PLJ 2025 Civil (Note) 69
[Lahore High Court, Lahore]
Present: Shams Mehmood Mirza, J.
MUBASHER SHAHZAD--Petitioner
versus
FEDERATION OF PAKISTAN and others--Respondents
W.P. No. 4142 of 2024, decided on 31.10.2024.
Anti-Money Laundering Act, 2010 (VII of 2010)--
----S. 25--Issuance of notice--Complaint--Allegation of money laundering--No authority of FIA--No report from reporting agency--Challenge to--The FIA had no authority to enter into an inquiry over alleged allegation of money laundering against petitioner without there being any report from reporting agency as prescribed by Act--The exercise of authority by FIA was thus patently illegal and without lawful authority--Impugned notice itself did not reflect any application of mind regarding prima facie guilt or otherwise petitioner before initiation of inquiry--Petition allowed. [Para 7] A
PLD 2024 Lahore 584 & 2023 PTD 1434 ref.
Mr. Abad-ur-Rehman Advocate for Petitioner.
Mr. Sheraz Zaka Assistant Attorney General.
Mr. Ahmad Anwar Advocate for Respondent No. 6.
Date of hearing: 31.10.2024.
Order
This writ petition calls into question the assumption of jurisdiction by Federal Investigating Agency (FIA) and issuance of notice dated 13.01.2024 to the petitioner on the allegation of money laundering.
2. It is stated that one Shakeel Masih filed a complaint with the FIA against the petitioner, who at the relevant time was contesting the general election from PP-107 Faisalabad. It is alleged that the account number and the amount lying therein were taken from the information supplied by the petitioner in his nomination papers. Pursuant to the said complaint, FIA issued notice to the petitioner and various banks/Financial Institutions under Section 25 of the Anti-Money Laundering Act, 2010 (the Act) seeking information and for seizure of the bank accounts.
3. Learned counsel for the petitioner has placed reliance on the case of Abdus Saboor v. Federation of Pakistan etc 2023 PTD 1434 to contend that FIA could not assume jurisdiction over the subject matter of the complaint filed by Shakeel Masih who was an anonymous person. It is furthermore submitted that the petitioner was victimized as he belongs to Pakistan Tehreek-e-Insaf.
4. Report and parawise comments have been filed by Respondents No. 2 to 4 in which stance of the petitioner was controverted.
5. This Court in Abdus Saboor’s case after going through various provisions of the Act made the following observations regarding the procedure to be followed in cases where the allegation of money laundering is involved
13. The process under the Act is set in motion by the Financial Monitoring Unit (FMU) which receives Suspicious Transactions Reports (STRs) and Currency Transactions Reports (CTRs) from the reporting entities which in turn are analyzed by it and in respect of which it is empowered to call for the record and information from any agency or person. After analyzing the STRs and CTRs, the FMU disseminates the same to concerned Investigating or Prosecuting agencies for inquiry or further action under the Act under Section 6 of the Act
32. The essence of the Act from the reading of Section 2(xxviii), Section 4 and Section 9 is that the proceeds of crime is the centerpiece or core of the offence of money laundering and that the said offence only materializes once the substratum condition of proceeds of crime comes into existence. It is for this reason that the investigating officer is required to make determination and record it into writing that the property in respect of which a notice was sent to the person concerned is indeed involved in money laundering on the basis of the available material before him before applying to the Court for confirmation of the attachment of the said property (Section 9 of the Act). It has already been noted above that the proceedings under the Act are initiated against the person concerned when the directorate (1 & 1) receives information from FMU which then results into provisional attachment of the property and issuance of a notice contemplated by Section 9 of the Act, the objective being to ascertain and verify the fact that the property has been acquired through the proceeds of crime. It is thus a mandatory requirement of Section 9 that the person against whom the allegation is made must be provided with all the relevant information to put him on notice about the case he must meet. Similarly, the said provision also requires that he must be provided the opportunity to produce all the material before the investigating officer to prove that the property is not involved in money laundering.
39. ... it may be stated that the investigative process is triggered when FMU receives STRs and CTRs from the reporting agencies and analyses the same. FMU has the power to call for the record and information from any agency or person. After analyzing STRs and CTRS, FMU then proceeds to disseminate the necessary information and material to the concerned investigating or prosecuting agency for inquiry. The starting point for the engagement of the investigating officer under Section 8 is receipt of the said report from the investigating or prosecuting agency whereupon he is required to provisionally attach the property, with the prior permission of the Court, which he reasonably believes to be the property involved in money laundering. This belief can only exist based on information or material which is sufficient to give rise to such a belief in the mind of a reasonable person. This information or material, however, need not satisfy the standards applicable to admissibility of evidence and that is why vast powers are conferred by the Act for further investigation of the matter. The investigating officer is required to forward a copy of the attachment order and the report to the head of the concerned investigating agency in a sealed envelope within forty-eight hours. The investigating officer shall then serve a notice on the person concerned requiring him to provide his sources of income, earning or assets from which he acquired the property and the evidence on which he relies and other relevant information and particulars and to show-cause why all or any of such properties be not declared to be the properties involved in money laundering and forfeited to the Federal Government. Finally, the investigating officer shall by taking into account the reply to the notice and all relevant material placed on record and after granting hearing to the concerned person record a finding as to whether all or any other of the properties in respect of which notice was issued are properties involved in money laundering. The investigating officer after making the second determination that the property is involved in money laundering shall apply to the Court seeking an order confirming the attachment of the property. The Court, after giving opportunity of hearing to the concerned person, may pass an order confirming the attachment, retention, seizure or as the case may be, release of the property. The investigating officer after confirmation of the attachment order is required to forthwith take over the possession of the attached property and if the property seized is perishable in nature or subject to speedy and natural decay, or when the expense of keeping it in custody is likely to exceed its value, he may apply to the Court which may order immediate sale of the property in any manner deemed appropriate in the circumstances. These steps in the inquiry/ Investigation as envisaged by Sections 6, 8 and 9 are exhaustive and are not dependent on the rules. It may relevantly be pointed out that where the legislature intends that rules are required to be framed for a certain function under the statute to be performed or carried out, it makes provision for it by requiring it to be done through the prescribed manner. The term “prescribed” is defined in Section 2(xxvii) of the Act to mean prescribed by rules and regulations under the Act. For the investigative processes to be carried out by the investigating officer under Sections 8 and 9 relating to attachment, the legislature did not stipulate that these functions be further regulated and guided by rule making. This fact alone restrains the hands of this Court in issuing any direction for framing the rules.
6. This Court in the case of Muhammad Bilal Nawaz v. Director General, FIA Punjab Lahore etc PLD 2024 Lahore 584 made the following pertinent observations regarding the powers of FIR for seizure of bank accounts:
Therefore, whenever the FIA issues a directive restricting an individual’s bank account, whether during an inquiry or investigation, it must promptly notify the relevant Magistrate or Court, which would then issue an order in accordance with the law appropriate to the situation and circumstances.
7. It is apparent parent that the FIA has no authority to enter into an inquiry over the alleged allegation of money laundering against the petitioner without there being any report from the reporting agency as prescribed by the Act. The exercise of authority by FIA is thus patently illegal and without lawful authority. Furthermore, the impugned notice itself does not reflect any application of mind regarding the prima facie guilt or otherwise the petitioner before initiation of the inquiry.
8. For what has been stated above, this writ petition is allowed and it is declared that FIA without any lawful authority initiated inquiry against the petitioner. Resultantly, notice dated 13.01.2024 is also set aside.
(Y.A.) Petition allowed
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