Brief on NAB Reference 1/2020 against Mr. Iqbal Z. Ahmed

  1. Background & Current Status
  • In March 2020, NAB filed a Reference in Accountability Court-1, Hyderabad (“NAB Court”) against Mr. Iqbal Z. Ahmed, Qazi Humayun Fareed, Mr. Fasih Ahmed, Mr. Razi Ahmed, Mr. Asim Iftikhar and Mr. Salamat Ali, alleging money laundering.

On Mar 31, 2020, the Sindh High Court granted bail to all accused, on merit. The Sindh High Court, in its Order said that:

“5.  Having heard the learned Counsel for the parties and perused the material available on the record, it transpires that the petitioners are a registered company that prima facie has caused no loss to the government exchequer. They are private individuals owning private companies, therefore, the misuse of authority is out of question. The petitioners are regular tax payers and the same has been confirmed by the Federal Bureau [Board] of Revenue. None of the petitioners is holding any public office. The allegation against the petitioners is that they have shown their income more than their actual earnings. The reason of which has not been found out yet. Prima facie, no material is available with the prosecution to establish that the petitioners have committed any misappropriation, embezzlement, corruption or were involved in any corrupt practices. The reference has been filed and prima facie nothing to out point any illegal source of earnings has been highlighted to give credence to the allegations. ……… The petitioners Qazi Humayun Fareed, Fasihuddin Ahmed, Raziuddin Ahmed and Asim Iftikhar have alleged malafide on the part of NAB authorities by filing their affidavits; and as discussed above no substance establishing their involvement has been prima facie collected, therefore, false implication of the petitioners, at this stage, cannot be ruled out. ……”

  • In the meanwhile, NAB Amendments were passed and the accused approached the trial Court for application for return of the Reference which was declined.

The Hon’ble Sindh High Court, on Apr 26, 2023 Ordered that the Reference be returned to NAB head office for disposal in accordance with law. In the Order the Hon’ble Sindh High Court noted that:

“…Learned Special Prosecutor NAB and I.O. of the case have admitted that in this case none of the petitioners is a public office holder and that government money is not involved and in fact no loss to national exchequer has occurred. Regarding allegations of money laundering, it has been conceded by them that there is no predicate offence alleged against the petitioners to give rise to allegations of money laundering. The I.O. submits that he had submitted the material before the Chairman NAB u/s 18(g) of NAO 1999 and the Chairman NAB had decided to file reference against the petitioners. They have given no objection if the reference is withdrawn from file of the trial Court and sent to the Chairman NAB through I.O. for passing appropriate orders.”

“Both Special Prosecutor NAB and I.O. have admitted that the allegations against the petitioners are not covered by the offences mentioned in Section 9 (a) (ix, x & xi) of NAO, 1999 and insofar as allegations of money laundering are concerned, no predicate offence prima facie is found to have been committed by the petitioners to induct an impression of injecting black money by them in the subject business for laundering purpose. Both have further conceded that neither any public office has been exploited by them nor any government funds, causing loss to national exchequer, are involved to confer jurisdiction upon the Accountability Court. In these facts and circumstances when apparently the petitioners are not shown to have committed any of the offence u/s 9 (a), (ix), (x) and (xi) NAO, 1999, particularly when such legal position has been conceded by learned Special Prosecutor NAB as well as by I.O., we are of the view that learned Accountability Court, Hyderabad lacks jurisdiction to adjudicate upon this matter. Resultantly, this petition is allowed and trial Court is directed to return reference to the Chairman NAB through Investigation Officer of the case for passing appropriate orders including but not limited to referring the matter to relevant forum in accordance with law.”

