' IBADAT YAR KHAN, J.--Miss Naushaba and other petitioners in this constitutional petition are widow and daughters of a gentleman named Muhammad Aminuddin, who died in Karachi on 17-4-1976.
The Late Mr. Muhammad Aminuddin and his family used to reside in East Pakistan. But in March 1973 they left that country and came over to this part of Pakistan with an intention to permanently settle down here. While they were in East Pakistan, Muhammad Amin formed a private limited company known as "Messrs Pak Italian Marble Works Limited Dacca" with a paid-up share capital of Rs.65,000 in all contributed by himself, his son-in-law and other ladies of his family including his wife and unmarried daughter. This company was registered in Dacca with the Registrar of Joint Stock Companies on 29-6-1960. Mr. Muhammad Aminuddin became its Managing Director and his daughters, wife and son-in-law were appointed as Directors. Among other assets the company owned a cinema known as "Moon Cinema" in Dacca. It appears that the company business flourished and it continued to function peacefully till the political disturbances and unrest started.
As a result this family decided to leave East Pakistan and migrated to West Pakistan and settled down at Karachi. It is stated that they transferred their capital and even the household effects from East Pakistan to West Pakistan. The National Identity Card, Ration Cards, Passports, Bank Accounts and a large number of other documents have been filed and annexed with the petition to show the permanent stay and domicile of each member of the family in Pakistan. Receipts of the shipping company for payment of freight for transporting goods and household effects from East Pakistan to West Pakistan have also been filed.
2. On 24-5-1971 Muhammad Aminuddin entered into an agreement with Mst. Shamim Khatoon wife of Haji Muhammad Younus, resident of Najma Nasima Mansion, Frere Road, Karachi for the purchase of a House No. BS-16 Block No.16, Federal 'B' Area, Karachi. This agreement was signed by Muhammad Aminuddin as Managing Director of Messrs Pak Italian Marble Works Ltd. on 20-9-1972.
The K.D.A. executed a Lease-Deed in respect of this plot in favour of "Messrs Pak Italian Marble Works Ltd." through its Managing Director Mr. Muhammad Aminuddin son of Shaikh Riaz of Federal 'B' Area, Karachi. This deed was duly registered with the Sub-Registrar, Karachi.
' After the migration of the shareholders from East to West Pakistan all the properties including the 'Moon Cinema' Dacca which were run in the name of the company in Dacca were seized and taken over by the Government of Bungladesh as abandoned property by notification, dated 3-1-1972. So far as this part was concerned, the sailing was good for the family and they continued to live peacefully in the house which was purchased by Muhammad Aminuddin in the name of the company. Muhammad Aminuddin having lost all his assets in East Pakistan, applied for registration of his company in Karachi. But before the registration certificate was issued, Muhammad Aminuddin died in Karachi on 17-4-1976.
3. By a notification, dated 8-11-1978 published in the Gazette of Pakistan on 11-11-1978 Mr. Mursalin Burney, Director Judicial of the Abandoned Property acting under section 11 of the Abandoned Properties (Management) Act XX of 1975 declared House No. BS-16, Block No. 16, Federal 'B' Area, Karachi belonging to 'Messrs Pak Marble Works Ltd'. Dacca as abandoned property. The grievance in this petition as well as in the connected petition (C.P. No. D-224 of 1983) filed by another sister Mst. Husn-e-Ara Begum and her husband Abdul Kalam originates from this order. These two petitions should, therefore, be disposed of by this common judgment, as the property, the parties, in deed the orders passed therein are the same. To complete the narrative it is to be mentioned that the notification, dated 8-11-1978 was challenged by Mst. Husne-Ara Begum daughter of Late Muhammad Aminuddin by filing a claim before the Administrator Abandoned Properties under section 14 of the Abandoned Properties (Management) Act questioning the validity of the decision, dated 8-11-1978. The Deputy Administrator, Abandoned Properties by his order, dated 20th May, 1979 rejected the claim and confirmed the order, dated 8-11-1978. An appeal was filed against this order before the Board of Trustees, but this remedy also proved to be abortive. The Board by its order, dated 6-5-1982 dismissed the appeal. In the meantime 'Messrs Pak Italian Marble Co. Ltd.' was registered with the Registrar of Companies as a private limited company with its office at House No.BS-16, Block No. 16, Federal 'B' Area, Karachi. The Directorship of the Company was the same as it was in the Dacca based company, with the only difference that due to the death of Muhammad Aminuddin, Abul Kalam became the Managing Director of the Company registered in Pakistan. An attempt was made to obtain permission from Controller of Capital Issues for shifting the Dacca based company to Pakistan. On his refusal a constitutional petition was filed in this Court which has been disposed of by us today on purely technical grounds.
