Find a Lawyer

Criminal Appeal No. 202 of 1986, decided on 24th June, 1987.

‑‑Ss. 9 & 23‑‑Notification, dated 17‑ 10‑ 1979 [as amended on 20‑ 8‑ 1985]‑ ‑ Recovery of foreign currency‑‑Prosecution failing to prove that accused after becoming owner of foreign currency did not offer same for sale within one year of his acquisition thereof as required under notification, dated 20‑8‑1985‑‑Accused, held, was entitled to benefit of doubt‑‑Conviction and sentence set aside in circumstances.

1978 P Cr. L J 155 and 1984 P Cr. L J 2083 rel.

Diwan Bashir Ahmad for Appellant.

Imam Bux Shaikh for the State.

Date of hearing: 13th May, 1987.

The appellant was charged under section 9 read with section 23 of Foreign Exchange Regulation Act, 1947, for having been found in possession of 1,000 U.S. Dollars and 309 Saudi Rials, without lawful authority, and was tried before the learned Sessions Judge, and Tribunal, Foreign Exchange Regulation Act, Karachi (South), who has convicted him under section 9 read with section 23 of Foreign Exchange Regulation Act, 1947, and sentenced him to undergo R.I. for three months and to pay a fine of Rs.5,000 or in default to suffer R.I. for one month.

The brief facts of the prosecution case are, that on 17‑2‑1982, Mr. Shaharyar Mughal, Assistant Director, F.I.A., searched the house of appellant Haroon m Adamji Nagar, in presence of mashirs Khalil and Rafique. He secured 1,000 U.S. Dollars and 309 Saudi Rials from the almirah of the bed room of the accused. The accused could not produce any authority for keeping foreign currency. He prepared mashirnama of recovery which has been produced as Exh.3. Later on, he registered a case against the appellant and the F.I.R. has been produced as Exh. 6. After necessary investigation the appellant was challaned before the Court.

A formal charge was framed against the appellant under section 9 read with section 23 of the Foreign Exchange Regulation Act, 1947, to which he pleaded not guilty.

At the trial prosecution examined mashir Muhammad Khalil P.W. 1, Raja Ajaib Khan Inspector P.W. 2, Fasahat Ali Shah, Inspector F.I.A., P.W. 3 and Shaharyar Mughal, Assistant Director, F.I.A., P.W. 4.

The evidence of P.W. 2 Raja Ajaib Khan and P.W. 3 Fasahat Ali was formal in nature and they were not cross‑examined. P.W. Raja Ajaib Khan has deposed that on 20‑11‑1982 he received the case papers of this case under orders of S.P. He submitted the challan in the Court on 18‑11‑1982.

P.W. Fasahat Ali Shah has deposed that on 23‑2‑1982 he was Inspector, F.I.A., State Bank Circle, at Karachi. On the above date he received case papers of this case from Mr. Shaharyar, Assistant Director, F.I.A. On 28‑2‑1982, he recorded the statements of Muhammad Rafique and Muhammad Khalil. He was then transferred. He then handed over the case papers to Raja Ajaib Khan, Inspector F.I.A.

P.W. 1 Muhammad Khalil has deposed that he has a laundry shop in Adamji Nagar. The accused resides in a flat near his shop. On 17‑2‑1982, a police party of F.I.A. came there at 9 or 10 a.m. They took him and another person to the flat of the accused. He did not know the name of that person. The accused was present in his flat. From the search of the flat the police secured 1,000 U.S. Dollars and about 309 Saudi Rials. The accused could not show any lawful authority for holding the same. Police prepared such mashirnama and he signed it He has produced the mashirnama as Exh. 3. In cross‑examination he has deposed that he is running his shop in rented premises. He has not produced any proof about his tenancy. It was incorrect that he had no shop in Adamji Nagar. F.I.A. people told him that he was required upstairs, and, therefore, he went upstairs and saw F.I.A. people inside the flat. F.I.A. people had currency with them already. He had signed mashirnama Exh. 3, in the flat and not at the shop. It was incorrect that he was deposing due to F.I.A. pressure. It was incorrect that he was not called at the place of recovery. It was incorrect that he signed mashirnama in F.I.A. Office. The foreign currency notes were not signed or initialed by him. The witness was recalled at the request of State counsel who asked him that he had stated in examination‑in‑chief that foreign currency was secured from flat of the accused, but in cross‑examination he had stated that currency was already with the F.I.A., he should explain the reply was that the currency was recovered in his presence from the flat and sealed. In further cross he denied the suggestion that he had given the above answer due to fear of F.I.A.

P.W. 4 Shaharyar has supported contents of his F.I.R. and has produced the F.I.R. as Exh. 7. He has further deposed that he handed over the investigation of this case to Inspector Fasahat Ali. In cross -examination he has deposed that he has not mentioned the number of currency notes in Exh. 3. He had also not put his initial on the currency. He had no search warrant to conduct the search. It was incorrect to suggest that no currency was recovered from the house of accused. The house of Haroon is at the distance of about three furlongs from the house of one Saleem who is facing similar charge before this Court. It was incorrect to suggest that mashirs were not with him at the time of search and that he had obtained their signatures on mashirnama in his office. There are shops near the house of the accused. It was correct that he stated in cases of Saleem and Ghaffar that there are no shops in the area, but he explained that near the house of this accused there are shops as the house of present accused is at a distance of about 2 to 3 furlongs from the house of Saleem and Ghaffar. It is incorrect that mashirnama was prepared in his office. It is incorrect to suggest that he involved accused Haro because he had protested about his behaviour with Saleem. Nazimabad is at a distance of about 5 miles from the house of accused Haroon. It was correct that on that day he had gone in search of one Arif, who was required in currency case. It was incorrect to suggest that he has foisted the currency upon accused to make out a case against him.

