Impleading Minister as a Party in a suit

PLJ 1990 SC 543

[Appellate jurisdiction]

Present: NASIM HASAN SHAH, SiiAFiuR REHAMAN, ZAFFAR HUSSAIN MIRZA, ALI HUSSAIN OAZILBASII AND ABDUL QADEER CHAUDHRY, JJ

AMANULLAH KHAN and another-Appellants

versus FEDERAL GOVT. OF PAKISTAN and 2 others-Respondents

Civil Appeals No. 677 to 682 of 1990 and CMPs. 182 and 183 of 1990, decided on

3.9.1990

[From judgment of Lahore High Court, Rawalpindi Bench, dated 10.4.1990, passed in Writ Petitions No. 655, 658 and 663 of 1989.]

(i) Constitution of Pakistan, 1973—

—Art. 248—Governor, Ministers etc.—Protection to—Allegations of malaflde against Minister-Whether prohibition in Art. 248 can be overcome without impleading Minister as a party but only by recourse to principles of natural justice—Question of—Although Minister was not formally impleaded as a partly but course followed by learned Judge of High Court, was sufficient to show that he was being treated as a party for all practical purposes—Held: Finding that Minister's order was vitiated by inalafides of fact, could have beenrecorded in facts and circumstances of this case. (Per Nasim Hasan Shah J).

[P.593]Z

(ii) Constitution of Pakistan, 1973—

—Art. 248—President, Governor, Minister etc.—Protection to—Allegations of malaflde against Minister-Whether provisions of natural justice are to prevail over express provisions of Constitution-Question of-Cognizant of bar of Article 248 of Constitution, High Court exacted answerability of Minister by recourse to principles of natural justice as if provisions of natural justice are to prevail over express provisions of Constitution-Indian Constitution grants such a protection only to Governor and President, therefore, Indian decisionsare not relevant-Consistent law laid down by Supreme Court is that no adverse comments are to be made against a statutory functionary unless it is impleaded as a party in proceedings or appears as a witness-Held: What j Constitution prohibits expressly, could not be indirectly achieved by recourse to principles of natural justice (Majority view).            [Pp.579 &582)E&F.

AIR 1964 SC 962 not relevant.

PLD 1950 Lahore 34, PLD 1957 Lahore 583 and PLD 1958 SC 333 rel

 (iii) Constitution of Pakistan, 1973--

—Art.248—Governor, Ministers etc—Protection to—Allegations of malaflde against Minister-Whether recourse to principles of natural justice, to overcome  rohibition contained in Art. 248, is permissible—Question of—Law laid down by Pakistan courts is that expression "exercise of powers and performance of  unctions of their respective offices or for any act done or purported to be done in exercise of those powers and performance of those functions has to be given a  ery strict meaning—In absence of a party, no finding with regard to malaflde of fact (as distinguished from malaflde of law) can be recorded—Held: Recourse to  rinciples of natural justice to overcome prohibition contained in Art. 248 of Constitution is not permissible. (Majority view).                                                                                 lPp.582,583&584]G&H

PLD 1975 SC 383, AIR 1948 P.C. 128, PLD 1973 SC 49 and PLD 1983 SC 457ref.

(iv) Rules of Business, 1973--

-—R.5(10)-Islamabad Stock Exchange-Registration of--Application for-Refusal of-Challenge to-Whether Court has to determine when a Secretary should resubmit case to Minister for reconsideration or when he should take controversy to Prime Minister—Question of— It was a case where views of Secretary were over-ruled by Minister-Rule provides that Secretary will normally defer to decision of Minister and implement it—It is only when Secretary feels that Minister's decision requires reconsideration that he is to resubmit case-If difference of opinion persists in resubmitted case and Secretary still feels that matter is important enough, he is required to request Minister to refer case to Prime Minister-Held: It is exclusive domain of Secretary and not for court's intervention (Majority view). [Pp.587&588]N&O

(v) Securities and Exchange Ordinance, 1969 (XVII of 1969)--

—S.5--Islamabad Stock Exchange-Registration of-Challenge to-In view of findings recorded, which are altogether different from those recorded by High Court in impugned  udgment order of High Court declaring order of ex- Minister of State and all subsequent orders passed on basis of that order (as against law, without lawful authority and  aving no legal effect), is affirmed and all six appeals, are dismissed- Two applications filed by ex-Minister of State, and adverse remarks against him are expunged from  udgment of High Court-Held: Result of this judgment shall be that registration granted to Amanullah and his associate, shall not be of avail to them and all applications shall be considered afresh, f Majority view)                         [P.59Q]P,Q&R 

(vi) Securities and Exchange Ordinance, 1969 (XVII of 1969)-

—-S. 5 read ih Constitution of Pakistan, 1973, Article 248-Islamabad Stock Exchange- i¹ cistration of—Challenge to—Whether without having impleaded Minister a •>•  arty, findings and other critical comments against him, could not be rec ; Jed-Question of-According to learned Judge of High Court, comments >.>n conduct of Minister  ould be made after affording him an opportunm ot explaining, his position—Minister declined to avail this opportunity ,ind position taken by him clearly indicates fact  hat  e was not formally impleaded a-* a party, did not make any difference—Immunity to Minister extends oni) to exercise of powers and performance of functions of his office- eld: If acts of Minister are performed wiihmalafide intent or for a colourable purpose such acts will not be deemed to have been performed in lawful exercise of powers and  ill not be covered by immunity. (Per Nasim Hasan Shah .1).                                                                                      [Pp.591,592&593]S,T,U,V,W,X&Y

PLD 1969 SC 69 and PLD 1975 SC 383 ref.

(vii) Securities and Exchange Ordinance, 1969 (XVII of 1969)—

—S.5— Islamabad Slock Exchange—Registration of—Application for—Refusal to register-Challenge to-Order passed by Minister of State has three infirmities namely that he did not grant a hearing to applicant, secondly he did not record any reasons for satisfaction of requirements of Section 5(2) of Ordinance, and thirdly thai order was not communicated in proper form enabling applicants toseek appropriate relief against refusal-Held: Clear non-compliance had taken place with a Statutory provision which is salutary and mandatory-Held further: In order to make exercise of remedies of revision and review under Section 26 of Ordinance, meaningful and purposive, it is necessary that applicant is communicated in proper form and promptly, result of his application containing reasons for refusal. (Majority view).

[Pp.584,585&586]J,K,L&M

1971 SCMR 681, PLD 1958 SC 437, (1948) Appeal cas.s-(House of Lords) 87 and (318 US 80-iOO at 94) ref.

(viii) Securities and Exchange Ordinance, 1969 (XVII of 1969)--

—-S.5 read with Constitution of Pakistan, 1973, Art, 18-Islamabad Stock Exchange-Registration of--Application for-Refusal of-Challenge to- Whether application  or registration could be refused without hearing- Question of—Business dealing in securities has been considered all over civilized world affected with public  nterest-Duty of registration of Stock Exchange is purely an administrative function—It is neither quasi judicial nor judicial—There is no Us between parlies— owhere law provides that if there is one Stock Exchange, there will not be another-Held: View of Corporate Law Authority that any application received, had to be  ut in cold storage without hearing applicant, without examining eligibility and merit, is untenable and amounts to refusal to exercise jurisdiction and duties  onferred by Statute- Held further: Where a hearing is provided, it has to be meaningful. (Majority view).                                                                                                 [P.579JC&D 

(ix) Securities and Exchange Ordinance, 1969 (XVII of 1969)--

—S. 5-Islamabad Slock Exchange-Registration of-Application for-Refusal of-Challengc to-Whether application could be refused on ground that there exists one  lock Exchange—Question of—Refusal to entertain application had taken place on a ground not warranted by law-Held: Ground that there exists one Stock  xchange, is no ground to refuse to entertain subsequent application—Held further: If handling of application by competent authority is assumed, even then,  round  iven for refusing consideration of application is wholly unjustified (Majority view).                                 [P.574JB 

(x) Securities and Exchange Ordinance, 1969 (XVII of 1969)—

S.5(3)~Islamabad Stock Exchange-Registration of-Application for-Refusal to register—Constitutional Petition against—Whether compliance had taken place with Section 5(3) of Ordinance while refusing applications for registration-- Question of—Intervention of Corporate Law Authority in matter of entertaining and also disposal of an application under Section 5 of Ordinance, was wholly without jurisdiction finding no support from statute-Held: Such order could be challenged by recourse to constitutional jurisdiction without availing of or exhaustinu departmental remedies. (Majority view)

[P.574]A

PLD 1959 SC 177, PLD 1961 SC 119, PLD 1963 SC 322 and PLD 1971 SC 130 re/.

Raja Muhammad Anwar, Senior Advocate, Supreme Court, Raja Mahmood Akhtar, Advocate, Supreme Court and Mr. Manzoor flahi AOR for appellants (in

CA 677 to 679). Raja Muhammad Anwar, Senior Advocate, Supreme Court and Mr. Mehr Kiian Malik, AOR for appellants (in CA 678).

Mr. K.M.A. Saindani, Advocate, Supreme Court, Mr. M. Ajzal Siddiqui, D.A.G. and Mr. Manzoor llahi, AOR for appellants (in C.A. 680 to 682).

Raja Muhammad Akram, Advocate, Supreme Court and Mr. Ijaz Muhammad Khan, AOR for Respondent No.3 (in C.A. 677 and 678) and for respondent No. 1 (in C.A. 680 & 681)

C/J. Muhammad Hassan. Advocate, Supreme Court and Rana M.A Qadri, AOR (absent) for Respondent (in C.A. 679 & 682).

Mr. Abid Hassan Minto, Advocate, Supreme Court and Mr. Ejaz Muhammad Khan. AOR, Mr. M. Afzal Siddiqui, D.A.G and Mr. Mehr Khan Malik, AOR for Applicant (in C.M.P. 182-R and 183-R).

Dates of hearing: 19&20.6.1990.

JUDGMENT

Shafiur Kalunan, J.--This judgment disposes of six appeals and two Misc. applications filed therein, all arising out of .t consolidated judgment of Lahore High Court.

2.              Leave to appeal was granted in all these appeals to examine inter-alia, thefollowing questions of !aw:-

"(1) Whether compliance had lakeu place with section 5(3) of Ordinance XVI! of 1969 (Securities and E-Achangc Ordinance, 1969) io the mailer of reiusiiu¹ the applications for registration? li siol so, its effect on the procec'.ii.i^S:'"6. In view of the procedure prescribed under the Securities and Exchange Ordinance, 1969 for processing of applications for registration of Stock Exchanges, Corporate Law Authority is required to proceed as follows:-

i) The two applications are to be examined in order to ensure that all relevant information on such issues as financial standing of sponsors, their experience of securities of business and their competence to run a Stock Exchange is available. If necessary, additional information would be obtained.

ii) In case an applicant is found to be satisfying all requirements, clearance for incorporation of the company would be given. Conditions considered necessary for safeguarding interest of the investors as well as public interest would be specified.

iii) The applicant whose application is not considered eligible for registration shall have to be heard before rejection of the application.In view of the telephonic directions of the Minister of State, action as mentioned in para 6 above is being initiated.

Submitted for information and any orders which the Minister of State for Finance may like to pass."

What comments were made by the Secretary or by the Minister of State for Finance, is not on record, but two facts emerge from this note; one, that the procedure prescribed by law had been pointed out to the Secretary Finance as well as to the Minister'of State for Finance, and the second that this Summary was preceded by a telephonic direction from the Minister of State.

4.  Another Summary for the Minister of State for Finance was submitted for information, on 17-6-1989, and the relevant portions of it are as under:-

"2, Corporate Law Authority received two applications for establishment of a stock exchange at Islamabad in 1988. The sponsors of "The Islamabad-Rawalpindi Stock Exchange (Guarantee) Limited" (Proposed) include a number of members of the Lahore Stock Exchange namely; Mr.Sarmad Maqsood Al-Hussainy, Syed Mohsin Raza Bokhari, Mr.Asmatuliah Sheikh, Mr.Noshir F.Dastoor and MrJamil Ahmad Sheikh. It has been indicated that some members of the Karachi Stock Exchange may become additional sponsors. Sponsors of "The Islamabad Stock Exchange (Guarantee) Limited"(Proposed), include Mr. Amanullah Khan, Mr.Tariq Iqbal Khan, Mr.Khalid Waheed, Mr.Fero/uddin A. Cassim, Mr.Latif and Mian Pervaiz Alam.

3................

4................

5................

6. In view of the requirements of the law, sponsors of both the proposed stock exchanges are being given an opportunity of hearing by the Member, Corporate Law Authority on July 1 and July 2, 1989 which would enable us to determine eligibility of the applicants for registration as the Stock Exchange, Islamabad. Clearance for incorporation of the company could be given in the first place. After incorporation under the Companies Ordinance, 1984, it would be granted certificate of registration under the Securities and Exchange Ordinance, 1969."This summary was seen without comments by the Finance Secretary and the Minister of State for Finance.

5.   The third Summary was submitted by the Chairman Corporate Law Authority on 31-7-1989 reporting to the Minister of State for Finance, through the Finance Secretary the following facts:-

"Minister of State for Finance has been pleased to announce in the budget speech, the decision of the Government to allow establishment of a stock exchange at Islamabad. Corporate Law Authority has initiated uaion to implement the decision of the Government in accordance with i!u- rcqui.i crnents of Securities and Exchange Ordinance, 1969 whichregui.iic-. 'cgistration and operation of the stock exchanges in theCOUlllPThe c plications vvix examined and the sponsors were asked to furnish adjih i i! iiiuimntuin considered necessary for processing of the pph. .: -;iv In .icv. ni ihe requirements of the law, all the three app'i-, .-.'•- have ken given an opportunity of hearing by Member,Corpor.ik   Law Authority The    applicant?, who were heard on July 1 and 2, 1989, were requested to furnish more detailed information latest by July 22, 1989. Theinformation called for relates  o their financial resources, business plans, membership criteria and experience in the securities business. Details of  he information required may be seen at  nnexure I. The information has since been received and is being scrutinized. Mr.Zaki and his co- sponsors are required to submit information by August 1, 1989.  ll theparties have been given at least ten days for preparation and furnishing of the information

6.   The last Summary on the subject presented to the Minister of State forFinance by the Chairman, Corporate Law Authority, is dated 8-8-1989. Herein,the claims of the applicants were evaluated and the following recommendations were made:-"...,()n the basis of analyst, of the information which has been received from the three sponsors, Corporate Law Authority has reached the conclusion that the application received from Mr.Muhammad Iqbal Zaki may not be considered as none of the sponsors has any experience of dealing in securities which is a critical requirement for operating a stock exchange. Mr.Zaki has also revised the list of sponsors after the hearing and adding five new sponsors and dele!ing eight sponsors. The application received from Mr.Amanuilah Khan has sponsors who belong to Rawalpindi and the adjoining areas and are mostly engaged in business. However onlv one of the sponsors namely Mr.Firozuddin A.Cassim has practical experience in dealing in securities and managing a stock exchange. The application received from Mr.Sarmad Maqsood Al-Hussainy includes five sponsors who are stock brokers of Lahore Slock Exchange and five sponsors who are stock brokers of Karachi Slock Exchange. However there is no sponsor from the Rawalpindi region and it is apprehended that if allowed registration alone the group would tend to manage Islamabad Stock Exchange through remote control.

