' NAIMUDDIN, J.---This petition under Article 9 of the Provisional Constitution Order,1981, calls in question the order of the Federal Government, respondent No,1, communicated through their letter dated 13th November,1982 and their order dated 23rd December,1982, upholding their previous order refusing to include the name of Anwar Ali A.Sajjan, petitioner No,2 as a director of petitioner No,1, as being without lawful authority, and for directions to respondent No,1 and Director-General, respondent No,2 to include the name of petitioner No,2 and to allow petitioner No,1 to operate its Overseas Employment Promoters Licence through its director including petitioner No,2.
2. The facts giving rise to the petition, as stated therein, are that in the year 1975, Messrs Feedai Agency, which was partnership firm, was holding Overseas Employment Promoters Licence granted by respondent No,1 with the following persons as partners:-
(1) Mr.Amir All R.Sajan
(2) Mr.Sadruddin R.Sajan Brother
(3) Mrs.Fatima Khanoo Amir All Wife
(4) Mr.Pyar Ali R.Sajan Son
3. On 1st October,1975, the partnership firm informed respondent No,2 that they have started functioning as Private Limited Liability Company incorporated under the Companies Act,1913, duly registered with the Registrar of Joint Stock Companies, effective from 1st October,1975. They further informed that they shall function under the name and style of Messrs Feedai Agency Limited and their address and telephone number would remain the same. They sent the copies of the memorandum and Articles of Association containing the names of their directors and shareholders including the name of Mr.Anwar Ali A. Sajjan, Petitioner No,2.
4. The Assistant Director, Bureau of Emigration and Overseas Employment, by the letter dated 6th May,1976 informed the petitioners that their request, for changing the name from Messrs Feedai Agency to Messrs Feedai Agency Limited Company had been accepted provided the partners after the changed name remain the same as were in the original licence. He further informed that in racy now partners were included the petitioners would have to give to the Department their full particulars for verification according to the procedure.
' We may here reproduce the letter in extenso.
"Government of Pakistan, Ministry of Health, Labour Social Welfare & Population Planning, (Manpower Division) Bureau of Emigration & Overseas Employment NO. 0/Pri-3(7)/73.
76-Strachan Road, Karachi-1.
6.5.1976. OFFICE MEMORANDUM ' Subject:- Messrs Feedai Agency, RAL No,435 as a Private Limited Company.
' The undersigned is directed to refer to your letter No, ARS/1/75/2040, dated Ist October,1975, and to inform you that your request for changing the name from Messrs Feedai Agency to Messrs Feedai Agency. Limited Company, has been accepted by this Bureau, provided the partners after the changed name remain the same as were in the original licence. In case new partners are to be included, you will have to give us their full particulars for verification according to the procedure.
Sd/- (SANAULLAH)
ASSISTANT DIRECTOR."
5. Thereafter, the petitioners applied for the renewal of licence and the same was renewed from year to year either in the name of the company or in the name of its director or in the joint names of the company and its directors, as would appear from the photostat copies of the licences placed on record and as detailed below:
(i) Licence dated 23rd June,1976 expiring on 22nd December, 1976, in the name of Feedai Agency Limited, Karachi.
(ii) Licence dated 30th December,1976, expiring on 31st December,1977, in the name of Feedai Agency Limited, Karachi.
(iii) Licence dated 16th January,1978, expiring on 31st December, 1978, in the name of Feedai Agency Limited, Karachi.
(iv) Licence dated 20th February,1979, expiring on 31st December,1979, in the name of Amir Ali. R.
Sajjan of Messrs Feedai Agency Limited, Karachi.
(v) Licence for the period from 13th July,1979 to 31st December,1979 in the name of A.R.Sajjan of Messrs Feedai Agencies Limited, Karachi.
(vi) Licence dated 1st January, 1980, expiring on 31st December,1980, in the name of Feedai Agency Limited, Karachi.
(vii) Licence dated 1st January,1981, expiring on 31st December,1981 in the joint name of A. R. Sajjan-- Messrs Feedai Agency Limited.
(viii) Licence dated 1st January,1982, expiring on 31st December,1982 in the joint name of A. R.
Sajjan--Messrs Feedai Agency Limited.
