' NAIMUDDIN, J.--The petitioner has filed this petition under Article 9 of the Provisional Constitution Order, 1981, against Pakistan, and the Chamber of Commerce and Industry, respondents Nos. 1 and 2 , respectively for the following main reliefs.
"(a) A declaration that the impugned sanction, dated 21st.July, 1982 an the proposed elections pursuant thereto are without lawful authority and of no legal effect.
(b) A declaration that the Memorandum and Articles of Association of be respondent No, 2- coutinued to be remain unchanged.
(c) A direction restraining the respondents and either of them from acting in pursuance of the impugned illegal sanction and/or circular and/or making amendments to the Memorandum and Articles of Association of the respondent No, 2.
(d) A direction restraining the respondents from holding the elections contrary to the subsisting Articles of Association."
2. During the pendency of the petition Mr. Saeed A. Shaikh Advocate filed an application under Order I, rule 10 read with section 151, C. P. C. Praying for joining the following persons who are members of respondent No, 2 as parties to the petition, which was allowed.
"(1) Ch. Muhammad Asghar.
(2) Mr. S. Khalid Tawab.
(3) Mr. Shaikh Muhammad Ilyas.
(4) Mr. Tariq Sayeed and
(5) Mr. Rashid Soorty."
' On a similar application made on behalf of Muhammad Naseem and Muhammad Siddique, they being members of respondent No, 2 have also been joined as parties to the petition.
3. The facts giving rise to the petition, briefly stated are as follows :- Respondent No, 2 at the Extraordinary General Meeting held on 5-2-1974 passed the following resolution.
"Resolved that different classification of members i,e, Class I and Class II be abolished and the annual subscription be fixed at Rs, 250 and admission fee at Rs, 200 and the same be recommended to the Ministry of Commerce, Government of Pakistan, for final approval and copy be sent to the Federation. Further, resolved that necessary amendment be made in the relevant clauses of the Memorandum and Articles of Association of the Chamber on the receipt of the approval of the Ministry of Commerce, Government of Pakistan."
' The above resolution remained dormant for about six years. It appears from the record that in response to the letters No, 1-8/3306, dated the 20-9-1980, and S. V. P., dated 2-6-1982 of respondent No, 2, Mr. Lal Hussain Keyani, Section Officer of respondent No, 1 by the letter No, 7(7)170- TO, dated 21-7-1982, conveyed to the Secretary of respondent No, 2 the approval of the Federal Government to the amendments proposed by respondent No, 2 in their constitution (Article 4), that is, merge of member class and the Association Mqmber Class, into one Class but subject to the condition that all the members will have to pay an admission fee of Rs, 300 each and annual subscription of Rs, 700 each so as to improve the financial viability, of respondent No, 2.
' It further appears from the letter of respondent No, 1 conveying the approval that respondent No, 2 was directed to adopt the amendments in usual manner under the provisions of the Companies Act, 1913, and get approved from the Registrar, Joint Stock Companies, Karachi.
4. It also appears from the record that pursuant to the above approval, respondent No, 2, by the notice, dated 2-8-1982, convened an Extraordinary General Meeting on Thursday, the 12th August, 1982 at 11-00 a.m. To consider inter alia item No, 3 which reads as follows :- "To consider raising the Admission Fee and Annual Subscription of Member Class to RS. 300 and Rs, 700 respectively as directed by the Ministry of Commerce Government of Pakistan, on acceptance of our proposal for the merger of Classes."
' However, on 7-8-1982, another notice of Extraordinary General Meeting with a modified Agenda was issued to consider inter alia the following resolutions :- "(I)
(2)To adopt the proposal of the merger for the classes of members, as approved by the Federal Government.
(3)To consider raising of the admission fee and annual subscription of member class to Rs, 300 and to Rs, 700 respectively, according to the directions of the Ministry of Commerce, Government of Pakistan.
(4) . .
