1987 P Cr (PLP)

6. In this Court, Special Prosecutor had in the very beginning filed an application Criminal Miscellaneous 159 of 1985 for summoning original bank guarantee No. EMN‑BA‑NR/4, dated 26‑6‑1975 and the original letter, dated 11‑ 12‑1977 of WASA, L.D.A., Lahore requiring the Manager of the N.B.P., Eminabad Mor Branch, Gujranwala to pay sum of Rs.2,24,700 to the WASA on account of failure of the contractor to fulfil the conditions of the contract in connection with which the said guarantee had been executed. By virtue of the same application, he summoned Ghulam Hussain Officer Grade‑II, N.B.P. Mor Eminabad Branch, Gujranwala alongwith photostat of bill of Rs.1,59,036.80 paid to WASA and other documents. On 3‑9‑1985, the original bank guarantee was produced by Muhammad Siddiq, Godown Keeper of N.B.P. Mor Eminabad Branch in this Court, as a result of requisition made by this Court. It was retained on the record to be marked and exhibited later in the statement of relevant witness. On that date, it transpired that Ghulam Hussain who was also posted at N.B.P. Mor Eminabad Branch had been transferred to Gujranwala and had for the same reason not attended the Court in spite of an order made requiring him to attend on that date. It was accordingly directed that Ghulam Hussain should appear in this Court on the next date of hearing even though he had been transferred to Gujranwala and that he should get necessary documents from N.B.P., Mor Eminabad Branch and produce them in this Court on the next date. Ghulam Hussain was examined in this Court as C.W./1. He got the original guarantee exhibited as C.W./1 and stated that that was the guarantee which had been issued by the accused on behalf of the bank. He also produced the original letter, dated 11‑12‑1977 from WASA to N.B.P. Mor Eminabad Branch, Gujranwala to pay a sum of Rs. 2,24,000 to WASA because the contractor had failed to fulfil the conditions of contract in connection with which the said gurantee had been signed. This document was exhibited as C.W.1/2. He also produced original pay order for a sum of Rs.1,59,036.80 as C.W.1/3 issued by N.B.P. Eminabad Mor Branch in favour of WASA as the payee. According to him the endorsement on the back of the said pay order showed that this pay order was encashed and payment was received by WASA. He also produced as EXh.P.W.I/4 the original letter, dated 19‑ 12‑ 1978 issued by the Zonal Office, Gujranwala to the Manager, N.B.P., Eminabad Mor Branch, District Gujranwala directing the branch to pay a sum of Rs.1,59,036.80 to the WASA in full and final settlement on their claim under the said guarantee. He also produced schedule of powers as Exh.C.W.I/6 and documents connected with the said schedule as Exh.C.W.1/5, Exh.C.W.I/7 to C.W.1/9 which were forwarding letter and supplements/amplifications of the said schedule of powers. The production of these documents, therefore, stands adequately proved on the record of this case.

7. On the merits of the case P.W.1 Muhammad Saleem stated that on 8‑1‑1979 he was posted as Manager N.B.P. Mor Eminabad Branch and accused Muhammad Iqbal Chattha was his predecessor in that branch and that on scrutiny, he had found that accused Muhammad Iqbal Chattha had issued bank guarantee in the sum of Rs.2,24,700 without taking or receiving any amount of security or any margin in favour of WASA, L.D.A. on behalf of Zeb & Co. He further deposed that accused had not entered this guarantee in the relevant register of the branch. He also stated that accused had no authority to issue this guarantee even on receiving equivalent amount, but he could do so on receiving cash with the permission of the Zonal Office. He stated that Zeb &Co. did not carry out the work given to it by WASA, L.D.A. and the bank had to suffer on this account loss of Rs.1,59,000 which has not been paid to the bank either by the accused or by Zeb &Co. He also submitted that this fact was discovered when WASA tendered this guarantee to the N.B.P. Shadman Branch for payment and the bank was obliged to pay guarantee to WASA, Lahore. C.W.1 Ghulam Hussain proved that Exh.C.W.1/1 the original bank guarantee was in the handwriting of the accused and was signed by him. On the basis of documents which he produced, he also proved that on demand by WASA, a sum of Rs.1,59,000 had been paid by the branch to the, WASA in full and final settlement of the claim of WASA on the basis of ; said guarantee. In cross‑examination by the Special Prosecutor he stated that this bank guarantee is not entered anywhere in the record of the bank and it was issued by the accused himself without complying with the requirements of the bank of securing 100% margin of the face value of the guarantee before its issuance. He further stated that this bank guarantee had been issued on behalf of the bank. In the schedule of powers Exh.C.W.I/6 for inland guarantee produced by the witness against the entry of officers (branch Managers), all the columns are blank showing that no power had been given by the bank to the officers (branch Managers). However, so far as staff officers (branch Managers) are concerned, the two columns against their description show that they can issue guarantee upto Rs.5,00,000 (on 100% margin in cash or lien on deposit held by the bank) or on 100% margin (in cash or easily realizable securities in pledge). The said witness Ghulam Hussain C.W.1 explained that from the term staff officers (branch Managers) used in the table of schedule of powers, were meant officers Grade‑II, who were working as Managers and from the expression officers (branch Managers) were meant officers Grade‑III who were working as branch Managers. He amplified that so far as officers Grade‑III who were appointed as Branch Managers were concerned, according to page 10 of schedule of powers Exh.C.W.1/6, no powers had been given to such officers to issue any bank guarantee. He also stated in cross‑examination by the Court that the said schedule of powers and instructions relating thereto, apply to all branches of N.B.P, and these are sent to all the branches by the Head Office directly. The endorsement at the foot of Exh.C.W.I/5, circular letter, dated 17‑7‑1974 of Head Office of the bank also showed that copies of the schedule of powers had been sent to all branch Managers in Pakistan. This concludes description of the evidence adduced in this case.

