National accountability bureau | **Landmark Judgment by Lahore High Court: Property Confiscation Overturned
**Landmark Judgment by Lahore High Court: Property Confiscation Overturned*
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In a recent landmark judgment by the Lahore High Court, the court overturned an order of property confiscation issued by the National Accountability Bureau (NAB). The case, W.P No. 5915 of 2020, involved Muhammad Ilyas versus The Chairman, National Accountability Bureau and 3 others.
The petitioner, represented by Mr. Khurshid Anwar Bhindar, challenged the order of restriction placed on his property and its inclusion in the list of confiscated assets for the recovery of a fine. The property, known as Ayesha Rice Mills, was alleged to have been acquired through illegal means connected to the Double Shah scam.
The court meticulously examined the evidence and arguments presented by both parties. It found that the petitioner, Muhammad Ilyas, was not implicated in any criminal activities related to the Double Shah scam. Despite being the owner of the property since 1995, he was unfairly targeted due to his association with individuals involved in the scam.
The judgment highlighted the principles of benami transactions and the burden of proof placed on the prosecution to establish a nexus between the accused and the confiscated property. It emphasized that reasonable grounds, based on tangible evidence, are essential before freezing or confiscating any property under the National Accountability Ordinance, 1999.
Furthermore, the court referenced previous legal precedents to reinforce its decision. It cited cases where disputes between real owners and alleged benamidars were resolved through civil proceedings, emphasizing the need for due process and judicial scrutiny in such matters.
In light of the evidence presented and the legal principles applied, the Lahore High Court ruled in favor of Muhammad Ilyas, setting aside the orders of property confiscation. The judgment serves as a testament to the importance of upholding individuals' rights and ensuring that justice is served through fair and transparent legal processes.
This landmark judgment reaffirms the fundamental principles of justice and due process enshrined in the Constitution of the Islamic Republic of Pakistan, 1973. It stands as a beacon of hope for those seeking redress against arbitrary actions by state authorities and underscores the judiciary's role in safeguarding citizens' rights.
UDGMENT SHEET
IN THE LAHORE HIGH COURT, LAHORE
JUDICIAL DEPARTMENT
W.P No. 5915 of 2020
Muhammad Ilyas
versus
The Chairman, National Accountability Bureau and 3 others
JUDGMENT
Date of hearing
05.12.2023
Petitioner by
Mr. Khurshid Anwar Bhindar,
learned Advocate.
Respondents by
Ch. Farid-ul-Hassan, learned Special
Prosecutor NAB.
SULTAN TANVIR AHMAD, J:– Through this petition,
filed under Article 199 of the Constitution of Islamic
Republic of Pakistan, 1973, the petitioner has challenged order
of restriction bearing No. 1(9)/HQ/535/NAB-P(IW-ii)
dated 08.10.2007 passed National Accountability Ordinance,
1999 (the ‘Ordinance’), with respect to property measuring
41-kanals
05-marlas situated in Mouza
Suhadara,
Tehsil Wazirabad, (Gujranwala) commonly known as
Ayesha Rice Mills (the ‘Property’) as well as the act of
placing the property under caution and order dated
23.12.2019 to include the property in the list of confiscated
W.P No. 5915 of 2020
2
assets for the recovery of fine of Rs. 1286 Million, in terms of
section 33-E of the Ordinance, as arrears of land revenue in
connection with case No. 20/2006 titled State vs. Zaheer
Abbas Ghumman & others.
2.
Brief facts, required for reaching to decision of
the case, are that Syed Sibt-ul-Hassan Gillani alias Double
Shah was found to be involved in receiving investment from
people of the area with promise to double the investments in
short span of time. Reference was filed against Double Shah
before the learned National Accountability Court, Lahore (the
‘Accountability Court’). During the course of inquiry against
Double Shah, Zaheer Abbas Ghumman and others were
investigated and after due probe a reference No. 17/2009 was
also instituted against them. Zaheer Abbas Ghumman, Javed
Iqbal and Syed Moazzam Hussain Gillani requested for their
plea bargain for an amount of Rs. 1286 Million, which was
accepted by the National Accountability Bureau (NAB).
Zaheer Abbas Ghumman and others made confession before
the learned Accountability Court on 13.04.2012. Consequently,
the learned Accountability Court convicted Zaheer Abbas
Ghumman and others and proceeded to pass the sentence in the
following manners:-
“They committed offence of corruption and
corrupt practices as defined in section 9 (a)(iii)(iv)
(ix) and (xii) and punishable u/s 10 (a) of NAO 1999.