5. Accordingly, the meeting was held on 12-8-1982 at which Jan Muhammad Bhatti objected inter alia to the convening of the meeting without a 21 days notice. At the same meeting other members also raised other objections. Mr. S. R. Khan stressed that the fixation of fee at Rs, 700 was unjustified because it would result in raising the class II subscription from Rs, 250 to Rs, 700. However, at the meeting inter alia the following resolutions proposed by Shaukat Ahmed and seconded by A. Habib Ahmed were passed :- "Resolved that articles of Association of the Chamber of Commerce and Industry, Karachi as proposed to, be amended by the General Meetings held on 5th February, 1974 and List December, 1981, as ratified from time to time by the General Body and as approved by the D. T.
0. Vide letters both No, 7(7)79/TO, dated the 21st August, 1982 with immediate effect be and is hereby adopted. Further, resolved that the delegation of the Chamber headed by the President or his nominee should call on the Officials of the Ministry of Commerce and make full efforts to get subscription of the member class reduced to maximum Rs, 500 and the President was empowerd for that purpose.
' The office-bearers are directed to get the amendments to the articles of association filed with the Registrar Joint Stock Companies and to send the updated copies of the Memorandum and Articles of Association of the Chamber of Commerce and Industry, Karachi to the D. T.
0. The General Body feels that the amendment made by the D. T.
0. In Article 32(c) is not equitable and, therefore, resolved that there should be two office-bearers from the member class and one from the trade group (Class H) and town association (Class III) and the delegation should pursue the matter with the Government on urgent basis and if this point of view is not accepted by the Government, the matter in this respect of the merger of classes would be brought back to the General Body.
' Further resolved that the officer-bearers (President, Sr. Vice-President and Vice-President) are empowered to make amendments in the relevant Articles and Clauses of the Memorandum and the Articles of Association to give effect to the Resolutions passed by the General Body on 5th February, 1974 and 21st December, 1981 and duly approved at today's meeting."
6. It further appears from the record that in terms of Articles 5 and 6 of the Articles of Association a distinction is made between the admission and annual subscription fee payable by the Members and Associate Members of respondent No, 2 inasmuch as the annual subscription for Members is Rs, 700 and for Associate Members is Rs, 250 while the admission fee is Rs, 300 and Rs, 200 respectively. On the above basis a list of members was prepared which showed the number of Members as 927 and that of Associate Members as 6,082.
7. Having stated the relevant facts, we now, proceed to consider the points raised before us.
' Mr. Kamal Azfar learned counsel for the petitioner urged the following points in support of the reliefs claimed in the petition
(1) The approval was illegal inasmuch as it was not in accordance with the provisions of section 8(1) of the Trade Organisation Ordinance, 1961 (hereinafter called the Ordinance). Respondent No, 2 was required by respondent No, 1 to amend its Articles of Association in accordance with the provisions of Company's Act, 1913 (hereinafter called the Act) but the relevant provisions, theteof were not complied with.
8. Now, taking up the first point, it was submitted by Mr. Kamal Azfar that under section 8(1) of the Ordinance the appropriate Government could only approve the resolution of respondent No, 2 as originally passed on 5-2-1974 but what the Federal Government approved was partly different, from one that was proposed by respondent No, 2, as respondent No, 2 by the resolution had proposed abolition of Classes I and II and fixation of admission fee at Rs, 200 and annual subscription at Rs, 250 but the Federal Government had directed to amend the Articles of Association by fixing the admission fee at Rs, 300 and annual subscription at Rs, 700 and this could be done by the appropriate Government only in accordance with the provisions of section 8(1) (b), which was not the case here.
' In reply it was submitted by Messrs Nasim Farooqi, S. Hamid Hussain and Saeed A. Shaikh that approval sought by respondent No, I was in respect of the two matters namely, the abolition of different classification of members that is, Class I and Class II and fixation of admission fee at Rs, 200 and annual subscription at Rs, 250.
9. Now, so far as the first part of the proposal is concerned, admittedly there is no dispute that the approval was given to abolition of the classification of the members.
