liability and specifically the name of Ch. Ghulam Rasool does not figure for corruption and malfeasance, etc. During cross- examination by the learned defence counsel for Makhdoom Salahaduddin admitted that Makhdoom Salahauddin became the Director of the Corporation on 5th of October, 1989 and on 6- 11-1991 the Registrar sealed this Company. He admitted that in para. No,10 of his report Makhdoom Salahauddin does not figure as one of the seven persons responsible for misappropriation/ embezzlement. He admitted that he had not associated any of the Directors in the inquiry and he had not issued any notice to Makhdoom Saladhauddin to join the inquiry. He stated that he did not mention any Meeting, Annual Meeting, General Meeting, Special Meeting or any other Meeting in which Makhdoom Salahauddin had participated. He admitted that Makhdoom Salahauddin never operated/maintained the accounts of the Company. He admitted that he had not appended any documents with his report to the effect that Makhdoom Salahauddin had obtained any monetary gain. During cross-examination by the learned defence counsel for Mujahid Zia Butt etc. He admitted that Major (Rtd.) Barkat Ali etc. Became the Directors of N.I.C.F.C. On 29-7-1991 as the earlier Directors of the Corporation had either resigned or had been removed. He admitted that he had not made any.Specific allegation against the said four persons i.e, Major (Rtd.) Barkat Ali, Mujhaid Zia Butt, Muhammad Ejaz and M.A. Hamid Faizi. He stated that the aforesaid four persons do not fall in the category of persons against whom he had recommended prosecution for criminal act of embezzlement and fraud. He stated that he was not aware of any proceedings under any law taken against the aforesaid four persons to determine their liabilities as Directors of N.I.C.F.C.
During the cross-examination, he stated that the aforesaid four persons had no role whatsoever to play regarding the transactions of sale and purchase of properties referred to his report and he had not specifically determined any loss after 29-7-1991 in the affairs of N.I.C.F.C.
14. P.W.3 is Muhammad Javed Iqbal Khan, a Chartered Accountant affiliated with Javed Tariq & Co., Chartered Accountants, He stated that Punjab Cooperative Board for Liquidation had appointed their firm for the audit of N.I.C.F.C. For the period ending up to 30th June, 1998 and their firm had prepared audit reports, one for the period ended on 31-5-1992 and the second for the period ended on 30-6-1998. He stated that the report Exh.P.W.1/4 had been prepared by this firm.
15. P.W.4 is Shahzada Tariq Inspector/ Circle Officer who had conducted the investigation in this case. During cross-examination he stated he had not considered any book of accounts except the three reports i.e, Lone Commission Report, report under section 43 of the Punjab Cooperative Societies Act, 1925 and Audit Report. He had not considered any other account book. During the investigation he had not examined the Register of Members, shareholders and Register of Directors of N.I.C.F.C. And in his report he had not mentioned the date of elections and resignation of any Directors. He stated that he had not mentioned in his report about any of the Directors availing of any loan or about any amount outstanding against them or their near and dear ones. He admitted that according to the report under section 43 of the Punjab Cooperative Societies Act, 1925 the date of election of Makhdoom Salahauddin as Director of N.I.C.F.C. Is 5-10-1989. He admitted that he had not mentioned in his report that the date of election as a Director of N.I.C.F.C. On 5-10-1989 was erroneous. He was not aware of the resignation of Mujahid Zia Butt on 13-10-1991. During cross- examination, he also stated that during the investigation he had not recorded the statements of any of the Directors under section 161, Cr.P.C. And he had not interrogated any of the Directors of N.I.C.F.C. And he did not know if the Registrar of Cooperative Societies had ever proceeded against any of the Directors of N.I.C.F.C. While invoking any provision of Cooperative Societies Act. He stated that he had made Ch. Ghulam Rasool, Advocate and Sheikh Muhammad Munir as accused in this reference on the basis of the complaint of Syed Zawar Hussain and not on the basis of any specific material.
16. On the conclusion of the prosecution evidence, the statements of the accused under section 342, Cr.P.C. Were recorded and wherein they denied all the incriminating circumstances. However, none of the accused appears to have made statement on oath under section 340(2), Cr.P.C. Nor any of them appears to have produced any evidence in defence.
