PLD1992Karachi353 (PLP)

0 The charge against the accused is that he being the sole proprietor of Messrs Nashiman and Co., 105, Dilkusha Chambers, Marston Road, Karachi on or about 6th April, 1987, .30th June, 1987, 22nd October, 1987 and 11th November, 1987, failed to produce the required statements and documents in relation to' the business carried out by him for the purpose of determining whether he was doing any banking business in contravention of the provisions of section 27(l) of the Banking Companies Ordinance, 1962, and4hcreby committed an offence punishable under section 43‑A, read with section 83(1‑C) of the Banking Companies Ordinance, 1962.

2. Accused Jawaid Arshad is the sole proprietor of M/s. Nashiman & Co., 105, Dilkusha Chambers, Marston Road, Karachi. On 13th March, 1987, the accused made an advertisement in Daily'Jang', Karachi soliciting deposits of money from public. As it appeared to the State Bank of Pakistan that the accused was transacting business of banking in contravention of the provisions of section 27(l) of the Banking Companies Ordinance, 1902, the State Bank of Pakistan in exercise of the powers under section 43‑A of the said Ordinance issued directives dated 6th April, 1987, 30th June, 1987, and 22nd October, 1987, calling upon him to furnish/produce to the authorised representatives of the State Bank of Pakistan documents/record/information mentioned therein, but he failed to comply with the same. The replies sent by the accused were not found satisfactory, and in order to give one more chance a directive dated 11th November, 1987, was published in Daily "Jang" and "Daily Dawn", Karachi, calling upon the accused to produce within seven days all the books and records concerning his business, but with no result. The accused thus .contravened the provisions of section 43‑A punishable under section 83 (I‑C) ‑)f the Banking Companies Ordinance, 1962. Consequently on 27‑1‑1988 a Court, which complaint for the said offence was riled against him before this C vas brought on regular rile on 7‑2‑1988. (3) I Charge under section 43‑A, read with section 83(1‑C) of the Banking ,companies Ordinance, 1962 was framed against the accused and he was asked whether he pleads guilty or has any defence to make, to which he claimed a trial. At the trial the. prosecution examined Mian Abdul Oadir, Senior Deputy director, State Rank of Pakistan (P.W‑1), and then closed its side.

4. In his statement recorded under section 342, Cr.P.C., the accused has denied the case of the prosecution. He, however, did not step into the witness box. No witness in defence was examined by him. The points for any determination in this case are, as follows:‑ Whether the State Bank of Pakistan had reason to believe that the accused was indulging in illegal banking business? (ii) Whether the accused has failed ‑ to produce/supply relevant record/information concerning his business, when called upon by the State Bank of Pakistan to do so?

6. My findings on the above points are as follows:‑‑ (i) Yes. (ii) Not proved.

7. POINT NOA: Mian Abdul Qadir, Senior Deputy Director, State Bank of Pakistan (P.W‑1) has produced the advertisement (Exh.4), made by the accused, which reads as follows:‑‑ L" ‑‑ 0.‑ J ~_qjv 0~‑;o e Lz‑ ‑ el;‑ I I& L. % a j4d .4r " iia;4 ‑‑‑‑4 ‑ d_15J He has further testified that from this advertisement it appeared to him that the accused was indulging in illegal banking business. The accused has not disputed the insertion of this advertisement in Daily 'Jang', Karachi, but denied to. have solicited the deposit of money from public. The word 'appears' used in section 43‑A of the Banking Companies Ordinance, 1962, denotes that at that stage there should be prima facie material to indicate that the offences complained of are likely to have been committed. It falls short of an absolute certainty. The evidence of Mian Abdul Oadir, Senior Deputy Director (P.W‑1) has not been challenged on this point. There was, therefore, reasonable ground for the State Bank of Pakistan to believe that the accused was indulging in illegal banking business. Point No.1 is, therefore, answered in affirmative.

8. POINT NO. : Before examining the evidence adduced in support of the prosecution version, I propose to examine a preliminary legal objection about the competency of Mian i Abdul Oadir, Senior Deputy Director, State Bank of Pakistan to file this complaint, that has been raised on behalf of the accused. This contention is based upon the provisions of sections 9 and 10 of the State Bank of Pakistan Act, 1956. Subsection (1) of section 9 of this Act lays down that the general superintendent and direction of the affairs and business of the State Bank of Pakistan are vested ‑in the Central Board. Subsection (1) 9f section 10 of this Act provides in clear terms that the Governor shall, on behalf of the Central Board, direct and control the whole affairs of the Bank. Subsection (2) of section 10 of the said Act again makes it clear that the Governor shall have authority to conduct the business, control the functions and manage the affairs of the Bank, if not specifically provided to be done by the Central Board. This question was examined in the case of Haideri International Finance Ltd v. State Bank of Pakistan, Lahore reported in PLD 1980 Lahore 658, wherein it was observed as follows:‑‑ "It may be observed that the powers which are available to the Governor under section 9(1) of the Act, are "on behalf of the Central Board". It is not denied by the petitioner that the power exercisable under section 43‑B of the Ordinance is exercisable by the Board. The authority which subsection (1) of section 10 of the Act gives to the 'Governor, is to direct and control "the whole affairs of the Bank" on behalf of the Central Board. The expression "whole affairs of the Bank" is of wider significance than the expression "affairs of the Bank". There is, therefore no scope for the view that these words must be regarded as applying to the 'affairs of the Bank" under the Act alone. Section 10(l) is to be read in the context of section 9(1) where the powers of the Central Board are given in every wide terms, and the petitioner admits that. these include the power to proceed under section 43‑B of the Ordinance. It is this power of the Board, which is exercisable by the Governor under section 9(l), because it pertains to ".the whole affairs of the Bank". I i In any case the Governor actually exercises his power in this behalf under subsection (2) of section 10, which. has also been reproduced above. Under this subsection, the Governor has the authority to "conduct the business,, control the functions and manage .the affairs of the Bank * ". Taking action under section 43‑B of the Ordinance, in my view, amounts to conducting the business of the Bank. There is, therefore, no force, in the contention that the Governor has no lawful authority to proceed against the petitioner under section 43‑B of the Ordinance."

