P L D 2003 Karachi 76 (PLP)

The accused No. 1, Muhammad Naeem being sole proprietor of Messrs Shoaib Corporation is the Principal Debtor/Pledgee, accused No.2 is the son of accused No.1, accused No.3 is the mortgagor having interest in the firm while accused No.4 is the Godown Keeper/Inspector and accused Nos. 4, 5 and 6 are the Chowkidar posted at the Godown premises i.e. Plot No.53 Gadani. Hub. The accused No. 1 on 8‑12‑1998 applied and later entered into an agreement for a cash finance facility of Rs.50 Millions sanctioned to him on 3‑3‑1999. Photocopies of request and sanction advice are annexed hereto and marked as Annexures "A" and "B". Beside he has executed the following Standard Bank documents:‑‑ (A) Demand Promissory Note. (B) Agreement for Financing. (C) Letter of Pledge. (D) Letter of Guarantee. Photocopies of the above documents are annexed hereto and marked as Annexures C to F. As security for repayment of the finance facility availed from time to time the accused No.3, created equitable/registered mortgage of his immovable property bearing Plot No.N.C.24 measuring 15 acres in Deh Dih District Malir, and executed registered/equitable mortgage and delivered original title documents of the property to the complainant/Bank having interest in the said business and the same are still in possession of the complainant bank. Photocopy of lease agreement/receipt of registration of mortgage and memorandum of deposit of title deeds annexed hereto and marked as G, H. and I. The accused No. 1 in order to secure the facility allowed by the bank pledged the ship scrap vide letter of pledge dated‑‑‑1999. The said pledge was handed over to complainant/Bank on 6‑2‑1999, which was duly receipted by the accused No.4 on 8‑2‑1999. Photocopy of letter of pledge dated 6‑2‑1999 and its receipt by the accused No.4 on 8‑2‑1999 is annexed hereto and marked as 'J'. Due to failure to adjust the liabilities against the said cash finance facility allowed to them on 3‑3‑1999 and amount of Rs.63,126,973 is outstanding against the accused persons Land 3 including mark up to 30‑9‑1999. The complainant/Bank many times requested and demanded from the accused(s) to adjust the outstanding amount but the accused failed to adjust the same. Whereas, the accused No. 1 confirmed the outstanding amount vide his letter dated 13‑9‑2000. Photocopy of confirmation letter is annexed hereto and marked as ' K'. It is further submitted that the bank during the period from 8‑2‑1999 till date issued Delivery orders for only 50 metric tons. It has now been come into knowledge of the complainant that the stock lying at Plot No.53, Gandani Hub which was under pledge of complainant/Bank, the accused No.1 together with his son accused No‑2 unauthorized/illegally and forcibly lifted the pledge stocks in collusion with other accused persons leaving behind very nominal quantity of pledge scrap as, compared, to stock pledged with the bank, which clearly established that the accused(s) jointly and collusively misappropriated the stock weighing about 9200 Metric tons (approx) and converted the proceeds for their personal gain thereby causing a wrongful loss to the complainant bank and committed the act of criminal breach of trust. From the facts and circumstances which have come to light it is established that the proprietor his son/mortgagor with criminal intention and common objective, misappropriated the total scrap weighing about 9220 M. Tons thereby causing a loss to the tune of Rs.63,000,000 or thereabout to the Bank. For this purpose accused Nos.4 to 6, the employees of NBP also joined hands with them. Thus the accused persons committed criminal breach of trust hence it is requested that a case may kindly be registered against the culprits under the relevant provisions of law of scheduled offence. (Sd.) (Shoukat Hussain) Manager, National Bank of Pakistan, Cotton Exchange Branch, Karachi.' Enquiry No.47 of 2000 was initiated at this Circle under the orders of competent Authority. From the enquiry, it has been revealed that accused Muhammad Naeem and his son Muhammad Shoaib Proprietor of M/s. Shoaib Corporation obtained Financial facility from NBP, Cotton Exchange Branch, Karachi to the tune of Rs.50(M) on 3‑3‑1999 against the security of immovable Property bearing No.C‑24, measuring 15 acres in Deh Dih District Malir executed registered/equitable mortgage with Bank. Besides, pledged the ship scrap lying at Plot No.53, Gadani Beach, Gadani. According to the valuation certificate of scrap dated 14‑12‑1998 issued by M/s. Razzak Umrani & Company 10,228 M/Tons was available valued Rs.11,04,62,

400. At Rs.10,800 per M/Ton. "The scrap was opened pledge with the Bank. Thereafter, accused Muhammad Naeem and Muhammad Shoaib in connivance of accused Shahid Umarani and Masood Zahid of M/s. Razaak Umarani & Company and NBP Godown Keeper Noorul Hassan and Ismail Khan, Chowkidar/NBP, illegally removed/disposed of pledged stock causing wrongful loss to the bank to the tune of Rs.6,30,00,000 and wrongful gain for themselves. They committed the offences punishable under sections 406/420/468/471/109, P.P.C. read with section 5(2) PCA‑II of 1947. Hence, registered this case against all the above accused persons under the orders of competent Authority. Investigation taken up. (Sd.) Muhammad Yousuf Khan Durrani. Inspector, FIA CBC

