' Rustam S. SIDHWA, J.-This is a petition of quo warranto filed by Fateh Khan, petitioner, directing this Court to call upon Sharaaf Khan, respondent No. 1, to show under what lawful authority he holds the membership of Union Council Ahmadal (Electoral Unit No. 7), Tehsil Pindi Gheb, District Attock.
2. It is the case of the petitioner that respondent No. 1 was on the date of his nomination as a candidate for the aforesaid Union Council and is even now an employee of the Sui Northern Gas Pipelines Limited and in view of Article 10(2) (aa) of the Houses of Parliament and Provincial Assemblies (Election) Order, P.
0. No. 5 of 1977, read with section 21(1) (f) of the Punjab Local Government Ordinance, VI of 1979, he was disqualified both to be a candidate on the date of his nomination and is even disqualified now to be a member of the said Union Council. It is submitted that under Atticle 10(2) (aa) of the Houses of Parliament and Provincial Assemblies (Election) Order, 1977, a person is disqualified from being elected or chosen as and from being a member of Paliament - "if he is in the service of any statutory body or any body which is owned or controlled by the Government or in which the Government has a controlling share or interest, unless a period of two years have elapsed since he ceased to be a member." ' and as section 21(1) (1) of the Punjab Local Government Ordinance, 1979, disqualifies a person to be a candidate or a member of a Local Council "if he for the time being is disqualified for membership of the Parliament or a Provincial Assembly under any law for the time being in force." ' the siad respondent stands disqualified from continuing to hold the said offi,:e, as the Government of Pakistan holds 58.97 per cent of shares in the issued, subscribed and paid-up capital of the Sui Northern Gas Pipelines Limited and thus has a controlling share or interest in the said company. In support of the fact that the Government of Pakistan has 58.97 per cent shares in the company, the petitioner has filed a copy of the Annual Report and Balance Sheet of 1982 of the said company, on page 52 of which the breakdown of the share-holding has been given, from which it is apparent that the largest share-holder of the said company is the President of the Islamic Republic of Pakistan holding 22,587,361 shares i. e.
58.97 per cent of the total issued, subscribed and paid up capital of the company.
3. On behalf of the contesting respondent No. 1, the following submissions have been made. First, that it is not admitted that the Government of Pakistan has a controlling share or interest and since this question is a disputed one of fact, this Court should not interfere in its constitutional jurisdiction.
In this connection, it is submitted that the original copy of the Annual Report and Balance Sheet of 1982 of the Sui Northern Gas Pipelines Limited, which has been filed by the petitioner, cannot be accepted as a public document or relied upon, without proper proof. Second, that the petitioner is not an aggrieved party and is not entitled to any relief in the constitutional jurisdiction. In this connection, it is submitted that the petitioner neither objected, to the respondent's nomination at the time of scrutiny nor filed any review application before the Election Authority against the acceptance of the respondent's nomination. Third, that the petition is mala fide and has been filed by the petitioner to vindicate the hatred of the defeated candidate and since the main object of the petitioner is to play the game of the defeated candidate, this Court should not lend any assistance to the petitioner. In further support of this allegation, it is submitted that the petitioner neither objected to the nomination papers of respondent No. 1 before the Returning Officer nor challenged the findings of the Returning Officer before the Election Authority under section 17 of the Punjab Local Government Ordinance, 1979, which shows that he is not personally interested in the matter. In this connection, the case of Dr. Kamal Hussain (I) has been referred. Fourth, that since the petitioner had before the election and even now has an adequate remedy, this Court should stay its hands and not grant any relief to the petitioner. In this respect, it is submitted that before the election the petitioner had the remedy of moving the Returning Officer in original jurisdiction and the Election Authority by way of review to challenge the acceptance of the nomination papers filed by the respondent, which he did not do, and that now that the election has been held, he can move a petition under section 24 of the Punjab Local Government Ordinance, 1979, calling in question the election of the respondent before the Election Tribunal.