All the accused are first offenders. They involved
W.P No. 5915 of 2020
3
themselves to work as agent of Double Shah due to
greediness. They are sole bread earners of their
families. They voluntarily confessed their guilt and
put themselves on mercy of the court. They are behind
the bar since 26-05-2009. These are mitigating
circumstances, to deal the accused with leniency.
They are convicted u/s 10 (a) of NAO 1999 and
sentenced to six (6) years rigorous Imprisonment each
which is sufficient to meet the ends of justice. They
shall also be pay to the tune of Rs.1286 million
subject to adjustment of amounts paid to, collected or
recovered by NAB in the terms of cash bank accounts
moveable and immoveable assets mentioned at pages
9, 10, 11, 13, 14 and 15 of the investigation report. In
case of failure in payments of fine, they shall have to
under go six (06) months simple imprisonment. The
amount of fine shall be recoverable as arrears of land
revenue as envisaged u/s 33-E of NAO 1999. All the
assets, amount and bank accounts in the names of the
accused and obtained by the accused in the name of
their benamidars/beneficiaries shall be confiscated in
favour of the state.”
3.
As per the allegations of the prosecution against
the petitioner as well as orders assailed, one Haq Nawaz who is
brother of Zaheer Abbas Ghumman-convict paid Rs. 17.5
Million (rupees seventeen million five hundred thousand only)
to the petitioner on 13.03.2007 as token money for the
purchase of the property and the petitioner is holding the
property as benamidar of Haq Nawaz. Aggrieved from the said
allegations and above mentioned orders the present petition has
been instituted.
4.
Mr. Khurshid Anwar Bhindar, learned counsel for
the petitioner, has submitted that the allegations against the
petitioner are uncertain and formless; that the petitioner is real
owner in possession of the property who purchased the same in
the year 1995; that the petitioner is also holding title
W.P No. 5915 of 2020
4
documents of the property in the shape of sale deed registered
in his favour on 14.09.1999 with Sub-Registrar of Wazirabad
(the ‘sale deed’); that the petitioner, having no idea as to any
case against Zaheer Abbas Ghumman-convict and in good
faith, entered into an agreement to sell the property dated
13.03.2007 (the ‘agreement’) with Haq Nawaz. It is further
submitted that Haq Nawaz merely paid earnest money and then
breached the agreement; consequently, the petitioner
approached the learned Civil Court concerned and obtained
decree dated 25.03.2010 to the effect of forfeiture of earnest
money on account of default by Haq Nawaz. Learned counsel
for the petitioner has relied upon cases titled “Eden
Developers Ltd. vs. NAB and other” (PLD 2011 Lahore 48),
“Ghani-ur-Rehman vs. National Accountability Bureau and
others” (PLD 2011 SC 1144), “Ghulam Basit vs. The State
and another” (2013 PCR.LJ 1797), “Saad Sumair vs.
National Accountability Bureau (NAB) through Chairman and
2 others” (PLD 2022 Islamabad 371), “Mst. Bilqis Bano and
another vs. Pakistan Defence Officers Housing Authority
through Administrator and 4 others” (2019 PCR.LJ 962) and
“Syed Azmat Hussain vs. Chairman, NAB and others” (2011
PCR.LJ 104) and he has contended that the petitioner is
neither an accused in any of the reference emanating out of the
Double Shah scam nor he is ever called as witness, thus,
confiscating the property is in utter violation of the principles
W.P No. 5915 of 2020
5
settled in the said cases; that the petitioner or the property has
no nexus with the alleged crime or the proceeds of the crime.
The learned counsel, without prejudice to the above, has stated
that even if Haq Nawaz is found to have been dealing with the
proceeds of the crime, the petitioner is lawful owner in the
possession of the property from 1995 and the agreement in
favour of Haq Nawaz since has been cancelled on account of
his failure to pay consideration and he never acquired any
ownership right or interest in the property, thus, the same
cannot be sold to satisfy any claim or payment of fine.
5.
Conversely, learned Special Prosecutor of NAB
has argued that huge amount is involved in the case and Rs.
682 Million has already been recovered from different
benamidars. The remaining amount is yet to be recovered by
the sale of confiscated assets including the property; that as a
matter of fact it was Zaheer Abbas Ghumman-convict, who
paid Rs. 17.5 Million as token to the petitioner through Haq
Nawaz, his brother, as a benamidar. He has further submitted
that the orders and the actions impugned, in this petition, are in
accordance with law.
6.
We have heard the arguments and perused the
documents with the able assistance of the learned counsel for
the parties.
7.