In view of the position explained above. Corporate Law Authority is of the opinion that in the interest of successful establishment and operation of a stock exchange at Islamabad the sponsors should represent a happy blend of experience in dealing in securities and the local contracts. H would he appropriate if sponsors mentioned in the application oiMr.Amanuilah Khan and Mr. Sarmad Maqsood Al-Hussainy join hands and a joint application to be submit!ed bv them is allowed to be registered. This course ol action would enable entrepreneurs oi the region and the persons having practical experience of dealing in securities am! managing stock exchanges to es!ablish a stock exchange at Islamabad on ihc right lines,

In case the proposal ol the foregoing paragraph is approved, the two applicants would be advised to submit a joint application. Corporate Law Authority would also prescribe necessary conditions as required by section 4 of Securities and Exchange Ordinance, 1969 to ensure establishment and smooth operation of stock exchange at Islamabad."The Finance Secretary signed the Summary, showing his concurrence with the proposal and forwarded it to the Minister of State, who, on 19-8-1989 passed the following order:-"The sponsors of the Group led by Mr.Amanuilah Khan, are allowed to establish and operate the Stock Exchange at Islamabad."

7. While implementing the Orders of the Minister of State for Finance just reproduced, the Corporate Law Authority formally addressed Mr.Amanuilah Khan, on 27th Aliens!, 1989, in the following words:-

"Subject:               NO OBJECTION CERTIFICATE FOR INCORPORATION OF

ISLAMABAD        STOCK         EXCHANGE         (C1UAR.4NTEE) LTD.f PROPOSED)

The Corporate Law Authority, after having considered the application filed by the sponsors led by Mr.Amanullah Khan for registration of Islamabad Stock Exchange (Guarantee) Limited (Proposed) for registration under section 5 of the Securities & Exchange Ordinance, 1969 and being satisfied that the proposed Stock Exchange is eligible for registration and that it would be in the interest of trade and also in the interest of public to register ihe said Stock Exchange, hereby grants this No Objection Certificate to enable the sponsors to incorporate the Company, as a company limited by guarantee under the Companies Ordinance. 19S4.

2.            However, this N.O.C. is granted subject to the conditions laid down in the annexed Annexures 'A' and 'B' which are to be incorporated in the  morandum and Articles ol Association of the proposed company. The certificate of registration under section 5 of the Securities and Exchange Ordinance,  1969 shall be granted after incorporation of the

S.   Or                                    Mr.Amanuilah Khan and his associates got the company

 (i)   For iiu.    ;: i live wais ol !he (iperation of the Exchange membership shaii be re>n ided ti¹ v>iie hundred.

(ii)   Nominee di' ^ctor ol' Corporate Law Authority will be represented on the commillces c>.Deeming membership and listing of companies.

(iii)   Applications   lor   initial   membership   shall   be   invited   through   an aduTlisemenl in the press.

Sd/

(Shamim Ahmad Khan) Member."

9. Ch.Muhanunad Aslam, the wril petitioner in Writ Petition No.655/1989, filed an application on 26-8-1989 with the Corporate Law Authority seeking permission for opening Stock Exchange in Islamabad. He was informed by theCorporate Law Authority on 16-9-1989 that 'No Objection Certificate' for incorporation of a Company limited by Guarantee for establishment of a Stock Exchange at Islamabad, had already been granted to one of the sponsors'group, as such his application cannot be entertained. In this background, Ch.Muhammad Aslam filed the Constitution Petition (W.P.No.655/1989) which is shown to be drawn up on 12-12-1989, alleging as hereunder:-

"(b) The petitioner however has now come to know that this statement made by respondent No. (?) and the orders contained in the impugned letter dated 16.9.1989 were factually incorrect. In fact the permission has been granted to respondent No.3 and 4 only on 15.10.1989. The petitioner has further come to know that the requisite permission/licence has been granted to them only on 2.12.1989. This the petitioner came to know only after respondents No.3 and 4 held a Press Conference giving information in this behalf and also inviting applications from various persons for the purpose of becoming members of the said Stock Exchange. The petitioner further understands that the respondentshave managed and manouvred the entire process for getting a No Objection Certificate in their favour in a calendistine manner and they are further taking steps to have applications from their own close associates excluding the members of the public in general and thereby they intend making only their own henchmen as members of the saidStock Exchange.".

10.         The specific allegations made against the Minister of State for Finance, in  he Constitution Petition filed by Ch.Muhammad Aslam, were as hereunder:-"That the entire proceedings have been done in a malafide manner by a group of persons for exterior motives. The petitioner understands that respondents No.3 and 4 were given No Objection Certificate/registration surreptiously through the patronage of the Minister of State for Finance. The persons who have been granted No Objection Certificate/permission for registration are the close associates of the said Minister of State for Finance. They have been selected for the grant of No Objection Certificate/permission for registration only because they have been old associates of the said Minister of State for Finance in various capacities including Rawalpindi Chambers of Commerce and Industry etc. Some of the sponsors are directly related and business partners of the saidMinister of State for Finance All these considerationshave been completely and deliberately ignored by the respondents No.l and 2 only for the purpose of projecting and promoting the self-interests of a small group of persons who are their henchmen and who have been close associates of the Minister of State for Finance."In his Constitution Petition, Ch.Muhammad Aslam, impleaded as respondents the Federal Government of Pakistan, through Secretary, Ministry of Finance; the Corporate Law Authority; Mr.Amanullah and the Islamabad Stock Exchange (Guarantee) Limited.

11. Raja Abdul Rehman, the Chairman of Raja Group of Industries and thePresident elect  of the  Federation  of Pakistan  Chambers of Commerce  andIndustry, made an application on 27-11-1989 to the Corporate Law Authority. Heclaimed that his application was still pending consideration but he came to know through the press that 'No Objection Certificate'/Permission for registration had been granted to Mr.Amanullah and his associates. He, therefore, challenged that decision by a Constitution Petition (Writ Petition No.658 of 1989) shown to have been drafted on the same day i.e. 12-12-1989. The specific allegations against the Minister of State for Finance were stated therein as hereunder:-"That the entire proceedings have been done in a malaflde manner by a group of persons for exterior motives. The petitioner understands that the respondents No.3 and 4 were given No Objection Certificate/registration surreptitiously through the partronage of the Minister of State for Finance. The persons who have been granted No Objection Certificate/Permission for registration are the close associates of the said Minister of State for Finance. They have been selected for the grant of No Objection Certificate/Permission for registration only because they have been old associates of the said Minister of State for Finance in various capacities including Rawalpindi Chambers of Commerce and Industry etc. Some of the sponsors are directly related and business partners of the said Minister of State for Finance. The case of the petitioner was not at all considered on merits and due to unlawful and clique consideration out of pure favour the licence/permission forrcgisira,:on was granted to respondents No.3 and 4       All theseconsi,! 'ions have been completely and deliberately ignored by the ixs|v . No.I and 2 only for the purpose of projecting and promoting :he iiii.rest of a small group of persons who are their henchmen and who iutve been close associates of the Minister of State for Finance."In his FVtiii••'•: Raja Abdul Rehman impleaded the Federal Government of Pakistar. thn                Secretary. Ministry of Finance; Corporate Law Authority; Mr.AmanulL        d Islamabad Stock Exchange (Guarantee) Limited.

12. .SYt Sunnad Maqsood Al-Hussainy, and his associates, the writ petitioner 'A'rii Petition No.663 of 1989, acted somewhat differently. Mr.Al-Hussaim • . ntormed by a letter from the Corporate Law Authority dated 27-8-1989asheK-..ndcr:-

In the light of ihe hearing held on 10th July, 1989 and the information lurnbhed by you in respect of your application, it has not been possible to agree to allow registration of the company sponsored by you alongwith others for establishment of a stock exchange at Islamabad.

He applied for a certified true copy of Orders containing reasons for the refusal of registration to him and reasons for the grant of registration to others and also sought inspection of the file with a view to inform himself of the facts leading to the decision which he wanted to impugn. He was denied both. He alongwith his associates, therefore, challenged by means of a Revision Pelition addressed to the Secretary, Ministry of Finance, the communication received by him from the Corporate Law Authority. The Finance Secretary by an Order dated 4.12.1989 entertained the Revision and proceeded to dismiss the same on 4.12.1989. Significantly, the Finance Secretary in his Order did not disclose that the Order was passed by the Minister of Stale for Finance and that a revision did not lie tohim but proceeded to deal as if the decision has been taken by the Corporate Law Authority. The merits were dealt by him in the revisionai order as hereunder:-"I have noticed that Corporate Law Authority had received three applications for registration under section 5 of Securities and Exchange(Ordinance, 1969. However, since only one company could be allowed to establish and operate the proposed Slock Exchange, two applications had to be rejected. One of the rejected applications happens to be that of the petitioners. The party which has been permitted to establish the Stock Exchange at Islamabad consists mostly of persons having businessinterest in Islamabad - Rawalpindi Region and this appears to be the dominant factor leading to the decision. The party also includes anexperienced broker of Karachi Stock ExchanIn myview, the party approved lor issue of certificate of registration had been selected after proper comparative evaluation. Besides, the petitioners would have an opportunity to apply for membership of the Stock Exchange at Islamabad. As such, I do not find any justification to upset the impugned order."

He, then, alongwith his 16 associates filed a Constitution Petition (Writ Petition No.663/1989) which is shown to have been drafted on 13-12-1989. They made the following specific allegations against the Minister of State for Finance in his Constitution Petition: -

"That Mr.KJialid Waheed Respondent No.4 is not only a close relation of Mr.Ehsan-ul-Haque Paracha, Minister of Slate for Finance, Government of Pakistan bul also is a business partner in Feroz Sons Laboratories Ltd. of which Khalid Waheed is Chairman/Chief Executive and Mr.Ehsan-ul-Haque Paracha Minister of Stale is one of its Directors. Respondent No.5 (Mr.Fcro/-ud-din A.Casim) is also one of the Directors of the Fero/ Sons Laboratories Ltd.The petitioner have every reason to believe that Respondent No.l refused certificate of registration to the petitioners and granted the same lo respondents 2 to 11 and respondent No.12 rejected the petitioners' revision petition (Annex 'E') with ulterior motives under the dictates of Mr.Ehsan-ul-Haque Paracha Minister of State for Finance and on this account as well the impugned orders of Respondents 1 and 12 are inalajide and without lawful authority and of no legal effect.".

In their Petition, they impleaded Mr.Shameem Ahmad. Member Corporate Law Authority; Mr.Amanullah and his associates namely. Tariq Iqbal Khan, Khalid Waheed, Fero/.ud Din A Casim. Lati! Ibraheem Jainai, Mian Habib Ullah. Mian Pcrvab Aslam, Muhammad Haji Yaqub, S.M.Hasan, Shabir Ahmad: and Secretary, Finance Division. He did not implcad Islamabad Slock Exchange (Guarantee) Limited, as a party/respondent.

13. The Corporate Law Authority filed its comments justifying the orders passed and claiming that it was in accordance with law. Mr.Amanullah and his associates in their comments took a number of preliminary objections lo the very competence of these Constitution Petitions and the right of the writ petitioners to challenue ihc decision on any ground whatsoever. It was also claimed bv them tthey had taken certain steps, consequential to the decision of the Government whereby a right had come to vest in them of which they could not be deprived by its revocation, withdrawal or modification.14. The three Constitution Petitions being on the same subject were taken up by the learned Judge together and disposed of by a single judgment dated 10-4-1990. During the course'of hearing in the High Court, on 23-12-1989, the Court passed the following Order.-

"Javed Panni, Deputy Chief, Government of Pakistan. Corporate Law Authority, (Corporate Regulation Wing) Islamabad has been directed to bring the entire original record of relevant proceedings on the next date of hearing and if meanwhile the learned counsel for the parties want to inspect the record, he shall allow them inspection."m ;iu preceding order, a copy of the writ petition ih.ii iirder should be x;nt to the Minister of State U- ; m.¹.,••• . vji-.\e:'ip.ieMi ol Pakistan. Islamabad, with a view to enable him ui .-^ plain his pt;sitK'n, at his option in view of the provisions of Article 24>S(!) of the ConsutiUson of Pakistan, 1973, in relation to certain allegation^ oi somewhat personal nature against him and if he so wishes he may avail ol the opportunity of being heard before this court on 6-2-1990 either personally or through some attorney or through some counsel.2. The learned Standing Counsel is also directed to contact the said Minister and convey him this order and get instructions from him, if any. for the next date of hearing."

On 6-2-1990, the matter was taken up again in the presence of the parties and the following Order was passed:"The office has, in compliance with the orders dated 24-1-1990 and 27-1-1990, conveyed the directions/observations of this Court to the Minister of State for Finance, Government of Pakistan, vide registered letter No.1139, dated 29-1-1990, alongwith the relevant document.The learned Standing Counsel for the Federal Government, vide paragraph 2 of the preceding order, was also directed to contact the Minister and convey the relevant order of this Court to him and get instructions, if any, from him for this date of hearing. The learned Standing Counsel states that he met the Minister and conveyed the relevant orders of this Court in order to enable him to put in his point of view, if any, and he stated that whatever he did was done in his official capacity as a Minister of State for Finance of the Federal Government and since it was not his personal matter, he had nothing to add to the defence already taken by or on behalf of the Federal Government.

Since the legal formality of affording an opportunity of being heard, as it appears from the statement of the learned counsel for the Federal  overnmeni, has been complied with and final arguments on the writ petition have already been heard, the judgment is reserved."

15. In his judgment dated 10-4-1990, the learned Judge, after narrating the facts noticed that "the; main ground of attack common to all these three writ petitions, but more elaborately slated in Writ Petition No.663 of 1989, is that of malafide". From the arguments addressed at the hearing, the following factual malafide was inferred:-

"(i) the Minister of State was hand in glove with him (Mr.Aman Ullah) on account of their close association in Rawalpindi-Islamabad Chamber of Commerce when the former was its President/Chairman and the latter was its member: and

(ii) the Minister of State had direct financial and other interests in the proposed slock exchange which he allowed to be set up for his personal aggrandisement as well as for the benefit of his close business associates and relations."It was further inferred that:-

"(i) the Minister of Slate was not a sleeping partner in Ferozesons Laboratories Ltd., a business concern of repute, rather, he was one of its directors and had been its Chief Executive for a number of years before he became the Minister of State and since then he continued to be shown as a 'director on leave' in its records;

(ii) Mr.Khalid Waheed respondent, who was one of the group of sponsors being headed by Mr.Aman iillah, besides being a major partner of the Minister of Stale in Fore/.csons Laboratories Ltd., was also his brother-in-law (<_jJ/£?) and they joined hands to promote their business interest through the stock exchange;(iii) Mr.Feroz-ud-Din A. Qasim respondent was also business partner of the Minister of State in Ferozesons Laboratories Ltd. while the rest of the respondents onstituting the group of sponsors headed by MrAman Ullah respondent were his henchmen and hand-picked persons of his main business associates, including a relation, named above; and

(iv) Aman Ullah's Group, after obtaining the Certificate of the Registration of the exchange, within the span of a few days and with the blessings of the Minister of State had collected one crore rupees as membership fee at the rate of rupees one lac per member and one can imagine the financial benefits of their joint venture."