8. The accused was examined on 20‑5‑1986 under section

342. Cr.P.C In his said statement, he accepted that in his capacity as Officer Grade-III, he was Manager, N.B.P. Eminabad Mor Branch at the relevant time and had issued bank guarantee Exh.C.W.1/1. He however, denied that it was a fake document. He also denied that he had not entered the said bank guarantee Exh.C.W.l/1 in the record of the bank and stated that he entered it in Katcha Register of the branch. To the question that according to the schedule of powers Exh.C.W.1/6, he, being an Officer Grade‑III in his capacity as Manager had absolutely no powers to issue bank guarantee and that he issued the said bank guarantee without any powers vesting in him in that regard. He replied that he was not in know of the schedule of powers and was under the impression that he had powers to issue such guarantee. He further stated that the schedule of powers was not available in the branch so long as he was Manager in said branch. He explained that he had issued the said bank guarantee in good faith because Zeb &Co. was valuable client of the branch dealing with rice, the partners of which, had obtained cash credit facility for a collective sum of Rs.10,00,000 on the basis of hypothecation/pledge of rice and there was a good amount of sum in their account. He further stated that he did not know that the bank guarantee Exh.C.W.1/1 was enforced by the WASA and N.B.P. had to make payment of Rs.1,59,035.80 vide pay order Exh.C.W.I/3. He stated that it was not correct that N.B.P. suffered a loss of Rs.1,59,036.80 due to his wrongful act and stated that there was no wrongful act on his part. He also stated that three cheques of Zeb & Co. had wrongly been credited by the Manager, who succeeded him in Mor Eminabad Branch, in the account of Dawn Associates and if the said cheques had been credited in the account of Zeb &Co., the bank would have been indemnified and could not have suffered any loss for the amount paid by it. He claimed that he would produce defence witnesses. However, he did not produce any witness and produced only copy of plaint of the suit filed by Zeb &Co. against N.B.P., Eminabad Mor Branch as D.1 and written statement of the bank as D.2 and closed his defence evidence.

9. I have heard arguments of the learned counsel for the accused as well as of the Special Prosecutor. I have also minutely gone through the record.

10. According to section 126 of the Contract Act a contract of guarantee is a contract to perform the promise or discharge the liability of the third person in case of his default. As such document of guarantee is a valuable security as defined in section 30 of P.P.C. and is property within the meaning of said word as used in section 405, P.P.C., which defines the offence of criminal breach of trust. The accused was in the position of Manager of National Bank of Pakistan, Eminabad Mor Branch and, therefore, when he executed the said guarantee Exh.C.W.1/1, it became a property. Since however, as provided in the said guarantee it had been executed on behalf of National Bank of Pakistan, it was property of N.B.P. At the time when the accused accepted service of bank and especially when he became Manager of N.B.P. Eminabad Mor Branch, the funds and other properties of the bank were put under his trust or at any rate under his dominion. Furthermore, on joining service of the bank, he entered into, an implied legal contract touching the discharge of the trust reposed by the' bank in him to dispose of the properties of the bank in accordance with the instructions of the bank. If, therefore, the accused executed a guarantee without having any authority whatsoever to execute the same so as to bind N.B.P. and gave it to the partners of Zeb & Co. to submit the same to the WASA, he disposed of the said property in violation of the implied legal contract entered into by him with the bank in regard to the manner in which trust of the dominion over property reposed in him by the bank as regards disposal of this property namely the guarantee was to be discharged.

