' SALEEM AKHTAR, J.-This judgment will dispose of Miscellaneous Appeal No. 39/1973, 40/77, 2/78 and 12/78 filed against the order of Monopoly Control Authority. The question of law involved in all these appeals is the same.
2. In Appeal No. 39/73 the petitioner is a public limited Company. While scrutinizing the undertaking for the purpose of registration, the Registrar by a letter dated 3-7-1972 called upon Jupiter Textitle Mills to furnish information required for determination whether it should be registered. The Company supplied the information and stated that it was a private limited Company, and request was made that proceeding should be dropped. The respondent Authority finding it to be a public limited Company, probed into the share-holdings by various share-holders and their relationship.
The respondent observed that the shares of the Company seem to be owned by two groups of Dossa and Dada. After correspondence the Authority issued notice dated 22-1-1973 to the appellant to show cause why action under Scrim 19 at the Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinances, 1979, hereinafter referred to as the Ordinance, should not be taken against him for failure to register under section 16 (1) (h) of the Ordinance. This show-cause notice was replied in which it was stated that the appellant was in no way in control of 50% of the voting power of the undertaking. It was also pleaded that value of assets of Jupiter Textile Mills was less than Rs. One crore and therefore the provisions of section 16 (i) (h) were not applicable. The Authority repelled both the contentions and by the impugned order held that the appellant holds and controls directly shares carrying not less than 50% of the voting power in Jupiter Textile Mills Limited, which is a public limited Company total value of assets of which is not less than one crore of rupees. The appellant was therefore liable to register under section 16 (i) (h) of the Ordinance. The appellant was directed to register with the Authority within 15 days. The Authority also imposed a penalty of Rs. 20,000 payable by 15th of April, 1973 and in case of failure to pay a further penalty of Rs. 20,000 per day after 15th April, 1973. The amount of Rs. 20,000 has been deposited in Court.
3. In M. A. 40/77 the appellant is a private limited Company. According to the finding of the authority the value of assets of this undertaking exceeded Rs. One crore and as it was not a public limited Company it amounted to undue Concentration of Economic Power within the meaning of section 4 (a) of the Ordinance. Accordingly notice under section 11 was issued calling upon the appellant to show cause why it should not convert itself into a public limited Company. The appellant replied that the value of assets has to be considered on the basis of the assets available on 31st March, 1976 which was Rs. 50,62,52104. This contention was not accepted by the Authority and by the impugned order the appellant was ordered under section 12 (1) (a) (i) read with section 11 of the Ordinance to take immediate steps to convert itself into a public limited company by 5-2- 1977 failing which action under section 19 (2) of the Ordinance may be taken. Similar orders were passed in M. A. 2/1978 and M. A. 12/1978.
4. In all these appeals the common question that was agitated before the Authority, as well as in this Court is that the words 'value of assets' as defined by section 2(0) of the Ordinance includes only such assets on which depreciation is calculated for assessing the income-tax. According to the appellants liquid and current assets in any form are excluded from the definition. I have heard Mr. Muhammad Ali Sayeed, Mr. Iqbal Naeem Pasha, Mr. Samiuddin Sami and Mr. Khalid M. Ishaq.
' Mr. Muhammad Ali Sayeed, the learned counsel for the appellant has contended that the circumstances constituting undue Concentration of Economic Power cannot be reduced in the shape of mathematical formula and the guideline provided by the statute has to be interpreted keeping in mind the practice and usage prevalent in trade, commerce, business and industries. He has further contended that considering the definition of 'value of assets' in section 2 (0) only fixed assets on which depreciation is calculated for purpose of assessing income-tax should be taken into consideration. While developing this argument, the learned counsel contended that in arriving at the 'value of assets' the liabilities of the undertaking should be deducted. To appreciate these contentions it is necessary to examine the relevant provisions of the Ordinance : "Section 2 (0).-"Value of assets", in relation to an undertaking, means the value of assets of the undertaking at cost less depreciation at the normal rates at which depreciation is calculated for purpose of assessm ent of income-tax ; ' Section 3.-Undue concentration of economic power etc. Prohibited.
' There shall be no undue concentration of economic power, unreasonable monopoly power or unreasonably restrictive trade practices.
' Section 4.-Circumstances constituting undue concentration of economic" power.
' Undue concentration of economic power shall be deemed to have been brought about, maintained or continued if-
(a) There is established, run or continued an undertaking the total value of whose assets is not less than one crore of rupees, or such other amount as the authority may by rule prescribe, and which is-
(1) Not owned by a public company, or
(2) Is owned by a public Company in which any individual holds or controls shares carrying not less than 50 per cent or such other percentage as the authority may, by rule prescribe, of the voting power in the undertaking.
(b) There are any dealings between associated undertakings which have or are likely to have the effect of unfairly benefiting the owners or share-holders of one such undertaking to the prejudice of the owners or share-holders of any other of its associate undertakings.
' Section 16(I).-Registration.