4. After the arguments were concluded, we considered it desirable in the interest of justice to find out from the Head Office of the Sui Northern Gas Pipelines Limited the exact number of shares held by the Government of Pakistan in that company and the percentage it constituted in the issued, subscribed and paid-up capital. Accordingly, we summoned a representative from the Head Office of the said company to bring the original Register of Members to show the number of shares held by the Government of Pakistan in that company and the percentage it constituted in the total issued, subscribed and paid-up capital. Mr. Dabing Ahmad Qadri, Asstt. Law Officer of the said company, appeared pursuant to our directions. He brought with him two original sheets out of the original Register of Members of the company, which related to the share-holding of the Government of Pakistan, and a certificate titled Share-holders' Statistics, duly
(1) PLD 1969 SC 42 certified by' the Company's Secretary. His evidence was duly recorded. According to his evidence, the original Register of Members of his Company was maintained in loose leaf book form and he had brought out from it the original two sheets on which was recorded the share-holding of the Government of Pakistan.
5. We have given our anxious consideration to this case. With regard to the first submission, the statement of Mr. Dabir Ahmad Qadri, Asstt. Law Officer, Sui Northern Gas Pipelines Limited, Lahore, clearly shows that the Government of Pakistan, both on the date the nomination of respondent No. 1 was accepted and even now, holds 22,587,361 ordinary shares of Rs. 10 each in the issued, subscribed and paid-up capital of the Company and that the said holding constitutes 58. 97 per cent of the total issued, subscribed and paid-up capital. Mr. Dabir Abroad Qadri, Asst. Law Officer, not only brought the original sheets from the original Register of Members maintained by his Company which related to the entries showing the exact number of shares held by the Government of Pakistan in the Company, copies of which were taken on the file as Exh. P. 1 (after they were compared with the original sheets, which were returned), but he also produced certified true copy Exh. P. 2 of the Share-holders' Statistics as on 30-6-1983, certified by the Company's Secretary, whose signature he identified, to show that the Government of Pakistan holds 22,587, 361 shares of Rs. 10 each in the issued, subscribed and paid-up capital. It is, therefore, clear that the statistics of the share-holding given at page 52 in the said Company's Annual Report and Balance Sheet for the year 1982, which the petitioner filed with his writ petition, was correct and that the same was falsely denied by respondent No. 1 his written statement in order to show that the case was one of disputed facts. On behalf of the respondent, it is submitted by Mr. Khalid Iqbal Qazi, Advocate, that Article 10(2) (aa) of the Houses of Parliament and Provincial Assemblies (Election)
Order, 1977, specifically refers to "controlling share" and not "controlling shares" and what is intended is not that the Government should have a majority stake or share-holding, but that the Government, either through its stake or share-holding or by the possession of the voting power or other rights granted by the Articles of Association or other documents regulating the company, has the ability, if it should so desire, to effectively take over its affairs or control, in accordance with its wishes. In this connection learned counsel has referred to the definition of "Control of Company" as given in Words and Phrases Legally Defined by John B. Saunders Volume 1, 2nd Edition, page 338.
He has further urged that since under Article 81 of the Company's Act 1913, three-fourth of the members entitled to vote are required to pass a special resolution, the mere fact that the Government has about 59 per cent of such votes does not give it the ability to effectively control its affairs or working, should it desire to do so. In this regard, the learned counsel has also drawn our attention to the Memorandum of Articles of Association of the Company. We agree with the learned counsel for the respondent that the words "controlling share or interest" do not necessarily refer to the stake or shareholding greater than fifty per cent in the statutory or other body. What they mean is that the Government, either through the percentage of its financial stake or bolding, or through power conferred by or spelt A out from the Articles of Association or partnership deed or other document or documents regulating that statutory or other body, has the ability, if it should so desire, to establish or take over control over its affairs and working. The words "which is owned or controlled by the Government" as opposed to the words "in which the Government has a controlling share or interest", obviously mean that the former relate to those bodies which are fully owned by the Government or over which it has established or exercised effective control over its affairs and working and the latter to those in which the Government has the means and the ability to establish or exercise such control, but over which it has not yet done so. For instance, in a partnership in which there are two share-holders, of which one is the Government, the Government may only hold twenty-five per cent of the capital, but yet have the ability to control the partnership, by having the option to take over as a managing partner by the terms contained in the ,partnership deed. Similarly, the Government may hold less than fifty per cent shares in a company, but yet have the ability to establish effective control either through other shares held by it as a trustee, or through other shares owned by other statutory or other bodies which are owned or controlled by it or in which it has a controlling share or interest, or pure and simple through power conferred by the Articles of Association or other documentation regulating the matter. When determining controlling interest of one company in another, where the latter has a majority share- holding in the former, one of the tests sometimes applied is to determine whether one of the directors of the former company controls the latter company. (See Berandsen Ltd. v. I. R. C. (1).
