Term ‘police authorities’ used in Section 22-A(6), Cr.P.C. is wide enough to include FIA

 PLJ 2022 Lahore (Note) 83

Present: Ali Zia Bajwa, J.

NATIONAL BANK OF PAKISTAN and another--Petitioners

versus

STATE and others--Respondents

W.P. No. 30742 of 2021, decided on 21.5.2021.

Constitution of Pakistan, 1973--

----Art. 199--Availability of alternate remedy--Jurisdiction of Justice of peace--Police authorities--Powers of Police officials--Maintainability--To challenge vires of inquiry conducted by Federal Investigating Agency on allegations of illegal issuance of loans and money laundering--Question of--Whether term ‘Police authorities’ used in Section 22-A(6), Cr.P.C. includes F.I.A. and if it does, whether judicial review under Article 199 of Constitution is maintainable--Crucial question emerging for consideration is whether F.I.A. falls within expression ‘police authorities’ as used in Section 22-A(6), Cr.P.C.--Ex-officio justice of peace is very much competent to issue directions to respondents as it can issue to Provincial police and contention of counsel for petitioners regarding lack of jurisdiction of ex-officio justice of peace in matters of F.I.A. is not tenable--Term ‘police authorities’ used in Section 22-A(6), Cr.P.C. is wide enough to include FIA officials and does not only connote provincial police authorities especially when FIA authorities can use all powers of a police officer of provincial police under Cr.P.C.--Directions under Section 22-A(6), Cr.P.C. can be issued to F.I.A. as status of F.I.A. is also of police--An aggrieved person can also seek his remedy against F.I.A. by filing complaint before ex-officio justice of peace--Provisions of Section 22-A (6), Cr.P.C. were made part of statute book with object to reduce burden of this Court by designating Sessions Judges and on their nomination Additional Sessions Judges as ex-officio justice of peace to share powers of this Court--Due to availability of an adequate and efficacious alternative remedy under Section 22-A (6), Cr.P.C. instant writ petition is not maintainable.

                                      [Para 1, 11, 12, 13, 14 & 16] A, B, C, D, E & F

PLD 2013 Islamabad 26; 2010 MLD 1346; 2011 SCMR 1813; 2005 MLD 1593; PLD 2007 SC 571 ref.

Mr. Khurram Abbas Jafri, Advocate for Petitioners.

Mr. Asad Ali Bajwa, Deputy Attorney General for Federation with Mr. Zahid Javed Butt, Assistant Attorney General for Respondents.

Hafiz Asghar Ali, Deputy Prosecutor General on Court’s call.

Date of hearing: 21.5.2021.

Order

Instant writ petition has been filed under Article 199 of the Constitution of Pakistan, 1973 (hereinafter ‘Constitution’) to challenge the vires of inquiry conducted by Federal Investigating Agency (hereinafter ‘F.I.A’) on the allegations of illegal issuance of loans and money laundering. Primarily it has been prayed that F.I.A. authorities be directed to drop the inquiry against the petitioner bank and its employees on the ground of excess committed by the respondent investigating agency.

2. It was fervidly contended by the learned counsel representing petitioner bank that no illegality had been committed by the bank as due process was followed for issuance of loans. It was further argued that allegation of money laundering is postscript. Further prayed that respondents be restrained from harassing bank employees and also to comply with the mandatory procedural requirements of Section 94 of the Code of Criminal Procedure, 1898 (hereinafter ‘Cr.P.C.’) for obtaining the Bank record of documentation pertaining to issuance of loans in question. Petitioner No. 2 Khadim Hussain, Executive Vice President/Regional Corporate Head, Faisalabad and Multan National Bank of Pakistan is accused against whom inquiry in question is in progress.

3. When learned counsel for the petitioners was confronted with the question of maintainability of instant petition, he submitted that instant petition is competent in every respect as no other efficacious and adequate remedy is available to the petitioners as respondents are transgressing their authority and are harassing the officers of petitioner bank which has badly affected its business and renown. It was argued that Section 22-A(6), Cr.P.C. only applies to F.I.A. to the extent of issuance of direction qua the registration of case.

4. While on the other hand, learned law officer refuted all the contentions of the petitioner side with vehemence and asserted that this petition is not maintainable in presence of an adequate alternate remedy under Section 22-A(6), Cr.P.C. by filing a complaint with ex-officio Justice of Peace regarding any alleged misuse or excess of authority by the F.I.A. officials. He further asserted that Section 25 Anti-money Laundering Act, 2010 ousts the operation of Section 94, Cr.P.C. and has an overriding effect being a non obstante clause incorporated in the special law which otherwise prevails over general law. Lastly contended that no illegality has been committed by the respondent authority and inquiry in progress is strictly in line with the relevant law.

5. Matter heard in detail.

6. After hearing both the parties, the vital questions, which require consideration in the instant writ petition are whether the term ‘Police authorities’ used in Section 22-A(6), Cr.P.C. includes F.I.A. and if it does, whether the judicial review under Article 199 of the Constitution is maintainable.

