UMAR ATA BANDIAL, C.J.---The petitioners are aggrieved by the impugned judgment which finds lack of proportionality in the order dated 21.02.2017 by the petitioner, Pakistan Electronic Media Regulatory Authority ('PEMRA'), The said order is passed in exercise of powers under section 30 of the Pakistan Electronic Media Regulatory Authority Ordinance, 2002 ('the PEMRA Ordinance, 2002') to revoke the Multi-Channel Multi-Point Distribution Service (MMDS) license of the respondent.
2. After hearing the learned counsel for the parties at length, we find that there are errors and lapses committed by both the sides in the performance of their respective duties under the PEMRA Ordinance, 2002 and the Rules framed thereunder in the year 2009. The controversy in the case pertains to the respondent's failure to effect changes in its management without obtaining prior written permission from PEMRA. Resultantly, PEMRA revoked the license of the respondent under section 30 of the PEMRA Ordinance, 2002.
3. The history of this case is that the respondent Company was granted Multi-Channel Multi-Point Distribution Service (MMDS) license on 20.05.2004. Before the 10-year term of license had expired on 20.02.2014 the CEO of the Company handed over its m to a new set of persons. The new directors/major shareholders informed PEMRA about the change in management of the Company vide letter dated 23.07.2012. An application for renewal of the license was made on 11.10.2012 by the new CEO which was granted by the: PEMRA on 15.10.2012. The respondent Company paid an amount of Rs.45 million by way of revalidation fee that was due from it. On 19.03.2014, PEMRA issued a show cause notice to the respondent Company threatening suspension/revocation of the license and imposition of fine under the provisions of section 30(1)(d) of the PEMRA Ordinance, 2002 read with Rule 16(2) of the Pakistan Electronic Media Regulatory Authority Rules, 2009 ('PEMRA Rules, 2009') for unlawful change in its management without prior permission from PEMRA. On 05.05.2014, PEMRA revoked the license of the respondent company. Such action was appealed by the latter before the learned High Court. While the appeal was pending in the High Court, the respondent Company again changed its management twice in June 2014 and December 2015. Be that as it may, the learned High Court remanded the matter back to PEMRA vide order dated 22.02.2016. The order directed PEMRA to "reconsider the case of the appellants for the change of management/shareholders/ directors by assuming that the application dated 23.07.2012 seeking change of Directors/shareholders is still pending". The matter was accordingly decided afresh by the PEMRA vide the impugned order dated 21.02.2017 wherein the following finding was recorded: "14. The Authority, while upholding its earlier decision in the matter in its 94th meeting held on 24.4.2014 and in compliance with the Order of the Hon'ble Sindh High Court in the matter of M.A. 15 of 2014 titled "Messrs Southern Networks Limited v. PEMRA etc." in exercise of its powers conferred under section 30 of the PEMRA Ordinance, 2002 as amended by the PEMRA (Amendment) Act, 2007 read with other enabling provisions, unanimously decided to revoke all the licenses of the Company on the following grounds: a. That despite being provided ample time and multiple personal hearing in pursuance to the Orders of the Hon'ble Court, the Company completely failed to provide any application along with a declaration/NOC and indemnity in favor of PEMRA required for change seeking transfer of shares to new directors duly signed by the CEO and Directors in favor of who the licenses had originally been granted: b. The fact that the Company repeated the violation of illegal change in management twice even after cancellation of its license on 24.04.2014, the very violation based on which its licenses were cancelled.
15. Above in view Messrs Southern Network Limited is required to comply with the afore mentioned decision of the Authority with immediate effect, clear all outstanding dues and fines (if any) and immediately stop operation in Karachi, Lahore and Islamabad.'
Emphasis supplied
4. It appears from the foregoing decision that PEMRA gave a post facto validation of the license until 21.02.2017 to the respondent Company. This stance may possibly be meant to mitigate the past conduct of PEMRA when having granted renewal of the license on 15.10.2012 to the new management of the respondent, PEMRA had thereafter taken a contrary stand by issuing the respondent a show cause notice on 19.03.2014 and order dated 05.05.2014 revoking its license.
During arguments, the learned counsel for PEMRA has emphasized the misconduct of the respondent to have changed its management thrice without permission from PEMRA. He also urged that the respondent did not cooperate in providing information and documents regarding such changes. In these circumstances, the previous directors were called to explain the position. By the order dated 21.02.2017 the PEMRA revoked the license granted to the respondent Company for failure to comply with the conditions specified in sub-paras (a) and (b) of para 14 of the said decision. The same was challenged by the respondent Company before the High Court in the Miscellaneous Appeal No.7 of 2017 which was allowed in the impugned judgment dated 02.09.2021.
5. We have read the impugned judgment carefully and find that the learned High Court failed to consider the statutory conditions laid down in section 30(1)(d) of the PEMRA Ordinance, 2002 read with Rule 16(2) PEMRA Rules, 2009. Furthermore, the impugned judgment did not take into account the specific conditions applicable to the scrutiny of an application for transfer of management of a licensee company laid down in section 25 of the PEMRA. Ordinance, 2002 read with Rules 13(3), 9(5) and 7(e) of the PEMRA Rules, 2009. The High Court has over emphasized PEMRA's requirement demanding the outgoing directors of the respondent to be present whilst considering the application by the respondent Company for change in its management. Accordingly, the conditions of remand directed in para 37 of the impugned judgment dated 02.09.2021 disregards the mandatory requirement of prior permission imposed by the statute in the aforementioned provisions of the PEMRA Ordinance, 2002. We consider that the said statutory provisions have mandatory effect and cannot be overlooked merely because an unlawful or unreasonable condition of personal appearance of the outgoing directors before PEMRA had been imposed by the latter authority. It is conceivable that even such a condition may be relevant for processing the application for change of management of a licensee under particular circumstances. Therefore, the same cannot be ruled to be altogether irrelevant for consideration by. PEMRA.
6. In the present case, the facts however are such that the statutory provisions mentioned above cannot be applied in their strictness. This is because PEMRA had itself misled the respondent Company by a course of action that justifies the consideration of the latter's change of management application on its merits. PEMRA can only be justified to insist upon the revocation of license as the only consequence attracted by the delinquent conduct of a licensee when it has acted lawfully in the enforcement of the statutory provisions.
7. In the light of the foregoing, we remand the matter back to PEMRA to consider the change of management application filed by the respondent strictly in accordance with law. Consequently, the impugned judgment is set aside and so is the order of PEMRA dated 21.02.2017. Learned counsel for the respondent undertakes that any lawful dues that are payable to PEMRA shall be paid on demand.
8. The petition is disposed of in the above terms.