JAWAD HASSAN, J. The Petitioner/Aitex Pakistan (the "Petitioner") has filed the instant Writ Petition (the "Petition") under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973 (the "Constitution") against the Secretary Interior, Ministry of Interior ("MOI") (Chairman, International Non-Governmental Organizations ("INGO"), the Board of Investment ("BOI"), the Securities and Exchange Commission of Pakistan ("SECP"), the State Bank of Pakistan ("SBP") and the Competition Commission of Pakistan ("CCP") impugning herein the refusal letter issued by the Respondent No.2/Director General, BOI against the application of the Petitioner for its registration as a Non-Profit Organization ("NPO") and has also sought interpretation of law regarding the regulatory jurisdiction in the matter.
I. PETITIONER'S ARGUMENTS
2. The learned counsel of the Petitioner, inter alia, submitted that the Petitioner is a liaison office of M/s. Asociacion De Investigacion De La Industria Textil (the "Spanish Association"), which is a Private Research Institute registered under the National Registry of Association, Spain, and is working in Pakistan through the Petitioner. The Spanish Association is a private technology centre dedicated to applied research and technological innovation, and performs the quality control tests and certifications which also help the Pakistani textile companies to improve their international business.
3. The Petitioner has contended that it was granted permission/license by the Respondent No.2/BOI vide permission letter dated 30.11.2004 to establish a liaison office in Pakistan for three (3) years, which was subsequently extended till 30.11.2017. Further, when the Petitioner applied for renewal of permission on 19.02.2018, the Respondent No.2/BOI replied that since the Petitioner is a "non- profitable organization (NGO)", therefore the Petitioner should contact the Respondent No.1/Secretary Interior, MOI (Chairman INGO). Therefore, the Petitioner immediately wrote letters dated 19.07.2018 and 03.12.2018 to the Respondent No.2/BOI by reiterating that the Petitioner does not fall within the category of INGOs and is merely a NPO.
4. It has also been argued that MOI has Policy for regulation of INGOs in Pakistan, therefore, the Petitioner has right to be treated as per Policy for regulation of INGOs in Pakistan issued vide notification No.6/34/2015-PE-III dated 01.10.2015 (the "Notification" or "Policy"), which includes NPOs.
Further states that the Petitioner's application regarding registration is still pending before the Respondent No.1 since 16.05.2019, which has not been decided so far. II. RESPONDENT'S ARGUMENTS.
5. Since it was pointed out that there is overlapping jurisdiction of certain regulators and non- clarity regarding permission from the concerned, regulating aforesaid foreign entities in Pakistan, therefore, notices were issued to all the Respondents to file their reports and para wise comments.
The Respondents submitted their para-wise comments to the Petition and reiterated following positions: A. MINISTRY OF INTERIOR (RESPONDENT NO. 1)
6. MOI admitted that it has received a manual application from the Petitioner for registration as an INGO on 2.5.2019. It was further stated that MOI has launched an online portal for registration of an INGO, who can apply through the same portal and its application is then forwarded to all stakeholders (i.e. Economic Affairs Division, Ministry of Foreign Affairs, Law and Justice Division, Federal Board of Revenue, SECP and the Security Agencies). Further, MOI has already guided the Petitioner vide its letter dated 19.6.2019 to apply through the online portal as per the Notification.
7. MOI further stated that the Notification regulates INGOs in Pakistan and an INGO Committee has also been notified in this regard, which has approved eight (8) areas of work i.e. vocational education and training, health, poverty alleviation, culture, environmental protection, natural disaster reduction and management, science and technology, and sports. INGO Committee has also finalized a standard Memorandum of Understanding ("MOU") to be signed between the Government of Pakistan and the respective INGO at the time of its registration, and a decision on the application, made through online portal, is then taken by such Committee on the basis of comments/input received from all the stakeholders.
B. BOARD OF INVESTMENT (RESPONDENT NO. 2)
8. BOI filed its para-wise comments and reiterated its stance that registration of foreign INGOs and NPOs is being dealt by MOI in light of the Notification. On these grounds, BOI prayed for its exemption to contest this Petition.
C. SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN (RESPONDENT NO. 3):
9. SECP stated in its para-wise comments that the Petitioner being a Foreign Company's liaison office was registered with SECP on 10.1.2005. Section 441 of the Companies Act, 2017 (the "Act") clearly states that a "Foreign Company" shall not be entitled to bring any suit/legal proceedings, claim any set-off, and make any counter claim.
