P L D 2008 Supreme Court 166 (PLP)

MUHAMMAD NAWAZ ABBASI, J.

These two connected Criminal Petitions, bearing No.164 of 2004 titled "State through National Accountability Bureau (NAB), Islamabad v. Commodore (Retd.) Mirza Ashfaq Baig and Criminal Petition No.165 of 2004 "State through National Accountability Bureau (NAB), Islamabad v. Mansoorul Haq, Ex-Chief of Naval Staff" have been directed against the judgment dated 4-3-2004 passed by a Division Bench of High Court of Sindh, at Karachi, in Criminal Accountability Appeals Nos.1 of 2004 and 2 of 2004, whereby the High Court by setting aside the conviction and sentence awarded to the above named respondents under section 10 of the NAB Ordinance, 1999 on the charge under section 9(a)(vi) of the said Ordinance by Accountability Court No.IV, Sindh, Karachi vide judgment dated 8-1-2004 acquitted them from the charge.

2. The brief facts giving rise to these petitions are that a reference under section 18(g) read with section 24(b) of the National Accountability Bureau Ordinance, 1999 was sent by the Chairman NAB against the respondents namely Commodore (Retd.) Mirza Ashfaq Baigand Admiral Mansoorul Haq, Ex-Chief of Naval Staff, along with Rear Admiral (Retd.) Javed Ali, (abscondee) to face the trial for the charge read as under before the Accountability Court No.IV at Karachi: "That you accused Mansoor-ul-Haq during the year 1994 were Chairman, PNSC and subsequently appointed as Chief of Naval staff and you accused Cdre Mirza Ashfaq Baig were Director (Ship Management) PNSC and thus you both have been holder of public office. That you accused Mansoor-ul-Haq, with criminal intent, to obtain undue benefits got an approval for acquisition/purchase of ships for PNSC in the capacity of Chairman from E.C.C. of the then government. Subsequently, when you were appointed as Chief of Naval Staff, you hatched a conspiracy with absconding accused Rear Admiral (R) Javed Ali and co-accused cadre Mirza Ashfaq Baig, who was a serving Naval Officer and you by using your influence obtained directions from the government to over see the purchase/acquisition of ships for PNSC. According to which despite you had bebn appointed CNS, in all matters concerning the said program your approval was binding upon the Board of Directors of PNSC in order to achieve your ulterior motives, you got appointed your men Real Admiral Javed Ali, absconding accused as acting Chairman PNSC and Cadre Mirza Ashfaq Baig as Director (Ship Management) PNSC. That you both accused in collaboration, connivance and collusion with each other and absconding accused Rear Admiral (R) Javed Ali misused your official authorities in purchasing following 3 ships. You violated -the laid down procedure, terms of approval and purchased the ships on the exorbitant price much higher than the prevailing price in the market of the similar specification and conditions. The said ships were not technically suitable and even were rejected/not evaluated. The purchase of ships was against the selection criteria of the Board of Directors of PNSC and E.C.C. of the government and without considering the classification record of the ships, payment of customs, regulatory and other duties. (i) Apolonia (re-named as Sawat) US$14.82 millions (ii) Ora Bhum (re-named as Shalamar) US$15.55 millions (iii) Independnet voyager (re-named as Lalazar) US$ 16.77 million US$ 47.14 millions Besides, by your such fraudulent actions and misusing your official authority the ex-chequer sustained colossal loss to the tune of Rs.1,85,743,

000. That you both in collusion, connivance and collaboration with each other and absconding accused Rear Admiral (R) Javed Ali wilfully, fraudulently misused your official authority to obtain undue benefits and failed to exercise your authority to prevent the losses to the ex-chequer and thereby committed an offence of corruption and corruption practices as defined under section 9 punishable under section 10 of National Accountability Bureau Ordinance, 1999 within the cognizance of this Court."