(1) In order that information relevant to the performance of its functions under this ordinance is available to the authority, the following undertakings, individuals and agreement shall be registered with the authority in such manner as may be prescribed by rules, namely :-- . (c) ...............................
(d) An undertaking which is not owned by a public Company and the total value of the assets of which is not less than one crore of rupees.
(e)
(1) ...............................
(g)
(h) An indvidual who holds or controls whether directly or indirectly, shares carrying not less than 50 per cent. Of the voting power in an undertaking owned by a public Company the total value of the assets of which is not less than one crore of rupees."
' It may be mentioned here that the amount 'one crore' in sections 4 (a) and 16(I)(d) and (h) have been increased from time to time and in 1982 it has been amended to 50 M i.e. Five crores.
5. The scheme of the Ordinance is that after defining certain words, under section 3 it declares 'Undue Concentration of Economic Power, Unreasonable Monopoly Power or Unreasonably Restrictive Trade Practices as prohibited but does not by itself confer any. Power to initiate any action PLD 1981 Kar.
177. Thereafter sections 4, 5 and 6 state the circumstances which constitute "Undue Concentration of Economic Power, 'Unreasonable Monopoly Power" and "Unreasonably Restrictive Trade Practices".
Considering the vast, varied and complex nature and subject covered by these provisions with which the Authority has to deal from time to time, the provisions of sections 4, 5 and 6 are by no means exhaustive. Keeping these factors in view section 7 provides that without prejudice to the provisions of section 4, 5 and 6 the Authority may by General Order prescribe circumstance and the conditions under which Undue Concentration of Economic Power or Unreasonable Monopoly Power shall be deemed to exist and the practices which shall be deemed to be Unreasonably Restrictive Trade Practices. This shows that beyond the pale of sections 4, 5 and 6 the Authority may declare circumstances, dealings, or practices amounting to undue Concentration of Economic Power, Unreasonable to Monopoly Power, or unreasonably Restrictive Trade practice.
Such declaration can be made by passing a General Order after conducting an inquiry which should be initiated after being satisfied that it is in public interest. All persons likely to be affected should be afforded opportunity of being heard during the inquiry. These conditions and procedure as laid down by section 7 has to be followed before making a General Order. Section 11 provides that where the Authority is satisfied that there is a contravention or likely to be a contravention of the provisions of section 3 and that action is necessary in public interest, it may after show-cause notice and hearing the person or undertaking pass an order as provided by section 12. Section 11 therefore provides a procedure for initiating action for violation of section 3 which has been elaborately spelt out in sections 4, 5 and 6. In the nature of cases I am dealing the Authority can inter alia require firms and companies not being public limited Companies to be converted into public limited companies require the controlling shareholders of public limited Companies concerned to offer such shares as specified to general public, or Government controlled investment institution or trust, require the person or undertaking to divest of ownership bf any stock, share beneficial interest in any undertaking, management or control of any undertaking or prohibit the person or undertaking concerned from acquiring the stock or of any asset of any undertaking or from merging with any under taking. Section 16 provides categories of undertakings agreements and individual which are required to be registered with the Authority.
6. Before discussing the merit and effect of these provisions, it is necessary to consider the object and intention of the Ordinance. From its very nature the Ordinance imposes restrictions on trade, commerce an business. The object of the Ordinance is to prevent concentration of weak in the hands of a few and to curb monopolistic and expansionist tendencies in trade, commerce, industry and business. It prohibits undue concentration of economic power, unreasonable monopoly power and eliminates unreasonably restrictive trade practices from the market. It also discourages such trade practices which prevent, restrain or lessen competition. The Ordinance is designed to restrict and prohibit, in public interest, dealings, agreements, arrangements and practices which create monopoly and economic power and unreasonably control the business, undertakings and market.
These economy evils as specified in the Ordinance have been considered detrimental to public" interest therefore the Ordinance has provided measures to regulate, check to eliminate them.
7. Mr. Muhammad All Sayeed, the learned counsel for the appellant and Mr. S. Samiuddin Semi, the learned counsel for the respondent have agreed on one point that while interpreting the law effort should be made to interpret it so as to achieve the object of the legislation. In this regard reference has been made to PLD 1971 SC, 1975 SCMR 371, 1921 (3) K. B 405, PLD 1975 Lah. 59, 1946 A C 271 and 1982 SCMR SIM It is not necessary to reproduce the principles laid down by these authorities except to reproduce a passage from Kadir Bux's case (1), in which various judgments of the Supreme Court and commentaries by Maxwell and Craise have been discussed. While referring to In re : Reference by the President of Pakistan under Article 162 of the Constitution of Islamic Republic of Pakistan PLD 1957 SC (Pak.) 219 it has been observed as follows:- 'In re : Reference by the President of Pakistan under Article 162 of the Constitution of Islamic Republic of Pakistan (1) an attempt was made to summarize eight wed-known rules of interpretation, namely : the first object of the Court is to discover the intention of the author from the words used ; the intention should also be gathered from reading the statute as a whole in order to arrive at a "consistent plan" the statute should not be extended to meet a case which is "deafly and undoubtedly out of its purview ; whenever a particular and general provision exists in the same statute and the general when taken in its most comprehensive sense, would overrule the particular, the particular "must be operative" and the general would then be confined to other parts to which "it may properly apply" these rules would apply to the interpretation of constitutions also, but with certain modifications so as "to give effect to the intention of the framers of the organic law and of the people adopting it." Court should try to avoid construction which renders any provision meaningless or inoperative and should thus lean in favour of keeping the words operative rather making them idle ; it is the duty of the Courts to have recourse to the whole instrument, if necessary, "but, in case of apparent repugnancy between different provisions, "the Court should harmonize them if possible."