16. The learned Judge noted in the judgment the procedure adopted by himin order to deal with the grounds of malafide elaborately projected before himduring the course of the arguments as hcreunden-.... On iru. conclusion of most of the arguments in the third week of January b 4, in view of the some allegations of personal nature against the Minister of State and great stress thereon having been laid in the context of malafide during the course of argument, it was considered necessary to afford him an opportunity of explaining his position to satisfy the requirements of rule of natural justice. Therefore, vide interim orders, dulcd 24.1.1990, and dated 27.1.1990 not only Pakistan or Government of Pakistan through Secretary Finance, who was, in fact, already a pariy in a different context, was directed to be impleadcd as a respondent, but also a copy of the Writ Petition No.663 of 1989 alongwith that ol supporting documents, which contained allegations of favouritism more elaborately, was sent to him through the Office of this Court as alsothrough the Lamed Standing Counsel for the Federal Government to enable him to explain his position at his option in terms of the provisions of Article 248(1) of the 1973 Constitution. The petitioners impleaded Pakistan through Secretary Finance as an added respondent and on 6.2.1')9() the learned Standing Counsel made a statement at the Bar in thecourt ihat:-"lie met the Minister and conveyed the relevant orders of this court in order to enable him to put in his point of view, if any. and he stated that whatever he did was done in his official capacity as a Minister of State for Finance of She Federal Government and since it was not his personal matter, he had nothing to add to the defence lready taken by or onbehalf of the Federal Government."23. The legal requirement of affording opportunity of being heard to the Minister of State thus having been complied with and no formal writtenstatement/comments having been filed on behalf of the Federal Government as the added respondent, as the stand taken and the argument already addressed on behalf of the Authority and Secretary Finance and some other respondents were stated to be enough, the hearing stood concluded and judgment reserved".

17.        After dealing with some of the preliminary objections to the competenceof the Petitions, the learned Judge held as hcreunden-"But, to ray mind, ihe decisive factor in this case is the question of malafide which, if decided in favour of the petitioners, would over-ride and wash away all technical and preliminary objections raised by or on behalf of the respondents. Therefore, I intend to consider it before taking up any othe'r preliminary objections raised on behalf of the respondents and that too if the necessity arose."The following findings of tad on malafide were recorded by the learned Judge:-"It is admitted position that the Minister of State was, and even now continues to be, one of the directors in Ferozsons Laboratories Ltd., a business concern of repute with its Head Office at Rawalpindi, and Khalid Waheed respondent, who is his brother-in-law ^-nl/'ff), is also a director therein, besides Fero/.-ud-Din A.Qasim respondent. It is also an admitted position that he had been its Chief Executive for a number of years before he accepted the present assignment and in that capacity he had been enjoying a number of facilities aadP^r'^vikges. j_n ,}j_c rec0rd «f the company he is now-a-day.s shown as a 'Director on leave". Mr.Khalid Waheed respondent is now the. Chief Executive. As submitted by the learned counsel for respondent No.2, his total investment in this concern may be around rupees one Lac but the fact remains thai besides being a direcior he bus been inch urge of its management aloiigwith his brother-in-law (*--^V7). it is almost their family concern as other share-holders appear to be playing only nominal role. Therefore, 1 am not inclined to agree with the contention ot tlie learned counsel lor respondent No.2 that due to his meagre investment', the Minister of Stale has no significant position in the company and his position was no better than of an employee. Perhaps i.'ie learned counsu! has forgotten thai, besides being adirecior in 'his company, he has been President of the Rawalpindi Chamber of Commerce, an Oiiice which is not occupied by an ordinary businessman. Besides, he is a politician and because of his political background he is now a member of Federal Cabinet. It is, therefore, due to the interplay of his business pursuits and political activities that he is now occupying the pivotal position of the Minister of Slate for Finance, Ineharge of the most important Ministry in the Federal Government. Therefore his business links could not be separated from his political interest and being basically a businessman he was very much interested in the establishment, constitution and control of the proposed financial institution at Islamabad wherein his business-cum-political interest would remain safeguarded and taken due care of by his own men. It is in this background that he seems to have picked up Mr.AmanulIah respondent. his old business associate in the Rawalpindi Chambers of Commerce, and his own relation and partner in business, namely, Mr.Khalid Waheed and Feroz-ud-Din A.Qasirn respondent even if he had to go out of the way to do so."

18. The magnitude of the consequences of such a malafide act was evaluated by giving the reasons and illustrations as hereunder:-(Shafiur Rehniau, Is and ccinrr'.-CK, interests but uiso his political stature and influence, both of which uu\. , in!cr-corinoacd and intermingled thai it was difficult to separate one fuiii; the other,"20 The two other legal defects noted by the learned Judge need mention because they require correction. The first was that in view of the delegation of the powers of the Federal Government to the Corporate Law Authority and its Member, the learned Judge held llial:-"Thc Authority under SRO No.l023(!)/8! and SRC) No.l024(I)/9t, both dated 1U-9-1981, issued under section 28 of the Securities and Exchange Ordinance, 1969, had the delegated power of the Federal Government and had all the necessary competence to entertain, enquire into, adjudicate and decide upon the applications made to it by the petitioners to set up ihe stock exchange at Islamabad and it wus not at ail necessary for it to have referred the matter to the Minister of Stale Ibr his approvalor decision. In referring the matter to him it abdicated or surrendered its own powers to him which by itself was an illegality in the schemes of things."The second was with regard to the conduct of the Secretary, Ministry of Finance and the learned Judge noted it as hereundcn-"But, if under some compulsion, it chose to submit the matter to theMinister of State for decision through Secretary Finance, he (Secretary) could and should have avoided to handle it at his own level while sending it up to the Minister of State but he did not do so. If he wanted to avoid his coming into picture at that stage he could do so by asking one of his Additional Secretaries to forward the case to the Minister of State insteadof putting his own signatures on it. By putting his signatures on the summary he happened to approve the proposal of the Chairman of the Authority and when the Minister of State disagreed with them by selecting Mr.Amanullah's group for the establishment of the proposed stock exchange, instead of approving the joint venture between that group and Al-Hussainy's group as proposed by them, then under rule 10 of the Rules of Business 1973 a difference of opinion had arisen between him and the Minister of State and it was his duty to request the Minister for reconsideration of his decision and if he stuck to his decision, then the matter should have been referred to the Prime Minister for her decision, This procedure was not adopted by the Secretary Finance and he did not perform his statutory duty. In these circumstances, the exercise of his revisional power also became meaningless. In fact he could exercise those powers, and quite lawfully, if the decision had been taken by the Authority itself. But by the intervention of Minister of State the entire set up envisaged by law became incapable of being acted upon. For that reason too the impugned order is unsustainable at law."

21.         On these findings all the three Constitution Petitions were accepted bythe learned Judge of the Lahore High Court and the following operative orderwas passed:-"For various reasons stated above, all the three writ petitions are accepted, and the impugned order, dated 27-8-1989, passed by the Minister of State and all subsequent orders passed on the basis of the order and other acts done pursuant thereto, are declared against law, without lawful authority, and having no legal effect. The respondents shall pay the costs of the petitioners."

22.          Aggrieved   by   this  judgment   three   appeals   have   been   filed   by Mr.Amanullah Khan and his associates and three others by the Government of Pakistan and its functionary, each rclalablc to the three writ petitions filed in the High Court. Two applications have also been made by Mr.Ihsanul Haq Paracha, Minister of State for Finance; one under Order V rule 2(2) read with Order XXXI11 Rules 5 and 6 of the Pakistan Supreme Court Rules, 1980 for impleading him  s a party in the proceedings; and the other under Order XXXHI Rule 6 of the Pakistan Supreme Court Rules, 1980 by which the expunction of the following remarks made in the judgment of the High Court is sought:-

"Para-25. "Out of these two groups of petitioners, the case of petitioner in WritPetition No.655 of 1989 was till (?) belter as his application had reached the Authority on 28-8-1989, a day prior to the issue of No Objection Certificate to Mr. Aman Ullah Khan Respondent on 27-8-1989 and it could be brought to the notice of the Minister of State forreconsideration but in the circumstances of the case the Authority, which appeared to be under pressure, perhaps could not dare to breach the subject again before him."

"Para-26. "Another objection of the respondents against the maintainability ofthese two Writ Petitions was that they did not avail of the remedy of revision available to them before the Secretary Finance. This objection is devoid of force for the simple reason that the Minister for Stale had already passed a Definite Order on the subject and it was fatuous to expect from Secretary Finance any remedy as there could be little possibility of his passing any order against the order of Minister of Slate already passed. Therefore, to invoke his rcvisional powers in these circumstances would have been an exercise in (utility."

"Para-27. "But, to my mind, the decisive factor in this case is the question ofmalafidc which, if decided in favour of the petitioners, would over-ride and wash away all technical and preliminary objections raised by or on behalf of the respondents. Therefore. I intend to consider it before taking up any other preliminary objections raised on behalf of the respondentsand lhat too if the necessity arose."

Para-28. "It is an admitted position lhat the Minister of State was, and even now continues to be, one of the Directors in Fcro/.esons Laboratories Ltd., a business concern of repute with its Head Office at Rawalpindi, and Khalid Waheed respondent, who is his brother-in-law (^J/"^), is also a Director therein, besides Feroze-ud-Din A.Qassim respondent. It is also an admitted position thai he had been ils Chief Execulive for a number of years before he accepted ihc present assignment and in lhat capacity he had been enjoying a number of facilities and privileges. In the record of the company he is now-a-days shown as a Director on leave. Mr.Khalid Waheed respondent is now the Chief Executive. As submitted by thelearned counsel for the respondenl No.2, his lolal investment in this concern may be around rupees one lac but the fact remains lhat besides being a Director he has been incharge of its almost their family concern (?) as other share-holders appear to be playing only nominal role. Therefore, I am not inclined to agree with ihe contention of the learned counsel for respondenl No.2 lhat due to his meagre investment, the Minister of Stale has no significant position in the company and his position was no betlcr lhan of an employee.

Perhaps ihc learned counsel has forgotten thai, besides being a Direclor in this company, he has been President of the Rawalpindi Chamber of Commerce, an office which is not occupied by an ordinary businessman. Besides, he is a politician and because of his political background he is now a member of Federal Cabinet. Il is, therefore, due to the interplay ofhis business pursuits and political acliviiies that he is now occupying thepivotal position of the Minister of State for Finance, Incharge of the most important Ministry in the Federal Government. Therefore, his business links could not be separated from his political interest and being basically a businessman he was very much interested in the establishment,constitution and control of the proposed financial institution at Islamabad wherein his business-cum-political interest would remain safeguarded and taken due care of by his own men. It is in this background that he seems to have picked up Mr.Aman Ullah Khan respondent, his old business associate in the Rawalpindi Chamber of Commerce, and his own relation and partner in business, namely Mr.Khalid Waheed and Feroze-ud-Din A. Qasim respondent even if he had to go out (of) the way to do so".

"Para-29. "It may be mentioned here that during the course of arguments I haveasked Dr.Pervaix Hassan Advocate, the learned counsel for respondent No.2, who was trying to defend the Minister of State to the best of his ability, as to whether he could quote any judicial precedent wherein a public functionary oi the State of the status of a Minister or Minister ofStale, as in the instant case, might have passed an Order similar to the one now under discussion and he would have been able to justify it on any ground and signified his inability to quote any."

"Para-30. "This argument does not oul much ice because it is an admitted fact that within a lew days of the issue of Certificate of Registration for the establishment of Stock Exchange, Mr.Aman Ullah respondent and his group collected membership fee lo the tune of one crore and it is by no means a small amount How ihcy will spend this money, is entirely theirdiscretion as they are controlling this organization and unfortunately the record of those who control finances of most of such like organizations in this country is not very clean. That was not without purpose as they could not fritter away the favour which they had won with no much efforts from one of the highest in the Government¹.

"Para-31. "In my opinion, the grant of permission by the Minister of State to theGroup of sponsors led by Mr.Aman Ullah respondent for selling up of Slock Exchange at Islamabad was a clear acl of favouritism and nepotism, having all the attributes of utalafide which according to the Federation of Pakistan etc. vs. Saeed Ahmad Khan (PLD 1974 S.C. 151) means "bad faith". Action taken in bad faith is usually action taken maliciously in fact, that is to say, in which the person taking the action does so out of personal motives either to hurt the person against whom the action is taken or lo benefit onself".

"Para-32. "In the lighl of these definitions of malal'ide and certain admillcd factsalready staled above, the Order, daled 27-08-1989, passed by (he Minister of Stale, graining permission to se! up Stock Exchange at Islamabad was clearly an Order stemming from maUiJlttc or bad faith, with a view to favour his own business associates, one of whom was even his relation through whom he wanled to safeguard and promote not only his business and commercial interests but also his political stature and influence, bothof which were so interconnected and intermingled thai it was difficult toseparate one from the other".

"Para-33. "But, if under some compulsion, it chose to submit the matter to theMinister of Slate for decision through Secretary Finance, he (Secretary) could and should have avoided to handle it at his own level while sending it up to the Minister of State but he did not do so"."But by (he intervention of Minister of Slate the entire set up envisaged by she law became incapable of being acted upon. For that reason too ihe impugned order is unsustainable at law.⁸'

"Para-34. "Since ihe b^ic order passed by the Minister of Slate for the setting up of the  Sioek  txchangj is untenable being tainted with malafide, all subsequent orders passed by any authority on the basis of that order are also bound lo crumble .

"Para-35. "' have tried to di?cus>. and record my landings on almost every pointraised by the learned counsel for the parties, particularly by the learned counsel representing the respondents, but if some preliminary objection stands omitted or it has not been adequately dealt with, it cannot save the impugned order for being struck down because the element ofmala fide or bad laUh. which is figuring, prominently in this case, is so basic, formidable and forceful thai it can easily wash away and undo any Legal objection raised in defence of the impugned order".

23.  The grievance  made  and  ihe grounds  iakcn  were  enumerated  as itereunder-

(a)     'The applicant wa-. no' arrayed as a 'party' 'o the writ petitions and in any case not in his personal capacity. If the writ petitioners intended to bring the  ersonal acts of the applicant as subject matter of writ petitions, he ought to iiave been made a parly by name. The fad thai the applicant was called upon to  -xpiain his position, by the learned High Court, it is submitted with respect, is of little consequence since, as submitted above, he was no! personally a  arty  o the svrits and did not consider it properto become one."