4. The two Constitutional Petitions No. D-642 of 1984 and D-224 of 1983 are to be disposed of by this common judgment. Mr. Abrar Hassan and Mr. S. Ahmad Hasnain Advocates have appeared on behalf of the petitioners and Mr. S. Noorul Hassan has represented the official respondents. The contention raised on behalf of the petitioners in substance is that the notification treating this unit of property as 'abandoned property' and the order passed by the Deputy Administrator and the Board of Trustees confirming this notification are unjust, illegal and contrary to the scheme of the Act XX of 1975. The learned counsel contends that the property was actually purchased by Mr. Aminuddin who was a Pakistani.national and since 1970 he was permanently settled and domiciled in this part of Pakistan. The mention of the Limited Company in the document of purchase as well as in the Lease-Deed executed by the K.D.A. is in the words of the learned counsel a 'benami transaction'. Additionally the family had a sentimental attachment with this name 'Pak Italian Marble Works Ltd.' and they wanted to utilise this name also because this name had earned a goodwill during the years and was fully popular in the trade circles. As a matter of fact the late Muhammad Aminuddin wanted to register this company in Pakistan as well and had applied to the Registrar of Companies in Karachi for the registration of 'Messrs Pak Italian Marble Works Ltd.' with the same Directorship and this application was under process, when Mr. Muhammad Aminuddin died.
5. Mr. Noorul Hassan learned counsel for the respondent on the other hand supports the order of the official respondent. But before we examine the contentions of the two counsel, it is better to dispose of a preliminary objection raised by the learned counsel for the respondent on the maintainability of this constitutional petition. It is urged that the remedy provided by section 14 of the Abandoned Property Act has not been availed of by the petitioner Mst. Naushaba in Constitutional Petition No. 642 of 1984, as such this petition is liable to be dismissed. In our opinion even if appeal was filed, it would have remained an exercise in futility. As stated in the earlier part of the judgment, a similar order in respect of the same property was challenged before the Board of Trustees. The Board of Trustees have expressed their views in a detailed order, dated 16-5-1982.
There is nothing to indicate that the Trustees would have changed their opinion, if Mst. Naushaba had challenged the same before the Board of Trustes. In the circumstances of the case it would have been a mere formality consuming more time and expenses. We would, therefore, reject this plea.
6. Now to turn to the central point of the case which has consumed most of the time of the Court. It is urged by learned counsel for the respondent that the impugned notification, dated 8-11-1978 followed by the order of the Deputy Administrator and the order in appeal by the Board of Trustees are in full compliance with the provisions of law. For this argument the learned counsel relies on clauses (a) and (f) of section 2 of the Abandoned Properties (Taking Over and Management) Act, 1975. These two clauses may be reproduced for ready reference:-- "(a) 'Abandoned property' means any property, movable or immovable (including share in industrial units and firms, invest ments, deposits, policies of insurance and all other interests and rights in or to or arising out of any such property), belonging to a specified person and includes any such property sold or transferred to or placed under the supervision or control of, any other person on or after the sixteenth day of December 1971, but does not include any ornaments or wearing apparel or any cooking vessels or other household effects in the immediate possession of a specified person, not exceeding a total of rupees one thousand;"
(b) ..............................................................................................