8. The aforestated observation in a nutshell summraizes the time tested principles that are well- recognised and applied while interpreting any statute. For the purpose of the present appeals it is relevant to mention that first intention of the legislature bas to be discovered and it should primarily be gathered from the language of the statute itself. According to Mexwell 'a statute is the will of the legislature, and the fundamental rule of interpretation, to which all other are subordinate, is that a statute is to be. Expounded according to the, intent of them that made it." In re : Reference by President of Pakistan Monir, C. J., observed that "the intention of the legislature in enacting a statute ought to be derived from a consideration of the whole enactment in order to arrive at a consistent plan."
9. In the light of these principles of interpretation I will now consider the arguments of the learned counsel for the parties. Mr. Muhammad Ali Sayeed has contended that while interpreting the definition of "value of asset" the meaning of technical terms as understood in the Companies Act, the Income-tax Laws as well as in trade and business should be adopted. According to the learned counsel the only meaning to the definition of these words as provided by the Ordinance is that it refers to fixed assets on which depreciation is allowed under the Income-tax Laws.
10. Now it is to be considered in what manner the technical word 'assets' is understood in 'business, trade, audit and accountancy practice, tax laws and the Companies Act. Ibis is a universal practice which cannot be denied that in every undertaking balance sheet and profit and loss accounts are prepared. These documents reflect the financial position of an organisation. In the balance sheet assets are shown on one side and liabilities on their other side. The assets are such resources that business owns. While liabilities
(1) 1982 SCMR 582 ' are obligations owed by that business to a third party. There are two types of assets which are clearly mentioned in the balance sheet. They are known as current assets and fixed asset. The current assets known as liquid and circulating assets are of immediate utility than other assets because they can be converted into cash or other kind of assets quickly and without much loss of time. This includes cash and such assets which can be, sold, converted or consumed reasonably soon. The cash includes bank notes, cheques, money orders and currency. In the category of current assets will fall debtors' accounts or bills receivable stock, merchandise, material and finished goods. The mobility and liquidity of current asset makes it more effective.
11. The fixed assets are permanent in nature which include freehold land, lease-hold land, building, plant, machinery and vehicles. These are tangible assets which are costly and relatively expensive having comparatively a longer life. As the valuation of plant, machinery, building and vehicle has to be spread over a period of its estimated life, a practice has developed in audit and accountancy that every year book value of such assets is mentioned after taking into consideration the wear, tear and depreciation. Therefore normally in every succeeding year the book valuation of such fixed assets is relatively reduced. It may also be mentioned that in the field of accountancy patents, copy rights, good-will and trademarks are treated as intangible assets which by nature and character play an important role in the promotion of business. It is thus clear that in business, trade, commerce and industry word "assets" is used for current and fixed assets both.
12. The meaning of assets as understood in audit and accountancy practice and recognised by the Companies Act for preparation of balance sheet may be a safe guide for ascertaining its meaning.
The word "assets" has nowhere been defined in the Companies Act. Section 132 of the Companies Act provides that a balance sheet shall contain a summary of property and assets or capital and liabilities of the Companies. Form 'F' of the HI Schedule of the Companies Act is a specimen Form of the balance sheet which is usually prepared according to the accountancy practice as well. I here are two separate columns. On the left is the column relating to capital and liabilities, whereas on the right is the column entitled 'property and assets'. The assets have been classified as fixed capital expenditure upon land, building lease-holders, railway siding, goods, plant, machinery and furniture. In the same column of assets are Included stores and spare parts, vehicles, stock in trade, bills of exchange, books advances, investments, interests, cash and other balance. This clearly shows that in the balance sheet prescribed by the Companies Act the assets include fixed as well as current assets and are not arrived at after deducting the liabilities.
13. Mr. Samiuddin Sami the learned counsel has referred to Dictionary of Scientific and Technical Terms IInd Edition by McGraw-Hill in which 'assets' has been defined as follows :- "Assets: All the resources, rights and property owned by a person or a Company: the book value of these items as shown on the balance sheet."
' In Webster's Third New International Dictionary meaning of 'Assets' has been given as follows :- "The series of items on a balance sheet representing the book values at a given date of resources, rights, or items of property owned grouped under appropriate headings according to their nature."
