1998 PLP 370 (PTD)

(4) The State Bank of Pakistan or other banks shall not impose any restrictions on deposits in and withdrawals from the foreign currency accounts and restrictions, if any, shall stand withdrawn forthwith. Section

9. Secrecy of banking transactions.

Secrecy of bona fide banking transactions shall be strictly observed by all banks and financial institutions, by whosoever owned, controlled or managed.

11. The learned counsel for the petitioner contends that the section 3 of this Act overrides "any other law for the time being in force". The matter is very clear when the last part of section 3 is read and interpreted which is "any other law for the time being in force". He quite forcefully argued that any other law for the time being in force and mentioned in the Protection of Economic Reforms Act, 1992 have overriding effect including narcotics laws. In support of this contention efforts are made to say that Anti-Narcotics Task Force law was enforced for the first time in the year 1991. But as far as the present Ordinance is concerned, it has been made applicable after the enforcement of Protection of Economic Reforms Act, 1992. Because of the new Ordinance (Anti-Narcotics Task Force) and the Protection of Economic Reforms Act, 1992, especially section 3 has become redundant to the extent of taking any action under Anti-Narcotics Task Force Ordinance (presently to existence). This Task Force Ordinances brought into existence after the Protection of Economic Reforms Act, 1992. Hence it cannot be hit by section 3 of the said Act. Before dealing with this section here it may be mentioned that 9 to 10 Ordinances of Anti-Narcotics Task Force have been promulgated one after the other. None of these Ordinances were got passed from the Parliament. It may or may not be proper to say that 9 to 10 Ordinances of the same nature and words were promulgated one after the other on the expiry of every 120 days, which goes counter to the Articles of the Constitution and its spirit. But the Court does not like to give finding on this aspect because of the number of judgments for and against given by the superior Courts. A few judgments are noted below:

(a) PLD 1959 (W.P.) Kar. 594. (b) 1992 SCMR 602. (c) PLD 1989 SC 75. (d) AIR 1987 SC 559. (e) PLD 1993 SC 473. (f) PLD 1994 SC 363. (g) PLD 1960 Kar. 733. (h) 1990 PCr.LJ 317.

12. Suffice it to say that before the enforcement of Protection of Economic Reforms Act, 1992, Drugs Act and Anti-Narcotics Task Force Ordinance and other Narcotics Laws were already enforced. If the answer is yes, which is factually true then in that case they cannot be taken away out of the hitting scope of section 3 of the Protection of Economic Reforms Act, 1992, in which "override any other law for the time being in force" is mentioned.

13. It was argued by the State Counsel that Protection of Economic Reforms Act, 1992 has no scope of overriding the Anti-Narcotics Task Force Act and the other allied laws. In support of his contention, he has submitted that Protection of Economic 64forms Act deals only with the Economic Reforms. A matter like, Foreign Exchange Regulation Act, 1947, Customs Act, Income Tax Ordinance etc. and not specifically with the other laws. According to him the matter involved is of criminal nature. Protection cannot be had in support of the foreign currency account under sections 3, 4 and 5 of the Protection of Economic Reforms Act, 1992. He has also referred section 9 of the said Act quoted above. Admittedly, in the Act nowhere it is mentioned that Narcotics Task Force Act and the other Narcotics law do not fall under the provisions of sections 3, 4 and 5 of the Act which gives protection against all the penal laws. The legislator's intention is very clear from section

3. The legislation was not lacking knowledge about the Constitutional provisions and the existence of all the Narcotics Laws. The legislators having' sufficient knowledge and authority to do away with the protection or any protection with regard to the Narcotics Laws. In case the legislators wanted not to provide the protection under section 3 of the Protection of Economic Reforms Act, 1992 with regard to the matter of criminal nature

bringing of foreign exchange currency to Pakistan alleged in the present case by the prosecution/respondent. There could have been no obstruction for the legislators. Saying that preamble part be considered. Firstly if section itself is clear then there is no need to look and read the preamble for interpretation, however, that too is very clear. Bringing foreign exchange currency to Pakistan and giving unrestricted liberty by the State mentioned in Customs Act, Foreign Exchange Regulation and Narcotics Laws were kept in view while quoting the override effect.

14. An important argument was also advanced that all the laws are meant to deal with bona fide structure of the working. In this regard special reference was made to section 9 of the Protection of Economic Reforms Act, 1992. This provision of law has no relevancy in the matter. It deals with the granting of permission about the secrecy of the bank transactions which means bona fide, whether account is fake or not. For example an account is opened in the name of "A" and "A" does not exist or somebody secured and got opened account in the name of any one who is not owning the account, section 9 will come into play. In the present case, the account holder is available and admits the opening of the account in foreign currency. He admits the deposit of amount, which means bank transaction was bona fide. Thus, no benefit can be given/taken to/by the respondents/agency under this provision of law.