7. Before dilating upon the maintainability of writ petition in hand, it will be advantageous to have a bird eye view of the powers available to an ex-officio justice of peace under subsection (6) of Section 22-A, Cr.P.C. which was inserted into the statute through the Code of Criminal Procedure (3rd Amendment) Ordinance, 2002 which provides infra:

“22-A(6) an ex-officio justice of peace may issue appropriate directions to the police authorities concerned on a complaint regarding-

(i)       non-registration of a criminal case;

(ii)      Transfer of investigation from one police officer to another; and

(iii)     Neglect, failure or excess committed by a police authority in relation to its functions and duties.”

8. Above reproduced provision of law is self-explanatory and Court does not have a slightest of hesitation to hold that it provides an adequate and efficacious alternative remedy to any person who is aggrieved by the excess committed by the ‘police authorities’.

9. Now the next crucial question emerging for consideration is whether F.I.A. falls within the expression ‘police authorities’ as used in Section 22-A(6), Cr.P.C. It shall be beneficial to scrutinize few provisions of the Federal Investigation Agency Act, 1974 (hereinafter Act of 1974). F.I.A. was constituted under Section 3 of this Act and under Section 4 superintendence and administration of agency shall vest in Director General of Agency. Sections 4 and 5 are reproduced hereinafter for further elaboration:

“4-Superintendence and administration of the Agency:

1.       The Superintendence of the Agency shall vest in the Federal Government.

2.       The administration of the Agency shall vest in the Director General who shall exercise in respect of the Agency such of the powers of an Inspector General of Police under the Police Act, 1861 (V of 1861), as may be prescribed by rules.

5-Powers of the members of the Agency:

1.       Subject to any order which the Federal Government may make in this behalf, the members of the Agency shall, for the purpose of an inquiry or investigation under this Act, have throughout Pakistan such powers, including powers relating to search, arrest of persons and seizure of property, and such duties, privileges and liabilities as the officers of a Provincial Police have in relation to the investigation of offences under the Code or any other law for the time being in force.

2.       Subject to rules, if any, a member of the Agency not below the rank of a Sub-Inspector may, for the purposes of any inquiry or investigation under this Act, exercise any of the powers of an officer-in-charge of a Police Station in any area in which he is for the time being and, when so exercising such powers, shall be deemed to be an officer-in-charge of a Police Station discharging his functions as such within the limits of his station.

3.       …………………..

4.       For the purpose of the exercise by the members of the Agency of the powers of an officer-in-charge of a Police Station,” Police Station” includes any place declared, generally or specially, by the Federal Government to be a Police Station within the meaning of the Code.”

10. Section 4(2) of the Act of 1974 provides that the administration of the Agency shall vest in the Director General who shall exercise, in respect of the Agency, the powers of an Inspector General of Police under the Police Act, 1861. While Section 5(1) in most unequivocal manner provides that the members of the Agency shall, for the purpose of an inquiry or investigation under this Act, have throughout Pakistan such powers, including powers relating to search, arrest of persons and seizure of property, and such duties, privileges and liabilities as the officers of Provincial Police have in relation to the investigation of offences under the Cr.P.C. or any other law for the time being in force. Likewise, Section 5(2), for the purpose of any inquiry, empowers a member of the agency, who is not below the rank of a Sub-Inspector to exercise any of the powers of an officer-in-charge of a Police Station.

11. Therefore, when status, functions, rights, privileges and liabilities of officials of F.I.A. are same as that of Provincial Police officer under the Cr.P.C., ex-officio justice of peace is very much competent to issue directions to the respondents as it can issue to the Provincial police and contention of the learned counsel for the petitioners regarding lack of jurisdiction of ex-officio justice of peace in matters of F.I.A. is not tenable.

12. The term ‘police authorities’ used in Section 22-A(6) Cr.P.C. is wide enough to include FIA officials and does not only connote provincial police authorities especially when FIA authorities can use all the powers of a police officer of provincial police under the Cr.P.C. There is no quibble that there may be some provisions of Act of 1974, which one may find in direct conflict with the provisions of Cr.P.C. and in that case, being special enactment, provisions of the Act of 1974 shall take precedence but this is not the case in instant lis as no provision of the Act of 1974 contradicts the powers of ex-officio justice of peace granted under Section 22-A(6) Cr.P.C. This view is further fortified by the dictum in Makhdoomzada Syed Mushtaq Hussain Shah’s case cited as (PLD 2013 Islamabad 26), where Islamabad High Court has vividly held that directions under Section 22-A(6) Cr.P.C. can be issued to F.I.A. as status of F.I.A. is also of police. Relevant paragraph is reproduced hereunder:

“14. Though by Section 10 of the Act, the Pakistan Special Police Establishment Ordinance, 1948 was repealed on promulgation of Federal Investigation Agency Act, 1974, therefore, there remained no ambiguity to concerned agency (FIA) and powers exercised by its members as officer Incharge of the Police Station. Therefore, status of the FIA defines as Police Station and Incharge whereof is officer Incharge of the Police Station as Station House Officer, therefore as defined being Police Station and Officer Incharge of the said Police Station. The Ex-Officio Justice of Peace can issue such direction while exercising powers under Section 22-A, Cr.P.C., which includes the appropriate direction to the Police Authority concerned. For such purpose FIA, being Agency is a Police Authority comes within such definition.”