' Assets have been classified as capital assets, cash assets, current assets, fixed asset, net asset, intangible asset and tangible asset. It is only in cases of net assets that a balance is obtained by subtracting liability from gross assets.
' The learned counsel for the appellants have mainly contended that only the fixed assets are to be taken into consideration while assessing the value of assets. In my opinion such an interpretation would restrict the meaning of the 1 "assets" to a very narrow compass. If this would have been the intention of the legislature then instead of the word 'assets words 'fixed assets' would have been used: The assets required to be evaluated include all assets fixed and current. The only concession granted is that where fixed assets are available, value shall be determined by deducting, depreciation from the cost. The formula of deducting the depreciation has been laid down by reference to the rules of depreciation fixed by the Income-tax K Laws. In this regard it is pertinent to note that under the Income-tax Ordinance, 1979 as well as the Income-tax Act, 1922 the word "assets" has nowhere been defined. Only the word "capital asset" has been defined as property of any kind held by an assessee whether or not connected with his business or profession but does not include : (1) any stock in trade, consumable stores or raw-materials held for the purpose of his business or profession, (11) personal effects i.e. Movable property held for personal use and of any land from which the income derived by the assessee is agricultural income. Therefore by implication it can be deduced that stock in trade, consumable stores or raw material, though assets, by operation of law have been excluded from the definition of 'capital assets'. Prior to.1946 there was no definition of 'Capital. Asset' which was later introduced in the Income-tax Act, 1922 and has been retained in the Income-tax Ordinance, 1979 in faintly for the purpose of assessing Capital Grain Tax. The Income-tax Act, 1922 or Income-tax Ordinance, 1979 are different from the Ordinance in this nature and operation. Income-tax Ordinance contemplates imposition of tax on income and not on assets. Therefore the object, operation and thrust of the Income-tax Ordinance and the Monopolies and Restrictive Trade Practices (Control and Prevention Ordinance, are completely different and distinguishable.
14. In business, commerce and industry the current asset is more effective and potential than the fixed asset. The mobility, convertibility and its encashment at the shortest possible time puts it at a much higher plane than the fixed assets. It is not uncommon with the bankers that they unhesitatingly advance loan on the basis of stock in trade.
15. Having considered the meaning of assets and the manner it is understood in audit and accountancy practice, business and Companies, it can I, safely be stated that the word 'asset' means and includes fixed assets and current assets. The Ordinance is an economic legislation intended to crest an economic system which should not result in the concentration of economy Power, monopolization and creating unreasonably restrictive trade practices. To restrict the meaning of assets to fixed assets only will amount to putting artificial barriers to the real meaning while determining the 'value of assets'. If current assets are excluded the effect and operation of the Ordinance shall be reduced to a narrow and limited sphere. This will nullify the object of the Ordinance. The limited meaning, the appellants wish to place, is against the real meaning, true object and economic reality. It will break the claw the Ordinance intends to provide. Instances are common where undertakings with negligible fixed assets but large current assets create monopoly power and concentration of economic power, control the market and develop ,, unreasonably restrictive trade practices but the Authority will not be able to invoke the provisions of the Ordinance only because such undertakings do not have sufficient fixed assets. This is not the intention of the legislature.
16. The learned counsel for the appellant contended that the concept of assets, is co-related with liabilities and therefore while calculating the value of assets the liabilities should be excluded. On the face of it no such provision has been made for calculating the value of assets in such a manner. According to the principles of interpretation nothing is to be added or substracted from the statute. If the appellant's interpretation is Accepted it would amount to substituting words which do not find place in the statute. As discussed above in accountancy practice 'Net assets" is arrived at by deducting the liabilities from: the assets. No such formula for assessing the 'value of assets' has been provided by the Ordinance. Therefore the question of R adjusting the liabilities is ruled out. In this regard it may be mentioned that Mr. Lqbal Naim Pasha the learned counsel for one of the appellants has maintained that assets should be restricted to fixed assets but liability cannot be adjusted from it. He has very aptly given example of trading companies which do not possess fixed assets or if at all, of nominal value, buts have vast business and are capable of creating monopoly and unreasonably restrictive trade practices.
17. Mr. Muhammad Ali Sayeed has referred to Words and Phrases Judicially Defined by Roland Burrows 1946 Edition Vol 1, where while illustrating the word 'assets' the following observation of Sterling, J., In re Pyle Works (1), has been reproduced : "But then the question arises what are to be considered 'assets' or property of the Company ? In my opinion. The assets or property of the Company which are referred in those sections (sections 98 and 133 of Companies Act, 1862) (repealed, section now Companies Act, 1929, section 157) must mean that portion of the capital which the directors have not actually dealt with before the winding up commenced Property which is in mortgage is not, in my opinion, 'assets' of the Company, namely free assets, assets which can be dealt with by the Company in payment of their debts without regard to those who have a mortgage on this portion of the property of the Company."