11. Words 'disposes of" used in section 405, P.P.C. have not been defined in P.P.C. In Black's Law Dictionary Revised fourth edition, the meanings assigned to it are 'to exercise finally in any manner one's power of control over'; 'to pass into the control of some one else; 'to part with; to bargain away'. Learned counsel for the accused has no cavil with the said meaning and also accepts (as also impliedly conceded by the accused in his statement under section 342, Cr.P.C.) that on evidence on record, the accused had delivered or transferred the custody of the said guarantee to the said 8 partners of Zeb & Co. He, however, contends that there was nothing wrong in the disposal of the said guarantee by the accused Manager to the partners of Zeb &Co. The reason advanced by him for that view is that if the accused had the authority to issue the said guarantee and had also obtained the necessary margin as security to protect the bank against any loss, even then delivery, by him of the said guarantee would have been to the same persons namely partners of said Zeb & Co. and, therefore, disposal of said guarantee to them is in order. I am afraid, I cannot accept this contention. Section 405, P.P.C. does not charge a person for having delivered property to one person or the other. It, on the other hand, incriminates him for having disposed it of in a particular manner. It is not the person of a particular transferee of property but the manner of transfer to such a transferee in violation of a legal contract, express or implied, which is the essential ingredient of criminality visualized by section 405, P.P.C. The accused had no authority whatsoever to issue the said guarantee but as stated by P.W. 1 Muhammad Saleem, he could do so on receiving cash with the permission of the Zonal Office. He, however, did not either get any equivalent cash nor get any sanction from Head Office of the bank to give the said guarantee. He had thus made away with the said guarantee in a wrong manner, i.e. in violation of legal contract, express, or implied with his employer to deal with the property of the bank in the manner prescribed by rules, regulations or instructions issued by the bank. Nevertheless, I may also state in spite of the above that it cannot be said that Zeb & Co. was a valid transferee of the said guarantee. The accused Manager could dispose of the said guarantee as property of the bank to the person who vis‑a‑vis him were entitled to receive the same from him. He was not a valid person to deliver the said guarantee and the partners of the said firm were not valid recipients of the said guarantee from him. The accused was not entitled to deal with the property of the bank in any way he liked. By the terms of the contract, express or implied, entered into by him with the bank, he was bound to dispose of the property of the bank in accordance with the rules and instructions issued by the Head Office of the N.B.P. Just as he could not have made away the funds of the bank to a person who had neither any account in the bank nor had produced a cheque or any other document in his favour as a beneficiary of the same, exactly in the same manner the accused could not have disposed of the said guarantee in favour of the persons who were not entitled to get the same from him in his capacity as an officer who was not entitled to issue the same. It is true that if the accused in his capacity as Manager of the said branch had also been Officer Grade‑II and had obtained the necessary 100% margin before issuing guarantee, the guarantee would have quite rightly been handed over to the partners of Zeb & Co. but that is a situation in which the accused would have been a valid executant and transferor of the said guarantee on behalf of the bank and the partners of Zeb &Co. would have been valid recipients of the said guarantee. It must be remembered that the guarantee in question was a substitute for the cash and was convertible into cash the moment demand was made by WASA (on commission of default by the contractors namely Zeb & Co. to pay back to WASA the said sum of Rs.2,24,000 advanced to Zeb & Company for execution of the contract) without reference to the said contractor and its disposal could not have been made without complying with instructions of the bank in regard to its disposal which bound the accused to deliver it to the persons entitled to it only. In that way, too, in my opinion the manner of the disposal of the said guarantee was in violation of instructions of the bank.

12. The other ingredient of the offence of criminal breach of trust as made out in section 405, P.P.C. is that the accused should have made said disposal dishonestly i.e. with the intention of causing wrongful gain to one person and wrongful loss to another person as defined in section 24, P.P.C. Now the intention is something which cannot be directly seen and in respect of which no direct evidence can be given. The intention has to be inferred from the facts and surrounding circumstances. Muhammad Saleem, the succeeding Manager who appeared as P.W.1 in this case stated in his testimony that he had found that the accused had not made entry of issuance of said guarantee in the relevant register and that this fact and others were discovered when WASA tendered this guarantee for payment. He also stated that he made a report to his seniors and also to the police. In cross‑examination, he stated that when he took over the charge he had personally counted valuable securities as per balance register but did not find out the issuance of this bank guarantee. He also stated that internal audit is carried out under the Zonal Office almost every month and there was no audit objection regarding the bank guarantee because it was not recorded. This witness had made a report to senior officers of the bank and also to police. He could not have done so without seeing the record of the bank and especially the guarantee issuance register. The circumstance of his having made a report to officers of the bank and filed a report with police visualizes and even ensures that he scrutinized the said register and other record before making any one of the two reports. His statement that accused had not entered the factum of issuance of said guarantee in the relevant register is supported by his disclosure in cross‑examination that there was no audit objection in respect of this guarantee as it was not recorded in the relevant register as well as in register of valuable securities. No cross‑examination was conducted on this witness by the defence counsel to contest his assertion that the accused did not enter the said bank guarantee in the relevant register. There was no suggestion that the said register did contain the said entry. The accused is, therefore, to be deemed to have admitted that he had made no entry of issuance of said guarantee in the said register. In coming to this conclusion I am supported by a similar observation made by Gulbaz Khan, J. in Kaloo v. The State 1975 P Cr. L J

112. In these circumstances in my opinion, sole testimony of this witness as regards this circumstance had proved that accused had not made entry of issuance of this guarantee in the guarantee issuance register. Ghulam Hussain Bhatti who had been working in the said branch as Second Officer at last from 1‑7‑1984 to May 1985 appeared as C.W.1 and stated in his cross‑examination by the Special Prosecutor that the bank guarantee Exh.C.W.I/1 did not stand entered anywhere in the record of the bank. He thus also supported the testimony of P.W.1 Muhammad Saleem. It is true that in cross‑examination by the defence counsel he stated that he did not know that in 1976‑77 there was any register in which any guarantee issued was required to be entered. He was, however, not posted in the said branch in 1976‑77 and lack of knowledge on his part of actual maintenance by the then management of guarantee issuance register in 1976‑77 is justifiable. That, however, does not cast any reflection on the truth of his statement that the accused had not made entry of issuance of this guarantee in any register of his branch. I, therefore, rely fully on the statement of this witness too. His evidence also visualizes and presupposes that during the period of his posting, which appears to embrace on them its ambit the time when the case was sought to be registered against the accused, he had looked into all the registers of the bank to find if entry of said guarantee stood made in any of them. Thus, the evidence of both the witnesses is based upon personal scrutiny by them with their own eyes of the record of the bank. In my opinion, therefore, the factum of non- existence of any entry in the record of the bank as regards issuance of said guarantee stands proved beyond any shadow of doubt on the evidence on record.

