1. This is a suit for declaration and perpetual injunction through which the following reliefs have been sought:-
(a) Declare that the Resolution of the defendant No.1 (Annex F) is arbitrary, illegal, void ab initio and without any lawful authority or legal effect whatsoever.
(b) Declare that Annexure F has been issued without lawful authority and is of no legal effect.
(c) Declare that the plaintiff No.1 continues to be a member of the defendant No. 1.
(d) Direct the defendant No.1 to admit/register the name of the plaintiff No.2 as its member in substitution of the plaintiff No. 1.
(e) Declare that section 14 of the Act. 1951, is discriminatory and violative of Article 25 of the Constitution.
(1) Declare that rule 3(c)(i) of the rules, 1971. is ultra vires the Constitution of Pakistan as well as the Ordinance, 1969, and has no validity whatsoever.
(g) Grant permanent injunction restraining the defendant No.1 directly or indirectly through its Board, management, committee, agents, representatives, servants, employees or any other person from passing any order or taking any action in pursuance of or giving effect to Annexure "F" and from interfering in any manner whatsoever with the membership rights or interests of the plaintiff No.1 and the normal incidents thereof or from conveying/transferring the same to any person other than the plaintiff No.2 or from creating third party rights/interests in any manner whatsoever.
(h) Any other relief which this Hon'ble Court deems just and proper in the circumstances of the case.
(i) Grant costs of this suit.
2. The case of the plaintiffs as disclosed in the plaint is that plaintiff No.1 is a citizen of Pakistan. His father was one of the founding directors of Karachi Stock Exchange (Guarantee)
3. Limited/defendant No. 1. The plaintiff No.1 also acquired the membership of defendant No.1 in the year 1955 and his membership number is 157. In the year 1959 the plaintiff No.1 acquired citizenship of United States and presently riding there. However, his name continued to appear in the list of the members published in the official diary of defendant No.1 till December, 1997. He has further stated that he never renounced or surrendered his Pakistani Citizenship and continues to remain a citizen of Pakistan and holds a valid and subsisting Pakistani Passport bearing No.F 071116 dated 25.3-1998 issued by the Consulate of Pakistan at New York. He also bears National Identity Card No.510-34- 381627. On 16th June 1997 he sent a written request to defendant No.1 for reactivation of his membership. Defendant No.1, however, desired that a letter in the format approved by it be issued by the plaintiff No. 1. Such compliance was made on 16th July, 1997. By a letter dated 10-11-1997 defendant No.1 informed the plaintiff No.1 that in order to process his case further it needed evidence of his Pakistani nationality and original membership certificate. Plaintiff No. 1 vide his letter dated December 4, 1997, requested the defendant No.1 to issue a duplicate membership card as its original was lost/misplaced. However, a copy of N.I.C. was enclosed. The plaintiff No.1 further requested the defendant No.1 to send his representative to New York to meet the plaintiff No.1 at his expenses. Messrs Haji Ghani, Vice-President of defendant No.1, and Muhammad Yaqoob Memon, General Manager of defendant No. 1 visited. New York on May, 4. 1998. and .met the plaintiff No.1 who produced all documents relating to his Pakistani nationality before them, who appeared to be completely satisfied. However, at their instance the plaintiff No.1 also gave a declaration and an indemnity bond. Despite the above stated position, a letter dated April 28, 1999, was received by plaintiff No.1 from defendant No.1 stating therein that being a citizen of the United States the plaintiff No.1 could not retain dual nationality as he is no longer a citizen of Pakistan. As such, under rule 3(c)
(i) of the Securities and Exchange Rules, 1971, the plaintiff No.1 has ceased to be its member and his name has been removed by the Board of Directors from the membership register vide resolution passed in a meeting held on 8-4-1999.
4. The plaintiff No.1, therefore, challenged such action on the part of defendant No.1 by stating it to be illegal, arbitrary and discriminatory as in other cases citizens of Pakistan who had acquired Untied States citizenship were allowed by defendant No.1 to transfer their membership case of Mr. Yousaf Haroon was cited who was allowed to transfer his membership in 1997 long after having acquired US citizenship whereas due to such arbitrary decision of the plaintiff No.1 has become handicapped to transfer his membership in favour of plaintiff No.2 who is his nominee. It was categorically stated that defendant No.1 has not framed any regulations to provide that on acquiring foreign national citizenship, the membership of a member will be suspended or, he shall cease to hold the same.
5. The plaintiff No.1 claimed that membership of defendant No.1 is in the nature of proprietary rights and Constitutional accords. He stated to have served the defendant No.1 with a legal notice through his lawyer, but to no avail, however he filed this suit for the above referred reliefs.
