MUHAMMAD SAJID MEHMOOD SETHI, J.- Through the instant petition, the petitioner has challenged the election process of the Board of Directors of M/s Bashir Jamil & Brothers (Private) Limited ("the Company"), held on 28.10.2024, with the following prayer:- "Under the circumstances stated above, it is therefore, most respectfully prayed that by allowing the instant petition, the elections process of the Company which is held in the 28th of October, 2024 and passed the resolution of the respondent No.4 may graciously be declared as illegal, unlawful, null and void ab-initio without considering the legal procedure and without considering the voting rights of the petitioner and without counting the vote of the shareholder persons to the ends of justice.
It is further prayed to set aside disputed board of director resolutions and restrain the respondent No.6 to issue funds and respondents No.2 & 3 restrain to sell company assets till the final adjudication of petition for protection of shareholder's precious rights.
It is further prayed for direction to respondent No.5 for mention dispute tag on file of M/s Bashir Jamil & Brothers (Private) Limited ("the Company) till final adjudication of petition.
It is further prayed that respondent No.5 be restrained to make the record of minutes of meetings."
2. Learned counsel for the petitioner contended that the elections conducted on 28.10.2024 were vitiated by material irregularities in breach of Sections 159(1) and 160 of the Companies Act, 2017 ("the Act, 2017"). He argues that no meeting of the existing Board was convened to fix the number of directors to be elected, as mandatorily required under Section 159(1). He maintains that the notice dated 05.10.2024 for holding the Annual General Meeting ("AGM") was issued without the required Board resolution and was thus void. He adds that the petitioner's and supporting shareholders' votes were not counted, and no proper attendance or voting record was maintained.
He submits that the respondents left the meeting midway, rendering the process non-transparent, emails confirming the shareholders' votes in favor of the petitioner were sent to respondent No.4 but were disregarded. In support, he has relied upon Tariq Aziz and others v. Makhdum Ahmed Mahmud and others (2022 CLD 1279) and Shahid Mahmood & Company (Pvt.) Limited and 2 others v. Zahid Mahmood and 5 others (2025 CLD 408).
3. Learned counsel for respondents No. 1 to 4 defends the elections and seeks dismissal of the petition, contending that the petitioner has failed to identify any irregularities in the notice of the AGM or in the proceedings of the election of Directors. He submits that the election of Directors was held on 28.10.2024, whereas the present petition was filed on 12.12.2024, i.e., 45 days after the election, and is, therefore, hopelessly barred by the prescribed limitation period of 30 days. In support of his contention, he relies upon Dewan Salman Fibre Limited v. Dewan Petroleum (Pvt.)
Limited (2016 CLD 1049). He further submits that the case law relied upon by the petitioner is not applicable to the facts and circumstances of the present case. Learned counsel for respondent- SECP adopts and reiterates the stance taken in the written reply.
4. Arguments heard. Available record perused.
5. Firstly, the issue relating to non-compliance with Section 159(1) & (2) of the Act, 2017 is being taken up. Section 159(1) mandates that the existing Board of Directors shall, through a duly convened meeting, fix the number of directors to be elected in the upcoming general meeting. The record in the instant case reveals that no such resolution was passed by the existing Board to fix the number of directors to be elected. Furthermore, the respondents have failed to produce any documentary evidence establishing compliance with the statutory requirements of Section 159(1) and (2).
Such non-compliance strikes at the root of the election process and renders the entire exercise invalid. Reliance is placed on Tariq Aziz and others v. Makhdum Ahmed Mahmud and others (2022 CLD 1279) and Shahid Mahmood & Company (Pvt.) Limited and 2 others v. Zahid Mahmood and 5 others (2025 CLD 408), wherein similar procedural lapses were held to have vitiated the election proceedings.
6. The petitioner, along with supporting shareholders, holds more than 10% of the voting power, thereby satisfying the threshold prescribed under Section 160 of the Act, 2017. This provision empowers the Court to declare election proceedings invalid where material irregularities or violations of law are established. In the present case, the petitioner has alleged serious procedural irregularities, including: (i) absence of proper attendance and voting records; (ii) failure to count votes cast in favor of the petitioner; (iii) lack of procedural transparency throughout the election process; and (iv) denial of effective participation to shareholders. These allegations, which strike at the root of a fair and lawful electoral process, have not been meaningfully rebutted by the respondents. The cumulative effect of these irregularities constitutes constitute fundamental procedural lapses that undermine the legitimacy and fairness of the election. Accordingly, such defects warrant judicial scrutiny and intervention under the mandate of Section 160 of the Act, 2017.
