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Case Judgement http://www.plsbeta.com/LawOnline/law/content21.asp?Casedes=1999L3164

1999 P Cr. L J 1584

[Lahore]

Before, Saeed-ur-Rehman Farrukh and Raja Muhammad Khurshid, JJ

Mian HAMZA SHAHBAZ SHARIF---Petitioner

Versus

FEDERATION OF PAKISTAN and others---Respondents

Writ Petitions Nos.12173 alongwith 12172 of 1997, decided on 27th May, 1997.

(a) Criminal Procedure Code (V of 1898)---

----S. 561-A---Penal Code (XLV of 1860), Ss.419/420/468/471 & 109--Constitution of Pakistan (1973), Art.
199--`-Constitutional petition---Quashing of proceedings---Report under S.173, Cr.P.C. had been filed while
petition under S.265-K, Cr.P.C. was not filed in Trial Court---Trial Court was not functioning and trial of
cases was not taking place---Petitioners were handicapped due to such situation and could not seek any relief
from the Trial Court---Constitutional petitions were maintainable in circumstances.

(b) Criminal Procedure Code (V of 1898)---

----S. 561-A---Constitution of Pakistan (973), Art 199---Constitutional petition---Quashing of proceedings---

Scope---Earlier, Constitutional petitions filed for quashing of F.I.Rs., were dismissed by High Court---Report
under S.173, Cr.P.C. had been filed later in the Trial Court and a drastic change in the situation was, thus,
brought about---Earlier petitions were filed at the initial stage of investigation of the cases, when prosecution
had yet to collect incriminating material against the accused---Subsequent petitions were filed after the
submission of challan reports under S.173, Cr.P.C. in Trial Court--Petitioners were entitled to seek quashing
of the cases against them and ordered to be acquitted on proving to the satisfaction of High Court that same
were filed before Trial Court un-authorisedly, and/or no offence on the face of those reports could be said to
have been made out.

(c) Federal Investigation Agency Act, 1974 (VIII of 1975)---

----S. 3---Penal Code (XLV of 1860), S.419/420/468/471---Investigation of Offences---Federal Investigation

Agency, competency of---Federal Investigation Agency could Investigate only those cases which were given
in the Schedule attached to the Act and same were alleged to have been committed either by a public servant
as defined in S.21, P.P.C., or were allegedly committed in connection with matters pertaining to Federal
Government or by employees of the Corporations set up, controlled and administered by the Federal
Government.

Mian Muhammad Abbas Sharif and 2 others v. Federation of Pakistan trough Secretary, Ministry of Interior
and 2 others 1995 PCr.LJ 1224; Akhtar Ali and 2 others v. Assistant Director 1990 ALD 28(1) and Javed
Iqbal and 2 others v. Federal Investigation Agency and 3 others PLD 1986 Lah. 42 rel.

(d) Federal Investigation Agency Act, 1974 (VIII of 1975)---

----Ss. 3 & 5---Penal Code (XLV of 1860), S.419/420 468/471 / 109--Investigation against private persons or
private limited companies---Jurisdiction of Federal Investigation Agency---Accused persons were private

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persons who opened foreign exchange accounts in foreign Banks---Private limited companies obtained
certain amounts as loan against those accounts---Federal Investigation Agency had no jurisdiction to register
cases---Investigation and submission of challan in Court by the said Agency was clearly without jurisdiction.

(e) Criminal Procedure Code (V of 1898)—

------S. 561-A---Quashing of proceedings---Where registration of criminal case is demonstrated/proved to be

without jurisdiction, the same can be legitimately quashed.

Haji Muhammad Yousaf v. M. Abbas Khan and others PLD 1968 Lah. 482 rel.

(f) Penal Code (XLV of 1860)---

----Ss. 419/420/468/471 & 109---Criminal. Procedure Code (V of 1898), S.173---Submission of challan

report---No offence was made out against accused persons on the face of challan report under S.1,73,
Cr.P.C.---No wrongful loss had been caused to anyone and none had been wrongfully benefited---Element of
cheating was totally missing---Question of commission of forgery also did not arise as neither the Banks nor
the account-holders, who could be said to have suffered damage or injury, as a result thereof, had come
forward to make a complaint---Baseless cases, held, were foisted upon accused persons in circumstances.

