' MUHAMMAD MUNIR PERACHA, J.---Through this appeal, order dated 13-4-2006 passed by Executive Director (Company Law) and affirmed by Appellate Bench of the Securities and Exchange Commission of Pakistan vide order dated 28-6-2006 has been assailed. The Executive Director (Company Law) vide order impugned appointed an Inspector under section 263 of the Companies Ordinance, 1984 to investigate the affairs of the appellant Company. I heard the appeal on 15-10- 2008 and passed the following order:- "After hearing the appeal on 15-10-2008, I reserved the judgment. While dictating the judgment, I felt necessity of assistance on the question of maintainability of the appeal before the High Court."
2. Sections 263 and 265 of the Companies Ordinance, 1984 empower the Securities and Exchange Commission of Pakistan to appoint one or more competent persons as Inspectors' to investigate the affairs of any company and to report thereon to the Commission. No appeal has been provided to the Court against the order of appointment of the Inspectors' or otherwise by the Commission to the High Court under Companies Ordinance, 1984. The power of the Commission under sections 263 and 265 has been delegated by it to Commissioner (Companies Law Administration Division).
Under section 33 of the Securities and Exchange Commission of Pakistan Act, 1997, any order passed by Commissioner is appealable to the Appellate Bench of the Commission. Section 34 of the Act provides that; "An appeal shall lie to the Court referred to in Part II of the Ordinance in respect of an order of the Commission comprising two or more Commissioners or the Appellate Bench."
' The question arises whether an order passed by an Appellate Bench of a Commission while dealing with a matter under sections 263 and 265 of Companies Ordinance, 1984 is appealable to this Court, notwithstanding the fact that no appeal has been provided to this Court against the said order of the Commission under Companies Ordinance, 1984. Let a notice be issued to the learned counsel for the parties to appear on 4-11-2008 and to assist the Court on this point. A notice be also issued to the Securities and Exchange Commission of Pakistan to depute some official to appear on the date fixed."
2. In response to the notice issued, the parties appeared on 4-11-2008. Learned counsel appearing for the parties made their submissions on the question of competency of the appeal. Learned counsel for the appellant relied on the following judgments to contend that the order of the Appellate Bench of the Securities and Exchange Commission of Pakistan is appealable to the Court under section 34 of the Securities and Exchange Commission of Pakistan Act, 1997:--
(1) 2002 CLD 1714
(2) 2006 CLD 988
(3) 2005 MLD 1255
(4) 2005 CLD 1229
(5) PLD 2003 SC 124
3. In none of the judgments, the question of maintainability of the appeal to the Court was examined. In all the cited cases, the appeals against order of the Appellate Bench were filed to the Court and disposed of without any objection by the respondents about maintainability. The maintainability of the appeal was neither objected to nor examined in the precedent cases.
4. Section 138 of the Companies Act, 1913 empowered the Federal Government to appoint Inspectors to investigate the affairs of any company and to report thereon. No appeal against the order of the Federal Government passed under section 138 of the Act, was competent. The Companies Act, 1913 was replaced by the Companies Ordinance, 1984. Original sections 263 and 265 of the Companies Ordinance conferred powers on the Corporate Law Authority to appoint Inspector. However, on 26-12-1997 the Securities and Exchange Commission of Pakistan Act, 1997, hereinafter referred, as the Act, was promulgated. Section 43 of the Act provided that the Corporate Law Authority stood dissolved. It was further provided that all references to the Authority in the Companies Ordinance, 1984 and any other law for the time being in force shall be deemed to mean and refer to the Securities and Exchange Commission of Pakistan. Section 20(4) of the Act enumerated the functions of the commission.
' Clause "o" would be relevant for the present purpose, which is reproduced:-- "performing such functions and exercising such powers of the Authority, including any powers of the Federal Government delegated to the Authority, (other than the power to make any rules or regulations) under the provisions of the Ordinance, the Securities and Exchange Ordinance, 1969 (XVII of 1969), the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 (XXXI of 1980) and under any other law for the time being in force under which any function or power has been conferred on the Authority including, but not limited to, the functions and powers set out in the schedule to this Act."
5. The schedule to the Act gives detail of powers and functions conferred on the Corporate Law Authority under the Companies Ordinance, which were to be exercised by the Commission. Section 10 of the Act permitted the Commission to delegate any of its functions or powers to one or more Commissioners or any officer of the Commission. Section 33 deals with the right of appeal to the Appellate Bench of the Commission and section 34 with appeal to the Court. Sections 33 and 34 of the Act are reproduced:-- "33. Appeal to the Appellate Bench of the Commission.--(1) An appeal shall lie to an Appellate Bench of the Commission in respect of an order of the Commission made by one Commissioner.
The person aggrieved by such order may within thirty days of the passing of the order prefer an appeal to the Appellate Bench of the Commission.
(2) The Commission shall constitute an Appellate Bench of the Commission comprising not less than two Commissioners to hear appeals under subsection (1).
(3) If any Commissioner who is included in the Appellate Bench has participated or been concerned in the decision being appealed against the Chairman shall nominate another Commissioner to sit in the Bench to hear that appeal.
(4) The form in which an appeal is to be filed and the fees to be paid therefor and other related matters shall be prescribed by rules.
34. Appeal to the Court. --(1) An appeal shall lie to the Court referred to in Par-II of the Ordinance in respect of an order of the Commission comprising two or more Commissioners or the Appellate Bench.
(2) The appeal under subsection (1) shall be filed within sixty days of the date of the decision and shall be accompanied by a fee of one hundred rupees."
