BEGUM RIFFAT AHAD vs NAB through Chairman and 4 otherss

' TASSADUQ HUSSAIN JILANI, J.--- Petitioner's husband (Malik Abdul Ahmad) was arrested on the night between 12th/13th August, 2002 on the direction of National Accountability Bureau. According to the petitioner no grounds of arrest were served at that time but on queries made by the petitioner it transpired that he had been arrested on account of default in payment of loan which the petitioner's husband had obtained from Messrs Services Cooperative Credit Corporation Limited. Presently he is in judicial lock-up and on account of his ailment he is admitted in the Punjab Institute of Cardiology, Lahore.

2. Through this Constitutional petition, a declaration is sought that the arrest of petitioner's husband and his continued detention is without lawful authority. In support of this petition, learned counsel for the petitioner (Mr. S.M. Zafar, Advocate) has made following submissions:--

(i) That the petitioner is not guilty of any wilful default in terms of section 5(r) of the NAB Ordinance.

(ii) That as per allegations levelled petitioner's husband had obtained a loan of Rs,24 lacs from Messrs Services Cooperative Credit Corporation Limited (hereinafter mentioned as SCCCL), the said Corporation went into liquidation whereafter it was taken over by the Punjab Cooperative Board for Liquidation, the said Board filed recovery proceedings against petitioner's husband under section 7(v) of the Punjab Undesirable Cooperative Societies (Dissolution) Act, 1993, the said petition is pending before the learned Cooperative Judge of this Court the proceedings before the said Court are being prolonged on .Account of the Punjab Cooperative Board for Liquidation which is reflected in the interim orders of the said Court reproduced in the petition, that in absence of any conclusive finding rendered by the learned Cooperative Judge of this Court, petitioner's husband could not be dubbed as a wilful defaulter.

(iii) That in terms of sections 31(d) and 35 of the NAB Ordinance, 1999 (as amended till date) no case of wilful default could be initiated without a reference filed by the State Bank of Pakistan.

(iv) That unless jurisdictional requirements referred to in the preceding paragraph have been met, neither any criminal case could be registered or reference filed nor petitioner's husband could have been arrested. He added that in any case the entire loan stands paid and that is why the Returning Officer accepted Nomination Papers of petitioner's husband, he has been allowed to contest coming General Elections, 2002 for the Provincial Assembly Seat, the said order was neither challenged nor it has been interfered with by the learned Election Tribunal of this Court. In the afore-referred circumstances he added, the detention being violative of statutory and Constitutional provisions merits interference under Article 199(1)(b) of the Constitution. In support of the submissions, he relied on Messrs Kaloodi International v. Federation of Pakistan PLD 2001 Kar.

311, Rashid Ahmad v. The State PLD 1972 SC 271 and Abdul Qadir v. Federation of Pakistan 2002 SCM R 1478.

3. The allegations levelled in the petition were controverted through comments submitted by the learned Deputy Prosecutor-General, NAB. Mr. Jawaid Shaukat Malik, Advocate/Deputy Prosecutor- General NAB, while defending the proceedings initiated and arrest of the petitioner's husband, contended as under:--

(i) That the arrest of petitioner's husband is not merely on account of his wilful default but he had obtained an imprudent loan which reflects a criminal transaction.

(ii) That he obtained loan without sufficient security by corrupt and dishonest means within the meaning of section 9(iv) of the NAB Ordinance.

(iii) That a sum of Rupees twenty lacs has been repaid a few days prior to the scrutiny of Nomination Papers filed by the petitioner's husband who is a candidate for Provincial Assembly seat although the loan was due in the year 1991. This delayed payment is reflective of his criminal intent.

(iv) That the National Accountability Bureau Authorities required the custody of petitioner's husband as the Inquiry Officer wanted to examine the documents on the basis of which he obtained the loan and no exception can be taken to his detention as under the NAB Laws he can be detained for a period of ninety days. He added that although the State has not challenged the factum of detenu's illness on account of which he is admitted in the Punjab Institute of Cardiology yet the NAB reserves its right to have his physical remand which, according to him, would not exceed 10/15 days.

4. We have heard learned counsel for the parties, have perused the precedent case-law produced during the course of arguments and have given anxious consideration to the submissions made at the Bar.

5. It would be pertinent to refer to some of the important provisions of the National Accountability Bureau Ordinance, 1999 (amended till date) which have a bearing on the issues raised in this petition. The expression "wilful default" has been defined in section 5(r) of the Ordinance which reads as under:-- "5(r) 'Wilful default' a person is said to commit an offence of wilfill default under this Ordinance if he does not pay, [or continues not to pay,] or return or repay the amount to any bank, financial institution, cooperative society, or a Government Department or a statutory body or an authority established or controlled by a Government on the date that it became due (as per agreement containing the obligation to pay, return or repay or) according to the laws, rules, regulations, instructions issued or notified by (the State Bank of Pakistan or the Bank), financial institution, cooperative society, Government. Department or a statutory body or an authority established or controlled by a Government as the case may be, and a (thirty days' notice has been given to the defaulter): ' Provided that it is not wilful default under this Ordinance if the accused was unable to pay, return or repay the amount as aforesaid on account of any wilful breach of agreement or obligation or failure to perform statutory duty on the part of any bank, financial institution, cooperative society or a Government Department or a statutory body or an authority established or controller by Government: ' Provided further that in the case of default concerning a bank or a financial institution a seven days' notice has also been given to the defaulter by the Governor, State Bank of Pakistan: ' Provided further that aforesaid thirty days' or seven days' notice shall not apply to cases pending trial at the time of promulgation of the National Accountability Bureau (Amendment) Ordinance, 2001."

