"This case affords a vivid illustration of two important points. The first is that where evidence of pre-contractual negotiations, and/or post-contract cond uct is crucial, rectification may, in principle, be available where the interpretative process is unable to assist a claimant. However , and secondly , the remedy of rectification may, in an appropriate case, be withheld where the parties have sought by themselves to correct any relevant mistake in the underlying document by entering into a deed of rectification."
MV Promotions Ltd and another v T elegraph Media Group Ltd and another [2020] EWHC 1357 (Ch)
JAWAD HASSAN, J. This judgment will decide fourteen (14) years old controversy between the parties and their alleged dispute of rectification of registe r of Carvan-e-Labbaik Travels & Tour (Pvt.) Limited (the "Company" ), arose in year 2008 and brought before this Court in year 2018. Tersely , the Petitioner seeks the original jurisdiction of this Court being a Company Judge under Section 126 of the Companies Act, 2017 (the "Act" ) for the rectification of register of members of the Company , the transfer of 29,900 shares from the name of Respondents No.2 to 4 in his favour , enter his name as Director of the Company and to declare all proceedings conducted by the new management of the Company as illegal, without lawful authority and void ab-initio.
2. At the outset, the Hon'ble Supreme Court while deciding another matter in C.P.No.1202 of 2020 has directed this Court on 14.02.2022 to decide this petition expeditiously without giving unnecess ary adjournments to the parties; therefore, as per directions of the Hon'ble Supreme Court, the matter was placed before this Court on 10.03.2022 and this Court, after giving an opportunity of hearing to both the parties, proceeded to decide the case on 16.03.2022.
I. FACTUAL BACKGROUND
3. Brief facts of the case, as per petition, are that the Petitioner was one of the Directors of the Company having 29,900 shares out of 30,000 and was engaged in the business of Hajj & Umrah since 2005 to 2008; he submitted annual returns for the year 2006 and 2007 . By cause of financial crises, the Petition er went to UAE in year 2008 for the purpose of job in a travel agency and upon his return to Pakistan in year 2015, he gained knowledge about transfer of his 29,900 shares in the name of the Respondents No.2&3. As per version of the Petitioner , he approached the Security and Exchange Commission of Pakistan (the "SECP" ) and the new management of the Company , but they refused to extend any sort of help. Hence, this petition.
II. ARGUMENTS OF THE PETITIONER
4. Mr. Muhammad Umer Qureshi, Advocate inter-alia contended that the Petitioner is still Director of the Company having 29,900 shares as these shares have illegally and unlawfully been transferre d by the Respondents No.2 & 3 declaring the Petitioner as resigned from the Directorship of the Company; that the name of the Petitioner has been omitted from the Register fraudulently without any sufficient cause and by submittin g bogus resignation without his signature before the SECP . Mr. Omar Tariq Shamim, Advocate next contends that the Respondents No.2&3 submitted fake, bogus and forged Form-21, Form-26, Form-7, Form-A, Form-3 with annual returns of years 2007 and 2008 which were submitted in year 2009; that the Petitioner visited the website of Ministry of Religious Affairs, Islamabad (the "Ministry" ) for verification of his status being a Director , from where he came to know that the Company still exists but surprisingly , it is being managed by the Respondents No.2 to 4 with different address of Office No.14, 1st Floor , Chauburji Point Plaza Chowk, Chauburji, Lahore; that the Respondents No.2&3 submitted annual returns till 2017 and managed to procure Hajj Quota from the Respondent No.5/the Ministry which was allotted to the Respondent No.4 who was having no concern with the affairs of the Company; that the alleged transfer of shares is clear violation of Section 74 of the Act as it is silent about the mode of transfer or instrument through which 29,900 shares were transferred in the name of the Respondents No.2&3; that at the time of alleged transfer , the Petitioner was not in the country as he left Pakistan on 23.10.2008 and returned on 03.11.2008 as is evident from his passport.
III. ARGUMENTS OF THE RESPONDENTS
(i) Arguments of Respondent No.1-SECP
5. Mr. Ibrar Saeed, Special Public Prosecutor/Director Law alongwith Mr. Ruman Bilal, counsel for the Respondent- SECP submitted report and parawise comments stating that the claim of the Petitioner is false and frivolous because he has not come to the Court with clean hand and has concealed the factum of pendency of civil suit regarding the same matter before the Civil Court. He further stated that as per Form-A made upto 31.10.2008, the shares held by the Petitioner were transferred in the name of the Respondent No.2/Asma Liaqat w.e.f 31.10.2008.
He adds that as per record of SECP 100 shares of Mr. Muhammad Imran were also shown as transferred in the name of the Respondent No.3/Liaqat Ali w.e.f. 28.09.2009. Mr. Ibrar Saeed, Special Public Prosecutor/Director Law next adds that as per Form-29 dated 31.10.2008, the Petitioner resigned as Chief Executive/Director of the Company and on the same date, the Respondent No.2 was appointed as Chief Executive/Director of the Company .
That the transfer of shares in a company being an internal matter is effectuated by the Company approved by its Board of Directors, as per law and procedure specified in Articles of Association and the SECP only maintains the record/information as reported by the companies under the Act through filing of statutory returns/forms prepared by the Company .
(ii) Arguments of Respondents No.2, 3 & 7
6. Mr. Salman Mansoor , ASC, learned counsel for the Respondents No.2, 3 & 7 submitted report and parawise comments objecting to maintainability of petition on the ground that this petition is barred by time, and is therefore, liable to be dismissed. He inter alia argue d that the Petitioner is neither a sharehol der nor Director of the Company as he has not only transferred his 29,900 shares in favour of the Respondents No.2&3 through transfer deed but also resigned from the Board of Directors of the Company on 31.10.2008; that the Petitioner has withheld the fact of filing civil suits on the same subject regarding similar allegations as raised in the titled petition thus he has not come to the Court with clean hands; that the Petitioner has not disclosed his past business history as he had been blacklisted by the Ministry defrauding hajj pilgrims as a result whereof, he had to sell his business to settle the accounts. Mr. Salman Mansoor , ASC contends that the Petitioner has been doing his business activities in Pakistan during alleged period of being abroad as such his version regarding lack of knowledge is based upon fraud and misrepresentation; that the Petitioner does not possess DTS License because after transfer of his shares, the Company and its management has continuously been doing its business by getting DTS License renewed from the Department of Tourist Services, Government of Pakistan and for this purpose, the Company and its management had provided new bank guarantee; that the Petitioner has not fulfilled the mandatory requirement of law by filing income tax returns or paying any income tax of his own or on account of the Company till filing of this petition to prove his version that he is still a shareholder and Director of the Company
(iii) Arguments of Respondents No.5&6
7. Ms. Sadia Malik, Assistant Attorney General submitted report and parawise comm ents on behalf of Respondents No.5&6 according to which the Ministry has not changed the management of the Company rather it was enlisted with the Ministry in 2012 and subsequently hajj quota was allocated to it in 2018 on merit. She has placed on record the criteria for assessment of profiles of new hajj companies issued by the Ministry alongwith certificate of recognition of the Company .