6. On 26-10-2002, the Companies (Amendment) Ordinance, 2002 was promulgated. Item 57 of the Amendment Ordinance provided that for word "Authority" whenever occurring in the Companies Ordinance, 1984, the word "Commission" shall be substituted. A proviso was added in subsection (1) of section 484 namely:-- "Provided that revision application shall be made to an Appellate Bench of the Commission comprising of not less than two Commissioners and if any Commissioner who is included in the Appellate Bench has participated or been concerned in the decision being appealed against, the Chairman shall nominate another Commissioner to sit in the Bench to hear that appeal."
7. Section 501(2) of the Companies Ordinance gave powers to the Commission to delegate any of its powers or functions under the Ordinance to the Registrar or any other officer of the Commission.
8. Sections 484 and 485 of the Companies Ordinance read as under:-- "484. Revision and review. --(1) Any order, other than an order under section 476, passed or made under this Ordinance by the registrar or officer or by an officer subordinate to the Commission or exercising powers of the Commission, not being an order of the Court, shall be subject to the revision by the Commission upon application being made by any aggrieved person or the registrar within sixty days from the date of such order; and the Commission's order in revision shall be final: ' Provided that revision application shall be made to an Appellate Bench of the Commission comprising of not less than two Commissioners and if any Commissioner who is included in the Appellate Bench has participated or been concerned in the decision being appealed against, the Chairman shall nominate another Commissioner to sit in the Bench to hear that appeal;
(2) The Commission may, upon an application being made to it within sixty days from the date of any order passed by it otherwise than in revision under subsection (1), or of its own motion, review such order; and the Commission's order in review shall be final;
(3) Any order passed or made be the Federal Government under this Ordinance shall be subject to review by the Federal Government of its own motion or on an application made to it within sixty days from the date of the order.
485. Appeals against orders etc --(1) Any person aggrieved by an original order, directive or judgment of the Commission or the Federal Government, other than an order, directive or judgment passed on a revision or review application may, within thirty days thereof, as an alternative to making an application for revision or review to the Commission or the Federal Government, as the case may be, prefer an appeal to the High Court within whose jurisdiction the order, directive or judgment is passed: ' Provided that no appeal under subsection (1) shall lie from an order which does not dispose of the entire case before the Commission or the Federal Government, as the case may be.
(2) An appeal under subsection (1) shall be heard by a Bench of two Judges of the High Court and shall lie on any one of the following grounds, namely:--
(a) the decision being contrary to law or to some usage having the force of law; or
(b) the decision having failed to determine a material issue of law or usage having the force of law; or
(c) a substantial error apparent in the procedure provided by or under this Ordinance which may possibly have led to an error in the decision."
9. The Commission delegated its powers under sections 263 and 265 of the Companies Ordinance, 1984 to its Executive Director (Company Law).
10. In my opinion, when the Commission or its delegate exercises the powers conferred under the provisions of the Companies Ordinance, 1984, the order passed can be challenged further under the provisions of sections 484 and 485 of the Companies Ordinance, 1984. Sections 33 and 34 of the Securities and Exchange Commission of Pakistan, 1997 shall be applicable only when the order is passed under any provision other than the Companies Ordinance, 1984. The orders passed by the Corporate Law Authority under the provisions of the Companies Ordinance, 1984 were challengeable under sections 484 and 485 of the Companies Ordinance. On the promulgation of the Securities and Exchange Commission of Pakistan Act, 1997, Corporate Law Authority was substituted by the Securities and Exchange Commission of Pakistan. I am conscious of the provisions of section 45 of the Securities and Exchange Commission of Pakistan Act, 1997, which provide:-- "45. Act to override other laws.-- The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force."
11. I have already held that sections 33 and 34 of the Securities and Exchange Commission of Pakistan Act, 1997 shall be applicable only when the order is passed under any provisions other than the Companies Ordinance, 1984. Therefore, there is no question of inconsistency because the question of inconsistency only arises when a particular situation is covered by two different provisions. There is another reasons for holding this and that is that in the year, 2002 a proviso was added in section 484 of the Companies Ordinance, which has already been reproduced in paragraph 6 of the judgment. If an order passed by any officer of the Commission was appealable to the Appellate Bench of the Commission under section 33 of the Securities and Exchange Commission of Pakistan Act, 1997, there was no need to add the proviso in section 484 of the Companies Ordinance.
12. An order appointing an Inspector to investigate the affairs of the Company and to report thereon to the Commission does not take away right of any party. On the receipt of the report, the Commission has to decide whether the prosecution should be launched under section 270 of the Companies Ordinance, 1984. If from the Inspector's report, the Commission is of the opinion that action should be initiated against the Management of the Company, the Commission moves the Court and the Court after recording evidence passes any of the order mentioned in clauses (i) to
(iv) of section 271(1) of the Ordinance. Thus, the order appointing Inspector is not a very substantial order, it only provides a base to the Commission to initiate action under sections 270 and 271 of the Ordinance. The legislature cannot be taken to have made such an order, which does not take away the right of any party subject to two appeals.
13. By reading sections 484 and 485 of the Companies Ordinance, 1984, it becomes clear that any person aggrieved by an order passed in exercise of powers of the Commission under the Companies Ordinance, has two options. He can challenge the same either through a revision petition under section 484 of the Companies Ordinance or file an appeal against the said order to the High Court. Only an original order can be challenged before the High Court under section 485 of the Companies Ordinance. The present appeal has been filed against an appellate Order passed by the Appellate Bench of the Commission. The appeal is therefore, not competent under section 485 of the Companies Ordinance, 1984. This appeal is therefore, dismissed being incompetent with no order as to costs.