There could also be a case where the Government may have more than 50 per cent shares in a company, of which a percentage has no voting rights or limited voting rights, and those that possess voting rights, do not provide sufficient strength to establish effective control. It is, therefore, not necessary that merely because the Government has a majority share-holding in a joint stock company, it must be assumed that it has a controlling share or interest. What has to be seen is whether with the capital it has, the Articles of Association of the Company give it the power to carry resolutions tabled in Directors' and General Meetings through its voting power. The mere fact that a portion of a company's activities happens to be regulated by law, such as where its manufacturing or distribution operations have to be conducted, a host of directions have to be complied with or an unending stream of permissions and sanctions obtained in its day to day working, all under the burden of statutory rules and regulations, or where the wages and other conditions of service of its staff are controlled by Government because the activities of the Company are considered an essential service, it does not mean that the Government can be said to have a "controlling share or interest in that Company" within the meaning of that expression, as it appears in Article 10(2) (aa) of the Houses of Parliament and Provincial Assemblies (Elections) Order, 1977. In these circumstances, an inspection of the Company's Articles of Association is necessary in the said connection, to find out whether the Government of Pakistan, which owns 58.97 per cent of the total share-holding, in the instant case, can establish effective control over the company through the same. Under Article 94 of the Articles of Association, every holder of one more ordinary shares standing in his name is entitled to be present and to speak and vote at any general meeting. Under Article 79, the business of an ordinary meeting is to receive and consider the Profit and Loss Account and Balance Sheet. The Reports of the Directors and of the Auditors, to elect Directors and appoint Auditors and other officers in place of those retiring, to fix the Auditors' remuneration, to declare dividends and to transact any other business which under the Articles can be transacted at any ordinary meeting, and any business which may be brought under consideration by the Report of the Directors issued with the notice convening the meeting. All other business transacted at an ordinary or extraordinary meeting is to be deemed special. Under Article 81,
(I) 1958 Chan 1 two members entitled to vote and present in person form a quorum for a general meeting. Under Article 86, at any general meeting, a resolution put to the votes of a meeting has to be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded by at least five members present in person or by the Chairman of the meeting, or by any member or members holding not less than one-tenth of the issued capital which carries voting rights, and unless a poll is so demanded, a declaration by the Chairman that a resolution has, on a show of hands, been carried or carried unanimously, or by a particular majority, or lost, is treated as conclusive evidence of the fact, without proof or number or proportions of the votes recorded in favour of, or against that resolution. Under the proviso to the said Article, the election and removal of Directors has to take place in accordance with Articles 10 and 12 respectively of the Companies (Managing Agency and Election of Directors) Order, 1972. Under Article 87, if a poll is demanded, it has to be taken in such manner as the Chairman of the meeting directs and the result of the poll is deemed to be the resolution of the meeting at which the poll is demanded.
Under Article 91, if a poll is demanded, every member present has one vote each in respect of each share held by him, except when the votes are being cast for the election of Directors, in which case a member has such number of votes as is equal to the product of the number of voting shares held by him and the number of Directors to be elected. Under Article 92, votes can be given either personally or, subject to the provisions of the Articles, by an agent duly authorised under a power- of-attorney or by a proxy or, in the case of a company, by a representative duly authorised under section 80 of the Companies Act. Under Articles 74 and 75 the first statutory General Meeting and the subsequent Annual General Meetings are Ordinary Meetings; all other general meetings are extraordinary. Under Article 76(1), an Extraordinary General Meeting of the company can be called by the Directors on the requisition of the holders of not less than one-tenth of the issued share capital of the company upon which all calls and other sums then due have been paid. These Articles, therefore, conclusively show that the Pakistan Government by virtue of its 58.97 per cent share-holding can requisition Extraordinary General Meetings and by demanding a poll in respect of any resolution, have the said resolution carried in its favour. Section 81 of the Companies Act, 1913, does not bar a poll being demande by a member in which case the resolution would be carried on the strength of the votes, and not the members present, as provided in Articles 86, 87 and 91 of the Company's Articles of Association. In short, therefore, it has the power and ability to establish control over its affairs and working. In the present case, it, therefore, cannot be denied that the Government of Pakistan has a controlling share or interest in the Sui Northern Gas Pipelines Limited. This submission, therefore, of the respondent is rejected.