17. We have heard the arguments. The learned counsel for Ch. Abdul Majeed appellant took the plea that the charge in this case has not been properly framed and that in the charge it had not been mentioned anywhere as to when the offence in question had been committed. He has argued that in case the offence in question had been committed prior to 1985, the provisions of N.A.B. Ordinance, 1999 could not be pressed into service. He has argued that the charge was clearly vague and the accused did not understand the nature of allegations and hence the trial could not proceed on its basis. The second objection raised by him was that the statement of Ch. Abdul Majeed accused/ appellant was legally never recorded under section 342, Cr.P.C. And that no such statement exists on record. In this respect there exists on record a statement on which the name of none of the accused is written. However, at the end of the statement there are signatures resembling those of Ch. Abdul Majeed and on the basis of which it can be inferred that the said statement can be that of Ch. Abdul Majeed, but it is surprising that the learned trial Court did not bother to write the name of Ch. Abdul Majeed accused as well as his other particulars on the said statement. In the absence of the name of a particular accused on a statement, how it can be presumed that the said statement was of that particular accused. Furthermore, the prosecution evidence recorded in this case which was considered by the learned trial Court as incriminating was not put to him. While we do not agree with the argument of the learned counsel for Ch. Abdul Majeed accused/appellant that the charge had been framed in such a way that the accused did not understand the nature of offence, but we do agree with him that there is no statement on record which can be legally considered as a statement of Ch. Abdul Majeed accused/appellant under section 342, Cr.P.C. It is correct that the charge in this case is also not properly worded but we feel that the accused fully understood the nature of charge/allegation against them and had it not been so, an objection to that effect could have been raised during the trial. Therefore, we feel that although there was hardly any justification for remanding the case to the learned trial Court for framing a fresh charge and thereafter recording evidence afresh, we feel that to the extent of Ch. Abdul Majeed accused/appellant there is every justification for remanding the case to the learned trial Court for recording his statement under section 342, Cr.P.C. Afresh in accordance with law and thereafter to decide the case afresh after completion of proceedings from the stage of the statement of the accused/appellant (Ch. Abdul Majeed) under section 342. Cr.P.C. The question arises whether the case can be partially remanded i.e, to the extent of any particular accused. The answer is certainly in affirmative and which finds support from the authority reported as Muhammad Nawaz alias Muhammad and 6 others v. The State (1991 PCr. U 156 Lahore) wherein it was held that Appellate Court can make an order for retrial of a particular accused from a particular stage in proceedings of a case and it is not obliged to make order for retrial of the case as a whole.
18. Now we come to the cases of (1) Makhdoom Salahauddin, (2) Major (Rtd.) Barkat Ali, (3) M.A.
Hamid Faizi, (4) Muhammad Ejaz (appellants in Criminal Appeal No, 1355 of 2002), (5) Mujahid Zia Butt (appellant in Criminal Appeal No,1391 of 2002), (6) Ch. Ghulam Rasool (appellant in Criminal Appeal No, 1393 of 2002) and (7) Sheikh Muhammad Munir (appellant in Criminal Appeal No, 1394 of 2002). The learned counsel for the aforesaid appellants have not objected in this case to the form of charge as was done by the learned counsel for Ch. Abdul Majeed nor they have taken the plea that the statement of any of the aforesaid appellants under section 342, Cr.P.C. Was not recorded in accordance with law. The learned counsel for all the said appellants have submitted that the case of none of the aforesaid accused/appellants was prejudiced due to the fact that the charge was not properly worded. The learned counsel for the aforesaid appellants request that the appeals of the said accused be decided on merits rather than remanding the case as a whole to the learned trial Court. They have argued that in case the statement- of one of the accused i.e, Ch. Abdul Majeed under section 342, Cr.P.C. Was not recorded in accordance with law, only to his extent matter could be sent back to the learned trial Court for recording his statement under section 342, Cr.P.C. And not for a fresh trial as a whole. As already mentioned above, we do agree with the arguments of the learned counsel for the appellants in that respect.
