1. ' MUNIB AHMAD KHAN, J.---This J.M. Has been filed under section 152 of the Companies Ordinance with 'the prayer that' the directions may be issued to the respondent-Bank to transfer its 2,69,894shares in the name of Central Depository Company of Pakistan (CDC) for the account of petitioner, and should also release accrued unpaid dividend etc. On them. The case of the petitioner is that he is a Member of Karachi Stock Exchange (KSE), in the course of its business as Broker, it sold out 9,80,500 shares of the respondent (MCB) belonging to its client Haji Abdul Razzak of ARY Traders during the period of March, 1997 to September, 1997 and sale proceeds were delivered to him. However, when some of those sold shares were lodged by various purchasers with the respondent, with Transfer Deeds, then the respondent refused to transfer, on the ground that those shares could not be transferred as they were belonging to Haji Abdul Razzak and others and a case under the Offences in Respect of Banks (Special Court) Ordinance, 1984 has been lodged and pending. On the other hand, KSE enforced its rule 26-A of the Ready Delivery Rule and Regulations, it purchased 2,69,894 shares of MCB for a sum of Rs,10,530,848 from open market on petitioner's account for the purposes of replacement to claimants and petitioner was made to make such payment and to receive back the share certificates, which were refused by the respondent to register. Detail of these shares has been filed as Annexure "E" with the plaint. The contention of the petitioner is that it transacted the shares of Haji. Abdul Razzak in a bona fide manner, as per routine of business, as the same were accompanied by, duly verified Transfer Deed and same are traded in KSE. The said shares contain no restriction nor there was any directions in that respect, therefore, respondent was duty bound to transfer and since it has failed, therefore, this petition has been filed.
2. ' The Additional Registrar of Companies--hi filed comments but these are not material, as there 'appears to be no involvement of it.
3. ' The respondent (MCB) has objected to the petition on the ground of jurisdiction, as according to it, two F.I.Rs,, bearing F.I.R.
4. No,5 of 1997, dated 22-1-1997 under section 409/34, P.P.C. Read with section 5(2) of Prevention of Corruption Act, 1947 and another F.I.R.
5. No,6 of 1997, dated 30-1-1997 under section 408/420/458/471, P.P.C., have been registered against Mr. Hussain Lawai, former President of MCB and Messrs ARY International Exchange Dubai, proprietor whereof Haji Abdul Razzak and since offences in both F.I.Rs, are schedule offences, falling under the domain of Ordinance, 1984, therefore, Special Court has taken jurisdiction. It has further been submitted that the shares in question were transacted during March, 1997 to September, 1997, while, the F.I.Rs, were registered earlier and cognizance was taken by the Special Court on 18-2- 1997. It has further been submitted that section 7 of the Ordinance, 1984 prohibits transfer of any property of the accused without previous permission of the Court, and if sold, then the sale shall be void and for the said reason, the respondent declined to transfer the share of accused Haji Abdul Razzak.It has further been submitted that KSE, to pressurize the respondent, wanted to stop transactions of respondent's shares, hence in a suit, Hon'ble Court passed restraining order whereby direction of KSE, dated 28-10-1997 was suspended.
6. ' In addition to above pleadings, the parties have filed statements and objections through which detail of above F.I.Rs,, as well . As proceedings before the Special Court (Offences in Banks) has been highlighted and record of certain other proceedings has been brought on this case file.
7. ' Learned counsel for the parties have argued their case, the main contention, which is coming out of the pleading/arguments is as follows:- "Whether the petitioner transacted the shares of the respondent (MCB) registered in the name of Haji Abdul Razzak in good faith, in its routine business and without any information about the registration of F.I.Rs,, was entitled to reimbursement of the amount, it spent on purchasing of shares? And what are the effects of section 7 of the Ordinance, 1984."
