' SALAHUDDIN MIRZA, J.--Petitioner No,1 M/s. Unison Ltd., (of. Which petitioner No,2 is a Director) purchased 50,000 shares (of Rs,10 denomination) of M/s. Dawood Petroleum Ltd., in the open market sometime before 12th April 1.974 and on this date lodged the transfer deeds with M/s. Dawood Petroleum Ltd., for registration of the shares in the name of Petitioner No,1. The Marketing of Petroleum Products (Federal Control) Act, 1974, having earlier come into force on 8th March, 1974, authorising the Government to take over the management, business and control of companies engaged in marketing petroleum products, the Government took over M/s. Dawood Petroleum Ltd., which was renamed as Premier Oil Company and later on it was merged, alongwith Pakistan National Oils Ltd., in the newly formed Pakistan State Oil Company Ltd., (respondent No,2). The requisite declaration under Rule 3(2) of the Marketing of Petroleum Products (Acquisition and Compensation)Rules, 1974 was also filed by Petitioner No,1 with M/s. Dawood Petroleum Ltd., Subsequently, on 2641-1974 Petitioner No,1 sent to M/s. Dawood Petroleum Ltd., the provisional transfer receipt dated 15-4-1974 and requested that new share certificates be supplied by them in lieu of the old ones already surrendered by them. Both the respondents, however, rejected the plea of petitioner No,1 and held it disentitled to .The transfer of the shares purchased by it in 1974 and vide letter dated 20th May 1977 (Annexure P-17) the Premier Oil Company (former nomenclature of respondent No,2) finally refused to transfer the shares in the name of petitioner No,1. Finally, after serving legal notice dated 19-12-1977 Annexure P-23 on the respondents, petitioner No,1 filed Constitutional Petition No,876' of 1978 which was decided vide judgment dated 16-4-1986 (Annexure P-24) whereby the petition was allowed in the following terms:- "No one has placed before us any material to show that the petitioner was ever heard in this matter either by the Government or by the respondent-company, and it therefore, appears to us to be clear that the petitioner has been prejudiced on account of failure of Federal Government of Pakistan to issue any notice to the petitioner to explain its position before they decided to reject the appeal of the petitioner which had been submitted to Pakistan Petroleum Marketing Board. The petition is, therefore, allowed and the Federal Government is directed to allow the petitioner to present its case before them. The respondent No,2 would then automatically follow the directions which are to be issued by the Federal Government after hearing the petitioner in respect of transfer of 50,000 shares in its favour."
' Thus, since this Court found that the respondents had taken decisions against petitioner No,1 without giving them proper opportunity to put up its case. Before them and without providing any opportunity of personal hearing, the respondents were directed to re-decide the matter after providing such opportunities to petitioner No,1. This was done but vide their letter dated 22nd January 1987 (Annexure P-25) Respondent No,2 again declined to transfer the shares in the name of petitioner No,1. The last para.Of this lettes is quoted below:- "We have been directed to advise you that your request for transfer of 50,000 shares to M/s. Unison cannot be acceded to".
' Petitioner No,1 and one Aziz Dawood then instituted yet another Constitutional Petition (No,D- 183/1987 challenging the refusal of the respondents to transfer the shares in the name of petitioner No,1. This petition was allowed vide judgment dated 27-4-1988 (Annexure P-25/A) and the case was remanded to respondent No,1 with the direction to:- "...,...To decide the petitioner's appeal afresh and to confront them with the material whatever is available with the Department and the petitioners will have right to produce any evidence or material in rebuttal. After that, after hearing the petitioners and the respondent No,2, the appeal may be decided within a period of three months in accordance with law".
' The matter was then further heard by respondent No,1 and vide a detailed order dated 21st September 1988 (Annexure P-26/A) Secretary, M/s Petroleum and Natural Resources Government of Pakistan again rejected the claim of the petitioners. It is this order which is now challenged through this third Constitutional Petition. The contention of the petitioners is that, as it has been throughout, that they are the bona fide purchasers of these fifty thousand shares and are entitled to their transfer in their name.