(iv) Arguments of Amicus Curiae
8. Mr. Shezada Mazhar , Amicus Curiae submitted written arguments by highlightin g the concept of rectification of register under Section 126 of the Act in Pakistan as well as in foreign jurisdiction and that too the applicability of Limitation Act. He also shed light on the jurisprudence of the terms 'fraudulent' and "sufficient cause' as used in Section 126 of the Act. This is appreciated.
9. I have respectively taken into consideration arguments advanced by learned counsel for the parties and perused the record.
IV. DETERMINA TION OF THE COURT
10. Out of divergent contentions of the parties, following moot points are necessary for determination:
1. Whether the Petitioner has fulfilled the criteria mentioned in Section 126 of the Act as well as other provisions of the Act for rectification of the register of members of the Company?
2. Whether the application of the Petitioner for rectification of register of members of the Company can be entertained after a period of approximately ten (10) years?
MOOT POINT NO.1
(i) Pathology of Section 126 of the Act
11. Basically , the Petitioner has invoked Section 126 of the Act by making prayer to rectify the register of the Company and he has also made multifarious prayers; one of which is to declare the Respondents No.2 to 4 not entitled to get any quota of Hajj from the Ministry . This moot point requires the interpretation of Section 126 of the Act by discussing in detail the words used in it, including (i) fraudulent; (ii) sufficient cause; and (iii) omitted/entered.
This Court will discuss in detail the Pathology and Anatomy of said Section with the Judicial Anthology of the case law in Pakistan, UK and India. Before proceeding further in this regard, Section 126 is reproduced hereunder for ready reference: "126. Power of Court to rectify register .-
(1) If -
(a) the name of any person is fraudulently or without sufficient cause entered in or omitted from the register of members or register of debenture-holders of a company; or
(b) default is made or unnecessary delay takes place in entering on the register of members or register of debenture-holders the fact of the person having become or ceased to be a member or debenture-holder; the person aggrieved, or any member or debenture-holder of the company , or the company , may apply to the Court for rectification of the register .
(2) The Court may either refuse the application or may order rectification of the register on payment by the company of any damages sustained by any party aggrieved, and may make such order as to costs as it in its discretion thinks fit.
(3) On any application under sub-section (1) the Court may decide any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register , whether the question arises between members or debenture-holders or alleged member s or debenture-holders , or between members or alleged members, or debenture-holders or alleged debenture-holders, on the one hand and the company on the other hand; and generally may decide any question which it is necessary or expedient to decide for rectificat ion of the register .
(4) Where the Court has passed an order under sub-section (3) that prima facie entry in or omission from, the register of members or the register of debenture-holders the name or other particulars of any person, was made fraudulently or without sufficient cause, the Court may send a reference for adjudication of offence under section 127 to the court as provided under section 482 (emphasis added).
(ii) Anatomy of Section 126 of the Act
12. The learned counsel for the Petitioner argues that his case falls under Section 126(1)(a) of the Act because the name of the Petitioner has been omitted by the Respondents No.2 to 4 from the Register fraudulently without any sufficient cause by submitting bogus resignation without his signature before the SECP . Literal study of Section 126(1)(a) of the Act provides a right to make an application before the Court for the purposes of rectification of register of members or register of debenture holders of a company in a case where name of a person "fraudulently" or "without suf ficient cause" was entered in or omitted from said registers.
(1) Judicial Anthology of Fraud/Fraudulent/ Fraudulently
13. Prior to reaching any conclusion on the point No.1, it will be relevant to ascertain the meaning of word "fraudulent", which is grammatically descriptive of something which results from a fraud i.e. the word Fraudulent is an adjective that attributes the noun 'Fraud', essentially characterizing an act that is based on Fraud. Thus, in deciphering the definition of Fraudulent, the definition of 'Fraud' shall suf fice.
14. The term 'Fraud' is defined in Black' s Law Dictionary 1 1th Edition in the following terms: '1. A knowing misrepresentation or knowing concealment of a material fact made to induce another to act to his or her detriment. Fraud is usu, a tort, but in some cases (esp. when the conduct is willful) it may be a crime.'
'2. A reckless misrepresentation made without justified belief in its truth to induce another person to act. 3, A tort arising from a knowing or reckless misrepresentation or concealment of material fact made to induce another to act to his or her detriment. Additional elements in claim for fraud may include reasonable reliance on the misrepresentation and damages resulting from this reliance.
4. Unconscionable dealing; esp., In contract law, the unfair use of the power arising out of the parties relative positions and resulting in an unconscionable bargain. See DEFRAUD. - fraudulent, adj "[Tjhe use of the term fraud has been wider and less precise in the chancery than in the common-law courts. This followed necessarily from the remedies which they respectively administered. Common law gave damages for a wrong, and was compelled to define with care the wrong which furnished a cause of action. Equity refused specific performance of a contract, or set aside a transaction, or gave compensation where one party had unfairly by the other . Thus, 'fraud' at common law is a false statement...: fraud in equity has often been used as meaning unconscientious dealing - 'although, I think, unfortunately ,' a great equity lawyer has said."
(William R. Arson, Principles of the Law of Contract 263 (Arthur L. Corbin ed., 3d Am, ed. 1919)) Whilst the term 'fraudulent act' has been defined in the following terms: "1. Conduct involving bad faith, dishonesty , a lack of integrity , or moral turpitude.
2. Conduct satisfying the elements of a claim for actual or constructive fraud..."
Fraudulent Alienation is also described in the following terms: "1. The Transfer of an interest in property with an intent to defraud others, esp. creditors and lienholders. See Fraudulent Conveyance (2),
3. The transfer of an estate asset by the estate' s administrator for little or no consideration."
15. Thus, a perusal of the above reflects that in plain ordinary terms, the word 'Fraudulent' connotes conduct that is based on Fraud. Fraud itself, is defined as making a false representation or concealment of a fact which causes a loss or risk of loss to another . It also includes conduct that is unconscionable and even a reckless misrepresentation or omission shall suffice to fit in the definition of Fraud or Fraudulent. It may also be characterized by dishonest conduct, something that includes moral turpitude or generally considered as an act or omission in bad faith.
16. The definition of 'Fraud' is also provided in Section 17 of the Contract Act of 1872 states as follows: "17. Fraud means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into contract;-
(1) The suggestion, as of a fact, of that which is not true, by one who does not believe it to be true;
(2) The active concealment of a fact by one having knowledge or belief of the fact;
(3) a promise made without any intention of performing it
(4) any other act fitted to deceive;
(5) any such act or omission as the law specifically declares to be fraudulent.