' But as regard the raising of admission fee from Rs, 200 to 300 and annual subscription from Rs, 250 to 700 it was conceded that it was not in accordance with the resolution passed and submitted to respondent No, 1 for approval. However, it was submitted that it was the direction under section 8(1)(b) which could legitimately be given by respondent No, 1.
10. On the other hand, it was submitted by Mr. Kamal Azfar that the direction could be given by applying the mind to the facts of the case. He submitted that in the present case, there was no justification for giving the so-called directions to raise the admission fee and the annual subscription as reasons given were "to improve the financial liability position of the Chamber," which was factually not correct as addited account for the year 1980-81 would show that the Chamber has earned a surplus of Rs, 3,95,887.46 during that year He also submitted that no opportunity was given to the members to be heard in this regard.
11. Before we consider the above submissions it may be useful if we reproduce hereinbelow, for ready reference, the provisions of section 8 of the Ordinance, which read as follows :- Amendment, repeal etc. Of articles, Memorandum, etc. Of trade organizations. -(1)
Notwithstanding anything contained in the Act or in any other law for the time being in force or in the articles or memorandum :-
(a) a registered trade organization shall not rescind, amend or otherwise modify its articles or memorandum without the prior approval of the appropriate Government ; and
(b) the appropriate Government may, whenever it considers expedient to do so, by order in writing, direct any such trade organization to rescind, amend or otherwise modify its articles, memorandum, rules or bye-laws, or to make any rule or by-law, in such manner and within such period as may be specified in the order.
(2) If any registered trade organization fails or neglects to comply with the direction under clause
(b) of subsection (1) the Central Government may, by notification in the official Gazette, rescind, amend or otherwise modify the articles, memorandum, rules or bye-laws of such trade organization, or make any rule or by-law in the manner specified in the direction or with such modification as it thinks fit, and any such rescission, amendment, modification or making shall be deemed to have been duly done by the trade organization in accordance with the Act of its articles or memorandum or in the manner it is otherwise competent to do so."
12. A perusal of- the above-quoted provisions would show that respondent No, 2 could amend the articles only with the prior approval of the appropriate Government and the Government gave its approval to the proposal/resolution as regard the merger of the classes of the members but subject to the condition that all the members will have to pay an admission fee at Rs, 300 and annual subscription Rs, 700 though the resolution passed by respondent No, 2 and submitted for approval to respondent No, 1 in this regard proposed the filiation of admission fee at Rs, 200 and annual subscription at Rs, 250.
13. Now, the question that arises for consideration is whether the change in the rate of admission fee and annual subscription was within the power of respondent No, 1 or not.
No doubt, the proposal/resolution was submitted by respondent No, 2 to respondent No, 1, pursuant to the provisions of section 8(0(a) of the Ordinance but for validity of the changes made in the admission fee and annual subscription, by respondent No, 1, we have not only to look to the provisions of section 8(1)(a) but also to the other provisions of the Ordinanc and also to explore, if necessary, every possible explanation for validity of th directions and examine the whole field of powers in regard thereto, before w could hold the same to be illegal.
This principle is well settled We may, however, here refer to three decisions of the Supreme Court of Pakistan on which reliance was placed by Mr. Saeed A. Shaikh namely, Chairman, East Pakistan Railway Board, Chittagong and another v. Abdul Majid Sardar, Ticket Collector (0, {{FOOT NOTE}}
(1) PLD 1966 SC 725 {{FOOT NOTE}} Lahore Improvement Trust v. Custodian, Evacuee Property (1) and Syed Muhammad Khurshid Abbas Gardezi v. Multan Development Authority and others (2).
In the second named case, it was observed by Muhammad Yaqub Ali, J. (as he then was) who wrote the opinion of the Court at page 837 of the report as follows :- "Another principle attracted in the case is that before an order passed 'by a public authority is struck down it is the duty of the court to explore every possible explanation for its validity and examine the - entire field of powers conferred on the authority in pursuance to which the impugned order has been passed."