The Petitioner has not approached the appropriate forum i.e. Government of Pakistan, Chairman INGO, Secretary Interior, Ministry of Interior etc., and has not resorted to remedies available i.e. Secretary Interior and the BOI appellate forums. The Petitioner has given contradictory statements because on one side, the Petitioner has claimed the regulatory jurisdiction of the Respondent No. 2 (paras 4 to 7) and on the other side, the same has been negated (Ground e). Further, SECP has prayed for dismissal of the Petition in view of statutory bar of Section 441 of the Act.
D. COMPETITION COMMISSION OF PAKISTAN (RESPONDENT NO. 5):
10. CCP submitted that it is only mandated with the exclusive statutory obligation to provide for free competition in all spheres of commercial and economic activity and to enhance economic efficiency and to protect consumers from anti-competitive behaviours under the Competition Act, 2010. Further, the Petition does not fall within the statutory mandate of CCP, and therefore, its name may be stuck-out from the array of the Respondents and an appropriate order may be passed in this regard.
III. AMICUS CURIAE'S ARGUMENTS
11. This Court appointed Mr. Shahzad Ata Elahi, Advocate as Amicus Curiae, who submitted his brief on bullet points and stated that the aforesaid foreign entities are being dealt with by MOI and notified under the regulations i.e. (i) Foreign Companies Regulations, 2018 (the "Foreign Companies Regulations"), (ii) the Associations with Charitable and Not for Profit Objects Regulations, 2018 (the "NPO Regulations") and the Companies (Incorporation) Regulations, 2017 (the "Companies Regulations") made by the SECP under Section 512 read with Sections 42 and 43 of the Act. He further stated that the issue in hand is regarding functioning of NPOs which cannot be dealt with by the Companies Regulations because Regulation 1(3) exempted the NPOs. Further states that there is no explicit mechanism and uniform policy regarding the registration and regulations of aforementioned foreign entities (INGOs/NGOs, I NPOs/NPOs, Companies, Firms and Associations) and obtaining the NOC from MOI without the coordination of its regulator is creating hurdle to encourage the investment in Pakistan.
IV. BRIEF FACTS
12. On 30.11.2004, BOI has given permission for three (3) years to the Petitioner to establish a liaison office in Pakistan at Karachi by the Spanish Association to provide services to textile companies for research, development, improvement of quality, certifications etc. subject to various conditions, including that no commercial/trading activities shall be undertaken in Pakistan, no remittance facility shall be allowed nor will it be claimed, and a company shall be registered within thirty (30) days with SECP. Subsequently, on 16.3.2016, BOI renewed and extended the permission of liaison office to the Spanish Association to continue operations of liaison office in Pakistan at Lahore and sub office at Karachi upto 30.11.2017; and stated that the terms and conditions of the prior permission letter dated 30.11.2004 shall remain intact.
13. On 19.2.2018, the Petitioner asked BOI to renew the permission for further period of five (5) years for its liaison office in Pakistan, and also sent a letter dated 16.4.2018 providing clarifications after email of BOI dated 11.4.2018. On 2.5.2018, BOI wrote to the Petitioner that it is not a company and is a "non-profit organization (NGO)" which is dealt by MOI, and therefore, requested the Petitioner to approach MOI
14. On 19.7.2018, the Petitioner informed BOI that it does not fall in category of NGOs, and is a Spanish non-profit association, and the liaison office is to assist its head office with its customers in Pakistan. On 3.12.2018, the Petitioner further informed BOI that it is not an INGO, and requested to extend such permission. Moreover, on 25.4.2019, the representative of the Petitioner sent a letter to Secretary Interior (Chairman INGO Committee) explaining the legal position in view of the Notification. Similarly, on 16.5.2019 and 27.5.2019, representative of the Petitioner again reminded the Secretary Interior about the same.
15. On 19.6.2019, MOI informed the representative of the Petitioner that registration cases of INGOs are processed through online portal to make the registration process transparent and requested them to apply for their INGO registration through online portal.
V. MOOT POINT
16. The sole argument of the Petitioner is that it does not fall under the definition of INGO, and is merely an International Non-Profit Organization ("INPO"), and therefore, the Notification providing the Policy for Regulation of INGOs in Pakistan does not apply to it. In each instance, the Petitioner has highlighted that BOI is the regulatory body to grant the extension/permission for establishment of a branch office of an INPO; however, in Ground (e) of the Petition, the Petitioner has itself negated the same.