9. The case of Hakim Muhammad Ismail Habibi v. Muhammad Qasim Khan and 2 others, reported in PLD 1980 Lahore 332, appears to lend some colour to the contention, raised on behalf of the accused that it was Governor of State Bank of Pakistan who alone was competent to rile complaint against the accused. Speaking broadly, however, this authority appears to me to create no difficulty. If sight is not lost of other relative provisions in this connection, the contention on behalf of accused might perhaps be found sustainable. However, the relevant provision in this behalf is also required to be taken note of. In this connection subsection (1) of section 84 of the Banking Companies Ordinance, 1962, is reproduced below:‑‑ No Court shall take cognizance of any offence punishable under section 83 except upon a complaint in writing made by an officer of the State Bank generally or specially authorised in writing in this behalf by the State Bank and no Court other than the High Court shall try any such offence."

10. By this section the authority to rile complaints has been delegated to the officer/officers authorised in writing to do so. The object of section 84 of the Banking Companies Ordinance, 1962 is to enable the officers of the State Bank of Pakistan to launch prosecution in respect of the offences committee under the said Ordinance. The object of this delegation is to enable the Governor of State Bank of Pakistan to concentrate on issues of vital policy, by leaving such matters to be handled by his officers. The notification dated 30th December, 1979, issued by State Bank of Pakistan, Central Directorate, Karachi is on record (Exh.3), which reads as follows:‑‑ "in exercise of the powers conferred by Section 84 of Banking Companies Ordinance, 1962 the Central Board at its meeting held on the 3rd December, 1979 has been pleased to authorise the incumbents of the posts of Director, Senior Deputy Director, Deputy Directors, Assistant Directors and Inspecting Officers of the Banking Inspection Department of the State Bank of Pakistan to file complaints in Courts of competent jurisdiction for trial of offences punishable under Section 83 of the said Ordinance."

11. Reading sections 9 and 10 of the State Bank of Pakistan Act, 1956, together with section 84 of the Banking C6mpanies Ordinance, 1962, it is apparent that Mian Abdul Qadir, Senior Deputy Director, State Bank of Pakistan was fully competent to file this complaint against the accused.

12. Reverting to the case of the prosecution against the accused, it will be observed that the accused has admitted the receipt of directives (Exh.5, Exh.7 and Exh.8). It is however, his case that all these directives were complied with. There is solitary testimony of Mian Abdul Qadir, Senior Deputy Director (P.W‑1) against the accused to the effect that the accused failed to produce relevant record and information when called upon by the State Bank of Pakistan to do so. The first directive dated 5th April, 1987 (Exh.5) mak6s it clear that M/s. Ovais Akhtar, Deputy Director and Muhammad Alam Khan, Inspecting Officer were the authorised representatives to inspect the office of the accused. Likewise the directive dated 10th June, 1987 (Exh.7) shows that M/s. S.M. Khursheed A. Majeed, Assistant Director and Mohiuddin Khan, Inspecting Officer were the authorised representatives of the State Bank of Pakistan. None out of these officers was, however, examined to prove that they had inspected the office of the accused who failed to co‑operate with them. It has also come on record through Mian Abdul Qadir, Senior Deputy Director (P.W‑1) that they had received complaints from public about the involvement of accused in illegal banking business. None of the persons who made complaints against the accused was, however, examined as a witness to lend support to the case of the prosecution. It, therefore, does not require much of calculation how to multiply 2 by 2.

13. Admittedly the accused has sent a reply (Exh.6) which was supported by estimated Statement of Accounts. He had also submitted the pro forma affidavit (EA.9) to rebut the allegations made against him. There is no supporting evidence to prove that the accused had the relevant record with him, which he declined to produce before the authorised representatives. At any rate the evidence of some of the authorised representatives was necessary specially when Mian Abdul Qadir, Senior Deputy Director (P.W‑1) has admitted in unambiguous terms that he did not visit the office of accused.

14. It is a cardinal principle of law that it is not for the accused to. prove his innocence. In criminal cases the burden lies upon the prosecution to establish the guilt of the accused beyond any shadow of doubt. A conviction can ever be based on the failure of the accused to put up proper defence.

15. Having regard to the circumstances mentioned above. I am satisfied that the prosecution has failed to prove charge against the accused beyond reasonable doubt. The accused is, therefore, acquitted. N.H.Q./S‑883/K