The Constitution of Pakistan, 1973 Developed by Zain Sheikh

Per Mian Allah Nawaz, C.J.

(a) Constitution of Pakistan (1973), Article 199

That notwithstanding the proclamation of 14th October, 1999 and Provisional Constitution Orders Nos. 1,2 4 to 9 of 1999 and 1 of 2000, the Constitution of 1973 still remains as the paramount law of the land subject to certain conditions namely that certain parts of it had been held in abeyance.

That the power of judicial review vesting in superior Courts under Article 199 and other Articles of the Constitution continue to remain in field. The mere fact that the Judge of the superior Courts have taken new oath under P.C.O No.1 of 1999, does not disable them from their power to interpret laws and scrutinize the actions of N.A.B. and its functionaries. The power under Article 199 had not been taken away by any ouster clause. The Courts have full authority to scrutinize/judge the validity of any act or action of functionaries including the functionaries of N.A.B. The superior Court have power to declare any action, act or proceedings of N.A.B. which are found to be without any lawful authority or suffer from excess of jurisdiction or mala fide.”

From the above conclusion, the question No. 1 is answered accordingly. We have thus no doubt in our mind that this Court has jurisdiction to issue writ against N.A.B. and its functionaries and declare its acts/actions/arrests are found to be without jurisdiction.[p. 527] A

Applying this principle to the facts and circumstances of the case we are very clear that this Court has jurisdiction under Article 199 of the Constitution to see as to whether the petitioner is being treated in a lawful manner irrespective of the fact that references have been filed before Accountability Court.[p. 529] B

(b) Constitution of Pakistan (1973), Article 12

As regards the second limb of the question, suffice it to say that this objection flows from Article 12 of the Constitution. This Article ordains that every legislation which makes an act done before passing of law and which was innocent at that time, such act/omission cannot be made penal and doer cannot be punished and prosecution for such offence will be wholly void. Stage is now set to examine this doctrine of retroactive legislation.[p. 532]H

In view of the facts and circumstances of the case in hand, we are very clear in our mind that the offence of wilful default incorporated in Schedule to Ordinance No.XVIII of 1999 as amended by 19 of 1999 and 4 of 2000 is a continuing offence and petitioners who had neither paid the principal amount nor its mark-up cannot seek benefit under section 12 of Constitution; that the rule of retrospectivity is not applicable to offence which is continuing in nature.[p.536]I

(c) Constitution of Pakistan (1973), Article 25

It is true that Article 25 of the Constitution ensures equality before law and equal protection of law/meaning thereby that State must treat similarly situated persons equally and be meted out even-handed treatment. If the functionaries of State violate this rule, such persons are entitled to challenge such uneven and partisan treatment and seek its quashment under Article 199 of the Constitution. Similarly, if the Government treats a person illegally, and less favourably, then such other person can come to this Court. This is well-known concept of equality, fairness. However, this principle is subject to a well-defined principle that equality before law is to be applied within the domain of lawful activity/meaning thereby that it does not apply to illegal activity.[p. 537] J

(d) Constitution of Pakistan (1973), Articles 25 & 199

From whatever has been stated above, it is thus clearly emerges that the equality protection clause guarantees equal treatment before law and equal protection of law. It is not designed to cover the instance of illegal action/activity. No doubt, we do not view with favour the treatment of NAB as far as other similarly situated people are concerned. However on the strength of this contention petitioners are not entitled to any relief as suggested. We hope and direct that the NAB will deal with the defaulters (similarly situated) equally and apply the law even by the point, as urged by learned counsel for petitioner, has no force.[p. 539] K

