Reading of the provisions of Section 80-D reveals that it is the minimum tax imposed on certain persons and starts with non obstante clause notwithstanding in the Ordinance

IN THE HIGH COURT OF SINDH AT KARACHI

H.C.A No. 195 of 2010

Present:

Mr. Justice Muhammad Ather Saeed, and

Mr. Justice Irfan Saadat Khan.

For the Appellants: Mr. Taimur Mirza, Advocate.

For the Respondent: Mr. Badar Alam, Advocate

Dates of hearing: 01.04.2011 & 05.04.2011

JUDGMENT

IRFAN SAADAT KHAN, J: This High Court Appeal has been filed against the judgment passed by the learned Single Judge in CMA No. 723/2009 filed by the Respondent in J.M. No. 30 of 2009 dated 26.08.2010 directing the Securities and Exchange Commission of Pakistan (SECP) to appoint an Inspector to investigate the affairs of the Appellant No. 01 regarding its accounts since 2007.

2. Briefly stated that facts of the case are that the Appellant is a Private Limited Company incorporated under Companies Ordinance 1984 (The Ordinance) having its registered office and factory at A-33(B) Textile Avenue, Street No. 02 Site, Karachi. The Appellant No. 01 was having Appellant No. 2, 3 & 4 as its share holders having the following share holding :-

S. No.	Name	Percentage of Shareholding
1.	Shamsa Haroon Qaudri	33.75%
2.	Shehzad Qaudri	22.083%
3.	Iftikhar Qaudri	22.083%
	Total	77.916%

3. That the Respondent is also a share holder of Appellant company and holds 22.085% shares in the company. The Respondent filed the J.M. No. 30/2009 under section 290 and 309 read with section 305 of the Ordinance for winding up of the Appellant company. Alongwith the said J.M. an application under section 151 CPC was also filed by the Respondent requesting the Court to appoint a qualified Chartered Accountant (C.A.) from the list of the C.As maintained by the State Bank of Pakistan (SBP) for scrutiny of accounts from 2007 onwards and to submit the report within a specified time to the Court. The said application was allotted CMA No. 723/2009 and the learned Single Judge after hearing both the learned Counsel at considerable length and obtaining their affidavit, counter affidavit and re-joinder etc. directed the SECP to appoint a C.A. as Inspector to investigate the affairs of the Appellant company since 2007. The learned Single Judge disposed of the said CMA by observing as under:-

“In my opinion there is no harm if the scrutiny of the accounts of Respondent No. 1 company since the year 2007 be made. Prima facie on the basis of material paced alongwith the memo of petition and with the written statement of the Respondents the case of investigation through an Inspector is made out. I therefore, direct the security and Exchange Commission of Pakistan to appoint a competent person preferably a Chartered Accountant/approved Auditor as Inspector to investigate the affairs of the Company/Respondent No. 01 regarding accounts of Respondent No. 01 Company since 2007 and to submit a detailed report thereon within a period of 30 days from the date of his appointment. The Commission if further directed to fix/settle the fees of the Inspector who will be paid by the Respondent No. 01. Office is directed to send the copy of this Court to the Security and Exchange Commission of Pakistan with the direction to comply with the orders expeditiously. The listed application is allowed in the above terms”.

It is against the above observations of the learned Single Judge that the present Appeal has been filed.

4. Mr. Taimur Mirza, Advocate appeared on behalf of the Appellant company and its three share holders, who happens to be mother and brothers of the present Respondent, and submitted that the order passed by the learned Single Judge is bad in law and in total deviation of the settled principles of law and against the decisions already given by the Superior Courts on the issue. He further submitted that the learned Judge was not justified in accepting the Respondent’s application for appointment of a C.A. as his action is contrary to the provision of section 265 of the Ordinance. The learned Counsel attacked the jurisdiction of learned Judge in passing such order and submitted that the jurisdiction of appointing an Inspector does not vest with the learned Judge and in support thereof relied upon the decision (1968) 38 Comp. Cases 337 (Mad.) –The Nadar Press Ltd.