' This observation was made in a case where a compulsory order was made for winding up the Company. Till then 4 per share had remained uncalled. The question arose whether the several mortgagees were entitled to have the calls to be made by the liquidator in the winding up applied in payment of their mortgage debts in priority to unsecured creditors. The Court after considering the memorandum and articles of association and referring to the provisions of Companies Act made the aforesaid observation which is completely in different context. The concept of a sets in the peculiar facts of the case, particularly in winding up cases as referred above can have no application to the meaning of assets as envisaged in the Ordinance.
18. Taking into consideration the object of the Ordinance, and viewing in the light of economic, industrial, business audit and accountancy practice and principle it seems that the words 'value of assets' do not mean, 'gross value of assets' or 'net value of assets' but value of assets at cost, after making provision for depreciation on such assets on which depreciation at the normal rate is allowed while assessing income-tax. Reference to income-tax has been made for calculating the depreciation as provided by the Income-tax Laws and not for identifying the assets. The emphasis seems to be on the value {{FOOT NOTE}}
(1) (1890) 44 Ch. D 534 {{FOOT NOTE}} ' of assets of the undertaking'. Which is neither controlled nor qualified by any word which may indicate whether it should be fixed asset or current asset. The word used is assets'. The absence of classification leads to the conclusion that all assets, fixed, current, liquid, tangible or intangible will be treated as assets. In order to make value of assets more realistic, proper and exact it has been provided that depreciation shall be delucted. Such deduction will be only in respect of such assets on which depreciation is allowed and calculated at the normal rate as provided by the Income-tax Laws. It will not be out of place to mention that significantly enough section 2 (0) provides that depreciation is to be calculated at the normal rate. Under the Income-tax Laws various types of depreciations are permissible but for purposes of calculating value of assets only depreciation calculated at normal rate is to be excluded from, the cost of surd assets. This clearly indicates that the provisions of Income-tax laws can be pressed in service for the limited purpose of calculating the depreciation and not for classifying the nature and type of assets.
19. Mr. Khalid Ishaq and Mr. Samiuddin Sarni have referred to section 16(1)(d) and (h) and contended that it is the 'total value of assets' which has to be taken into consideration. According to Mr. Sarni this is an attributive adjective qualifying value of assets. It is pertinent to note that the Ordinance requires calculation of total value of assets and not net value of assets. This supports the conclusion that while assessing the total value of assets humilities are not to be taken into consideration.
20. Mr. Iqbal Nasim Pasha has referred to Kanaiya Lal v. Shah Muhammad (I), where it was held that the word 'assets' used in section 73 of Code of Civil Procedure refers only to money. Mr. Pasha's contention is that as the meaning of assets has been restricted to only money, in the present case it can be restricted to fixed assets. I am not inclined to accept this contention. In this case the Court was considering the meaning of the words 'assets held by Court' as used in section 73 of Code of Civil Procedure which provides for rate able distribution of such assets amongst the claimants.
Considering the object of section 73 it was held that the word assets means money as otherwise it cannot be rateably distributed. In the present case taking into consideration the object of the Ordinance word 'assets' cannot be restrict to fixed assets only. As pointed out earlier in 1980 the original figure of one crore of rupees in section 4(a) and 16(1)(h) was amended to 30 M. Again by Ordinance XVI of 1982 it has been amended to 50 M. Referring to these statutory changes during the pendency of the appeal Mr. Muhammad All Sayeed contended that the case of the appellant should be decided in accordance with the provision of law, which exists on the date of the decision in appeal. The effect of this contention, if accepted, will be that as the value of assets calculated by the Authority does not exceed 50 M. No action can be taken against the appellants. Reference has been made to Mrs. Keays Byrne v. M Obaidullah Khan (2), where relying on AIR 1936 P C 49 ; AIR 1941 FC 5 and PLD 1958 SC (Pak.) 533 it was held that "we have arrived at the conclusion that as the appeal is pending before us the decree passed by the Senior Civil Judge is not yet final. An appeal is by way of rehearing the original proceedings and the Appellate Court can make such order as the trial Judge could have made if the case had been heard by him at the date of the hearing of the appeal". The other case relied upon by the learned counsel is Mgt. Zebun Arisa Qureshi v. Chief Settlement and Rehabilitation Commissioner Pak and another (3), where it was {{FOOT NOTE}}
(1) PLD 1959 Dacca 939 (2) PLD 1961 Lab. 256
(3) PLD 1963 Pesh. 61 {{FOOT NOTE}} ' held that "in the ordinary appellate jurisdiction, the High Court is enjoined to see that a decision had been made in accordance with the law in force at the time of the decision of a matter before it". Similar view seems to have been taken in Mst. Mariam Bibl v. Abdul Hassan and others (1), where it was held 'that appeal is a continuation of the original proceedings. Reliance was placed on AIR 1 41 FC 5 where it was held that hearing of an appeal being in continuation of the original proceedings, the appellate Court is entitled to take into account even facts and events which have come in existence after the decree appealed against. It was further held that the Appellate Court was competent to take into account legislative changes since the decision under appeal was given and its powers were not confined only to see whether the Lower Court's decision was according to law as it stood at the time when its decision was given. In Mahan Singh and others v.