6. In its written statement defendant No.1 did not dispute that plaintiff No.1 had been admitted as a member of defendant No.1 in the year 1955 under Membership No.157 but disputed his right to retain the same amongst others on the ground that plaintiff No.1 is not the sole legal heir of his father Miswa njee Bomanjee Dalai but there are other legal representatives and that at the time of becoming a member, the plaintiff No.1 had submitted a declaration according to which plaintiff No. I was supposed to carry on business of Stock Brokerage in partnership with his father and, as such, he alone has no right to sue in this respect. The act of termination of the membership of plaintiff No.1 has been justified by stating that plaintiff No. 1 has no vested right to take over the membership from plaintiff No. 1. It is not-dented that in response to the request made by the plaintiff No.1 asking the defendant No.1 to depute some of his representative to visit the plaintiff No.1 in United States at the latter's expenses, two of its nominees went to USA and met the plaintiff No. 1. The main defence taken is that in the year 1991, the Board of Directors of defendant No.1 reviewed the cases of those members who were not traceable and their whereabouts were not known or had either expired or migrated from Pakistan and eventually show-cause notices were being issued to them. Plaintiff No.1 was also issued a show-cause notice dated February 11, 1991, which was received back undelivered with the postal remarks that there was no such person living at the address. In response to the letter from plaintiff No.1 to reactivate his membership, defendant No.1 requested the plaintiff No.1 to submit details of his present status of nationality/citizenship and make him available before the Board of Directors of defendant No.1 but the Plaintiff No.1 did not come over there. In view of the request made by plaintiff No.1 that he was unable to travel, two representatives of the defendant No.1 called on him in United States and found him hale and hearty. Appearance of plaintiff No. l's name in official diary was not disputed with a clarification that his membership remained suspended from 11-2-1991. Lastly, it has been stated. that clarification was sought from Ministry of Interior, Government of Pakistan, who confirmed on 19-8-1998 that a Pakistani cannot continue or retain his Pakistani citizenship on acquiring the citizenship of United States. Regarding issuance of passport it is stated that the same was obtained by plaintiff No.1 on the basis of national identity card. It is further stated that renunciation of Pakistani citizenship by plaintiff No.1 was not necessary as according to section 14 of the Citizenship Act, 1951, a person on acquiring the citizenship of another country automatically ceases to be a citizen of Pakistan and dual nationality is not permissible under section 14 of the Citizenship. Act, except in cases where a Pakistani national acquires nationality of the United Kingdom and the countries which were former British Colonies. It is stated with vehemence that the name of plaintiff No.1 was rightly removed from the membership roll of defendant No.1 and he has no right to file ' this suit. Legal pleas such as maintainability of suit, etc. have also been taken.
7. Defendant No.2 was debarred from filing the written statement vide order dated 14-3-2001, as no written statement was filed despite repeated chances. In view of the pleadings of the parties following issues were framed on 27-2-2002:-.
(1) Whether the suit is bad for non-joinder of proper and necessary parties viz. Mr. Miswanjee Bomanjee Dalai and/or his legal representatives and the Securities and Exchange Commission of Pakistan?
(2) hether the relief of perpetual injunction is barred under section 54 of the Specific Relief Act, 1877?
(3) Whether the plaintiff No.1 has the sole interest in the Membership No.157 of the defendant No.1?
(4) Whether there is any privity of contract between the plaintiff No.2 and the defendant No.1? If not, whether the plaintiff No.2 has any right to sue or any cause of action in her personal capacity?
(5) Whether the plaintiff No.1 continues to be a citizen of Pakistan? If not, what is its effect?
(6) Whether the National Identity Card and Pakistani Passport were validly issued to the plaintiff No 1? If so, whether these can confer Pakistani Citizenship; upon the plaintiff No.1?
(7) Whether the plaintiff No.1 continues to be a member of the defendant No.1 under the Membership No:157?
(8) Whether the plaintiff No.1 has the right to nominate the plaintiff No.2 for transfer of his membership?
(9) Whether citizenship is a pre-condition for holding property under Article 24 of the Constitution 1973:?
(10) Whether rule 3(c)(i) of the Securities and Exchange Rules, 1971 is inconsistent and ultra vires the provisions of sections 33 and 34 of the Securities and Exchange Ordinance. 1969 as well as the Constitution 1973?
(11) Whether the Securities and Exchange Ordinance. 1969 and the Rules of 1971 framed under it, apply prospectively and not retrospectively?