6. The petitioners in the year 1980 had submitted an application in the new prescribed form for renewal of the licence which also showed the names of ali the Directors including Mr.Anwar Ali A.Sajan, petitioner No,2. The respondents renewed the licence in the name of petitioner No,1. But upon the application for renewal of the licence for the year 1981, the respondents desired to be satisfied of petitioner's claim for inclusion of the name of petitioner No,2 but meanwhile renewed the licence in the joint names of A.R.Sajan and Feedai Agency Limited.
7. It appears that the respondents required petitioner No,1 to give full particulars of Mr.Anwar Ali A.Sajan and submitted character and bank certificates.
' Accordingly, the petitioners under the cover of their letter dated 13th January,1981 addressed to respondent No,2 submitted the following certificates:
(1) Full particulars of Mr.Anwar Ali A.Sajan for verification.
(2) Charachter certificate signed by the Deputy Commissioner (South) and the Deputy Superintendent of Poilce, Anti-Corruption Establishment.
(3) Bank Certificates--Bank of America in sealed cover, Habib Bank Ltd., Finlay House Branch, and Habib Bank, Kharadar Branch.
8. Thereafter, petitioners received a letter from Mohammad Sadiq, Assistant Director, Bureau of Emigration and Overseas Employment, Government of Pakistan, which reads as follows:- "I am directed to refer to your application No,ARS/77-A/Adm-5/82, dated 5th September,1982 on the subject noted above and regret to say that your request has not been accepted by the competent authority (Manpower Division)."
9. Therefore, on 9th December,1982, the petitioners filed an appeal against the above order which respondent No,1 rejected.
' The communication dated 23rd December,1982 received by the petitioner on 5th January,1983 reads as follows:- ' Registered "Government of Pakistan, ' Ministry of Labour, Manpower and ' Overseas Pakistanis ' (MANPOWER DIVISION).
' No,1-52/79-EMRG, Islamabad the 23rd December,1982.
To, ' Messrs Feedai Agency Ltd., 12-A, Mandviwala Building, Old Queens Road, Karachi-2.
' Subject:- APPEAL UNDER SECTION 12 OF EMIGRATION ORDINANCE, 1979 AGAINST REVIEW ORDER OF DG, DE & OE. ISLAMABAD.
' Dear Sir, ' Reference your appeal No, ARS/77-A/ADM-5/82/113, dated 9th December,1982 addressed to the Secretary Labour, Manpower, and Overseas Pakistan, on the subject noted above.
2. An appeal under rule 12 of the Emigration Rules, 1979 lies only against an order passed by the D.G.With regard to canceilation/suspension/non-renewal of an OEP licence or forfeiture of security.
3. In view of above the case under reference is not appealable. Hence it cannot be admitted for hearing.
' Yours faithfully Sd/- (M.Haneef Qureshi Section Officer Tele: 27195'
10. Aggrieved by the two orders, the petitioners, as stated hereinbefor have filed this petition.
11. The respondent have not filed any counter-affidavit. They have however, filed comments wherein they have mainly stated in paragraphs 2 4 and 6 as follows:- ' Mr.Anwar Ali Sajan, petitioner No,2 was not accepted by the Bureau as Director of the Company.
The petitioner was informed that no new person could be included unless his full particular were funished to the Bureau for verification according to the procedure--vide Bureau's letter No, 0/Pri- 3(7)/73, dated 6th May,1976. Therefore, the Company is not authorised to operate through petitioner No,2.
' Petitioner No,2 was made Director of the Company without intimation to and approval of respondent No,2 and is, therefore, not recognized as such by the respondents.
' They have in paragraph 7 of the comments admitted that the petitioner's company informed the respondents of the change of their entity as a private limited company but their request was accepted subject to the condition that the partners after the changed name remained the same as were in the original licence and in case new partners were to be included they would furnish their full particulars for verification according to the procedure."
' However, their stand in paragraphs 8 and 9 of the comments is that in the application for renewal of licence, they gave the names of the same four old partners as directors of the new company and when petitioner No,1 submitted application for renewal of licence for the year 1981 on the new form, it was found that petitioner No,2 was included as Director and when this was pointed out to the Company his name was deleted.
12. We have heard Mr.J.H. Rahmatullah for the petitioners and Mr.S. Inayat Ali, Standing Counsel who appeared on behalf of the respondent.
