State Versus Babar Usman Malik

Order

Arbab Muhammad Tahir, J .--- The State, through the instant petition under Section 497(5) Cr.P.C., seeks cancellation/recall of the pre-arrest bail orders dated 08.07.2025, 15.05.2025, and 24.09.2025, passed by the learned Judge, Special Court Central-II, Islamabad, in FIR No. 09 dated 21.02.2025, registered under Sections 409, 420, 468, 471, and 109 P.P.C, read with Section 5(2) of the Prevention of Corruption Act, 1947, at Police Station CCC/FIA, Islamabad. Since the titled petitions involve common questions of law and fact, the same are, being decided through this common order.

2. The relevant facts are that the Federal Government Employees Housing Authority (FGEHA) launched a housing scheme at Park Road, Islamabad, comprising approximately 8,000 kanals of land for the housing needs of members of the Supreme Court Bar Association as well as Federal Government servants. After a competitive process, a firm namely M/s HRK and Co. (contractor) was employed for the development work. Accordingly, a letter of acceptance was issued to the contractor on 04.04.2023.

3. The contractor submitted Bank Guarantee No. BG/23/00167 dated 09.05.2023, amounting to Rs.716,243,409/-, issued by United Bank Limited, for the release of mobilization advance. As per the record, the said Bank Guarantee was subsequently found fake. It is worth mentioning that, on the strength of the said fake substantial amount Bank of a Guarantee, Rs.358,121,704/- (first half of the mobilization advance) was released by FGEHA. The note for release of the said amount was initiated by the Project Engineer, namely Muhammad Hamza, and further endorsed by the DDO (PF), namely Babar Usman, by dishonestly recording in the note sheet that the Bank Guarantee had been verified from the bank. The case was approved by the Project Director, namely Ghulam Farid, on the same day.

4. The release of the second half of the mobilization advance, i.e., Rs.358,121,704/-, was subject to achievement of 2% value of the works by the contractor. On 16.05.2023, the Engineer's Representative (Mr. Mukhtar Arshad) certified to the employer that the said 2% of the work had been completed by the contractor, which resulted in the release of the second half of the mobilization advance. As per the record, the said certification was dishonest, as physically the work at the site was not possible for the reason that, at the relevant time, possession of the land had not been handed over to FGEHA.

5. Thereafter, the contractor submitted three claims in the shape of Interim Payment Certificates (IPCs), namely IPC#1 amounting to Rs.203.359 million, IPC#2 amounting to Rs.182 million, and IPC#3 amounting to Rs.1,405.105 million. As per the record, the contractor received Rs.84.648 million and Rs.46.557 million against IPC#1 and IPC#2, respectively, from the employer. However, payment in respect of IPC#3, although sanctioned by the Project Director, was withheld.

6. Needless to mention that IPC#3 was generated for dumping unsuitable and surplus material from the project site to a location 60 kilometers away at Missa Kiswal, Gujjar Khan, at the rate of Rs.114/- per cft. According to the prosecution, this was not part of the original contract and was dishonestly and illegally approved by the Project Director, Sheikh Ghulam Fareed, on his own authority so as to confer undue benefit upon the contractor.

7. Learned Deputy Attorney General has argued that pre-arrest bail is an exceptional remedy, to be granted only in cases where mala fide and ulterior motive are established, whereas no such circumstance was either pleaded or established by the respondents before the learned trial Court. According to him, the learned Court below exercised jurisdiction in a mechanical manner without properly appreciating the material collected during Inquiry/investigation. He further contended that the impugned orders are non-speaking and suffer from patent illegality, as the same were passed merely by observing that bail had already been granted to a co-accused, without independent application of judicial mind to the individual role, allegations, and attending circumstances of each respondent. He argued that the learned Court below failed to record separate and cogent reasons in support of each order, which is a mandatory requirement while extending the extraordinary concession of pre-arrest bail. Mere parity with a co-accused, particularly in pre-arrest bail matters, could not by itself be made the sole basis for grant of relief in the absence of independent judicial assessment. He further contended that the allegations against the involving respondents embezzlement of huge public funds, forgery of a fake are of serious nature bank guarantee amounting to Rs.716,243,409/-, and dishonest release of mobilization advance to the tune of Rs.716,243,408/- in two installments. It was argued that the respondents, being public servants actively facilitated the contractor in commission of the offence by misuse of their official positions. Their roles are specifically reflected in the record, including initiation and endorsement of notes, false verification of the bank guarantee, dishonest certification of completion of work, and unlawful approval of IPCs for conferring undue monetary benefit upon the contractor. He maintained that the offences fall within the prohibitory clause and carry severe punishment; therefore, the respondents were not entitled to the extraordinary concession of pre-D arrest bail as a matter of course. It was added that the respondents, owing to their influence and previous official positions, may tamper with prosecution evidence or influence witnesses if protected by bail. On these grounds, he prayed that the impugned bail orders be recalled/cancelled.