' These observations are based on an earlier decision of the Court mentioned at Serial No, 1 hereinbefore, wherein also the opinion was written by Muhammad Yaqub Ali, J. The relevant observations are as follows :- "Acts performed and orders made by public authorities deserve due regard by Courts and every possible explanation for their validity should be explored and the whole field of powers in pursuance to which the public authorities act or perform their functions examined and only then if it is found that the act done, order made or proceeding undertaken is without lawful authority should the Courts declare them to be of no legal effect."
These observations have been followed in the last named case wherein the opinion of the Court was delivered by Aslam Riaz Hussain, J., on 18th May, 1982, which is, therefore, the latest reported pronouncement following the above-cited principle.
14. Examined in the light of the above principle we find that the impugned directions are squarely covered by the provisions of section 8(1)(b) of the Ordinance.
15. As regard the argument by Mr. Kamal Azfar that the directions could be given after applying mind to the facts of the case, it may be stated that there is nothing on record to show that the mind 'was not applied to the facts of the case.
16. Correctness or sufficiency of the reasons for the directions given is not for us to examine in the present exercise of powers under Article 9 of the Provisional Constitutional Order for we are not sitting in appeal against the C directions. We would have to see whether the order passed is within the jurisdiction of the Federal Government and we feel no hesitation in saying that it was.
We must not also loose sight of the fact that a further .Direction h been given to carry out the proposed amendments in the usual manner under the provisions of the Companies Act, 1913 where under again the matter has to be taken to the General Body of the Chamber in the form of a special resolution and, therefore, it was or is open to the members to accept or not to accept the directions and to carry out the proposed amendments o not. Therefore, the grievance that no opportunity was given to the members to be heard in this regard is not well-founded for an option was given to them to accept or reject the proposed amendments in the extraordinary meeting o the members of respondent No, 2.
' Therefore, the first point has no substance and we accordingly reject it. {{FOOT NOTE}}
(1) PLD 1971 SC 811 (2) PLD 1983 SC 151 {{FOOT NOTE}}
17. So far as the second point is concerned, it was submitted by Mr. Kamer Azfar that the Articles of Association could be amended/altered by a resolution as provided in section 20 of the Act, which reads as follows :- Alteration of articles by special resolution.--(1) Subject to the provisions of this Act and to the conditions contained in its memorandum, a Company may by special resolution alter or add to its articles ; and any alteration or addition so made shall be as valid as if originally contained in the articles, and be subject in like manner to alteration by special resolution.
(2) .
He further submitted that under section 81 of the Act a resolution can be called special resolution when it is passed by a majority of not less than 3/4th of such members entitled to vote, as present in person or by proxy, (where proxies are allowed) at the General Meeting of which not less than 21 days notice specifying the intention to propose the resolution as a special resolution had been duly given. He pointed out that admittedly in the present case, the first notice was issued on 2-8-1982, calling the meeting on 12-8-1981, i,e, within 10 days and the second notice modifying the proposed resolution was issued on 7-8-1982, calling the meeting on 12-8-1982, i,e, within 5 days. He submitted that under section 81 of the Act a 21 clear days notice was required to be given which was, therefore, not given. In this regard he referred to an English decision In re: Hector Whalting Ltd. (1), wherein the phrase "not less than twenty-one days notice" used in section 117(2) of the (English)
Companies Act, 1929 (which phrase has also been used in section 81 of our Companies Act) came up for consideration.
' He also submitted that the impugned resolution had not been passed at a general meeting of which requisite notice specifying the intention to propose the resolution as a special resolution had been duly given. In support of this submission he relied on Remoorgate Mercantile Holdings Ltd. (2) and on Taj Woollen Mills Ltd. v. Muhammad Younus (3). He, therefore, argued that both these notices were not in accord with the provisions of section 81 of the Act and thus the resolution which was passed at the meeting held on 12-8-1982, amending the Articles of Association was invalid and, therefore, of no legal effect.