(12) Whether the plaintiff No. I could lawfully seeks the transfer of his membership to the plaintiff No.2?
(13) Whether the Resolution dated 8-4-1999 issued by the defendant No.1 is arbitrary, discriminatory, illegal. void ab initio and has been issued without lawful authority?
(14) Whether section 14 of the Pakistan Citizenship Act 1951 is discriminatory and in--violation of Article 25 of the Constitution 1973?
(15) What should the decree be?
8. In the meantime, an application (C.M.A. No.1208 of 2004) was filed on behalf of the plaintiff suggesting certain preliminary issues which if taken up and decided earlier, will set at rest the entire controversy. Such prayer was objected by defendant No.1, however by an order dated 29-4- 2004 following preliminary issues were framed by this Court and the matter was fixed for hearing of the same:
(i) Whether effect of Notification dated 29-8-2002 issued by the Ministry of Interior, Government of Pakistan is prospective in operation or otherwise, if so to what effect?
(ii) Whether the impugned Board Resolution dated 8-4-1999 (Annexure "F" of plaint) is contrary to settled law as well as Notification dated 29-8-2002 issued by the Ministry of Interior, Government of Pakistan? If yes, its effect?
(iii) Whether the plaintiff No.1 could lawfully seek the transfer of his membership to any other person including the plaintiff No.2?
9. I have heard Ms. Sana Minhas for the plaintiffs and Ms. Lubna Aman for defendant No.1 my findings on the above referred preliminary issues are as under:- Preliminary Issues Nos.(i) and (ii).----Since the preliminary issues Nos.(i) and (ii), appear to be inter-connected and since decision on preliminary issue No.(ii)shall mainly depend upon the decision of preliminary Issue No.(i), hence I propose to decide both these issues together.
10. Admittedly under section 14 of the Pakistan Citizenship Act. 1951, as before its amendment in 1972 there was no concept of dual citizenship. However, as a result of Amendment introduced through subsection (3) of section 14 which provided that "Nothing in subsection (1) shall apply, or shall be deemed to have applied at any stage, to a person who, being or having at any time been, a citizen of Pakistan is also the citizen of the United Kingdom and colonies or of such other country as the Federal Government may. by Notification in the official Gazette specify in this behalf", the law was changed so far the countries specified hereinabove but United States of America was not included.
11. Admittedly, the plaintiff No. 1 has acquired citizenship of United States in the year 1959 and, as such, according to defendant No.1, he has ceased to be a citizen of Pakistan and consequently, its member under rule 3(c)(i) of the Securities and Exchange Commission Rules, 1971 which while dealing with the qualifications for stock exchange membership, etc. has clearly laid down that a member shall cease to be a member, if at any time, he ceases to be a citizen of Pakistan. However, proviso to this rule has provided certain further protection to such person, as the membership of a member in case of a stock exchange functioning immediately before commencement of the said rules, which came into force on 19th March, 1971, and was not a citizen of Pakistan at the relevant time shall become suspended and shall remain so suspended until he became a citizen of Pakistan. It shall be beneficial to reproduce the said provision of law hereinafter, for ready reference:-
(3) Qualification for stock exchange membership etc.--- (a)
12. (b)
(c) A member shall cease to be a member if, at any time,---
(i) he ceases to be a citizen of Pakistan: Provided that, in the case of a stock exchange functioning immediately before the commencement of these rules, the membership of a member thereof who is not a citizen of Pakistan shall become suspended on such commencement and shall remain so suspended until he becomes a citizen of Pakistan: or (ii)
13. (iii)
14. It is not dispute that the name of plaintiff No.1 was removed from the membership register of defendant No.1 with effect from April '8, 1999 when a resolution was passed by its Board and the only reason assigned therein is that plaintiff No.1 has not been able to substantiate that after acquiring citizenship of United States of America. he continued to be a citizen of Pakistan and, since he could not retain dual nationality and since he was no longer a citizen of Pakistan hence he ceased to be a member of Karachi Stock Exchange under rule 3(c)(i) (supra). His seat was declared (having fallen vacant. The defendant No.1 has supported its decision in view of a reply from the Ministry of Interior and Narcotics Control (Interior Division) Government of Pakistan dated 19th August, 1998 received in response to a query made as to "whether a Pakistani National can continue to retain his citizenship on acquiring citizenship of the United States of America" which , clarified that, "a Pakistani cannot continue OR retain his Pakistani citizenship on acquiring citizenship of the United States of America".