A 8. Conversely, learned counsel for the respondents opposed the petition and argued that the impugned orders are lawfel, well-reasoned, and do not call for interference. They submitted that cancellation of bail stands on a different footing from refusal of bail, and once concession has been granted, the same cannot be withdrawn unless misuse of liberty, violation of conditions, absconsion, tampering with evidence, or emergence of fresh incriminating material is shown. No such circumstance, according to him, has been demonstrated by the petitioner-State. They contended that the respondents are innocent and their involvement is merely on account of holding official positions, whereas no material has been produced to show dishonest intention, personal gain, receipt of illegal gratification, or active participation in any forgery. It was further submitted that respondents joined investigation, cooperated with the inquiry, and never attempted to evade process of law. They prayed that the petitions may be dismissed.

A

9. I have heard the learned counsel for the parties at considerable length, examined the respective contentions advanced at the bar, and gone through the record with anxious and careful consideration. The controversy in hand pertains to cancellation of the concession of pre-arrest bail already extended to the respondents. It is by now a settled proposition of law that cancellation of bail is not to be ordered in a casual or mechanical manner, for once liberty has been granted by a competent Court, the same is not lightly withdrawn. At the same time, it is equally well-settled that where the order granting bail is itself patently illegal, based on misreading or non-reading of material, suffers from non-application of judicial mind, or has resulted in miscarriage of justice, this Court would not remain a silent spectator and is fully competent to correct the error.

10. The august Supreme Court of Pakistan in case of Sami Ullah and another v. Laiq Zada and another (2020 SCMR 1115) has summarized the grounds for cancellation of bail. The foremost amongst them is where the bail granting order is patently illegal, erroneous, factually incorrect, and has resulted in miscarriage of justice. A careful perusal of the impugned orders reveals that the learned Special Court has passed the same without application of judicious mind. The orders proceed on the solitary observation that pre-arrest bail had already been granted to a co-accused and, therefore, the respondents were entitled to the same treatment on the principle of consistency. This reasoning, in the peculiar facts of the present case, is legally deficient and wholly inadequate. Parity may, in an appropriate case, be a relevant consideration; however, it can never be treated as a substitute for independent judicial assessment, particularly where pre-arrest bail is sought.

11. The Hon'ble Supreme Court in the case of Rana Muhammad Arshad v. The State (PLD 2009 SC 427) has summarized following the principles and law governing the grant/refusal of pre-arrest bail.- a) grant of bail before arrest is an extraordinary relief to be granted only in extraordinary situations to protect innocent persons against victimization through abuse of law for ulterior motives; b) pre-arrest bail is not to be used as a substitute or as an alternative for post-arrest bail; c) bail before arrest can not be granted unless the person seeking it satisfies the conditions specified through subsection (2) of section 497 of Code of Criminal Procedure i.e. unless he establishes the existence of reasonable grounds leading to a belief that he was not guilty of the offence alleged against him and That there were, in fact, sufficient grounds warranting further inquiry into his guilt; d) not just this but in addition thereto, he must also show that his arrest was being sought for ulterior motive, particularly on the part of the police; to cause irreparable humiliation to him and to disagree and dishonour him; e) such a petitioner should further establish that he had not done or suffered any act which would disentitle him to a discretionary relief in equity e.g. he had no past criminal record or that he had not been a fugitive at law; and finally that; f) in the absence of a reasonable and a justifiable cause, a person desiring his admission to bail before arrest, must, in the first instance approach the Court of first instant i.e. the Court of Session, before petitioning the High Court for the purpose.

12. It is thus clear that pre-arrest bail is an extraordinary relief intended to protect an innocent citizen from mala fide arrest, abuse of process, humiliation, or ulterior motives on the part of the complainant or investigating agency. Before granting such relief, the Court is under a legal duty to satisfy itself that the accusation appears tainted by mala fide or that the arrest is sought for collateral purposes. Unless the petitioner, prima facie establish these preconditions, jurisdiction to grant pre-arrest bail is not ordinarily exercised. In the impugned orders, there is no finding, even tentative in nature, that the prosecution acted with mala fide, that the investigating agency was motivated by ulterior considerations, or that the intended arrest of any respondent was solely for humiliation or persecution.