15. Similarly, an important principle is involved as to whether State Authorities can play fraud on the citizens of Pakistan by first giving them protection to bring foreign exchange to Pakistan under Protection of Economic Reforms Act, 1992 and when they do so, then they may turn their faces and start to harass and punish the people. In simple words the State is not expected to playing foul play with the citizens. To compel citizens to do a thing, if they do so, how they can be proceeded against, later on.

16. The petitioner was offered Protection of Economic Reforms Act, 1992 regarding foreign exchange currency. He is now told that he cannot avail that protection because Narcotics Laws are not concerned with section 3 of the Protection of Economic Reforms Act, 1992. He further agitated that when the foreign exchange was brought, Narcotics Task Force Ordinance and the other Narcotics Ordinances/laws were already in the field. All the citizens including the petitioner were granted protection. Thus, the petitioner's case will fall under the protection and no order for freezing of the account with a view to inquire into the matter or taking any action against him can be passed. Hence all the actions of the respondents taken against the petitioner are void, ineffective and without jurisdiction.

17. The leaned counsel for the petitioner has further gone to the extent while arguing the case that in the present case there is mala fide quite open on the part of the respondents. Smuggling Act has been referred in the Protection Act of 1992. The foreign exchange currency in question does not fall under the definition of smuggling.

18. At one stage, learned counsel for the petitioner also referred to Circular No.33 of the National Bank of Pakistan, dated 26-2-1991, which is reproduced below:

PRIVATE FOREIGN CURRENCY ACCOUNTS IN PAKISTAN.--We append below the text of State Bank of Pakistan, F.E. Circular No.33, dated 24-2-1991 for your information and necessary action:

"Attention of Authorised Dealers is invited to paragraph:

(1) (i) Chapter VI of the Exchange Control Manual (6th Edition, 1987) and F.E. Circular No.32, dated 23rd February, 1991 on the above subject. (2) It has now been decided that all the foreign currency accounts opened with the Authorised Dealers in Pakistan in terms of the general permission quoted above, can be fed by remittances received from abroad, travellers cheques, foreign currency notes and foreign exchange generated by encashment of Foreign Exchange Bearer Certificates. No question will be' asked about the source of acquisition of such foreign exchange. (3) The requirement of obtaining photo copies of the first 4 pages and that pages of the passport on which work permit/residence visa is endorsed, for the purpose of opening of foreign currency accounts in the names of non-resident Pakistanis as laid down in paragraph 1(ix) Chapter VI of the Exchange Control Manual (6th Edition, 1987) is also hereby waived. (4) It is further clarified that opening of foreign currency accounts in the joint names of residents and non-residents is permissible. (5) The limit of US$ 100 for withdrawal from the foreign currency accounts, in the shape of currency notes, prescribed vide paragraph 38, Chapter XVII of the Exchange Control Manual (6th Edition,, 1987) is also hereby withdrawn. (6) This supersedes F.E. Circular No.28, dated the 14th February, 1991. (Sd.) (Gul Nawaz Khan), Senior Vice-President. NOTE.

As per information provided by the respondent No.2, this Circular yeas issued on the direction of the State Bank.

19. I have gone through the circular. Its para 2 is very important wherein, it is written that any question will not be asked about the source of such foreign exchange. Thus, how the respondents can ignore the law enforced by the then Government unless Protection of Economic Reforms Act is repealed or some amendment is made therein.

20. In view of the present legal position, I doubt the authority of even State Bank to pass order for freezing the account. To say that the respondents were concerned with the matter relating to Narcotics offence. It has no force as the respondents had not bothered to register a case under any provisions of law. It is not within my competency to go in detail to know as to why this mala fide action was taken against the petitioners. It will be appropriate to say that there is a big force in the arguments of the learned counsel for the petitioner that inquiry department/Investigating Officer acted in the matter mala fide and did not bother to obey the dictates of law.