(b)    "Questions of maiajldv  raised in the  writ petitions were essentially questions of facts,  The  learned ,fud;.<e  has recorded findings on the questions of fact which were not even raised in the petitions. Mosl of the findings are based on inferential basis."

(c)    "The tenor of the findings on "malajlde" and "bad faith" against the applicant, in the impugned judgment are of extraordinary nature and unfortunately (for  he applicant) have received wide (adverse) publicity. The judgment is being playing (?) up not only by the political adversaries ol the applicant but also by  pponents of the ruling Government party. Applicant has been subjected to an unmending tirade in the Senate, National Assembly. Television, Radio and  ress.

Members of Senate and National Assembly ha^ moved motions against the applicant.

Newspapers have printed editorials and articles.

Questions are put to the Prime Minister, applicant or other Ministers in Press Conferences.

Almost   every   day   a   news   item/statement   appears   in   the   press condemning the applicant."

(d)      "Applicant humbly submits thai the remarks against him were neithernecessary, nor justified for disposing of the writ petitions."

"This Honourable Court has been pleased to declare law relating to expunction of remarks in various judgments specially in relation to a person who is not a party to or witness in the proceedings. Applicant relies on the law declared in Malik Feroze Khan Noon's case, Abdul Hayee Khan's case and Mujahid-ud-Din's case."

24.           Mr.K.M.A.Samdani, Advocate,  the  learned  counsel  representing the Government of Pakistan in three appeals has laken up the plea that there may have been at  ertain stages mishandling of the applications for registration of the Stock Exchange by the Corporate Law Authority but this was more due to its inexperience than any deliberate design or dictation from superior or otherwise. The Minister of State could not, according to him, on the facts stated and found established, be accused of favouritism, nepotism and bias. For mere relationship by marriage with one of the promoters of the public company which was to be registered as a Stock Exchange, (he Minister of State for Finance did not andcould   not   stand   disqualified   from   dealing  with  the   matter  nor   could   that relationship by itself be made the sole ground for inferring favouritism, nepotism and bias.  Similarly, by being in  the  past  Director  in  a  Public Company or President of the Chamber of Commerce, or a member of its Committees, the Minister of State for Finance did not in respect of other Directors or Members with whom he worked on such bodies, render himself disqualified to deal with their matter. Further, according to the learned counsel, the impugned judgment in so far as it took Stock Exchanuc to be like an investment company, the case inhand to be one of serious violation of Rules of Business or one of failure of the Secretary, Ministry of Finance, to lake his difference of opinion with the Minister of State, to the Cabinet, showed lack of awareness of the law applicable. On merits, the learned counsel considered that  the Summary submitted to the Minister of State for Finance, contained all the relevant data on which Ordercould be passed and was passed.In the  Written Arguments which was  required  to  be  s bmitted  to supplement  the  oral submissions,  the  learned  counsel  has  brought  out  and explained the  ature of acquaintance or relationship which the Minister of State had with the parlies, the protection that he enjoyed under Article 248 of the Constitution and  is qualification to act for and on behalf of the Government. 

26.            As regards the first, the learned counsel has concluded as hcreunden-

"In short, both contestants being eligible, the Minister of Slate had the option to choose one or the other. If one group of contestants were betterknown to the Minister some of them being relatives or business associates, they did not stand disqualified on that ground. If the order had been passed in favour of the other group, the first group would be equallyjustified to question the validity of the decision on grounds of discrimination. Therefore, if such grounds were to be entertained, the administrative authority would always be in a quandary and it would not be possible to take any decision in such a situation."As regards the second, the learned counsel for the Government considers the provision regarding the unanswerability of the Ministers to the courts contained in Article 248 of the Constitution to be absolute. However derelict the Minister, howsoever outlandish his approach, howsoever gross and determined the violation of law, the Minister remains, according to him, untouched, unscathed, beyond the pale of courts. This has been expressed as hcreundcr:-"In view of the protection provided to the Minister of State in terms contained in the said Article, no party or court could implcad him or subject him to the process of court in relation to the exercise of powers and performance of functions of his office.

Il is, therefore, humbly submitted that neither the kind of adverse remarks passed by the High Court could have been passed against the Minister of State in his absence nor his order in question could be set aside merely on the basis of those remarks because the Minister of State was not and could not be made a party to the proceedings."

As regards the third point, the learned counsel has submitted as hereunder:-

"Neither [he term Central Government/Federal Government nor the term Minister/Minister of Slate is defined any where in the Securities and Exchange Ordinance, 1969. "Federal Government" has not been defined under Article 260 of 1973-Constitution, either. This term has not expressly been defined even in Part III Chapter 3 of the Constitution. However, if we read the Articles 91 and 92 of the Constitution and the Rules of Business framed under the authority (Article 99) of the Constitution, we come to the unescapablc conclusion that the Minister of Stale is the Federal Government so far as the Ministry of Finance is concerned. The relevant provisions of the Rules of Business are Rules 3 and 5."

27. Raja Muhammad Anwar, Advocate, representing the Islamabad Slock Exchange and its promoter, Mr.Amanullah and his associates, has in the three appeals taken up and reiterated his preliminary objections to the very competence of the Constitution Petitions. For example, about the two Constitution Petitions (Writ Petitions No.655/1989 and 658/1989) it was stated thai the two petitioners therein had not exhausted the departmental remedy, not even availed of it, though a right of revision or review was available. Reliance has been placed by him on the Turiq Transport Company Lahore versus The Sargodhu-Bhera Bus Service, Sargodha and others (PLD 1958 S.C. 437), Muhammad Aslain versus Member (Colonies), Board of Revenue, Punjab, Lahore and another (1988 SCMR 1803) and Ahmad Ali and olhers versus Haji and others (1988 SCMR 1945). Secondly, il wascontended that in none of the petitions the mala fide of facl alleged was pleaded with particularity and detail as is required under the law laid clown by this Court inthe Federation of Pakistan, through the Secretaiy, Establishment Division versus Saeed Ahmad Klian and others (PLD 1974 S.C 151). According lo him, the ground pertaining to merits, law and jurisdiction, viz., non-observance of requirement of Section 5(3) of the Ordinance was neither taken up in the petitions, nor argued in the High Court, nor dealt with by the High Court, A point emphasised in the written submissions of the learned counsel is that once permission had been granted to Amanullah Group on 19.8.1989, none had thelocus standi to seek or obtain permission for setting up another Stock Exchange at Islamabad. On merits, the learned counsel supported the decision of the Minister of State, stating that !K kept relevant considerations (local participation and avoidance of monopoK! 'fully in view while passing the Order. In the Written Submissions, the learned counsel took up the plea as hereunder:-

"The grant of permission to the petitioners to establish Islamabad Stock Exchange was purely a matter within the administrative discretion of the Federal Government and the Minister was acting purely in his administrative capacity. As such his decision cannot be measured with the yard stick of judicial propriety."On the question of hearing to the party whose application is refused, the following submission was made:-

"That before the learned High Court the respondents made no grievance that ihey were not heard in view of Section 5 sub-clause (3) of the Ordinance. In any case, no prejudice is caused to them as summary prepared by the members and signed by the President C.L.A. gave the total facts which were placed before the Minister who passed the order. Hearing is only required if application for setting up Stock Exchange is disallowed, which is not the case here, and the Minister has passed the order that Islamabad Stock Exchange is lo be established in the interest of the trade and also in the, public interest and therefore, no hearing was necessary."As regards the protection of Article 248 of the Constitution, the learned counsel took up the position as hereunder:-"The Minister was only asked to explain his position regarding the allegations of his relationship with three sponsors. The Minister repliedthat whatever was done by him was in his official capacity as a Minister of State and since it was not his personal matter, he had nothing to add to the defence already taken by or on behalf of the Federal Government. Article 248 gives full protection to the Minister from the process of the Court. Article 199 is subject to the Constitution, therefore, no processcould be issued to the Minister. This can be the only constitutional interpretation, otherwise Article 248 will become redundant."

28. Mr.Abid Hasan Minto, Advocate, in his Written Arguments, submitted on behalf ol the applicant/Minister of State for Finance, Mr.Ihsanul Haq Piracha, stated as hereunder:-

"The applicant passed the order to which exception was taken in the Writ Petition on 19.8.1989. At that time, the applicant had before him only three applications for registration under SEO. The three applicants atthat time were (/") Sarmad Maqsood-ul-Hussainy Group, (//') Major Aman Ullah group and (Hi) Iqbal Zaki group. Raja Abdur Rehman and Ch. Muhammad Asiam were not before the applicant as they had not applied at the relevant time. It is, therefore, clear that the applicant did not deal with the cases of Raja abdur Rehman and Ch. Muhammad Aslam at any stage of the proceedings before he passed the order dated 19.8.1989."As to why the case was submitted to the Minister of State and not disposed of at a Sower level by an equally competent delegate, the explanation offered was asfollows:-''In view of the fact that the Government had taken policy decision for establishing the Stock Exchange at Islamabad and the Minister had from time to time given instructions to the CLA for expediting this matter, the Member CLA deemed it appropriate to keep the Minister informed of the various steps taken by it in this connection. It was in this back ground that the Member CLA did not take a final decision in this matter and referred the case to the Minister for a final determination."As regards the merits of the decision taken, the following explanation was offered:-

"It may be mentioned that the policy of the Government all along had been to establish the Stock Exchange at Islamabad for development of and for encouraging the business and commercial community of the area. The Minister, who was in fact keenly intereted in establishing Stock Exchange for Islamabad and Rawalpindi area and had been instrumental in formulating Government policy in that regard, was of the view that the best way of realising the policy of the Government in practice was to encourage the local business community in the matter of establishing a Stock Exchange at Islamabad. Such a policy was consistent with the requirement of Section 5(2) (//) of the SEO. It may also be mentioned that the Minister himself belongs to the business and industrial community. He has been closely associated with the Rawalpindi Chamber of Commerce as its Member and Chairman for a long period of time. Keeping in view the policy of the Government and considering the statement contained in the Summary of 8th August, 1989, the Minister decided to grant registration to Amanullah's group which represented the local Trading Community and whose Members are leading industrial and trading parties of the area. Two of its members, namely, Feroze A Qasim and Latif I.Jamal had extensive experience in running the Stock Exchange at Karachi."The allegations of malafide were met by making the following submission:-

"It is submitted that the Minister's relationship with Khalid Waheed andhis being a shareholder in Ferozesons Laboratories Ltd., is not denied. Itis also not denied hat he himself is a businessman and industrialist andhaving been associated with the Rawalpindi Chamber of Commerce, heknew most of the traders and ndustrialists in the area. It is, however,submitted that such connection alone cannot be made basis of plea ofmalafide."About the omission to implead him in the proceedings and the consequences of il, the following submission was made by hinr-"The applicant was not made a party to the proceeding though it appears from the final judgment that it was his order which was struck down and it was his conduct, which was called in question. (This is being submitted notwithstanding the plea of protection available to the applicant under Article 248 of the Constitution). If the High Court thought that the applicant has to show cause with regard to certain matters, it was only necessary that the Writ Petitioner should have been called upon to implead the applicant as a party to the case.:As regards the constitutional provision (Article 248), the following interpretation of it was provided:-"Having made the submissions as above, the applicant submits additionally that in view of Article 248 of the Constitution, the action of the applicant in discharge of his duties as Minister is protected and that he is not answerable to any Court in that behalf."On the question of malafide, the following submission was made on behalf of the applicant:-"That the applicant relies on the Federation of Pakistan v/s Saeed Ahmad Klian PLD 1974 SC 151 at page 171 and on Fauji Foundation case (PLD 1983 SC 457) for the view that malafide cannot be implied unless it is alleged positively and is proved by substantial evidence. In the present case, the entire basis of. the plea of malafide is on assumption and inferences supported only by conjectures."29. Raja Muhammad Akram, Advocate, representing the writ petitioners Ch.Muhammad Aslam (W.P.No.655/89), and Raja Abdur Rehman(W.P.No.658/89) now arrayed as respondents in four appeals out of six (C.A.Nos.677/90, 678/90, 680/90 and 681/90), reiterated his grounds of mala-fide of fact. In the written submissions, the learned counsel has provided more factual details of it. For example, he mentioned as follows: -

"The motive is not difficult to ascertain if one goes to the details of the persons who composed this group and a respectful analysis is given below personwise:-

A.         (/) Mr.Khalid Wahid;)      of Ferozsons Laboratories Limited

(/;') Mr.Feroz Qasim;)

Mr.Paracha has been the President and Chief Executive of the said Company vix. Feroxsons Laboratories Limited since 1968 upto the time that he became the Minister of State. In the case reported as PLD 1986 S.C. 200 (Sh.Ehsamil Haq Paracha Vs. Mr.Wasim Sajjad) at page 205, Mr.Paracha himself produced this evidence. Even in the latest balance sheet of the Company produced before the High Court in the List of Directors of the Company, Mr.Paracha is shown as a Director "on leave'. Thus his connection with the Company is deep and long. Mr.Khalid Wahid has been the Chairman of this Company andMr.Oasim, a Director. Thus these Iwo persons have close business relations with Mr.Paracha. Also admittedly Mr.Khalid Wahid is a brother-in-law of Mr.Paracha."More details were provided of the Rawalpindi Chambers of Commerce and Industry (RCCI) and its Committees and of the activities of its members to concludeas hereunder:-"... The Above enumeration will amply testify to the fact that all these persons i.e. Mr.Aman Ullah Khan, Mr.Parvcz Aslam, Mr.S.M.Hassan, Haji Muhammad Yaqoob and Sh.Abdul Ghafoor were close associates of Mr.Paracha in the Rawalpindi Chambers of Commerce and Industry till he became a Minister of State in the Federal Government.

It is thus submitted that the only reason for Mr.Ehsanul Haq Paracha to give sanction for establishment of the-Stock Exchange to the group sponsored by Mr.Aman Ullah Khan was that it consisted of his relatives, business partners and other close associates of the Rawalpindi Chambers of Commerce and Industry. Thus his act clearly amounts, both tonepotism and favourtism. Action of Mr.Ehsanul Haq Paracha was mala fides (malice in fact). Mala fides or bad faith means dishonest intention or corrupt motive."

Relying on the decisions in The Slate of Punjab, versus Ramji Lai and others (AIR 1971 S.C. 1228), Lai Kama! Dus versus the State of West Bengal (AIR 1975 S.C. 753), Noor Chand Sheikh versus State of West Bengal (AIR 1974 S.C. 2120) and S.G. Jaisinghani versus Union uf India and others (AIR 1967 S.C. 1427) it was urged that strict proof of mala-fidccannot be insisted upon from the parly who is at a disadvantage but can be as well inferred from improper or perverse exercise of discretionary power.