13. The material collected during inquiry, prima facie, indicates that each respondent is alleged to have performed a particular function to facilitate the overall transaction through which unlawful financial benefit was allegedly extended to the contractor. The respondents namely Babar Usman Malik, Assistant Director Finance, FGEHA, Muhammad Afzal, Deputy Director Finance, FGEHA, Muhammad Kashif, Director Finance, FGEHA, and Sheikh Ghulam Fareed, Project Director, are alleged to have been instrumental in providing official endorsement and administrative cover to the fake bank guarantee submitted by the contractor, for release of substantial public funds in the shape of mobilization advance. The prosecution case, at this tentative stage, is that the fake bank respondents facilitated acceptance of a guarantee and enabled the respondent/contractor namely Mir Rab Nawaz Bugti, CEO of M/s HRK and Co., to secure undue and unlawful monetary benefit.

14. It has further been alleged that respondent Sheikh Ghulam Fareed, being Project Director, unlawfully authorized the contractor to dump unsuitable and surplus excavated material from the project site to a distant location, which, according to the prosecution, was not part of the original contract. The prosecution asserts that such unauthorized approval was deliberately granted so as to enable the contractor to generate an inflated and heavy bill to create a financial cushion to offset or cover recovery of the mobilization advance in the event the fake nature of the bank guarantee came to light. This allegation, if viewed tentatively, is not a mere administrative lapse but a distinct and conscious act alleged to have been committed to protect the contractor from financial consequences of the fraud already committed.

15. Likewise, the respondent Mukhtar Arshad, representing NESPAK/ Consultant, is specifically alleged to have certified to the employer that two percent of the contractual work had been completed by the contractor, which certification formed the basis for release of the second half of the mobilization advance. Prima facie, this allegation carries significance because the prosecution asserts that such certification was factually impossible at the relevant time, as possession of the land had not been handed over to the contractor owing to subsisting disputes with the landowners. These allegations, therefore, required the learned Court to examine the case of each respondent independently in light of the distinct role assigned to them. Instead of undertaking such individual assessment, the respondents appear to have been dealt with through a generalized approach. The material collected during inquiry, including the report of the fact-finding committee constituted by the Ministry of Housing and Works was relevant for tentative assessment at the bail stage. Yet, the impugned orders do not reflect that the learned Court below examined this material, appreciated the distinct role of each respondent, or applied its mind separately to the case of each accused. The learned trial Court was also required to record at least brief but independent reasons demonstrating why each respondent deserved the extraordinary concession.

16. Judicial orders are not to be sustained by assumptions as to what may have weighed with the Court. Reasons are the heartbeat of a judicial order. They disclose that discretion has been exercised according to law. It is now settled law that a judicial order must be a speaking order, demonstrating on its face that the Court has duly applied its judicial mind to the issues and points of controversy involved in the matter. In the present case, the impugned orders are neither speaking orders nor supported by any reasons. As such, the same are not sustainable in law, being contrary to the principles laid down by the Hon'ble Supreme Court of Pakistan in, inter alia Adamjee Jute Mills Ltd. v. The Province of East Pakistan and others (PLD 1959 SC (Pak) 272), Gouranga Mohan Sikdar v. The Controller Import and Export and others (PLD 1970 SC 158), Mollah Ejahar Ali v. Government of East Pakistan and others (PLD 1970 SC 173), and Muhammad Ibrahim Khan v. Secretary, Ministry of Labour and others (1984 SCMR 1014). Absence of reasons, especially where serious allegations supported by documentary material exist, itself furnishes a valid ground to hold the order perverse.

17. For what has been discussed above, it is concluded that the impugned orders are the product of cursory exercise of jurisdiction, lacking proper judicial scrutiny, and therefore not sustainable in law. Consequently, the titled petitions are allowed. The pre-arrest bail orders dated 08.07.2025, 15.05.2025, and 24.09.2025 passed by the learned Judge, Special Court Central-II, Islamabad, are hereby set-aside. Consequently, the pre-arrest bails granted to the respondents are cancelled. Needless to mention that the above observations are tentative in nature which shall not prejudice the case of the parties during trial.

MH/45/Isl. Petitions allowed.