13. Mr.J.H. Rahmatullah, Advocate submitted that the first order impugned in this petition is arbitrary and capricious as firstly, no reasons as communicated or otherwise stated for non-inclusion of the name of petitioner No,2 for operating the licence. Secondly, petitioner No,2's name was already mentioned in the application form submitted in the year 1980 for renewal of licence, and the licence was accordingly issued in the name of petitioner No,1, Lastly, the respondents had required the petitioners to give full particulars of petitioner No,2 and submit character and bank certificates, which were accordingly, sUbmitted under the cover of petitioner No,1's letter dated 13th January,1983.
14. In reply the learned Standing Counsel submitted that the respondents have had discretion to allow or not to allow petitioner No,2 to operate or not to operate the licence and in exercise of their discretion they have refused the same.
15. Now, taking up the submission of Mr.Rahmatullah, we may state that, we have already reproduced the communication whereby the petitioners' request was rejected. A perusal of the same would show that no reasons whatever have been given for refusing the request of the petitioner No,1 to allow petitioner No,2 to operate the licence as their Director. The respondents should have stated the same at least in a counter-affidavit but they have not filed any, nor have they stated the same in the comments field by them. Therefore, it cannot be known on what grounds they refused to allow petitioner No,2 to operate the licence. An order which adversely affects rights and privileges of a person or applicant and which has been passed in the exercise of discretion must state the reasons on which it is based, so that the person concerned could know whether it is based on A relevant consideration or irrelevant or immaterial consideration and is or is not in accordance with the provisions of the Act and the rules under which it is passed and whether it advances the object of the Act.
16. Moreover, when an order is challenged before a Court exercising constitutional jurisdiction, it has to see whether the discretion has been exercised in a manner that complies with the express or implied legal requirements of the Act and the rules. In this regard "desmid in his famous Book "Judicial Review of Administrative Action", 4th Edn. At pages 322-323, in relation to prerogative powers of the Court states as follows:- "In some contents they have confined themselves to the question whether the competent authority has kept within the four corners of the Act and whether it has acted in good faith. Usually they will pursue their inquiry further and will consider whether the repository of a discretion, although acting in good faith, has abused its powers by exercising if for an inadmissible purpose or on irrelevant grounds or without regard to relevant considerations or with gross unreasonableness."
' The learned author in the preceding pages of the same book at page 285 while dealing with the principle governing the exercise of discretionary powers states: "The relevant principles formulated by the Courts may be broadly summarised as follows. The authority in which a discretion is vested can be compelled to exercise the discretion, but not to exercise it in any particular manner. In general, a discretion must be exercised only by the authority to which it is committed. That authority must genuinely address itself to the matter before it: it must not act under the dictation of another body or disable itself from exercising a discretion in each individual case. In the purported exercise of its discretion it must not do what it has been forbidden to do, nor must it do what it has not been authorised to do. It must act in good faith, must have regard to all relevant considerations and must not be swayed by irrelevant consideration, must not seek to promote purposes alien to the letter or to the spirit of the legislation and gives it power to act, and must not act arbitrarily or capriciously:" (Underlining is ours for emphasis).
17. We have referred to a decision of this Court in Jamil Ahmad v. Commissioner of Karachi PLD 1958 Kar.56, wherein it was observed by Wahiduddin Ahmad, J. (as he then was) as follows:- "The decisions of a judicial Tribunal are always expected to be accompanied by reasoned opinion.