3. The prosecution examined 16 witnesses in support of its case and accused having denied the correctness of the allegation contained in the charge refuted the truthfulness of the prosecution evidence in their statement under section 342, Cr.P.C. and taking the plea of false implication with the assertion that transaction was transparent in all respect as no loss was caused to PNSC and there was also no complaint of any technical or other defect in the ships which were fully operational as per requirement of intentional standard. The learned trial Judge, in the light of prosecution evidence having formulated the points noted hereinbelow for determination gave its verdict in favour of the prosecution:-- "

1. Whether the accused Rear Admiral (R) Javed Ali has absconded deliberately in order to avoid the service of process issued by this Court or prevent or evade service of warrants upon him or concealed himself to screen himself from the proceedings of the reference of punishment under this Ordinance?

2. Whether the accused Mansoorul Haq, the then Chairman PNSC and accused Mirza Ashfaq Baig, the then Director (S.M.) Ship Management PNSC in the year 1994 were holders of public office?

3. Whether the investigation conducted by the investigating Officer Altaf Hussain in pursuance of authorization letter Exh.27/1 is beyond the scope of said letter and violative of section 18 of National Accountability Bureau Ordinance, 1999 and therefore, illegal and unwarranted bylaw?

4. Whether the accused Mansoorul Haq with criminal intent to obtain undue benefits got an approval of acquisition/purchase of ships for PNSC in the capacity of Chairman from Economic Coordinatioin Committee (ECC) of the then Government?

5. Whether the accused Mansoorul Haq in his capacity as Chief of Naval Staff hatched a conspiracy with absconding accused Rear Admiral (R) Javed Ali and co-accused Mirz Ashfaq Baig, who was a serving Naval Officer and he by using his influence obtained directions from the government to over-see the purchase/acquisition of ships for PNSC?

6. Whether the accused Mansoorul Haq in order to achieve his ulterior motives got appointed his men Rear Admiral (R) Javed Ali (now absconding) as Acting Chairman PNSC and Cmdr. Mirza Ashfaq Baig as Director (S.M.) Ship Management PNSC?

7. Whether both the accused in collaboration, connivance and collusion with each other and absconding accused Rear Admiral (R) Javed Ali by violating the laid down procedure, terms of approval and misusing their authority purchased 3 ships viz. (i) Apolonia (renamed as Swat) for US$ 14.82 million (ii) Ora Bhum (renamed as Shalmar) for US$ 15.55 million and (iii) Independent Voyager (renamed as Lalazar) for US$ 16.77 million on the exorbitant price much higher than the prevailing price in the market of similar specification and conditions, and caused loss to the exchequer to the tune of Rs.1,851,743,000 and obtained undue benefits?

8. Whether the purchase of these 3 ships was against the selection criteria of Board of Directors of PNSC and ECC of the Government and without considering the classification record of the ships, payments of customs, regulatory and other duties?

9. Whether the accused Mirza Ashfaq Baig being member of Technical Committee of PNSC with ulterior motive and by misusing his authority had recommended M.V. Apolonia which was earlier rejected by him and also recommended M.V. Westertal without considering its classification record and thus favoured to co-accused persons to their advantage?

10. Whether accused Mansoorul Haq wilfully misused his official authority while recommending purchase of 3 container ships on 28-12-1995 and favoured co-accused persons to their advantage?

11. Whether accused Mansoorul Haq failed to exercise his authority to prevent purchase of ships when he knew that for want of exemption in custom and regulatory duty 3 container ships in question were not able to enter Pakistani waters and caused loss to PNSC and thereby committed an offence of corruption and corrupt practices as defined under section 9 punishable under section 10 of the National Accountability Bureau Ordinance, 1999?

12. What offence, if any, the accused persons have committed?

4. In consequence to the finding of guilt of the respondents arrived at by the learned trial Judge, they were convicted and sentenced under section 10 of the Ordinance as under:-- (a) Rigorous Imprisonment for seven years with a fine of rupees two million each and in default of payment of fine to undergo R.I. for one year each. (b) The disqualification to hold public office for a period of 10 years under section 15 of the National Accountability Bureau Ordinance, 1999.