30. The learned counsel has attempted an interpretation of Article 248 of the Constitution in the context of Article 199, Article 4, and Article 184(3) and the principles of natural justice, in the following words:-"Thus the restricted scope of Article 248 of the Constitution is only lo ihe extent that a Minister or Minister of State may not be 'compelled' by the Court to make an answer to it for exercise of his power and performs (?) all his functions or for any act done or purported to be done in the exercise of those powers and performance of those functions. However, if on the facts of a case it is proved to the satisfaction of the Court that the Minister has acted in a mala fide manner, abused his discretionary powers and the functions performed by him are only a colourable exercise of powers, the Court will be entirely justified in striking downthose acts   Thus the Court would be not only justified but bebound in law to give the Minister/Minister of State an pportunily of rebutting the allegations against him. This will not be any contravention of Article 248 of the Constitution which says thai "a Minister shall not be

answerable.... " because once the allegations againsl him are brought lohis notice, he may like to rebut them or leave the mailer there. If he does not rebut them, obviously he will be doing so at his own risk and his refusal lo do so inspile of full opporlunily would not affect ihc power of

the Court  in pronouncing upon the legality of his actions and  theallegations of mala fides in fact       it re-affirms the basicrule of interpretation thai the protection provided to the Minister/Minister of State should be construed very strictly and also when the right of any person is not to be restricted by Article 248(1). his remedy can also not be restricted and the remedy is provided in Article 184(3) and Article 199 of the Constitution of Pakistan which Articles would have full play qua the actions of Minister assailed on the grounds of mala fides in fact, abuse of power and discretion, and colourable exercise of power,"For reference and comparison, the learned counsel has mentioned Article 361 of the Indian Constitution and decisions given in Union of India versus Jyoti Prafcash Mitter (AIR 1971 S.C. 1093) and H.H. Maharajadhiraja Madhav Rao Jivaji Rao Sdndia Bahadur and oilier^ etc., versus Union of India (AIR 1971 S.C, 530).Ch.Muhammad Hassan, Advocate, the learned counsel representing the writ petitioner Syed Sarmad Maqsood Al-Hussainy Group (W.P.No.663/89) now arrayed as respondents in two appeals (C.A.No.679/90 and 682/90) has also submitted his Written Notes/Arguments.

Mr.Sarmad Maqsood Al-Hussainy and his associates (writ petitioners in W.P.663/89) represented by Ch.Muhammad Hasan, Advocate, claim to have applied on 20-11-1984 through Secretary, Lahore Stock Exchange to the Capital Development  Authority,  for  allotment  of land for establishment of a Stock Exchange at Islamabad. This Group claims to be the first to have formally applied to    Registrar,    Government   of   Pakistan,   Companies    Registration     ffice, Rawalpindi and to the Corporate Law Authority on this subject. The Order rejecting its application did not either give any reasons for the same or disclose that the order of rejection was passed by the Minister of State or the Government. This group was denied the certified copy of the order and was not allowed to inspect the file on the ground that there was no provision of law authorising suchinspection. This group filed a revision under Section 26 of the OrdiJance before Chairman Corporate Law Authority which was heard and disposed of by the Secretary, Ministry of Finance. From these facts and this background the learned counsel   lor   the   respondcnts/Syed   Sarmad   Maqsood   Al-Hussainy   ;md   his associates, for the purposes of argument inferred as hereunder:-

"... neither the Member Corporate Law Authority nor the Chairman Corporate Law Authority nor the Secretary Finance had the courage to disclose thai the Minister of State for Finance had passed the order in the case and it establishes the extent of pressure upon them of the Minister to keep his order a secret, as otherwise at least the Secretary Financeought to have disclosed in his revisional order dated 4.12.1989 (Pages 11 to 13 of the Paper Book of additional documents) that Minister of State had passed the order and as such no revision was competent before him or the Chairman Corporate Law Authority and that Sarmad Maqsood Al-Hussainy and his group, if so advised, were to seek a review of the orders of the Minister of State as provided under S.26 of the Ordinance."The fact that the Minister of Slate finally dealt with the case of sanction though Member, Corporate Law Authority was equally empowered to deal with thematter as a delegate has led the learned counsel representing the respondents to submit as hereunder:-".... a Stock Exchange is a potential source of economic and political power and Mr.Ehsan-ul-Haque Piracha, Minister of State (inspite of the fact that Mr.Shamcem Ahmad, Member Corporate Law Authority himself had ihe necessary powers of the Central Govt. delegated to him under S.R.O. No.l024(l)/Sl dated 10-9-81 (page 130 of the" Paper Book of additional documents) to allow or refuse application for registration of a Slock Exchange and Mr.Irtaza Husain Chairman Corporate. Law Authority had also been delegated the rcvisional powers of the Central Govt.. managed a reference to him through the Chairman Corporate Law Authority and took upon himself to pass the impugned order dated 19-8-89 not without larger eyes of personal reasons and motives to benefit himself and his close relation, business associates and old colleagues in ihe economic and political field. This was a dear case oi abase and raisu^ oi his powers and staius as Minister oi State."As regards the bar of Article 248 of the Constitution the learned counsel has taken up three grounds; First that notwithstanding ihe bar the illegal and mala fide acts of the exempted functionaries can still be declared as without lawful authority and of no Seual effect. The other two grounds are expressed in the following words:-".. as submitted earlier in para No.4 (xii) Mr.Ehsan-ul-Haque Piracha, although not formally impleaded as a party, was given full opportunity bythe learned Judge of the High Court to explain the allegations and facts against him as is given to a party to the case but. he failed to do so and as such no prejudice was caused to him. .Secondly, even this formal defect of Mr.Ehsan-ul-Haque not having been impleaded us a party to the writ Petitions in the High Court, stands amply rectified by Ihe fact that Mr.Ehsan-ul-Haque Piracha has got himself impleaded in the Supreme Court itself in the six appeals from the impugned judgment of the High Court and has not even in his application for being impleaded as a party and also in his application for cxpunction of the remarks against him denied or explained the allegations against him in the Writ Petitions."

33. In order to decide the question of competency of ihe Writ Petitions filed in the High Court in a manner to deal with the preliminary objections taken by Raja Muhammad Anwar, Advocate, one has necessarily to go to ihe specific orders impugned in those Petitions. Ch.Muhamrnad Aslani (Writ petitioner in W.P.No.655/89) challenged the following order dated 16-9-1989. reproduced in extenso:-

"GOVERNMENT OF PAKISTAN

CORPORATE LAW AUTHORITY

(CORPORATE REGULATION WING)

STATE LIFE BUILDING 7-BLUE AREA

No.2(205)CF/SE/89-   Islamabad, the 16th September, 1989

Ch.Muhammad Aslam, Flat No.l, Block 12-C, Jinnah Super Market, Islamabad.

Subject:    ESTABLISHMENT    OF   A    STOCK   EXCHANGE    AT ISLAMABAD.

Dear Sir,

Please refer to your application dated August 26, 1989, for permission for opening of a stock exchange at Islamabad.

It is advised that no objection for the incorporation of a company limited by guarantee for establishment of a stock exchange at Islamabad has already been granted to one of the sponsors group. As such your application cannot be entertained for consideration.

Yours faithfully,

Sd/-

(M.JAVED PANNI) Deputy Chief."

34. Raja Abdur Rehman (writ petitioner in W.P.658/89) had approached the High Court at a stage when his application for the registration of a  tock Exchange was not being entertained or attended to by the  Corporate  Law Authority or its Member. No order was passed or communicated to him but in the comments  submitted,   the  Corporate   Law  Authority   took   up   the   plea   as hereundcr:-

"Applicalion from Raja Abdul Rehman was received by the CLA on November 20, 1989. The application could not be entertained as the Government had approved the group lead by Mr.Amanullah Khan for establishment of a Stock Exchange at Islamabad on 19lh August, 1989.     The  application  of petitioner  could  not  (be)entertained as only one stock exchange could be established at Islamabad."

35.         In the third writ petition (W.P.No.663/89), the following communicationwas received by the writ petitioners which is reproduced in extcnso:-

"GOVERNMENT OF PAKISTAN CORPORATE LAW AUTHORITY

(Corporate Regulation Wing)

Stale Life Building, 7-BIue Area

Islamabad

No.2( 181 )/CF/SE/87-   Dated the August 27,1989.

Mr.Sarmad Maqsood Al-Hussainy, Promoter,

Islamabad-Rawalpindi Stock Exchange (Guarantee) Limited (Proposed), C/o Lahore Stock Exchange, 17-Bank Square, Lahore.

Subject:    ESTABLISHMENT    OF    A    STOCK    EXCHANGE    AT ISLAMABAD.

Dear Sir,

Please refer to your application dated January 28, 1989 for registration of Islamabad-Rawalpindi Stock Exchange (Guarantee) Limited (Proposed! under Section 5 of the Securities and Exchange Ordinance, 1969.

2.                      In the Light of the hearing held on 10th July, 1989 and theinformation furnished by you in respect of your application, it has not been possible to agree to allow registration of the company sponsored by you along with others for establishment of a stock exchange at Islamabad.

Yours faithfully,

Sd/(M.JAVED PANNI) Deputy Chief."

He, alongwith his associates, preferred a Revision petition under Section 26 of the Ordinance (Securities and Exchange Ordinance, 1969 - Ordinance No.XVII of 1969), which was disposed of by the Finance Secretary on December 4, 1989 treating the Order of rejection to be of Corporate Law Authority and a revision against it being competent under Section 26 of the Ordinance.

36. The scheme of the Ordinance clearly shows that the Corporate Law Authority does not find a mention in it. It is mentioned and finds a place in the definition of "Authority" contained in Rule 2(a) of ihe Securities and Exchange. Rules, 1971. The Chairman, 'Corporate Law Authority' has also been delegated, under Section 28 of the Ordinance, all powers and functions of the Federal Government under Sections 26, 27 and 29 of the Ordinance, (Notification dated 10th September, 1981 refers). The Chairman, as a delegate could, therefore, exercise the powers of the Government where an Order was passed by an authority subordinate to the Government (Section 26). The Chairman, Coiporate Law Authority has also under this delegation, power to constitute an advisory committee (Section 27) and to grant "by notification in the official gazette" exemption "to person or class of persons or any security or class of securities or any transaction or class of transactions from the operation of all or any of the provisions" of the Ordinance (Section 29). Therefore, the Chairman or the Corporate Law Authority could not deal with the applications under Section 5 of the Ordinance. Power under Section 5 (all powers of Government excepting the above enumerated) was delegated to the Member, Corporate Law Authority (Corporate Law Wing).A somewhat guiciai dcfiniiio;; o!' : Jurisprudence 2nd Edition in the f ;.•!!.."An exchange is a ED  7d6.  19. S  •:' furnishing In i's their business   ot merchants,  oi  in facilitating the disseminatin«"An organized niarke!-place, in which securities (mainly stocks) are bought and sold. In the Un'i.cd Slaies, the tenn refers to eleven centrally located trading places where brokers and dealers regularly meet to transact business for their own .'iceouii's ;tnj for their customers. These stock exchanges mu>t register with She Securities and Exchange Commission (SEC) as r.adonsl securities exchanges unless they have been specificallv exemi'lca h'.> {he SFC'. As of December 1982, there were eleven national securities exchanges in ihe United States; one stock exchange was exempted from rcsHslraUon. The SBC' rec;uJates the stock exchanges, the securities iisij'd on the exchanges, and the brokers and•:?,;,s. The New York Slock Exchange Ijiii ,:d States, accounting for about earlv S4"c of the dollar volume ofcountry wasconsidered in an Indian case ol \ladhuhkai Amalhahil Gandhi versus Union of India (AIR 1961 S.C. 21.) in the following words:-'Thc history of stock Cvvhanqus in foreign countries as well as India shows that the development of joint stock enterprise would never have reached its present stat:r but foe the foc.ilitics which She stock exchanges provided for deeding in tec-.intics. They have a very important function to fulfil in the country's economy. Titc.« main function, in the words of as< eminent writer, is "to liquify capita; by enabling a person who lias invested money in, say, a factory or a rai'wav. ;o convert it into cash by disposing of his share in the enterprise to :-,ornconc essc", Wirhoul the stock exchange, capital woulu iiecome irisraobili/ed. The proper working of a stock exchange depends upon noi onlv ihe i^ioral stature of the members but also on their calibre, ft is a trii saving that a jobber or dealer is bornand not made. In the words of the same author, a jobber must be a man of good nerve, coo! judgment, and ready to deal under any ordinaryconditions, and he must be a man of financial standing, considerable experience, with an understanding of market psychology. There are three modes of dealing in shares and stocks, namely, (1) spot delivery contract, i.e., a contract which provides for the actual delivery of securities on the payment of a price thereof either on the day of the contract or the nextday, excluding perhaps the period taken for the despatch of the securities or the remittance of money from one place to another; (2) ready delivery contract, which means a contract for the purchase or sale of securities for the performance of which no time is specified and which is to be performed immediately or within a reasonable time; (3) forwardcontracts, i.e., contracts whereunder the parties agree for their performance at a future date. If the stock exchange is in the hands of unscrupulous members, the second and third categories of contracts to buy or sell shares may degenerate into highly speculative transactions or, what is worse, purely gambling ones. Where the parties do not intend while entering into a contract of sale or purchase of securities that only difference in prices should be paid, the transaction, even though speculative, is valid and not void, for "there is no law against speculation as there is against gambling'. But, if the parties do not intend that there should be any delivery of the shares but only the difference in prices should be accounted for, the contract, being a wager, is void. More often than not it is difficult for a court to distinguish one from the other, as a wagering transaction may be so cleverly camouflaged as to pass off as a speculative transaction. These mischevious potentialities inherent in the transactions, if left uncontrolled, would tend to subvert the main object of the institution of stock exchange and convert it into a den of gambling which would ultimately upset the industrial economy of the country."

42.     Raja Muhammad Akram, Advocate has by reference to Edeard D. Page (Bankrupt) verms Charles W, Edmunds, (47 U.S. L.ed 596), Citizens National  ank of Cincinnati versus Peter W. Duir (66 U.S. L.ed. 107) and para 12 page 574 of 73 American Jurisprudence (2nd e.d), tried to demonstrate that membership of a stock exchange, a seat on the stock exchange is property, a very valuable one for that matter, capable of being transferred or disposed of on certain conditions. True, but the membership of Stock Exchange is not limited to promoters, sponsors or Directors. In what manner the sponsors, the Directors and the promoters are more privileged or distinguished as against the members is not shown.

43.     A Company, limited by guarantee, as is the Stock Exchange in dispute, is characterised by the following traits as noted by Reobert R. Pennington. in the

Company Law (Fourth Edition) at page 666:-

"A company limited by guarantee is one whose memorandum of association contains an undertaking by its members to contribute a specified amount towards the  ayment of its debts and the expenses of winding it up if it is wound up while he is a member or within one year after he ceases to be a member. The rest of the  ompany's memorandum is similar to that of a company limited by shares, and in particular it states that the liability of its members is limiteonipanies limited by guarantee are mostly formed for charitable, socialor other non-trading purposes, and it is not uncommon for their articles to provide that certain persons shal be members of them ex officio. This does not make such persons members of the company for the purpose of company law, however, and so unless they have specifically requested that they should be treated as ordinary members and their names have been entered on the company's register of members, they are not liable to contribute toward payment of the company's debts, nor may they exercise the rights of members, such as attending general meetings and voting."

