2003 PLP 888 (MLD)

Initiation of criminal proceedings on the basis of a disputed stock-taking is also premature and thus, uncalled for. I see no option but to remand the case for de novo consideration back to the adjudicating officers with the following observation: Fresh stock-taking be undertaken by:- giving the appellants at least 7 days' notice in advance; associating a representative of the appellants in this exercise of stock-taking; and also associating a mutually agreed surveyor who is expert in Cement Industry affairs and who can monitor the whole exercise and also guide the staff into proper stock-taking; Since the criminal proceedings against the appellants are based on a stock-taking whose very credentials are challengeable, F.I.R. lodged against them may be withdrawn Fresh actions can be initiated on the basis of the fresh report of stock-taking as outlined to (a) above. The appeal is disposed of accordingly." (Underlined for emphasis).

6. Fresh survey was conducted in the presence of all the parties, as ordered in appeal. Copy of survey report dated 26-2-1999 is filed as Annexure C. The survey report reveals that it took almost two weeks and detailed survey was carried out from 9-2-1999 to 23-2-1999 for the 18 heaps of clinker as against the earlier search/survey conducted on 27-4-1998, which only took a couple of hours and the omission claimed by the applicants cannot be ruled out in view of the marked difference in the quantities and the time consumed in the two surveys.

7. Applicants moved the present application on account of delay in disposal of their applications under section 265-K, Cr.P.C. On 30-8-1999 the present application was admitted to regular hearing and the interim order staying further proceedings was confirmed. During the pendency of this application, on an application moved by the National Accountability Bureau, the respondent No.4, i.e. Special Judge, Customs and Taxation, transferred the case to the NAB Curt while the Customs, Excise and Sales Tax Appellate Tribunal, through order dated 12-6-2002 in Central Excise Appeals Nos.K-1458 and 1459 of 1999, dismissed the appeal filed by the Collector of Central Excise against the order of the Collector of Customs (Appeals) dated 17-12-1998 whereby the matter had been remanded for de novo proceedings, criminal proceedings recommended to be withdrawn and a fresh survey ordered which, as stated, has since been carried out.

8. Mr. Ziauddin Nasir, the learned standing counsel has raised a preliminary objection regarding the maintainability of this application on grounds that since the application under section 265-K, Cr.P.C. moved by the applicants before the trial Court was pending, the applicants could not have filed the present application under section 561-A, Cr.P.C.

9. Mr. Ziauddin Nasir has contended that there is a complete bar of approaching the High Court for quashment under section 561-A, Cr.P.C. without first exhausting the remedy provided under section 265-K, Cr.P.C. In this respect reliance has been placed by him on Gianchand v. The State and another 1968 SCMR 380; Syed Nazar Ali v. Syed Ibne Ali and others 1981 SCMR 239; Ahmed Saeed v. The State and another 1996 SCMR 186; Criminal Miscellaneous No.36 of 1999; State v. Asif Ali and another Criminal Appeal No.553 of 1995 dated 29-1-2001; and The State v. Muhammad Nawaz 2002 SCMR

634. Mr. Anwar Tariq has supported Mr. Ziauddin Nasir in this regard.

10. Dr. Farogh Naseem, the learned counsel for the applicants, in support of the application, while relying upon the order passed by this Court on 30-8-1999, stressed that the application is not only maintainable but the only remedy in the light of the facts of the this case. He placed reliance on the case of Nazir Iqbal alias Jeera and another v. The State (NLR 1999 Criminal 181); Aamir Zia v. The State (NLR 1999 Criminal 31); Muhammad Hanif Pathan v. The State (PLD 1999 Kar. 12); 2000 PCr. LJ 1734); Mian Munir Ahmed v. The State (1985 SCMR 257); The State v. Asif Ali Zardari and another (1994 SCMR 798); Asif Ali Zardari v. State (1992 PCr.LJ 58); Syed Muhammad Awais Shibli v'. The State (1995 MLD 511); Miraj Khan v. Gul Ahmed and 3 others (2000 SCMR 122); Muhammad Aamir Ali son of Hakim Ali and others v. The Judicial Magistrate, Moro and others (Criminal Miscellaneous No. 112 of 1997) Muhammad Alam son of Muhammad Hashim v. Muhammad Aamir Ali son of Hakim Ali and others (Cr.P.L.A. 36-K of 1997); Malik Salman Khalid v. Shabbir Ahmed, D & S J, Karachi and another (1993 SCMR 1873); Sher Muhammad and another v. The State (1996 PCr.LJ 200).

11. I have heard Dr. Muhammad Farogh Naseem, the learned counsel for the applicants, Mr. Zaiuddin Nasir, the learned standing counsel on behalf of the State and Mr. Anwar Tariq, the learned counsel appearing for NAB, perused the record and the law on the subject.