5. He further submitted that the matter of investigation is a serious matter and the learned Judge was not justified in ordering the said investigation, without their being satisfactory grounds. He submitted that the learned Judge in this regard has failed to consider the provisions of section 237 of the Ordinance and Article 19(1) (2) of the Indian Constitution. He submitted that the said appointment has seriously prejudiced the Appellants and such appointment is an infraction of his fundamental rights as enshrined under Article 18 of the Constitution of Pakistan. In support of his above contentions the learned counsel relied upon the following decision:-

Service Industries Textiles Ltd v. SECP and others (2000 MLD 1880)

Rohtas Industries Ltd. V.S.D. Agarwal (AIR 1969 SC 707)

Delhi Flour Mills Co. Ltd. [(1975) 45 Comp. Cases 33 (Del.)]

6. He further submitted that it is the Central Government alone which can look into the affairs with regard to referring a matter to an Inspector and a report of Inspector appointed under section 237 of the Ordinance can only be used by the Central Government in the manner prescribed under section 243 of the Ordinance. He in this regard relied upon the case of Nadar Press Ltd and (1984) 56 Comp. Cases 284 (Ker.) – V.J. Thomas Vettom v. Kuttanad Rubber Co. Ltd.

7. He further submitted that the learned Single Judge was not justified in relying upon the decision of the Hon’ble Supreme Court of Pakistan in the case of Safia Bibi vs. Aisha Bibi (1982 SCMR 494) and PLJ 1992 SC 443 which are quite distinguishable and have no bearing with the facts of the case. Learned Counsel further submitted that it is a settled law that a Court cannot grant a relief which has not been prayed for by a person, as according to the learned Counsel the learned Single Judge by appointing a C.A. as Inspector, has gone beyond the prayer which was made in the application. In support of his contention he relied upon the following decisions:

Fazal Din and others v. Milkha Singh (AIR 1933 Lahore 193)

Secretary to Govt. (West Pakistan) and others vs. Abdul Kafil (PLD 1978 SC 242)

8. The learned counsel went on to argue that the Courts are always guided by the contents of an application and not by citation of a particular section and in this regard placed reliance on the decision of Muhammad Iqbal Vs. Riaz Sabir (1984 CLC 2375). The learned Counsel also submitted that the enforcement of Companies Ordinance is vested in the SECP and not with the Court and in this regard placed reliance on 2002 CLD 726 – Progressive Consultants (Pvt) Ltd. V. Corporate Law Authority and others. He also submitted that the learned Judge has passed the judgment on an issue which was not even argued before him. The learned Counsel in this regard placed reliance on the following judgments:-

Alembic Glass Industries [(1972) 42 Comp. Cases 63 (Guj.)]

PLJ 2003 Lahore 1183

Ejaz Siddique Vs. Kaneez Begum (1992 CLC 1658)

(1983) 54 Comp. Cases 368

9. Mr. Badar Alam, Advocate appeared on behalf of the Respondent and supported the order passed by the learned Single Judge and submitted that other directors of the Appellant No. 01, being mother and brothers of the Respondent, were not willing to submit the accounts of the company for settlement. He further submitted that in view of the circumstances the Respondent was forced to move J.M. No. 30/2009 for winding up of the company. It is submitted that in the said J.M. the Respondent has sought relief from the Court by contending that several meetings were conducted by the Board of Directors and some actions were taken in this regard which all were illegal as the Respondent who claimed himself to be Chairman of the company was never issued notices to attend those meeting but certain adverse action behind his back were illegally taken by the Appellants 2, 3 & 4. He submitted that the Respondent made a request by way of filing a J.M. that the Appellants be directed to render true accounts of the company and those accounts should be scrutinized and authenticated by a qualified C.A. from the list maintained by the SBP. As per the learned Counsel it has specifically been mentioned in section 309 of the Ordinance that if a company was not working in accordance with law the court may pass such orders for winding up the same. He submitted that though section 263 of the Ordinance provides that Inspector would be appointed by SECP but there is no bar on a Court to appoint an Inspector, in view of the facts and circumstances of the case. He, therefore, submitted that there is nothing wrong in the order and the present Appeal has been filed with malafide intention, which may be dismissed. In support of his above contentions the learned Counsel has relied upon the following decisions:-