44. It is necessary in the context of the dispute raised by the writ petitioners to keep in view the distinction between a Director, a Promoter, a sponsor of the company and the company itself. There are a series of decisions, some of them of this Court, which clearly deal with this question, the basic law being contained in Aron Salomon (Pauper) versus A Salomon and Company, Limited (1897 A.C. 22) followed by Aveline Scott Ditcham versus James J. Miller (AIR 1931 Privy Council 203) and E.B.M. Company, Ltd. versus Dominion Bank (AIR 1937 Privy Council 279). In Ikram Bus Service and others versus Board of Revenue, West Pakistan and others (PLD 1963 Supreme Court 564), the following summation of the law occurs at page 595:-

"If authority is needed for this proposition, reference may be made in the decision of the House of Lords in England in the case of A. Salomon and Company Limited v. Aron Salomon (1897 A.C. 22) where Lord Macnaghten observed that "the company is at law a different person altogether from the subscribers to the memorandum; and, though it may be that after incorporation the business is precisely the same as it was before, and the same persons are managers, and the same hands receive the profits, the company is not in law the agent of the subscribers or trustees for them. Nor are the subscribers as members liable, in any shape or form, except to the extent and in the manner provided by the Act." This view has been consistently followed in England and even adopted by the Judicial Committee of the Privy Council, in the case of Avolin Scott Ditcham v. James J. Miller (AIR 1931 P.C. 203) where the general notion that a private company need not be regarded as a corporation distinct from the person composing it was dispelled in thefollowing words:-

"It is necessary in their lordships' opinion that this view should be once for ail dispelled. The duties and responsibilities of the liquidator are as serious inthe liquidation of a private company as any other."Again in another case from Ontario the view taken by the House of Lords in the case of A. Salomon & Co. Ltd. v. Aron Salomon was re­iterated and it was pointed out in the case of E.B.N. Companv Limited v. dominion Bank (AIR 1937 P.C. 279) that:

"They believe it to be of supreme importance that the distinction should be clearly marked, observed and maintained between an incorporated company's Segal entity and its actions, assets, rights and liabilities on the one hand, and the individual share-holders and their actions, assets, rights and liabilities on the other hand."In tiiis view of ihe mailer ii is idle to suggest thai the M'ani. oi die \K rrr i;. in the name of the company was really ;; grant in favour of the individi/a! applicants who ad agreed to promote the company. If thai had really been so then a transfer of the permil would have had to be eOected. in accordance with (he provisions of Section 61 of the Act. in favour oi ihe company with the permission of ihe Regional Transport Authority. No such transfer of the- permit has so far been made, to?', the oruer ot UK; Transport authority dearly shows that the permit was in i.xl eraiu-.:d in the name oi the respondent "iUehais Transport Service Company Limited'¹ "

45. When the Ordinance was promulgated, the Fundamental Rights were suspended and (he Constitution of Pakistan itself was kept in abeyance. However, when the applications were deal! with. Fundamental Rsghls were in force, Fundamental Rioiii 18 provides as hercunder:-'18.    /">i-Vi,'r'?>    of   radt:.    l'\ ciiuuiixauons, if am . a^c mu--conduct, any lawful trade or busine^:Provided that nothing in this Article shall prevent -

(a)      the retaliation oi' any trade or profession by a licensing system: or

(b)      the  regulation   ol   trade,   commerce  or   industry  in   the   interest   ot   Iree
competition therein; or

(c)       the carrying, on. by the Federal Government or a Provincial Government, orby a corporation controlicd by anv such (iovernmcnt, of any trade, business.industry or service, to the cxclvsir.n. c^'nvMel;: or partial, ot nUvr persons."Its equivalent in the Indian Constitution is runuaiueiuai Right 19f l)(g). 46. Section 3 of the Ordinance provides as hereunder:-

"3. No Stock Exchange to operate without registration,- No Stock Exchange shall operate or carry on its (unctions, arid no person shall use or utilize, for the purpose oi any transaction or dealing in any security, she facilitiesor services of a Stock Exchange, unless such Stock Exchange is registered under '.his Ordinance."

Section 5 which deals with 'registration", is as hereunden-

"(1.) Any Stock Exchange which is eligible tor registration under Section 4 may, in such form and manner as may be prescribed, apply 10 the Centra! Government ior registration.

(2) The Central Government, if it is satisfied, after such inquiry and after obtaining such further information as it may consider necessary. --

(/)                            that the Stock Exchange is eligible for registration; and

(//') that it would be in the interest of the trade and also in the public inleres! to register the Stock Exchange;inay grant a certificate oi registration to she Stock Exchange,No application for regisiraU'Hi shall be refused except after giving the applicant an opportunity ol' being he<ual" provides thai a ''Stock Exchange which fulfils such conditions or complies with such requirements as may be prescribed to ensure lair dealings and to aa a!act investors shall br eligible foe registration under this Ordinance".

47.   The business of dealing in securities has been considered all over the j c.ivili/ed world affected with public inte, est and its regulation and control has been ensured  n laraied Kingdom bv Prevealion oi'Fraud (Iim;s!.ruen!) Act, 1958 and in Incha b\ Sae;.i?'itie.-. (d.anraci Regulation Act.  1956, This diUy of registration of Stock laaehsnee is a purely adminiatrative function, if is neither quasi judicial nor judicial. There is no fc between the parties. There is no adversary hearing. There is no adjudieaiory exercise  undertaken  in determining the saus'aeuosi ol  the, I r-ofidinons of eiigibil'tv which ;>;e yet to he prescribed, had to be determined and dies-sailr'r the element of public interest. Nowhere the law provides that if there is t- one Stock E/a aaage. 'here will be not another. To ihat extent, the view taken by f fhe Corporate Lav; Authority thai a-iy application received had to be put iis, the! cold storage without hearing the applicant, without examining his eligibsiity andj nienl  as supported by R.aja  Muhammad Aiv.var, Advocate, is untenable and arnauns- u> r-rfasa! to exercise jatisdicdon and di'pies eonfeired by the statute. 4y.   The   pro\isions   of   tna   Ordinai'ici   regarding   registration   of  Stock Exchange   being  regulatory  in  nature,  coneea.iint;  the  Fundamental  Right  of freedom of trade, business or profession have to be construed strictfy and beneficially. For that reason, wherever a hearing has been provided it has to be meaningful; wherever the competent authority has been given the power ofJD refusing registration after hearing, the season for it has !o be recorded and communicated to  the party  adversely affected so thai it  can promptly and meaningfully secure its remedies of revision or review.50. In the impugned judgmens, the learned Judge, confined his attention only] So allegations of main-fide, the proof thereof and the vitiation of the impugned order of the Minister of Slate on account of it. Cogni/an! of the has of Article 248 of the Constitution, die Court exacted the aaswerabilily of the Minister by recourse to the principles oi natuial justice as if the provisions of natural justicearc to prevail over the express provision of the Constitution. The bar of Article 248 is couched in (he foliowinti words:-"248, Protection to President, Governor, Minister, etc.—(I')The President , a Governor, the Prime Minister, a Federal Minister, a Minister of State. the Chief Minister and a Provincial Minister shall not be answerable to any court for the exercise of powers and performance of functions of their respective offices or for any act done or purported to be done in the exercise of those powers and performance of those functions:Provided that nothing in this clause shall be construed as restricting the right of any person to bring appropriate proceedings against the Federation or a Province.

No criminal proceedings whatsoever shall be instituted or continued against the President or a Governor in any court during his term of  ffice.

No process for the arrest or imprisonment of the President or a Governor shall issue from any court during his term of office.

No civil proceedings in which relief is claimed against the President or a Governor shall be instituted during his term of office in respect of any thing done or not done by him in his personal capacity whether before or after he enters upon his office unless, at least sixty days before the proceedings are instituted, notice in writing has been delivered to him, or sent to him in the mariner prescribed by law, stating the nature of the proceedings, the cause of action, the name, description and place of residence of the party by whom the proceedings are to be instituted and the relief which the party claims."

51. _ Raja Muhammad Akram, Advocate has referred to a number ofdecisions from the Indian jurisdiction wherein the courts have dealt with theallegations of malaftuc of fact against the Ministers and/or Chief Ministers and inthis context particular reference can be made of C.S. Rowjec and others versus TlieState of Andhra Pradesh and others (AIR 1964 Supreme Court 962) wherein mala                 ,fide against the Chief Minister was alleged and found proved. The Indiandecisions are not relevant in our context because the Constitution of India (Article 361) grants such a protection only to the Governor and the President and not to the Chief Ministers, Ministers or to Ministers of State. The law laid down by this Court has been consistently that no adverse comments are to be made against a statutory functionary unless it is impleaded as a party in the proceedings or appears as a witness in the proceedings. The iahore High Court in its judgment in the matter of expitnction of remarks from a judgment, laid down the law in PLD 1950 Lahore 34, at page 41 as hereunder:-"Disparaging remarks in a judgment, whether they amount to a verdict or not, imputing cirtne, moral delinquency or improper conduct to a person are a constant source of uneasiness and irritation to him. They lower him in the public estimation and haunt him like a spectre for life, invariably visiting him whenever he enters the precincts of a Court of Justice as a witness or a party. Being fraught with such serious consequences they should only be made where any hesitation or reluctance in making them would impede the ends of justice. Persons making or publishing such remarks, whether true or not, are not liable for libel or for defamation because in the former case they are protected by common law and in thelaller by statute, the reason being that unless Judges had ihe power to make hold and fearless comments on the evidence given be I ore them they \vould not be able effectively to discharge their Junctions. These two conllicling considerations must always be present to the mind ol a Judge whenever he is culled upon to criticise the character and conduct of a person. On the one hand he should weigh the gravity of the damage that his remarks would cause to the person concerned and on the other he must realise that he owes a duty to the parlies, the public and the appellate Court of staling in lull his reasons lor the view he lakes ol theevidence. It is again a rule, as ancient as the law itself and based on common sense and fair play, that when a Judge decides lo condemn a man whether a parly or witness the facts on which condemnation is intended to be based must be put to him so as lo give him an opportunity to explain the condemnatory lads and thus lo remove ihe Judge's suspicion about his conduct. A Judge who condemns a man unheard acts as unlairly as it lie were lo convict a man without hearing him in his dilcncc. Persons who are attributed ignominious or improper conduct in judicial determinations, though thc\ were neither parlies nor witnesses in the cause, have, therefore. .1 |Ust cause lor complaint agamsl this unlair treatment and the law reports are full of precedents where in the circumstances mentioned High C'ourls expunged the offending remarks. The need lor caution in making such remarks is much greater where the person disparaged is a public servant acting in his own independent splui\ In such vases it is absolutely necessary that the Judge's suspicion about his condud be communicated to him and an opportunity given to him to show cause against the view lhat the Judge is inclined to take of his londtut If the officer concerned has not at all appeared before the Judge and has had no opportunity lo vindicate himself, the Judge acts mosi unfairly, if not actually without jurisdiction, in commenting advciscly on his conduct. And a Judge who makes his position in Court a mere pidcxt lo condemn another person for peronal reasons does not acl as a Judge at all: he is a mere parly who has arrogated lo himself theposition ol a .Indue.

This decision \v is followed by the Lahore High Court in S7i. lituvtilii/ltjli Bull versus ( ,uiti>irni'ni tiniir,!. Rti^ii/iimti i/'i</ dnoilhi (PI.I) IvS"⁷ Lahore .\S3) in the following woi\K:-l is well settled that Courts should say nthing that is likely lo prejudicial ailed a person without hearing thai person. The reason for ihis nik is ihal remarks made by C'ourls are likely lo be used by inleiesUd pet-.oils against ihe person about whom they were made, and conso|iK ntlv it has been laid down in a lame number ol cases decided by High 1. nuiis that disparaging remarks should not be made by Courts. against persons who are neither parlies nor witnesses before them. The petitioner was not a parly to the suit and the fact that his wile was the plainlill does noi, lo my mind, make any difference for our present purpose. "I lie peiilioner was not a witness either and condemning him without hearing him offends against the salutary rule followed by Courts in this icspecl. II a Court makes disparaging remarks against a personwho is neither a party nor a witness in the case, it can be said to have exercised a jurisdiction not vested in il by law or at leas! to have acted illegally or with material irregularity in the exercise of its jurisdiction."In the case of Malik Firoz Klwn Noon, Prime Minister's House, Karachi versus ihc State (PLD 1958 S.C, 333) ihe law laid down by the Lahore High Court was emphatically reiterated in the following words:-"In all cases which have come before the Courts, where an aggrieved person asks for expunction of object bnsable remarks made against him in a judgment, one point has consistently been emphaMxed. namely, that a Judge ought not to make any disparaging remarks against a person who is neither a parly nor a witness in the case,"The insistence of the Courts to have the person against whom the remarks are made either as a party or as a witness is intelligible. In bosh she  ases it offers the fullest opportunity to the person concerned as well as to the Courts to lake a full and a complete view of the conduct alleged before adjudging itscorrectness or incorrectness by imputing personal motives. In the case in hand, the   learned   Judtc   proceeded   on   she   assumption,   without   examining   its correctness, thai on the findings which he was going io record against the Minister of State, he could no! he impleaded as a party in view of Article 248 of theConstitution. It was not ihe pleading aione which prompted the court lo obtain satisfaction of the requirement ot natural justice but h was the amplitude of mala-J'idc as brought out during the course of ihc arguments which prompted ihe learned Judge to send a copy of the pleadings for getting the comments of the Minister of Slate. In the first place, what the Constitution expressly prohibits could not be indirectly achieved by recourse to the principles of natural justice. The  rinciples of natural justice yield lo a Constitutional provisJon and what the Constitution prohibits, directIv and expressly, could not be accomplished indirectly and  y implication. In the second place, it is ihe argument which impressed the learned   Judge   more   than   the   pleadings;   and   the   arguments   were   not communicated to the Minister ot Stale for comments. He was, therefore, taken into confidence with regard to only a part of the proceedings in court leading to the  rejudicial observations.On merits too, the conclusions are not quite sound. IS Mr. Khalid Wahid is a relative of his: if such a relative happened lo he a Director of public limited company (Fero/sons Ltd.) and also promoter of the Islamabad Stock Exchange, that did not transfer the taint or relationship of Mr. Khalid Wahid to the public company limited by guarantee, in view of the legal identity of the company and itspromoter and Director being quite distinct and separate. Similar is ihe positi n with regard to other persons, who have been Directors or associates on Trade organisations like  Rawalpindi Chamber of Commerce and Industry or other Public  ompanies. Even on the facts established, and in view of the public company  or   Trade  Organisation   status   intervening   in   every   case,   such   a relationship or contact cannol be termed as taint attaching to a Minister of Stale preventing him from taking a decision with regard to administrative mailer havi g predominately a policy content.The  law laid down by the courts in  Pakistan is lhal  the expression'exercise ol [lowers and pcrtormancc ol functions of their respective oifices or torany act done or purported to be done in the exercise of those powers and performance of those functions" has to be given a very strict meanning. This Article (Article 248) of ihe Constitution came up for consideraton in CH. Zahur I la hi versus Mr. Zulfikar All Bhutto and 2 others (PLD 1975 S.C. 383) where the following observations were made:-"We are also is agreement with the learned counsel for the petitioners that the immunity provisions must, in accordance with the accepted principles of interpretation, be construed strictly and unless persons claiming the immunity come strictly within the terms of the provisions granting the immunity, the immunity cannot be extended. The immunity is in the nature of an exception to the general rule that no one is above the law. It is. nevertheless, not possible to lay down any hard and fast rules as to what is or what is not within the powers and functions of a Minister or a Prime Minister but each case will have to be judged on its own facts and circumstances."In the case of H.B. Gill and another versus Jlie King (AIR 1948 Privy Council 128), while considering such protective provisions, the Privy Council laid down the law as hereunder:-"Their Lordships, while admitting the cogency of the argument that in the circumstances prevailing in India a large measure of protection from harassing proceedings may be necessary for public officials cannot accede to the view that the relevent words have the scope that has in some cases been given to them. A public servant can only be said to act or to purport to act in the discharge of his official duty, if his act is such as to lie within the scope of his official duly. Thus a Judge neither acts nor purports to act as a Judge in receiving a bribe, though the judgment which he delivers may be such an act: nor does a Government medical officer act or purport to act as a public servant in picking the pocket of a patient whom he is examining, though the examination itself may be such an act. The test may well Ix \vhclhcr the public servant, if challenged, can reasonably claim that, whal he does, he does in virtue of his office."

