OMAR SIAL, J. A background to the case is that the applicant was the Chief Executive and Chairman of a public limited listed company by the name of Beema Pakistan Company Limited ("BPCL"). BPCL is currently under liquidation. On 12-4-2008 (before the liquidation process began), the Securities and Exchange Commission of Pakistan ("SECP") filed a direct complaint before the learned District and Sessions Judge, Karachi South against BPCL and its officers, one of whom was the applicant. The complaint was filed under sections 409, 420, 468. 471 and 477-A, P.P.C. read with sections 30 and 37 of the S.E.C.P., Act 1997. The officer who was authorized by S.E.C.P. in this behalf (Mr. Sidney Pereria who was the then Registrar) was subsequently transferred to Islamabad and an application was moved by S.E.C.P., that the Additional Registrar (Mr. Zia Abbasi) be allowed to appear on behalf of S.E.C.P. The application was allowed by the learned trial court through order dated 8-1-2020. The applicant being aggrieved by this order has challenged it through these revision proceedings.
2. The learned counsel for the applicant has argued that the substitution of the complainant cannot be permitted as there is no law that allows it. An argument simpliciter has been raised. We have heard the learned counsel for the applicant as well as the learned Special Prosecutor for S.E.C.P. and the learned D.A.G.
3. The issue that requires adjudication in these proceedings is whether S.E.C.P., a body corporate could have initiated a criminal complaint in its name and, having initiated a criminal complaint, could validly continue to prosecute the case through an officer different from the one who initially filed the complaint. Learned counsel for the applicant contends that this should be answered in the negative. We for the following reasons answer this in the affirmative.
4. Securities and Exchange Commission of Pakistan via section 3(2) of the Securities and Exchange Commission Act 1997 ("the Act of 1997") has been established as a body corporate. The legal fiction in our jurisdiction treats a body corporate or a company as a "person", albeit an artificial or juristic person. By virtue of that status, a juristic entity enjoys many rights and privileges. One such entitlement is the right to sue and be sued. This right is also expressly provided to S.E.C.P. by section 3(2) of the Act of 1997. The term "sue" in Black's Law Dictionary has been defined as -"to institute a lawsuit against (another party)." Whereas, the meaning of the term "criminal proceeding" in the Black's Law Dictionary refers to the term "proceedings". The latter has been defined as, "the regular and orderly progression of a lawsuit including all acts and events between the time of commencement and the entry of the judgment." In the said context, criminal proceedings can be read into the term "sue and be sued." A wider definition of the Word "sue" would thus include criminal prosecutions within its ambit; however, even if the word "sue" is restricted to civil actions there appears to be no reason why a company cannot initiate criminal proceedings in its own name. This interpretation is in line with the judgment rendered by the Privy Council in The Matter of The Reverend James Godfrey Mackmanway (PLD 1950 PC 149) where it was held that "The primary duty of a Court of law is to find the natural meaning of the words used in the context in which they occur that context including any other phrases in the Act which may throw light upon the sense in which the Act used the words in dispute." The said dicta was referred to in the case State Bank of Pakistan v. Securities and Exchange Commission of Pakistan (PLD 2018 SC 52).
5. There is no cavil to the fact that there are precedents in our jurisdiction that have allowed for natural persons to initiate and prosecute criminal complaints at the behest of and under authority of a juristic person. Any conclusion to the contrary would have been illogical bearing in mind the fact that the world has witnessed mushroom growth of such juristic persons who act through natural persons. Predominantly the business industry operates through these juristic entities and economic development of a country heavily relies on their smooth and efficient workings.
Therefore, it is imperative that the law provides the said entities with legal safeguards against potential criminal behavior that may or does in fact adversely affect their functioning. In fact, when the said juristic person(s) are found to have acted on the wrong side of the law, the law wields its influence to penalize the same either by imposing penalties or by piercing its corporate veil to fixate liability on its members. As a corollary, it is only fair that when wronged against, the body corporate should be able to institute and prosecute criminal proceedings against any wrong meted out to it.