5. The High Court of Sindh at Karachi in criminal appeals separately filed by the respondents against their conviction and sentence after detail scrutiny of the evidence and discussion of the points formulated by the trial Court, having come to the conclusion that prosecution has not been able to prove the charge against the respondents beyond reasonable doubt, allowed their appeals vide judgment, dated 4-3-2004 and acquitted them from the charge as under:-- "Reverting back to the facts of the present case and examination thereof on the touchstone of the exposition of legal position as discussed above, we find that there is no iota of evidence on record to show that any exorbitant price was paid for the purchase of the three ships thereby causing any loss to the exchequer or PNSC. It is established on record that no loss of any nature was caused as a result of the purchase transaction. There is nothing on the record to show that any favour was done to anybody or was attempted to be done to anybody for purpose of any gain or benefit or any attempt was made or rendered in this direction by the two appellants and consequently it is held that the learned trial Court while rightly holding that no exorbitant price was paid for the purchase of three ships and no loss was caused by the appellants to the exchequer and PNSC, has misdirected in holding that the prosecution has succeeded in bringing home the guilt to the appellants for the commission of offence under section 9(a)(vi) of the NAB Ordinance. In the absence of any evidence and finding on the point of any gain benefit or favour or any attempt in this behalf to the appellants or any other person, the impugned finding of the trial court is not sustainable which is hereby set aside. Consequently, the impugned conviction and sentence are also set aside. Both the appellants are acquitted.

34. On 4-3-2004, the learned advocates for the parties concluded their arguments and the appeal was allowed by a short order as follows:-- Having heard the defence counsel and the learned DPGA for NAB and having assessed the entire evidence in detail, we have reached a definite conclusion that the prosecution has failed to prove the charge against both the appellants. Resultantly by this short order, we allow the appeals of both appellants and acquit them in the case/reference. They shall be released forthwith if not require to be detained in an other case. These are the detailed reasons in support of the short order dated 4-3-2004. The appeals are allowed.

6. The State through National Accountability Bureau, has filed the present petitions seeking leave to appeal against the judgment of the High Court mainly on the ground that in the light of special provisions contained in NAB Ordinance, 1999 relating to the burden of proof, the acquittal of respondents from the charge by the High Court in the appeals, was not based on sound principles governing criminal administration of justice. Learned counsel for the petitioner has contended that the High Court reversed the findings of guilt of the respondents arrived at by the trial Court on flimsy ground by misappreciation of very strong evidence of unimpeachable character and emphasized that in white collar crime it is difficult to collect the direct evidence of corruption and corrupt practices, rather in the light of special provision contained in the Ordinance on the discharge of the initial burden of proving the charge against the accused by the prosecution, the Court may raise a presumption of guilt of the accused and in such situation, the burden is shifted on the accused to rebut the allegation and explain his position. In the light thereof learned counsel argued that in the present case, the prosecution by producing oral and documentary evidence, has sufficiently established on record that the accused, holders of public offices by misuse of their official authority and in departure to the prescribed procedure provided under the law finalized the transaction of purchase of three merchant navy ships for PNSC for personal consideration of financial' gain, therefore, notwithstanding the non-availability of the direct evidence of taking commission and kickbacks from the foreign seller company, the manner in which the transaction was conducted itself would provide sufficient material to draw an inference of unfair and dishonest deal. The learned counsel thus assented that the trial Court was fully justified in raising a presumption of the guilt of respondents whereas the High Court was misdirected in drawing an inference contrary to the law and facts of the case.

7. Mr. Iqtedar Hussain Hashmi, learned counsel appearing for respondents-caveators, has opposed these petitions with the submission that there are concurrent findings of the trial Court as well as the High Court that the allegation of fixation of exorbitant price of ships for financial gain and personal interest was without any foundation and substance and that the High Court has rightly held that the transaction may not constitute an offence under section 9(a)(vi) of the NAB Ordinance or under any other law for the time being, therefore, the finding of the trial Court regarding guilt of the respondents on the basis of allegation of procedural irregularities would have no nexus with criminal liability and consequently, the conviction and sentence awarded to the respondents by the trial Court was bad in law to sustain.