13. Learned counsel for the accused has, however, contended that it was necessary on the part of the prosecution to have produced register in which entries of issuance of guarantees are made and that in the absence of the said register, the oral statements of the said witnesses cannot be believed. However, provisions of the Evidence Act, 1872, now of Qanoon e‑Shahadat, 1984, do not sustain the said objection of the learned counsel for the accused. According to section 59 of the Evidence Act, 1872 all facts except the contents of the documents may be proved by oral evidence and according to section 61 of the same statute, the contents of the documents may be proved either by primary evidence which meant the original document or secondary evidence which meant certified copies, etc. thereof. It may, however, be noted that embargo against proof by oral evidence is confined to the proof of contents of the documents and not to a fact which is not available in the contents of a particular document. The prosecution in this case did not seek to prove any fact available in the contents of the said register but wanted to prove that there was no entry of the issuance of this guarantee in the relevant. register or in any other register of the bank. Such evidence according to section 59 has quite rightly been adduced by oral evidence. The only exception however, is that this oral evidence as stated in section 60 of the Evidence Act must be direct evidence. The testimony of P.W.1 Muhammad Saleem clearly shows that he had scrutinized the record of the bank. If, therefore, he stated that the accused did not make entry of the issuance of the said guarantee in the relevant register it is clear, that what in fact he had stated was that after having gone through and scrutinized the register with his own eyes he had found that the entry in regard to the issuance of the said guarantee was not there in the said register. He had, therefore, given direct evidence of what he had seen. His oral statement was, therefore, valid to establish the said circumstances. Learned counsel for the accused has further referred me to portion of section 91 of Evidence Act, 1872 which states that in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given of the said matter except the document itself or secondary evidence of its contents in case in which secondary evidence is admissible. His submission is that the register itself ought to have been produced. In my opinion, however, the said section too does not improve the case of the accused. What is reduced to writing is something positive and, therefore, the matter referred to in the said section which is required to be reduced in the form of writing in the context of the present case is the positive fact of guarantee having been issued. The case of prosecution, however is in the negative and it is that there is no entry of issuance of said gurantee in the register. A register not containing an entry is not a document within the 'meaning' of the said word as used in section 91 of the Evidence Act, 1872 and now Article 102 of Qanoon‑a‑Shahadat 1984, which must be produced to prove the non-existence of said entry. In my opinion the bar contained in this section against proof of positive entry in a register except by production of the original register does not extend to proof of non‑existence of an entry in a register and the absence of such an entry can competently be proved by oral evidence of a witness who has seen the register and can give direct evidence in that regard. For the aforesaid reasons, the objection raised by learned counsel for the accused does not detract from the correctness of my finding that the fact that accused did not make any entry of issuance of said guarantee in the relevant register and even in any other registers of the bank has been proved to the hilt on the basis of oral statement of the said two P.Ws.

14. In this connection, it is pertinent to note that since the prosecution had discharged the onus which lay on it to prove that accused had not made entry of issuance of said guarantee in guarantee issuance register, if the defence considered it a material document which according to them would show that an entry had been made by the accused in it, the accused should have got it summoned to prove the same in his defence. This, however, was not done. Therefore, the presumption under section 114‑G of Evidence Act, 1872, now Article 129 of Qanoon‑e‑Shahadat, 1984 is that the register would not have furnished any evidence favourable to the accused or in other words there is no entry of issuance of said guarantee in the said register.

15. In his statement under section 342, Cr.P.C. the accused did not deny that he had not made entry of the issuance of the said guarantee in the guarantee issuance register. He, however, stated that he did make an entry of issuance of said guarantee in a Katcha register of the bank. The accused, however, never made a suggestion to P.W.1 Muhammad Saleem or even to Q.W.1 Ghulam Hussain Bhatti in that respect. It is clear, therefore, that the said statement in defence is an afterthought. In this conclusion's which I have arrived at I am fortified by the observation made in Emperor v. Naga Nyun A I R 1935 Rang. 393 that when defence fails to cross- examine the prosecution witnesses concerning the version of the facts', which the defence alleged, it is usually safe to conclude that the defence is an afterthought and had in fact not been concocted at the time when the prosecution witnesses were examined. The said statement is inconsistent with the statement of P.W.1 Muhammad Saleem in cross‑examination that when he took over the charge, he had personally counted the valuable securities as per balance register but he did not find out the issuance of this bank guarantee and that there was no audit objection regarding the bank guarantee because it was not recorded. If the accused had made any entry of the said issuance even in Katcha register, it would have been reflected in balance register and would have been discovered during the audit. This statement of the accused was not, therefore, plausible. Though entry in a Katcha register is hardly of any consequence in the circumstances of this case, it was necessary for the accused to have summoned the said Katcha register from the record of the bank and proved entry in it of issuance of the said guarantee. Any statement in defence taking a special plea which appears to be negated by the prosecution evidence, must be proved by the accused by producing defence evidence; otherwise, the said special plea is left to be of no consequence. The accused did not summon the said Katcha register too and, therefore, his plea in statement under section 342, Cr.P.C. does not impinge upon the correctness of my finding that no entry was made by the accused in guarantee issuance register or any other register of the bank in respect of issuance by him of said bank guarantee.

