STATE BANK OF PAKISTAN Versus Syed AKBAR HUSSAIN RIZVI

The charge against the accused is that they alongwith absconding accused Syed Akbar Hussain Rizvi, being the Director of Messrs SACO International (Pvt.) Ltd., having office at C‑9/A, Saghir Centre, Rashid Minhas Road, Karachi, on or about 22nd June, 1988, 26th June, 1988 and 19th October, 1988, failed to produce the required statements and documents in relation to the business carried out by the said company for the purpose of determining whether they were doing any banking business in contravention of section 27(1) of the Banking Companies Ordinance, 1962, and thereby committed and offence punishable under section 43‑A, read with section 83(1‑C) of the Banking Companies, Ordinance 1962.

2. Messrs SACO International (Pvt.) Ltd., having its office at C/9‑A, Saghir Centre, Rashid Minhas Road, Karachi, is a Private Ltd. Company, with absconding accused Syed Akbar Hussain Rizvi, present accused Syed Anjum Iqbal and Amir Abbas as its Directors. As it appeared to State Bank of Pakistan that the accused were carrying on business of Banking in contravention of the provisions of Banking Companies Ordinance, 1962, the State Bank of Pakistan, in exercise of its powers under section 43‑A of the Ordinance, issued directives dated the 22nd June, 1988 and the 26th June, 1988, calling upon them to produce their books and records and to furnish the information mentioned in the said directives but they failed to comply with the same. The accused replied to the said directives but the same was not found satisfactory. In order to give one more chance a directive dated 19th October, 1988, was published in Daily `Dawn' Karachi, calling upon the accused to produce within seven days all the books and records concerning their business for inspection by the State Bank of Pakistan, but with no result. The accused, thus contravened the provisions of section 43‑A, punishable under section 83(1‑C) of the Banking Companies Ordinance, 1962. Consequently on 13‑5‑1990 a complaint for the said offence was filed before this Court, which was brought on record on 20‑5‑1990. Accused Syed Akbar Hussain Rizvi is absconding. His presence could not be procured in spite of repeated process. On 24‑1‑1991 order under section 512, Cr.P.C. was passed against absconding accused and the case proceeded against the present accused.

3. Charge under section 43‑A read with section 83(1‑C) of the Banking Companies Ordinance, 1962, was framed against accused Syed Anjum Iqbal and Amir Abbas, to which they pleaded not guilty and claimed a trial. At the trial the prosecution examined Mr. S.M. Khursheed, Deputy Director (P.W.1), and Muhammad Rafique, Inspecting Officer (P.W.2).

4. In their statements recorded under section 342, Cr.P.C. the accused have disputed the case of the prosecution. Their defence in the words of accused Syed Anjum Iqbal, which is also adopted by accused Amir Abbas is as follows:‑‑

"It is further submitted that I came to know first time about the SACO International working as investment company when the summons of this case was served upon me. I also came to know through the complaint of State Bank of Pakistan that I was shown as one of the Directors of SACO International in the Memorandum and Articles of Association of SACO International. I say on oath that I never joined SACO International in any capacity, I alongwith my friend Amir Abbas supplied Aluminium doors and windows to Mr. S. Akbar Hussain Rizvi who was the absolute owner of Company under the name and style of Syed Aluminium Company. I being the aluminium fabricator used to supply/make the aluminium doors and windows to various parties. I do not know when S. Akbar Hussain Rizvi got incorporated the Syed Aluminium Company as SACO International and started the business of investment. I am also not aware about the advertisement published in Daily `fang' Karachi for collection of investment. Mr. S. Akbar Hussain Rizvi was the resident of my Mohalla and being resident of same Mohalla I had business terms with him and on his request we supplied the aluminium doors and windows to him. In November, 1987 he had taken photocopy of my identity card on the pretext that a big tender of aluminium doors and windows was going to be awarded to him and he executed the said tender jointly. From November, 1987 to June, 1988 I visited about three, four times to his house situated in my Mohalla and enquired about said tender but every time he assured that tender will be awarded to him very soon.

In first week of July, 1988, I came to know that he left our Mohalla and from such date he never came to Mohalla or he contacted us. I had never gone to his office. I say on oath that I had no concern with the business of the SACO International nor with Mr. S. Akbar Hussain Rizvi nor I am Director of said company nor State Bank of Pakistan has served any notice or letter on me. Mr. S. Akbar Hussain Rizvi has falsely and fraudulently involved me in the said case. I am innocent, hence entitled for acquittal."

5. The accused examined themselves on oath under section 340(2), Cr.P.C. They, however, led no defence.

6. ???????? The points for my determination are as follows:

(i) ???????? Whether accused Syed Anjum Iqbal and Amir Abbas are the Directors of Messrs SACO International (Pvt.) Ltd., Karachi?

(ii) ??????? Whether the State Bank of Pakistan had reason to believe that the accused were indulging in illegal banking business?

(iii) ?????? Whether the accused failed to produce/supply relevant record/ information when called to do so by the State Bank of Pakistan?

7. ???????? My finding on the above points are as follows:‑‑

(i) ???????? Yes.

(ii) ??????? Yes.

(iii) ?????? Not proved.