55. More recently, in the State versus Zia-w-Rahman and others (PLD 1973 S.C. 49), the lollowing law was laid down by the Supreme Court:-"H will thus be seen thai, so far as this Court is concerned, it has consistently held the view that a mala fide act stands in the same position as an act done without jurisdiction, because, no Legislature when granting a power to do an act can possibly contemplate the perpetration of injustice by permitting the doing of that act mala fide. 1 am, therefore, of the opinion that the words 'purported to be done or done, in the purported exercise of powers" cannot cover acts which were not done by persons empowered under the statute or the legislative measure to so act or were clearly beyond the scope of the powers given by the statute or were done mala fide or by practising a fraud upon the statute for a colourable purpose."

In the case of Fauji Foundation and another versus Shamimur Rehman (PLD 1983 S.C. 457) il was held that "mala fides is not different from other imputations. <>i PAMSI \\such as  crime,  moral  delinquency  and  improper  conduct,  and  (he   rule   tor establishing it is also the same".

56.     If inala-jide of fact was pleaded by a party then it had to decide lor itself whether on the material with it, the Minister has to be impleadcd inspite of theprotecting provisions of the Constitution: because if his act does not fall within the puriew of the provision so interpreted, then he can be impleaded as a parly and all the objections to such implcadmcnl dealt with in the proceedings. In the absence of the party, no finding with regard to mala-fidc of fact (as distinguished from inala-fideof law) can be recorded, should be recorded and should have been recorded.  Recourse  to  the  principles  of  natural justice  to  overcome  the prohibition contained in Article 248 of the Constitution is not permissible.

57.     The Order passed by the Minister of Slate has three infirmities. The first was that he did not grant a hearing to the applicant whom he was refusingregistration. The second was that he did nol record any reasons expressing satisfaction of the requirements contained in sub-section (2) of Section 5 of theOrdinance namely, the eligibility and the public interest and the interest of the trade. Tltirdly, the Order passed by the Minister of Stale was nol communicated in proper form for enabling the applicants to seek appropriate relief against the refusal.

58.     As regard the first defect, sub-section (3) of Section 5 of the Ordinance itself provides that no application for registration shall be refused excepl after giving the applicant an opportunity of being heard. The Minister of Slate did not hear anyone of the parties whose application was being refused. The law on the subject has been very clearly laid down by this Court in the case of Collector, Sahiwal and 2 others versus Mohammad Aklitar (1⁽)71 S.C.M.R. (xSI) in the words that follow:-

"The Courts in Pakistan have, however, taken the view thai where the giving of a notice is provided for by the stalule itself, then the failure to give such a nolice is fatal and can nol be cured. Bui where there is no specific slululory provision and reliance is only placed on the principles of natural justice and audi alterant partem, there if at some stage or other the person aggrieved has been given a fair opportunity of representing his poinl of view, then the defect, if any. in the initial order may be deemed to have been cured. Thus, in the case of Muhammad laliaq v. Dr. Saiditddin Swalclt (PLD 1959 Karachi 669) it was pointed out that each case will have to be determined on its own tacts. If the statutory provision for notice be of a mandatory nature, then an order without any notice would be wholly void; but if there be no such provision or if the provision be merely of a directory nature, then, wherever a violation of this principle of natural justice is alleged, the Court may call upon the parlyalleging ihc same lo prove prejudice before il sels aside the order. Such prejudice would obviously nol be ihere if il is found that the party had been actually given a lull hearing by the appeallalc or revisional aulhorily and afforded every opportunity of showing cause against the allegations made. To the same effect is the view of the Peshawar High Courl in ihe case of Clianaddah Stif>ar Mills Ltd v. Ctnvmmau of Pakistan (PLD 1971 Pcsh. 210).This Court, loo. has consistently taken the same vieu vide; 7lie ("ommissioner ol Income-tax. East Pakistan v. Fuzlnr Rehman (PLD 1%4 S.C. 410). Abdul Latif \ia:i \. Government of Wesl Pakistan (PLD 1%7 S.C. (>2) ami Mansub Ali v.Amir (PLD 1971 S.C. 124).           The principle, so far as this country is concerned, isaccordingly well-settled that where notice required to be given by the statute is mandatory notice, then the failure to comply with such mandatory requirement of the statute would render the act void ab inilio as being an act performed in disregard of the provisions of the statute. Furthermore any further action taken on the basis of such a void order would also be vitiated and the defect at the initial stage would be incurable by a hearing at a subsequent stage."

59.   Raja   Muhammad   Anwar,   Advocate,   the   learned   counsel   for   the Islamabad Stock Exchange/Amanullah Group has contended that the statutory requirement of a hearing was amply satisfied in this case as the hearing had admittedly been granted to all the applicants in the first round by the Member, Corporate Law Authority who aslo happened to be a delegate exercising the same powers as was available under Section 5 of the Ordinance to the Government. In support of this submission he has relied on thecases of the Tariij Transport Company (PLD 195S S.C. 437) and Franklin and others versus Minister oj Town and  onntrc Planning (I94X Appeal C'ases- (House of Lords) page 87). In the case oj Tarit/ Transport Company, substantial compliance with the provisions ol the law had taken place in asmuch as I he parly had been granted a hearing by a statutory lunclionarv. The objection was that he was not heard in adversary proceedings in  resence of the other party. In the ease of Franklin and others, the Minister had conferred an express authority on the Inspector to hold a publii .'nquiry. The report   ubmitted  contained  all  the  submissions  of the  objector,   including a complete  transcript   of the  proceedings.  There   was  no  authorisation  by  the Minister of Slate, in the case in hand, to the Member Corporate Law Authority, nor  has  the  Member  conducting the  hearing in  this ease  in the  first  round recorded under his signatures the result of the hearing. He did not act either as a functionary or as a dclcizatc. Instead, the Chairman. Corporate Law Authority who could administer the law but enjoyed no statutory position as such in that matter had submitted llu report about the hearing which was held by someone else.  herelorc. clear non-compliance had taken place with a statutory provision which   is   salutary   and   mandatory  because   the   restrictions  and   the   controlserrvisaged by the Ordinance impinge on the Fundamental Right ol ,1 cili/en.

60.         In according permission, the Minister ol Slate has recorded no reason. Inthis   context,   ease   of Securities   and   Exchange   Commission   versus   CheneryCorporation (3IS US 80-100 at ^l>4) is relevant wherein it was observed thal:-

"In either event the orderly functioning of the process of review requires that the grounds upon which the administrative agency acted be clearly disclosed and adequately sustained. "The administrative process will best be vindicated by clarity in its exercise."."

This observation made in l^l>42 led to the incorporation "I that requirement in Section 557 in the I niled Stales Administrative Procedure Act. when it came to be enacted in l<>4<>. It reads as under:-

"................ All   decisions,   including   initial,   recommended,   and   tentativedecisions, arc a part of the record and sha!! include a statement of—

findings and conclusions, and she reasons or basis therefor, on all the material issues of fact, law. or discretion presented on the record; and

the appropriate rule, order, sanction, relict', or denial thereof."

61,         Section 26 of the Ordinance provides the remedy of a revision to the Central Government upon an application being made by any aggrieved person within ninety days from the date of such Order. Sub-section (2) of the same section provides a period of six months for review from the date of any order passed by the Government on an application being made to it. Both these provisions arc remedial and beneficial to a person who is denied registration under Section 5(3) and kept out of the trade or business. In order to make the exercise of these remedies meaningful and purposive, it is necessary that he is communicated  in  proper  form,  and promptly,  the  result  of his  application containing the reasons for refusal.

62.         Not with a view to interpret or to limit or to extend the language of the provisions contained in the Ordinance but with a view to understand how others more entrenched in rule of law, have dealt with the same situation aiul the same problems, one can refer to similar legislation elsewhere. As pointed out, in the United Kingdom, Prevention of Fraud (Investment) Act, 1958, makes the matter of grant of registration referable to a Tribunal whose recommendation is made binding on the Board of trade which administers the law. In India, in the Securities Contracts (Regulation) Act, 1956, instead of registration of the slock exchange, the words 'recognition of stock exchanges' has. been used and in sub­ section (4) of Section 4 provision is made that "no application for the grant of recognition shall be refused except alter giving an opportunity to the stockexchange concerned to be heard in the matter and the reasons for such refusal shall be communicated to the slock exchange in writing". Wherever wide worded powers conferring discretion exist, there remains always the need to structure the discretion and it has been pointed out in the Administrative Lava Text by Kenneth Culp Davis (Page ^l>4) that the structuring of discretion only means regularising it, organixing it, producing order in it so thai decision will achieve the high quality ofjustice. The  seven   instruments  that  arc  most   useful  in  the  structuring of discretionary power are open plans, open policy statements, open rules, open findings, open reasons, open precedents and lair informal procedure. Somehow, in our context, the wide worded conferment of discretionary powers or reservation of discretion, without framing rules to regulate iis exercise, has been taken to be an enhancement of the power and it gives that impression in the first instance but where the authorities fail to rationalize it and regulate it by Rules, or Policystatements or Precedents, the courts have to intervene more often, than is necessary,  apart  from  the  exercise  of such  power  appearing  arbitrary  and capricious at times.

(o. There are three findings or observations made by the learned Judge which arc incidental to the decision of the main controversy involved in the case.They have lo be dealt with because legally those findings or observations arc nol sound and have lo be taken care of in the appellate judgment. In paragraph 20 ofthis judgment the relevant portion has been reproduced where the learned Judge observed "in referring the matter to him it abdicated or surrendered its own powers to him which by itself was an illegality in the schemes of things". The Order delegating the powers of the Government under Section 5 has no such characteristics. The relevant Order delegating the power is SRO l(!24f I)/8'l dated 10.9.1981 which is reproduced hereunden-

"In exercise of the powers conferred by Section 28 of the Securities and Exchange Ordinance, 1969, (XVII of 1969) and in supersession of the Ministry of Finance Notification No.SRO.261(I)/70, dated the 26th October. 1970, she Federal Government is pleased to direct that al! powers and functions of the Federal Government under the saidOrdinance, other than those under Sections, 26, 27, 28, 29, and so much of Section 33 thereof as relates to the making of rules for regulations of the business mentioned in Seel ion 32 thereof, shall, subject So such directions relating to questions of policy as may be issued from lime to time by the Federal Government, tie exercised or performed also by theMember, Corporate Law Aulhorilv (Corporate Law Wing)."

The use of the word 'also' makes both the authorities concurrently empowered to exercise this power. The delegation has not the effect of making the delegate the sole repository of power nor can the delegate be held lo have surrendered his own power by reserving the decision in a particular case for the delcgator. The delcgutor did not by such delegation denude himself of such power nor the failure It) exercise the power in a particular case by a delegate amounts to abdication or surrender, such as to vitiate ihe exercise of the power. It is true thai the exercise of thai power by both ihe deiegalor and the delegate was no! possible and the exercise of it by either exhausted the [tower.

64. In this judgment in paragraph 20 has also been reproduced an observation of the Court thai "if under some compulsion, il chose to submit the mutter to the Minister of Stale for decision through Secretary Finance, he (Secretary) could and .should have avoided lo handle it al his own level while sending it up to the Minister of State but he did no! do so. If he wanted lo avoid his coming into picture al ihjt sune he could do so by asking one of his Additional Secretaries lo forward tin. v,>>e to the Miiii>le.r oi Slate instead of putting his own signatures on it". II a matter oi impost,mcc or having policy or public interest over tones, had to be submitted to ihc Minister or Minister of Stale, it was in the schemes of Rules of Business obligatory for the Secretary to record his opinion and not to avoid il or pass on the responisbility to someone else. Between the Secretary and Ihe Additional Sccrctan., there is a shceme of distribution of business and that has by and large to he observed except for the discretion to be exercised by ihe Secretary in handling himself the imporlanl cases and by Addilional Secrelary in routine limnmh him. There is no question of Secretary, avoiding to come in the piclute. It i.\ his duly to remain in the piclure and to discharge his duly in accordance with ihe law by recording his opinion on the subject.