After close of the prosecution case statement of appellant was recorded u/s 342, Cr.P.C. in which he has denied the allegations. He has further stated that he was innocent and nothing was recovered from his house. Police had come to the house of Saleem whom they maltreated. On his protest he was involved in this case. However, the appellant did not examine any witness in his defence.

The learned trial Judge while relying upon the above evidence convicted and sentenced the appellant as described above. The present appeal is directed against the above judgment of conviction,

I have heard Mr. Diwan Bashir Ahmed for the appellant, Mr. Imam Bux Shaikh for the State, and have also gone through the R&P of the case.

It was contended by Mr. Diwan Bashir Ahmed that the mashirs did not belong to the locality from where the recovery was made, inasmuch as mashir Khalil was resident of Mehmoodabad, while the accused resides near Stadium. It was further contended that the charge against the appellant was that he was found in possession of foreign currency, and that according to notification dated 17‑10‑1979, which was further amended or. 20‑8‑1985 it had to be proved that accused after becoming owner of foreign exchange failed to offer same for sale within one year. In support of his contention he has relied upon 1978 P Cr. L J 155, 1984 P Cr. L J 2083.

Mr. Imam Bux Shaikh, learned counsel appearing for the State has contended that in view of the legal position taken by the learned counsel for the appellant, he does not support the conviction.

I have considered the contentions of the learned counsel and have also gone through the case law cited at the Bar.

So far, the recovery of foreign currency was concerned, it stood proved from the evidence of masher Khalil and complainant Shaharyar Mughal. Their evidence was straight forward, natural and reliable. It was not shaken in any way in cross‑examination.

However, the important point raised in the present case by the learned counsel for the appellant was that the prosecution had failed to prove that the appellant after becoming owner of foreign exchange failed to offer same for sale within one year of his acquisition as required under the notification dated 20‑8‑1985.

Section 9 of the Foreign Exchange Regulation Act, 1947 reads as under:‑‑

"S. 9 The Federal Government may, by notification in the Official Gazette order every person in, or resident in (Pakistan).

(a) who owns or holds such foreign exchange as may be specified in the notification to offer it, or cause it to be offered for sale to (the State Bank) on behalf of the Federal Government or to such person as (the State Bank) may authorise for the purpose, within such time as may be specified in the notification, and as such price as the (Federal Government) may fix, being the price which is in the opinion of the (Federal Government) not less than the market rate of the foreign exchange when it is offered for sale;

(b) who is entitled to assign any right to receive such foreign exchange as may be specified in the notification, to transfer that right to (the State Bank) on behalf of the Federal Government on payment of such consideration therefor as the Federal Government may fix.

Provided that the Federal Government may by the said notification or another order exempt any person or class of persons from the operation of such order;

Provided further that nothing in this section shall apply to any foreign exchange acquired by a person from an authorised dealer and retained by him with the permission of (the State Bank) for any purpose:"

In Jalil v. the State 1978 P Cr. L J page 155 it was held:‑‑

"As regards the alleged offence under section 9 of the Foreign Exchange Regulation Act is concerned, the same has also not been conclusively proved. because merely coming into possession of foreign exchange by itself does not constitute an offence. Section 9 of the Foreign Exchange Regulation Act lays down that the Federal Government may by notification in the Official Gazette, order every person in, or resident in, the Provinces and the Federal territory who owns such foreign exchange as may be specified in the notification to offer it or cause it to be offered for sale to the State Bank or to such person, as the State Bank may authorise for the purpose at such price as the Federal Government may fix."

It is further held:‑

In order to succeed in its case, prosecution was required to strictly prove that the appellant after becoming owner of foreign exchange had failed to offer the same for sale within a particular period as envisaged by the notification issued under section 9, to an authorised dealer:'

In Muhammad Saleem v. The State Bank of Pakistan and another case in 1984 P Cr.L J 2083 it was held by this Court:‑‑

Mere possession of foreign exchange, held, by itself constitutes no offence within the meaning of section 4 of the Act, but prosecution is bound to prove for conviction under section 9, that accused after becoming owner of foreign exchange, failed to offer same for sale within particular period from his acquisition as required under notification:

From the above factual and legal position it is clear that the prosecution had failed to prove that the appellant had failed to offer the foreign currency for sale within one year of the day he became its owner as envisaged by notification dated 20‑8‑1985, and, therefore, he was entitled to the benefit of doubt. I, therefore, allow this appeal, set aside conviction, and sentence of the appellant and acquit him. He is on bail, his bail bonds stand discharged.

However, in view of the fact, that the appellant has denied the recovery of foreign currency and has not claimed the same, the property order confiscating the above currency to the Government is hereby maintained.

M.Y.H./H‑34/K Appeal accepted.

Find a Lawyer Near You

Dealing with a matter like this? Connect with a verified advocate in your city — free on SJP Lawyers Directory.