' Section 31-D of the Ordinance has nexus with the afore-referred provision and is being reproduced below:-- "31-D. Inquiry, investigation or proceedings in respect of imprudent bank loans, etc.--- Notwithstanding anything contained in this Ordinance or any other law for the time being in force, no inquiry, investigation or proceedings in respect of imprudent loans, defaulted loans or re- scheduled loans shall be initiated or conducted by the National Accountability Bureau against any person, company or financial institution without reference from Governor, State Bank of Pakistan: ' Provided that cases pending any Accountability Court before coming into force of the National Accountability Bureau (Second Amendment) Ordinance, 2002, shall continue to be prosecuted and conduct without reference from the Governor, State Bank of Pakistan."

' The afore-referred statutory provisions were added on account of the observations made by the august Supreme Court in Khan Asfandyar Wali v. Federation of Pakistan PLD 2001 SC 607.

6. A bare reading of these provisions would indicate that conscious of the technical nature of the question of "wilful default", the law-maker has made it mandatory that no authority under the NAB Ordinance can initiate inquiry or investigation without a reference from the State Bank of Pakistan.

This newly-added provision came up for consideration before a learned Division Bench of Sindh High Court in Messrs Kaloodi International v. Federation of Pakistan PLD 2001 Kar. 311 wherein at p.338, it commented as under:-- "Thus, after insertion of section 31-D of the NAB Ordinance, no inquiry, investigation or proceedings in respect of imprudent loans, defaulted loans or rescheduled loans shall be initiated or conducted by the National Accountability Bureau, against any person without reference from the Governor, State Bank of Pakistan. The result is that after the insertion of section 31-D, all such matters are to be placed before the Governor State Bank of Pakistan and he is the competent Authority in law to take a decision if any inquiry, investigation or proceedings in respect of the loans and wilful defaults shall be initiated or conducted by the National Accountability Bureau, or not. The expression 'proceedings' used in section 31-D, is very wide in its import and includes the initiation of proceedings and references by the National Accountability Bureau before the Accountability Court.

Thus, section 31-D, does not place merely a bar on taking of cognizance by the Court without reference from Governor State Bank of Pakistan to the National Accountability Bureau and thereafter, reference by Accountability Court under section 18(a) of the National Accountability Bureau Ordinance, 1999, but prohibits the initiation of very proceedings and as such the reference made by the Chairman, National Accountability Bureau in this case without reference from the Governor State Bank of Pakistan was illegal and a nullity in law which cannot be cured by subsequent order of the Governor State Bank of Pakistan."

7. In the instant case admittedly neither any reference has been filed by the State Bank of Pakistan nor there is any issue pending with the State Bank rather the question of recovery of defaulted loan is pending before the learned Cooperative Judge (on the application of the Punjab Cooperative Board of Liquidation) and before it could determine the final liability, a sum of Rs,28,00,000 has been deposited by the petitioner's husband and it was on account of this clearance of loan that his Nomination Papers were accepted and he was allowed to contest the coming General Elections.

8. The argument that the petitioner's husband was not provided with the grounds and substance on the basis of which he was arrested, we note that both these pleas have specifically been controverted in the comments submitted by the learned Deputy Prosecutor-General NAB but copies of those grounds have not been placed on record. Rather it has not even been brought on record as to who is the complainant in the case which is likely to be filed against the petitioner's husband. The furnishing of ground of arrest is not only a requirement of section 24(d) of the NAB Ordinance but is also mandated in Article 10 of the Constitution.

' Commenting upon this essential prerequisite of arrest, the august Supreme Court in Abdul Qadir v.

Federation of Pakistan 2002 SCM R 1478 at p.1490, held as under:-- "Conveyance of the grounds and substance on the basis of which the accused is arrested, is the first essential ingredient of the above provisions of law, which is mandatory in nature and has to be complied with in letter and spirit and it is based on the Constitutionally guaranteed right providing safeguards as to arrest and detention of a person embodied in Article 10 of the Constitution of Islamic Republic of Pakistan, which reads as follows:--

10. Safeguard as to arrest and detention.--(1) No person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest, nor shall he be denied the right to consult and be defended by a legal practitioner of his choice."

9. The National Accountability Bureau has not challenged the factum of ailment of petitioner's husband either before the Accountability Court or before this Court in these proceedings. On a specific query made by the Court as to why the custody of the detenu (petitioner's husband) is required, the learned Deputy Prosecutor-General submitted that he had secured loan on insufficient securities and the Inquiry Officer would like to lay his hands on those documents for completion of reference. Para.4 of the application filed by the Punjab Cooperative Board for Liquidation before the learned Cooperative Judge of this Court, clearly shows that the Board is in full knowledge of all the documents on the basis of which the loan was secured. However, notwithstanding this, the Inquiry Officer can always associate the detenu (petitioner's husband) in any inquiry or investigation. The learned Deputy Prosecutor-General NAB did not apprise this Court of any outstanding amount to be recovered from him. No useful purpose would be served for keeping the petitioner's husband in detention any further.

10. For what has been discussed above, we are of the prima facie view that the procedure adopted and the detention are not in accord with the mandate of law. This petition is, therefore, allowed and subject to detenu's (Malik Abdul Ahad) furnishing bonds in the sum of Rs,5,00,000 (Rupees five lacs only) with two sureties .Each in the like amount to the satisfaction of the learned Judge/Duty Judge of the concerned Accountability Court, he shall be released forthwith. He shall, however, join enquiry/investigation, if so required at any stage.