17. On the other hand, the concerned Respondents have repeatedly stated their position that the Petitioner is an INGO and is regulated by MOI through the Notification, and there is a mechanism available for its registration through an online portal made specifically for this purpose.
18. In view of the above, the moot questions arising from the above arguments requiring determination are as follows:-
(1) Whether the Spanish Association, being an NPO comes within the ambit of an INGO.
(2) Whether being an NPO, Spanish Association is required to be registered as per the Notification.
(3) Whether earlier renewal of license by Respondent No.1 provides a fresh ground to the petitioner for further renewal.
(4) Whether the Spanish Association is required to follow the procedure provided under the Notification for its registration or renewal of permission for establishment of a liaison office in Pakistan.
VI. DIFFERENCE BETWEEN NGO AND NPO
19. No law has been brought on record which provides clear distinction between an NGO and NPO.
Section 2(36) of the Income Tax Ordinance, 2001 defines "non-profit organization"
(36) "non-profit organization" means any person other than an individual, which is --
(a) established for religious, educational, charitable, welfare or development purposes, or for the promotion of an amateur sport;
(b) formed and registered under any law as a non-profit organization;
(c) approved by the Commissioner for specified period, on an application made by such person in the prescribed form and manner, accompanied by the prescribed documents and, on requisition, such other documents as may be required by the Commissioner; and none of the assets of such person confers, or may confer, a private benefit to any other person; Furthermore, meanings of a word can be understood from a dictionary because as held by Hon'ble Supreme Court in a case cited as "MUHAMMAD IJAZ-UL-HAQ Versus EXECUTIVE DISTRICT OFFICER"
(2006 SCM R 989) wherein it was held as under:- "It is settled principle of law that in case-the word is not defined in the rules, then the meaning of the word must be understood as defined in English Dictionary. In other words the meaning of dictionary is relevant to understand intention of the policy maker as it is an elementary principle of interpretation of statutes that when a particular word is not defined in a statute, Courts are to give it the natural plain dictionary meaning and that where the meaning is supposed to depict the intention of the law-makers."
20. So to understand the true meanings of these terms, we can seek guidance from a legal dictionary. In Advanced Law Lexicon, Volume 3, Published by LexisNexis Non-governmental Organization and Non-profit organization have been defined at Pages 3265 and 3270 respectively, in following words: Non-Government Organization(NGO): A non-profit making organization in the private sector that assists developing countries through aid (financial and material), and the provision of skilled personnel and training.
A non-profit group or association organized outside of institutionalized political structures to realize particular social objectives (such as environmental protection) or serve particular constituencies (such as indigenous peoples). NGO activities range from research, information distribution, training, local organization, and community service to legal advocacy, lobbying for legislative change, and civil disobedience.NGOs range in size from small groups within a particular community to huge membership groups with a national or international scope.
Organizations formed by the people and of people outside government; nonprofit, human rights, humanitarian aid and grassroot organizations. (Human Rights).
Non-Profit Making Organization(NPO).
"Company or organization that has a legal obligation not to make a profit. The term is most usually applied to Registered charities.
The categorization of an organization as non-profit-making organization' should based on all the organization's active-ties. Classification of an organization as"non-profit-making" should depend on its aim which, unlike a commercial undertaking, should not be to achieve profits from its members"
21. So, definition of term NGO clearly transpires that words "A non-profit making organization" is used to define an NGO. Generally, NPO is an organization that operates on the principle that no member will receive profits from such organization, and such organization applies its surplus funds on the promotion of its objectives rather than distributing it among the members of such organization. On the other hand, NGO is an association of persons that works for promoting humanitarian objective instead of a commercial one, and is formed by ordinary citizens that operates autonomously/independently of government. NGO and NPO are two of the most common designations which work towards improving human welfare and betterment of the society, and are often interchangeable.
VII. THE NOTIFICATION AND ITS APPLICABILITY
22. The Notification provides the Policy for Regulation of INGOs in Pakistan, and regulates the registration, working, functioning, monitoring and other related aspects pertaining to all types of INGOs functioning in Pakistan. This Notification has been notified in order to facilitate and streamline the registration and functioning of INGOs contributing to socio-economic development in Pakistan while ensuring the obedience of the relevant laws and norms of Pakistan; and to encourage INGOs to build a synergistic relationship with the Government and private sector, while ensuring efficient execution of their programs and activities in the best public interest. This enables INGOs to receive legitimate foreign contributions or foreign economic assistance through legal channels and appropriately utilize these financial resources on the agreed areas of public welfare
23. Clause 2 of the Notification provides the scope and applicability of the Notification
2. SCOPE OF THE POLICY 2.1 This Policy will have sole jurisdiction over all types of International Non-governmental Organizations (INGOs) (including not-for-profits that may not be registered in their home countries as INGOs but are still, part of the not-profit sector and undertake activities similar to typical INGOs) receiving foreign contributions or utilizing foreign economic assistance to engage in various development programs in Pakistan.
