' SYED QALB-I-HASSAN, J.---Brief facts leading to filing of this writ petition are that petitioners were authorized to deal in sale/purchase of foreign currencies coins under the name and style of Khan Money Changers, vide licence No,FEI/49/34(49)98 dated 30-9-1998, and Taha International Money Changers, vide licence No,EEI/22/34(22)-92 dated 26-11-1992, respectively by respondent No,1 and the said licences were valid up to 30-6-2004. Respondent No,2 directed, vide Circular No,6 dated 7- 6-2004, for constitution of Exchange Company "B" category and prescribe rules and regulations for exchange companies of "B" category to all the licence holders with certain terms and conditions.
The respondent No,1 further disclosed, vide circular No,EBP/3387/1(95)EC-Policy 2004 dated 25-5- 2004, that the individual licences of the existing authorized money changers would stand expired on 30-6-2004 and they would seize to function as money changers w,e,f, 1-7-2004. The petitioners in view of the above said compulsion contacted respondents Nos.4 to 6 for formation of Exchange Company and got incorporated Messrs Al-Khaleej Exchange Company, vide incorporation certificate, on 28-6-2004 having two lac share of rupees hundred each and the petitioners became the Directors of said company by acquiring forty thousand shares each of rupees hundred. After completion of the formalities respondents No,1 issued NOC for establishment of exchange company and also issued licence No,17 and allowed the petitioners to carry on the business at their respective places of business as authorized branches of Messrs Al-Khaleej Exchange Company (Pvt.) Ltd. Respondents Nos.4 to 6 with mala fide intention addressed a letter showing their intention to surrender licence No,17 issued in favour of Al-Khaleej Exchange Company and simultaneously another letter was addressed by them to respondents Nos.1 and 2 to also get opinion from the petitioners before proceeding for any final decision and the respondent Bank also intimated respondent No,4, vide its letter dated 19-5-2005 that the cancellation of the licence on their request will be considered after receipt of written consent from all the Directors of the company. However, the licence was cancelled by respondents Nos.1 and 2 without any show-cause notice or providing any opportunity of hearing to the petitioners prior to cancellation of the licence.
The petitioner with this background filed the instant writ petition and has challenged the cancellation of licence No,17 issued to Messrs Al-Khaleej Exchange Company on 29-6-2004.
2. Learned counsel for the petitioners contended that petitioners were conducting lawful business as authorized money changers for purchase and sale of foreign currency to the public and were forced to surrender their licence to form a group of five persons by incorporation of exchange company under circular No,6 dated 7-6-2004 and now petitioners could not be bound to close their business at the behest of other Directors not willing to carry on with the business for the reasons best known to them and respondents Nos.1 and 2 are at least bound under the law to issue show-cause notice with opportunity of hearing before the impugned action of cancelling of the licence of Al-Khaleej Exchange Company. The petitioners are admittedly Directors, therefore, respondents Nos.1 and 2 are bound to provide an opportunity of hearing to the petitioners as also decided. By them, vide letter No,EBD/520/25(6)ECB-2004 dated 19-1-2005. It is further contended that neither any notice was served for convening meeting of Messrs Al-Khaleej Exchange Company for moving any resolution for surrendering of the licence under Memorandum of Article and Association of Company nor respondents Nos.4 to 6 were authorized to move a resolution or address a letter to respondents Nos.1 and 2 for surrendering licence and the respondents have acted upon an unauthorized representation of the company. Learned counsel further contended that Circular No,6 and rules/regulations for exchange companies are ultra vires of the provisions of Constitution and defeats the basic spirit of basic human rights guaranteed under Article 18 of the Constitution of Islamic Republic of Pakistan and sought a direction that the impugned cancellation order of licence No,17 be declared as illegal, arbitrary and in violation of principle of natural justice with further direction to respondents Nos.1 and 2 to amend the rules and regulations and the petitioners be allowed to continue with their lawful Lade and business as provided under the law.