(c) ..............................................................................................
(d) ..............................................................................................
(e) ..............................................................................................
"(f) 'specified person' means a citizen of Pakistan domiciled in the territories which immediately before the sixteenth day of December, 1971, constituted the province of East Pakistan who has left or leaves or has expressed his desire to be taken out of, or to be allowed to leave, the territories of Pakistan and includes a company registered in the said territories the registered office of which has not been shifted in pursuance of the Companies (Shifting of Registered Office) Ordinance, 1972 (V of 1972)."
' The contention is that the Company admittedly having its registration in East Pakistan prior to 16- 12-1971 is covered under the definition of 'specified person'. It is covered by the expression 'specified person' within the meaning of clause (f) of section 2 quoted above, and the house having been leased out by the K.D.A. to this Company must be treated to be 'abandoned property' under clause
(a) of section 2, quoted above.
7. The learned counsel for the petitioner meets this argument by trying to show that the 'Pak Italian Marble Works Ltd.' is a Private Limited Company. All the paid-up capital of this company have been contributed by the family members rather by the head of the family in his own name as well as in the names of his sons and daughters. As this company has acquired a reputation and earned a goodwill, the name has become a sacrosanct for the family. It was for this reason that Mr. Muhammad Aminuddin, while entering into agreement of purchase with a Pakistani lady named Mst. Shamim Khatoon on 24-5-1971 and also, while obtaining the lease hold rights of the plot from the K K.D.A. vide lease-deed, dated 20-9-1972 used this name. He wanted to continue to enjoy the goodwill of this name. Nevertheless all the funds to finance this deal were provided exclusively by Mr. Muhammad Aminuddin in Karachi where the family was residing. Mr. Aminuddin also applied for registration of this Company in this part of Pakistan by applying to the Registrar of Companies for registration. This registration has been secured and the company 'Pak Italian Marble Works Ltd.' is a Pakistani Company, having its registered office at House No. BS-16, Block-16, Federal 'B' Area, Karachi.
8. We have given our anxious consideration to the arguments advanced by the two sides and, while appreciating the technical merits of the contention raised by the counsel for the official respondent, cannot help feeling that adopting such a view would result in serious miscarriage of justice and would be contrary to the scheme and object of the Abandoned Properties Act itself. As the name of the Act itself suggests this piece of legislation was enacted to control a situation which had arisen as a result of secession of a part of this country. Property owned by such a citizen of the parent country who had his origin and roots in the seceded territory and who returned to his place of origin was to be treated abandoned property in this part of the country.
9. In the present case we have to see whether a group of individuals who collectively form a personality encased in the statutory jacket provided by registration of this personality should be subjected to the consequences visualised by the two clauses quoted above. It is a case of duel personality. The real one which is represented by the share holders and the shadow which is represented by the statutory form these individuals have assumed by virtue of registration. The latter is nothing but a collective name of the individuals. Question arises whether if all the shareholders shake off the statutory jacket and migrate to Pakistan and permanently settle here and acquire property in the name of skeleton which have been left behind, would such property be treated as abandoned property? It is to be seen where does the power of decision making lie, here or in what was East Pakistan and now Bungladesh. Can this company take a decision without the participation of the Directors/shareholders. If all the shareholders and Directors who can legally take a decision for disposal and sale and also management of the property, happened to be here should it still be treated as abandoned property? The answer is provided by the notification of Bungladesh Government who have treated 'Moon Cinema' in Dacca which as stated earlier, was shown as the property of this company and which has been taken over as abandoned property on account of migration of the Directors of the Company from Bungladesh, although the legal title vests in the company which is registered in Dacca. Fortunately some guide line is provided in a case very close to the present situation. This case is reported in PLD 1971 SC 585. In this case a Judge of the High Court, prior to his elevation to the Bench, had acquired shares in private limited companies which he retained even after becoming a Judge. He was charged for violating the Code of Conduct framed for Judges of the superior Courts on account of his involvement in financial and business dealings which were to embarrass him in the performance of his duties. In defence of the charge it was pleaded that "a company has separate legal entity apart from its share-holders. Merely because a person holds shares in a private company it cannot be said that he either participated in the management or became involved in activities of trade and industry". It was held that in order to determine the extent and nature of involvement of a shareholder in the affairs of the company, the Court could lift the veil of incorporation and see whether the immunity claimed by the shareholder was justified. Chief Justice Hamoodur Rahman analysed the issue in the following words:-- "The growing tendency appears to be rather to look at the substance and not to allow the vision to be clouded by the shadow of the corporate personality. Thus, whether the corporate personality is being used merely as a cloak for fraud or improper conduct or where it can be established that the corporate personality is merely acting as an agent or trustee for someone else, be he an individual or another subsidiary company, or where it is necessary to determine the true character of the corporate personality for other purposes such as to determine its tax liability or its quasi-criminal liability or as to whether the corporate body is an enemy concern or not, or a mere trustee for certain purposes, the Courts have not hesitated to look behind the veil of incorporation."