8. ' The above contention needs no evidence, as all the documents including registration of F.I.Rs, and sale of disputed shares are not assailed. The petitioner has submitted that the respondent cannot refuse registration and mutation of the shares on the ground of lodging of F.I.Rs, as in F.I.R. No, 6 of 1997, name of Haji Abdul Razzak does not appear and even in the interim charge-sheet, dated 17- 2-1997 his name has not been mentioned. It is submitted that in that case, warrants were only .Issued against Hussain Lawai, the Ex-President of MCB and that is why only through supplementary interim charge-sheet, dated 8-5-1998, when the name of Haji Abdul Razzak was brought on the case file of the Special Court, therefore, pendency of F.I.R. No, 6 of 1997 before Special Court cannot be a ground. Learned counsel has further submitted that Haji Abdul Razzak was also not nominated in F.I.R. No, 5 of 1997, which was registered on 22-1-1997 but was brought on record through interim charge-sheet on 3-2-1997. A case was registered on 15-2-1997 when NAB was issued against him, while, first appearance of Haji Abdul Razzak in that Case, bearing No, 12 of 1997, was on 26-8-1997 on which date application for recalling NBW against him was filed. He has submitted that accused Haji Abdul Razzak was surfaced in F.I.R. No,5 of 1997 (Case No,12 of 1997) on 26-8-1994, and in F.I.R.
9. No, 6 of 1997 (Case No, 14 of 1997) on 3-5-4998 and both the dates are much beyond the last sale date of shares i,e, 17-7-1997, on which date some disputed shares were sold and it can safely be said that petitioner or the purchaser through it, had no intimation regarding pendency of any case, therefore, respondent was not justified to refuse the transfer of share on the ground, which was not available to it. The petitioner has also argued that without prejudice to the above arguments, the respondent could notrefuse registration and transfer of the shares in the name of purchaser as it filed Suit No, 1467 of 1997, when KSE placed certain restrictions on it and in that suit, it has also filed copy of a letter sent by it to its Registrar, whereby Registrar was directed not to transfer the shares of Haji Abdul Razzak without obtaining prior approval from it. He has further submitted that the said letter can be an internal arrangement but despite .The fact, that respondent was aware that transaction of its shares is going on in KSE daily as per routine and numerous shares were transacted, therefore, it would have also intimated KSE so that, information would have been circulated amongst its members but that has not been done purposely and by not doing so it has impliedly consented to dealing of shares of Haji Abdul Razzak and now it cannot object to transfer.
10. Learned counsel has further submitted that claim of MCB in respect to the shares of Haji Abdul Razzak has not been considered in toto, as in its Suit No, 1647 of 1997, filed against Haji Abdul Razzak, on C.M.A. No, 1674 of 2003 it has been directed this Court that 'MCB (plaintiff in that suit) should deposit dividend and bonus shares with the Nazir. Learned counsel has further submitted that by the time Haji. Abdul Razzak instructed petitioner to sell his MCB's shares, there was no intimation to him about any F.I.R. And even till last date of transaction of shares by the petitioner, dated 17-7- 1997, neither he nor purchasers were aware. Learned counsel has referred case of Asfandyar Wali v.
11. Federation of Pakistan PLD 2001 SC 607 and has stated that section 23 of the National Accountability Ordinance, 1999 is similar to section 7 of the Ordinance, 1984 and the decision of Hon'ble Court in that case has although upheld section 23 of National Accountability Ordinance, 1999 and declared it not violative to. Articles 23 and 24 of the Constitution, but it can be inferred from the said judgment that notice of restraint to the effective person was necessary. He has submitted that keeping in view the attitude and conduct of the respondent, itself, section 7 of the Ordinance, 1984 was not applicable.
12. ' On the other hand, Mr. Rizwan Ahmed Siddiqui, learned counsel for the respondent, has .Submitted that since F.I.R. No, 5 of 1997 was registered on 22-1-1997, under section 409/34, P.P.C. And another F.I.R. No, 6 of 1997 on 31-1-1997 under sections.408/420/468/471, P.P.C., being scheduled Offences in Respect of the Banks (Special Court) Ordinance, 1984 and cognizance was taken, therefore, any.
