P L D 2025 Balochistan 106 (PLP)

MUHAMMAD HASHIM KHAN KAKAR, J.

Through these petitions, the petitioners have challenged the validity and legality of the order dated 10th October, 2022, passed by Assistant Director, FIA Zone-I, Karachi, whereby the accounts of the petitioners were blocked during the course of an inquiry No.69 of 2022, initiated against one Munir Ahmed and Ayaz Muhammad being allegedly involved in Hundi/Hawala and money laundering. The accounts of petitioners were blocked on account of owing some business transactions with the above named suspects. 2 We have heard learned counsel for the parties and also perused the available record with their valuable assistance.

3. To have a better understanding of the controversy in hand, it would be advantageous to refer subsection (5) of section 5 of the Federal Investigating Agency Act, 1974, (FIA, ACT, 1974) which reads as under: "(5) If, in the opinion of a member of the Agency conducting an investigation, any property which is the subject matter of the investigation is likely to be removed, transferred or otherwise disposed of before an order of the appropriate authority for its seizure is obtained, such member may, by order in writing, direct the owner or any person who is, for the time being, in possession thereof not to remove, transfer or otherwise dispose of such property in any manner except with the previous permission of that member and such order shall be subject to any order made by the Court having jurisdiction in the matter."

4. Perusal of the aforesaid provision of law clearly reflects that members of Federal Investigation Agency have powers to issue an order in writing for placing an embargo upon the removal, transfer or otherwise disposing of a property which is subject matter of an ongoing investigation, however, it cannot be exercised during the course of an inquiry. As a matter of fact, inquiry and investigation are two related terms, but they have distinct meaning and context. Inquiry refers to the process of seeking information, knowledge or understanding about a particular subject or issue, whereas, investigation, on the other hand, is a systematic and formal process of examining a specific incident, situation or problem with the purpose of uncovering facts, gathering evidence and reaching at conclusion. Thus, issuance of closing orders at inquiry stage renders the impugned orders to be of no legal effect.

5. It is also imperative to mention here that even at the stage of investigation; the powers bestowed upon FIA members under section 5 of FIA Act, 1974 are not unfettered, these are subject to certain restrictions and limitations, required to be used sparingly and only in cases of exceptional nature. The investigation officer can only exercise such power, if he believes that the progress of the investigation might be hindered due to the removal, transfer or disposal of the property in question. Furthermore, this belief held by the FIA member must be expressed in writing. Similarly, the expression 'likely to be removed' used in section 5(5) implies that usual course of action is to obtain a seizure order from the court and the FIA members can exercise their powers only in cases of utmost urgency where seeking court intervention would provide the possessor of the property an opportunity to remove or dispose it off.

6. It is also pertinent to note that the people of Balochistan mostly earn their livelihood through agriculture and livestock and during last two decades, they have badly suffered due to continuous drought, depletion of water level and shrinking of pastures/rangelands. Presently they depend on trade activities with the business communities of Iran and Afghanistan. Due to international sanctions on Iran, absence of proper banking system in Afghanistan and worse law and order situation in the province, the small traders have to make and receive payments through cheques. Consequently, their transactions frequently come under scrutiny. The frequent use of powers under section 5(5) of the FIA Act, 1974 has fueled the situation while bringing the economy at the verge of collapse. We have noticed in a number of cases that in many instances, no predicate offence, which is a prerequisite for the offence of money laundering, is present. Despite this fact, the businessmen of Balochistan are subjected to inquiry and their accounts remain frozen for an indefinite period without any lawful justification.

7. During the course of proceedings, we were informed that freezing of accounts on the directions of ANF, CTD, NACTA, FBR, BRA, NAB, CIA, ANTI-Corruption, Home Department and different Agencies is a common practice. The gravity of issue in hand can be assessed from the fact that during the years 2021-2023, 507 accounts were subjected to inquiry in Quetta by the FIA authorities and presently more than 50 banks are operational in Quetta, meaning thereby closures of thousands of bank accounts. Such practice on part of different government institution has significant negative impact on the businesses and individuals within the province. It disrupted financial transactions, hindered economic activities and created uncertainty in the local business. To address the concerns of business community of Balochistan, all the institutions are required to ensure that any blocking of bank accounts is based on valid and transparent reasons. The freezing of bank accounts deprives individuals of their hope to lead a meaningful life, as it takes away their most significant asset (cash in bank accounts). Thus, some investigating officers, who make departure from observing legal formalities while blocking the accounts of citizens for indefinite period cannot be allowed to violate the fundamental rights of citizens, enshrined in Articles 4, 9, 18, 2324 and 25 of the Constitution of 1973.

