SHAMS MEHMOOD MIRZA, J.---This writ petition challenges the refusal of Registrar of Companies/Securities and Exchange Commission of Pakistan (SECP) to issue certified copy of Form 29 dated 29.04.2015 filed by the petitioner company.
2. The facts in this case are not directly in issue and only a legal question requires resolution as to whether there exists any law, rules or regulations empowering Registrar of Companies (the Registrar) or SECP to withhold supply of certified copy of the statutory returns. These statutory returns are the Forms or documents required to be filed with the Registrar Joint Stock Companies or SECP under various provisions of the Companies Ordinance, 1984 (the Ordinance). The certified copies of these Forms/Returns are made available to the general public through the Company Registration Office. The format of these Forms/Returns is provided for by SECP in the Companies (General Provisions and Forms) Rules, 1985. The purpose of seeking these statutory Returns appears to be to keep and maintain the updated record of company by the Registrar so that general public and third parties may seek information about the affairs of the company and accordingly to shape their decisions while dealing with the company based on such information.
3. In the petition, it was stated that pursuant to the special resolution passed on 30.03.2015, 2,380,000 shares were allotted to petitioners Nos,2 and 3 and subsequently in the extra ordinary general meeting of the shareholders held on 29.04.2015, Mrs. Saeed Kausar was removed as director and in her place petitioner No,3 was appointed and that the said change was reported to the Registrar through Form 29 which was electronically filed on 29.04.2015 in terms of section 205 of the Ordinance. Grievance raised in the petition is that despite repeated requests, certified copy of Form 29 was not being issued and instead letter dated 16.06.2015 was issued by the Assistant Registrar stating the certified copy of Form 29 cannot be issued on account of the pending complaint by Mrs. Saeed Kausar.
4. Mrs. Saeed Kausar also filed an application bearing C.M. No,6194 of 2015 under Order I, rule 10, C.P.C. for becoming a party in the present proceedings. The said application was allowed on 13.07.2015 and the learned counsel for the petitioner on the instructions of the Court made her as respondent No,2 on the same day by adding her name to the memorandum of parties. It was stated by the counsel for respondent No,2 that petitioners Nos,2 and 3 fraudulently tried to remove the applicant from the office of the director by illegally diluting her shareholding. It was, therefore, contended that the information contained in Form 29 was based on a fraudulent transaction and, therefore, the Registrar/SECP has every right to inquire into it and to refuse to grant certified copy of it. It was further submitted that an application was filed by her before the Chairman SECP which is pending adjudication. The learned counsel appearing for SECP, however, on instructions, stated that the said application was dismissed and respondent No,2 was advised to approach the Court for redressal of her grievance in terms of section 152 of the Ordinance.
5. Arguments of the respective parties have been heard and record perused with their assistance.
6. Section 205 of the Ordinance deals with the record to be kept by a company with regard to its directors/officers, auditors and legal advisers. It reads as under
205. Register of directors, officers, etc. (1)Every company shall keep at its registered office a register of its directors and officers, including the chief executive, managing agent, secretary, chief accountant, auditors and legal adviser, containing with respect to each of them such particulars as may be prescribed.
(2)Every person referred to in subsection (1) shall, within a period of ten days of his appointment or any change therein, as the case may be, furnish to the company the particulars specified in subsection (1) and, within the periods respectively mentioned in this section, the company shall file with the registrar a return in duplicate in the prescribed form containing the particulars specified in the said register and notification in the prescribed form of any change among the directors, the chief executive, managing agent, chief accountant, secretary, auditor or legal advisor or in any of the particulars contained in the register.
(3) The period within which the said return is to filed with the registrar shall be a period of fourteen days from the date of incorporation of the company and the period within which the said notification of a change is to be sent shall be fourteen days from the happening thereof.
Under the afore-mentioned section, a register of the directors is required to be maintained by the company wherein the particulars of the directors/officers are required to be stated. Under subsection (2), any change, inter alia, among its directors is required to be sent to the Registrar, specifying the date of the change. The change in the particulars can be of any nature and can be brought about by resignation/death of a director or election of a new director, which changes have to be notified to the Registrar under section 205 of the Ordinance in accordance with the prescribed procedure. The procedure so prescribed is by filing Form 29 with the Registrar. In terms of section 205 of the Ordinance, the said change is required to be filed within 14 days. This being a secretarial practice, it may be required to be filed with the Registrar by the secretary of the company and can even be filed electronically. Upon such filing, the Registrar would issue a certified copy thereof.
7. Notwithstanding the dispute between the petitioners and Mrs. Saeed Kausar, the pivotal question is whether the Registrar is empowered to examine the legality or validity of a transactions/matters incorporated in the returns so filed with it by a company? In other words, is the Registrar competent under the law to call for information and come to a conclusion that a particular person named in Form 29 was indeed elected to the office he is stated to hold and that the changes reflected in Form 29 are indeed a true reflection of the transactions/matters stated therein.
8. Although learned counsel for respondent No,2 referred to section 20 of SECP Ordinance, 1969 to contend that the power vests in the Registrar/SECP to refuse the supply of certified copy of Form 29, it is clear that the said section has no bearing on the case. Before proceeding any further in the matter, it would be useful to refer to section 468 of the Ordinance, which might appear to be relevant and, therefore, its scope needs to be considered and interpreted.