  • As the Reference was returned to NAB, the accused approached the Sindh High Court for release of their surety bond, which was allowed by the Court.
    • The amended laws were challenged in the Supreme Court in CP No. 21 / 2022 and the Supreme Court by majority of 2-1 to struck down certain amendments.
    • However, the Supreme Court retained the amendment related to S.9 of the NAO 1999 which provided that NAO was not applicable to private persons. Accordingly, the position is that the NAO is not applicable to any of the accused.
    • A notice was received from Accountability Court Hyderabad for appearance on 11/11/2023. In good faith and out of respect for the Court, all accused appeared before the Court and purely on technical grounds i.e. withdrawal of surety bonds and earlier bails, the Accountability Court ordered the custody of all accused and then in the bail order dated 16/11/2023, though admitting that by orders dated 26/04/2023 the Reference had been sent back by orders of the High Court to the NAB HQ; it was in these circumstances that the sureties were returned but since the accused had not appeared before the High Court for restoration of their Bail with another surety, the Court on purely technical grounds and reasons which cannot be termed legal or lawful rejected the bail application.
    • Upon rejection of bail applications of the accused, an application was filed before the Sindh High Court, which on Nov 23, 2023 granted bail to all accused. The order of the Accountability Court Hyderabad dated 11/11/2023 was on misconception of the legal position and on purely technical grounds. This is borne out by the detailed order of the Sindh High Court dated 23/11/2023 wherein Para 6, the Court has clearly stated that it was on the orders of the Sindh High Court referred to above in CP D-545/2023 the Reference was not maintainable and had been returned to the NAB HQ. It has also been held that the order dated 11/11/2023 and 16/11/2023 of the Accountability Court Hyderabad, “failed to consider the reasoning as to why these bails had been recalled and why the Applicants could not approach this Court for recalling of the said orders.”

The relevant paragraph of the Order is reproduced below:

“…… 6.  Admittedly, the applicants were granted bail on merits earlier vide order dated 31.03.2020 by this Court and it has been over three years, yet trial has not progressed. It is also relevant to note here that the subject reference had been returned to the Chairman following a decision of this Court in Constitutional Petition No. D-545/2023 vide order dated 26.04.2023. This was done in the light of an application u/s 265-K CrPC which was initially filed before the trial Court, was dismissed there and then the applicants approached the Court for return of the subject reference. Following this, on applications for return of surety papers, same were returned vide orders dated 08.08.2023 and 30.08.2023 respectively. The statutory amendments, in the light of which this Court had ordered the return of reference, were challenged before the Supreme Court through CP No. 21/2022 and CMA No. 5029/2022 and the august Supreme Court declared the same as null and void. As a corollary, the subject Reference was revived before the trial Court. Unbeknownst to the applicants, their sureties had been returned and they were taken into custody after their subsequent pre-arrest bails were dismissed by the trial Court. Then they filed a post-arrest bail before the trial Court which was dismissed through order dated 16.11.2023. Suffice it to say that the only reason provided by the trial Court for dismissing the post-arrest bail application of the applicants was with respect to their earlier bail being recalled. Trial Court failed to consider the reasonings as to why these bails had been recalled and why the applicants could not approach this court for recalled of the said order.”

The Order also highlights “…That the Accountability Court failed to consider the dictum laid down in such like cases in PLD 2021 SC 916. In Para 7, the Sindh High Court has reiterated what it had said earlier; that Mr. Iqbal Z. Ahmed and others were private individuals and not holders of public office and as such there was no misuse of public authority, neither there was any evidence of money laundering.

The paragraph from the Order is reproduced below:

“…… 7. As observed by this Court in the earlier rounds of bails, the applicants, proprietors of Associated Group-, prima facie have caused no loss to the government exchequer, nor otherwise apparent from the face of the record placed before us. They are also private individuals and not holders of public office; therefore, the question of misuse of authority is beyond the mark. The allegation against the applicants is that they have shown their income more than their actual earnings from their companies to hide ill-gotten gains under the guise of such earnings, however the source of these ill-gotten gains has not been found. No material is available with the prosecution to establish that the applicants have committed any misappropriation, embezzlement, corruption or money laundering or that they were involved in any corrupt practices.”

The Hon’ble Court also stated that:

“…… 7. ……… when Special Prosecutor NAB was asked whether any additional evidence had come on record against the applicants after they were earlier granted bail by this Court, he conceded that no additional evidence had come on record;”

  1. Impact of Amendments to NAO 1999, retained by the Supreme Court?

An application is pending in the trial Court for return of the Reference on the basis of the amendments in NAB law, duly retained by the Hon’ble Supreme Court of Pakistan that private persons are outside the scope of NAO 1999.

Even on merit, the case is baseless and likely to be dismissed.

  1. Likely outcome of the case

That in view of the legal provisions in the NAO 1999 (as amended) specifically S.9 Clauses (ix) (x) (xi) which have not been struck down by the Supreme Court order; all accused cannot be tried under any provision of the NAO.

Further, in view of the reconciliation of the accounts no case of money laundering is made out and there is no possibility of any of the accused being held liable under the provisions of S.3 of the AMLA 2010.