12. The objection that the present application under section 561-A, Cr.P.C. has been filed without awaiting a final disposal of the application under section 265-K, Cr.P.C. moved before the trial Court, has been repeatedly examined and the powers have indeed been exercised in appropriate cases wherever it was considered to be in the interest of advancing the cause of justice. In the instant case, my learned brother, Ghulam Nabi Soomro, J, while admitting this application on 30-8-1999, had observed that since the application under section 265-K, Cr.P.C. had not been disposed of by the trial Court even after the expiry of 11 months, it would be taken as dismissed. The relevant observations from the order dated 30-8-1999 are reproduced as follows:-- "Since the said application could not be disposed of even after expiry of about 1l months, it is taken as dismissed. Such order is not a condition precedent to the admission/maintainability of the application under section 561-A, Cr.P.C."

13. The above observation clearly sets the objection at rest.

14. The observations made in the order dated 30-8-1999 seem to be based on proper reasoning and appreciation. If an application under section 265-K, Cr.P.C. is not disposed of by the trial Court within a reasonable time, the High Court, considering the facts and circumstances of the case, may well take the same to be dismissed and directly entertain an application under section 561-A, Cr.P.C. Coupled with this, the other principles should not be lost sight of. Albeit, law favours the accused to exhaust the remedy envisaged under section 265-K or section 249-A, Cr.P.C., as the case may be, before pursuing a direct application under section 561-A, Cr.P.C. However, Mr. Zaiuddin's contention, reading an absolute bar to entertaining of a direct application under section 561-A, Cr.P.C. in all events, has no merit as it would amount to placing a precondition on exercise of jurisdiction by the High Court which is not intention of the law already examined by the superior Courts. The settled law seems to have two limbs, which are as follows:-- (a) The power of the Court under section 561-A, Cr.P.C. as against section 265-K or 249-A, Cr.P.C. is co-extensive. [See State v. Gulzar Muhammad (1998 SCMR 873); (b) law prefers the accused to first exhaust the remedy before the trial Court under section 265-K or 249-A, Cr.P.C. before resorting to an application under section 561-A, Cr.P.C. However, where the accused is able to establish that the remedy under section 265-K or 249-A, Cr.P.C. is illusory, nugatory, not proper or efficacious, looking to the circumstances of each case, the High Court can well entertain a direct application under section 561-A, Cr.P.C. In some rather exceptional circumstances where the accused is able to demonstrate that the matters complained of constitute a patent abuse of process of Court, and continuation of the trial is a waste of time, a futile exercise and from the admitted facts no offence is made out, non-suiting the applicant solely on grounds of alternate remedies would lead to nothing but brute injustice (see Muhammad Hanif Pathan v. The State PLD 1999 Kar. 121; Nazir Iqbal v. State NLR 1999 Criminal 181; Malik Salman Khalid v. Shabbir Ahmed 1993 SCMR 1873; Miraj Khan v. Gul Ahmed 2000 SCMR 122 and many others).

15. The judgments relied upon by Mr. Ziauddin Nasir hardly expound any proposition other than the ones discussed above. In Gianchand v. State (1968 SCMR 380), the plea of quashment was declined as the innocence of the accused was dependent upon factual dispute; Syed Nazar Ali v. Syed Ibne Ali (1981 SCMR 239) is some civil case; Ahmed Saeed v. State (1996 SCMR 186) is also distinguishable as the said case is only an authority for the proposition that section 561-A, Cr.P.C. cannot be pressed into service to quash an F.I.R. if trial proceedings have not commenced. In my opinion in such a case the correct mode would be to employ the Constitutional jurisdiction embodied in Article 199 of the Constitution of 1973. It is rather clear that the case of Ahmed Saeed v. State (supra) is not applicable where the Court has taken cognizance of an F.I. R. in which event the entire proceedings including the F.I.R. become amenable to the regime of C quashment laws found in sections 249-A, 265-K and 561-A, Cr.P.C. State v. Asif Ali and another Criminal Appeal No.533 of 1995 dated 29-1-2001 is a case where it was held that the factual controversy was of such a nature which could not have been resolved under section 561-A, Cr.P.C. Finally the last case relied upon i.e. State v. Muhammad Nawaz (2002 SCMR 634) is also not helpful to him as in that case evidence was required to be unrevealed. The judgments thus relied upon by the learned standing counsel are distinguishable and irrelevant to the matter at hand.

16. In the present case the learned trial Court instead of disposing of the application moved under section 265-K, Cr.P.C. chose to, proceed first with the application for the cancellation of bail in violation of the rule laid down in State v. Gulzar Muhammad 1998 SCMR 873, wherein it has been held that the moment an application under section 265-K, Cr.P.C. is moved, the trial Court is to dispose of the same first. The relevant observations are as under:-- "

7. The case-law surveyed would, therefore, clinch the matter. The trial Court can acquit the accused under sections 249-A and 265-K, Cr.P.C., as the case may be, at any stage of the proceedings and in the circumstances of each case the appropriate remedy for the accused appears to be to request the trial Court to consider their case under the provisions of law, The learned trial Court should thereupon apply its mind to this aspect of the matter and in the first instance, before it proceeds any further with the proceedings, shall decide whether the accused are entitled to be acquitted in terms of section 249-A/265-K, Cr.P.C."