16. The circumstances of the accused having not made entry of issuance of the said guarantee in the guarantee issuance register does not appear to be an inadvertent omission on the part of the accused. The transaction in question charged the bank with responsibility of paying a huge amount of Rs.2,24,700 to WASA by way of refund on failure of the contractor to execute the work. It put to jeopardy a heavy amount of the bank. It was an occurrence of great importance in the branch, sufficient to be a source of some concern to the accused Manager and, therefore, its entry in the relevant register could not have just been missed by the accused Manager. Moreover, accused who had issued the guarantee on 22‑ 6‑ 1976 had remained Manager in the branch till 7‑1‑1979. If he had at all missed making an entry on 22‑6‑1976 in the relevant register, on recollection in his memory of said issuance on any date, thereafter, he could have, after getting permission of higher authorities, made a post dated entry in the said register. lie, however, remained silent and did not make any such entry during the remaining period of 2‑ I/2 or three years of his tenure. It is obvious, therefore, that the said act of the accused in making no entry of issuance of said guarantee in the relevant register or any other register of the bank was made by design and was intentional and was not an inadvertent omission on his part.

17. The proved circumstance that accused had intentionally not made entry of issuance of the said guarantee in guarantee issuance register or any other register of the bank, shows that lie withheld the said circumstance from the bank. The said concealment is obviously the result of guilty conscience on the part of the accused. In Abdul Majid v. Superintendent and Rememberancer of Legal Affairs P L D 1964 SC 422 criminal Court was advised to examine the circumstances of the criminal act and its result for the purpose of gauging natural probabilities. Again in The State v. Manzoor Ahmad P L D 1966 SC 664 it was held that in case of the kind where there is no direct evidence to show as to what was the precise manner in which the crime had taken place, it was not sufficient to say that since there was no direct evidence to connect anyone with the felonious act, the guilt cannot be fixed and that it is precisely in such cases that it is the duty of the Court to examine the probabilities in the light of the circumstances proved in the case. Relying on the above observations I think it is permissible for me to discover the intention of the accused from circumstances of the case and natural probabilities arising therefrom. By issuing a guarantee when he was not authorised to do so, the accused denied to the bank the commission which would have otherwise been obtained by the bank from Zeb & Co., the party to whom it had rendered service. Furthermore, in issuing the guarantee himself without getting sanction from higher authorities who would demand 100% margin, the accused deprived the bank of the deposit by Zeb & Co. of equivalent sum of Rs.2,24,700 as required by Schedule of Powers Exh.C.W. 1/6 and its consequent benefits to the bank. The said sum though entered in the sundry account of the bank was to remain in circulation. The advantage of utilization by the bank of the said sum in its business were thus taken away by the said act of the accused. The question is what was the intention of the accused in doing all this. The obvious answer is that his intention was to appropriate the commission to himself and get other advantage from Zeb & Co. in his private capacity. Intention to cause wrongful gain to himself and to Zeb & Co. was inherent in this situation. It appears to me that the accused had in order to make wrongful gain intentionally desisted from making the entry of issuance of said guarantee in the said relevant register of the bank or in any other book of the bank. It has been held in Arif Matin Bhutta v. The State P L D 1984 Lah. 383, that Courts do not act in a vacuum and have to take into consideration prevailing trends and circumstances in the society. In the light of the said observation, I think I cannot overlook the existing techniques of commission of offences in the banks, Number of cases have been received in this Court wherein the allegation is of parallel banking being indulged in by Managers of the branches with the funds of the banks. Indeed in the circumstances noted above it appears to me that the accused desisted from making entry in the said register from the motive of making private wrongful gain at the expense of the bank from this transaction. Guilty conscience on the part of the accused in issuing the said guarantee and disposing it of in the manner done by him therefore, stands fully established.

18. Section 405, P.P.C. makes said disposal of property 'dishonestly' as a criminal offence. 'Dishonestly' has been defined in section 24 of P.P.C. as doing of an act with the intention of causing wrongful gain to one person or wrongful loss to another person. Section 23, P.P.C. defines wrongful gain to be gain by unlawful means of property to which the person gaining is not legally entitled and wrongful loss to be loss by unlawful means of property to which the person losing is legally entitled. The manner in which the accused issued and disposed of the said guarantee appears to be fully covered by the word 'dishonestly'. As already shown above, he failed to protect the bank against effect of non‑performance of the contract by the contractor. Natural result of this secretive, stealthy and surreptitious execution and delivery of guarantee was to expose the bank to serious risk of loss. It was obvious that in case terms of contract would not be carried out by Zeb &Co. the WASA would enforce the guarantee and recover the sum lost by it from the bank and thereby cause loss to the bank for the sum recovered. The accused Manager must, therefore, be attributed the' intention to cause that wrongful loss to the bank too. The said important' ingredient of the said offence, accordingly, also stands fully satisfied in l this case.