(g) Criminal Procedure Code (V of 1898)---

----S. 561-A---Constitution of Pakistan (1973), Art.199---Constitutional petition---Quashing of criminal

case---Powers of High Court---Baseless cases were foisted upon accused persons by Federal Investigation
Agency without any legal authority to do so and considerable harassment, tension and ignomity was unduly
suffered by accused persons---Besides, waste of public time and money in useless trials further trial would be
prolongation of agony and would be clear denial of justice to accused persons---High Court having ample
powers to intervene in such-like cases, challan cases were ordered to be quashed and accused persons were
acquitted in circumstances.

Haji Muhammad Yousaf v. M. Abbas Khan and others PLD 1968 Lah. 482 and Asif Ali Zardari's case 1994
SCMR 798 fol.

Ashtar Ausaf Ali for Petitioners.

Kh. Saeed-uz-Zaman, Dy. A.-G. for Respondents.

JUDGMENT

SAEED-UR-REHMAN FARRUKH, J.--- By this judgment we propose to dispose of the following two
matters as- common questions of law and facts are involved therein:--

(i) Mrs. Mukhtar Hussain and others v. Federation of Pakistan and others Writ Petition No. 12172 of
1997 and

(ii) Mian Hamza Shahbaz and others v. Federation of Pakistan and others Writ Petition No. 12173 of
1997.

2. The facts, relevant for the determination of these cases are; on 10-11-1994, F.I.R. No.12 of 1994 was
registered at Police Station F.I.A./S.I.U., Islamabad under sections 419/420/468/471 and 109, P.P.C. read with
section 5(2) of Prevention of Corruption Act, 1947 and Article 3 of the Holders of Representative Office

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(Punishment for Misconduct) Order, 1977, against Mukhtar Hussain and 4 others, Directors Hudabiya
Engineering (Pvt.) Ltd. Challan, after investigation, has since been filed before Special Court constituted
under section 3 of Offences in Respect of Banks (Special Courts) Ordinance, 1984, hereinafter called
"Special Courts".

In the final report under section 173, Cr.P.C. the offences with which the accused are charged are under
section 419/420/468/471 read with section 109, P.P.C. Remaining offences i.e. section 5 of Act 11 of 1947
and Article 3 of Presidential Order No. 16 of 1977 have been dropped.

The allegations in the F.I.R. are that on 26-8-1993, two fake accounts were opened each in the name of
Suleman Zia and Muhammad Ramzan in the 4abib Bank, A.G. Zurich, Lahore with small amounts and
subsequently both were "issued" Dollar Bearer Certificates worth U.S. Dollars 7,50,000 by the Union Bank
Ltd. against cash receipt of Travellers Cheques encashed through American Express, New York. Allegedly
the amount from these accounts was transferred to an account in the name of Kashif Masood Zia at the Bank
of America, Lahore. Later on another account was opened in the name of Mrs. Nuzhat Gohar Qazi in the
Bank of America, Lahore and an amount of about .05 million U.S. dollars was also transferred from her
account to the account of the abovenamed persons. All these accounts were allegedly found to be fictitious.

Against the petitioners, the allegation is that they, in collaboration with the officials of Habib Bank A.G.
Zurich, Lahore and Bank of America, Lahore under the influence of Mian Nawaz Sharif, present Prime
Minister of Pakistan, managed to draw, by opening three fake accounts, an amount of Rs.60 millions by
raising loan against the account of Kashif Masood Qazi. It was alleged that it was the petitioners' black
money which was fraudulently utilized by them, to procure "further" wrongful gains".

In Writ Petition No.12173 of 1997, the allegations levelled in the F.I.R. registered at Police Station
F.I.A./S.I.U.,. Islamabad under section 419/420/468/471, P.P.C., section 5 of Act 2 of 1947 and Article 3 of
Presidential Order No. 16 of 1977 are that two fake accounts were opened in the names of Muhammad
Ramzan and Asghar Ali in Habib Bank A.G. Zurich by depositing traveller cheques amounting to U.S.
Dollars 2 millions cash in these accounts, and on the request of the account-holders they were issued Dollar
Bearer Certificates for the above two amounts Subsequently, another "fake" account was opened in Citi Bank,
Lahore in the name of one Mrs. Sikandar Masood Qazi by depositing Dollar Bearer Certificate amounting to
U.S . Dollars 150 millions. Later on D.B.C. for another amount of U.S. Dollars 1 million were also deposited
in her account.