2.2 To be covered under this Policy, an INGO should be: A private entity i.e. separate from the Government.
Not receiving return profits generated to their owners or directors or staff.
Self-governing i.e. not controlled by the Government.
A registered organization with defined aims and objectives
24. In other words, the Notification applies to such entities which meet the following criteria:
(1) INGOs, or INPOs which (i) may not be registered in their home countries as INGOs, (ii) are part of the not-profit sector, and (iii) undertake activities similar to typical INGOs;
(2) receiving foreign contributions or utilizing foreign economic assistance to engage in various development programs in Pakistan;
(3) private and self-governing entities which are separate and not controlled by the Government;
(4) entities which are not receiving return profits generated to their owners or directors or staff
(5) registered organization with defined aims and objectives
25. Since the Petitioner has itself claimed it to be a non-profit organization, it means that applicability of above clauses (1)(ii) and (2) to (5) is not disputed. Therefore, the only question that remains to be determined now is that whether the Spanish Association is controlled by the Government or not. It is pertinent to note that nothing has been brought on record establishing that the Spanish Association is controlled by its Government, and the Petitioner has itself admitted in the Petition as well as in arguments that the Spanish Association and the Petitioner is a Private Research Institute. therefore, for all intents and purposes, it can be stated that the Spanish Association is operating as an autonomous body independent of the Government, and can also be categorized as an INGO. Therefore, the Notification is applicable to the Petitioner, and the Petitioner or the Spanish Association is required to follow its mandatory provisions, in that, in clause 2.1 of the Notification, words "including not-for-profits" have specifically been used and as per golden rule of interpretation, words and phrases used in a law/statute/notification should be read keeping in view their plain meaning.
26. Be that as it may, Clause 4.1 of the Notification requires INGOs, which are receiving foreign contributions (funds, materials and services) emanating from outside Pakistan or utilizing foreign economic assistance, to get its prior registration exclusively with MOI. Further, Clause 4.5 of the Notification requires all existing INGOs in Pakistan to apply for fresh registration on the newly introduced electronic version of the registration form, within sixty (60) days from the date of proclamation of this Policy. Clause 4.8 of the Notification allows INGO to apply for renewal of its registration four (4) months prior to expiry of registration, and under Clause 4.9 of the Notification, previously registered INGOs are allowed to continue their operations for six (6) months or until final decision on their applications for fresh registration.
27. Clause 4.4 of the Notification constitutes an INGO Committee for approving registration of INGOs, which is chaired by the Secretary Interior, MOI, to facilitate, streamline and monitor the working of INGOs. On 14.3.2019, this INGO Committee has been re-constituted which include total of nine (9) members, having following Terms of References:
(1) Scrutinize and decide application and documents received online from intending INGOs, in the light of Policy for Regulation of INGOs in Pakistan, 2015 and Memorandum of Understanding between the Government and INGOs within one (1) month; and
(2) Require missing or additional information from the applicant, if necessary
28. This Committee is required to meet as and when required, with the permission of the Chairman of the Committee, and recommendations of the Committee are to be submitted to the Minister of Interior for approval.
29. Clauses 4.6 and 4.7 of the Notification requires the INGO Committee to make scrutiny of applications within a period of sixty (60) days, and then approve/register INGOs for specific field(s) of work and specified location(s) or areas of operation, after consultation with the relevant Federal and Provincial authorities, and in line with their needs and national priorities of Pakistan. Similarly, subject to approval, INGO are also required to sign a Memorandum of Understanding (MOU) with the Government of Pakistan for a period upto three (3) years from the date of signatures (Clause 5.1), and a draft MOU has also been prepared/notified in this regard.
30. The Notification has also provided a right of appeal to the cases of cancellation of registration (Clause 7.1), and any INGO having grievance against the order of the INGO Committee, has been provided with a right to file representation within ninety (90) days to a Special Ministerial Committee to be constituted and notified by the Government, whose decision is final (Clause 7.2).