In our country both Civil Courts and Criminal Courts are bound to give reasons for passing a particular order and judgment. Mr.Sharifuddin urged that this principle is applicable even to orders passed by a Quasi-judicial Tribunal and by executive authorities. (Emphasis supplied). He invited our attention to the practice followed in England, America, France and Italy in this respect, Bernard Schwartz in his book 'AMERICAN ADMINISTRATIVE LAW," 1950 Edition at p.104 and 'EXECUTIVE IN BRITAIN' at page 251 has discussed this question at great length. W.A. Robson in 'JUSTICE AND ADMINISTRATIVE,' 3rd Edition at page 778 and S Galectti in JUDICIAL CONTROL OF PUBLIC AUTHORITIES IN ENGLAND AND ITALY' at page 157 has also discussed this question. These authors are unanimously in their opinion that as a principle of natural justice a party is entitled to know the reasons for decision be it judicial or 9uasi-judicial. In administrative matters, however, this principle is in the process of recognition. Two members of the Dough more Committee, Professor Laski and Miss Vilkinson, considered that to give decision without giving reason was the very definition of Authority. It is unnecessary to quote their opinion in extenso. We will only confine ourselves to what Schwartz in his book 'LAW AND EXECUTIVE IN BRITAIN' stated at page 251. The learned author stated: "The purpose of requiring the disclosure of the reports of its subordinates used by the administrative agency to aid it in the process of decision is to ensure just decisions by subjecting the administrative process to the light of public inquiry. Even more important in ensuring this result is the requirement of reasoned decisions. The value of reasoned opinions as a check upon arbitrary administrative power seems clear. 'for, in the first place, the requirement of an opinion provided considerable assurance that the case will be thought through by the deciding authority. There is a salutary discipline in formulating reasons for results, a discipline wholly absent where there is freedom to announce a naked conclusion. Error and carelessness may be squeezed out in the opinion shaping process. Second, the exposure of reasoning to public scrutiny and criticism is healthy. An agency will benefit from having its decision run a professional and academic gauntlet.
Third, the parties to a proceeding will be better satisfied if they are enabled to know the basis of the decision affecting them. Often they may assign the most improbable reasons if told none. Finally, opinions enable the private interest concerned, and the Bar that advises them, to obtain additional guidance for their future conduct. Even where strict adherence to precedent is not observed, some light-perhaps as much as the agency itself possess will be shed on future action."
It will thus be apparent that the giving of reasons enables the party penalised to know the ground of their condemnation and creates a satisfaction that the authorities have done justice to them."
18. This case went up in appeal before the Supreme Court (Chief Commissioner, Karachi. v. Jamil Ahmad PLD 1961 SC 145. Although the writ issued by the High Court was recalled but on the question of requirement of stating reasons what was said or not said in the four opinions of the Honourable Judges has been very succinctly summarised by Syed Sharifuddin Pirzada in his book 'FUNDAMENTAL RIGHTS & CONSTITUTIONAL REMEDIES IN PAKISTAN' at page 520 as follows:- "The above case went in appeal before the Supreme Court (Chief Commissioner, Karachi v. Jamil Ahmad PLD 1961 SC 145. Mr.Justice Amiruddin Ahmad found that the reasons given in the notification were sufficient for the purpose to satisfy the law. Mr.Justice S.A.Rahman preferred not to express an opinion about the necessity of giving reasons. Mr.Justice Kaikaus observed: The High Court had on the question as to effect of failure to record reasons referred to a number of cases. It would not be correct to overrule all those cases without even a reference to them.... I read some of these cases myself and found that there was a discussion as to what was meant by the recording of reasons. In one judgment it had been held that not only the conclusions of fact but the reasons for those conclusions had to be stated. According to the learned Attorney-General even the conclusions of facts are not to be stated, only the category under which the case falls.... The requirement of recording reasons occurs in a number of statutes and, if we go into cases relating to those statutes it will not at all be difficult to find authority in support of the proposition that reasons recorded must relate to facts. In fact, it would be difficult to find an authority to the contrary. Cornelius, C.J. Remarked: 'As for the requirement of 'reasons', I consider that this expression cannot be understood in the sense of an argument presented by way of justification in order to carry conviction, which is perhaps a fair description of the character of 'reasons' contained in a judgment', "
19. Here we may also refer to the well-known decision of the House of Lords in Pad field v. Minister of Agricultural, Fisheries and Food (1968) A C 997. In this case the Minister had refused to appoint a Committee, as he was statutorily empowered to do when he thought fit, to investigate complaints made by members of the Milk Marketing Board that the majority of the Board had fixed milk prices in a way that was unduly unfavourable to the complainants. The House of Lords held that the Minister's discretion was not unfettered and that the reasons that he had given for his refusal showed that he had acted ultra vires by taking into account factors that were legally irrelevant and by using his power in a way calculated to frustrate the policy of the Act. The view was also expressed by four of their Lordships that even had the Minister given no reasons for his decision, the Court would not have been powerless to intervene: for once a prima facie case of misuse of power had been established, it would have been open to the Court to infer that the Minister had acted unlawfully if he had declined to supply any justification at all for his decision.