2. Both the respondents have controverted the averments of the petitioners by filing counter- affidavits. Mr. M. Iqbal Qureshi, Director (Marketing) of the Ministry of Petroleum and Natural Resources has sworn affidavit on behalf of the Federal Government. According to him the applications made for the transfer of the shares were not in conformity with Rule 3(2) of the Marketing of Petroleum Products (Acquisition and Compensation) Rules, 1974, that the shares were found to be in the names of fictitious and non-existent persons and, therefore, their transfer in the name of the petitioners was refused. Grievance was also made of the fact that till the date of the taking over of M/s, Dawood Petroleum by Government (1-1-1974),petitioner No,1 had not lodged the shares with the siad M/s. Dawood Petroleum for their registraton in its (Petitioner No,1's) name even though Petitioner No,1 claims to have purchased the shares in May, 1973. All this, together with the facts that the registered shareholders of these fifty thousand shares gave proxies in favour of Ahmad Dawood for purposes of 5th Annual General Meeting of M/s. Dawood Petroleum held on 30th June 1972, and the further fact that notices sent to these registered shareholders (49 in numder) were returned unnerved for want of correct address in the case of 42 and the remaining 7 although served did not come forward, convinced Respondent No,1 that these shareholders were fictitious and the Federal Government (respondent No,1) felt justified on this account not to transfer these shares to petitioner No,l.
3. Respondent No,2 (Pakistan State Oil Company Ltd.,) filed the counter-affidavit of its Manager Legal Affairs A. Ghaffar Khatri in which it was stated that a list of such shareholders of M/s. Dawood Petroleum was prepared who had given proxies in favour of Mr. Ahmad Dawood on the occasion of the 5th Annual General Meeting of the Company held on 30th 3une 1972 and notices were issued to them to, appear in person alongwith share-certificates. Since the shareholders of the disputed fifty thousand shares (who were 49 in all) also fell in the above category, notices were likewise issued to them but 7 of them did not appear in spite of service and the remaining 42 could not be served as they were found to be not living at their registered addresses. This showed that these share- holders did not exist and the transfer application of petitioner No,1 therefore did not come up to the standard laid down in Marketing of Petroleum Products (Acquisition and Compensation) Rules 1974 and was, therefore, rightly rejected.
4. Learned counsel of the parties have been heard.
5. We would just take up the contention of Mr. Yahya Bakhtiyar, learned counsel of respondent No,2, that under the circumstances of the case. Constitutional petition is not maintainable as an / alternate remedy under section 38 of the Repealed Companies Act (which is equivalent to section 152 of the Companies Ordinance, 1984) was available but was not first availed by the petitioners. A short answer to this objection can be that on the basis of these very facts, the previous two Constitutional petitions of the petitioners were admitted and decided on merits and, therefore, the maintainability of this third petition cannot be questioned. We have, however, taken into consideration the arguments of learned counsel of the respondents in this regard. Section 38 of the repealed Companies Act or section 152 of the present Companies Ordinance provided for the rectification of the register of the members or register of debenture-holders of a company and according to Mr. Yahya Bakhtiar it was open to the petitioners to file a civil suit under this section and he relied on the following judgments in support of this argument: (1) 1988 CLC 1541 Zakir Latif Ansari v. Pak Industrial Promotors Ltd.
' PLD 1987 Lah.1 Khursheed Ahmad Khan v. Pak Cycle Manufacturing Co.Ltd.
' 1987 CLC 2079 Sheikh Mushtaq Ahmad v. Shoukat Soap Factory.
' PLD 1976 Kar.1011 the Beco Industries Ltd. v.The Karachi Municipal Corporation.
' 1991 CLC 110 Virtu Ahmad Bisvil Spinners (Pvt.) Ltd.
