' In this Constitutional petition, a question as to legality of order dated 25-8-1994 passed by Wafaqi Mohtasib (Ombudsman) on the complaint of respondent No,1 has been raised.
2. The facts of case are that the petitioner who was Member of Lahore Stock Exchange and as such was allottee and occupant of Booth No,310 being Membership No,117 through agreement dated 18- 84993 executed between him and respondent No,2, agreed to transfer his Membership for a consideration of an amount of Rs,29,000. In pursuance thereof the petitioner on receipt of the said amount intimated the Stock Exchange about his resignation and nominated respondent No,2 for Membership. According to the petitioner respondent No,2 when made an application for grant of Membership, the same was not allowed as he being not a graduate, was found to be not qualified under the rules. Subsequently, however, respondent No,2 received from the petitioner an amount of Rs,32,50,000 in lieu of Rs,29,00,000 earlier paid by him which was inclusive of the profit on the said amount of consideration. This payment was allegedly made on 29-1-1994 out of which an amount of Rs,5,00,000 was paid earlier on 14-12-1993.
3. The case of the petitioner was that with the acceptance of the refund of the said amount of Rs,32,50,000 the respondent No,2 agreed not to press his application for grant of Membership in pursuance to the earlier agreement executed between the parties and come to an end.
4. The respondent, however, made a complaint before the learned Wafaqi Mohtasib alleging that the payment of an amount of Rs,29,00,000 was made to him but the same was under coercion as he was threatened by one of the Directors of the Lahore Stock Exchange who was relative of the petitioner to accept the same in order to save him from any danger. He alleged that the authorities of the Lahore Stock Exchange should be directed to transfer Membership No,117 in his name.
Inquiries were held on this complaint through Mr. Shahid Zaffar, Director-General (Finance) who has been impleaded as respondent No,4. It has been alleged that the petitioner was not heard either by respondent No,4 or learned Wafaqi Mohtasib (Ombudsman). An order was passed by learned Wafaqi Mohtasib on 25-8-1994 in which after recording findings on merits of the case against the petitioner in the following words "in any case when the action was taken thereon under Articles 10, 11 and 12 etc. Would tend to make the process irreversible in so far as the option of the resigning member is concerned", issued a direction to the Lahore Stock Exchange to take further necessary action to resolve the grievance of the respondent No,2 and complaint in terms of paras.
14, 15 and 16 in order to rectify the inordinate delay caused by Lahore Stock Exchange as regards transfer of Membership No,117 in favour of the complainant, compliance should be reported by September 30, 1994. This order has been brought under challenge in this Constitutional petition.
5. Learned counsel for the petitioner laid a great deal of stress on his submissions that Lahore Stock Exchange being not an 'Agency' as defined in section 2(1) of the Establishment of the Office of Wafaqi Mohtasib (Ombudsman) Order, 1983 hereinafter called "The Order" therefore, the Wafaqi Mohtasib while entertaining the complaint of respondent No,2 and passing the impugned order travelled beyond the frontiers of power and jurisdiction defined under the Order.
6. Under section 9 of the Order the Wafaqi Mohtasib has been empowered to undertake any investigation into any allegation of maladministration on the part of any agency or any of its officers or employees. Section 2(1) of the Order defines the expression 'Agency' as under:- " 'Agency' means a Ministry, Division, Department, Commission or Office of the Federal Government or a statutory corporation or other institution established or controlled by the Federal Government but does not include the Supreme Court, the Supreme Judicial council, the Federal Shariat Court or a High Court."
7. It is manifest from this definition that the main object of establishment of Office of Wafaqi Mohtasib was to investigate into the allegations of maladministration of the Department of the Federal Government, statutory corporations or other institutions established or controlled by the Federal Government and of its officers or employees, cognizance of which could be taken on the complaint of an aggrieved person or, on a reference by the President, the Federal Council or the National Assembly, as the case may be, or on a motion of the Supreme Court or a High Court as provided in section 9 of the Order.
8. The question which requires determination in this case is whether the Lahore Stock Exchange as an institution falls within the scope of the expression "agency" as defined by section 2(1) of the Order so as to extend power and jurisdiction of the Wafaqi Mohtasib to deal with the complaint of maladministration in relation to its internal affairs.
9. The Lahore Stock Exchange is admittedly a company established ,by Private individuals and not by the Federal Covernment which has been registered under the laws relating to registration of companies. It is nobody's case that the Federal Government is holding any share muchless controlling shares in this company entitling it to exercise administrative control through its employees, officers or nominated or elected directors or members of management over the affairs and functions of the exchange.