The prosecution has not denied before us that the
W.P No. 5915 of 2020
6
petitioner is not an accused in any of references filed by NAB
in the matters arising out of Double Shah scam. It is further
confirmed that the petitioner was never produced or summoned
by the learned Accountability Court as a witness. Admittedly,
the petitioner is never examined by any forum, judicial or even
investigation agency, in connection with the property or
receiving proceeds of crime. The definition of benamidar
given in the Ordinance, as applicable at the material time, is as
follows:-
Section 5(da).
“benamidar” means any person who
ostensibly holds or is in possession or
custody of any property of an accused on
his behalf for the benefit and enjoyment of
the accused.
(Underlining is added)
A bare perusal of the definition of word benamidar given in the
reproduced provision of the Ordinance, reflects that one can be
said to be a benamidar only when he ostensibly holds or is in
possession or has custody of some property which actually
belongs to the accused of an offence punishable under the
Ordinance or if it is meant for the benefit and enjoyment of the
accused.
Benami transaction or benamidar is also mentioned in section
9(v) of the Ordinance which, at the relevant time, was as
under:-
W.P No. 5915 of 2020
7
Section 9(v)
“If he or any of his dependents or
benamidar owns, possesses, or has
[acquired] right or title in any assets or
holds irrevocable power of attorney in
respect of any assets or pecuniary
resources disproportionate to his known
sources of income, which he cannot
reasonably account for or maintains a
standard of living beyond that which is
commensurate with his sources of income;
or …
(Underlining is added)
8.
Reading of section 9(v) of the Ordinance further
confirms that before holding someone as benamidar of illegal
asset it is necessary that the person is given a chance to
reasonably account for the asset in question or if he maintains
standard of living beyond his means or if the asset does not
commensurate with his sources. It is not argued by the
representatives of NAB before us that the petitioner was ever
asked to account for the property or the petitioner is holding
the property beyond his means. The Honourable Supreme
Court of Pakistan in case titled “Mst. Zahida Sattar and others
vs. Federation of Pakistan and others” (PLD 2002 SC 408)
observed that in the cases under progress for accumulation of
wealth by illegal or corrupt practices, if dispute arises between
the one claiming to be the real owner (not being accused
himself) and on the other hand the alleged ostensible owner i.e.
benamidar then such dispute being civil in nature can be
resolved by the learned Civil Court under Section 9 of the
W.P No. 5915 of 2020
8
Code of Civil Procedure, 1908. It will be beneficial to
reproduce the following extract from said judgment:-
“12. The question arises whether a Civil Court is
vested with the jurisdiction to entertain a suit to
try an issue which is subject-matter of a criminal
charge for which an accused is being tried in a
Criminal Court under special law i.e. NAB
Ordinance. The answer to this question revolves
around the decision on the question whether the
Civil Court can try a criminal charge which is
exclusively triable by a criminal Court under the
special law. The answer cannot be but in the
negative. If it had been a dispute between the
real owner and the ostensible owners who were
alleged to be the benamidars arising from denial
of latter's right for former, certainly it would
have been a dispute of civil nature and only the
Civil Court could take cognizance of the same
under section 9, C.P.C. which provides that a
Civil Court shall (subject to the provisions herein
contained) have jurisdiction to try all suits of civil
nature except the suits of which their cognizance
is either expressly or impliedly barred.”
(Emphases supplied)
9.
In the aforesaid case the Supreme Court of
Pakistan also recommended the Federal Government to
consider making suitable amendments in the Ordinance,
ensuring that the alleged ostensible owners are summoned by
the learned Accountability Courts to provide them opportunity,
during the trial, to prove that the assets in question were
acquired by them through their own resources and if it is
decided that the allegations are correct, they should be
provided with remedy of appeal to advance the needs of
justi
W.P No. 5915 of 2020
9
10.
The Supreme Court of Pakistan in case titled
“Iqbal Ahmed Turabi and others vs. The State” (PLD 2004
SC 830) examined the question involving benami transaction
in a NAB matter and observed that in the situation when the
dispute arises between third party on the one side and the real
owner and the benamidar on the other, conduct of the parties
and surrounding circumstances are to be taken into
consideration to determine as to whether the questioned
transaction was a benami or not. The relevant part of the
judgment reads as follows:-
“The premises was taken from petitioner
Iqbal Ahmad Turabi but the tenancy agreement
was executed in which petitioner Hassan Raza
was shown as landlord. In the beginning the rent
was being collected by petitioner Iqbal Ahmad
Turbai but after few months petitioner Hassan
Raza started collecting the rent. From the above
evidence, it is clear that the letting out of the
premises to Khalid Hussain has not been denied
by any of the petitioners. It is pertinent to point
out that in benami transaction, from whom the
consideration money came and from whom the
document of sale are produced in Court plays a
dominant roll when the dispute is between the real
owner and the benamidar. If the dispute is
between the third party on the one hand and the
real owner and the benamidar on the other hand
then the above-mentioned consideration looses its
importance. In such situation the conduct of the
parties and the surrounding circumstances are to
be taken into consideration to determine, whether
the transaction was a benami transaction or not.