Further allegation is that Citi Bank, Karachi created a loan of Rs.40 millions in favour of Messrs Hudabiya
Paper Mills against the deposit of account of Sikandara Masood Qazi against "weak/inadequate security",
which loan is still outstanding. Allegedly, during inquiry none of the abovenamed account-holders could be
traced out at the given addresses. Against the petitioners, the allegation was that they, with the blessing of
Mian Nawaz Sharif, have not only indulged in money laundering but also cheated the Government.

During the course of investigation, charges under section 5 of Prevention of Corruption Act (II of 1947) and
Article 3 of Presidential Order No.16 of 1997 were dropped and challan was submitted before the "Special
Court" for the remaining offences, as mentioned in the F.I.R.

3. To complete the narration of the history of the litigation, two writ petitions were filed by the petitioners, in
both these matters, before the Rawalpindi Bench of this Court seeking quashment of the two F.I.Rs.; (i) Writ
Petition No.1361 of 1994-F.I.R. No.12 and (ii), Writ Petition No.1362 of 1994-F.I.R. No. 13.

Two bail applications were also filed; (i) Criminal Miscellaneous No.846/B of 1994 converted into Writ
Petition No.1376 of 1994 and (ii) Criminal Miscellaneous No. 847/B of 1994 converted into Writ Petition
No. 1377 of 1994. All these writ petitions were dismissed by a Division Bench of this Court on 28-12-1994

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vide judgment report as Mian Muhammad Abbas Sharif and 2 others v. Federation of Pakistan through
Secretary, Ministery of Interior and 2 others 1995 PCr.LJ 1224.

Another writ petition (Writ Petition No. 14532 of 1994) was filed at the Principal seat seeking a direction to
the investigating agency to refrain from taking any proceedings under the aforementioned two F.I.Rs. This
writ petition was dismissed by a learned Single Judge of this Court vide judgment, dated 19-12-1994.
Presently, I.-C.A. No.16 of 1995 against .this judgment is pending adjudication. It was earlier listed for
hearing before a Full Bench of this Court, comprising the Honourable Chief Justice, Justice Asif Jan and
Justice Saeed-ur-Rehman Farrukh.

Later on, the honurable Chief Justice directed the enlargement of the said Bench and now, as per orders, a
Bench of five Judges, is to be constituted by including Justice Malik Muhammad Qayyum and Justice Raja
Muhammad Khurshid, therein. Date of hearing has not been fixed so far.

4. In both these Constitutional petitions the prayer made by the petitioners is for saving them from the agony
of the trials, "which in any event would be an exercise of futility.

5. We questioned the` learned' counsel for the petitioners as to why the petitioners have approached this Court
direct and not appeared before the learned "Special Court" with a petition under section 265-K of the Code of
Criminal Procedure for grant of relief about their acquittal. His reply was that the "Special Court" is presently
non-functional, as a sitting Judge of this Court (Mr. Justice Khalid Paul Khawaja) has been notified and
appointed as Presiding Officer of the said Court but only bail applications are being dealt with and that too
only on one day in a week and trial of cases is not taking place at ~ all. According to him this situation would
continue to prevail till the Honourable Judge retires from High Court and assumes the office of the Presiding
Officer of "Special Court" on whole time basis. Thus, it is urged that presently the petitioners are left with no
other alternate remedy except to invoke the writ jurisdiction of this Court.

We find force in this contention in that the factual position as asserted is correct. At the present moment the
petitioners are indeed handicapped due to the above situation and cannot thus, seek any relief from the
"Special Court". Consequently, we are inclined to dispose of these writ petitions on merits.

6. We have heard Mr. Ashtar Ausaf Ali, Advocate, learned counsel for the petitioners in both the cases, Kh.
Saeed-uz-Zaffar, learned Deputy Attorney-General for Pakistan. We have also gone through the record of
both the challan cases and also the police files.