19. Learned counsel for the accused has here contended that it has not been proved on the record that the accused had knowledge that he had no powers vesting in him to issue the said guarantee and that he had no knowledge of schedule of powers Exh.C.W.I/6 and that it has not been proved by any witness that the said schedule of powers had been sent to, received in and was available in the N.B.P. Eminabad Mor Branch to fasten the knowledge on the accused in respect of lack of authority on his part to issue such a guarantee. For this contention, he has relied upon the circumstance that C.W.I Ghulam Hussain Bhatti had brought the original schedule of powers from his own branch namely N.B.P., Bank Square Branch, Gujranwala to which he had been transferred from Eminabad Mor Branch, and had not brought it from N.B.P, Eminabad Mor Branch. There was, therefore, no proof on the record that the said schedule of powers was available in the Eminabad Mor Branch.

20. I have given my anxious thought to this point. It may, however, be noted that as already stated, C.W.1 Ghulam Hussain was originally posted in Eminabad Mor Branch at the time when he was summoned alongwith necessary documents from Eminabad Mor Branch. However, at the time when summons reached in Eminabad Mor Branch he had been transferred and the original guarantee had been brought from Eminabad Mor Branch by Muhammad Siddiq Godown Keeper and produced in this Court as shown by interim order, dated 9‑3‑1985 passed in this case. On the same date, it was directed that even though Ghulam Hussain had been transferred he should get documents from his previous branch and produce the same in this Court and appear himself to give evidence in the case. Although he brought the other documents from the said Eminabad Mor Branch, avowedly he had not brought the schedule of powers from the said branch but had brought it from his own branch. He, however, stated in the cross‑examination by the Court that the original schedule of powers C.W.1/6 and its related papers supplementing the said schedule of powers exhibited on record as C.W.1/5, C.W.1/7 to C.W.1/9 were sent to all the branches by the Head Office directly. Endorsement on the forwarding letter Exh.C.W.l/5 whereby the said schedule of powers Exh.C.W.6 was sent clearly shows that copies of the said schedule of powers which was attached to the said forwarding letter were sent to all the branches of the bank by the head office. There is a presumption of regularity of official acts and it has got to be presumed that official acts were regularly performed and copies of the said schedule of powers were meant to be sent to all branches of the bank otherwise said endorsement would not have been made. Admittedly Eminabad Mor Branch was branch of N.B.P. and was not excluded from the list of branches of N.B.P. There was, therefore, no reason that a copy of schedule of power was not meant to be sent to Eminabad Mor Branch. The said branch must, therefore, have been sent the copy as deposed to by C.W.1 Ghulam Hussain Bhatti. Furthermore, the said endorsement at the end of forwarding letter C.W.1/5 was an entry in an official ‑record made by a public servant in discharge of his official duty and, therefore, under section 35 of the Evidence Act, 1872 it furnished a valuable and important piece of evidence upon the said question. Even otherwise, it is not believable that a copy of the said schedule of powers was not available in that branch for being consulted by the accused Manager at the time of issuing the said guarantee as every branch has to be self‑sufficient in regard to rules, regulations and instructions as it cannot otherwise function independently, effectually and efficiently. However, it does not stand to reason that a Manager should not know the scope of his powers for issuance of guarantee because it is only men with sufficient knowledge of the rules and instructions who are posted as branch Managers.

21. For the aforesaid reasons, I am of the view that said schedule of powers was available with the accused and at any rate he was fully in know of the circumstances that he had no power to issue any guarantee of any sort and had intentionally issued the said guarantee.

22. Thus, all the ingredients of offence of criminal breach of trust as defined in section 405, P.P.C. having been proved, the impugned act of the accused falls fully within the ambit of the said section. The accused as Manager of the branch was public servant as defined in clause ninthly of section 21, P.P.C. and he committed the said offence in that capacity. He is thus proved to have committed offence under section 409, P.P.C.

