IHC explains powers to freeze property of NAB accused

Judgment says excessive use of lawful power is itself unlawful

ISLAMABAD:

The Islamabad High Court (IHC) has held that exercise of discretion to freeze the property of a National Accountability Bureau (NAB) accused must be based on “reasonable grounds for believing” that he has committed an offence under National Accountability Ordinance (NAO) 1999.

While interpreting the Section 12 of the NAO, an 18-page judgment, authored by IHC Chief Justice Athar Minallah, also said that the exercise of power had to be reasonable and lawful on the touchstone of the principle of proportionality.

“In order to exercise the power under section 12, one of the most crucial factors for satisfaction is the required standard ie having reasonable grounds to believe that the accused has committed an offence,” the judgment said.

“It is implicit in the language used by the legislature that the property regarding which power can be lawfully exercised must have a nexus with one of the offences described under Section 9,” the ruling added.

“The required standard that must be met in order to justify interference under Section 12 ie having reasonable grounds to believe, is of significance and, therefore, its scope needs further elaboration.”

Section 12 of the NAO empowers the NAB chairman or the trial court to order the freezing of the accused’s property or part of it, whether it is in his possession or in the possession of any relative, associate or person on his behalf.

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The power is discretionary in nature and it can either be exercised either by the NAB chairman or by the court, trying any offence under the NAO. The power of the court has a nexus with the trial against an accused, while the NAB chairman is empowered to order freezing of a property at any time.

A division bench of the IHC heard the petition filed by an accused, involved in fake accounts scam, against seizure of five vehicles by NAB. The judgment said that the powers under Section 12 could only be exercised in relation to the assets of the accused and if it had nexus with the alleged offence for which the requisite standard was to have reasonable grounds to believe that it was so.

Defining “reasonable grounds”, the court said that it was obvious from the precedent law that having “reasonable grounds to believe” had 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,” the judgment said.

“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,” it added.

“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.”

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The court said that the requisite standard was higher than a reasonable suspicion but lower on balance of probabilities” and added that it was 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,” it said.

“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’,” the judgment said.

It also said that there was yet another distinguishing feature of the power relating to dealing with property under the NAO that was the discretion to adopt one of the modes prescribed under the Section 12(b) or (c), as the case might be.

“This exercise of discretion has to be reasonable and lawful on the touchstone of the principle of proportionality,” the court said. “The Bureau, in each case, will have to justify that the least intrusive mode has been adopted,” it said.

“It would not be reasonable to seize a property if the intended object could be achieved by resorting to the least destructive mode,” the ruling added. “It is settled law that where express statutory power is conferred on a public functionary, it should not be pushed too far, for such conferment implies a restraint in operating that power, so as to exercise it justly and reasonably,” it further said.

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“Excessive use of lawful power is itself unlawful,” the court declared. “We are, therefore, of the opinion that the provisions of Sections 12, 13 and 23 relating to dealing with ‘case property’ in the context of the offences described under the Ordinance of 1999 are inconsistent with those prescribed under the CrPC.”

In such an eventuality, the court said, the provisions of the CrPC would not apply nor could the scheme under sections 12 and 13 be rendered redundant. “It is settled law that when a special statute confers special powers and jurisdiction and provides a special form of procedure then they will prevail over the procedure or provisions of the CrPC.”

The judgment explained that the power under Section 12 was discretionary in nature and it could either be exercised by the NAB chairman or the court trying any offence under the NAO. It added that the power of the court had a nexus with the trial against accused, while the NAB chairman was empowered to order the freezing any time.

“The legislature has circumscribed the power by prescribing certain mandatory statutory safeguards. The required standard prescribed for justifying interference with the right to property is for the chairman or the court, as the case may be, to satisfy the test of having ‘reasonable grounds for believing’ that the accused has committed an offence under the Ordinance,” it said.

Regarding the instant case, the judgment said that it was an admitted position of the NAB that the five vehicles claimed by the petitioners were neither registered in the name of the respondent nor had any material been collected by the NAB to indicate the latter’s connection therewith.

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“There is nothing on record to satisfy the required threshold of having ‘reasonable grounds to believe’ that the five vehicles are connected with the offences alleged to have been committed by the respondent,” the judgment said.

“The vehicles were taken into possession by the Bureau and detained/seized in disregard to the statutory requirements and safeguards provided under sections 12 and 13 of the Ordinance of 1999.

The powers were exercised unlawfully and arbitrarily under the CrPC on mere suspicion because the vehicles were found at the property,” it added.

“The petitioners are not accused of committing any offence under the Ordinance of 1999 nor are any proceedings pending against them thereunder. There is also nothing on record to show benami ownership or control of the Respondent. The detention and seizure of the five vehicles was, therefore, without lawful authority and jurisdiction and an abuse of powers by officials of the Bureau.”

According to the ruling, it was not a case of handing over temporary possession (superdari) because the vehicles could not have been treated as ‘case property’ in relation to the alleged offences committed by the respondent. The powers exercised by the Bureau to the extent of the five vehicles claimed by the petitioners were ultra vires the scheme of the Ordinance of 1999,” the judgment said.