HAMIDULLAH Versus THE STATE
1. Appellant Hamidullah, an employee of the Telegram Department, was tried by the Foreign Exchange Tribunal in respect of an offence punishable under section 5(1)(c) of the Foreign Exchange Regulation Act, 1947 (hereinafter referred to as the Act), and was convicted by the said Tribunal, by its judgment delivered on 4‑5‑1973 of the said offence and was sentenced to pay a fine of Rs. 500 or in default to suffer R. I. for 3 months. The appellant has come up in appeal in this Court against his .conviction and sentence.
2. The brief facts of the case are these: One Najibullah, who is brother of appellant Hamidullah, is residing at Abu Dhabi. The said Najibullah wrote a letter to the appellant on or about 5‑9‑1970 in which he instructed the ,appellant to take a sum of Rs. 2,050 from one Saeed and out of the said .amount to send a sum of Rs. 1,900 by money order to Haji Abdul Karim Noor Muhammad of Pasni. This letter was intercepted by the Special Police Branch attached to the state Bank and after a photostat copy thereof was made .it was allowed to reach the appellant. As instructed in the above letter the appellant sent the amount of Rs. 1,900 by two postal telegraphic money orders to Abdul Karim at Pasni and the latter in turn delivered the amount to the mother of one Shaukat for whom this amount was meant. It may be stated here that this Shaukat was originally a resident of Pasni but has since some time been residing at Dubai. The Exchange Control Department of the State Bank, which had been keeping a watch over this matter, thereupon served a notice upon the appellant asking him to submit his explanation for making payment to Haji Abdul Karim at the behest of a person who was residing outside Pakistan and which act of his was in contravention of the provisions of section 5(1)(c) of the Act. The explanation offered by the appellant was that this amount of Rs: 1,900 was paid out of the sums which his brother, Najibullah, had been lawfully remitting under the House Remittance Bonus Scheme and receipts and other particulars whereof he had already submitted to the Special Police which had been investigating the matter. This explanation of the appellant apparently did not find favour with the authorities of the State Bank and accordingly a complaint was filed against the .appellant by the authorised Officer of the State Bank before the Foreign Exchange Tribunal.
3. The appellant's case before the Tribunal, as was his stand in the .explanation submitted by him to the State Bank, was that he had undoubtedly remitted a sum of Rs. 1,900 to Haji Abdul Karim under the instructions of his brother, Najibullah, but that this amount was paid out of the sums lawfully remitted by Najibullah under the Home Remittance Bonus Scheme. In support of his contention he filed a number of documents showing that Najibullah had regularly been remitting sums to him under the aforesaid scheme. He also examined two witnesses, one being an employee of the Chartered Bank and the other an employee of the United Bank Ltd. who testified that Najibullah had been remitting through their Banks sums in favour of the appellant under the Home Remittance Bonus Scheme.
4. Mr. Faizuddin, the learned counsel for the appellant, impugned the conviction of the appellant on two grounds. His first ground, which is founded on section 20 of the Act, is that by reason of the provisions of the said section Najibullah is still to be considered as resident in Pakistan. His second ground is that inasmuch as the amount paid to Haji Abdul Karim was paid out of the sums remitted by Najibullah under the Home Remittance Bonus Scheme, with the permission of the State Bank of Pakistan, the payment to Haji Abdul Karim did not attract the application of section 5(1)(c) of the Act.
5. Section 20(1)(a) of the Act lays down that for the purposes of the Act and the rules, directions or orders made thereunder, a person who has at any time after the commencement of the Act been resident in Pakistan shall be treated as still being resident in Pakistan. Mr. Faizuddin contended that since Najibullah was resident in Pakistan for some period after the commencement of the Act, he is still to be treated as "resident in Pakistan" for the purposes of the Act, notwithstanding the fact that he may for the time being b; residing at Abu Dhabi. In support of his contention, the learned Advocate placed reliance on the decision of the Karachi Seat of the former High Court of West Pakistan report ed as Muhammad Sharif v. State (P L D 1963 Kar. 7). The facts of the reported case were that one Muhammad had paid to two persons certain sums at the behest of one Ghulam Rasool who according to the prosecution was resident of Kuwait in the Persian Gulf. It was held that inasmuch as no directions had been issued by the State Bank under section 20(1)(a) of the Act, Ghulam Rasool, at whose behest the payment was made, was to be deemed still to be resident of Pakistan, though he was putting up for the time being at Kuwait. The provisions of section 20(1)(a) are, however, to apply until the State Bank, by general or special orders, otherwise directs. The State Bank, in exercise of the aforesaid power, had issued a Notification on 1‑7‑1948, which reads as under :‑
6. "In pursuance of clause (e) of subsection (1) of section 20 of the Foreign Exchange Regulation Act, 1947 (VII of 1947), the State Bank of Pakistan is pleased to direct that any subject of His Majesty other than a person domiciled in Pakistan, who has been resident in Pakistan but who leaves Pakistan and becomes resident in any country or territory for the time being specified in the Schedule appended hereto shall be treated as being resident in the country or territory to which he has gone.