19. The learhed counsel fore the aforesaid appellants i.e, Makhdoom Salahauddin, Major (Rtd.)
Barkat Ali. M.A. Hamid Faizi, Muhammad Ejaz, Ch. Ghulam Rasool, Mujahid Zia Butt and Sheikh Muhammad Munir have all taken the plea that during the course of inquiry, liability of individual Directors had not been determined. It was pointed out that M.A. Hamid Faizi, Muhammad Ejaz, Mujahid Zia Butt and Major (Rtd.) Barkat Ali had been elected as Directors of the Corporation on 29- 7-1991 while Makhdoom Salahauddin had become the Director on 5-10-1989. The Company was sealed by the Registrar on 6-11-1991. The learned counsel for the aforesaid appellants have referred to the statement of P.W.1 who stated that he did not collect any evidence except considering Lone Commission Report and report under section 43 of the. Punjab Cooperative Societies Act, 19252 They have referred to the statement of P.W. 4/Investigating Officer who had stated in the course of cross-examination that he had not considered any other book of accounts except three reports i.e, Lone Commission Report, report under section 43 of the Punjab Cooperative Societies Act, 1925 and the audit report, all of which are exhibited and that he had not considered any other account book.
They have submitted that the Investigating Officer had admitted that except the afore mentioned three documents, he had not looked into or attended to any other matter or book of the corporation. They have argued that P.W.2 had neither relied on any document nor referred to any document specifically which is basis of the findings of his report. The learned counsel for the appellants have argued that it is the case of prosecution that the accused who were on the Board of Directors of N.I.C.F.C. Had in furtherance of their common intention, caused a loss of Rs,1.8 billion to N.I.C.F.C. Fraudulently and/or by indulging in corruption and corrupt practices within the meaning of section 9 read with section 10 of the N.A.B. Ordinance, 1999. They have argued that to prove the said allegations it was required that the prosecution should have established that during the period the accused were on the Board of Directors, a particular loss was caused which was directly on account of a particular act or omission of the accused. They have argued that in this case the prosecution has been unable to prove as to what loss was caused to N.I.C.F.C. During the period that the aforesaid accused/appellants were on the Board of Directors of N.I.C.F.C. Nor they have been able to prove that any act or omission of the said appellants had caused any loss to the Corporation. They have argued that to prove their case the prosecution has relied on three documents which are (i) the inquiry report prepared by P.W. 2 under section 43 of the Punjab Cooperative Societies Act, 1925, (ii) the extracts from the findings of the Lone Commission Report, and (iii) the audit report of P.W.3. They have argued that neither the said three documents nor any other document including the complaint refers to any specific act or omission of the said Directors/appellants which had resulted in loss to N.I.C.F.C. They have argued that the prosecution has not referred to any decision of the Board of N.I.C.F.C. Which had caused loss to the Corporation in general and had not been able to refer to any decision of the Board which included the consent of the appellants. They have argued that the documents relied upon and exhibited in evidence by the prosecution were firstly not admissible and secondly the contents thereof had not been proved in accordance with the provisions of law in general and certainly for not proving the guilt in criminal law in particular. He has argued that none of the witnesses examined by the prosecution has specifically deposed against any of those Directors. The learned counsel for M.A. Hamid Faizi and Muhammad Ejaz has referred to the statement of P.W.1 who in the course of cross-examination admitted that in paras. Nos.6 to 13 of the complaint the names of Muhammad Ejaz and M.A. Hamid Faizi do not figure and no role is specifically assigned to them and that in his knowledge there was no specific instance of misfeasance, malfeasance, embezzlement, fraud, misappropriation, dishonesty, corruption and corrupt practices against Muhammad Ejaz and M.A. Hamid Faizi. The learned counsel for the appellants have argued that P.W.3 during the course of cross-examination admitted that he had not given any observation regarding the conduct of aforesaid Directors of N.I.C.F.C. Nor he had placed responsibility on any person on the issue of loss caused to N.I.C.F.C. In his audit report. Referring to the statement of P.W.3 they have argued that he had admitted that no observation regarding the role of ex-Management had been given by them in the audit report and no specific liability of ex-Management/ Directors of N.I.C.F.C. Had been pointed out by them in the audit. The witness, however qualified his statement by saying that they had not been asked to conduct any inquiry regarding embezzlement or to find the liability of any Director.
