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Criminal Appeal No. 367 of 1962, decided on 29th October 1962.

‑Resident in Pakistan making payment to another resident in Pakistan at behest of Pakistani residing outside Pakistan--- Not guilty in absence of State Bank's direction under S. 20.

Muhammad Hayat Junejo for Appellant.

Zahoorul Haq for Respondent.

Date of hearing: 29th October 1962.

The appellant Muhammad Sharif son of Lal Din has been convicted by the learned Sessions Judge, Foreign Exchange Tribunal, Karachi under section 23 of the Foreign Exchange Act and sentenced to R. I. for 9 months in addition to a fine of Rs. 3,000, in default further R. I. for six months.

2. The trial Court framed a charge under section 5 (1) (c) read with section 23 of the Foreign Exchange Act 1947, in that Muhammad had paid two sums of Rs. 2,500 and Rs. 250 to Muhammad Ramzan and Amir Khan at the behest of one Ghulam Rasul who according to the prosecution was a resident of Kuwait in the Persian Gulf outside Pakistan through one Ghulam Muhammad.

3. The circumstances that led to the prosecution of the appellant are that Agha Ainul Hasan, S. I. of Special Police, attached to the State Bank of Karachi, on the basis of infor mation regarding illegal business in Foreign Exchange, secured the sanction of the District Magistrate, Karachi and thereafter intercepted certain letters and receipts from the Saddar Post Office, Karachi. He also recorded the statements of Muhammad Ramzan and Amir Khan and submitted his report to the State Bank. On the basis of the report, a complaint Exh. 4‑B was filed by Qamarul Islam Siddiqui, Deputy Assistant Controller of the State Bank of Pakistan, especially empowered in this behalf. This complaint was filed on the 2nd of June 1962. Four witnesses were examined in furtherance of the prosecution case, and they are Qamrul Islam Siddiqui, Agha Ainul Hassan, Amir Khan and Muhammad Ramzan. The relevant part of the statement of the appellant is Exh. 5 at page 20 of the Paper book in answer to whether he had paid two sums of Rs. 2,500 and Rs. 250 to Muhammad Ramzan and Amir Khan respectively at the behest of Ghulam Rasul and Hussain, resident of Kuwait of the Persian Gulf without the necessary permission. The appellant replied as under :‑

"Ghulam Rasul while leaving for Kuwait had deposited Rs. 2,500 with me. Muhammad Ramzan approached me for return of this amount saying that he had received a letter from Ghulam Muhammad. I refused in the beginning, but when he pressed me hard I paid the amount to him. By profession I am a dhobi and ignorant of these laws. I may be pardoned if I have made any mistake. It is correct that I have paid Rs. 250 to Amir Khan. This amount also belongs to Ghulam Muhammad. Amir Khan had approached me for a payment to him stating that he had received a letter from Ghulam Muhammad in this respect."

4. In regard to another question referring to Exh. 2/D a letter allegedly written by one Amzad Parvesh and endorsed by Muhammad Sharif and addressed to Muhammad Boota Sahib, a cover Exh. 2/E along with the receipts Exhs. 2/F to 2/I, addressed to Muhammad Boota and Abdul Ghafoor c/o Haji Ghulam Muhammad of Kuwait in the Persian Gulf, the appellant stated that he was illiterate, that he had not sent this letter and receipts in this cover and denied that the endorsement Exh. 2‑D was in his handwriting. It will be seen, therefore, that the appellant admitted the entire facts of the prosecution case, except that he had not sent or written the letters and covers produced by the prosecution. It would indicate his plea therefore amounted to a denial of committing any offence under the Foreign Exchange Act.

5. Subsection (c) of section 5(1) of the Foreign Exchange Regulation Act, VII of 1947 reads as follows

"(c) make any payment to or for the credit of any person by order or on behalf of any person (resident outside Pakistan)."

6. It would appear therefore on a bare reading of this section, as the learned trial Judge appears to have done, that any payment made to or for the credit of any person or by order or on behalf of any person resident outside Pakistan is an offence. So that if any person resident in Pakistan were to make payment to another resident in Pakistan at the alleged behest of somebody residing outside Pakistan, even though he be a Pakistani, he would be committing an offence under the Foreign Exchange Regulation. Mr. Hayat Junejo has, however, rightly pointed out section 20 of the Foreign Exchange Regulation, subsection (a) of section (1) which reads as follows :‑

"(a) Until (the State Bank) by general or special order otherwise directs, any person who has at any time after the commencement of this Act been resident in Pakistan shall be treated as still being resident in Pakistan and if such direction is given in relation to any such person, (the State Bank) may by the same or a subsequent direction declare the territory in which he shall be treated as being resident."

This provision was necessary to obviate the complications which would otherwise clearly arise under this section. Conse quently all residents in or of Pakistan will for purposes of the Act be treated as such, until by a general or special order the State Bank directs otherwise. It is admitted that the State Bank has not issued any such order in regard to the persons at whose behest the alleged two amounts were paid by the appellant.

7. Mr. Zahurul Haq for the State concedes that in view of the provisions of section 20 of the Foreign Exchange Regu lation, and reading it with his straight‑forward statement, the appellant cannot be held liable of any offence under this Act, for obviously there is no direction of the State Bank of Pakistan under section 20 of the Act, and besides the prosecution have not been able to prove by any evidence whatsoever the identity A of those persons who wrote Exhs. 2/D, . 2/E and 2/F, specially as the appellant had initially stated that he was illiterate or denied either having written them or received them. In the circum stances the conviction of the appellant cannot be upheld. It is also clear that had the trial Court been assisted, as I have been today, by the pointing out of section 20 of the Act, the appellant would not have been convicted.

8. I, therefore, set aside the conviction and sentence. The appellant is in jail. He is ordered to be released forthwith and set at liberty, if he is not otherwise required.

K. B. A. < [if supportLineBreakNewLine]>

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