(>5. The learned Judge has further observed, as reproduced in paragraph 20 of this judgment, that "under rule 10 of the Rules of Business 1M73 a difference of N opinion had arisen between him and the Minister of Slate and il was his duly lorequest the Minister for reconsideration ol his decision and if he stuck lo his decision, then the matter should have been rclerrcd to ihe Piime Minister for her decision. This procedure was not adopled by lhc Secretary Finance and he did not perform his statutory duly". The Rule of Business relied upon is not 10 but Rule 5 sub-rule (10) of the Rules of Business. It reads as hercunder:-"When the Secretary submits a case to the Minister, the latter may accept the proposal or views of the Secretary or may over-rule him. The Secretary will normally defer to the decision of ihe Minister and implement it. In case, however, the Secretary feels that the decision of theMinister requires reconsideration, he may stale his reasons and re-submit the case It) the Minister. If the Minister still adheres lo his earlier decision and the Secretary leels that the matter is important enough in the national interest to require lurlher reconsideration, he shall request the Minister to refer the case lo the Prime Minister lor orders,"

6d. It was a case where the views of the Secretary were over-ruled by lhc Minister. The rule prescribes that the Secretary will normally defer to the decision of the Minister and implement il. Il is only when the Secretary leels ih.it the Minister's decision requires reconsideration that he is lo resubmit the case. It is only in a rcsubmilted case thai it the dillcivnci. i<l opinion persists and still ihe Secretary feels that ihe mailer is important enough, in the national interest, lo require lurlher consideration ihal ihe Sccrelarv is required to request the Minister to iclei ihe case lo the Prime Minister for ordeis. It is not ordinarily lor the I ourt lo determine when a Secretary should submit to lhc decision ol the Minister or x\hen he should u submit ihe case lor ivcoiiMdciaiion. or v\hen he should lake ihe controversy lo ihe Piime Minister. Il is his domain and exclusively his own. not lor the courts inleivcniion

(>7. A rcleixnce lo Schedule HI under rule 4(4i ol the Rules ol Business will show thai al serial Numbei 32. Securities and FXihanuc Authority of Pakistan happens to be an Attached Department under the Finance Division. In 1W1, at serial number 33. the Deparlmcni of Corporate Law Authority was also introduced as an Attached Department ol the Finance Division. In such circumstances any proposal or case coming from the Corporate Law Authority had to be routed through the Finance Division, For that reason, the Secretary. Ministry of finance, had a role to play and he has played il. No illegality or infirmity, as such, was there in handling of lhc case except lo the extent Ihal he proceeded to deal with ihc Revision under ink 2i>( 1) ol lhc Rules as a revision against ihe Order of the Corporate Law Authority when in fad il should have been a review against the Order of lhc Minister ol Stale, which he could nol have competently disposed of but should have resubmillcd to the Minister of Stale.<>S. Hereunder arc our precise conclusions summarised lor the purposes ol clarity in comprehension:-

(i) Notwithstanding the preliminary objections to ihe competence ol the three writ petitions filed in the Hiuh Court, these arc found lo be competent.

(</)   Writ Petition No.(o5/l»>SM tiled by Ch, Muhammad Aslam. for the reason ihal Corporate Law Authority had refused lo entertain hisapplication on the ground that another Company had been granted the 'No Objection Certificate'. The Corporate Law Authority had no such power under Section 5. The reason isclosed was also extraneous to the law. It was an action completely lacking in jurisdiction;(/>) Writ Petition No.c>5S/l'W Tiled by Raja Abdul Rahman, lor the reason that a non-statutory Authority (Corporate Law Authority) intervened to consign the application instead ol passing it on to the Statutory functionaries competent to deal with it alter hearing the applicant,vi:. Government or Member Corporate Law Authority, This action of the (.'orporate Law Authority was also completely lacking jurisdiction;

(c) Writ Petition No.bco.. 1¹>*M Tiled by Sycd Sarmad Maqsood Al-Hussainy and his associate- lur the reason lhat the order of relusal was uivcn out in lij'^ K^n '-.is-^d bv Corporate L.aw Authority and dealt with in Roi^'H N v^r. L;n F'm^ruY as thai of Corporate Lav. Authority. The Corpoiatc Law Aulhurif. POSSCSMIK no sudi power under the law the action was cnmpelellv without jurisdiction.

(//') The departmental \iew that where there e\isls a Siock L^:\change another cannol be reiiisk-red is un.supportable by law as it ^:\isi> today.

(/'/'/) The provisions ol the Ordinance being Regulatory ol Fundamental Right No.lS have to be interpreted smelly and beneficial!¹,.

(iv) The hearing of an applicant who is refused registration prescribed in Section 5(3) is mandatory, has to be by an authority, competent to, and in lad, taking a decision unless lor reasons recorded that power i.s delegated and the delegate records the minutes of the hearing to facilitate She decision making authority.

(r) Constitutional bar to answcrabiliu of a Minister to a Court of Law (Article 248) eannot be avoided b\ recourse to principles of natural justice.

(17) Protection muLi AihcL 24> .-I tk Con-iilutinii is not a'-ailable to the designaled lunclion.i! i^ il ih,_n aeiii'ii^ viiilei li om inaut-jtilc ol lacl.

(vii) Where the allegation aganut Mi, piot^eted luiKtionaries is one of/»,•//</-fide ol fact. lhe\ have to K iKi^uuiliv impleaded as a party to the proceedings; without which tin liiulini? on that issue can be recorded.

Relationship, professional or p,. i s,uul. with pr*nnoli-rs. tlirectors. sponors ol a public companv 01 li.ide omani/alon does not disijiiahiv an administrative ilccision maker in dealiiis; vviih such public conipanv or trade organisation.The order ol granting regisiialion to Amanullah (iroup passed by the Minister ol Slate suffers Irom lht\x infirmities,; of denial of hearing to those who were refused registration, of failure to record reasons as prescribed in Section 5 tor reuislration. and failure to communicate the relusal and the ixason.s to the affected persons.9. In view of the findings recorded which are altogether different from those recorded by the High Court in the impugned judgment, the order of the High Court, declaring the impugned Order dated 19.8,1989 passed by (he ex-Minister of State (wrongly stated in the High Court's judgment to be of 27.8,1989) and all subsequent orders passed on the basis o( thai order, is affirmed. Bui for these 'findings and the reversals of the findings ana observations recorded by the High Court, all the six appeals are dismissed,

70.            The two applications filed by the ex-Minister of State are allowed. The judgment of the High Court so far as it attributes personal motives to the Minister

O:

i of Slate, holds his conduct amounting to favouritism, nepotism and motivated by advancement of his politieal and economic interests to make him a judge in his own cause, is set aside. The remarks as prayed for, arc expunged from the judgment of High Court No part of it shall be published or repuhlishcd in any official or non-official document, This prohibition shall exclude this judgment of the Supreme Court if published in Us entirety, as it lays down the law for the

i country in its proper context.

71.        Parties are left to bear t.!v;ir own costs ihroughom.

72.   The result of this judgment shall be that, the registration granted to  Amanullah and his associates/Islamabad Stock Exchange, .shall not be of avail to them, and all the applications shall be considered afresh in accordance with the law on ihc subject by the competent authority, Nasiin Hasan Shah, J.--I agree with the main conclusion arrived al by my learned brother upholding the High Court's view thai the order dated 19.8.1989 passed by Mr. Ehsan-ul-Haq Piracha, Ihe then Minister of State for Finance, Government of Pakistan and all subsequent orders passed on Us basis are untenable and. accordingly, the registration granted to Amanuliuh and his associates was not of any avail to them. Consequently, ail the applications lor registration would have to be considered afresh in accordance with law, by the competent authority. But regre! that 1 cannot subscribe to some of the other conclusions expressed in Para 6S of the draft, judgment., especially the conclusion contained in items (v) & (vii) of the said paragraph.

Items (v) <& (vii) are as follows:

(v) Constitutional bar to answerability of a Minister to a Court of Law (Article 248) cannot be avoided by recourse lo principles of natural justice; and

(vii) Where the allegation against the protected functionaries is one of mala-Jlde of fuel, they have to be personally impieaded as a party Jo the proceedings; without which no finding on that issue can be recorded.

Undoubtedly the main reason given by the High Court for finding that the order of the Minister was without lawful authority was because it held the view that his order wdsnwla-fidc.This is manifest from the following:"In the light of these definitions of muhi-fide and certain admitted facts already slated above, the order dated 27.8.1989 passed by the Minister of Slate, granting permission to set up slock exchange at Islamabad wasclearly an order stemming from mala-fnic or had faith, with a view to favour his own business associates, one of whom was even his relation, through whom he wanted to safeguard and promote not oniy his business and commercial interests but also political stature and influence, both of which were so inter-connected and intermingied that it was difficult to separate one from the other".The question is whether without having impleaded the Minister as a parly to the proceedings these findings and the other critical comments made against him could not be recorded?

According to the learned Judge in the High Court, the comments on the conduct of the Minister could be made alter affording him an opportunily of explaining his position. This is evident from the orders passed by him on 24.1.1990, 27.1.1990 and 6.2.19^l)0: The order recorded on 24.1.90 reads as foliows:-

"On the conclusion of arguments on 22.1.1990 the judgment was reserved but at the time of writing the judgment it has been felt thai in the writ petition there are certain allegations of somewhat personal nature against the Minister of State for Finance, Government of Pakistan and in the absence of his explanation it may not be possible to record any finding on those allegations. Besides, in view of nature of allegations and keeping in view the requirements of rule of natural justice, even otherwise it appears to be in the fitness of things that he should he given an opportunily to explain his position though sorn-j of the respondents, who arc allegedly his business partner in Fxnv^ Sons Lahoratone-.. Limited, have filed sworn affidavits in his defence. Therefore, the matter needs lo be further considered for which it should be listed on 27.1.1990 and (he Deputy Attorney General should also be asked to appear".

The order recorded on 27.1.1990 is as follows:

"For the reasons staled in the preceding order, a copy of the writ petition alongwilh the copy o! dim order should be sent to the Minister of State lor Finance, Government of Pakistan, Islamabad, with a view to enable him to explain his position, at his option in view of the provisions of Article 248(1) of the Constitution of Pakistan 1973, in relation to certainallegations of somewhat personal nature against him and if he so wihses he may avail of the opportunity of being heard before this court on 6.2.1990 either personally or through some attorney or through some counsel.

2. The learned Standing Counsel is also directed to contact the said Minister and convey him this order and gel instructions from him. if any, for the next date of hearing".The order recorded on 0.2.1990 stales:-"The office has. in compliance wilh the orders dated 24.1.1990 and 27.1.90, conveyed the directions/observations of this Court to the Minister of Slate for Finance. Government ol Pakistan, vide registered  letter No.l l» dated 2'U.⁽H). alongwith the relevant doeument.The  learned Standing Counsel lot   the  Federal (iovcrnmcnlvid  Paragraph 2 of the preceding order, was also directed to contact the Minister and convey the relevant order ol this Court lo him and get instructions, il any, from him lor this dale of hearing.

The learned Standing Counsel stales that he mel ihe Minister and  conveyed the relevant orders of this Court in order lo enable him to pul in his point of view, if any, and he staled that whatever he did was done in his official capacily as a Minister of Slate for Finance of the Federal Government and since it was not his personal mailer, he had nothing to add to the  defence  already   taken  by  or on behalf of the  Federal Government.

Since the legal formality ol affording an opportunity ol being heard, asil appears from the statement of the learned counsel for the FederalGovernment, has been complied with and final arguments on ihe wrilpetition have already been heard, the judgment is reserved".Notwithstanding the above opportunity of being heard afforded to the Minister, my learned brother considers that the offending remarks could nol be made. According lo my learned brother as the remarks made by the learned Judge are lo ihe eilect that the order of the Minister was vitiated by malice of fad i.e. the order was passed for personal motives lo benefit some persons in whom the Minister was personally interested, the only way in which such a finding of mala-fidc of tad could be recorded was when the person against whom the remarks were made had been formally impleaded because the prohibition contained in Article 248 of the Constitution cannot be overcome merely by recourse lo the principles of natural justice.

A "parly in general terms, means, one having right to control proceedings, it) make defence, to adduce and cross-examine witnesses and to appeal from the judgment. All these ingredients are in essence contained in the order daled 27.1.1991) passed by the learned Judge of the High Court. The copy of the writ petition was sent to the Minister with a view to allowing him to explain his position both with regard to the allegations ol personal nature made against him as also in the Sighs of Article 248 of the Constitution; he was allowed to he heard personally il he so desired or through some attorney or counsel as he wished, that he had a right of appeal under the law laid down by ihis Court (see H.M. Suva Vs.U'a:irAH Industrie*; LttL- PLD !%<> S.C. (>9) if he was affected by the judgment. Bu! he declined to avail all these facilities on ihe ground that whatever he did was done in his oliicial capacity as a Minister ol Stale lor Finance ol the Federal Government and since il was nol his personal matter he had nothing lo add lo the defence already taken by or on behalf of the Federal Government.

The position taken by him clearly indicates she stance ol the Minister in all its amplitude and, thcrelore. the lad that he was not formally impleaded as a parly did nol. as a matter of fact, make any difference.Now the only question is whether the prohibition contained in Article 248 of the Constitution afforded the requisite immunity lo his being impleaded as a party? Article 248( I), to the extent relevant, lays down:

(1) The President, a Governor, the Prime Minister, a Federal Minister, a Minister of State, the Chief Minister and a Provincial Minister shall not be answerable to any court or the exercise of powers and pertorrnance of functions ol their respective offices or for any act done or purported to be done in the exercise of those powers and performance of those functions",

This Court in Cii. Zahur Ilalii Vs. Mr. Zulfujar Ali Bliituo (PLD 1°75 S.C.has laid down that the immunity provided by this Article must be construed strictly, as the immunily provided is in the nature of an exception to the general X rule that no one is above the law. Accordingly, unless the person claiming the| immunity comes strictly within the terms of ihe provisions granting the immunity, the immnity will not come into play.Now the immunity to a Minister extends only to the exercise ol powers and! perlormancc ol functions of his office or lor any act done or purported to be done! in the exercise ol those powers and perlormance ol those functions. A Minister j can be said to be acting in exercise of the powers and functions of his office, if hisi acts are such which not onl\  lie within the scope of the powers and functions] conferred on him by law but are perlormed boim-l'iilc and lor carrying into ellecl the intention and purposes ol the statute under which he is aciine. II on the other hand his acts are perlomed with nmlujiilc intent or lor a colourable purpose, suchacts will not be deemed to ha\e been perlormed in. the  lawful exercise ol the powers and functions \csicd in him and will not. then. fore, be covered by the immunily. Accordingly, where it transpires that a Minister has acted illegally and abused  his  discretion  and  the  illegality  committed was  not   in  the  hona-Jutc j exercise of his powers and functions but on account ol inula-j'idcs the immunily contained in Article 24S( 1 ) would not extend to protect such an act.

The question, now is whether the prohibition contained in Article 248 of the Constitution can be overcome without inipleadiiu; the Minister a^ a party but only by recourse lo the principles ol natural justice. In other words could a Imding that I the order ol the Minister sutlers from nuilitc in fail be given without impleading i the Minister as a party because the mere fact that he was allowed to explain his j position on the basis of the principles of the natural justice was not enough. I have I already said enough to indicate that in the fact¹- and circumstances of this ease j although the Minister was not lormally impleadecl as a parly to the proceedings hut the course followed in the learned Judge of the High Court Was sufficient lo show thai he was beinu treated as a partv lor all practical purposes: hence the (hiding that ihe Minister's order was \iiiatcd by nmlu-luk'^ ol iaet could ha\e beenrecorded in the facts & circumstances ol this case. I would, therefore, nol agree with the broad propositions laid down in ilcm-. Nos. (\) ^V (\ii) of Para (>.x ol the judgement of my learned Brother as each case will have to be examined on its merits lor determining whether in the laets iX, circumstances oi the given ease a finding ol ' nuilu fiilcs of J act could or could not be recorded.Subject to these observations 1 wmild COIKUI with mv learned brother that the mder ol the Minister dated l^l>> . l'»s^l) is liable to be --el aside and that theapplications lor registration submitted b> all the parlies will be deemed to be pending decision afresh in accordance with law. In the competent authority.I would leave ihc parties to Iv.ir their own costs.(MBC)    Orders accordingly.