Diamond Industries Limited Vs. Appellate Bench of the Securities and Exchange Commission of Pakistan [2002 CLD 1714]

Sardar Khan Niazi Vs. Barex Lahore Ltd.[2005 CLD 1670]

Brothers Steel Ltd Vs. Mirajuddin [PLD 1995 SC 320]

Attock Refinery Ltd. Vs. Executive Director, Enforcement and Monitoring Division, S.E.C.P.[2010 CLD 774]

Qamar Loan Vs. Kashmirian (Pvt.) Ltd [PLD 1997 Karachi 376]

Muhammad Shabbir Khan Vs. Muhammad Anwar [1988 CLC 1955]

Amina Begum Vs. Ghulam Dastagir [PLD 1978 SC 220]

Safia Bibi Vs. Aisha Bibi [1982 SCMR 494]

10. We have heard both the learned Counsel at considerable length and have perused the written synopsis filed by them and the decisions relied upon.

11. Before dilating upon the issue it would be in fitness of things if the relevant law and the decisions relied upon by both the learned counsel are first discussed:

Section 151 C.P.C.

Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the Court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court.

265. Investigation of Company’s affairs in other cases.—Without prejudice to its power under Section 263, the Authority-

a) shall appoint one or more competent persons as inspector to investigate the affairs of a company and to report thereon, in such manner as the Authority may direct, if-

(i) the company, by a resolution in general meeting, or

(ii) the Court, by order.

declares that the affairs of the company ought to be investigated by an inspector appointed by the Authority; and (emphasis supplied)

Extracts of the decisions relied upon by the learned counsel for the Appellants:

1) Delhi Flour Mills Co. Ltd v/s Delhi Flour Mills Co. Ltd and others (1975) 45 Comp. Cases 33 (Del.)

“Because an investigation ordered under section 237 can result in a prosecution under section 242, or a winding up under section 243, or proceedings under section 397 and 398, or proceedings under section 244 for recovery of damages or properly misapplied on account of misfeasance or mismanagement, a petition under section 237 must disclose some material which would result in such proceedings as are envisaged under section 242, 243 and 244 being taken. An investigation cannot be ordered merely because a shareholder feels aggrieved at the manner in which the company’s business is going on.

Held, dismissing the petition, (i) that the purpose of section 237 was not to order an investigation into the economic working of the company

That the mere fact that the subsidiary company had not shown any profit would not justify an order for investigation”.

2) Service Industries Textiles Ltd v. SECP and others (2000 MLD 1880)

“Investigation against company being a serious matter same should not be ordered except on good or satisfactory, grounds.

Principle which governed administration of justice in Islam was that in case of liability with penal or quasi-penal consequences and or deprivation of basic rights, a notice as well as an opportunity of hearing were absolutely necessary”.

3) Muhammad Iqbal v/s Riaz Sabir (1984 CLC 2375).

“Held, a litigant had only to state necessary facts and it was for Courts to apply correct law – Courts held further, are to be guided by contents of application and not by citation of particular section”.

4) Mst. Safia Bibi v/s. Mst. Aisha Bibi (PLJ 1982 SC 443)

“Mention of wrong provision of law in application not to deprive Court of power and jurisdiction if same otherwise available to decide such application”.

5) Secretary to Govt (West Pakistan) v/s Kazi Abdul Kafil (PLD 1978 Supreme Court 242)

“Plaintiff claiming larger relief than one to which entitled. – Held, cannot be granted such larger relief without first amending his plaint”.

6) Progressive Consultants (Pvt) Ltd v/s Corporate Law Authority and others (2002 CLD 726)

“Enforcement of the Companies Ordinance, 1984, was vested in the Commission”.

7) V.J. Thomas Vettom v. Kuttanad Rubber Co. Ltd. [(1984) 56 Comp. Cases 284 (Ker.)]

“The report can be made use of only by the Central Govt. in the manner provided in s. 243 of the Companies Act, 1956.

The Central Govt. has to consider various aspects including public interest before starting any proceeding on the strength of the report. The scheme contained in these provisions makes it clear that a machinery is provided for the use of the report that an inspector submits after investigation into the affairs of the company either at the instance of the Central Govt. or at the instance of the Court.