17. In these circumstances, the applicants have a valid ground to seek their remedy under section 561-A, Cr.P.C. Subsequent circumstances also corroborate this. This Court through order dated 30-8-1999 has stayed further proceedings before the trial Court.

18. Having examined the preliminary objection as above, I now venture to embark upon the merits of the case. The law of quashment in criminal proceedings is also well-settled, which can be succinctly summarized in terms that where on the case as pitched by the prosecution there is no chance of conviction the accused, or the very basis of the prosecution version is patently untenable or rendered so, and continuation of the trial is a waste of time, a futile exercise and from the admitted facts no offence is made out or where the very cognizance is completely without jurisdiction, the criminal proceedings can safely be quashed.

19. On merits it is now abundantly clear that the F.I.R. and proceedings before the learned trial Court seem wholly untenable. As it stands, admittedly, there is no outstanding demand against the applicants or Pakland Cement, the order in original alongwith the search/survey dated 27-4-1998 having been set aside on the irregularities in the very survey and verification proceedings by the department itself that formed the basis of lodging of F. I. R. As such there can be no allegation or event of tax evasion with which the applicants could be charged since there is no outstanding demand. It is only when a demand is raised or events of tax evasion are brought to surface, that the prosecution may commence proceedings. However, till such time there is no demand, the proceedings are to be quashed and the prosecution cannot continue. See Bhola Nath Keshari v. State of Bihar and another (1999 PTD 2374); Dr. Chandra Mohan Goswami v. State of Assam and another (1984) 145 ITR 582; W.L. Kohli and another v. Commissioner of Income-tax and another (1985) 152 ITR 154; Dr. R.P. Gupta v. Inspecting Assistant Commissioner of Income-tax (Assessment), Range XIV, New Delhi and another (1987) 168 ITR 33; M. Murali Mohan v. State (Income-tax Officer, Nalgonda) (1987) 168 ITR 729; Swastika Metal Works and others v. Vimal Vashist, Inspecting Assistant Commissioner of Income-tax (1989) 176 ITR 526; Radhakrishna Reddiar v. Controller of Estate Duty, Kerala (1968) 67 ITR

838. I am of the humble opinion that this is sufficient to quash the proceedings and allow this application.

20. There is another very convincing reason for coming to the conclusion. In criminal cases a higher standard of proof i.e. "beyond all reasonable doubt" is required, whereas in civil cases a lower.standard of proof i.e. "balance of probabilities" is required. See Nooruddin and 11 others v. Abdul Waheed (PLD 1997 Kar. 6). Accordingly, when for the same facts charges under adjudication are dropped on the ground of validity of survey/search, no criminal proceedings can be forced against them.

21. Indeed the entire case in the F.I.R. is based upon the survey/search and its stock taking that took place on 27-4-1998. The said search/stock taking has been declared to be unlawful and set aside in the appellate order passed by the Collector Appeals which has been upheld by the Tribunal. The fresh survey report dated 26-2-1999 is also available now as a result of which the entire basis of the F.I.R.

the impugned search dated 27-4-1998 has been dislodged/set aside by this Court, there is no justification for prosecution to continue. In a similar case reported as Zameer ul Hassan v. State (1999 MLD 546) a Division Bench of the Lahore High Court, while relying upon AIR 1945 PC 18, held that where the fresh laboratory, reports had belied the very basis upon which the F.I.R. has been registered, there was no justification for continuation of prosecution and hence the proceedings were quashed. The present case is not different.

22. Before parting with this case, there is another aspect which requires some elaboration. Mr. Ziauddin Nasir had initially contended that in view of the order passed by the trial Court transferring the case to the NAB Court, the present application has become infructuous. Mr. Anwar Tariq, learned Deputy Prosecutor-General, NAB, has very candidly stated that in case the main application is disposed of it will not be necessary for the Court to decide this aspect. According to Mr. Anwar Tariq, in case the applicants make out a case for quashment it is immaterial whether the proceedings are before the NAB Courts or any other trial forum; and if the preconditions of quashment are not met then of course the application can be dismissed and the trial will proceed before the NAB forum. In view of this, Mr. Tariq has stated that it is hot necessary for the Court to address the issue of transfer of the case from Special Judge Customs to the NAB Courts. I am inclined to agree with Mr. Anwar Tariq, however, it would suffice to say that even if the case has been transferred to some other forum during pendency of the case the Court has ample power to take notice of the subsequent events and mould relief according to altered circumstances of the case and dictates of justice, even if there has not been such a prayer. See Saiyyid Abul A'la Maudoodi and.others v. Government of West Pakistan and others (PLD 1964 SC 673); Mst. Amina Begum and others v. Mehar Ghulam Distgir (PLD 1978 SC 220); Samar Gul v. Central Government and others (PLD 1986 SC 35) and Syed Ali Asghar and 3 others v. Creators (Builders) and 3 others (2001 SCMR 279).

23. The upshot of the above discussion is that the application is allowed and all proceedings in consequence of F.I.R. Crime No.3/55-INT/CE/97-98 dated 17-6-1998 are hereby quashed. N.H.Q./T-40/K Proceedings quashed.