6. The above-noted first judgment lays down that intricate and complicated questions of title between the parties cannot appropriately be the subject-matter of decision in a petition under section 152 of the Companies Ordinance, 1984 (which is same as section 38 of the Companies Act which was in force at the time of the disputed transaction)and dispute of title must be settled in the Civil Court. The second judgment lays down that summary procedure under section 152 of the Companies Ordinance can be resorted to only when the sale of shares in favour of the petitioners is complete but since it was not complete (in that case) inasmuch as there was only an agreement to sale and sale-price had only been partly paid and the balance was yet to be paid, the application under section 152 of the Ordinance was held to be not maintainable. The third judgment also lays down that disputed questions of fact cannot be decided in a petition for rectification of 'Register of Members' under section 152 of the Ordinance. In the fourth judgment, a petition under Article 199 of the Constitution was held to be not maintainable because (a) adequate remedy was available in that case but was not availed by the petitioner (K.M.C.) and (b) complicated questions of fact existed whose agitation before the High Court under its Constitutional jurisdiction was not warranted. The observations in the fifth judgment 1991 CLC 110 are the same as in 1987 CLC 2079, namely, that petition under section 152 of the Ordinance was not maintainable when complicated questions of title arise in which case the proper forum is the Civil Court.
7. To controvert the argument of learned counsel of respondent No,1 regarding the non- maintainability of this Constitutional petition, learned counsel of the petitioners has relied on the following two judgments:-
(a) 1986 .SCMR 916 Federation of Pakistan v. Choudhry Muhammad Aslam.
(b) 1986 CLC 930 Major (Rtd.) Muhammad Sabir Khan v. Govt. Of Pakistan through Secretary Ministry of Interior Islamabad and 2 others. The above noted Supreme Court judgment is in respect of the powers of the Government under the Imports and Exports Act, 1950 and lays down the principle that the executive powers vested in the Government, however overriding and absolute they might be, must be exercised fairly and justly and for advancing the object of legislation and every such exercise of power has to satisfy the test of reason and relevance and, therefore, even the untrammelled powers vested in the Government have their limits. In this context, the following extract from the judgment is reproduced below:- "The department's contention that it possessed untrammelled powers and could prospectively prohibit or control the imports, is correct considering the wide amplitude of powers conferred by section 3(1) of Act XXXIX of 1950 and the nature of the right that a seeker of the import licence can claim. Such a power has been recognised by this Court in Zamir Ahmad's case. All the same, even such an extensive power has its limits. One such limit was spelt out in Zamir Ahmad's case and it is that vested rights cannot be allowed to be overridden, unless it takes place by unequivocal words, by an organ or authority competent to impair or override the vested rights. The question will still remain whether the respondent writ-petitioner at that stage of the proceedings had at all acquired any vested rights. The second limit now well-recognized is that all executive power has to be exercised fairly and justly, for advancing the object of the legislation. In other words every such exercise of power has to satisfy the test of reason and relevance".
' In the second judgment 1986 CLC 930 it is held that Constitutional jurisdiction is not designed to probe into and decide complicated questions of title for which the proper forum is Civil Court but High Court in fit cases might probe into a question of fact in Constitutional petition if it did not require a detailed enquiry and if dictates of justice so demanded.
8. Out of the five judgments relied upon by learned counsel of respondent No,2, four are in respect of section 152 of Companies Ordinance, 1984 and they emphasise the limitation of the scope of the summary relief provided under this section. In fact, in PLD 1987 Lah. 1 there was a serious dispute of title as there was no completed transaction of sale of shares and only an "agreement to sale" was executed by the parties and only part of `consideration' had been paid by the purchaser. As a matter of fact, in this case there is no dispute about the title of the fifty thousand shares. No disputant has come forward to claim any title or interest in these shares. On the contrary the case as set up by the respondents is that the Dawood Group, which controls petitioner No,1 was the actual owner of these shares, which means that according to the respondents the ownership of these shares, even after the shares are transferred in the name of petitioner No,1, shall remain where it, has always been, namely, the Dawood Group. As such, these judgments are not relevant in the present context. This leaves PLD 1976 Kar. 1011 BECO v. K.M.C. As noted above, according to this judgment two conditions must be fulfilled to warrant the maintainability of a Constitutional petition under Article 199 of the Constitution; firstly, no adequate remedy should be available to the petitioner and, secondly, complicated questions of fact should not arise for decision. Now, as for the first condition, what alternative remedy, according to the respondents, is available to the petitioners? Learned counsel argued that the repealed Companies Act being in force at the relevant time, the petitioners should have approached the Company Judge under section 38 thereof and even now they can approach the same judge under section 152 of the Companies Ordinance which is in pari-materia with section 38 of the Repealed Act. However, learned counsel had also argued, and relied upon the four judgments referred to above in support of his argument, that section 38 or section 152 could not be resorted to as very intricate questions of title to these.