In this regard, it would also be advantageous to reproduce hereunder Section 25 of the Pakistan Penal Code, 1860: "Fraudulently". A person is said to do, a thing fraudulently if he does that thing with intent to defraud but not otherwise.
17. The Hon'ble Supreme Court of Pakistan in "ALLAH WASAYA and 5 others Versus IRSHAD AHMAD and 4 others" (1992 SCMR 2184) has held that "fraud means and includes, inter alia, the suggestion as a fact of that which is not true, by one who does not believe it, to be true, and the active conc ealment of a fact by one having knowledge or belief of the fact". In "Mst. ZULAIKHAN BIBI through LRs and others Versus Mst. ROSHAN JAN and others" (2011 SCMR 986), the Hon'ble Supreme Court has held that "fraud vitiates all solemn acts and any instrument, deed, or judgment, or decree obtained through fraud is a nullity in the eye of law and can be questioned at any time so much so that they can be ignored altogether by any court of law before whom they are produced in any proceedings". In another case cited in "HABIB AHMAD Versus MEEZAN BANK LIMITED and 5 others"
(2016 CLC 351), the learned Division Bench of this Court has observed that "allegations of fraud require specific evidence establishing unequivocally malfeasance or a misrepresentation made with a design to get benefit for oneself or misleading the other into a course of action, detrimental to its rights".
18. Thus, a summary of the above jurispr udence of the Hon'ble Supreme Court is that Fraud encompasses all acts and omissions whether by suppression of truth or suggestion of fact, which are deliberate and intended to cause benefit to oneself and to cause the other to suffer a loss or the risk of loss. It includes the element of intent and the actual act or omission which follows from such an intent. However , in circumstances there may not be a deliberate intent, yet the act or omission may be so reckless so as to constitute Fraud. Where allegation of Fraud is raised, such an allegation must be specific and must be proved by the party alleging such a Fraud.
(a) Fraud in UK Jurisdiction
19. Fraud is defined under the Fraud Act 2006 which provides three different instances of Fraud; (i) Fraud by misrepresentation, (ii) Fraud by failing to disclose information and (iii) Fraud by abuse of position. These terms are then further defined in the Act. Firstly , a person is held to have committed fraud by misrepresentation if he dishonestly makes a false representation and intends by that misrepresentation to (i) make a gain for himself or (ii) to cause a loss to another or to expose another to risk of loss. Further , a representation is held to be false if (i) it is untrue or misleading and (ii) the person making it knows that it is, or might be untrue or misleading. Under Section 2(3) of the Act, a Representation is defined as any representation of fact or law including a representation as to state of mind of (i) the person making the representation or (ii) any other person, Subsection (4) further provides that a representation may be regarded as made (either express or implied) if it is submitted in any form to any system or device designed to receive such communication (with or without human intervention).
20. Thus, under the second heading a person is found to have committed Fraud by abuse of position if he occupies a position in which he is expec ted to safeguard or not to act against the financial interests of another person, and such a person dishonestly abuses that position and intends by means of that position to (i) make a gain for himself or another or (ii) to cause loss to another or to expose another to a risk of loss. Subsection (2) further provides that a person may be regarded as having abused its position even though his conduct amounted to omission rather than act.
21. Lastly , a person is considered to have committed fraud by failing to disclose informatio n if he dishonestly fails to disclose to another person information which he is under a legal duty to disclose and intends by failing to disclose such information (i) to make a gain for himself or another or (ii) to caus e loss to another or to expose another to risk of loss.
22. Thus, on a plain reading of the Fraud Act 2006, it transpires that two elements exist in defining Fraud i.e. (i) the intention of the party to commit the fraud as defined in the Act, and (ii) is the actual act or omission of committing the Fraud. The definition of fraud as provi ded in the Fraud Act 2006 was further interpreted by the Queen Bench of the Honorable High Court of England and Wales in a decided case reported as [2019] EWHC 1349 (QB) in the case of Frank Kofi Otuo v . Watch T ower Bible and T ract Society of Britain , in the following terms: "Fraud is the intentional use of deception, trickery or perversion of truth for the purpose of inducing another to part with some valuable right or thing belonging to him or to give up a legal right."
23. The Supreme Court of the Ireland had also held that fraud is proved when it is shown that a false representation has been made knowingly or without belief in its truth or recklessly , careless whether it be true or false. In the case of Superwood Holdings Plc vs Sun Alliance (1995) 3 IR 303, the following dictum was observed by the Courts: - "First, in order to sustain an action of deceit, there must be proof of fraud, and nothing short of that will suffice.
Secondly , fraud is proved when it is shown that a false representation has been made (1) knowingly , or (2) without belief in its truth, or (3) recklessly , careless whether it be true or false."
In the case of Derry vs Peek (1889) 14 App Cas 337 , Lord Herschell observed as follows: - "'Fraud in ordinary speech means the using of false representations to obtain an unjust advantage ... Likewise in law 'fraud' is proved when it is shown that a false representation has been made knowingly or without belief in its truth, or recklessly , careless whether it be true or false."
24. In addition to the above, Section 993 of the Companies Act 2006 (UK) stipulates the offence of Fraudulent trading, which provides that if any Company is carried on with the intent to defraud creditors of the Company or creditors of another person, or for any fraudulent purpose, then every person who is a party to carrying on the Company in such a manner commits the offence of fraudulent trading. It is further defined that a trader intends to defraud a creditor where he intends to do something which if he agreed to do it, would render them guilty of conspiracy to defraud. There are thus three types of activities which would constitute the carrying on of business with intent to defraud (i) putting traders' existing creditors at risk of not being paid (ii) causing people who are not his existing creditors to become his creditors at a time when he is, or is likely to become, insolvent and (iii) doing things that give rise to causes of action sounding in damages against him, in favor of people who are not his existing creditors [1978] Ch. 262 / [1978] 2 W .L.R. 866.
The offence of Fraudulent trading is however , not limited to solely defrauding creditors as it includes the term 'any other fraudulent purpose' . Fraudulent purpose has been defined as an intention to go beyond the bounds of what ordinary decent people engaged in business would regard as honest [1984] 2 W .L.R. 815
(b) Indian Jurisdiction
25. In terms of jurisprudence in India, similar definition as provided in Section 17 of the Contract Act 1872 and Section 25 of the Pakistan Penal Code 1890 are present in the corresponding Indian Legislations. However , a subsequent definition of Fraud is provided in the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Markets) Regulations 2003. Secti on 2 (1) (c) of the regulations is thus reproduced hereinbelow: "fraud" includes any act, expression, omission or concealment committed whether in a deceitful manner or not by a person or by any other person with his connivance or by his agent while dealing in securities in order to induce another person or his agent to deal in securities, whether or not there is any wrongful gain or avoidance of any loss, and shall also include-
(1) a knowing misrepresentation of the truth or concealment of material fact in order that another person may act to his detriment;
(2) a suggestion as to a fact which is not true by one who does not believe it to be true;
(3) an active concealment of a fact by a person having knowledge or belief of the fact;
(4) a promise made without any intention of performing it;
(5) a representation made in a reckless and careless manner whether it be true or false;
(6) any such act or omission as any other law specifically declares to be fraudulent,
(7) deceptive behaviour by a person depriving another of informed consent or full participation,
(8) a false statement made without reasonable ground for believing it to be true.