20. The learned counsel for the appellants Makhdoom Salahauddin and others has referred to the statement of P.W. 4/Investigating Officer who admitted in the course of cross-examination that he had not mentioned in his report the proceedings of any meeting of the Board of Directors during the entire period as to what was on the agenda, who attended the meeting, the votes given by them and the resolution passed, if any. This witness i.e, P.W. 4 had further admitted that in the reference it was not specifically mentioned as to which of the accused had caused any loss and to what extent. The learned counsel for the appellants have argued that the dates on which the appellants had become Directors were material and it was to be noted that the Company had been sealed by the Registrar on 6-11-1991. They have argued that there was no convincing evidence on record to connect the aforesaid accused with the offence in question and that the learned trial Court had convicted the accused/appellant aforesaid without any lawful justification and, hence their conviction as well as the sentence awarded to them by the learned trial Court is liable to be set aside.
21. On the other hand, the learned counsel appearing on behalf of the N.A.B. Has submitted that it was the case of the prosecution that N.I.C.F.C. As a whole had defaulted and had committed massive breach of trust whereby a loss of more than Rs,1.8 billion stands established and for which the individual Directors of the said Company were liable under the N.A.B. Ordinance, 1999 as well as the general law of the land. He has argued that the defence taken by the appellants is not adequate and they have confined their defence to their inaction and to the fact that they did not participate in meeting whereas they should have proved that they had disengaged themselves from the activities of the Corporation that had resulted into the loss. He has argued that this is the case of the prosecution that the respondents have failed to exercise their authority to prevent the loss to N.I.C.F.C. And its depositors and that they also committed criminal breach of trust by allowing the properties of the N.I.C.F.C. To be disposed of in utter violation of the rules and the regulations. He has argued that in a case of this nature, it was not the obligation of the prosecution to spell out independently the role of each and every accused separately and it was sufficient if the total loss of the Company was established and placed on record. He has argued that the Lone Commission Report, the extract of which is part of record of this case, cannot be disregarded in a lighter way. It was argued that the prosecution of the case was in fact in compliance with the said report. Referring to the case the Province of Punjab and another v. National Industrial Cooperative Credit Corporation and another (2000 SCMR 567) he has argued that in terms of Article 49 of the Qanun-e-Shahadat Order, 1984 all the above-referred exhibits can be fully relied upon and there was no need to bring to the notice of the trial Court any record on the basis of which those reports have been prepared. He has argued that those reports per se were sufficient in terms of the factual details and also in terms of the specific instance which they have mentioned.
22. The learned counsel for the N.A.B. Has argued that under the law of Cooperatives as well as the Companies Ordinance, the Directors are responsible for the losses done by the Company or done on behalf of the Company. He has argued that in terms of section 83(d) of the Banking Companies Ordinance as well, in case of default on the part of any private Company, all the Directors whether active or passive, are nevertheless responsible in their individual capacity to face the prosecution.
Relying on State Bank of Pakistan v. Messrs Salman Associates (Pvt.) Ltd., Karachi and 2 others (1992 MLD 142) he has argued that no Director of the Company can be allowed to shift his liability or claim exemption therefrom for any reason whatsoever in the absence of any express provision of law. The Directors can be held liable under the provisions of the Undesirable Cooperative Societies Act, 1993 as well. He has argued that a Company is although a distinct legal entity and quite different from its Members, including Directors, yet the Company could act only through its Directors and officers and the allegation of criminal offence against the Company can only mean alleged offence having been committed by its Directors or officers.
23. The learned counsel for the N.A.B has argued that Mujhahid Zia Butt accused cannot show ignorance to various fraudulent transactions being carried out by the Company and at least three of such transactions were being carried out with his own real brother namely Sohail Zia Butt with whom the Company was entering into joint venture agreements and, therefore, it was quite evident that Mujahid Zia Butt was being brought on the Board of Directors to protect the financial interests of his brother and also himself.