7. As regards the issue of limitation, the impugned election took place on 28.10.2024, while the petition was filed on 12.12.2024. The delay in filing has been satisfactorily explained. The petitioner applied for certified copies of relevant minutes on 29.10.2024. However, only uncertified copies were provided on 14.11.2024. Certified copies were re-applied for on 27.11.2024 but were never issued. This fact, when confronted to the rival party, remains unrebutted. Accordingly, the delay stands duly explained. In these circumstances, there is no merit in the contention advanced by learned counsel for respondents No.1 to 4 that the petition is barred by limitation, particularly when there has been a failure to comply with the mandatory provisions of Section 159(1) and (2) of the Act, 2017.
8. So far as the case law relied upon by learned counsel for the respondents is concerned, it suffices to say that said reliance is misplaced, as Dewan Salman Fibre's case supra was decided under Section 160A of the repealed Companies Ordinance, 1984 and is distinguishable on facts and legal context. In the said case, proceedings of AGM were challenged, however the Court found that petitioner could not point out any defect or omission in the notice of the meeting which either prejudiced its rights or prevented from effectively exercising its rights. Similarly, the judgment reported as Mrs. Hijab Fatima Tariq and 2 others v. Kohat Cement Co. Ltd. and others (2017 CLD 436) involved application of the repealed law which required a 20% shareholding threshold for invoking judicial intervention - a requirement no longer present under the Act, 2017. The present petition, based on Sections 159 and 160, stands on a materially different legal footing.
9. Needless to say, when a statute requires that a thing should be done in a particular manner or form, it has to be done in such manner. otherwise it would not be in-compliance with the legislative intent. Reference can be made to Atta Muhammad Qureshi v. The Settlement Commissioner, Lahore Division, Lahore (PLD 1971 SC 61), Hakim Ali v. Muhammad Salim (1992 SCMR 46), Khyber Tractors (Pvt.) Ltd v. Pakistan through Ministry of Finance (PLD 2005 SC 842), Zia Ur Rehman v.
Syed Ahmed Hussain (2014 SCMR 1015), The Collector of Sales Tax, Gujranwala v. Messrs Super Asia Mohammad Din and Sons (2017 SCMR 1427), Abdul Khaliq v. Sardar Sanaullah Zehri (2019 CLC 1543), Shahdost Dashti v. Federation of Pakistan (2019 CLC 1750) and Muhammad Andleeb Raza v. Muhammad Nazar (2019 YLR 1974). It is settled law that when the word 'shall' is used in a provision of law, it is to be construed in its ordinary grammatical meaning and normally the use of word 'shall' by the legislature brands a provision as mandatory, especially when an authority is required to do something in a particular manner. Reference can be made to Haji Abdul Karim and others v. Florida Builders (Pvt.) Limited (PLD 2012 Supreme Court 247).
10. In view of the above findings, the election of the Board of Directors of M/s Bashir Jamil & Brothers (Pvt.) Limited held on 28.10.2024 is declared illegal, void ab initio, and without lawful authority, being violative of the mandatory provisions of the Act, 2017. Consequently, the entire election process and resolutions passed on 28.10.2024 are set aside. Consequently, the existing Board of Directors shall, through a duly convened meeting, fix the number of directors to be elected in the upcoming general meeting in compliance with provisions of Section 159(1) & (2) of the Act, 2017. Thereafter, an afresh general meeting shall be held in accordance with law. Notices and agenda shall be issued strictly in terms of the Act, 2017. The SECP to appoint an officer to supervise the whole process till the election of the directors. This process shall be completed within two months from the date of receipt of certified copy of this judgment. Respondents No.2 and 3 are restrained from alienating or disposing of any assets of the Company. Respondent No.6 is restrained from disbursing any funds until fresh elections are conducted.
11. The petition is allowed in the above terms. No order as to costs.