REASONS

8. ???????? Point No. l:

Mr. S.M. Khursheed, Deputy Director, State Bank of Pakistan (P.W.1) has testified that Messrs SACO International (Pvt.) Ltd., Karachi is a Company registered under the Companies Ordinance, 1984, with absconding accused Syed Akbar Hussain Rizvi, present accused, namely, Syed Anjum Iqbal and Amir Abbas as its Directors. The certificate of Incorporation (Exh.P.5) proves that Messrs SACO International (Pvt.) Ltd., was incorporated on 25th January, 1988. The Memorandum and Articles of Association are also on record (Exh.6), Form 29‑A (Exh.7) makes it clear that both the present accused are the Directors of this Company. The accused have simply denied this fact. Admittedly they had taken no steps to get their names deleted even after they came to know about this prosecution as Directors of Messrs SACO International (Pvt.) Ltd. The presumption of truth is attached to the official record. Point No. 1 is, therefore, answered in affirmative.

9. Point No. 2:

Mr. S.M. Khursheed, Deputy Director, State Bank of Pakistan (P.W.1) has testified that Messrs SACO International (Pvt.) Ltd., made an advertisement (Exh.8) on 11‑1‑1988 inviting deposits of money from public and consequently it approached to the State Bank of Pakistan that the accused were indulging in illegal banking business. Although by the advertisement (Exh.8) the deposits of money were not invited in specific words, but the contents thereof, which are reproduced below, indicated to the State Bank of Pakistan that the accused might be indulging in such activities:‑‑

URDU PAGE 809

10. The word `appears' means that at that stage there should be prima facie material before the State Bank of Pakistan to indicate that the offence complained of is likely to have been committed. The learned counsel for the accused has, however, taken a legal objection in this behalf by stating that the advertisement was made on 11‑1‑1988 prior to the registration of Messrs SACO International (Pvt.) Ltd., which was incorporated on 25‑1‑1988. The evidence which has come on record, however, makes it clear that the advertisement was made by the same company, which was subsequently incorporated as Messrs SACO International (Pvt.) Ltd. In para.No.2 of the reply sent by accused vide (Exh.11) the absconding accused acting as Chief Executive admitted this fact in the following terms:‑‑

"No deposit/ investment was solicited from the public. The advertisement in Daily `fang', dated 11‑1‑1988 was for `partnership and not for deposit or investment'."

The point No.2 is, therefore, answered in affirmative.

11. ?????? Point No. 3:

Mr. S.M. Khursheed, Deputy Director, State Bank of Pakistan (P.W.1) has testified about the issuance of directives (Exhs.9, 10 and 12) Muhammad Rafique, Inspecting Officer, State Bank of Pakistan (P.W.2) has deposed about the service of directives (Exhs. 9 and 10). His evidence further goes to show that the relevant record was not shown to the Inspecting Officer. The receipt of both these directives is proved from the record. The reply sent by absconding accused S. Akbar Hussain Rizvi, Chief Executive is on record (Exh.11), in which all the queries made by the State Bank of Pakistan vide (Exh.10) were answered in the following words:‑‑

"Reference your letter No. BID (INSP)/ 1574/604‑A‑88, dated 26‑6‑1988.

2. ???????? The required documents/ information etc., are given below in seriatim:‑‑

(1) ??????? A copy of Memorandum and Articles of Association is enclosed.

(2) ??????? No deposit/ investment was solicited from the public. The advertisement in Daily Jang, dated 11‑1‑1988 was for "partnership" and not for deposit or investment.

(3) ??????? There was no response from the public to the said advertisement and no (repeat No) sum of amount was received from any member of the public.

(4) ??????? As no fund was received from the public the question of investment does not arise.

(5) ??????? Nil.

(6) ??????? Nil.

(7) ??????? The SACO International incorporated in January, 1988 vide Regd. No.K.00490 of 1987‑88 and has not yet completed a year. A copy of the latest financial statement is enclosed.

(8) ??????? Nil

(9) ??????? Nil.

(10) ???? Nil.

(11) ???? An up‑to‑date list of Directors of the Company and the same of the Chief Executive is annexed as Annexure 'A'.

(3) ??????? It may be stated that in response to your No.BIUD (Insp) 1509/604‑A‑88, dated 22‑6‑1988, we sent a reply dated 25‑6‑1988, copy of which is enclosed."

12. This position was also admitted by Mr. S.M. Khursheed, Deputy Director (P.W.1) in the following words:‑‑

"I see Exh.11. The documents mentioned therein were sent to us except the financial statement."

13. It is, thus obvious that the accused had complied with the directives (Exhs.9 and 10) to the above extent. If the State Bank of Pakistan wanted any additional information/ record then it was obligatory to have called upon the accused with specific reference to supply/produce the same. It may be added that the absconding accused had made it clear in (Exh.11) that there was no response from the public to the said advertisement and no amount was received from any member of public. There is also no indication on the record that any effort was made to seize the record of the accused by the Inspecting Officers, although quite admittedly such powers are available to them.

14. The mens rea or a guilty mind is an essential ingredient of a criminal offence and it is a sound rule of construction to read this element in the statutory provisions unless the statute expressly or by necessary implication excluded it.

15. For all the above reasons, I am satisfied that the prosecution has failed to prove the case against the present accused beyond any reasonable doubt. The benefit of doubt is extended to the accused and they are acquitted from the charge. The accused who are on bail are discharged from their bail bonds. The case against absconding accused S. Akbar Hussain Rizvi be kept on dormant which shall revive after the said accused is arrested.

H. B.T. / S‑179 / K

Order accordingly.