(e) Constitution of Pakistan (1973), Articles 4, 12 & 25

The stage has now reached to undertake the examination of remaining questions namely questions Nos.5 and 7. In so far as question No. 5 is concerned, the case of the petitioners is that the creditors and the borrows had concluded an agreement on 16-11-1999; that the said agreement was sanctioned by the Court through decree dated 8-2-2000; that the Chariman, NAB had no jurisdiction to override that agreement and initiate action against petitioners Nos. 1 and 2. On the strength of the above, it is suggested that the reference by NAB is, thus, without lawful authority. The case of the NAB, as already stated in detail, is that the bank made an offer to the petitioners on 16-11-1999; the settlement however, was not finalized till 19-11-1999; that Shah Jewana Mill approached the bank for settlement and final agreement was reduced in black and white on 19-11-1999 after the target date; that the Mill acknowledged and admitted its liability to the tune of Rs. 620.389 million and that under the said agreement, outstanding amount was divided into two parts/down payment of Rs. 80.00 million and demand finance-I Rs. 237.692 million and demand finance-II Rs. 239.635; that 14% mark-up was leviable on demand finance-I while second demand did not have any mark-up. The answer to the above competing claims is to be examined by reference to section 25-A brought by amending Ordinance IV of 2000. This section has eight sub-clauses. Sub-clause (a) prescribes that the person, who has been arrested or is in the custody of NAB, may apply to Chairman, NAB for reconciliation of his liability. The Chairman, NAB has been vested with authority to arrest such person or to take him into custody. Sub-clause (b) deals with composition of Conciliation Committee. it enacts that such Committee shall consist of a nominee of NAB, a nominee of the Prosecutor-General of NAB, an officer of a nominee of NAB, a nominee of the Prosecutor-General of NAB, an officer of the Banking Cell of NAB, a nominee by Chairman, NAB, a nominee of the Governor of State Bank of Pakistan, a Chartered Accountant appointed by the State Bank of Pakistan, a Chartered Accountant appointed by the accused and a Chartered Accountant appointed by the lender institution. Sub-clause (c) empowers the Conciliation Committee to examine the record, accounts of the lending institution; written evidence of the accused produced through his nominee; the Chairman, NAB is given power to determine the amount due against the accused. This sub-clause gives right to the accused to put his defence before the Committee at the commencement and before the conclusion of the proceedings. This provision, so incorporates the principle of audi alteram partem that nobody should be condemned unheard. The Committee is required to conclude the reference within thirty days and send its recommendations to Chairman, NAB. Sub-clause (e) is very significant. It empowers the Chairman, NAB to consider the recommendations so received. The Chairman may accept the recommendation or may, for the reasons to be recorded, pass appropriate orders rejecting or modifying the same he may deem fit. It so shows that such order shall be justiciable. Sub-clause (f) says that if a man undertakes to repay the amount, as determined by the Committee or the Chairman, NAB, the Chairman may release the accused for the purpose of the Ordinance. Sub-clause (g) is one of the most important provisions. It gives a very stringent power to Chairman, NAB. It states that if the Chairman is satisfied that the agreement entered into by the bank/creditor and the borrower is vitiated by section 23 or any other provision of the Contract Act or finds that the same is collusive and is against the public interest, the may refuse to take into consideration such agreement for the purpose of Conciliation Committee. Sub-clause(h) is penal in nature. It says that in the event of failure either of Conciliation Committee to conclude the reference within thirty days of commencement of conciliation proceedings or failure of the accused to accept recommendation the reference shall be filed in the Accountability Court.

From the aforesaid analysis of section 25A of Ordinance, it is clear to us that it provides a new strategy to effect the recovery of outstanding loans form the defaulters who have been designated wilful defaulters. The principle of reconciliation and hearing the wilful defaulters is incorporated in this new strategy. The Chairman, NAB is given extraordinary power to ignore any agreement entered into between the borrower and the lending institution subject to a condition that he comes to the conclusion that the agreement is violative of section 23 of the Contract Act or any of its provision or is opposed to public policy. Undoubtedly, this power appears to be highly exceptionable and at the first blush, seems to be draconian in nature. This power was not provided in Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997. The question which arises for consideration is whether this section is violative of any provision of the Constitution. As already noted, this is not repugnant to Articles, 4, 12 or 25 of the Constitution. This has been issued by the President of Pakistan on the advice of the Chief Executive pursuant to Proclamation of Emergency declared on 14th October, 1999. This action of October 12, 1999 has already been found validated on the doctrine of necessity by the Hon’ble Supreme Court. It is well settled that normally Courts never impute motive to the Legislature. Furthermore, it is well settled that a new law, to the extent of repugnancy repeals the earlier one by doctrine of implied repeal and if a special law is enacted, it overrides the general law. Reference may be made to Statutory Construction by Crawford, page 429:-

“It is not uncommon to find one statute treating a subject in general terms and another treating only a statute should be read together and harmonized. This is especially true where the two statutes are in pair materia. In the event of repugnancy, the special statute should prevail, in the absence of a contrary legislative intent, since the specific statute more clearly evidence the legislative intent than the general statute does. And this rule–that a statute relating to a specific statute does. And this rule-that a statute relating to a specific subject controls a general statute which includes the specific subject–is not necessarily dependent on the time of the enactment of such statutes, although it may be a vital and important consideration.”
[p. 539, 540, 541]L

Applying this rule to the Ordinances 18 and 19 of 1999 and 4 of 2000, we find that these are new legislative measures enacted by the competent authority and so, occupy the field validly. From that perspective, we do find that section 25A is valid provision and does not suffer from doctrine of ultra vires.[p. 541]M

(f) Constitution of Pakistan (1973), Article 199

A similar offer was given to petitioner No.2 but none of them showed any willingness to accept the aforesaid offers. This clearly demonstrates that the petitioner had come to the Court with unclean hands and with unbending resolution not to pay the loans which are admittedly due against them on one pretext or the other. This being the position, we have no difficulty in coming to the conclusion that the petitioners have come to the Court with unclean hands and so, are not entitled to grant of relief under Article 199 of the Constitution of Pakistan (1973) which is discretionary and equitable in nature. [p. 543] N