20. Reference may also be made to a decision of a Division Bench of Baluchistan High Court in Miss Nasreen Fatima Awan v. Principal, Bolan Medical College, Quetta and 4 others PLD 1978 Q.17, wherein while delivering the opinion of the Court Mr. Justice Abdul Hayee Kureshi, the then Acting Chief Justice-, at page 29 of the report described an arbitrary decision as one which does not proceed on any substantial reason or exhibits lack of application of mind. His observation may be quoted herein-below with advantage:- "29. Arbitrary decisions are never considered wholesome in our system of law. One of the dominant tests of a decision being arbitrary is whether it proceeds on any substantial reason or exhibits lack of application of mind. Such manner of exercise of jurisdiction has very often been equated or called by a synonym of abuse of jurisdiction. Such abuse manifests itself by making it patent that the authority that had the a lis before it either overlooked the evidence brought before it or by reason of preconceived notices misdirected itself to arrive at such conclusions, which are either perverse or could not be substantiated on the basis of available evidence. Such arbitrariness or abuse of jurisdiction may very often become patent by an ad hoc observation indicating a desire to overlook the available evidence coupled with a longing for evidence which in the imagination of the authority should have been produced."
21. It is settled rule that a discretionary power must always be exercised in good faith for the purpose for which they were granted and within the limit of the Act and the Rules conferring the power and discretion must also be exercised fairly and not capriciously. See HALSBURY'S LAWS OF ENGLAND, 4th. Ed., Vol-I, paragraph 61, page 70.
21A. On the question of discretion I may also refer to The Montgomery Flour and General Mills Ltd., Montgomery v. The Director Food Purchases and others PLD 1957 (WP) Lah.914. In this case the Food Department had withheld the quota of Sugar of the petitioner on the ground that there was an unsettled claim of the Food Department against the petitioner. It was observed by Kaikaus, J.
Who delivered the opinion of the Court, at page 920 of the report, as follows: "The discretion, given by section 7 of the Sugar and Sugar Products Control Order, for the distribution of sugar is not an absolute and arbitrary one, to be exercised according to the pleasure of the Director of Food. It is a discretion to be exercised with a view to attaining the object for which the Essential Supplies Act, 1946, under which this order was promulgated, was enacted. The Essential Supplies Act was necessitated because on account of deficient supply of certain commodities it was necessary that prices and distribution be controlled and the object of the Sugar and Sugar Products Control Order is the fair distribution of sugar. The Director of Food (or other officer empowered under the Order) is entitled "to pass an order granting or withholding quota of sugar only on the ground that that is the order which should be passed for a proper distribution of sugar, in accordance with the object and policy of the Essential Supplies Act and the Order. If the order granting or rejecting the quota of sugar be based on ground that is beyond the scope of the Essential Supplies Act, the order is an abuse of power. The Essential Supplies Act was not enacted in order to arm the Government with a weapon to enforce its alleged claim and cannot be used for this purpose."
22. In the instant case we have already stated that in prescribed application form for renewal of the licence for the year 1981, petitioner No,2's name was already mentioned and the petitioners were issued the licence in the name of petitioner No,1 and subsequently petitioners were required to submit full particulars character certificate and bank certificate which they did. Yet the respondents refused to grant the request without assigning any reasons and without stating why they were rejecting the request. It may be stated that a limited liability company registered under the Companies Act, 1913, is a legal entity separate from its shareholders and it was to act through its director and other officers. Moreover, petitioner No,2 was the son of Mr.& Mrs. Anwar Ali Sajan and brother of other shareholders and petitioner No,1 Company was a family company and at the beginning of the partnership firm petitioner No,2 was a minor and therefore, could not have been made a partner.
23. It therefore, appears to us that respondents have acted arbitrarily and capriciously and consequently without lawful authority.
24. Now, so far as the order passed in appeal is concerned no arguments were addressed as to how the same was illegal. But since the first order cannot be sustained the order passed on appeal must be held to be of no consequence. (See: Yousaf All v. Muhammad Aslam Zia and 2 others P L 1958 SC 104.
25. We therefore, allow the petition and direct the respondents to allow petitioner No,2 to operate the licence issued to petitioner No,1. However, we leave the parties to bear their own costs. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.