(9) The act of an issuer of securities giving out misinformation that affects the mark et price of the security , resulting in investors being effectively misled even though they did not rely on the statement itself or anything derived from it other than the market price.
In reported case cited as AIR 2003 ALL 337, the Court relying upon a pre-partition decision cited as 1914 AIR Sind 28, divulged into the distinction between Fraud as defined in Section 17 of the Contract Act 1872 and Fraud as would be understood in Equity . It was the opinion of the Court that Fraud under Section 17 of the Act of 1872 connoted a far narrower definition than the definition as would be understood in equity .
"The ruling case is the Duchess of Kinsto n's case, in which case it was held that the effect of a judgement may be avoided by proving the same to have been obtained by Fraud or collusion. As fraud is infinite in its varieties, the Courts have always refused to define it (snell, P 519) nor is the word defined for the purposes of the Evidence Act; see Amir Ali and Woodnoffe, Notes to Section 41. But a reference to any standard texts book on equity will make it obvious that "fraud" has a wide meaning, far wider than the definition in the Contract Act. It is necessary to investigate into the full meaning of the word for the purposes of the case, for we have it declared by Lord Cairns that a decree can be set aside if there be "fraud" such that there is in the person chargeable with it the malus animous putting itself into motion and acting in order to take an undue advantage of some other person for the purpose of actually and knowingly defrauding him." Patch v. Ward cited in Mahomed Golab v. Mahomed Sulliman."
26. Thus, the summary of the above definitions provides that Fraud, connotes an element of intent and the acts / omissions. The intent must be to benefit oneself or to cause loss or the risk of loss to another . The Act must be one which is false, coupled with the mental element of being aware that the act being done is false or misleading.
Similarly , the Omission must also be deliberate and with the intent of causing a loss or misleading another .
(2) Judicial Anthology of Sufficient Cause
27. The jurisprudence relating to the definition of the phrase 'sufficient cause' is primarily within the context of Section 5 of the Limitation Act, 1908. The Hon'ble Supreme Court of Pakistan in a judgement cited as "ATA ULLAH MALIK Versus THE CUST ODIAN EVACUEE PROPER TY, WEST PAKIST AN AND KARACHI,SARDAR BATTAN SINGH HARNAM SINGH" (PLD 1964 SC 236), defined the phrase so as to mean 'circumstances beyond the control of the party', thus the term within the context of Section 5 of the Act of 1908 was that a party had to show to the Court that due to circumstances beyond its control, it could not file an appeal within the prescribed period of limitation. The opinion of the Court is reproduced hereinbelow: "Under Section 5 of the Limitation Act there has to be a finding of sufficient cause . In pre-Partition India sufficient cause had been defined as circumstances beyond the control of the party and I do not know of any case wherein this definition of sufficient cause had been rejected. However , at least in determining sufficient cause while dealing with the same expression in Order IX, rule 9 C.P.C. and Order IX. Rule 4, C.P.C the courts have been lenient and had been condoning some negligence i.e. negligence to the extent to which it is regarded as human though they never condoned negligence, At the same time the Courts had always been strict in demanding proof of sufficient cause for every day which had expired after the ordinary period of limitation."
28. The above view of the Honorable Supreme Court of Pakistan was further endorsed in the cases cited as "KHUSHI MUHAMMAD Versus Mst. FAZAL BIBI" (2016 PLD SC 872) wherein it had held that sufficient cause within the context of Section 5 of the Limitation Act, 1908 would be required to be interpreted whilst considering the provisions of Section 14 of the Act of 1908, which provided that a Court shall only allow for the exclusion of time where a party had acted in 'good faith'. The Honorable Court considered that 'good faith' was defined under Section 7(2) of the Act of 1908 as "nothing shall be deemed to be done in good faith which is not done with due care and attention."
29. The definition of sufficient cause as to mean circumstances beyond the control of the parties, does not provide any clarity in terms of Section 126 of the Act. The Hon'ble Supreme Court of Pakistan in "MUHAMMAD ANW AR Versus Mst. ILYAS BEGUM" (PLD 2013 SC 255) has held that "'sufficient cause' means a good cause, a just cause, a lawful cause etc. and there is no hard and fast rule and no absolute criteria can be set forth as to what constitute 'sufficient cause'. What is a 'sufficient cause' always depends upon the facts of the case, however a party must show a legally sufficient reason as to why a request should be granted or the inaction / omission should be excused, i.e. the judicial conscience of the Court must be satisfied with justifiable reasons". Sufficient cause has further been defined in "ABDUL MAJID and others Versus Mst. ZUBEDA BEGUM" (2007 SCMR 866) as cogent reasoning, convincing justification and satisfactory explanation, and the question what constitutes sufficient cause would depend upon the facts of the case.
30. The upshot of the above is that in the context of Section 5 and 14 of the Act of 1908, 'sufficient cause' is interpreted narrowly , in a sense that negligence or lack of due diligence on part of a party would render it unable to show that sufficient cause existed, this is so primarily owing to the phrase 'good faith' as used in Section 14.
However , in the context of Order IX Rule 4 and 9 CPC, 'Sufficient cause' is interpreted rather liberally so even in circumstances where a party has acted with negligence or failed to exercise due care, the Court may still decide that sufficient cause exists to allow the restoration of a Suit or allow a party to pay the requisite Court fee, as the circumstances may be. In Section 126 of the Act, a litigant is merely required to show that his name was removed 'without sufficient cause', and no such express provision stipulates that a litigant must have acted in 'good faith', then in such circumstances it may be open to the Court to decide as to whether to adopt a narrow approach as in the context of the Limitation Act 1908 or as the liberal approach as adopted in terms of Order IX Rule 4 and 9.
Since based on the definition as provided, the phrase Without Sufficient Cause in Section 126 of the Act would connote that in the opinion of the Court a good or justifiable reason was not provided for removing the name of a member from the register of the members.