We will examine the scope of the report under s. 237 presently. Section 237 enables the Central Government or the court to appoint one or more competent persons as inspectors to investigate into the affairs of a company. The court exercise its power under s. 237 when it finds that the affairs of the company ought to be investigated by an inspector appointed by the Central Government, on being satisfied that such investigation is necessary though the evidence on record is not sufficient to give relief to the aggrieved party. Under s. 241, the inspectors have to submit a final report to the court, a copy of the report has to be furnished to the court. While under s. 235 appointment of inspectors by the Central Government when circumstances mentioned in the said section exist is discretionary, the appointment under s. 237 is mandatory. Section 42 provides for initiating prosecution against persons for any offence disclosed from the reported submitted by the inspector. Section 243 enables the Central Government to file a petition for the winding up of the company, or to file an application for an order under s. 397 or s. 398. It has to be noted that the use of the report obtained under s. 237 is restricted; it can only be by the Central Government and not by any other person, for example, a shareholder. But the Central Government can cause an application to be made either for winding up in a case falling under s. 243, under s. 439(1)(f), or an application under s. 397 or s. 398, under s. 401, by any person authorized by it in this behalf. The attempt of the Appellants before us is to make use of the report in a manner not contemplated by the Act. The report could be made use of only by the Central Government in the manner provided in s. 243. Section 244 provides for proceedings being taken for the recovery of damages if from any such report as aforesaid, it appears to be brought by the company or any body corporate whose affairs had been investigated. The scheme contained in the above provisions makes it clear that a machinery is provided to use the report that an inspector submits after investigation into the affairs of the company either at the instance of the Central Government or at the instance of the court”.

8) Alembic Glass Industries Ltd v/s Alembic Glass Industries Ltd. [(1972) 42 Comp. Cases 63 (Guj.)]

“The court exercising jurisdiction under the Companies Act has no power to appoint an inspector to investigate the affairs of a company under section 237 of the Companies Act, 1956. The power to appoint an inspector to investigate the affairs of a company is vested in the Central Government”.

9) Rohtas Industries ltd v/s S.D. Agarwal and another (AIR 1969 S.C. 707)

“Investigation into the affairs of a Company is a very serious matter and it should not be ordered except on good grounds”.

“The Government is not required to act on the basis of that report; the company has to be called upon to have its say in the matter but yet the risk - it may be a grave one – is that the appointment of an Inspector is likely to receive much press publicity as a result of the company may be adversely affected. It should not therefore be ordered except on satisfactory grounds”.

“Finally we must also remember that the section in question is an inroad on the powers of the company to carry on its trade or business and thereby an infraction of the fundamental rights guaranteed to its shareholders under Article 19(1) (g) and its validity cannot be upheld unless it is considered that the power in question is a reasonable restrictions in the interest of the general public. In fact the vires of that provision was upheld by majority of the Judges constituting the Bench in Barium Chemicals’ case, 1966 Supp SCR 311=(AIR 1967 SC 295) principally on the ground that the power conferred on the Central Government is not an arbitrary power and the same has to be exercised in accordance with the restraints imposed by law”.

10) Fazaluddin and others v/s Malikha Singh (AIR 1933 Lahore 193)

“Court cannot grant more than what is asked in plaint. Where the plaintiff asks, for possession of one piece of a land, the court cannot allow him to seek possession of the whole land”.

11) Nadar Press Ltd. V/s. N.P.S.N. Ramiah Nadar and others (1968) 38 Comp. Cases 337 (Mad.)

“Further when the court by order declared that the affairs of the company ought to be investigated by an inspector and directed the Central Government to appoint an inspector to go into such details, the jurisdiction of the court was exhausted in so far as that application was concerned. It was for the Central Government to take up the matter in their hands after receipt of the report of the inspector and do such things as were necessary and expedient in public interest”.

“It should be, however, be remembered that once an inspector is appointed and the inspector, after enquiry, submits a report, it is for the Central Government to act, and it is no longer open to a person, who prompted the court to issue an order under section 237(a)(ii), to call upon such court after the investigation report of the inspector, to consider the said report once again and give him such reliefs which, according to him, he is entitled to”.