Tavi Mian and others (2), it was held that "the Court of Appeal can take the subsequent events and the changes of law Into consideration in arriving at its decision". Mr. Muhammad Ali Sayeed also referred to Province of East Pakistan v. Muhammad Hussain (3), where amendments were made with retrospective effect therefore, to that extent it may not apply to the present case. However, reliance has been placed on the following observation :- "On the filing of appeal, the entire matter became reopened and sub judice and bad to be decided in accordance with law then prevailing."
' In the case of Muhammad Aslam Bajwa v. Federation of Pakistan (4), following the dictum laid down in Commissioner of Sales-tax (West) Karachi v. Messrs Kruddsons Ltd. (5), it was observed that "it is welt-settled that if during the pendency of the litigation new law comes into operation the Courts can take notice of and enforce the same". In Kruddsons case a manufacturer having collected Sale Tax from the customers on account of Sales Tax paid it to the Department. Later he discovered that articles manufactured by him were exempted from Sales Tax. He claimed refund from the Department. The request was refused because having collected the amount from the customers he cannot be permitted to retain it and enrich himself. Reference was made to the High Court under section 17 (1) of the Sales Tax Act, 1951 and it was answered in favour of the manufacturer. The Department filed a certificated appeal to the Supreme Court. During the pendency of appeal section 30-A was added in the Sales Tax Act by Finance Act, 1967 which was further amended by Finance Act, 1968. The effect of this amendment was that under section 30- the amount collected from a customer by a manufacturer of articles exempt from tax was to be refunded to the Government. The Hon'ble Supreme Court while considering the effect of amendment in law on the pending appeal and further discussing several authorities referred to Badrul Hay Khan v. The Election Tribunal Dacca and others (6), and made the following observation : "It was observed in that case that there can be no doubt that it (amended law) appealed to the proceedings pending at the time when the Act came into force and this Court had no hesitation to grant the appellant's interest in accordance with law as it existed at the time of hearing of appeal, without discussing the law as it existed at the time of when the High Court had seize of the case. It was further observed that once appeal had been admitted against the order of the High {{FOOT NOTE}}
(1) PLD 1967 Lah. 354 (2) PLD 1971 Dacca 75
(3) PLD 1965 SC 1 (4) PLD 1974 Lah. 545
(5) PLD 1974 SC 18Q (6) p D 1963 SC 704 {{FOOT NOTE}} ' Court, the matter has been sub judice again and thereafter this Court was seizing of the whole case. On this view of the matter, therefore, this Court took into account and gave effect to the repealing Act notwithstanding the fact that the judgment of the High Court was unassailable according to law as it then stood."
' It was finally observed that : ' the pendency of the certificated appeal in this Court had destroyed the finality of the High Court order dated 11-10-1966 and therefore, was hit by the new dispensation in section 30-A of the Act."
21. Mr. Samiuddin Sami, the learned counsel has attempted to distinguish these authorities by stating that in Kruddsons case the amendment was made retrospectively, whereas Muhammad Aslam Bajwa's case related to matter before Service Tribunal where pending matters had stood abated. Likewise in Mrs. Keays Bryrnes case, the civil Court had no jurisdiction when it passed the decree. These may be the dish, guishing features but the consensus of the authorities seems to be that once appeal has been filed against a decision, the entire matter is reopened and should be decided according to law applicable at the time of hearing of appeal. The filing of appeal as held in Kruddson's case destroys the finality of the order and the entire case is reopened and the Appellate Court has full authority not only to take note of the legislative changes, but also subsequent events which may affect the rights of the parties in dispute. So far the applicability of any amendment in law to the pending proceedings is concerned it has been subject-matter of discussion by various notable commentators and authors. The consensus is that where a statute confers a substantive right on any party and it is altered during the pendency of an action then unless the new statute clearly varies such right, the rights of the parties shall be decided according to law which existed at the time action was initiated.
22. Mr. Khalid M. Ishaque has contended that if a substantive right had been created the same cannot be destroyed by amendment in law. He has referred to Hassan and others v. Fancy Foundation k 1), where it was observed that "it is well-established principle, that in general, when substantive law is altered during the pendency of an action, the rights of the parties are decided according to law as it existed when the action was begun, unless the new statute shows a clear intention to a vary such rights." In this case ejectment application was filed under West Pakistan Urban Rent Restriction Ordinance. During the pendency, amendments were made affecting the substantive rights of the parties, therefore, amended law was held not to be applicable. In the present case, it would be proper to state that no substantive right has been created in favour of either of the parties. By amendment prescribed limit has been enhanced which indicates that it was with the intention to benefit the public and undertaking.