It is no doubt true that the source of consideration
money and the possession of the titled documents
are essential elements to determine the nature of
the transaction where the dispute arises in
between benami and the real owner.”
(Underlining is added)
W.P No. 5915 of 2020
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11.
Section 12(a) of the Ordinance, which permits
NAB authorities or the learned National Accountability Court
to pass an order of freezing of any property or part thereof in
possession of the accused or in possession of any relative or
associated person, itself is dependent upon availability of
reasonable grounds. A learned Division Bench of Islamabad
High Court in case titled “Shah Rukh Jamal Versus National
Accountability Bureau, Islamabad and Others” (PLD 2022
Islamabad 1), while examining section 12, 13 and 23 of the
Ordinance, reached to the conclusion that reasonable grounds
as contemplated in the section 12 of the Ordinance, requires
existence of certain essential facts. The test settled is that the
facts and circumstances should be so that it lead a reasonable
prudent person to form belief that a property, directly or
indirectly, is owned and controlled by an accused under the
Ordinance. The requisite standard, to pass an order under
section 12 of the Ordinance, is fixed as more than mere
suspicion but less than on the balance of probabilities. It has
also been concluded that the power to freeze one’s property is
subject to judicial scrutiny. It will be well advantageous to
reproduce paragraphs No. 13 to 15 of the said judgment:-
“13. The august Supreme Court in the case titled
“Chaudhry Shujat Husain v. The State” [1995 SCMR
W.P No. 5915 of 2020
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1249] has observed and held as follows:-
“The term “reason to believe” can be
classified at a higher padestal than
mere suspicion and allegation but not
equivalent to proved evidence. Even
the strongest suspicion cannot
transform in “reason to believe.” In
Nisar Ahmad’s case the criteria laid
down seems to be that where some
tangible evidence is available against
the accused which, if left unrebutted,
may lead to the inference of guilt.”
14.
It is obvious from the above discussed
precedent law that having ‘reasonable grounds to
believe’ has reference to the required evidentiary
threshold. It is a legal standard and it has to be met
as a precondition before exercising the intrusive
power under section 12 of the Ordinance of 1999.
There must be ‘reasonable grounds’ which
manifests existence of certain essential facts. It
essentially refers to the existence of such facts and
circumstances which would lead a reasonable
prudent person to form a belief. In the context of
section 12 such belief would be relatable to the
property being, directly or indirectly, owned and
controlled by an accused and the latter having
committed one of the offences described under
section 9 of the Ordinance of 1999. The requisite
standard is higher than a reasonable suspicion but
less than ‘on balance of probabilities’. It is distinct
from conjecture, speculation or suspicion. The
required standard is far less than proving something
beyond a reasonable doubt. It is a threshold required
for a reasonable person to conclude and be satisfied
on the basis of sufficient material to conclude
deprivation of or interference with the right to own,
hold or control a property. The conclusion may be
subjective but it must be based on some reliable
material or evidence. The formation cannot be based
on mere suspicion even if it may be reasonable. In a
nutshell, forming an opinion On the basis of
reasonable grounds to believe is distinct and a higher
legal standard than ‘reasonable suspicion’.
15. There is another distinctive factor of the
scheme regarding the intrusive power provided under
section 12. The power is subject to judicial scrutiny
explicitly described under section 13. While the
claim or objection is exclusively justifiable by the
Accountability Court, a statutory right of appeal lies
to a High Court. Moreover, even if no order has been
passed under section 12, there is a statutory
W.P No. 5915 of 2020
12
prohibition under section 23 to deal with a property
connected with one of the offences described under
section 9 of the Ordinance of 1999. The special
scheme provided under sections 12, 13 and 23 of the
Ordinance of 1999 to deal with a property owned or
controlled by an accused and connected with the
offence allegedly committed by the latter is distinct
from the powers under Cr.P.C.”
(Emphases supplied)
12.