7. It is submitted by Mr. Ashtar Ausaf Ali, Advocate, that the present petitions merit acceptance both on
jurisdictional as well as factual planes. He has also made submissions on the maintainability of these petitions
in view of the decisions of the earlier writ petitions on the subject, referred to hereinbefore.

As regards the earlier writ petitions filed by the petitioners, it is pointed out that these were instituted at a
point of time when the matters were under investigation and the relief sought for in those writ petitions was
mainly for quashment of the F.I.Rs. How the investigations have been crystalized into final challan reports
under section 173, Cr.P.C. and the prosecution has placed all its cards before the "Special Court". A drastic
change in the situation has been brought about justifying the filing of the present writ petitions seeking
wherein a prayer for acquittal is made. These cannot be thrown out on the ground of dismissal of the earlier
writ petitions.

As regards the I.-C.A. presently pending, his submission is that it would be pressed only to the extent of the
decision of the learned Single Judge with regard to the interpretation placed by him on the relevant law,
regarding immunity available to the foreign exchange accounts under Economic Reforms Act (XIII of 1992).

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8. On the question of jurisdiction the plea raised by learned counsel for the petitioners is that the F.I.A. had no
authority to register these case. It is argued that these are admittedly foreign currency accounts, opened in
private banks in the names of private persons against which private limited companies have availed of loan
facilities. The transactions in question had nothing to do with the Federal Government at any stage
whatsoever and, thus, F.I.A. could not poke therein and no criminal cases could be registered by it. According
to him the entire exercise starting with the registration of the cases and ending with the submission of challan
is coram non judice which merits to be quashed by issuing an appropriate order/direction under Article 199 of
the Constitution read with section 561-A, Cr.P.C.

9. It is argued that even on merits, no offence whatsoever, from perusal of the challan reports, is made out
necessitating the trials of the petitioners as same would be an exercise in futility. It is argued that no wrongful
loss has been caused to any person nor any wrongful gain has accrued to any one of the petitioners on
account of alleged opening of "fake accounts". The banks and/or account-holders not come forward to lodge
a complaint. The reason is obvious as they have not been cheated in any manner, and therefore, no offence
under section 420, P.P.C. is made out. Likewise offences under sections 468 and 471 are also not made out as
the element of causing damage or injury to the public or any person is missing.

10. We find force in the contention of the learned counsel for the petitioners that despite the dismissal of the
earlier writ petitions the present writ petitions are competent. Those writ petitions were filed at 'the initial
stage of investigation of the cases and were dismissed on the ground that the prosecution was yet to collect
incriminating material, if any, against the accused. Now after thorough investigation the Investigating Agency
has formulated the final challan reports and submitted the same before the "Special Court" the petitioners are
entitled to seek quashment of the cases against them and ordered to be acquitted on proving to the satisfaction
of this Court that the challan reports have been filed before the "Special Court", un-authorisedly, and/or no
offences on the face of these reports under section 173, Cr.P.C. can be said to have been made out.

11. Federal Investigating Agency was established under section 3 of the Federal Investigation Agency Act of
1974. The agency can investigate into the offence as given in the schedule attached to the Act, only in those
cases, where the offences are alleged to have been committed by a public servant as defined in section 21 of
P.P.C. or those offences are allegedly committed in connection with matters pertaining to the Federal
Government, or the same, are committed by the employees of the Corporation set up, controlled and
administered by the Federal Government. This position of law is well-established through number of reported
judgments. We may quote few out of them as under:--

(i) Abdul Razzaq and 2 others v. Pakistan Agricultural and Storage and Service Corporation Ltd. 1992
PCr.LJ 1884,

(ii) Akhtar Ali and 2 others v. Assistant Director 1990 ALD 28(1),

(iii) Javed Iqbal and 2 others v. Federal Investigation Agency and 3 others PLD 1986 Lah. 42.