23. Another aspect, which has persuaded me to take the view that in these appeals, the amendment should be taken note of, is that, if at any time there is any variation it's the relevant facts which may affect registration, the same may be reported to the Authority, which may after inquiry cancel the registration. Sections 16 (4) and 18 authorize the Authority to take note of the changing facts and circumstances, and cancel the registration. Therefore, the Authority is empowered to take note of the changing situation and circumstances, which may happen even after the proceedings have been closed and registration has been effected. Such power therefore, exists and can be {{FOOT NOTE}}
(1) P L 1975 SC 1 {{FOOT NOTE}} ' exercised even by the Appellate Court, because, firstly, the proceedings have not finalized and are still pending and secondly, the Ordinance contemplates that subsequent events, factual or legal, can be taken note of, and even the order passed for registration can be cancelled. In this view of the matter it may be noted that if the order of the Authority would not have been challenged, then in view of the amendment in sections 4 and 16, the appellants would have been entitled to file necessary application before the Authority for variation or cancellation of the order of registration.
Mr. Khalid M. Ishaque appearing for the Authority in M. A. No. 39/73 has contended that as appellant can obtain relief under section 18 the proper course is to approach the Authority. Mr. Muhammad Ali Sayeed has expressed his apprehension that this section is applicable only if registration has been effected, or the order has been complied with, and therefore, in the present case it may not be possible to ask for cancellation. This cannot be a correct interpretation and may lead to a very anamolous situation. It will amount to say that a party should first comply with the order and then apply for its cancellation. This would be an exercise in futility, as such compliance may ultimately be rendered infructuous by subsequent action. The Courts are always reluctant to pass orders which are infructuous or could be rendered infructuous. It would, therefore, be in keeping with the principles of justice and equity, that if any enquiry or proceeding is pending under section 16 the Authority taking note of the legislative amendments can decide the case accordingly. It would not be just and proper to ignore the amendment, pass order for registration, ensure its compliance and then draw up proceedings of its cancellation. Section 18 does not apply to orders passed under section 12. In M. A. 40/77, 2/78 and 12/78 the appellants have been ordered to be converted into public limited Companies. Once the order is complied with the entire structure of the Company shall be changed. No procedure as, provided under section 18 of the Ordinance is available for such cases. `6 Because once a private limited_ Company is converted in public Limited Company or shareholdings are diversed or undertakings are merged it may not be possible to bring it back to its original position. Therefore, in such cases, as the order of the Authority has not attained finality and is still open, it would be proper to allow such appellants to avail of such benefits which have accrued to them by virtue of legislative amendments introduced during the pendency of the case or appeal.
' In M. A. No. 39/73 the Authority has imposed a fine of Rs. 20,000 on the ground that the appellants has willfully failed to register himself as required by the Ordinance and a further penalty of Rs. 2,000 per day in case the order is not complied with. The power to penalise is conferred by section 19 which treads as follows : "19. Penalty.-The authority, may, by order, direct any person or undertaking to pay the Central Government' by way of penalty such sum not exceeding one lac of rupees as may be specified in the order. If, after giving the person or undertaking concerned an opportunity of being heard, it determines that such person or undertaking-
(a) has failed to comply with any order of the authority made under this Ordinance, or has wilfully failed to register as required by the provisions of this Ordinance, or
(b) has furnished any information or made any statement to the authority which he knows or has reason to believe to be false in any material particulars.
(2) If any such failure as is referred to in clause (a) of that subsection is a continuing one, the authority may in the manner provided for in subsection (1) also direct the person or undertaking guilty of such failure shall pay by way of penalty to the Central Government a further sum which may extend to ten thousand rupees for every day after the first.
(3) A penalty imposed under subsection (1) or subsection (2) shall be recoverable as an arrear of land revenue."
25. The learned Authority noted that ignorance of law is no excuse and proceeded to consider the meaning of the word "default" as interpreted by various authorities. Relying on the authorities of our Superior Courts where word 'default' has been interpreted it followed the dictum that default would seem to embrace every failure by the defendant to perform his contract unless prevented by the superior force over which he had no control". The entire emphasis of the learned Authority is on the meaning of the word "default" as interpreted by the judgments of our Superior Courts. In majority of these cases the Courts were considering the provisions of West Pakistan Urban Rent Restriction Ordinance, where the word "default" has been used. In section 19 of the Ordinance, however, words used are "wilfully failed to register". There is a sharp difference in the meaning of the word "default" and "wilful default" or "wilful failure". There can be no cavil with the meaning of "default" as stated by the learned Authority, but will this meaning apply to "wilful default" or "wilful failure". The fact that the word "failure" has been qualified by the word "wilful" indicates that the 'failure' or 'default' should be wrongful or intentional. 'Wilful failure' as it is apparent, will occupy when a party has purposely failed to comply with the provisions of intentionally avoided to comply, knowing full well that he is duty-bound to do so. In such cases the party knows that he has to do a certain act but intentionally persists to follow a different course. If the failure is without any intention it will be a "default" or "failure" simpliciter, but if it is intentional it will amount to "wilful default" or "wilful failure".