Shares had arisen which could not be decided in the summary manner envisaged by these provisions of law. The argument was thus self-contradictory. The only other forum can be Court of general jurisdiction, namely, the Civil Court but learned counsel of respondent No,2 did not even remotely suggest this course of action. And rightly so, since in our view Civil Court is not a proper forum in this case where there is no dispute of title to the ownership of the shares in question and even if it were the proper forum, petitioners cannot get adequate relief there and we are of the view that on the basis of the facts of this case and in the light of the judgments reported as 1986 SCM R 916 and 1986 CLC 930 and referred to above this Constitutional petition is maintainable under Article 199 of the Constitution.
9. Certificate under Rule 3(2) of Marketing of Petroleum Products (Acquisition and Compensation)
Rules 1974 is the basic document on the validity or otherwise of which rests the fate of the claim of the petitioners as the contention of both the respondent is that the transfer applications submitted by the petitioners were not in conformity with this Rule. Rule 3(2) is reproduced below:- Rule 3(1).................
(2) An application for transfer in a case referred to in sub-rule (i) shall be submitted to the company the shares of which are a subject-matter of such application, accompanied by a valid transfer deed, bearing the signatures of the transferor and the transferee and a declaration and certificate in the form set out in the schedule.
(3)
10. The "Declaration" and "Certificate" referred to in Rule 3(2) are also reproduced below for ready- reference:- DECLARATION ' I hereby declare that shares of M/s listed in the schedule belowwere my property on and on that date the share and the bank transfer deed in respect of these shares were held by me (Bankers) on my behalf. I further Clare that these shares were purchased by me through a regular transaction on the stock exchange and the payment of Rs as consideration for this purchase was made by me on to (Member of the Stock Exchange) in cash/by crossed cheque/Bank Draft No,.......Dated .........Drawn on (Bank). I also declare that I am not a benami-holder of these shares.
' SCHEDULE ' Share Certificate No, Share Distinctive No, Number of Shares Signature............
Name.................
Address..............
' CERTIFICATE ' I hereby certify that the shares mentioned in the schedule to the above declaration were purchased by the declarant through me on.....And the payment in respect of them was made in cash/by crossed cheque /Bank Draft No dated drawn on (Bank).
' The transaction has been duly recorded in my book of accounts in accordance with the procedure prescribed by the Stock Exchange and. The Securities and Exchange Authority of Pakistan.
Signature............................. of Member of Stock Exchange Name..................................
Address...............................
' Seal of the Stock Exchnige.
' Annexures P/2-A, P/2-B and P/2-C are the declarations/certificates as contemplated by Rule 3(2) and prima facie they meet the requirements of law but the contention of the respondents in para. 3(i) in the impugned order dated 21-9-1988 (Annexure P/26-A) is that these certificates/declarations were not produced by the transferees. This observation is patently false and incorrect and in para. 14 of the counter-affidavit of respondent No,2 and in para. 12 of the counter-affidavit of respondent No,1 the stance taken is that certificates/declarations as contemplated by Rule 3(2) were submitted but they were not in conformity with Rule 3(2). Even this later stance is incorrect as these declarations/certificates are exactly on the pattern provided in the schedule to the Rules. However, during the course of hearing, the stand of the defendants was that the previous owners of the shares were fictitious persons and, therefore, the transaction was fraudulent and hence transfer of shares in the name of petitioner No,1 could not be effected.