13. Transaction in respect to property of the accused was prohibited under section 7 of the said Ordinance, 1984, until permission is given by the trial Court. He has further submitted that Ordinance,- 1984 is Special Law and restrict transfer of property of accused person or even of its relative, as defined under the, said Ordinance, without permission of the Court and that law does not require that any intimation should be given to accused person or to the concerned' agency and in the instant case to KSE. He has argued that Special Law is to be followed strictly in thelight of Reference No,1 of 1988, made by the President of Pakistan, under Article 186 of the Constitution, reported in PLD 1989 SC 75 as well as case of Mst. Imam Bibi v. Allah Ditta and others PLD 1989 SC 384 and Khan Asfandyar Wali v. Federation of Pakistan, PLD 2001 SC 607 and submitted that certain restriction placed by the statute are necessary to maintain status quo in respect to the property, which may be subjected to the decision of the Court, otherwise, whole exercise by the trial Court would be redundant. He has further submitted that the same view also find support from the case of Naya Daur Motors (Pvt.) Limited v. Federation Investigation Agency, CBC, 2000 M LD 1384. He has submitted that. F.I.R.No, 5 of 1997 was registered on 22-1-1997 against Hussain Lawai and ARY Internaiional Exchange Dubai and since the latter is under the proprietorship of Haji Abdul Razzak,.Therefore it cannot be said that his name was missing or he was not involved. He has further submitted that according to the petition, transaction of the shares of Haji Abdul Razzak was effected between March to September, 1997, while, both the F.I.Rs, were registered prior to that and that Haji Abdul Razzak through Advocate was appearing in Lahore High Court in Writ Petitions Nos.
14. 17163 of 1997 and 17166 of 1997, therefore, even knowledge cannot be denied prior to sell, when there is admitted litigation. He has further submitted that since KSE was putting pressure on the respondent to transfer the shares of Haji Abdul Razzak, therefore. Suit No, 1467 of 1997 was filed and restraining orders were passed. He has further submitted that another Suit No, 1674 of 1997 was filed by the respondent against Haji Abdul Razzak in which certain directions have been gassed by this Court, regarding deposit of dividend and bonus shares with the Nazir of this Court but Haji Abdul Razzak has not been allowed to take the disputed shares. He has submitted that since the shares of Haji Abdul Razzak are disputed shares, which status was acquired by them immediately after lodging of first F.I.R. In January, 1997, hence further investigation under section 152(3) of the Companies Ordinance, 1984 is needed. In support of his contention he has relied upon the cases of 2005 CLD 30 Rauf Bakhsh Kadri and others v. Messrs National Technology Development Corporation Ltd. And others 2005 CLD 747 and Mian Javaid Amir and others v. United Foam and others, 2005 CLD 1291.
15. ' After hearing the arguments, advanced by the learned counsel for the parties, the, basic point coming for consideration is as to what are the effect of section 7 of the Ordinance, 1984 and if an accused alienates his properties without any notice of cognizance, taken by the Special Court under the said Ordinance then what will be the fate of those properties. It is an admitted position that Haji Abdul Razzak is holding certain shares of MCB (respondent) but when those shares were sold through petitioner to third parties, the respondent refused to registerthe transfer on the ground that since those shares belong to an accused person, facing trial under Ordinance, 1984 before the Special Court, therefore, the same cannot be transferred. From the record, presented by the parties, it appears that there are two F.I.Rs, Nos. 5 of 1997 and 6 of 1997, lodged on 22-1-1997 and 30-1-1997 respectively. In F.I.R.No, 5 of 1997, the name of the accused has not been mentioned but in the charge-sheet, dated 3-2-1997, while F.I.R. No, 6 of 1997 was registered on 30-1-1997 and its interim charge-sheet was submitted on 17-2-1997 but in both, name of Haji Abdul Razzak is note mentioned but name of ARY. International Exchange Dubai as accused. Apparently, the shares in the name of Haji Abdul Razzak were of MCB (respondent) and it was well aware that its shares are transacted daily in Stock Exchange of the country and same fact was also reported in electronic and print media but admittedly no intimation was sent by the respondent to KSE with specific number of shares of MCB belonging to Haji Abdul Razzak with the request that these shares should not be transacted due to pendency of case before Special Court, with the result, the KSE continued transaction and petitioner sold out 2,69,849 shares of MCB to third parties from A March, 1997 to September, 1997, as disclosed in paragraph 3 of the petition. This may be a serious fault on the professional working of the Corporate Division of respondent but this excuse or fault is to be assessed vis-a-vis section 7 of the Ordinance, 1984 and to be seen as to whether it can overpower the mandatory requirement of that section, which is reproduced as under:-- "(7) Transfer of property void. (1) After a Special Court has taken cognizance of a scheduled offence alleged to have been committed by an accused person, such person or any relative of such person or other person on his behalf shall not without the previous permission in writing of the Special Court, transfer, or create a charge on, any movable or immovable property owned by him or in his possession while proceedings are pending before the Special Court; and any transfer of or creation of a charge on, such property without such permission shall be void.
