Acquittal of accused: Bid to convert civil dispute into criminal one to be dealt with sternly

ISLAMABAD: A Lahore accountability court has warned the National Accountability Bureau (NAB) that an attempt to convert a civil dispute into criminal one shall be dealt with iron hands by it in future.

“The NAB authorities are directed to refrain from exercising jurisdiction in purely civil disputes,” Judge Amjad Nazir Chaudhry ordered in a judgement handed down on March 9 while acquitting an accused. The verdict went unreported, unnoticed.

Before parting with this order, the presiding officer, who chairs the Judge of the Accountability Court-V, wrote, it is highly regretted to note that NAB authorities, while taking cognisance under the NAO [National Accountability Ordinance], 1999, in this case travelled beyond their jurisdiction and tried to convert a pure civil dispute into criminal one.

While ordering release of the accused, he used the powers given in Section 265-K of the Criminal Procedure Code (CrPC), which reads “Power of Court to acquit accused at any stage: Nothing in this Chapter shall be deemed to prevent a Court from acquitting an accused at any stage of the case; if, after hearing the prosecutor and the accused and for reasons to be recorded, it considers that there is no probability of the accused being convicted of any offence.”

The judge opined that upshot of the discussion done in the verdict is that there is absolutely no probability of the conviction of accused Hassan Arshad Chaudhry, even after recording of entire evidence. Thus further proceedings in this reference shall tantamount to abuse of process of law and sheer wastage of time of this court. It is well settled that court can itself exercise jurisdiction under Section 265-K even without formal application by the accused in order to do justice, equity and fair play.

As per allegations contained in the reference number 03/2020, the accused obtained amounts from certain persons through agreements of investment or franchise agreements while he was running the business of kids garments since 2003-04 with the name and style of Colours & Little Junior. The reference contained the lists of claims and amounts of profit received by the claimants.

The NAB alleged that the accused caused a loss of Rs100.41 million and $860,700 to the members of public at large.

The judgment said during perusal of the file, it transpired that the claimants made investment in the business of accused through written agreements of investment and franchise, therefore, this court issued show cause notice to the State/NAB that why accused should not be acquitted under Section 265-K keeping in view the law laid down by the Supreme Court in Hashmat Ullah’s case (2019 SCMR 1730).

However, the NAB prosecutor argued that the case of the present accused is distinguished from the facts of the Hashmat Ullah’s case. He claimed that the accused on the false pretext of business fraudulently received money from the claimants and misappropriated the same and no profit was given to the aggrieved persons; therefore, it is a case of the cheating public at large. He further pleaded that there were 39 claimants/affectees, and during investigation, after scrutiny claims four persons were rejected for not falling in the category of cheating public at large and claims of 35 claimants were accepted.

The prosecutor also argued that prima-facie case for framing of charge against the accused is made out; therefore, charge be framed and reference be decided after recording of entire evidence.

The judge wrote that initial dishonest intention of the accused is also a vital factor to constitute a criminal offence. Admittedly, the accused is running business of kids’ garments since 2003-04 and had been paying profits to the franchise partners/investors. The loss in the business or non-payment of agreed profits or violation of any term of the agreement or breach of agreement, for which remedies are provided in the law of civil judicature, does not entail criminal prosecution.

He said that from the prosecution’s version and perusal of investment and franchise agreements, it is crystal clear that it is a purely business transaction of civil nature between the accused and the claimants, and no criminal offence authorising NAB to exercise jurisdiction under NAO is made out. At the most, a civil dispute based on alleged breach of agreement is made out, for which civil remedies are provided other than in a criminal court particularly in the shape of NAB reference. In this regard, the judge was “fortified by the judgement handed down by the full bench of the Supreme Court Hashmat Ullah’s case ibid.”

He noted that it was mentioned in the investigation report of NAB that “in the case of investment agreements, the accused entered into such agreements with the claimants wherein he received hefty amounts from the claimants and agreed to pay them profit on their investments. Such investment was to be made in the stock of Colours and Little Junior. In this case, there was no mention of any franchise of such similar arrangement, whatsoever, but the accused undertook to pay them profit by two mechanisms: either 24% p.a. [per annum] of the investment made by the investor or a particular shop was mentioned in the investment, and the accused undertook to pay 24% of the net profit of the shop to the investor. In such cases, the accused paid profits to the investors for sometimes and then failed to pay profit or refund any investment.”

Amjad Nazir Chaudhry said that he has his anxious contemplation to the arguments advanced by prosecutor in response to the show cause notice issued by his court and perused the record.

He pointed out that it is mentioned in the reference that “the investigation revealed that the subject accused being owner of Colours & Little Junior (kids wear brand) had cheated the members of public”. The investigation officer mentioned that “accused Hassan Arshad Chaudhry owned and operated a business of kids garments since 2003-04; namely Colours & Little Junior, the form of such business being sole proprietorship”.

The investigation report also said that “he [accused] entered into franchise agreements or investment agreements or both with the members of public at large. In the franchise agreements, the accused made agreements with the claimants/affectees regarding long term franchise partnerships.

He, being the franchiser, undertook to provide technical and retail expertise right to use trade mark, admin assistance and logistic support to franchises (affectees/claimants.”