468. Registrar not to accept defective documents.---(1) Where, in the opinion of the registrar, any document required or authorized by or under this Ordinance to be filed or registered with the registrar- (a)contains any matter contrary to law, or does not otherwise comply with the requirements of law; (b)is not complete owing to any defect, error or omission; (c)is insufficiently legible or is written upon paper which is not durable; or (d)is not properly authenticated; the registrar may either require the company to file a revised document in the form and within the period to be specified by him or refuse to accept or register the same.
(2) Subject to the provisions of subsections (3) and (4), if the registrar refuses to accept any document for any of the reasons aforesaid, the same shall not be deemed to have been delivered to him in accordance with the provisions of this Ordinance unless a revised document in the form acceptable to the registrar is duly delivered within such time, or such extended time, as the registrar may specify in this behalf.
(3) The registrar shall, if he refuses to accept any document as aforesaid, communicate his decision in writing to the company.
(4) If registration of any document is refused, the company' may either supply the deficiency and remove the defect pointed out or, within thirty days of the order of refusal, prefer an appeal- (a)where the order of refusal has been passed by an additional registrar, a joint registrar, a deputy registrar or an assistant registrar, to the registrar; and (b)where the order of refusal has been passed, or upheld in appeal, by the registrar, to the Commission.
(5) An order of the Commission under subsection (4) shall be final and shall not be called in question before any Court or other authority.
At first blush, it might appear that power has been reserved to the Registrar to refuse registration of a return for containing a matter contrary to law. However, a closer scrutiny of the said provision shows that matters agitated by respondent No,2 regarding her illegal removal as director cannot be looked at or formed basis by the Registrar to refuse registration of Form 29 much less to issue certified copy thereof. The learned counsel for SECP frankly conceded that the powers of the Registrar contained in the afore-mentioned section can be and indeed are delegated to various registrars working under him. This power of delegation, in the opinion of this Court, demonstrates ministerial nature of work performed by the Registrar under section 468 of the Ordinance. It is of course logical to assume that if the Registrar had been constituted as an authority with powers to decide such vital questions, he would not have been given power to delegate his functions of scrutinizing the Forms. Under section 152 of the Ordinance, power is given to this Court to rectify the register of members and that provision further shows that a similar power was not, and could not have been intended to be conferred on the Registrar under section 468 of the Ordinance. Similarly, the meeting in which the election of directors takes place can only be challenged before a Court.
Likewise, the election of a director is itself open to challenge under the provisions of the Ordinance.
It might be argued that the power of the Registrar to decline to register a return on account of defects contained therein is not a power to rectify the register or to hold the meeting to be illegal or to declare the election of a director as illegal. That may be so, but when the substance of the provision is looked at, it would appear that the power of the Registrar is restricted to circumstances where ineligible persons have been elected/nominated as directors of a company, for example, in violation of section 187 of the Ordinance. In such a situation, the Registrar by declining to register the return can compel the company to rectify its return by removing the names of the ineligible persons there-from.
9. It was argued that the Legislature could not have intended that the Registrar should not be able to refuse registration of returns containing wrong information and that power ought to be presumed to have been reserved with the Registrar to compel the removal of defect in a return. It was further submitted that if this power is not to be found in the office of the Registrar under section 468 of the Ordinance, it would lead to defective returns being filed and registered and may be a source of misguidance to the public which deals with the company. To the extent that the scope of section 468 of the Ordinance is interpreted in a limited manner conferring ministerial powers on the Registrar, there is no cavil with this proposition. The Registrar may also seek help from the powers available to him under sections 472 and 473 of the Ordinance for directing the company to file a proper or complete Return or to make good the default or to undo the irregularity. If the transaction incorporated in the Return is unlawful and illegal, the shareholders too have the option to take up the matter in the appropriate forum but this Court is not convinced regarding the availability of the power with the Registrar to sit in judgment over the validity or invalidity of the transactions incorporated in a statutory Return. Looked at it from any angle, section 468 of the Ordinance cannot be interpreted in a manner that concedes such a power to the Registrar. In the opinion of this Court, there is a statutory obligation on the part of the Registrar to register the Return if it is not defective or incomplete. The power to decide the validity of a transaction in a statutory Return of the nature which is under issue in this case must, therefore, be found elsewhere in the Ordinance. This Court does not find such power resting with the Registrar.
10.In this particular case, Form 29, when communicated electronically, was not refused by the Registrar rather it was registered. The only issue is with regard to his refusal to supply the certified copy thereof to the petitioners. It has been noted that respondent No,2 till date has not filed any legal proceedings challenging meeting dated 29.04.2015 in which her alleged illegal ouster as director took place. From the above discussion, it is clear that the Registrar has no power under the Ordinance to refuse supply of a certified copy of a statutory return once was registered. If the matter in issue is sub-judice before a Court, the Registrar at best can make a note of that in the certified copy of the Return to be supplied to the applicant.
11.In the circumstances, this writ petition is allowed and respondent No,1 is directed to forthwith supply/furnish certified copy of Form 29 dated 29.04.2015 to the petitioners.