Reverting to the facts of the case. It is the claim of
the petitioner that he is in possession of the property since
1995 and he had been running his business on the property in
name of ‘Ayesha Rice Mill’. The original ownership of the
petitioner from 1990s and the title document i.e. the sale deed
is not denied. Haq Nawaz, the brother of the Zaheer Abbas
Ghumman-convict, entered into the agreement and paid earnest
money. This agreement is in conformity with article 17 of the
Qanun-e-Shahadat Order, 1984. The learned special prosecutor
of NAB has not argued that Haq Nawaz ever paid the balance
consideration. The learned prosecutor, when confronted as to
the aspect of balance consideration, has candidly conceded that
there is nothing on record showing such payment. The decree
dated 25.03.2010 was granted in favour of the petitioner by the
learned Civil Court for forfeiture of the earnest money upon
admitted failure to fulfill the obligation or to pay the remaining
consideration, which has attained finality. No one until today
has approached the learned Civil Court claiming any interest in
the property. No application for fraud or misrepresentation
under section 12(2) of the Code of Civil Procedure, 1908 is
W.P No. 5915 of 2020
13
ever instituted by anyone. The Order dated 13.04.2012 reads
that during the inquiry against Zaheer Abbas Ghummanconvict, the petitioner is found to be beneficiary of illegal
gains. We have very carefully gone through the final
investigation report dated 11.02.2010. In this final
investigation report the only part that relates to the property
simply states that Zaheer Abbas Ghumman-convict has
purchased the property in the name of his father out of the
crime proceeds for which Rs. 17.5 Million was paid as token
money to the petitioner. However, today it is argued that the
property is purchased in the name of Haq Nawaz brother of the
said convict. There is no discussion in the entire record for
reaching to the conclusion. The entire documents relied by the
NAB-authorities lack reasonable grounds and it is purely based
on mere suspicions and do not qualify the reasonable prudent
person test settled in Shah Rukh Jamal case (supra).
13.
Starting from the year 2007 until today, NABauthorities have not brought the case of the petitioner before
the learned Accountability Court for judicial scrutiny. The
petitioner was not even summoned as a witness in any of
references filed in Double Shah scam. No effort has been made
to examine if the amount of earnest money paid by Haq Nawaz
is actually proceeds of the crime. It is not argued before us that
even Haq Nawaz has been tried for being benamidar or for
using or having possession of crime proceeds. This is the
W.P No. 5915 of 2020
14
position despite the fact that more than one decade has passed.
Learned Special Prosecutor has submitted before us that the
property is required to be sold for recovery of fine imposed
against Zaheer Abbas Ghumman-convict under section 33-E of
the Ordinance, however, he has failed to satisfy if this can be
done without first establishing that the property is held as
benami for any convict.
14.
For what has been discussed above, the present
petition is allowed and the orders assailed are set-aside. No
order as to costs.
(Ali Baqar Najafi)
(Sultan Tanvir Ahmad)
Judge
Judge
Approved for reporting
Judge
Judge
Announced in open Court on _____________.
Judge
Judge
Case laws on the property confiscation by NAB
Certainly! Here are a few more case laws relevant to the topic of benami transactions and property confiscation:
1. **Eden Developers Ltd. vs. NAB and Others (PLD 2011 Lahore 48)**: This case dealt with the legality of property confiscation by NAB in connection with corruption cases. The Lahore High Court upheld the principle that confiscation orders must be based on concrete evidence and established legal grounds.
2. **Ghani-ur-Rehman vs. National Accountability Bureau and Others (PLD 2011 SC 1144)**: In this Supreme Court case, the court emphasized the importance of due process and fair treatment in matters involving property confiscation. It stressed the need for transparency and accountability in the actions of NAB and other accountability bodies.
3. **Ghulam Basit vs. The State and Another (2013 PCR.LJ 1797)**: This case focused on the rights of individuals whose properties are subject to confiscation proceedings. The court reaffirmed the principle that property rights should only be curtailed based on solid evidence and lawful procedures.
4. **Saad Sumair vs. National Accountability Bureau (NAB) through Chairman and 2 Others (PLD 2022 Islamabad 371)**: This Islamabad High Court case examined the powers of NAB to freeze and confiscate assets. It highlighted the need for NAB to have reasonable grounds and evidence before taking such actions.
5. **Mst. Bilqis Bano and Another vs. Pakistan Defence Officers Housing Authority through Administrator and 4 Others (2019 PCR.LJ 962)**: This case focused on the role of the Civil Court in resolving disputes related to property ownership and benami transactions. It underscored the importance of civil litigation in adjudicating claims of ownership and possession.
These cases collectively reinforce the principles of justice, due process, and property rights in the context of confiscation proceedings and benami transactions. They serve as valuable precedents for ensuring fairness and legality in the actions of accountability bodies like NAB.
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