The petitioners have mainly sought relief against respondents Nos.1 and 2. Respondent No,2 was directed to file para-wise comments vide order dated 27-7-2005 and respondents No,2 submitted para-wise comments and contested die writ petition.
3. Learned counsel for the respondents Nos. 1 and 2 contested the writ petition and raised a number of preliminary objections. It is contended that the writ petition is liable to be dismissed for want of territorial jurisdiction as admittedly respondents Nos.1 and 2 are carrying on business at Karachi and all the orders have been passed and actions have been taken at Karachi, therefore, the Islamabad High Court, Islamabad has no territorial jurisdiction in the matter. On merits learned counsel contended that on 16-10-2004, Muhammad Saeed Rana, Chairman, Mirza Mubeen Baig and Raja Anwar Directors of the company informed the respondents that Malik Ghulam Farid is out of Pakistan for the last two three months without any intimation to them and the other Director Javed Khan is in jail. They further disclosed that they are not running any joint account in the name of Messrs Al-Khaleej Exchange Company and opted to surrender the licence issued to Messrs Al- Khaleej Exchange Company. The above said Directors have not submitted NOC and licence issued to the company, therefore, they were called upon to tender NOC and licence which was subsequently surrendered by them. It is further contended that under the rules and regulations at least five money changers were required to form one exchange company of "B" category and since three directors have requested for the cancellation of licence, therefore, there was no such ground for continuation of operation by the company however, the respondents again wrote a letter to the company to ensure the maximum consensus of the Directors but the respondents Nos.1 and 2 were informed that the other Directors were not in their reach being one of them out of country and other was in jail and further informed that as per clause 45 of the Articles of Association of the company two Directors not having less than 25% of total shares can constitute quorum for general meeting. Now three directors with 60% shares have requested for winding up and cancellation of licence, therefore, respondents Nos.1 and 2, after this information and request made by the majority Directors left with no option except to cancel the licence issued to the company. Learned counsel added that as per standards and practices in vogue the respondents Nos.1 and 2 addressed the letters to Chairman of the Board, therefore, the licence was cancelled after providing opportunity of hearing to the Chairman of the company. It is further contended that upon promulgation of Ordinance No,XXX of 2002 regarding amendment in the Foreign Exchange Regulation Act, 1947 money changing business cannot be carried out without forming a company and since there is no company in existence therefore, the respondents Nos.1 and 2 have rightly proceeded in the matter and in this view of the matter the rules and regulations for formation of companies are neither against the provisions of the Constitution of Islamic Republic of Pakistan nor the same defeats the basic human right: Learned counsel prayed for the dismissal of the writ petition with costs.
4. Arguments heard, record perused.
5. The petitioners were authorized to deal in sale/purchase of foreign currencies under the name and style of Khan Money Changers and Taha International Money Changers under the valid licence. The petitioners and other money changers were directed to form exchange companies under the Rules and Regulations contained in Circular No,EPP/3387/1(95)ECPolicy 2004 with further information that their individual licences would stand expired on 30-6-2004. Petitioners like other money changers constituted exchange "B" Category company with respondents Nos.4 to 6 and got incorporated Messrs Al-Khaleej Exchange Company (Pvt.) Ltd. Respondents Nos. 1 and 2 issued the requisite NOC for the establishment of exchange company and after fulfilling all the prerequisites the company was issued license No,17 on 29-4-2004 for three years. That respondents Nos.4 to 6 applied for cancellation of A licence and respondents Nos.1 and 2 intimated respondent No,4 that cancellation of licence will be considered after receipt of written consent from all the Directors of Al-Khaleej Exchange Company but the said intimation was not conveyed to the petitioner as admitted by respondents Nos.1 and 2 in their written comments. It is stated in the comments that respondents Nos.1 and 2 wrote a letter to the Chairman of the Company to get consent of other Directors and in response to said letter, the Chairman of the Company intimated that the petitioners are not in his reach and under clause 45 of Articles of Association of the Company two Directors having 25% of total voting power can constitute a quorum for general meeting, therefore, on the request of three Directors having 60% share holding have requested for winding up and cancellation of the licence. Respondents Nos.1 and 2 left with no option to cancel the same and wind up the company after necessary explanation called and received from the Chairman. The above said stance of respondents Nos.1 and 2 clearly shows that the petitioners were not provided with any opportunity of hearing or even had not been merely informed about the process of cancellation of licence by respondents Nos.1 and 2 or the other Directors of the company. Petitioner No,2 was Secretary of the Company and respondents Nos.1 and 2 were bound to initiate any proceeding against the company through Secretary but all the correspondence, made and information were received from the Chairman who has initiated the process of cancellation of licence admittedly with the consent of the petitioners. That clauses 36 and 37 of Rules and Regulations for Exchange Companies of "B" category provides the procedure for suspension and revocation of a licence of exchange companies which reads as under:-- "36. SBP shall have the right to suspend or revoke a Licence at any time. Before a Licence is suspended/revoked, the Exchange Company shall be served with a notice mentioning therein the reasons for such suspension/revocation and instructions for the company to explain its position in writing within 7 days from the date of issuance of notice.