(2) Any person who transfers, or creates a charge on, any property in contravention of subsection
(1) shall be punishable with rigorous imprisonment for a term which may extend to three years and shall also be liable to fine".
16. 'Admittedly both the F.I.Rs, Nos. 5 and 6 of 1997 have been registered in January, 1997 and cognizance was taken by the Court inNo, 5 of 1997 on 3-2-1997, when interim charge-sheet was filed, while, in F.I.R. No, 6 of 1997 cognizance was taken on 18-2-1997.The said section 7 of Ordinance, 1984 is prohibitory in nature and places restriction on the transfer or creation of charge on the property, owned by an accused against whom the case has been initiated but it does not say that the notice of that case is to be sent to each and every authority, which is custodian of record of any of the property of an accused person or that this section will be effective after notice is served upon accused person. This section even places restriction on the property, which are not known to the prosecution and may come to its knowledge thereafter. The aim of this section is to forestall alienation of property of the accused so the finding of the Court may not be redundant, which can be a situation, when the property of an accused person is allowed to be transacted after registration of case. Learned counsel for the petitioner has relied upon the case of Khan Asfandyar Wali v. Federation of Pakistan PLD 2001 SC 607 but this authority is not helpful, as it does not specifically require a notice to an accused person, preceded under Ordinance 1984. There may be certain situation and, specially, keeping in view the standard of corruption with the Law Enforcing Agencies that an accused person even gets information about the opinion given for registration of F.I.R. And beforehand approach the Court for bail before arrest. It cannot be ruled out that the accused Haji Abdul Razzak might have got information about registration of F.I.Rs, as well as pendency of litigation in Lahore High Court and in a precautionary way, it planned to sell huge quantity of shares, immediately, after registration of F.I.Rs,, which otherwise, he was holding comfortably. There may be a cause between accused Haji Abdul Razzak and the petitioner but that cannot be twisted in a way to overcome mandate of section 7 of the Ordinance, 1984. In the instant matter, Haji Abdul Razzak would have been a necessary party, but is not being impleaded.
17. ' The relevant issue in this respect, as pointed out by learned counsel for the respondent, has been dealt with in Naya. Daur Motor (Pvt.) Ltd. v. Federal Investigation Agency, C.B.C., 2000 M LD 1384 from which the following paragraph is reproduced:-- "Section 7 of the Ordinance, 1984 prohibits transfer or creation of charge on any movable or immovable property owned by an accused or his relative without prior approval of the Special Court once the Court has taken cognizance of a scheduled offence and any such transaction without prior permission of the Special Court shall be treated to be void".
18. ' Keeping in view the wording of section 7 of Ordinance, 1984, the contention of learned counsel for the petitioner that said section will come into operation after notice of the pendency of case before the Special Court to the accused person cannot be accepted hence this J.M. Has no force and is accordingly dismissed.