12) Muhammad Aslam Javed and another v/s Malik Ijaz Ahmed and another (PLJ 2003 Lahore 1183)

“Allegations of forgery, fraud, invalidity and fabrication of documents etc. pleaded by plaintiff in his suit for declaration, cancellation of documents and perpetual injunction – Competency of Civil Court to try such suit in view of provisions of Ss. 7 and 152 of Companies Ordinance 1984—Perusal of S. 152 of Companies Ordinance 1984, would reveal that if name of any person was fraudulently and without sufficient cause omitted from Register of members of a company, person so aggrieved can apply to company judge for rectification of Register whereupon Company Judge was required to proceed expeditious by following summary procedure—Such summary procedure does not visualize holding of a trial or inquiry through detailed evidence upon allegations of fraud, forgery and fabrication of documents etc. as have been pleaded and raised in Civil suit of plaintiff – Such suit therefore, was triable by Civil Court which is Court of general Jurisdiction under S. 9, Civil Procedure Code 1908”.

Extracts of the decisions relied upon by the learned counsel for the Respondent:

1) Diamond Industries Limited Vs. Appellate Bench of the Securities and Exchange Commission of Pakistan (2002 C.L.D. 1714)

“Section 263, 264 and 265 of the Ordinance are in pari materia with sections 235, 236 and 237 of the Companies Act respectively. The investigation under sections 263 and 264 can only be ordered when the applicant is having sufficient evidence for showing that he has good reasons for requiring the investigation, but under section 265 (b) the Commission may direct the Investigation if in its opinion there are circumstances suggesting that (i), (ii), (iii) and so on”.

“20. The two provisions whereby the Investigation is directed to be conducted stand on different footing. The one under section 263 can only be ordered when the applicant is having evidence in support of his plea showing thereby that he has got reason for requiring the investigation, but in the case of section 265(b) such an investigation can be directed suo motu by the commission, if in the opinion of the Commission, the circumstances suggesting the grounds mentioned therein for the purpose of investigation. The former requires some proof while in the latter case it has been left to the opinion of the Commission formed on the basis of the circumstances leading to the grounds justifying investigation”.

2) Sardar Khan Niazi Vs. BAREX Lahore Ltd. (2005 C.L.D. 1670)

“290 & 263 Petition under S. 290 Companies Ordinance, complaining that the affairs of the company were being unlawfully, in a fraudulent manner and in a manner oppressive to the member and prejudicial to the public interest and that the present management was not maintaining the Register of members, Register of Transfer of shares, the Minutes Book etc. Honestly and thus acting fraudulently – Respondents contended that the petition was only meant to cause harassment and to reopen the matters already settled with the old administration, which fact had been denied – Validity --- held, keeping in view of allegation and counter allegations made in respect of a public limited company, it could be concluded that the investigation of company’s affairs had become essential in the public interest – Since S. 265(ii) of the Companies Ordinance, 1984 provided on efficacious remedy, under the circumstances, High Court directed the Securities and Exchange Commission of Pakistan to appoint inspectors for the purposes of investigation of the affairs of the company in the light of allegations made Inspectors shall associate representatives of both the parties for purposes of investigation and will submit a report to the High Court within a period of 3 months from the date of present judgment using the commission as the channel”.

3) Brothers Steel Ltd. and others Vs. Mian Mirajuddin and 15 others (PLD 1995 Supreme Court 320)

“Ss. 265 & 9 ---Application for appointment of inspector for investigation of company’s affairs---Procedure--- Court has only to satisfy itself, prima facie, on the basis of the material placed before it, that case for investigation through an Inspector is called for – Inspector has to ascertain and determine the truth or otherwise of the allegation during the investigation to be conducted by him where after he has to submit the report to the concerned authority---Matter in fact vests in the discretion of the Court, to be decided after following the summary procedure as laid in S. 9, Companies Ordinance, 1984”.

4) Attock Refinery Ltd. Vs. Executive Director Enforcement and Monitoring Division, S.E.C.P. and another (2010 C.L.D. 774).