SCHEDULE
(1) The United Kingdom.
(2) Any Dominion within the meaning of Statute of Westminster, 1931, except Canada and Newfoundland.
(3) Any part of His Majesty's Dominion, nit being a Dominion within the meaning of the Statute of Westminster 1931, or a part of such a Dominion.
(4) Any British Protectorate or British Protected State.
(5) Any territory held by His Majesty's Government in the United Kingdom or in any Dominion, in respect of which a mandate on behalf of the League of Nations was accepted by his Majesty or which is held in trust on behalf of the United Nations by that Government.
(6) Burma."
7. The aforesaid Notification was modified by a later notification, issued on 14‑10‑1963. The modified notification reads as follows :‑
8. "In pursuance of clause (a) of subsection (1) of section 20 of the Foreign Exchange Regulation Act, 1947 (VII of 1947) and in partial modification of the State Bank of Pakistan Notification No. F. E. 13/48‑SB dated the 1st July 1948, the State Bank of Pakistan is pleased to direct that a person, other than a person holding any office in the service of Pakistan and residing outside Pakistan for the time being either on duty or on leave, being domiciled in, or a national of, Pakistan, who is for the time being resident outside Pakistan, shall, unless otherwise authorized or exempted under the said Act, be treated, for purposes of section 5 of the said Act, as a person resident outside Pakistan, for so long as he is so resident."
9. The combined effect of the aforesaid two notifications would appear to be that a national of Pakistan or a person domiciled in Pakistan, not being a person holding any office in the service of Pakistan and residing outside Pakistan for the time being on duty or on leave, who is for the 'l time being resident outside Pakistan, is to be treated, unless otherwise authorised or exempted by the Act, as being resident outside Pakistan for the purposes of section 5 of the Act. The Notification of 14‑10‑1963 came up for consideration before their Lordships of the Supreme Court in the case of Muhammad Ali v. State Bank of Pakistan (1973 S C M R 140) where in the contention raised on behalf of the State Bank that even a casual or a flying visit to a place outside Pakistan would make a person "resident out of Pakistan" was repelled and it was held that the Act being a penal statute its provisions must be interpreted strictly and as the prosecution had failed to establish that the appellant in that case had left Pakistan not just casually but with the intention of taking up an abode outside Pakistan, howsoever temporary or provisional it may have been, it could not be said that the resident outside Pakistan for the purposes of the Act. It was further held that no evidence had been led to prove in satisfaction of the requirements of the Notification that the person at whose credit the sum had been placed by the appellant was in fact a national or a domicile of Pakistan and that the prosecution had proceeded merely on presumptions and assumptions taking them to be proved without taking the trouble of proving the several ingredients of the offence with which the appellant was charged.
10. In the instant case, the payment of sums by the appellant to Haji Abdul Karim qt the behest of appellant's brother, Najibullah, is admitted. No evidence, however, has been led by the prosecution to show that Najibullah is either a national of or domiciled in Pakistan (sic). As such this case would be covered by the decision of the Supreme Court in Muhammad Ali's case. From the mere fact that Najibullah is the brother of appellant it cannot positively be inferred that Najibullah is either a national of or domiciled in Pakistan (sic). The case of the appellant thus does not attract the application of the Notification of the State Bank of Pakistan dated 14‑10‑1963.
11. In this view of the matter, I am of the opinion that the prosecution have failed to establish an essential ingredient of the offence with which the appellant has been charged. I would accordingly give the appellant the benefit of doubt, set aside his conviction and sentence and allow his appeal. The fine, if paid by him, should be returned.
12. K. B. A. Appeal allowed.