21. There is another debateable point in this case. Anti-Narcotics Task Force Ordinance, 1991 after the expiry of every 120 days new Ordinances containing the same wording were promulgated one after the other. The present Ordinance is No. 10th Ordinance. I have already said that I will restrain from indulging to give finding about the validity or otherwise of this Ordinance. Most of the judgments for and against have been given by the Courts. There is a need for discussion as to whether the Anti-Narcotics Task Force Ordinance which was already in the field prior to enforcement of the Protection of Economic Reforms Act, 1992 has been taken as having no force to the extent and scope of section 3 of the said Act. Mildly, it was argued that Anti-Narcotics' Task Force Ordinance, 1994/95 which was promulgated after the enforcement of the Protection of Economic Reforms Act, 1992, was not effected. The simple reason therefore is that the provision of Reforms Act do not override. Anti-Narcotics Task Force Ordinance, 1994/95 was a later Ordinance, which was not in existence. To be more clear, the present law (Anti Narcotics Task Force Ordinance) though technically enforced after the enforcement of the Protection of Economic Reforms Act, 1992 which has complete effect. It gives all the powers to the respondents to pass order for freezing of account and forfeiture. This is quite surprising. Safety provided cannot be taken away by the aforesaid Ordinance with retrospective effect. Such a law cannot be made and in fact the Government had no intention to do so, Other cases of like nature later on may or may not fall under the scope of the present Anti-Narcotics Task Force Ordinance, 1994/95 but it has no adverse effect over the present case, as it was not an offence during that period, when it was ordered to freeze the account. There is no need to make reference to the decided cases, dealing with this subject. In fact it has become an accepted principle of law that law containing penalty and liability cannot be retrospectively enforced. An act/action once not an offence cannot be taken as offence by a law promulgated later on.

22. Here, I may mention an interesting point that Customs Act, 1969 had given definition of sumggling which reads as follow:

"Section 2-F of the Prevention of Smuggling Act (Act No. 12 of 1977) (f) 'smuggling' has the same meaning as in clause (s) of section 2 of the Customs Act, 1969 (IV of 1969) but in Chapter II, relates only to the taking of goods out of Pakistan."

23. The learned counsel for the State has also relied upon the provisions of sections 30, 31 and 32 of Smuggling Act, Chapter

4. I have read these provisions. These provisions deal with the matter which is brought to notice of the Special Judge. He can also issue notice. He can pass an order if so satisfied. He can also pass order for the forfeiture of the foreign currency in favour of the State. But it is not the case of the respondents that this matter was never brought before the Special Judge, to take action. Here it may also be- stated that foreign exchange currency in dispute may not fall within the ambit of jurisdiction of the Special Judge. At one stage, the learned counsel for the State referred to provisions of Narcotics Substance Ordinance, 1995 but while making arguments he failed to make out any proposition to, be considered.

24. In the beginning part of this judgment it was mentioned that evidence so far collected by the respondents/Investigating Agency will be discussed in the later part of the judgment, at proper stage. In view of the legal position, there is no need to deal with this aspect of the case minutely. But to point out lacunas in the prosecution case, it is in the interest of justice to point out that the prosecution has no direct evidence to prove that the amount in question was directly connected with the narcotics drafting. They have presumed it on the ground that the party was involved in one or two cases, having copies of the charge-sheet/counts framed by the Canadian Court, some time back but having no reference to the foreign exchange currency in dispute has been shown to the Court. It is considered appropriate to say in short words that so far after the lapse of about three years, the prosecution is armed with only hearsay evidence and-.not with any iota of directly connecting evidence. Thus even on this count, the prosecution cannot face defence having a bold posture.

25. In view of the above and in spite of my best efforts to protect the so -called legal and genuine interest of the State, I find no way out. As far as the present case is concerned, I am of the considered view:

(i) that the petitioner has legal protection. Foreign Exchange Currency was brought to Pakistan through different banks and the National Bank of Pakistan cannot be ordered to freeze the account; (ii) that the order of freezing the Account No.FC-941 is wholly without jurisdiction; and (iii) that the petitioner/account holder is not liable to be proceeded against. As far as this matter is concerned, it is alarming that the inquiry was pending for the last about three years and the authorities could not come to a definite conclusion. No criminal case was ever registered, hence there is a smell of mala fide and some ulterior motives.

26. In view of the above findings the writ petition is accepted. Order dated 13-7-1993 freezing the account and all the other proceedings pertaining to that are quashed being without jurisdiction. The account holder is at liberty to operate his account. Bank Manager is present before the Court. Keeping in view his submissions, it will be improper to obstruct the smooth working of the bank. Hence it is further directed that the total amount of foreign exchange currency be released to the petitioner on his request but in two instalments. The first instalment shall be paid with immediate effect ii the petitioner so requires. As far as the remaining amount/currency with .interest, if any, is concerned, releasing date shall be fixed by this Court in submission of an application by the petitioner. A:A./A-185/L Petition accepted.