24. So far as Ch. Ghulam Rasool is concerned, the learned counsel for the N.A.B. Has argued that the argument that he did not participate in any specific meeting is of no relevance and cannot absolve him or the other Directors from the responsibility. He has argued that although some of the appellants became Directors on 29-7-1991, yet the Society continued to make some extremely dubious transactions and these transactions which were done by the Society after their having become the Directors continued and some of those transactions were continuing from the previous series of actions that the Society was carrying out.
25. The learned counsel for the N.A.B. Has argued that the prosecution was not required to assign or prove specific role of each and every Director and it was sufficient to bring on record the default made by the Company and whosoever occupied the seat on the Board of Directors was burdened with the responsibility of a financial and criminal nature in the said circumstances. He has argued that even if the N.A.B. Ordinance had not been there, even then in the discharge of specific recommendation of the Lone Commission to prosecute the Directors, the ordinary law of the land was there and convictions could have been recorded on the basis of the same record against the Directors under section 405 of the Pakistan Penal Code. He has submitted that once a default had occurred, there, was no need to further prove the same or to attribute the same to specific persons as certain persons by virtue of their positions can be attributed the specific roles relying on Abdul Muhammad Khan v. Mahananda Upadhyaya (AIR 1931 Patna 293) he has argued that although the position of Directors differs from that of trustees in some respects, yet to the extent of their being entrusted with the monies of the Company, their trustees and Directors are jointly and severally liable for breach of trust. He has submitted that the stance of the appellants that they had not been associated with the inquiry or the investigation is not of much value and relevance. Relying on Muzaffar Ali Shah and others v. Registrar, Cooperative Societies, Karachi and another (PLD 1968 Karachi 422) he has argued that there was no rule of natural justice that such an inquiry should have been held in the presence of parties concerned.
26. We have carefully considered the arguments from both sides. We have already pointed out that to the extent of Ch. Abdul Majeed accused/appellant the case is liable to be remanded as his statement under section 342, Cr.P.C. Had not been recorded in accordance with law and in fact it cannot be legally considered as his statement.
27. So far as the other appellants aforementioned are concerned, the learned trial Court had observed as following:-- "Although all the accused are seen unnecessarily exploiting the insignificant technicalities being oblivious of their own character but despite their utmost efforts of care and caution to contrive chicanery of manipulation, their liable role is quite manifest. Hafeez Abbasi although endeavoured to get an unnecessary declaratory decree from Civil Court, Rawalpindi rendered by the then District Judge, M.A. Hamid Faizi and Muhammad Ejaz are capitalizing some letter, of 1992 with blessing of Ch. Abdul Majid. Sahibzada Usman Abbasi nowhere admits his loan of 1/4 crore. Ch. Ghulam Rasool does not disclose availing of loan of Rs,4.5 million by his son. Makhdoom Salahauddin Gilani also appeared having not paid interest of his loan. Sh. Munir is shown accused in other reference of Land Mark Construction alongwith Ch. Abdul Majid, 'his son Shahid Mehmood. All this abundantly shows full active participation of all of them in the affairs of Corporation. A man is always known by his association. Therefore, their close association with Ch. Abdul Majid is itself is more than sufficient to determine their status. All, when are found fully involved in commission of white collar crime having ruined lacs of poor law-abiding citizens, making their both ends meet with their hard- earned fair and lawful wages, it never behave them to capitalize unnecessary false technicalities. It looks quite ludicrous to experience that accused of corruption also expect benefit of technicalities which is never available to other ordinary accused who appear having fallen prey to some unknown circumstances. Corruption is not only a contagious disease, rather it is a divine infliction.
Only Allah's gracious infinite mercy can save otherwise its germs permeate in every soul. Therefore, it is no. Argument that Registrar should have directed the Corporation to ensure its audit twice a year or Investigating Officer should have associated the accused investigation. These persons are so callous that they spare no body to corrupt, therefore, it is beyond control for a law-abiding noble functionary of State to resist this element."