23. Learned counsel for the accused has, however, contended that by making payment of the sum of Rs.1,59,033.80 on the said guarantee, the N.B.P. had ratified the said contract of guarantee and as laid down in section 196 of the Contract Act, on the said ratification, the same effect had followed as if the act done by the accused had been performed by the authority of the N.B.P. and, therefore, the accused cannot be convicted and sentenced now. I have read through section 196 of the Contract Act. It is quite right that there can be ratification by the principal of the acts done without lawful authority by the agent of the said principal but it is also stated in the said section that principal may elect to ratify or to disown such acts. There must, however, be some point of time uptil which the principal can make the said election for the said act to be considered as an act of the principal. That point of time appears to me to be the time before the default in terms of the contract is committed and penalty clause of the said contract is invoked to recover the sum made payable on that default. In my opinion, there is a distinct difference between ratification of a contract which must take place before infringement of the terms of the contract and payment of a sum of money as penalty on the commission of default in complying with the terms of the contract. The earlier act is voluntary and the later one is the result of compulsion and cannot be considered to be ratification of the contract. In the present case, however, there was no time with the principal namely N.B.P. to make said election or choice by a voluntary act on its own part. It (N.B.P.) had suddenly been confronted with a fait accompli of a guarantee, issued by the accused on behalf of the bank and disposed of to Zeb &Co. dishonestly and the default in completion of the contract having been committed and bank having been faced with necessity of making payment to WASA on the basis of the said guarantee. As stated by P.W.1, WASH had large deposits in the N.B.P. and the principal, N.B.P. could not have displeased the same and was constrained to pay the sum of Rs.1,59,036.80 on the said guarantee. In my opinion, therefore, the said payment did not tantamount to ratification of the contract and did not wash off criminal liability of the accused. Furthermore, I am of the view that under section 196 of Contract Act, it is only the civil liability (created by the act of an agent acting for his principals) which can be ratified and criminal liability cannot be ratified. For instance, if a servant of a master or agent of a principal acting for and on behalf of his master or principal, commits the murder of a person, the criminal acts of the servant or agent cannot be ratified by the master or the principal.

24. Apart from the above, there is another fatal objection to treatment of said payment to WASA as ratification of the contract of guarantee and that is that the guarantee is a forged document and there can be no ratification of forgery. The accused made the said document with the intention of causing it to be believed that the said guarantee was made by the authority of National Bank of Pakistan by whose authority he knew that it was not made. It has been proved that he had done so dishonestly with intent to deceive the bank and cause damage and injury to it. The said document, therefore, falls squarely within the peripheri of a false document as defined in clause first of section 464, P.P.C. and is the result of forgery as defined in section 463, P.P.C. I am fortified in this view of mine by observation made in L.K. Siddapa v. Lalithama A I R 1954 Mys.

119. In that case the accused got printed false marriage invitations issued under the name of two persons announcing the celebration of marriage of the accused with the complainant, a young woman of about 20 years inheriting property worth thirty/forty thousands. Neither the complainant nor the persons under whose name they were issued had authorised the accused to get printed such invitations. It was held that the said marriage invitations were forged instruments and fell within the definition of false documents under section 464, P.P.C. The said guarantee in the present case is, therefore, a forged document. It was held in Brook v. Hook 1871 L.R. 6 Ex. 89 that forgery is incapable of ratification. The said doctrine of English Law appears to be fully applicable to this country as section 29‑B of Negotiable Instruments Act, 1881 countenances this view. The said section is quoted in its full text as below:‑

29‑B. Forged or unauthorised signature.‑‑ Subject to the provisions of this Act, where a signature on a promissory note, bill of exchange or cheque is forged or placed thereon without the authority of the person whose signature it purports to be the forged or unauthorised signature is wholly inoperative, and no right to retain the instrument or to give a discharge therefore or to enforce payment thereof against any party thereto can be acquired through or under that signature, unless the party against whom it is sought to retain or enforce payment of the instrument is precluded from setting up the forgery or want of authority: Provided that nothing in this section shall affect the ratification of an unauthorised signature not amounting to a forgery. It was held in William v. Bayley 1866 LR IHL 200 and M. Kenizie v. British Linen Co. (1881) 6 App. Case, 82 at page 99, that though it is sometimes said that forgery cannot be ratified, the true doctrine appears to be confined to this, that public policy prohibits' man to extort from another, whose signature has been forged, an undertaking to be responsible as if the signature were genuine, as the price of forbearing criminal proceedings against the forger. The act of the accused in making and issuing the said guarantee, therefore, cannot be said to have been ratified as the guarantee was a forged document. I do not, therefore, think that it is not possible to convict the accused for offence under section 409, P.P.C. on that account. The said point too, therefore, does not restrain me from convicting the accused for the offence under section 409, Pakistan Penal Code.

25. Learned counsel for the accused has next contended that there is no proof on the record that default in completion of the work of the contract was committed by Zeb &Co. to justify payment by National Bank of Pakistan of the sum of Rs.1,59,036.80 to WASA. His submission is that the accused cannot, therefore, be convicted. I have considered this objection of learned counsel for the accused. In my opinion commission of default by Zeb &Co. stood fully proved on record and was not open to any exception as the letter Exh.C.W.l/2 of WASA informing the N.B.P. Eminabad Mor Branch that contractor had failed to fulfil the conditions of the contract had to be accepted according to one of the terms of the guarantee and payment made without reference to the contractor. It is notable that the accused had taken it for granted during the entire period when prosecution evidence was being recorded that there was default by the contractor as no question was asked from prosecution witnesses that actually no default had been committed. In any way proof by prosecution of commission of default was not an absolute necessity in the investigation by this Court into the question whether accused had committed offence under section 409, P.P.C. in this case or not, as it is not necessary ingredient of offence of criminal breach of trust. Even if no default had been committed, on the facts relied upon by the prosecution, the offence had even then been committed earlier. I, therefore, repel this argument of learned counsel for the accused. The point raised by him does not stand in the way of my convicting the accused for offence under section 409, P.P.C.