37. The Licence may be suspended/revoked if:--
(a) the State Bank is provided with false, misleading or inaccurate information by or on behalf of the E.C.(B);
(b) it appears to the State Bank that the E.C.(B) has violated these or any other regulation/requirement, instruction or circular issued by the State Bank or if any of the conditions of licence has not been fulfilled or is incapable of fulfilment;
(c) the interests of the customers of E.C. (B) are in any way threatened, whether by the manner in which the company is conducting or intends to conduct its affairs or for any other reasons;
(d) any other reason that in the opinion of the State Bank disqualifies the E.C. (B) to hold the licence."
Respondents Nos.1 and 2 are bound under clause 36 of the regulations to serve a notice mentioning there in the reasons for suspension/revocation and instructions for the company to explain its position in writing within 7 days from the date of issuance of notice but neither a notice was issued to the company nor the licence was cancelled in accordance with clause 37. The petitioners who have surrendered their valid individual licences for the formation of exchange company and licence was suspended, revoked for the reasons and procedure alien to the rules and regulations unambiguous provided for its suspension and revocation. It is a well established principle that if by an enactment something is required to be done in a particular manner then it has to be done in that way and in no other way, therefore, in the peculiar circumstances they are entitled to opportunity of hearing before any action taken by respondents Nos.1 and 2, thus action of respondents Nos.1 and 2 was in violation of principle of nature justice and the procedure provided by the rules and regulations. Therefore, the matter requires fresh determination in the appropriate forum in accordance with law.
6. The learned counsel raised an objection that action of respondents Nos. 1 and 2 has been challenged in the writ petition. Admittedly respondents Nos.1 and 2 were performing their functions in Karachi, therefore, they are not the persons performing functions within the territorial limits of Islamabad High Court. That F.E. Circular No,6 dated 7-6-2004 for the formation of Exchange Company was issued by respondent No,1 from State Bank of Pakistan, S.B.P. Banking Services Corporation (Bank) Sector G-5/2, Islamabad, along with rules and regulations for Exchange Companies, the individual licences of money exchange were ceased by the above branch of State Bank of Pakistan and licence of company was cancelled by a branch of respondent No,1, therefore, the relevant branch of respondent No,1 is functioning in the territorial jurisdiction of Islamabad. The writ petition was initially filed in Lahore High Court, Rawalpindi Bench, and same is transferred to this Court, therefore, objection after transfer of the writ petition has no force and the same is rejected.
7. In this view of the matter, petitioners are directed to appear before respondent No,2 and respondent No,2 is directed to pass an appropriate order strictly in accordance with rules and regulations for exchange companies of "B" category preferably within two months after receiving the order of this Court, either himself or send the same to competent authority for its decision who is also to pass appropriate order strictly in accordance with law in terms of the above said directions of this Court. He is further directed to submit his report to Deputy Registrar (Judicial) of this Court within stipulated period.
8. With these observations the writ petition is disposed of.