28. Although we may agree with some of these observations, we do not entirely agree with the learned trial Court. In order to convict a person on the criminal charge, it is essential to prove the existence of mens rea and it is not appropriate to convict anyone on the basis of mere presumptions. In order to determine the criminal liability one has to advert to the fact as to what extent a certain person is liable on account of his acts or omissions and whether the same entail criminal liability.
29. P.W.1 who was the Executive Incharge of N.I.C.F.C. (Defunct) of the Punjab Cooperative Board for Liquidation. Lahore and had prepared the complaint Exh. P. W1/1-7 admitted that while doing so he had not consulted any document/ record, except the documents/record of the report under section 43 of the Punjab Cooperative Societies Act, 1925, Lone Commission Report and the latest audit report. He also admitted that in paras. 6 to 13 of his report, Major (Rtd.) Barkat Ali, Mujhid Zia Butt, Muhammad Ejaz and M.A. Hamid Faizi do not figure and no role is specifically assigned to them. He also admitted that the said four persons were elected as Directors of N.I.C.F.C. On 29-7- 1991. He did not know if any of the aforesaid persons had participated in any meeting in their capacity as Directors of N.I.C.F.C. After their election on 29-7-1991. He did not know whether there were any outstanding dues against them and whether they were concerned in any type of transaction of property of N.I.C.F.C. Or not. In answer to a question he replied that he was not aware of any specific violation of bye-laws of N.I.C.F.C. By all the afore mentioned four accused and he was not aware of any specific violation of law and notified rules of N.I.C.F.C. In answer to an other question he stated that he did not know if the Board had sanctioned any loan or not after 29-7- 1991. He stated that he came in 1995 and he did not know if N.I.C.F.C. Had sold any land or not and he did not know if N.I.C.F.C. Had sold any of its assets after 29-7-1991 at a value less than its acquisition value. In the course of cross-examination P.W.1 further stated that there was no specific instance of misfeasance, malfeasance, embezzlement fraud, misappropriation, dishonesty, corruption, illegal means, pecuniary advantages and corruption and corrupt practices in his knowledge against the aforesaid four persons and he did not know if any of them had ever indulged in any corruption or corrupt practices.
30. As reads Makhdoom Salahauddin appellant, P.W.1 admitted that in the inquiry report it was held that the Directors were responsible/liable but specifically their names were not mentioned. He admitted that separate/distinct roles of all the accused do not appear in the report and in para.10 thereof only 7 persons were shown as directly involved for misappropriation/embezzlement of funds of the Corporation and name of Makhdoom Salahauddin does not figure therein. During cross-examination he admitted that Makdoom Salahauddin became the Director of the Corporation on 5th of October, 1989 and in the complaint submitted by him he had not made any mention about his attending/participation in any General or Special Meeting of the Board of Directors and he had not even jointly or even vaguely made mention of the same. During cross- examination he admitted that he had not examined audit report before making report and that he had not associated Makhdoom Salahauddin in his inquiry before making the report. He admitted that there was no specific instance of misfeasance, malfeasance, embezzlement, fraud misappropriation, etc. Against Makhdoom Salahauddin. Although he stated that Makhddom Salahauddin had availed some loan and interest thereof is still outstanding but he stated that the amount of interest can be ascertained from the Recovery Cell. He admitted that about the interest outstanding against Makdoom Salahauddin he had not made mention in his report.
31. As regards Sheikh Muhammad Munir, P.W.1 admitted in the course of cross-examination that specifically the name of Sheikh Muhammad Munir was not mentioned in connection with corrupt practices in financial affairs. He admitted that the name of Sheikh Muhammad Munir does not figure in paras. Nos.7-A, 8-A and 9 to 14 of the complaint.
32. As regards Ch. Ghulam Rasool accused, he admitted in the course of cross-examination that his name did not figure in paras. Nos.6-A to 13 of the complaint. He did not remember as to when Ch. Ghulam Rasool was elected as Director. However, he stated that' the same could be ascertained from the record. He admitted that in para. No,5 of the inquiry report name of Ch. Ghulam Rasool is not mentioned. He did not know if any of the Directors was associated in proceedings of the inquiries as a result whereof audit report and the report under section 43 of the Punjab Cooperative Societies Act, 1925 had been prepared.