26. Learned counsel for the accused has next contended that there is nothing on record to show that any enquiry was made by N.B.P. as regards the correctness of claim of WASA for payment to them of the sum of the guarantee and that the sum paid on the basis of the said guarantee was made over to WASA only in order to oblige WASA which was maintaining a big account with the said bank in Shadman Branch. Plea of the learned counsel for the accused is that since P.W. 1 Muhammad Saleem had accepted that if the loss of Rs.1,59,036.80 had not been sustained by N.B.P., no F.I.R. would have been lodged, the accused cannot be convicted and sentenced. I have looked into this question too. In my opinion, the question of correctness or otherwise of the quantum of loss suffered by N.B.P. is wholly irrelevant to the issue whether accused had committed offence under section 409, P.P.C. or not. However, since the question of validity and actual amount of loss suffered have bearing on the question of fine to be imposed on the accused, I feel inclined not to leave the said point unnoticed and undetermined. In the original letter, dated 11‑12‑1971 Exh.C.W.I/2 by WASA addressed to Manager National Bank of Pakistan, Eminabad Mor Branch, claim was made for payment of WASA of a sum of Rs.2,24,700 i.e. the entire sum of the guarantee. However, in Exh.C.W.1/4, the final letter, dated 19‑12‑1978 by N.B.P. the Manager of Eminabad Mor Branch District Gujranwala was directed to pay to WASA a sum of Rs.1,59,036.80 only. It is thus clear that the original claim for payment of Rs.2,24,700 was not accepted and a reduced sum of Rs.1,59,036.80 was allowed to WASA. That shows that authorities of National Bank of Pakistan did not act blindly and got the amount of original claim reduced by a substantial sum. That also visualizes that inquiry was made by N.B.P. into the question of the actual loss suffered by the WASA. It is also clear from dates of the two letters mentioned above that there was a time log of about one year between the claim and acceptance letter. That also shows that authorities of National Bank of Pakistan did not act in hot haste and took time to elicit from WASA the figure of the actual loss suffered by WASA on account of default of the contractor and the circumstance that the N.B.P. took full one year further shows that they were making enquiry into the question what was the loss actually suffered by WASA. There is intrinsic evidence, therefore, of the fact that the said sum of Rs.1,59,036.80 paid by N.B.P. to WASA, was the amount of actual loss suffered by the WASA on account of default by Zeb & Co. in completing their contract. The prosecution had discharged the general onus of proving the damage caused to WASA by producing said two letters and thereby showing that there was enquiry by N.B.P. into the correctness of the claim of WASA. If the defence considered it material for its case to show that there was no enquiry into the question of actual loss suffered by WASA, it should have produced defence evidence to that effect but none was produced. This point also has, therefore, no force and does not hold me from recording a finding that accused is liable to be convicted for offence under section 409, P.P.C.

27. Kh. Saeeduz Zafar, learned Special Prosecutor has at this stage vociferously argued that the accused should be convicted of offence under section 467, P.P.C. too inasmuch as on the facts of this case accused is clearly proved to have forged a valuable security. His plea is that notwithstanding that no charge for offence under section 467, P.P.C. was framed against him, he should be convicted and punished for the said offence as sections 236 and 237, Cr.P.C. read together permit adoption of that course. I have considered the said question. I am afraid, I cannot do so as his plea does not fall within the ambit of sections 236 and 237, Cr.P.C. The case of the Special Prosecutor is not for punishment being awarded under an alternative offence for which the accused had not been charged but for additional offence. However, no charge for offence under section 467, P.P.C. had been framed in this case and, therefore, the accused cannot be convicted of the said additional offence otherwise serious prejudice would be caused to him as he had fought the case on the sole basis that he had been charged for offence under section 409, P.P.C. I, therefore, reject the said contention of learned Special Prosecutor.

28. The upshot of the above discussion is that it stands established to the hilt that the accused while working as Manager N.B.P. Eminabad Mor Branch in his capacity as a public servant had dishonestly disposed of the property of the N.B.P. consisting of the said guarantee (dominion over which had been entrusted to him) in violation of the implied legal contract which he had made with the bank touching discharge of said trust and had thus committed criminal breach of trust by a public servant made punishable under section 409, P.P.C. I accordingly convict him of the same.

29. The accused had done the above act with the intention of causing wrongful gain to Zeb &Co. and wrongful loss to the N.B.P. It has also been held that he did so with intent to cause wrongful gain to himself. There is however, no direct evidence on the record that he himself had in fact gained any pecuniary advantage from the said transaction. In my opinion, therefore, it is not proved that he had committed offence under section 5 of Prevention of Corruption Act. I, therefore, acquit him of the said offence.

30. Taking all the facts into consideration I sentence the accused for offence under section 409, P.P.C. to six years' R.I. and a fine of a sum of Rs.2,00,000 and in case of default in payment of fine, he shall suffer further R.I. for 2‑1/2 years. The accused shall be entitled to the benefit of section 382‑B, Cr.P.C. and period of his detention as an undertrial prisoner in the judicial lock up shall be deducted from the term of imprisonment imposed upon him and he shall be made to undergo only the remaining period of imprisonment. Out of the fine if recovered a sum of Rs.1,60,000 shall be given to N.B.P. Eminabad Mor Branch and remaining sum of fine shall be confiscated to the State. S.A./6/L Accused convicted.