31. The Courts in India have given the term "sufficient cause" a liberal meaning so as to advance substantial justice. For this purpose, the findings in the case of Ram Nath Sao & Ram Nath Sahu vs Gobardhan Sao and Others (2002) have been reproduced below: - "The expression 'sufficient cause' within the meaning of Section 5 of the Limitation Act, 1963 (hereinafter referred to as 'the Act'), Order 22 Rule 9 of the Code of Civil Procedure (hereinafter referred to as 'the Code") as well as similar other provisions and the ambit of exercise of powers thereunder have been subject matter of consideration before this Court on numerous occasions. In the case of The State of West Bengal v. The Administrator , Howrah Municipality and others (1972) 1 Supreme Court Cases 366, while considering scope of the expression 'sufficient cause' within the meaning of Section 5 of the Act, this Court laid down that the said expression should receive a liberal construction so as to advance substantial justice when no negligence or inaction or want of bona fide is imputable to a party ."
32. It follows from the above, that the question as to what is 'sufficient cause' depends upon the facts of each case, and as such would differ from case to case, such a view was opined by the Hon'ble Supreme Court of Pakistan in "Mst. KHADIJA BEGUM and 2 others Versus Mst. YASMEEN and 4, others" (PLD 2001 SC 355) in the following terms: "20. The principles laid down in Abdul Ghani' s case have been followed in other above-referred cases. It has been held that sufficient cause means "circumstances beyond control of party concerned" and that nothing shall be deemed to be done in good faith, which is not done with due care and attention. In case of Haji Abdul Wahid, it was held that what was sufficient cause it would differ from case to case and further it was held that any action taken on advice by the counsel against a clear provision of law would not entitle the party to seek condonation of delay on the ground that he acted bona fide on such advice."
33. Thus, ultimately the discretion lies with the Court to decide based upon the facts of the case as to whether such satisfactory or acceptable reasons/justifications have been provided so as to constitute a sufficient cause. In "Rai MUHAMMAD RIAZ (decd) through L.Rs. and others Versus EJAZ AHMED and others" (PLD 2021 SC 761), the Hon'ble Supreme Court has held as under: "Although the term sufficient cause has not been defined in the Code of Civil Procedure nor can a specific yardstick be put in place for determining what constitutes sufficient cause and what does not, it always depends upon the facts and circumstances of each case and it has to be left to the judicial conscience of the Court to make an informed assessment as to whether the cause disclosed by the Petitioners was a reason good enough to satisfy the Court that it was beyond the reasonable control of the party concerned to appear before the Court on the date fixed for hearing."
34. The summary of the above definitions provided by the Hon'ble Supreme Court in terms of Section 5 of the Limitation Act, 1908, connotes that sufficient cause means 'circumstances that are beyond the control of the parties whereas in other circumstances 'Sufficient Cause' would connote a justifiable excuse, cogent reasoning, convincing reasoning, reasoning that in the opinion of the Court is satisfactory for a certain act or a justifiable explanation for an omission. In another case cited in "Dr. Syed SIBT AIN RAZA NAQVI Versus HYDROCARBON DEVELOPMENT and others" (2012 SCMR 377) the Hon'ble Supreme Court opined that the term 'sufficient cause' connoted that the element of discretion lay with the Court to decide as to whether the justification provided amounted to suf ficient cause. The Honorable Court held that: "The two expressions "due diligence" and "good faith" in section 14 do not occu r in section 5 of the Act which enjoins only "sufficient cause". The "expressions" due diligence and "good faith" used in section 14 of the Act cannot be equated with the expression "sufficient cause" used in section 5 of the Act. If it were so, the Legislature could have used identical expressions in both sections particularly when "good faith" has been defined in Section 2
(7) of the Act is discretionary , whereas under Section 14 of the Act, exclusion of time is mandatory on the satisfaction of the condition prescribed in it."
35. In "Mian MUHAMMAD NAWAZ SHARIF Versus THE STATE" (PLD 2009 SC 814) the Hon'ble Supreme Court has held that "sufficiency of a cause depended upon the facts and circumstances of each case and it was for the conscience of the Court to decide as to what constituted 'Sufficient Cause'. Sufficient cause can also amount to cogent reasoning, convincing justification and satisfactory explanation."
36. The above discussion can be summarized in the terms: Sufficient cause means something that is a satisfactory explanation for the Court for an action or some omission, it may be a justifiable reason, a cogent reason, a reason which satisfies the Court that a certain action should have been taken or a certain omission was justifiable / excusable. Whether sufficient cause is shown for an act or an omission depends upon the facts of the case and it is at the discretion of the Court to decide whether it is satisfied that sufficient cause has been shown for an action or a justifiable excuse is provided for an inaction. Thus, whilst interpreting the phrase 'without sufficient cause' in the context of Section 126 of the Act, the question before the Court is whether a justifiable cause has been provided for the act of removing a member from the register of members or whether a justifiable excuse is provided for failing to enter the name of a member in the register or whether a sufficient cause has been given by the Petitioner in filing the petition in hand after a long span of time, as the case may be.
(3) Name of Directors/Shareholders could be omitted/entered without their consent
37. The Petitioner has strongly emphasized that his name, being a Director of the company , was omitted/entered without his consent. While the stance of the Respondents is that the Petitioner has voluntarily resigned from the posts of Chief Executive and Directorship of the Company on 31.10.2008. Pertinently , under the provisions of the Act, there are certain stances where the name of Directors/Shareholders could be omitted/entered without their consent. These are as follows: Section 17 of the Act.
38. Section 17 of the Act, if, in the event the money payable by a subscriber in pursuance of his undertaking in the memorandum of association against the shares subscribed is not paid within thirty days of incorporation of the Company , then in such circumstances the shares are deemed to be cancelled and the name of such a subscriber by virtue of law is to be removed from the register of members. In such an event for obvious reasons the consent of such a member is not required.
Section 74(5) of the Act
39. Another situation where consent may not be required is the addition or omission by operation of the law as mentioned in aforesaid Section, thus, plausibly in such a situation the name of a member may be added or removed without his consent.
Section 285 of the Act
40. According to said Section, where a scheme or contract involving the transfer of shares of any class of shares in the Company to another Company has been approved by shareholders of the selling company , then the Company purchasing the said shares may issue a notice to the dissenting shareholder refusing to sell his shares with the intention to acquire such shares and the transferee company shall be entitled and bound to acquire the shares as per the terms of the scheme or contract and the Commission may order that the said shares be transferred to the transferee company . In such a scenario the name of the dissenting shareholder shall be omitted from the register without its consent and the name of the transferee company added.
Section 286 of the Act
41. Where a petition is filed under the said Section on the grounds that the affairs of the Company are being conducted in a manner that is prejudicial to the interests of the Company or its members, and that the affairs as conducted constitute oppression, then the Court under Section 286 of the Act is empowered to order for the compulsory purchase of shares of any members by the other members. In such a scenario once more the purchase of share is non-consensual, as it is solely being made on the basis of the order of the Court, ultimately however , if any such order is made by the Court, then such a transfer shall also be recorded by the Company and any change of shareholders/members shall also be duly added in the register of members.