10. Learned counsel for the respondents when questioned as to how in this situation the Lahore Stock Exchange can be said to be an institution either established or controlled by the Federal Government, maintained that the word 'control' occurring in the definition of the expression "agency" as given in the Order has been used disjunctively and not conjunctively from the preceding words "established" as used therein therefore even if an institution has not been established by the Federal Government the same would still fall within the ambit of definition of 'Agency' if it is otherwise controlled by the Federal Government.
11. In order to demonstrate that the Lahore Stock Exchange a company is an institution controlled by the Federal Government, learned counsel for the respondents referred to various provisions of the Securities and Exchange Ordinance, 1969. He argued that the Lahore Stock Exchange has been registered under section 3 of this Ordinance and under section 4 thereof the Federal Government has been empowered to prescribe the conditions on the fulfilment of which or the other requirements in compliance thereof, a Stock Exchange shall be eligible for registration including the conditions as to qualification for membership and admission, exclusion, suspension, expulsion and re-admission of members thereto or therefrom as also the constitution and powers of the governing body and the powers and duties of the office-bearers and representation of the Central Government on the governing body of a Stock Exchange or any of its Committees, maintenance of accounts and the manner in which business should be transacted. Section 6 provides that every Stock Exchange and every Director, officer, and member thereof shall prepare and maintain such books of accounts and other documents in such manner as may be prescribed which shall be subject to inspection. The Stock Exchange is required to submit to the Central Government in such manner and containing such particulars as may be prescribed, an annual report and periodical returns relating to its affairs. Under section 7 on contravention of any of the provisions of the Ordinance the Federal Government has been empowered to suspend transaction of any business, cancel registration of Stock Exchange, supersede the governing body or other authority of the Stock Exchange and remove the director, officer or member from his office in, or membership of, the Stock Exchange by an order which should also provide as to who shall perform the functions of the governing body or of the member removed or superseded. Section 11 provides submission of return as regards securities to the Federal Government. Provisions have also been made in this Ordinance that in case the Stock Exchange declines to delist a security, the Central Government may on petition of the applicant direct the Stock Exchange to delist the same. Under section 21 of the Ordinance, the Central Government has been empowered on its own motion, or in the case of the issuer of a listed security, or, on representation of holders of not less than ten per cent. Of equity securities at any time by order in writing, cause an enquiry to be made by any person appointed in this behalf into the affairs of any Stock Exchange, the business transaction etc. And it also prescribes the penalties in case any person refuses or fails to furnish any document.
12. Referring to the abovementioned provisions of the Ordinance, learned counsel for the respondents maintained that Lahore Stock Exchange is an institution which is controlled by the Federal Government, therefore, it falls within the ambit of definition of 'Agency' as given in the Order.
13. The argument though appears to be ingenious but not tenable on close scrutiny. Securities and Exchange Ordinance, 1969 is a law which has been promulgated to regulate the affairs and business of Stock Exchange registered under the Ordinance. The registration of A Stock Exchange under the Ordinance carries with it certain benefits as without such registration as per section 3 of the Ordinance, no Stock Exchange can operate or carry on its functions and no person can use or utilize, for the purpose of any transaction or dealing any security, the facilities or services of a Stock Exchange. The other provisions of the Ordinance referred to above have been enacted merely to regulate the affairs of his Stock Exchange registered under the Ordinance just as Companies Ordinance, 1984, regulates the matters relating to company registered under the Ordinance and Partnership Act, 1940, regulates the matters as regards partnership firms registered thereunder to safeguard the interest of the person dealing with such Companies and the Partnership Firms.
14. As has already been observed, the main object of the establishment of an office of Wafaqi Mohtasib is to undertake investigation as regards maladministration in the departments of Federal Government by public functionaries i,e, its employees and officers and statutory corporations and other institutions established or controlled by the Federal Government therefore the act of maladministration unless committed by such public functionary of the Federal Government in any institution, the same shall not be deemed to fall within the scope of expression 'controlled' by the Federal Government as used in the definition of "agency". Keeping in view this broad principle and criteria and the Order of Lahore Stock Exchange in the matter of grant of membership of respondent No,2 if tested on the touchstone of the same it can safely be held that the Lahore Stock Exchange is not an institution which can be said to be an institution controlled by the Federal Government in the sense as this expression has been used in the definition of 'Agency' given in the Order. Though the expression controlled by the Federal Government has been used prima facie disjunctively but keeping in view the relevant considerations and the object for which office of Wafaqi Mohtasib has been created it cannot be considered in isolation of the definition of "agency" as a whole. It is clear that it was not intended to give power to Wafaqi Mohtasib to interfere in the internal affairs of Private institutions such as company in relation to their internal affairs.