“Order of Security and Exchange Commission appointing a firm of Chartered Accountants to investigate affairs of Company-appeal against such order dismissed on basis of proviso to S. 485 (1) of Companies Ordinance, 1984---Plea of Company was that such appointment would affect its reputation---validity---Investigation would remain pending till making of report by investigator-Conduct of investigation was part of case pending with Security Exchange Commission for investigating affairs of Company—Mere appointment of an investigator would not “dispose of the entire case” ---Object of proviso to S.485(1) of Ordinance, 1984 was to avoid fragmentary decision and ensure non-occurrence of delay to hamper regulatory role of Commission—Security Exchange Commission had passed such order after due consideration of all circumstances—Company through dilatory tactics had frustrated investigation of its affairs for past nine (9) years—Company itself should have no reluctance in joining investigation, if could explain and answer significant and well-founded question raised by the Commission--- Such plea could hardly be a ground for rendering redundant provisions of S. 265 of Companies Ordinance, 1984--- Supreme court declined to grant leave to appeal in circumstances”.

12. It is noted that during the period 2007 the Respondent proceeded to USA in connection with getting admission of his son and daughter in the educational institutes of USA. During that period the Appellants 2-4 were looking after the affairs of the company i.e. Appellant No.1. It is seen from the record that upto the month of November-2008 the Appellants 2-4 deposited the salary of the Respondent in his bank account, however thereafter stopped the same. The Appellants 2-4 stopped making payments of certain utility bills, credit cards bills and other expenses of the Respondent also. The Respondent came back to Pakistan on 22.05.2009 and thereafter visited his factory/office and to his utter surprise when he found out that the Appellants 2-4 have not only maintained duplicate/bogus and unofficial accounts but the Respondent also found out that the Appellants 2-4 have infact totally ruined the business, of which he was the Chairperson. The Respondent also found out that the Appellants 2-4 have held certain meetings behind his back and due to inefficiency of the Appellants 2-4 the business had suffered huge losses.

13. When the Respondent requested for tendering of accounts and for explaining the financial position of the company no satisfactory explanation was furnished by the Appellants 2-4. The Respondent also came to know that huge amounts have been transferred from the company’s account to the personal accounts of the Appellants 2-4, of which no plausible explanation was furnished. In these circumstances the Respondent considered it expedient, in order to verify the current and latest financial position of the company and in order to save himself from future losses, to file an application for winding up of the company. Thereafter the Respondent approached this Court with the abovementioned prayer. It was in this backdrop that the CMA No.723/2009, i.e. application under Section 151 CPC, was filed by the Respondent with the prayer to appoint any licensed/approved auditor/chartered accountant from the list maintained by the SBP for scrutiny of the accounts of Appellant No.1 since the year 2007 onwards and to submit a report thereof.

14. Now a question would arise that whether under the provisions of Section 151 CPC the learned Single Judge was empowered to convert this CMA No.723/09, under Section 151 CPC, into an application under Section 265 of the Ordinance as admittedly no application in this regard was given by the respondent. A perusal of Section 151 CPC reveals that such Section gives ample power to a Court to make such order as may be necessary to meet the ends of justice looking at the facts and circumstances of the case. Now if a close look at the facts of the present case is taken it would be seen that serious allegations of misappropriation and manipulation have been raised by the respondent which require thorough investigation into financial affairs of the company which could only be done by appointing a person having sound knowledge of the subject to dig out true affairs of the company. Hence, in our considered opinion, in view of the peculiar facts of the case it was necessary for the ends of justice to appoint an Inspector and in our considered view the learned Single Judge was justified in accepting the said request by accepting the said application filed by the respondent. Regarding submission of the learned counsel that the learned Single Judge had no authority under the provisions of Section 151 CPC to have appointed an Inspector which could only be done by way of an application under Section 265 of the Ordinance, suffice it to observe that Section 151 CPC signifies inherent powers to a Court in order to do complete administration of justice to pass such orders as may be necessary to meet the ends of justice. The Courts are empowered under the said Section to pass such orders which are necessary to do substantial justice between the parties subject to the condition that Court not to act upon something which is specifically prohibited by express words in this regard. The words “as may be necessary for ends of justice” used in the said Section are quite significant and empower the Court to make such orders as may be necessary for ends of justice.