' After reviewing the case-law, the learned Chief Justice summed up the discussion as follows:-- "Whatever might be the position of third parties, vis-a-vis the company and the liabilities of its shareholders, it does appear that there is no bar to the Courts lifting the veil of incorporation to determine the true relationship of the shareholders with regard to their dealings with the company or to ascertain the true nature of the company itself in matters which are governed by other statutes or where other considerations necessitate the taking of such a step. In the present case too, we are not concerned with the liability of the respondent as a member of the companies but we are concerned, in terms of a Code of Conduct drawn up under the Constitution, with determining as a matter of public policy as to whether the association of a Judge of a superior Court with such concerns constitutes involvement in activities of trade, business or industry. For this purpose we think we are entitled to go behind the shadow of incorporation in order to ascertain as to what the real nature of the association of the respondent was with these concerns."
' In the case of Daimler Company Limited. v. Continental Tyre & Rubber Company (Great Britain)
Limited, the company was registered in Great Britain but most of its shareholders were Germans.
The shareholders taking advantage of incorporation of the company in Great Britain surreptitiously availed and served the German interest. The House of Lords lifted the veil of incorporation and held that "the Daimler Company which though incorporated in England, was an associated body of Germans, because, all its shareholders except one were of German nationality".
10. Before parting with the case one more look at clause (f) of section 2 of the Abandoned Properties Act. This clause while covering a company in the definition of 'specified person' excludes such company from the category of 'specified person' whose registered office has shifted from former East Pakistan in pursuance of the provisions of the Companies (Shifting of Registered Office) Ordinance, 1972. Now it is to be remembered that the case on hand is the case of a private limited company. It is to rank at par with a partnership. In support of this proposition reference may be made to the opinion of Earl of Halsbury in Daimler Company Ltd. case referred to above. The relevant part is as follows:-- "It is in fact a partnership in all that constitutes a partnership except the name, and in some respects the position of those whom I shall call the managing partners."
11. It is admitted position that all the shareholders or in other words "partners" of this company have shifted to Pakistan. The effective control or operational base of this company exists in Pakistan.
Even the name 'Pak Italian Marble Works Ltd.' has been registered with the Registrar of Companies and a certificate of its incorporation has been issued to this company in Pakistan itself. Such incorporation would be a substitute for shifting the office from East Pakistan and a substantial compliance of provision of clause (f) of section 2. The effect of all these facts and circumstances is that not only the corporate skeleton but the real body capable of exercising effective control of the company have come and settled in Pakistan and are managing their property. The property cannot be treated as abandoned property. The result would be that the notification, dated 8-11- 1978 treating it as such and the orders, dated 20-5-1979 and 6-5-1982 passed by the Deputy Administrator of Abandoned Properties and the Board of Trustees respectively are declared to have been passed without lawful authority and are of no legal effect.
' Constitutional Petitions No. D-642 of 1984 and D-224 of 1983 are allowed. The parties to bear their own costs.