42. Barring the above-mentioned instances, the name of a member can never be entered or omitted from the register without his/her consent in terms of the provisions of the Act. However , it may be relevant to consider the legal procedure for the adding of or removal of a person from the register of members.
(iii) Judicial Pathology of the W ords Entered or Omited
43. The requirement to maintain a register of members is provided under Section 119 of the Act which provides that a company shall maintain a register of all members of the Company . As per Regulations for management by a Company , contained in the First Schedule Table - A, of the Act, Regulation 47 thereof provides the duties and responsibilities of a Director of the Company according to which the Directors of the Company may exercise all such powers of the Company as are not specifically required to be exercised in a general meeting including the business of the Company . Further , Regulation 50 provides that the Directors shall comply with all the provisions of the Act pertaining to the register of Directors and members. Although Section 119 of the Act itself does not stipulate any express requirement to the scope that a register shall be maintained or names shall be entered or omitted only through a general meeting, thus as per Section 183 of the Act, such powers must be exercised by the Board of Directors of the Company who may authorize any officer of the company to maintai n the register and as such make addition or omission from the same and the same power would be exercised by the Directors of the company or any person authorized by the Board of Directors with prior authorization through a board resolution. It must be understood that the basic position arises that name of a member usually is only added or omitted where a transfer of shares has taken place and in such a situation a name of a member (the transferor) is omitted whilst the name of the new member (the transferee) is added. Thus, the mode of adding or omitting a member from the register shall then, be in compliance with the requirements of Sections 74, 76 and 77 of the Act, which can be summarized as follows: i. The process for transfer of shares as mentioned in Section 76 must be complied with i.e. a notice must be issued to the board of Directors by the prospective selling member indicating an intention to sell the shares, the board of Directors upon such a requisition shall offer the shares to all the shareholders in proportion to their existing shareholding, upon acceptance by the shareholders of the offer so made a duly recognized instrument of transfer shall be executed between the parties (a share transfer deed). ii. As per Section 74 of the Act, the executed instrument of transfer shall then be submitted to the Company to register the same and to add and omit the name of the transferee and the transferor as the case may be.
Subsequently , when a duly executed transfer deed signed and stamped by the transferor and transferee is tendered to the Board of Directors of a private limited Company , then in such circumstances the Board as per Sections 74 and 75 of the Act is bound to register the transfer of shares i.e. to add and omit the name of the transferee and the transferor respectively , and failure of the board to register the same shall grant the aggrieved party the right to move the Court under Section 126 for rectification of the register of members.
44. Thus, where the name of a member has been removed without his consent lies in situations where a transfer deed is executed with the forged signatures of a transferee, and then presented to the Company for registration in the register . In such cases, the Company cannot question the genuineness or validity of the transfer deed, unless there is an apparent defect in the same, thus where the transfer deed so presente d bearing the forged signatures of the transferee are presented to the Company , and on the basis of the above mentioned procedure the Company proceeds to omit the name of the transfe ree shareholder and adds the name of the transferor on the basis of this fraud, then in such circumstances the name of the transferee member would have been omitted without his consent and his legal tittle snatched from him. Such a member shall have the remedy to appear before the appropriate forum, for cancellation of such a fake and bogus transfer deed and for rectification of the register under Section 126 of the Act.
45. Considering then, the instrument required to be submitted to have the name of a person added or omitted from the register . As per Section 62 of the Act, a share certificate specifying the shares held by a person shall be prima facie evidence of title of the person to such shares. Further , the instrument of transfer as provided in the Act, is the share transfer deed since Section 75 also makes a reference that a Board may only refuse the transfer of shares if a defect is found in the 'transfer deed'. It has been held in "ALLIANCE TEXTILE MILLS LIMITED and 8 others Versus Mrs. NAHEED KAYANI and 9 others" (2015 CLD 1532 ) that under Section 76 of the Act, a company cannot register transfer of shares i.e. cannot add the name of the transferee or omit the name of the transferor unless a proper instrument of transfer duly stamped and signed by the transferor and transferee has been delivered to the Company along with the script.
46. The upshot of the above is that the name of a shareholder can be added or omitted by the Board of Directors by way of passing an ordinary resolution specifying that the name of such a memb er be added or such a member be omitted where the mode is through the transfer of shares as mentioned in Section 76. The mode of adding or removing such a name from the register is where the Board as per Section 74 has received an application along with a duly executed instrument of transfer signed and stamped by the transferor and transferee for the registration of shares, it enters the name in the register or omits from the same. The instrumen t of transfer as stipulated in the Act, is the Share transfer deed and the title to the shares are established through the share certificate issued under Section 62 of the Act. The Court in "MUHAMMAD SOHAIL BUTT Versus CAPIT AL INSURANCE COMP ANY LIMITED and another" (2007 CLD 1487) has held that the legal title to the shares is conferred by entry of the name in the register of members, whereas beneficial ownership is conferred when share certificates are issued. In the process so mentioned the consent of the members is seemingly evident, since the act of adding or omitting is merely being done on the basis of a consensual agreement submitted by the members. The powers of the Board to arbitrarily add or omit the names is further made subject to the provisions of Section 126 of the Act, which provides that a member may move the Court to have register rectified where his name has been added or omitted without a sufficient cause or fraudulently . Thus, inherently the power of the board to alter the register is greatly curtailed, since on account of removing a member without any justifiable reason or fraudulently , the Directors may be exposed to the penal provisions of Section 127 of the Act, and although the Board may practically do such an act, it would albeit be considered as illegal. Thus, in the normal course of business the name of a member cannot legally be removed without his consent.
47. Thus, it follows that although Directors of a Company can add or omit the name of members from the register of members, such an act may only be done where there exist justifiable reasons. An instance of such a justifiable reason would be where a shareholder has sold his shares as per the process mentioned in Section 76 of the Act. In such circumstances, at the last stage where the transfer of shares is to be registered by the Directors, such an act in practice takes place through a board resolution, whereby usually the company secretary or any other officer of the Company is authorized by the Board, to register the transfer of shares, and thus add the name of the new member whilst omitting the name of the previous member . In such a scenario the addition / omission is with consent. In the case in hand, the Respon dents have annexed with their report and parawise comments, the extract of minutes of Board of Directors meeting held on 31.10.2008 (Annex-J Page 29) whereby it was resolved that the Petitioner/Mr . Abdullah Osmani Director/Chief Executive resigned from his posts voluntarily which is approved and the same will take effect from 31.10.2008 and for this purpose, the Petitioner has tendered his resignations for each post, mentioned above, on 31.10.2 008. (Annex-G, Page-23 and 24). In addition, the transfer deed dated 31.10.2008 is also annexed (Annexure-F , Page 22).