8. We have heard the learned counsel for the parties at length and have also examined the record in detail with their assistance. The learned Dy. PGA, NAB, has conceded the factual position before the High Court as under:-- "On the other hand, Mr. Muhammad Anwar Tariq learned DPGA, has supported the impugned conviction and sentence. He has however frankly stated that the learned trial Court has given an unequivocal and categorical finding to the effect that neither any exorbitant price was paid for the purchase of 3 ships under consideration nor any loss was caused to the exchequer or PNSC on account of purchase of these ships. On being confronted by the Court with the evidence on record he frankly stated that according to the Investigating Officer and other prosecution witnesses, the loss referred to in the reference and charge is an operational loss for which the appellants are not responsible and no evidence has been brought on record to substantiate the alleviation of causing any loss to the exchequer by the appellant. When called upon to show any evidence on the record to the effect that the appellants gained any benefit or favour for themselves or any other person, the learned DPG has no option but to concede that there was no such evidence on record. He however, submitted that the appellant Mansoorul Haq was instrumental in getting the 3 ships purchased and in doing so, he did not exercise his authority for preventing the Board of Directors of PNSC from deviating from the policy laid down by ECC for the purchase of ships and likewise appellant Commodore Mirza Ashfaq Baig, wilfully failed to exercise his authority to prevent the purchase of ship M.V. Apoloma, which he could have done by sticking to his earlier opinion rejecting the ship. He was specifically asked to show from the impugned judgment of the trial Court as to what were the findings forming basis for the impugned conviction and sentences. The learned DPGA, took us through the impugned judgment and contended that so far, the points pertaining to exorbitant payment of price and causing of loss to exchequer and PNSC, are concerned, they have been decided against the prosecution and in favour of appellants. He however, submitted that the learned trial Court awarded conviction and sentence to the appellant on the basis of findings on the points Nos.9, 10 and

11. The learned DPGA, was asked to point out findings of trial Court on the point of ulterior motive on the part of appellant Mirza Ashfaq Baig and any favour to the co-accused resulting in advantage to them as envisaged in points Nos.9 and

10. After going through the entire impugned judgment and the prosecution evidence, he submitted that neither there is any finding of the trial Court nor there is any evidence on record to show that the alleged misuse of authority on the part of appellant Mirza Ashfaq Baig, resulted in any favour or personal advantage to any accused or any other person and that any omission on the part of appellant Mansoorul Haq resulted in favour of advantage to any accused or any other person.

22. We have very carefully considered the contentions raised by the learned Advocates for the parties and have assessed the entire material available on record. We are of the considered opinion that in view of very specific and categorical finding on the part of the trial Court that no exorbitant price was paid for. the purchase of 3 ships under consideration and no loss was caused to the exchequer or PNSC on account of the purchase transaction of the ships and in the absence of any finding of the trial Court on the point of ulterior motive resulting in any benefit advantage, gain or favour to accused or any other person, we need not to dwell on the findings of facts. The only point requiring our consideration is, whether a mere deviation from any policy decision or any mistake, lapse or irregularity in execution of any decision or policy matter or a transaction or in execution of a project is an administrative lapse calling for disciplinary action only by the competent administrative authority or it amounts to commission of an offence under section 9(a)(vi) of the NAB Ordinance:"