8. Besides the use of power under section 5(5) of the Act of 1974, the FIA authorities also frequently blocks the accounts of individuals under the provisions of Anti Money Laundering Act, (V1 1 of 2010) and section 8 of said Act reads as under: "

8. Attachment of property involved in money laundering.

(1) Investigating Officer may, on the basis of the report in his possession received from the concerned investigating (or prosecuting) agency, by order in writing, with prior permission of the Court, provisionally attach property, which he reasonably believes to be (the property) involved in money laundering for a period not exceeding one hundred and eighty days from the date of the order. (2) The Investigating Officer shall within forty-eight hours immediately after attachment under sub-section (1), forward a copy of the order, [and the report] referred to in that subsection, to the head of the concerned investigating agency, in a sealed envelope. (3) Every order of attachment made under subsection (1) shall cease to have effect after the expiry of the period specified in that sub-section 9 whichever is earlier. (4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1)from such enjoyment. (5) The Investigating Officer who provisionally attaches any property under subsection (1) shall, (submit to the Court monthly report on the progress made in the investigation)."

9. The above provisions of law provide the entire mechanism for attachment of property involved in money laundering, wherein, the Investigating Officer on the basis of a report in his possession received from the concerned investigating agency, by order in writing, with prior permission of the court, can provisionally attach property, which he reasonably believes to be proceeds of crimes or involved in money laundering for a period not exceeding ninety days from the date of such order, and thereafter, if such permission is granted, then in terms of section 9 of the Anti- Money Laundering Act, the Investigating Officer shall not later than seven days from the date of order of attachment made under subsection (1) of section 8, serve a notice of not less than 30 days on the person concerned, and such notice shall call upon the person to indicate the sources of his income, earning or assets or out of which or by means of which he has acquired the property attached under subsection (1) of section 8 and the evidence in which he relies and the other relevant information and particulars. We have noticed that the members of FIA frequently close third-party accounts involving odd transactions under mere suspicion, and that too without affording them an opportunity to explain their position regarding the transactions. It is also painful to observe that instead of freezing the account to the extent of the amount involved in the alleged transaction, they block the account while barring the third party from enjoying the amount not relevant to the alleged transaction.

10. Last but not the least point for determination of this Court is regarding jurisdiction of the Court to try the offence. According to our humble opinion, it does not need scholarly discussion to hold that it refers to the Court having jurisdiction to try the offence. Admittedly, primarily the order of seizure is to be obtained from the appropriate authority and in the latter part of section 5(5), it is mentioned that such seizure order is subject to confirmation by the Court having jurisdiction to try the offence. To have better understanding of the controversy in hand, it would be relevant to quote section 177 Cr.P.C. which reads as under: "177 Ordinary place of inquiry and trial. Every offence shall ordinary be inquired in and tried by a court within the local limits of whose jurisdiction it was committed".

11. While analogically explaining the principle enunciated in the aforementioned provision of law, if a person commits a crime in Quetta and gets arrested by the police of Karachi, the FIR is also lodged in Karachi, he would still be tried by the Court having local jurisdiction in Quetta as the wording of the legislature is very clear and no exceptions have been provided to the above that would be applicable in the present case. The use of the expression "be inquired in and tried by" further provides no exceptions. The provisions of the Code of Criminal Procedure 1898 are applicable to FIA related cases, both in terms of section 5 of the FIA Act, 1974 and section 22(1) of the Anti-Money Laundering Act, 2010. Therefore, the jurisdiction in this regard, concerning the freezing of accounts, investigation of the case and trial of the case, is to be determined under section 5 of the FIA Act, 1974, section 22(1) of the Anti-Money Laundering Act, 2010 and section 177 of the Code of Criminal Procedure 1898. The members of FIA, while inquiring or investigating an offence of Money Laundering or any other offence within their jurisdiction, must seek permission from the court to freeze bank accounts under section 5(5) of the FIA Act, 1974 and sections 8 and 9 of the Anti-Money Laundering Act, 2010. This permission must be sought from the court within the territorial jurisdiction where the offence occurred specially the court in whose territory the holder of a bank account under investigation was involved in suspicious activity or directly connected to an offence of Money Laundering.

12. We are conscious of the fact that FIA as a federal entity is the prime infestation agency in the country, especially for the organized crimes, however, like any other institution it is not exempted from improvement, as the room for improvement always exists, and it is crucial that we continually strive to improve our methods for the greater benefit of justice and the general public. As stated above, FIA is a federal entity and has its tentacles throughout the country, as such, calling of suspects to different cities of the country or headquarters, instead of conducting investigations at their place of residence is not suitable. A localized approach instead of the currently adhered centralized one could yield better results and streamline our operations. For the foregoing reasons and discussion, the impugned seizure letter dated 10.10.2022 issued by the Assistant Director, State Bank Circle (SBC) FIA Sind Zone-1 Karachi being suffered from perversity and clear transgression of authority is nullity in the eye of law, therefore, the same is hereby set aside by accepting both the petitions. Registrar is directed to send the copy of this judgment to D.G FIA and all District and Session Judges for information and compliance. JK/11/Bal. Petitions allowed.