48. The record submitted by the SECP also verifies the stance of the Respondents because as per Form-A made upto 31.10.2008 submitted before the SECP , the shares held by the Petitioner were transferred in the name of the Respondent No.2/Asma Liaqat w.e.f 31.10.2008 and further 100 shares held by one Muhammad Imran were also shown as transferred in the name of the Respondent No.3/Liaqat Ali w.e.f. 28.09.2009. It is noted that the Petitioner alleged in para No.2 of the petition about having 100 shares by Muhammad Imran who has not resigned yet from the company nor his resignation before the SECP . Although, the Petitioner has not made Muhammad Imran as party to the petition yet record attached by the SECP reflects that aforesaid 100 shares held by Muhammad Imran were transferred by him in favour of Liaqat Ali w.e.f. 28.09.2009 as reported vide Form-A made upto 31.10.2009. In this view of the matter , it cannot be said that his 29,900 shares were transferred fraudulently or without sufficient cause, and no valid reason or evidence has been provided by the Petitioner to substantiate his claim.
MOOT POINT NO.2 (Entertainment of Application after a period of ten years)
49. In order to constitute a sufficient cause and a justifiable excuse for the purpose of limitation, it would be appropriate to reiterate the facts of the case. The Petitioner has taken specific stance that he, being Director of the Company , filed annual returns for the year 2006 and 2007 and had gone abroad in year 2008 for the purpose of job in travelling agency . Thereafter , upon his return in the country in year 2015 (as admitted in para No.4 of the petition), he intended to start a new business and for this purpose, he visited the website of the Ministry for verification of his status as Director of the Company , and from there he came to know about running the Company by the Respondents No.2 to 4. He, after getting knowledge from the website of the Ministry , filed applications to the Respondents No.1, 5 and 6, same dated i.e. 02.07.2018.
50. It is clarified here that the Petitioner has never moved any application to the Respondent No.1/SECP which is the relevant and proper forum for obtaining such information rather application attached with this petition by the Petitioner at Annex-E/I, as stated by the Petitioner to be filed before SECP , is actually addressed to the Director FIA, Lahore. While applications at Annex-E/II and Annex-E/III were submitted to the Respondent No.5&6.
Interestingly , the Petitioner opted to move applications to the Respondents abou t knowing his status and other quires (made in the applications) but aforesaid Respondents have no nexus or link to provide such information to him rather it was the Respondent No.1/SECP who could better correspond the quires to him. The applications annexed at Annex-E/I to Annex-E/III, makes it quite clear that the Petitioner has never approached the Respondent No.1/SECP after his resignation i.e. 31.10.2008 till filing of applications in year 2018.
51. Notably , the Petitioner has mentioned the date of his return in Pakistan as 2015 in the petition however , during the whole arguments, the counsel for the Petitioner has specifically argued about his return to Pakistan in June, 2018 when he gained knowledge about issuance of Hajj Merit List 2018 through the website of Ministry .
Particularly , the Petitioner , at his own, is presuming and is under the impression that he, being Director of the Company , submitted annual returns for the year 2006 and 2007, went abroad in year 2008, returned to Pakistan in year 2015 (as per contents of para 4 of the petition) and another date of returning to Pakistan as June, 2018 and then filing of applications to the Respondents No.1, 5&6 on 02.07.2018 followed by this petition as justifiable sufficient cause.
52. It evinces from the record that the Petitioner has mentioned, in paragraph No.4 of this petition, the date of his departure as 2008 while date of return as 2015. It is his version that the shares were transferred in between his departure and arrival i.e. 31.10.2008. The said version of the Petitioner has strongly been negated by the Respondents on the ground that the Petitioner has wrongly mentioned his date of return to Pakistan as 2015 while he remained active in doing business of Hajj and Umra in Pakistan. During the course of arguments, Mr. Salman Mansoor , ASC stated that in year 2009 the Petitioner was the Chief Executive of 'Kissa Travels' and the said company defaulted in hajj travels services pursuant to which the Ministry sold his assets for refunding amount to affected pilgrims. He further stated that thereafter the Petitioner opened a new Hajj and umrah company in year 2012 in the name of his wife under the name and style of "Liza Travels' having enrolment number 13091 with the Ministry and the said name was further changed to 'Muballigh Travels'.
53. Hence, it cannot be said that the Petitioner was not aware of the transfer of shares which he himself had transferred in favour of the Respondents No.2&3 in presence of witness and through duly executed transferred deed as per Section 74 of the Act as such this petition has been filed after ten years just to cover the period of limitation. So far as the assertion of Petitioner that he timely filed this petition regarding illegal and bogus transfer of shares is concerned, suffice it to say that the remedy of rectification does lie with this Court because Section 126 of the Act provides remedy for redressal of grievances of the Petitioner which he did not opt for a considerable span of time rather he opted to file application s before the Respondents who have no concern to respond or provide information under the Act.
54. As per his version, he was not in Pakistan at the time of execution of transfer deed rather it was presented before the Board of Directors bearing his forged signatures and this fact came to his knowledge in year 2018 when he visited the website of the Ministry . While this stance of the Petitioner has strongly been agitated by learned counsel for the Respondents on the ground that this petition is time barred in the light of judgment passed by this Court in "NAZAR HUSSAIN ETC Versus NASIR ALI etc" (2020 CLD 578) whereby the Court held that Article 181 of Limitation Act is applicable and limitation would start to run from "the time when the right to apply accrues". In response, learned counsel for the Petitio ner replied that right to sue and accrual thereof as mentioned in Articles 120 and 181 of the Limitation Act, 1908, as dilated upon by the aforementioned judgment, involves the element of knowledge whilst juxtaposing the aforementioned Judgment with the judgment of the august Supreme Court cited in "BAKHSHA and others Versus CHUGA TTA" (2002 SCMR 1353), wherein it was held that "right to sue accrues when the factum of fraud comes to the knowledge of the plaintiff." The Court is in agreement with the stance of learned counsel for the Respondents that limitation act is appliable on petition under Section 126 of the Act and the limitation starts to run from the time when the right to apply accrues and not from the date of knowledge. The Court in the case of "NAZAR HUSSAIN , supra has held as under: "28. In view of the above discussion and law laid down in aforesaid judgments by the Hon'ble Supreme Court which annunciate principles of law and decide questions of law hence are binding on this Court under Article 189 of the Constitution, therefore, it becomes clear that since there is no limitation period mentioned in Section 152 of the Ordinance, Article 181 of the Limitation Act is applicable for fling an application under Section 152 of the Ordinance (now , Section 126 of the Companies Act, 2017) before this Court. Such application has to be filed within a period of three years from the time when right to apply accrues ,(emphasis added)"
55. Mr. Shezada Mazhar , ASC/Amicus Curiae has also relied on the judgment passed by the Hon'ble Supreme Court of Pakistan in the case of DR. SYED SIBT AIN RAZA NAQVI (supra) in which it has been held that the term 'sufficient cause' connoted the element of discretion lay with the Court to decide as to whether the justification provided amounted to sufficient cause. In this case, the Petitioner has alleged gaining of knowledge about transfer of his shares in June, 2018 while he himself has voluntarily resigned from the Directorship of the Company on 31.10.2008 therefore, the right accrues on 31.10.2008 when the Petitioner volunta rily resigned and thereafter the Company made the entries/ changes in the registers of members and Directors by filing its returns through Form-A and Form-29 and notifying changes to the SECP . Pertinently , every company is bound to submit annual returns to SECP and such changes in the Company' s registers become public knowledge, all treated as public notice and knowledge after filing of the Annual Returns through Form-A.