7. With regard to the second submission of the respondent that the petitioner is not an aggrieved party and, therefore, has no locus standi to seek any relief, we need only draw attention to Article 9(1)(b) (ii) of the Provisional Constitution Order, 1981, which permits any person, not necessarily an aggrieved person, to file a petition for quo warranto. There is, therefore, no force in this submission, which is rejected.
8. With regard to the third submission that the present petition is not bona fide, as the petitioner never objected to the respondent's nomination papers and that only to vindicate the dishonour of the defeated candidate he has come up in writ petition in order to play the game of the defeated candidate, the same cannot be accepted. In order to show mala fides, proper details and particulars of the same should be set out by a party, duly supported by affidavit. No such detailed particulars have been so set out in the written statement of the respondent. The mere fact that the petitioner did not object to the nomination papers of the respondent which were accepted by the Returning Officer or did not file a review petition against the said order before the Election Authority under section 17 of the Punjab Local Government Ordinance, 1979, does not ipso facto prove any malice on his part. Since the petitioner was not personally contesting the election and there is nothing in the law which compels every voter in an electoral unit in which his name is entered to take up cudgels against every person filing his nomination papers, who otherwise is not qualified to do so, no duty was cast on him to act as a samaritan pro bona public. If he, therefore, D did not object to the respondent's nomination papers or did not file any application under section 17 of the Punjab Local Government Ordinance, 1979, to the Election Authority, no malice arises by these Commissions. The petitioner resides permanently in the electoral Unit No. 7 of Union Council Ahmadal, Tehsil Pindi Gheb, District Attock, from which the contesting respondent has been elected. If the contesting respondent legally has no right to hold the said office, the petitioner is within his right to have him disqualified. In these circumstances, it cannot be doubted that the petitioner has come to Court bona fide with clean hands in vindication of a public right. In Kemal Hussain's case, the Supreme Court found that the person Who had filed the writ petition had not come bona fide for the vindication of any public right or the redress of a public wrong, but only to redeem the discomfiture of some defeated candidates and to fight their battles on another front, which they had already waged through election petitions. In the said case, delay had also occurred in the filing of the writ petition, which had not been satisfactorily explained. In these circumstances, the Supreme Court felt that it was not a fit case in which the High Court should have issued the writ of quo warranto. Kamal Hussain's case rests on distinguishable facts. The present case stands on a totally different footing. We have not the slightest doubt that the present petitioner has brought the present petition to vindicate a public right. This submission of the contesting respondent, therefore, has no force and is rejected.
9. With regard to the fourth submission, we need only add that the remedy of quo warranto is permissible to the petitioner. Not being a candidate himself in the election for Electoral Unit No. 7, in which the respondent was elected, he has no remedy of moving the Election Tribunal for the respondent's removal. As regards certain submissions made by the learned counsel for the respondent with regard to the petitioner's ability to have moved the Returning Officer or the Election Authority we have already dealt with that matter in para. 8 above and need only add that the fact that the petitioner did not avail of those remedies does not disentitle him as a relator to call upon this Court to compel the respondent to show the legal authority under which he holds his membership. This objection, therefore, has no merit.
10. For the foregoing reasons, this petition is accepted and it is hereby declared that Sharaaf Khan, respondent No. 1, does not hold his office of councillor of Union Council Ahmadal, Tehsil Pindi Gheb, District Attock, under any lawful authority. As a consequence of this declaration, he is debarred from acting or holding himself out as such member.
11. The petitioner shall be entitled to the costs of this petition, including he sum of Rs. 1,390 defrayed by him towards the cost of summoning the Court witness who gave evidence in this case.
12. By our short order passed on 7-11-1983, we had accepted this writ , petition. This detailed judgment gives the reasons therefor.