11. Petitioner No,1 purchased the shares at the Stock Exchange through 'Mr. Khadim All Shah Bukhari, stock broker and member of Karachi Stock Exchange and respondents could not refer us to any law under which a purchaser at the Stock Exchange should make enquiries about the owners of the shares he is purchasing and if a member of Stock Exchange commits any, breach of business rules, the purchaser must, suffer for it. Under para. 7(ii) of the impugned order, the respondents have expressed doubts about the bona fides of the transaction because the transactions in respect of purchase of these shares, which were allegedly made through a broker on 5-5-1973, 7-5-1973 and 8-5-1973, did not tally with the record of the Stock Exchange for these dates as the record of Stock Exchange showed a sale of far less shares on these dates. However, the broker (Mr. Khadim All Shah) explains this in his letter of March 7th, 1989 to petitioner No,1 in the following words:- "I did not report these transactions to Karachi Stock Exchange Ltd. As these were transacted after trading hours and most of such transactions transacted after the trading hours were not reported to the Karachi Stock Exchange during that period by most of the members of the Stock Exchange including myself'.
' This is a plausible explanation and the respondents have not been able to controvert it and as such the conclusions arrived at in para. 7(ii)(c) cannot be sustained.
12. It seems that the trouble started when Mr. Khawaja Habibullah, Chief of 'Securities and Exchange Authority of Pakistan' sent a letter dated 13th April 1974 (Annexure R/6 to counter-affidavit of respondent No,2) to the Managing Director of Dawood Petroleum in which suspicion was expressed about the genuineness of the 49 shareholders from whom petitioner No,1 had' purchased the shares and the Managing Director was asked to conduct an enquiry and submit information on the points given in Exh.R-6. This enquiry culminated in the issuance of letter dated 10th May 1975 from the Deputy Secretary of the Ministry of Fuel, Power & Natural Resources to the Managing Director of Premier Oil Company (Annexure H to the counter-affidavit of respondent No,1) directing the latter that transfer application of petitioner No,1 should not be accepted. However, letter Annexure R-6, alongwith some others which is the basis of the stance adopted by the respondents does not disclose the provision of law under which shares cannot be held by a person as a benamidar for someone else or that a purchaser loses the entitlement to have the shares transferred in his name if he cannot prove that the seller was not a benamidar. On the contrary, section 155 of the Companies Ordinance provides that "the registers referred to in sections 76, 147, 149 and 156 shall be prima facie evidence of any matter which by this Ordinance is directed or authorised to be inserted therein". Section 76 provides that on the receipt of an applicationfor registration of the transfer of the shares, the Company shall enter in its register of members the name of the transferee; section 147 provides that a company shall maintain an up-to-date register, duly indexed, of its member,.Giving their names and fathers' names, address etc. All this record is prima facie evidence of the entries in this record in view of section 155 and in our view this presumption is not satisfactorily rebutted on the strength of a suspicion arising out of the failure of the 49 shareholders to appear before the Assistant Chief of "the Securities and Exchange Authority" in response to the notice served on them on their registered addresses. Apparently, these shareholders had lost all interest in these shares and had nothing to lose by not positively responding to these notices and most of them had even, in the meantime, moved out of their registered addresses and as such no adverse inference can be drawn from the failure of these shareholders to appear before the Assistant Chief in response to the notices and there is no basis of the `suspicion' mentioned in Annexure R-6.
13. Besides, the respondents could not refer us to any law under which shares could not be held in benami. Even the declaration which a transferee is required to file under Rule 3(2) of the Rules does not require the transferee to enquire into the character and status of the past owner of the shares and make a declaration about his character awl status. The declaration under Rule 3(2)merely requires the transferee to declare that "I am not a benami-holder of these shares". Such 4claration was made by M/s. Unison Ltd., and it is not the case of the respondents that M/s. Unison Ltd., are benamiholders for someone else. As such, we find nothing wrong with the.' declarations.
14. In view of the above discussion we are inclined to accept this Constitutional petition and grant the following reliefs:-
(a) A declaration to the effect that the order of Respondent No,1 dated 21st "September 1988 (Annex*, P-26 A) is of no legal effect and a nullity, being based on incorrect interpretation of Rule 3(2) of the Marketing of Petroleum Products (Acquisition and Compensation) Rules, 1974 and Articles.
(b) A mandatory injunction directing respondent No,2 to register the fifty thousand shares in its register of shareholders in the name of petitioner No,1 from the date of purchase of the shares by petitioner No,1 and give all consequential benefits to it. In view of the special circumstances of the case the parties are left to bear their own I costs.