15. At this juncture, we would like to reproduce hereinbelow a judgment of this Court given by Mr. Justice Mujeebullah Siddiqui (as he then was) in the case Government of Sindh Vs. Sirtaj Bibi (PLD 2001 Karachi 442) wherein the learned Judge has observed as under:-

“It is the duty of the Judges to apply law, not only to what appears to be regulated by their express proposition, but to all the cases to which a just application of them may be made and which appeared to be comprehended either within the express sense of law or within the consequences of achieving the ends of justice.”

“From the principles laid down in the above judgments I find no hesitation in holding that this Court is fully competent to pass an appropriate order to achieve the ends of justice and prevent the abuse of the process of law. Ends of justice should not be defeated or crucified at the altar of technicalities. The Court can always exercise its inherent powers to do the complete justice in accordance with the principles of equity and good conscience. This Court is not only the Court of law but is Court of equity and justice as well. Until and unless any course is specifically prohibited in the Code of Civil Procedure or any other statute law, this Court is fully competent to adopt the course which serves the ends of justice and prevents the perpetuations of injustice. The absence of any specific provisions and technicalities should never be treated as insurmountable hurdle in the dispensation of justice.

16. Allegations for manipulation of accounts is a matter of investigation which has to be determined on the basis of the documents which needs a thorough investigation. While investigating the matter by the Inspector both the parties would have a fair chance to prove, with the help of the documents, to repel the allegations leveled upon them. In the decision given by the Hon’ble Supreme Court of Pakistan in the case of Brothers Steel Ltd. and others Vs. Mian Mirajuddin and 15 others reported in PLD 1995 S.C. 320 the Hon’ble Apex Court has observed as under:-

“In proceedings under section 265 of the Companies Ordinance, 1984, full-fledged inquiry in the form of a trial, is not required to be held nor any formal evidence is, to be recorded before passing the order under section 265 of the Ordinance, The court has to only satisfy itself prima facie, of course, on the basis of the material placed before it, that a case for investigation through an Inspector is called for and it is for the Inspector to ascertain and determine the truth or otherwise of the allegations during the investigation 'to be conducted by him where after he has to submit report to the concerned authority. The matter in fact rests in the discretion of the Court, to be decided after following the summary procedure as laid down in section 9 of the Ordinance.”

17. Learned counsel for the Appellant was not able to point out that the learned Single Judge in this regard had acted arbitrarily as serious allegations of manipulation of accounts was raised in the case, which surely was a matter of investigation. It is also a well settled proposition of law that if a Court is satisfied that prima facie a case of investigation is made out, the discretion rests with the Court to either give directions for appointment of an Inspector or not and this exercise of jurisdiction is not open to any exception, as held by the Hon’ble Supreme Court in the case of Brothers Steel relevant extract of which has already been quoted supra.

18. We do not find ourselves to be in agreement with the contention that by referring the matter to the Inspector fundamental rights of the Appellants have been infringed as the Respondent being a Chairperson of the company and having 22% shareholding in the company has the right to know the financial status of the company and has the right to enquire from other shareholders about the financial status of the company and no fundamental right in this regard has been infringed. It is a trite proposition of law that shareholder of a company has a legal right to know about the affairs of the company as shareholders are infact the stakeholders of a company.

19. The upshot of the above discussion is that we dismiss this High Court Appeal and uphold the order of the learned Single Judge. The SECP is directed to appoint a competent person as an Inspector to inspect the accounts of the respondent company from 2007 onwards. Let a copy of this judgment be sent to the Chairman SECP for doing the needful. The learned Chairman is also directed to appoint an Inspector within 15 days of receipt of this order. The SECP may give such instructions, if deemed necessary, for the expeditious submission of the report by the Inspector, keeping in view the facts and circumstances of the case.

20. We may at this stage observe that winning or losing is a part of the game what matters is how you play the game and we would like to compliment the learned counsel for appellant for preparing his brief perfectly and providing invaluable assistance to this Court.

21. This High Court Appeal is disposed off in the manner prescribed hereinabove.

JUDGE

Karachi.

Dated: _____ June, 2011.