15. However, it is not denied that on 29th August, 2002, in exercise of the powers conferred by subsection (3) of section 14 of the Pakistan Citizenship Act, 1951, the Federal Government has issued a notification specifying United States of America to be one of the countries referred to in that section which, inter alia, provided that nothing in subsection (1) shall apply or shall be deemed to have been applied at any stage, to a person who being, or having at any time been, a citizen of Pakistan, is also citizen of United Kingdom and Colonies or of such country as the Federal Government may, by Notification in the official Gazette specify in this behalf. Since United States of America has been vide Notification dated 29th August, 2002, as referred to above, hence the plaintiff No.1 has become entitled for dual citizenship i.e. of Pakistan as well as USA.
16. The plaintiff acquired the citizenship of United States of America in 1959 and, as such, till 29th August, 2002 he had ceased to be a citizen of Pakistan though he claims to have not renounced the citizenship of Pakistan. The Securities and Exchange Rules, 1971 came into force w.e.f. 19th March, 1971 hence in view of the proviso to rule 3(c)(i) of the said rules, the membership of the plaintiff No.1 stood suspended till 29th August. 2002 but, in the meantime, his membership was terminated by the Board of the Directors defendant No.1 vide their resolution dated 8th April. 1999.
17. Now the point which requires consideration is, whether the Notification dated 29th August, 2002 issued by the Federal Government under subsection (3) to section 14 of the Act, prospective in nature or otherwise.
18. An identical point arose in the case of Umar Ahmad Ghumman v. Government of Pakistan (PLD 2002 Lahore 521). After examining the relevant provisions of law at length Mr. Justice Tassaduq Hussain Jillani (as his Lordship then was) came to the conclusion That the legislature intends that the citizens of Pakistan were allowed to retain their original nationality notwithstanding the acquisition of citizenship in another country is manifest not only from the parliamentary debate referred to in the preceding paragraphs. the reading of subsection (3) of section 14 of the Pakistan Citizenship Act. sn also from the contents of section 14-A, apart from the comments submitted by the Ministry of Interior and statement by its official while appearing before this Court is reproduced hereinafter: A careful reading of section 14-A would indicate that a citizen of Pakistan living abroad was required to renounce Pakistani citizenship only in case it was a condition precedent for acquisition of citizenship of a foreign country concerned and not otherwise. Subsection 1(b) to section 14-A(1)
(b) provides that a citizen of Pakistan shall cease to be a citizen of Pakistan if he "has been given by the competent Authority of another country any valid document assuring him of the grant of the citizenship or nationality of that other country upon renouncing his citizenship of Pakistan".
19. Ms. Lubna Aman, learned counsel for the defendant No.1, has vehemently urged that the above referred amendment in section 14 of the Act is not retrospective and it shall come into force only from the date when the said Amendment was introduced. She has further argued that it is a past and closed transaction as the plaintiff No.1 has ceased to be a member and his seat was declared vacant vide resolution dated April 8, 1999 whereas the Amendment conferring dual citizenship with reference to Untied States of America was introduced in 2002. She further argued that the plaintiff No.1 failed to produce any evidence despite personal hearing granted to him at New York by two nominees of the Board of Directors that after acquiring citizenship of United States, he continued to be a citizen of Pakistan. On the contrary he was fully aware that after having become a citizen of United States of America he could not retain dual nationality and, as such, could no longer be a citizen of Pakistan.
20. In support of her contention that it is a past and closed transaction learned counsel has referred to Alsamraz Enterprise v. Federation of Pakistan (1986 SCMR 1917) so also the Chief Land Commissioner, Sindh and others v. Ghulam Haider Shah and others (1988 SCMR 715). She has further placed reliance on Pakistan Steel Mills Corporation v. Muhammad Azam Katper (2002 SCMR 1023) and Malik Asad Ali and others v. Federation of Pakistan (PLD 1998 SC 161). The main thrust of the arguments of learned counsel is that it being a past and closed transaction has created rights in favour of defendant No.1 which cannot be taken by amendment is section 14(3) of the Citizenship Act, 1951 made in the year 2002 as the name of plaintiff No.1 stood removed from the membership register of the Karachi Stock Exchange w.e.f. 8th April, 1999 that is the date of the passing of resolution by the Board of the Stock Exchange, hence the amendment in question cannot undo the effect of the said resolution.