In this regard reference can be made to Horabin v. British 0 v. Airways Corporation (I), where the meaning of "wilful misconduct" has been explained in the following manner : "Wilful misconduct is misconduct to which the will is a party, and it is wholly different in kind from mere negligence or carelessness, however, gross that negligence or carelessness may be. The will must be a party to the misconduct, and not merely a party, to the conduct of which complaint is made. As an example if the Pilot of an Aircraft knowingly does something which subsequently a Jury find amounted to misconduct, that fact alone does not show that he was guilty of wilful misconduct. To establish wilful misconduct on the part of this imaginary Pilot, it must be shown not only that he knowing (and in that sense wilfully did the wrongful act, but also that, when he did it, he was aware that he was committing misconduct."
' Barry, J., has illustrated it in the following words :- "The same act may amount on one occasion to mere negligence, and on another to wilful misconduct. Two men driving motor cars may both pass traffic right after they have changed from yellow to red. In both cases there are the same act, a same traffic light, the cross-road, and the same motor-car. In the first case the man may have been driving {{FOOT NOTE}}
(1) (1952) 2A E R 1016 {{FOOT NOTE}} ' a little too fast. He may not have been keeping a proper look-out, and he may not have seen the light (although he ought to have seen them) until he was too close to them and was unable to stop, and, therefore, crossed the road when the light was against him. He was not intending to do anything wrong, to disregard the provisions of the Road Traffic Act or to endanger the lives of any one using the road, but be was careless in not keeping a proper look-out, and in going too fast, and as a result, without intending to do anything wrong he committed an act which was clearly an act of misconduct. The second driver is in a hurry. He knows all about the lights, and he sees in plenty of time that they are changing from yellow to red, but he says to himself ; "Hardly any traffic comes out of this side road which I am about to cross. I will go on. I am not going to bother to stop." He does not expect an accident to happen but he knows that he is doing something wrong. He knows that he should stop, and he is able to stop, but does not and he commits exactly the same act as the other driver. But in that frame of mind no Jury would have very much difficulty to the conclusion that he had committed an act of wilful misconduct."
While determining whether the appellant has wilfully failed, the finding that he has defaulted, will not be sufficient to impose penalty unless it is E established that he has intentionally and purposely defaulted knowing full well that he had to get himself registered.
26. In this regard it may be noted that the Ordinance was a completely new legislation in a field in which our country had little or no experience. The appellant could genuinely believe in the correctness of his interpretation of the provision of the, ordinance, relating to registration. There was no clear cut guidance or authoritative judgment in that direction. Things seemed to be in a state of uncertainty and the party was attempting to interpret the provisions of the Ordinance in his favour. In these circumstances it cannot be said that the appellant had wilfully defaulted. This state of affairs seems to be borne out by Circular No. 1 of 1972 issued by the Authority on 6-1.1972 which is reproduced as follows :- "Registration under section 16 of the Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance, 1970-Clarification Regarding Certain Provisions.--Circular No. 1 of 1972 issued by the Monopoly Control Authority, is reproduced below :
(1) Under rule 10 of the Monopoly Control Rules, 1971 any undertaking, individual, and agreement liable to be registered under section 16 of the Ordinance, shall be registered with the Authority, within 1.5 days of the publication of the Rules i.e., by the 15th of January, 1972.
(2) Enquiries have been received by the Authority regarding calculation of the "total value of the assets" for purposes of registration.
(3) It is pointed out that the Ordinance quite clearly defines "value of assets" in section 2 (1) (0) namely :- "Value of assets", in relation to an undertaking means the value of assets of the undertaking at cost less depreciation at the normal rates at which depreciation is calculated for purposes of assessm ent of income-tax.
(4) Enquiries have also been received as to the date upto which the total value of assets has to be calculated for the purposes of registration. This is clarified for general information that the value of assets has to be calculated as on the date of commencement of the Rules, i.e. The 31st of December, 1971."
27. This clearly indicates that many queries were being raised in respect of definition of "value of assets" but the learned Authority instead of clarifying it or explaining it to the public that it included fixed and current assets, both, merely contended to reproduce the definition as provided in section 2 (1) (0). This definition was available to every one and the learned Authority in fact neither clarified nor properly explained the meaning. In these circumstances considering the facts of the case, and in view of the fact that no wilful default was committed by the appellant, the order of the learned Authority imposing fine and penalty is set aside.
' For the aforestated reasons, the impugned orders are set aside. I remand all the four appeals to the learned Authority to determine the "value of assets" in the light of the observations made hereinabove and decide, whether in view of the amended provision any action can be taken against the appellants, under sections 11, 12 and 16(1) (d) (h) of the Ordinance.
' The parties to bear their own costs.