VIII OTHER LAWS
31. SECP has notified the Foreign Companies Regulations, 2018 under Section 512(1) of the Act, which provides the detailed procedure for registration of foreign companies. Section 2(1)(35) of the Act defines the Foreign Company as follows:
(35) "foreign company" means any company or body corporate incorporated outside Pakistan, which--
(a) has a place of business or liaison office in Pakistan whether by itself or through an agent, physically or through electronic mode; or
(b) conducts any business activity in Pakistan in any other manner as may be specified Regulation 1(3), however, has excluded the applicability of these regulations to NPOs
32. Similarly, SECP has also notified the Associations with Charitable and Not for Profit Objects Regulations, 2018 under Section 512 read with Sections 42 and 43 of the Act, which provides the method and procedure for registration etc. of companies licensed under Section 42 of the Act.
Section 42 of the Act provides as follows:
42. Licensing of associations with charitable and not for profit objects.--(1) Where it is proved to the satisfaction of the Commission that an association is to be formed as a limited company--
(a) for promoting commerce, art, science, religion, health, education, research, sports, protection of environment, social welfare, charity or any other useful object;
(b) such company--
(i) intends to apply the company's profits and other income in promoting its objects; and
(ii) prohibits the payment of dividends to the company's members; and
(c) such companys objects and activities are not and shall not, at any time, be against the laws, public order, security, sovereignty and national interests of Pakistan, the Commission may, by licence for a period to be specified, permit the association to be registered as a public limited company, without addition of the word "Limited" or the expression "(Guarantee) Limited", to its name. ....
However, the applicability of these Regulations has not been specifically extended to INGOs or INPOs.
33. As far as earlier renewal of grant of permission/license to the petitioner by the Respondent No.2/BOI, is concerned, it is settled law that an illegality cannot be perpetuated. Reliance is placed on the judgment of Hon'ble Supreme Court in "RAUNAQ ALI Versus CHIEF SETTLEMENT COMMISSIONER" (PLD 1973 SC 236) in which it has held that "The Courts would refuse to perpetuate, in such circumstances, something which would be patently unjust unlawful. Further in "Ms. SHAGUFTA HASHMAT Versus FEDERATION OF PAKISTAN through Secretary Cabinet Division" (2018 PLC (C.S.) 619) the Court has held that "an illegality cannot be pleaded as a ground for discrimination, nor can it be allowed to be perpetuated while exercising powers under Article 199 of the Constitution.
34. Furthermore, as per arguments of learned counsel for the Petitioner, the Petitioner has applied to the Respondent No.1 for registration and its application is still pending. Perusal of para-wise comment of respondent no.1/MOI transpires that respondent no.1/MOI has received a manual application while petitioner is required to apply online through online portal launched by MOI. It is settled law that when law requires a things to be done in a specific manner that should be only done in that specific manner.
35. Lastly, the competent authority is at liberty to regulate its affairs and unless such regulation is arbitrary, discriminatory or demonstrably irrelevant to the policy, which the legislature is free to adopt, cannot be interfered on the grounds of mere technicalities. Guidance is sought from the case law reported as "DOSSANI TRAVELS PVT. LTD Versus TRAVELS SHOP (PVT) LTD" (PLD 2014 SC 1) " in which Hon'ble Supreme Court has held that "a bare perusal of Article 18 would show that the right of freedom of trade, business or profession is not an absolute right rather it is qualified by the expression, "subject to such qualifications, if any, as may be prescribed by law" and there are three exceptions which stipulate: (a) the regulation of any trade or profession by a licensing system; (b) the regulation of trade, commerce or industry in the interest of free competition therein; and (c) the carrying on, by the Federal Government or a Provincial Government, or by a corporation controlled by any such Government, of any trade, business, industry or service, to the exclusion, complete or partial, of other persons
36. In view of the above mentioned circumstances and the applicable laws, the instant Petition is hereby dismissed being devoid of merits and the Petitioner is directed to follow the online application procedure under the Notification for its registration, which shall be decided by the MOI and the relevant departments strictly within the stipulated period of sixty (60) days under the applicable laws. The Petitioner shall make this application, if so advises, within two (02) months of passing of this judgment.
37. Meanwhile, in view of the prior functioning of the Petitioner in Pakistan, the Respondents shall not obstruct in the lawful business of the Petitioner till the decision on the application of the Petitioner under the above para.
38. Further, SECP is also directed to formulate appropriate Regulations, after following the applicable laws including the Notification, which are applicable specifically to INGOs or INPOs as it will create discrimination to foreign entities to do business in Pakistan in order to attract and facilitate foreign investment in Pakistan for the future of its economy.