13. Same view was taken by this Court in Ch. Abdur Rehman’s case, reported at (2010 MLD 1346) that an aggrieved person can also seek his remedy against F.I.A. by filing complaint before the ex-officio justice of peace. Therefore, an aggrieved person is fully competent to file a complaint under Section 22-A(6), Cr.P.C. with the ex-officio justice of peace against any neglect, failure, or excess committed by the F.I.A. authorities and can conveniently get adequate redressal of his grievance from that quasi-judicial forum.

14. Regarding efficacy and adequacy of this alternate remedy, suffice is to say that in view the judicial prescriptions expounded by the august Supreme Court in Dr. Sher Afgan Khan Niazi’s case reported at (2011 SCMR 1813) and by this Court in Mehboob Ali Malik’s case reported at PLD 1963 (W. P.) Lahore 575 to judge the adequacy of an available remedy, filing complaint with an ex-officio justice of peace is very much adequate and efficacious alternate remedy for an aggrieved person, with respect to its nature, extent of relief, point of time of availability of relief and the conditions on which that relief would be available particularly the conditions relating to the expense and inconvenience involved in securing the same.

As it is clearly established that petitioner had an alternate remedy under Section 22-A(6) Cr.P.C. and in such like cases, this Court always shows reluctance to encourage the practice to invoke the extra-ordinary writ jurisdiction under Article 199 of the Constitution. It has become more necessary than ever to put a legitimate check on the carefree constitutional petitions under Article 199 of the Constitution, considering the heavy burden of pending cases in the Constitutional Courts. The provisions of Section 22-A(6) Cr.P.C. were made part of the statute book with the object to reduce the burden of this Court by designating Sessions Judges and on their nomination Additional Sessions Judges as ex-officio justice of peace to share the powers of this Court in the matters mentioned in subsection (6) of Section 22-A Cr.P.C. In Syed Zafar Ali Shah’s case reported at (2005 MLD 1593), this object was highlighted by this Court in the following words:

“4. Section 22-A, Cr.P.C. was inserted in the Code of Criminal Procedure just to lessen the burden on this Court whereby such-like matters ought to be resolved by the Court of first instance by deciding matter.”

Contention of the learned counsel for the petitioners that Section 22-A(6) Cr.P.C. is only applicable to the extent of direction to F.I.A. authorities qua the registration of criminal case has no substance as it a cardinal principle of interpretation of statutes that provision of law must be read and applied in toto as was held by the august Supreme Court of Pakistan in Mirza Shaukat Baig’s case cited as PLD 2005 SC 530.

It was reiterated in Fazal Dad’s case cited as (PLD 2007 SC 571) that:

“It is a settled law that provisions of law must be read as a whole in order to determine its true nature, import and scope as law….”

Same view was taken by a full Bench of this Court in Aziz Ahmad’s case reported at 2019 YLR 355, where it was categorically held by this Court that:

“…A Statute is to be read and constructed as a whole and the same holistic approach is to be adopted with regard to a particular provision/section thereof and, thus, a provision cannot be dissected into pieces….”

Although learned law officer has also resisted this petition on merits but it is settled law that once this Court makes-up its mind that in presence of an alternate adequate remedy, relief cannot be granted to a petitioner, Court should refrain itself from commenting upon the merits of the case and should leave this exercise for the competent alternate forum, otherwise no fruitful purpose would be served to send such aggrieved person to that alternate forum. In this regard this Court is enlightened from the decision of august Supreme Court in Khalid Mehmood’s case cited as 1999 SCMR 1881, where it was firmly held by the august Supreme Court that:

“To sum up, therefore, the High Court in the circumstances, should have declined to say anything on merits of the dispute and preferred to non-suit the petitioner on the sole ground of maintainability.”

15. To summarize the legal position discussed above, this Court holds:

i.        Phrase ‘police authority’ as used in Section 22-A (6) Cr.P.C., includes FIA officials therefore any neglect, failure or excess committed by them in relation to their functions and duties, can be complained before ex-officio justice of peace.

ii.       Remedy provided under Section 22-A (6) Cr.P.C. is adequate and efficacious in nature, hence constitutional jurisdiction cannot be invoked without exhausting that remedy.

16. The resultant position that emerges from the discussions in the foregoing paragraphs is that due to availability of an adequate and efficacious alternative remedy under Section 22-A (6) Cr.P.C. instant writ petition is not maintainable, hence dismissed in limini without touching the merits of the case.

(Y.A.)

FIA had no authority to enter into an inquiry over alleged allegation of money laundering without any report from reporting agency

 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