MUHAMMAD IQBAL Versus THE STATE
This bail application arose from criminal proceedings against a bank cashier accused of misappropriating Rs. 1.53 million from a bank branch by manipulating cash packets. The core legal question was whether, given the circumstances and the nature of the bank's internal audit procedures, the applicant was entitled to post-arrest bail pending trial. The High Court observed that while the prosecution alleged the misappropriation occurred over several months, the bank's mandatory annual closing on June 30th—a critical verification point—had not detected any discrepancies, and the prosecution failed to explain this anomaly. Applying the principle of tentative assessment, the Court held that the prosecution's case required further inquiry to determine the applicant's culpability, particularly regarding the oversight of other bank officials. Consequently, the Court granted bail to the applicant, emphasizing that the evidentiary gaps regarding the timing of the alleged fraud and the failure of internal audit mechanisms warranted the applicant's release on bail pending the conclusion of the trial.
- Does the failure of a bank to detect alleged misappropriation during its annual June 30th closing provide grounds for further inquiry in a bail application?
- Is an interim challan filed under Section 173 of the Code of Criminal Procedure 1898 considered a final report for the purposes of bail proceedings?
- Can bail be granted when the prosecution's case relies on evidence that requires further scrutiny at trial?
- Section 409, Pakistan Penal Code 1860
- Section 420, Pakistan Penal Code 1860
- Section 468, Pakistan Penal Code 1860
- Section 471, Pakistan Penal Code 1860
- Section 109, Pakistan Penal Code 1860
- Section 173, Code of Criminal Procedure 1898
- Offences in Respect of Banks (Special Courts) Ordinance 1982
ORDER
WAHID BUX BROHI, J.‑‑ ‑Applicant Muhammad Iqbal son of Muhammad Ibrahim, is being tried by the Special Court (Offences in Banks), Sindh at Karachi, for an offence punishable tinder sections 409/420/468/471/109, P.P.C., arising out of F.I.R. No.4 of 2003 of FIA CBC‑II, Karachi. The F.I.R. incorporates a written complaint made by Khalid Ahmed, AVP and Chief Manager, HBL, Timber Market Branch, Karachi, the text whereof is reproduced hereunder:‑‑
"The Deputy Director
FIA CBC‑II
Habib Square,
Karachi.
Dear Sir,
Registration of case on account of fraud and misappropriation, cheating Rs.1,530(M) committed by Muhammad Iqbal son of Muhammad Ibrahim, Cashier employee No.298143 posted at Timber Market Branch of Habib Bank Limited, Karachi.
This is to inform you that our Cashier Mr. Muhammad Iqbal son of Muhammad Ibrahim managed to steal an amount of Rs.1,530(M) from the cash safe, it was detected while checking the, cash ‑on 6‑11‑2002.
The accused' Mr. Muhammad Iqbal son of Muhammad Ibrahim in. the capacity of Cashier of the Branch was entrusted over property of the Bank and in the course of business of the Bank, he has committed fraud and illegally included the packet of Rs.100 in the packet of Rs.1,000 thus committed the act of criminal breach of trust/misappropriate, cheating and in this way guilty mind of accused person caused willful loss to the Bank as provided in the Offence in respect of Banks (Special Court Ordinance No.IX of 1982).
It is, therefore, requested that a case may kindly be registered against the above named accused person and dealt with accordingly.
(Sd).
Complainant
Khalid Ahmed
AVP & Chief Manager, HBL,
Timber Market Branch,
Karachi. "
2. On the basis of above F.I.R., investigation was conducted and an interim challan was filed in the trial Court on 4‑2‑2003. The Investigating Officer is present before us and states that he proposes to submit final challan. Both the learned counsel present, however, concede that an interim challan under section 173, Cr.P.C. is normally a final report for all practical purposes and the term "interim" is, indeed, meaningless.
3. We have heard Mr. Mehmood A. H. Baloch, for the applicant and Mr. Khursheed A. Hashmi, D.A.‑G., for the State.
4. It was mainly contended by Mr. Mehmood A.H. Baloch, that there is delay in lodging the F.I.A., the counting of the cash was done in absence of the applicant, and the applicant has been made scapegoat although the cash is generally under the supervision of three officials namely, the Chief Manager, Manager Operations and the Chief Cashier, but the other two or at least the Manager Operations has not been made accused in this case.
5. Mr. Khursheed A. Hashmi, learned D.A.‑G., opposed the bail on the ground that‑the Bank has been defrauded of a colossal amount and applicant was directly in control of the cash.
6. We have given our anxious consideration to all these conventions At the outset, we have noted that as per F.I.R. the offence had taken place in between September and November, 2002 that is to say the cash was removed/replaced during the said period of over two months. Nevertheless, as per interim challan/report under section 173, Cr.P.C. the investigation conducted by the Investigating Officer revealed that the applicant while posted as Chief Cashier at Habib Bank Limited, Timber Market Branch, Karachi, misappropriated an amount of Rs.1,530,000 fraudulently in between 15‑4‑2002 to 5‑11‑2002 by inserting notes of Rs.100 denomination in the packets of Rs.1,000 showing the cash intact as per summary of "Paying Cashier Register". In view of this statement, we had called even the Bank Officer to clarify the position, who too admitted that on the closing at the end of month of June every aspect of the banking transaction is thoroughly examined, A checked, verified and noted. There is no denial of this fact even by the prosecution that the closing shown on June 30, of every year carries vital importance and the entries whatsoever, recorded and consolidated thereby cannot be ignored. Nothing could be explained to us what were the reasons that this missing of cash was not detected or noted on June,
30. The report of Chief Manager also shows that although the offence allegedly started from 15‑4‑2002, everything was O.K. upto 30‑10‑2002.
7. We do not intend to go too far, nor would get out of the domain of tentative assessment of the evidence but, suffice it to say that what was at the bottom can only be clarified at the trial on recording the B evidence of material witnesses. For the time being we are persuaded to hold that at least a case of bail is made out. Consequently, the application is allowed and bail is granted to the applicant. He may be released on furnishing solvent surety to the satisfaction of Nazir of this Court in the sum of Rs.1,335,000 (Rupees one million three hundred thirty five thousand only) as it is shown to us that an amount of Rs.195,000 had been deposited in the meantime. P.R. bond be executed in the like amount.
N.H.Q./M‑575/K Bail allowed.