1. Karachi. dated 29‑3‑2002. " Mr. I.A. Hashmi, learned counsel for the applicant has submitted that co‑accused Noorul Hassan, Shahid Umarani and Masood Zahid have been released on bail by this Court while co‑accused Ismail Khan has been admitted to bail by the learned trial Court. He has submitted that sections 468 and 471 provide‑punishment for committing forgery with the intention that the documents forged shall be used for the purpose of cheating and using the forged documents as genuine. Mr. I.A. Hashmi, has maintained that there is no allegation of commission of forgery or fraudulent/dishonest use of a forged document as genuine one. According to him the applicant availed loan facility from National Bank of Pakistan and for that purpose pledged the goods and co‑accused Saleh mortgaged his immovable property as security for repayment of loan. Mr. I.A. Hashmi, has contended that there is no allegation that any of the documents used by the applicant for availing loan facility is a forged or fraudulent document. He has further contended that section 406, P.P.C. provides a punishment for committing criminal breach of trust which is defined in section 405, P.P.C. The condition precedent for constituting offence, defined in section 405, P.P.C and punishable under section 406, P.P.C, is the entrustment of property and dishonest misappropriation or conversion thereof to his own use by the person to whom the property has been entrusted or disposal thereof in violation of any direction of law prescribing the mode in which such trust to be discharged or of any legal contract, express or implied, which he has made touching the discharge of such trust. Mr. I.A. Hashmi, has contended that in the present case, no one has entrusted any property to the applicant. The immovable property mortgaged with the bank belongs to the applicant and the bank has filed a suit for the recovery of the loan which has been decreed and the said loan is fully secured. So far, the pledged goods are concerned, they also belonged to the applicant and notwithstanding the civil liability of the applicant it is a question of further inquiry if in the facts and circumstances of the case, the applicant has entailed any criminal liability. The offence punishable under section 420, P.P.C., provides a punishment for cheating and the cheating has been defined in section 415, P.P.C., to the effect that, whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit it he were not so deceived, and which act or omission causes or‑is likely to cause damage or harm to that person or any other person in body, mind, reputation or property. Mr. I.A. Hashmi, has submitted that in the present case, the applicant availed a loan facility from the National Bank and the loan is fully secured with the decretal of the suit and the availability of the mortgaged property. Thus, it is also a case of further inquiry if in these circumstances, the punishment provided in section 420, P.P.C. is attracted to the applicant. Mr. I.A. Hashmi, has contended that for the foregoing reasons and adhering to the rule of consistency, the applicant is entitled to be released on bail. Mr. S. Tariq Ali, learned Federal Counsel has opposed the bail application contending that the scrap pledged with the National Bank of Pakistan was already pledged with the Allied Bank Ltd. who have also filed suit for recovery being S.No.158 of 2000. He has submitted that the declaration made by the applicant with the N.B.P. was fraudulent and the case of applicant is different from the co‑accused as he is the main beneficiary of the transaction. We have carefully considered the contentions raised by the learned Advocates for the parties. Adhering to the principles governing the grant or refusal of bail, we would not like to enter into in‑depth examination of the facts which is the function of the trial Court to be performed after recording the evidence. However, we find, substance in the contention of Mr. I.A. Hashmi, that in the F.I.R there is no allegation of using any fraudulent or forged document as genuine. In short, the prosecution case is that the scrap was pledged with the bank which was lifted and disposed of in violation of the agreement with the bank. We are, further of the opinion that it is required to be considered by the trial Court as to what is the effect of the pledge which is in the nature of bailment of movable property by way of security. In the case of mortgage the legal title passes conditionally to the mortgagee, while in the case of pledge, generally the title in the property remains with the pledgor. To what extent the pledge affects the right of the pledgor and whether in the case of a pledge, any entrustment of the property by the bank to the pledgor takes place also requires consideration by the trial Court. The availing of loan facility is basically a transaction of Civil nature and it is to be determined by the trial Court as to how far, the contravention of any contractual obligation constitutes a criminal offence. In addition to the fact that according to us, it is a case of further inquiry, we are of the opinion that the rule of consistency also requires that the present applicant may also be extended the same facility which has been extended to all the remaining co‑accused. For the foregoing reasons, we are of the opinion that, it is a fit case for bail and consequently, the applicant is granted bail in the sum of Rupees 2 (Two) Millions on furnishing one surety and execution of P.R. Bond in the like amount to the satisfaction of Nazir of this Court. N.H.Q./M‑411/K Bail allowed.