15. Merely because in the Stock Exchange Ordinance provisions have been made to supersede the governing body of Stock Exchange as a matter of penalty in the event of contravention of any of the provisions of the Ordinance, the same would not make the same as an institution controlled by the Federal Government as envisaged by the definition of expression "agency given in the Order.
Even in Companies Ordinance, 1984 provisions have been made for holding investigation by Corporate Law Authority which is a Federal Government institution into the affairs of a company in given circumstances but it would not bring a company within the scope of definition of "agency".
16. Learned counsel for the respondents relied upon the case of Sindh Industrial Trading Estate Ltd. v. Provincial Ombudsman and others (1993 SCM R 948), to argue that Lahore Stock Exchange in view of the rule laid down in this case should be held to be an institution controlled by the Federal Government. It was a case of Sindh Industrial Trading Estate (Ltd.) in which it was held that as a matter of fact, in spite of the establishment of the same as a juristic person, it was performing the essential functions of the Province with regard to the development of trade and industries and that the income of the same was the income of the Provincial Government. In view of this distinctive feature of the said case it cannot be argued that the Lahore Stock Exchange should also be declared as an institution controlled by the Federal Government. Learned counsel for the respondents then referred to the case of Naeem Mahmood Alvi v. Wafaqi Mohtasib and 22 others (1986 CLC 1433). It was a case regarding maladministration in WAPDA. WAPDA is admittedly a creation of Federal Statute, therefore, it falls within the definition of 'Agency' as such the principle settled in this case is not applicable to Lahore Stock Exchange.
17. Learned counsel for respondents then referred to the meanings of the word "control" as given in Oxford English Dictionary, Volume 11, 1961 Edition. According to this Dictionary the word "control" means to check or verify and hence to regulate, to take task, call to account, rebuke, reprove, find fault with, censure, to exercise restraint or direction upon the free action of, to hold sway over, exercise power or authority over, to dominate, command, to hold in check, curb, restrain from action, to hinder, prevent, to overrule.
18. The ordinary Dictionary meaning of the word "control" cannot be pressed into service to interpret the definition of the expression "agency" as the said definition is itself clear and does not admit of any ambiguity.
19. Learned counsel for the respondents then maintained that the petitioner had a remedy of appeal under "The Order" before the President therefore the writ petition cannot be maintained without availing of such remedy which was adequate. He refers to judgment reported as Almas Khanum v. Federation of Pakistan and 4 others PLD 1994 SC 91. It was a case where the writ petition was dismissed in exercise of discretion vested in die Court on the ground that the remedy of appeal should have been availed which order was not interfered with by the Supreme Court. In another case reported as Water and Power Development Authority and others v. Commissioner, Hazara Division and others 1992 SCM R 2102, the Supreme Court has granted leave to appeal to consider the question as to whether the remedy of appeal before the President was adequate remedy. The question as to whether in a particular case, remedy of appeal provided in the statute is adequate or not is to be determined in the facts and circumstances of each case. In the present case since it has been held that Wafaqi Mohtasib was not vested with the jurisdiction to deal with the matters of Lahore Stock Exchange, therefore, it was a case of absence of inherent jurisdiction as such, I am not inclined to dismiss the writ petition in any discretion to perpetuate an illegality and assumption of powers which did not exist.
20. Before parting, it may also be observed that the petitioner was not heard before the impugned order was passed, therefore, the same also suffers from violation of principle of natural justice. The respondent had admitted to have received back the consideration paid by him under the contract, therefore, in my view the parties should have been directed to settle the matter before the Court of general jurisdiction for enforcement of their rights under an agreement executed between them. In view of the facts as discussed above it was not a case of maladministration of any agency as defined in the Ombudsmen Order, 1983.
21. For the foregoing reasons, the writ petition is accepted. The order dated 25-8-1994 passed by the learned Wafaqi Mohtasib, is hereby declared to be without lawful authority and of no legal effect and quashed. There will be no order as to costs.