12. In the instant cases, undisputedly, neither any employee of Federal Government nor of any Corporation
created, controlled or administered by the Federal Government is involved. The alleged offences cannot be
said to have been committed in connection with the matters concerning the Federal Government. The
allegations against private persons of allegedly opening foreign exchange accounts in foreign banks, against
which certain amounts were taken as loan by direction of private limited companies cannot, by an stretch of
reasoning, attract the jurisdiction and authority of F.I.A. so as to enable it to register cases in respect thereof.
The investigations by the agency and submission of challan in Court are clearly without jurisdiction.

It is well-settled that if the action regarding registration of a criminal case is demonstrated/proved to be

without jurisdiction the same can be legitimately quashed. See case of Haji Muhammad Yousaf v. M. Abbas

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Khan and others PLD 1968 Lah. 482.

13. We have carefully perused the judgments delivered in the earlier writ petitions referred to hereinbefore,
and find that the question of jurisdiction of F.I.A. to register these cases was neither agitated nor adjudicated
upon.

On this short ground alone the petitioners are held entitled to the relief prayed for.

14. That is not all. We also find force in the contention of the learned counsel for the petitioners that on the
face of the allegations in the final reports under section 173, Cr.P.C., no offence is made out. No wrongful
loss has been caused to any one and none has been wrongfully benefited. Element of cheating is totally
missing. The question of commission of forgery also did not arise as neither the banks nor the account-
holders who could be said to have suffered damage or injury, as a result thereof, have come forward to make
a complaint.

As regards impersonation and opening of "fake accounts" we pertinently asked the learned Deputy Attorney-
General to show us evidence/material, if any, available in the challan files in support thereof. He failed to do
so. On the contrary, he informed us that as a result of investigation, carried out by F.I.A. it has transpired, that
all those persons, in whose names the accounts in question were opened, are alive and in existence; while
Suleman Zia is a resident of Essex, London, the others are Pakistani Nationals, living in the country.

About Suleman Zia, he showed us page 115 of the police file, (letter from Consular Section, British High
Commission, Islamabad, addressed to Raja Mansoor Elahi, Deputy Director F.I.A), testifying the fact that
Suleman Zia was holder of British Passport No.312783-S. Thus, allegation of opening of fake accounts in the
names of non-existant persons is also to be treated to be groundless.

15. We are dully convinced that baseless cases were foisted upon the petitioners by an agency (F.I.A.) which
otherwise too, had no legal authority to do so. These cases were registered 3 years ago, during which period
considerable harassment, tension and ignominy was unduly suffered by the petitioners. Further prolongation
of their agony would be clear denial of justice to them, besides waste of public time and money in the useless
trials.

The powers of High Court to quash the criminal case in exercise of Article 199 of Constitution where its very
initiation is without jurisdiction stands established in Haji Muhammad Yousaf's case (supra). Likewise High
Court has ample authority to intervene under section 561-A, Cr.P.C. as has been laid down authoritatively by
their Lordships of Supreme Court in Asif Ali Zardari's case 1994 SCMR 798. Following passage from the
judgment is being reproduced with profound respect:--

"Section 561-A, Cr.P.C. confers upon High Court inherent powers to make such orders as may be
necessary to give effect of any order under this Code or to prevent abuse of process of any Court or
otherwise to secure the ends of justice. These powers are very wide and can be exercised by the High
Court at any time. Ordinarily High Court does not quash proceedings under section 561-A, Cr.P.C.
unless Trial Court exercises its power under section 249-A or 265-K, Cr.P.C. which are incidentally of
the same nature and in a way akin to and co-related with quashment of proceedings as envisaged
under section 561-A, Cr.P.C. In exceptional cases Hitch Court can exercise its jurisdiction under
section 561-A Cr P.C. without waiting for Trial Court to pass orders under section 249-A or-265-K.
Cr.P.C. if the facts of the case so warrant to prevent abuse of the process of any Court or otherwise to
secure the ends of justice." (underlining is ours).

16. Drawing strength from the above two precedents, we accept both the petitions and in exercise of our
power under Article 199 of the Constitution read with section 561-A, Cr.P.C. quash the challan cases, under

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reference, against the petitioners, and acquit them.

Through two short orders, dated 27-5-1997 the petitions were accepted. The above are the reasons therefor.

Q.M.H./M.A.K./H-51/L
Petitions accepted.

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