56. It is observed that the Petitioner , at one point of time, was a Director of the Company who submitted annual returns for the year 2006 and 2007 and nothing is brought on record by him thereafter and at this stage, his saying that he gained the knowledge of alleged transfer through the website of Ministry , is not convincing inspiring in the sense that the Petitioner is not a laymen rather he was performing his duties of professional nature and he remained silent for a considerable period of time when the law itself has provided many opportunities to keep in touch with the company record, inspect registers of Directors and documents, file statutory annual returns once in each year which becomes public record. In this regard, Section 74(4) of the Act provides that company registers are open to inspection by members and copy is to be supplied as per demand which admittedly the Petitioner has not applied during long span of time. While Section 124 of the Act envisages rights of the members to inspect registers and index referred to in Sections 119, 120, 122 and 123 which are open to inspection of members or debenture-holders during business hours, subject to such reasonable restrictions, as the company may impose, so that not less than two hours in each day be allowed and that too such inspection cannot be refused. Moreover , as per Section 130 of the Act every compa ny having a share capital is bound to prepare and file an annual return through submission of "Form-A", once in each year and all new changes in the register of members/shareholders and other changes of particular in registers are required to be notified to SECP . As per Section 205 of the Act, the changes in the name of Directors are also duly notified to SECP by filing of Form-2 9 and such register of Directors of the companies is open to inspection in terms of Section 198 of the Act and individuals can obtains certified copy of Form-29 from SECP and whenever , any company submits information in terms of Form-29 and Form-A to the SECP , the change in the register of memb ers and register of Directors become public information and is treated as public notice. If, for the sake of arguments, the stance of the Petitioner is admitted as true that he is Director of the Company till 2018, he was under the statutory duty to submit annual returns in terms of Section 130 of the Act for year 2008 to onward but he has not attached with this petition any annual return subsequent to year 2006 and 2007 the period he remained Director of the Company .
57. If we look this aspect of the matter from another viewpoint by considering the Petitioner 's stance that he gained the knowledge about alleged transfer of shares through fraudulent manner by the Respondents No.2 to 4, even then there is another way, called electronic communication such as email, text messaging, voicemail and video messages, then what prompted the Petitioner to remain silent for a decade while he had the opportunity to use these methods for knowing his status as Director in the Company from the SECP which he failed after voluntary resignation from the Directorship of the Company . Mr. Shezada Mazhar , ASC/Amicus Curiae emphasized on the fact that the Petitioner had also opportunity to appoint his agent or attorney for the purpose of getting any information about his status in the Company but none of these were utilized by him rather he remained silent for almost ten years.
58. Another important aspect of the matter is that the Petitioner was running the business of travel agency which requires a DTS License and its yearly renewal every year, which the Petitioner has not placed on record to substantiate his claim. On the other hand, the Respondents have regularly been filing annual returns from 2008 to onward and they have Certificates of Accreditation issued by the International Air Transport Association from 2011 to 2018 in their favour , a certificate which verifies professional standards of an agent and that was approved through an agreement on 09.06.201 1 (Annex-Q, Page 58), in favour of Asma Faisal (Annex-Q, Page 59). The Company is also carrying out its business activities after renewal of its license which is coupled with submission of bank guarantees to the IATA and the Tourist Department as well which is essential for any travel agency to run its business
59. The question at hand relates to statutory forms and register of members and debenture holders which are maintained by the company . Out of the said registers some information is necessarily required to be submitted with the SECP which plays a supervisory role on the companies incorporated under the Ordinance of 1984 as well as the Act. As per the Ordinance of 1984 it was mandatory for a company , inter alia, to keep in one or more books or register of its members and enter therein certain information subject to certain requirements that were laid down in Section 147 and 148 of the Ordinance of 1984. This requirement of maintenance of Register was also made part of the Act by insertion of Sections 119 to Section 123 which manifests different types of registers such as but not limited to register of members, register of debenture holders etc. that are required under the said Sections of the Act. All said kinds of Forms/returns or documents are required to be filed with concerned registrar of Commission under various provisions of the Ordinance of 1984 and the Act of 2017. Section 471 of the Act also makes provisions for filing of documents electronically .
60. This process of filling the documents with the SECP is known as the process of filling the Statutory Return, which are filed with the registrar concerned of the Company Registration Office (the "CRO"). SECP has prescribed the formats of the Statutory Returns in the Companies (General Provisions and Forms) Rules, 1985 (the "Rules of 1985"). Specific forms for Single member Companies are prescribed under the Single Member Companies Rules, 2003, whereas Formats of Annual returns i.e., Form A/B are prescribed under Third Schedule to the Ordinance of 1984. On the other after the promulgation of Act of 2017 the SECP restructured the old rules by promulgating the Companies (General Provisions and Forms) Regulations 2018 (hereinafter referred to as "Regulations 2018") under which a complete guide on the procedure of filing such statutory returns was explained in detail by insertion of Regulation 5 of the said 2018 Regulations. Additionally , by inserting Regulation 4, Forty-Five (45) different kinds of Forms were explained and put in place , which duly facilitated the issue at hand. Said Statutory Returns are filed under any of the following three situations: a. Immediately after incorporation of company b. Periodical (annual, half yearly , quarterly) c. On the occurrence of any particular event.
61. Therefore, it may be stated that there exist multiple ways, forms and documents but not limited to Form-A, Form-B, Form-29 and such others which are firstly , public documents available for inspection subject to payment of certain fee, and secondly are submitted at least once every year which are accessible by company members as well as public at large and which may help a shareholder in ascertaining the statu s of their shareholding because not only such like forms and documents are maintained in the company register but are also available as public documents with the SECP which the Petitioner has failed to show that he ever put an effort after his resignation from the Directorship of the company till 2018, to get his status known or he neve r adopted the proper procedure provided under the law. Moreover , anyone can get information through online service/SDMS portal provided by the SECP or alternatively by lodging complaint or writing an email or even through the phone provided for resolving complaints or even can contact through fax; but none of these methods were ever used by the Petitioner to strengthen his version for almost ten years.
62. The accumulative conclusion of the discussion made hereinabove based on the detailed interpretation of Section 126 of the Act with its Pathology , Anatomy and Judicial Anthology is that this petition fails which is hereby dismissed .