9. It is clear from the above referred portion of the judgment of the High Court that the prosecution has not been able to bring on record any cogent evidence to establish the charge and learned DPGA frankly conceded the factual position in the light of which the trial Court held that the allegation regarding exorbitant price and financial loss to the PNSC or financial gain by the accused, was not proved. Learned counsel for the petitioner has not been able to convince us from the evidence on the record that essential elements of mens rea and intention to commit an offence under section 9(a)(vi) of NAB Ordinance were traceable in the transaction or the accused acted for their personal gain at the cost of causing financial loss to the organization (PNSC) or the ships in question were not of viable technology and were not that of international standard and specification. The mere procedural irregularities in the transaction, would not be sufficient to constitute an offence under section 9 (a) (vi) of the ibid Ordinance. This is essential to draw distinction between procedural irregularities and violation of substantial provisions of law to determine the question of criminal liability in the transaction. The procedural irregularities may bring an act done in the official capacity within the ambit of misconduct which is distinguishable from criminal misconduct or an act which may constitute an offence and thus unless it is established through the evidence that an act or series of acts done in the transaction constituted an offence, the criminal charge would be groundless. We may point out that notwithstanding the special provision contained in the NAB Ordinance regarding shifting of the burden of proof, the fundamental principle of the law of criminal administration of justice that basic onus is always on the prosecution to establish the commission of an offence is not changed and in the present case, we find that the respondents having negotiated with the seller company abroad in the official capacity entered into the contract of purchase of ships and in the process certain procedural irregularities constituting an act of misconduct in the contemplation of law applicable to their service were probably committed but the same may not constitute a criminal offence under section 9(a)(vi) of NAB Ordinance punishable under section 10 of the said Ordinance or under any other law without proof of the existence of element of dishonest intention of personal gain. The prosecution in the present case has not been able to bring on record any evidence to substantiate the allegation of dishonest intention to cause financial loss to the organization for personal gain to bring the case within the purview of National Accountability Bureau Ordinance, 1999. This is settled law that unless prosecution discharges the initial burden of proving the charge no presumption of guilt can be raised and in the present case, the prosecution except pointing out certain irregularities committed by the respondents in the transaction of purchase of ships for the use of PNSC, has not been able to bring on record any evidence oral or documentary to show that either the price for which the ships were purchased, was exorbitant or the respondents while acting for their personal gain have caused financial loss or any other damage to the organization. In the light of the facts of prosecution case and the circumstances leading to the completion of transaction it is evident on record that the view of the evidence taken by the High Court was unexceptional. The National Accountability Bureau Ordinance, 1999, on doubt is a special law and prosecution having the advantage of the provision of section 14(a) of the Ordinance may not under heavy burden to discharge the onus of proving the charge as the Court may on discharge of initial burden of proving prima facie case by the prosecution raise a presumption of guilt but in the light of concept of criminal administration of justice, the prosecution is not absolved of its duty to prove the charge beyond reasonable doubt under NAB Ordinance as the burden of proof is only shifted on the person facing charge if the prosecution succeeds in making out a reasonable case by discharging the initial burden of proving the charge. The provision of section 14(d) of the said Ordinance envisages that burden of proof is only shifted to the accused to rebut the allegations if the prosecution succeeds in establishing the preliminary facts to raise the presumption of guilt.

10. This Court in Khan Asfandyar Wali v. Federation of Pakistan (PLD 2001 SC 607) having examined the provisions of section 14(d) of the said Ordinance, has held as under:-‑ "Be that as it may, the prosecution has to establish the preliminary facts whereafter the onus shifts and the defence is called upon to disprove the presumption. This interpretation appears to be reasonable in the context of the background of the Ordinance and the rationale of promulgation the same notwithstanding the phraseology used therein. The above provisions do not constitute a bill of attainder, which actually means that by legislative action an accused is held guilty and punishable. For safer dispensation of justice and in the interest of good governance, efficiency in the administrative and organizational set up, it is necessary to issue the following directions for effective operation of section 14(d): (1) The prosecution shall first make out a reasonable case against the accused charged under section 9(a)(vi) and (vii) of the National Accountability Bureau Ordinance, 1999. (2) In case the prosecution succeeds in making out a reasonable case to the satisfaction of the Accountability Court, the prosecution would be deemed to have discharged the prima facie burden of proof and then the burden of proof shall shift to the accused to rebut the presumption of guilt. In the present case, the prosecution has not been able to discharge the initial burden of proving even a prima facie case constituting an offence under the NAB Ordinance.

11. In the light of foregoing reasons, we without taking any exception to the judgment of the High Court dismiss Criminal Petitions Nos.164 & 165/2004 being any substance. Leave is accordingly refused.

12. In consequence to the dismissal of the two criminal petitions, learned counsel for the petitioner in Civil Review Petition. No.80 of 2003 against the judgment dated 1-4-2003 passed by this Court in Civil petition No.1139-K of 2002, does not press the review petition which is accordingly dismissed. M.H./M-124/S Petition dismissed. ***