1988 P Cr (PLP)

Briefly stated the facts of the case are that the applicants are Directors and the co‑accused, Mr. Khursheed Suhail is the Managing Director of Tasneem Industries Limited (hereinafter referred to the said Firm). In 1973 the said Firm exported certain goods through Habib Bank Limited, Karachi. All the documents relating to the consignment in question including the bill of lading, six invoices and three certificates of original were delivered to the New Cloth Market Branch of the said Bank for realizing the amount due on the consignment and crediting the same in the account of the said Firm. However, the said Bank failed to do so and allowed the letter of credit to expire and the ship to sail on the ground that bank was prevented by some letter, dated 11‑5‑1972 of the Export Promotion Bureau. Despite the above position the said Firm just in the spirit of cooperation found a customer in Dubai who agreed to purchase the goods if they were to be transhipped and sent to Dubai by 30‑6‑1973. Once again the Habib Bank failed as it did not take appropriate steps with the result that even the second attempt on the part of the petitioners' Firm to sell the goods abroad and repatriate the foreign exchange proved abortive. Therefore, the petitioners' Firm was left with no option but to file Suit No. 391 of 1972 against Habib Bank Limited in this Court. In the meantime, on 14‑3‑1977 the State Bank of Pakistan sent a. report to the F.I.A. alleging therein that since the amount due on the export of the goods in question had not been repatriated necessary action be taken in the case. The F.I.A. took six years to register the F.I.R.. which was recorded on 28‑2‑1983. Thereafter, investigation followed and challan was put up in the Court in 1984. Thus, the two applicants and co‑accused Khursheed are facing trial under section 12/23 Foreign Exchange Regulation, 1947 since then. After hearing the arguments of the learned counsel for the applicants and the learned A.A.‑G. Mr. Abdul Ghafoor Mangi on behalf of the State, the application was allowed and the proceedings against the applicants in the lower Court were quashed by short order, dated 27‑2‑1976 for reasons to be recorded later. Following are reasons in support of the said short order. The chief contention raised on behalf of the applicants was that the lady applicants were not in any way liable for any offence as there is absolutely no evidence against them to warrant their conviction. It was further submitted that if at all any person is liable for the alleged offence attributed to said Firm, it is Mr. S.M. Suhail who at the relevant time was Managing Director of the said Firm. However, the learned counsel, submitted, the said principal accused is absconding and two lady accused are being unnecessarily dragged. It is admitted on both hands that the goods in question were exported in the name of Tasneem Industries Limited and the money which was to be realized from the foreign buyers was to be credited in the account of the said Firm. Assuming that said firm was liable for failure to repatriate the amount due on the consignment, the question still arises as to who on behalf of the said Firm could be prosecuted for that reasons. In this connection my attention was drawn to subsection (4) of section 23 of the Foreign Exchange Regulations Act, 1947. It is read as under:‑

"23(4). Where the person guilty .of an offence under this Act is a Company or other body corporate, every Director, Manager Secretary and other officer thereof who is knowing a party to the offence shall also be guilty of the same offence and liable to the same punishment." It is clear from the above subsection that among others every Director, of the company or other body corporate' attributed with the offence is also responsible for commission of the offence and is liable to the same punishment as is awarded to the company or body corporate. It is an admitted position that both applicants are directors of the said Firm. However, the learned counsel appearing on their behalf argued that they had done nothing in connection with the disputed transaction and as such they cannot be held to be 'knowingly' party to the offence as required by above provision of law. When the learned A.A.‑G. was confronted with this argument, he conceded that there is no evidence documentary or otherwise against the lady applicants to show that they were in any way associated with the export of the goods in question. The only allegation against them is that they were the Directors of the company which had exported the disputed goods. This by itself was not enough to saddle them with any liability unless it is further proved against them that they were party to commission of the offence knowingly. Even otherwise commission of an offence involves mens rea on the part of the person who is alleged to have committed the offence. However, there appears nothing on record to indicate that in their capacity as Directors of the said Firm, the applicants did any specific thing towards conclusion of the disputed transaction. Even according to the learned A.A. ‑G. there is no material to prove criminal intent against the applicants. I have also perused the order, dated 24‑2‑1985 of the learned II Additional Sessions Judge, Karachi whereby he dismissed the application moved before him under section 249‑A, Cr.P.C. from acquittal of the lady applicants. The relevant observations made by the learned Judge are reproduced as under:‑ "In the charge‑sheet there are clear allegations against the firm of the accused persons that they had exported goods to France on firm contract basis and they were required to realise the sale proceeds within 4 months from the date of shipment but they failed to realise the same therefore show‑cause notice was issued against them by the State Bank of Pakistan but they did not send any reply, therefore, the case was registered against them." The above order is apparently sketchy. The learned Judge has not considered the grounds on which the application under section 249‑A, Cr.P.C. was based. It is clear from his observations that it was the said Firm who has exported the goods in question and it was also the said Firm who was required to realise the sale proceeds within four months from the date of shipment but it failed to do so. It also appears from the order that show‑cause notice was issued by the State Bank of Pakistan to the Firm who did not send any reply to the said notice. There is nothing to show as to who was service on behalf of the Firm with the show‑cause notice issued by the State Bank. In any case when the learned A.A.‑G. was asked in this connection, he did not specifically mention that the applicants were served with such notice or that they had failed to reply to the said notice. Even otherwise there is no indication in the papers that any such notice was personally served on the lady applicants. Normally it is the Manager, or Secretary or other executive officer of the Firm, who deals with daily affairs of the Firm who is served with such notice and gives reply thereto. For above reasons, I am of the view that there is no material to connect the lady applicants with the transaction of export of goods undertaken by their Firm. As such they cannot be held to be party to the said transaction knowingly. Merely because they happened to be directors of the firm at the time of transaction would not make them liable for the alleged offences. Accordingly the pendency of the case against the lady applicants in the lower Court is of no legal consequence and as such the case against them was quashed. S.G.D./A‑209/K????????????????????????????????????????????????????????????????????????????????? Proceedings quashed.