6. Coming to the present case, the preamble of the Act of 2017 explains that S.E.C.P was established for the beneficial regulation of the capital markets, superintendence and control of corporate entities and for matters connected therewith and incidental thereto. S.E.C.P. as a regulator of companied in Pakistan has been empowered, in fact it is its responsibility, to ensure a healthy environment for the establishment, growth and functioning of corporate entities. This is imperative for sustained economic growth. At the same time, S.E.C.P. must also ensure adequate protection to the various stakeholders of a company from unlawful and illegal acts of those who control and manage such a company. Section 20 of the Act of 2017 provides that SECP shall have all such powers as may be necessary to perform its duties and functions under that Act or any administered legislation. The predecessor to the current Companies Act 2017 i.e. Companies Ordinance, 1984, was one such administered legislation. The scheme of the Companies Ordinance, 1984 in itself envisages that SECP can initiate criminal prosecutions. Such intent is reflected in, inter alia, section 265 which provides that SECP can appoint an officer to inspect and investigate the affairs of a company if SECP is of the opinion that persons concerned in the formation of the company or the management of its affairs have in connection therewith been guilty of fraud, misfeasance, breach of trust or other misconduct towards the company or towards any of its members or have been carrying on unauthorized business. Section 268 provides that if a person does not provide assistance to the SECP in an investigation being conducted, any such person who makes default in complying shall, without prejudice to any other liability, be punishable in respect of each offence with imprisonment of either description for a term which may extend to one year and shall also be liable to a fine which may extend to ten thousand rupees. Section 270 provides that upon an inspector's report If it appears to SECP that any person has, in relation to the company or in relation to another body corporate, whose affairs have been investigated, been guilty of any offense for which he is criminally liable, SECP may, after taking such legal advice as it thinks fit, prosecute such person for the offence, and it shall be the duty of all officers and other employees and agents of the company or body corporate, as the case may be, other than the accused in the proceedings, to give the SECP or any person nominated by it in this behalf, all assistance in connection with the prosecution which they are reasonably able to give. It would be an absurdity if SECP with such powers is barred from initiating criminal complaints.
7. Having established a body corporate's right to initiate criminal proceedings, the question that ensues is that how the right should be exercised. It must necessarily be through a living person who has been authorized by the body corporate to initiate such proceedings. Such living person would not be the "complainant" per se but would be a representative of the body corporate who is the complainant. There can be a number of reasons why the complainant (when it is a juristic person) may require changing a person to represent it. No illegality would occur if circumstances are such that a body corporate needs to change its authorized officer. It would not be necessary for the body corporate to be represented through the same individual right from the inception of the complaint till its final disposal. To hold so would be to allow for a technical knockout to take precedence over the aim and spirit of the law which would then inevitably stand defeated.
Litigation is a protracted exercise and it is practically impossible for the same officer to be involved in the case throughout its course. The impracticality of such a suggestion is obvious from the fact that the employee may have retired, removed, resigned, transferred or passed away.
8. A somewhat similar situation had arisen in the case reported as Shahzad Abid v. The State (2004 PCr.LJ 409). The fact of this case were that a bank had registered an FIR through its authorized officer, however, the authorized officer himself subsequently absconded having committed a fraud. The bank moved an application under section 540, Cr.P.C. praying that another officer of it, he allowed to substitute the original complainant. The trial court allowed the application against which a revision was filed in this Court. This court dismissed the revision while holding that "in such type of cases the successor-in-office in bank has to discharge the very same duties which were then cast by law on his predecessor in the chair, and only because the original complainant in such cases is not found available, for any reason, the accused of such case cannot be allowed to take the benefit of any nature of any such absence of such complainant/witness on the contrary the law enjoins upon the trial court to fully take care of such situation and to examine all necessary witnesses so that all relevant and necessary evidence is produced in the particular case for the purpose of a just and proper decision of the case.
9. In view of the above discussion, the application is dismissed. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.