18. In reply Messrs Nasim Farooqui and Saeed A. Shaikh submitted that under Article 21 of the Articles of Association of respondent No, 2 a shorter notice could be given in case of every business which in the opinion of the authority convening the meeting was emergent. We may here reproduce this article in its entirety for the convenience of future reference. The article reads :- "Proceeding at General Meetings 21-Twenty-one days notice in writing, at the least, specifying the place, the day and the hour of meeting, and in case of special business, the general nature of the business, shall be given to the members in the manner herein mentioned or in such other manner as may be prescribed by the General Body, but the non-receipt of such a notice by any member, shall not invalidate the proceedings at any {{FOOT NOTE}}
(1) 1935 All E R 302 (2) (1980) 1 All E R 40 (3) PL D 1982 Lab. 664 {{FOOT NOTE}} general meeting provided always that a shorter notice shall suffice in the case of every business which in the opinion of the authority convening the meeting is emergent."
' Now, so far as the period of notice, is concerned it would suffice to say that the notice issued by respondent No, 2 on 2-8-1982 and 7-8-1982, for 12-8-1982 fell short of 12 days' and 17 days respectively, while under section 81 of the Act a 21 clear days notice was a must. We find full support from the judgment In re: Hector Whaling Ltd. Cited by Mr. Kamal Azfar. The relevant passage reads :- "The first point to be decided is what is meant by the phrase 'not less than twenty-one days' notice', contained in section 117(2) of the Companies Act, 1929. In the interests of every body it is of importance that there should be no doubt as to the meaning of a phrase in a section of almost daily use. I do not think there is any doubt about its meaning, and I propose to found my decision on R. V. Turner and Chambers v. Smith and to decide that the phrase means twenty-one clear days exclusive of the day of service and exclusive of the day on which the meeting is to be held."
19. However, as already mentioned, the counsel for respondent No, 2 and other respondents have relied on Article 21 of the Articles of Association that a shorter notice could be given where in the opinion of the authority convening the meeting the business is urgent. But firstly, the notices do not state that they were issued to consider any emergent business nor is such intention otherwise apparent, secondly, the resolution was' passed on 5-2-1974 and the approval came on 21-7-1982, therefore, if a period of more than 8 years could lapse between the two actions, we are unable to find any reason for applying the provisions of Article 21 for shortening the period of notice thirdly, section 20 of the Act itself provides that alterations in the articles of Association could be made subject to the provisions of the Act and to the conditions contained in the memorandum of the Company which means that g amendments could be made in accordance with the provisions of the Act including the provisions of section 81 of the Act, and as Article 54 of the Articles of Association also provides that no alteration or addition shall be made therein or thereto save and except provided in the Companies Act.
20. The second submission that the notice did not specify the intention to pass the resolution as special resolution is also correct, for the notice issued do not specify it to be so. Therefore, the same is invalid.
21. Now, the last question that arises for consideration is that what relief, if any, could be granted to the petitioner in this case. We have already stated on the first point that direction given by the respondent No, 1 to respondent No, 2 is according to law. We have however, found that articleg which was not convened by a notice given in accordance with the provision of section 81 of the Companies Act.
It was urged by learned counsel for the respondents that no relief could be granted to the petitioner in regard to the validity of the amendment.
22. We agree with them for under Article 9 of P. C.
0. We could direct a person performing, within the territorial jurisdiction of the Court, function in connection with the affairs of the Federation, a province or a local authority, to refrain from doing anything he is not permitted by law to do, Qt to do anything he is _required by law to dot or declare that any act done or proceeding taken within the territorial jurisdiction of the Court by a person performing functions in connection with the affairs of the Federation, a province or a local authority has been dode or taken without lawful authority and is of no legal effect.
' Respondent No, 2, while amending the Article of Association was not performing the functions in connection with the affairs of the Federation, a province or a local authority and, therefore, we cannot interfere in the present jurisdiction. However, it will be open to the petitioner to seek relief elsewhere according to law if respondent No, 2 persists in its action. We, therefore, dismiss this petition subject to above observations.
' We in the circumstances of this case make no order as to costs.
23. We may however, record that we had reserved this judgment on 2-6-1983 at the request of counsel for respondent No, 2, for today as according to him the petitioner and respondent No, 2 were likely to resolve their difference meanwhile. But the said parties failed to do so.