33. P.W.2 Mian Ahmad Sher had conducted the inquiry under section 43 of the Punjab Cooperative Societies Act, 1925 and had submitted the report on 23-1-1992 and which is Exh.P.W./1/3. In his statement he also did not make mention of any instance of misfeasance, malfeasance, misappropriation, embezzlement, fraud or misappropriation of property of any of these Directors/appellants (other than Ch. Abdul Majeed). In the course of cross-examination he also stated that he had not recorded the evidence of any person while conducting an inquiry under section 43 of the Punjab Cooperative Societies Act, 1925.
34. Now the position is that the P.Ws. Have not been able to point out any instance of misfeasance, malfeasance, misappropriation, embezzlement, ishonesty or corruption with reference to any of these seven appellants i.e, (1) Makhdoom Salahauddin, (2) Major (Rtd.) Barkat Ali, (3) M.A. Hamid Faizi, (4) Muhammad Ejaz, (5) Mujahid Zia Butt, (6) Ch. Ghulam Rasool, and (7) Sheikh Muhammad Munir. In para. No,10 of the complaint Exh.P.W./1-7 a mention has been made of the seven persons (who according to the said report were involved for misappropriation, embezzlement of funds, etc.) but the name of none of these seven appellants is included in those names. It is only the name of Ch. Abdul Majeed out of the present appellants which appears in para.No,10 of the complaint but as mentioned above, we are intending to remand the case to the learned trial Court to the extent of Ch. Abdul Majeed appellant for a fresh decision on 'account of the reason mentioned in this judgment. But so far as the other seven appellants mentioned above are concerned, the prosecution has been unable to prove any specific act or omission on their part or the existence of mens rea so far as they are concerned. As already observed by us, conviction in criminal cases cannot be recorded on the basis of mere presumptions. Benefit of doubt always goes to an accused person. Unless there is convincing evidence against a particular accused connecting him with the offence, it would be unjust to hold him guilty of the offence. In a criminal case, an accused person cannot be convicted merely on account of "the company he keeps". After all, a person is accountable only for his own acts and deeds.
35. As in this case the prosecution has been unable to prove the charge beyond reasonable doubt against the aforesaid seven appellants i.e, (1) Makdhoom Salahuddin, (2) Major (Rtd.) Barkat Ali, (3)
M.A. Hamid Faizi, (4) Muhammad Ejaz, (5) Mujahid Zia Butt, (6) Ch. Ghulam Rasool, and (7) Sheikh Muhammad Munir, therefore, all seven of them are entitled to be acquitted.
36. In view of what has been stated above, Criminal Appeal No, 1511 of 2002 titled Ch. Abdul Majeed v. The State is accepted, the conviction as well as the sentence awarded to Ch. Abdul Majeed appellant aforesaid is set aside and the case to his extent is remanded to the learned trial .Court with a direction to record his statement under section 342, Cr.P.C. Afresh in accordance with law and thereafter, after recording the defence evidence (if the appellant/accused wants to produce any evidence in defence), the case to his extent be decided afresh in accordance with law, uninfluenced by the findings of this Court qua his co-accused.
37. The Criminal Appeals: (1) No, 1355 of 2002 titled Makhdoom Syed Salahauddin Gilani and 3 others v. The State, (2) No, 1393 of 2092 titled Ch. Ghulam Rasool v. The State, (3) No, 1391 of 2002 titled Mujahid Zia Butt v. Chairman, NAB, etc., and (4) No, 1394 of 2002 titled Sheikh Muhammad Munir v. Chairman, NAB and others are accepted, the convictions and sentences of all these appellants are set aside and all the seven appellants aforesaid i.e, (1) Makhdoom Salahauddin, (2)
Major (Rtd.) Barkat Ali, (3) M.A. Hamid Faizi, (4) Muhammad Ejaz, (5) Mujhaid Zia Butt, (6) Ch. Ghulam Rasool, and (7) Sheikh Muhammad Munir are acquitted of the charge. All of them are on bail. Their bail bonds are discharged and the sureties relieved.