21. Ms. Sana Minhas, learned counsel for the plaintiffs, has argued that the plaintiff No.1 has never renounced or surrendered his Pakistani Citizenship and continued to remain a citizen of Pakistan which is evident from passport. bearing No.F071116 dated 25-3-1998 issued by the Consulate of Pakistan at New York and copy of. the National Identity Card bearing No.510-34-381627 issued on 27-5-1997, copies whereof have been placed on record. Learned counsel has further argued that even if the plaintiff No 1. ceased to be citizen of Pakistan, his citizenship stands restored and under the amended law he shall be deemed to have been a citizen of Pakistan for all intents and purposes and it cannot be deemed to be a past and closed transaction.
22. In support of her contentions learned counsel has argued that dual nationality with USA was always permissible and it was not introduced for the first time through the Amendment in the relevant law in August, 2002. She further contended that there has never been a prohibition under Pakistan Citizenship Act, 1951 against dual nationality with USA. She has referred to Umar Ahmed Ghumman's case (PLD 2002 Lahore 521) and argued that the position of the law has been clarified and no new law has been laid down, Learned counsel has further argued that proviso to rule 3(c)(i) of the Securities and Exchange Rules, 1971 confers the maximum powers to suspend the membership until he becomes a citizen of Pakistan therefore the removal of the name of the plaintiff from the register of membership of the Stock Exchange/defendant No. is an access of authority and power. Learned counsel has further argued that there is much difference between suspension and removal which are too different and separate legal concepts with altogether different consequences. In support of her contentions learned counsel has further placed reliance on Mehreen Zaibunnissa (PLD 1975 SC 397) and Molasses's case (1993 SCMR 1905). Learned counsel has further argued that even otherwise a beneficial notification is always in retrospective in effect as held in Army Welfare case (1992 SCMR 1652) which was followed in Gatron Industries v.
23. Government of Pakistan (1999 MLD 2994).
24. I have given due consideration to the arguments of the IA learned counsel for the parties and perused the case-law cited at the bar. There is no cavil with the well-settled proposition of law that no statute shall be construed so as to have a retrospective action, unless its language is so plain to require such construction and in the absence of any specific intention of the legislature it could not have retrospective operation. There can be no two opinions that rights created in favour of a party cannot be demolished through Amendment in law. However, the Notification dated 29-8-2002 is to be examined on the touchstone of the principles of interpretation of law so as to find out whether it is prospective in operation or otherwise, if so to what extent. As a result of amendment in section 14(3) of the Act it is manifest that till August, 2002 no such Notification was issued by the Federal Government including United States of America as one of the countries specified under section 14(3) of the Act. Language of section 14(3) of the Act clearly shows that it is retrospective in effect and the addition made vide notification dated 29th August, 2002 will be read as dating back to the year 1972 when section 14(3) was inserted in the Act for the first time.
25. I am, therefore, of the considered view that Notification dated 29-8-2002 as referred in preliminary Issue No.(i) is retrospective in operation and shall be deemed to have taken effect from 1972 as and when subsection (3) was added in section 14 of the Act.
26. Indeed, the Resolution of the Board dated 8-4-1999 was passed when the Notification dated 29-8- 2002 was not in the filed, but the fact remains that under rule 3(c)(i) of the Securities and Exchange Commission Rules, 1971 the power which could be exercised by the defendant No.1 were to the extent of suspension of the membership of a member as the proviso to said rules clearly provides that the membership of a member in the case of Stock Exchange functioning immediately before the commencement of said rules shall become suspended on commencement of such rules and shall remain so suspended until the said member became a citizen of Pakistan. Termination of the membership of plaintiff No.1 was thus void ab initio and in view of Notification dated 29th August, 2002 his membership stood revived. This issue is replied accordingly.
27. As a result of discussion made above it is held that the Notification dated 29-8-2002 is retrospective in operation and the order of termination of membership of plaintiff No.1 is illegal, void and without any lawful authority.
28. Issue No. (iii).---With reference to this issue Ms. Lubna Aman learned counsel for defendant No.1 has vehemently urged that recording of the evidence is necessary more particularly on Issue Nos. 1 to 8, 12 and 13. She has referred to the preliminary objections raised in the written statement in which the identity of plaintiff No.1 was challenged by defendant No. 1. The factum of power of attorney on the basis of which the suit has been filed has also been called in question. I find force in this contention that in order to resolve such controversy evidence is necessary. While deciding Preliminary Issue No.(iii) I will order that the case shall be set down for recording evidence on this preliminary issue, as well as other issues, if the parties so desire whereafter the suit shall be decided as a whole. Since it is a matter pertaining to the year 1999 and sufficient time has passed hence I would direct that the parties shall adduce their evidence within six months from the date of this order, whereafter the competence of plaintiff No.1 to transfer his membership in favour of plaintiff No.2 will be decided. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.