' NAZIM HUSSAIN SIDDIQUI, J.---The Civil Appeals Nos.400-K and 401-K of 1990 are directed against the common judgment dated 14-2-1989 of a learned Division Bench, High Court of Sindh, Karachi, whereby Civil Petitions Nos.D-1054 and D-1055 of 1980 were dismissed. The facts relevant for decision of these matters are asC.P. No,D-1054 of 1980 (C.A. No, 400-K of 1990).
' The appellants, Mercantile Traders (Pvt) Ltd., is a private limited company incorporated in 1970. It is alleged that it was promoted by the members of "Habib Family" and all its business dealings had been with members of Habib family and/or their companies. The appellant calls it "Family Company", as it was used for convenience of the members of said family, as a vehicle for making investments. According to the appellant, it never accepted any loans or advances from members of the public, but confined its borrowing exclusively from its members and/or their companies.
Further, it is averred that it had never defaulted in payment of even a single rupee in relation to any of the amounts, which was invested in it. The objects of the company, inter alia, as mentioned in paras. 1, 7, 8, 10 and 11 of the Memorandum of Article of Association, is as under:-- "1. To carry on all or any of the business of exporters, importers, manufacturers, dealers, distributors, financiers, promoters, underwriters, agents, attorneys and particularly the following forms of business:--
7. To promote, re-organise or re-construct or finance or to assist in promoting, re-organising or financing any business undertaking or industry, either existing or new, and developing or forming the same through mergers or otherwise, either through the instrumentality of syndicates or otherwise.
8. To promote, effect, guarantee, underwrite, participate in, manage and carry out any issue, public or private, of State, Municipal or other loans or of shares, stocks, debentures or debenture stock or any company, corporation or association and to lend money for the purpose of any such issue.
10. To invest the moneys of the Company in securities issued by or under the authority of the Government of Pakistan or any Provincial Government or any other Public or Local Body, formed or set up under any Act of Legislature and in shares, stocks, debentures or debentures stocks and otherwise to deal with the moneys of the Company in such manner as may from time to time be determined.
11. To contract for public and private loans and negotiate, arrange and issue the same. C.P.1055 OF 1980 (C.A.401 OF 1980).
' The appellant, Habib Commercial Company Ltd., was incorporated in the name of Messrs Habib Finance Corporation Limited in 1956. The objects of above company as per its Memorandum and Article of Association are identical, as that of company referred to in Civil Petition No,1054 of 1980 (Appeal No,400-K of 1990).
2. In the year 1979 certain amendments were introduced in the Banking Companies Ordinance, 1962, hereinafter referred to as "the Ordinance", by means of Ordinance, LVI of 1979, hereinafter called as "the amending Ordinance". The amending Ordinance, inter alia, includes the prohibition of carrying on banking business by any firm or individuals or any organisation save by a company.
The amending Ordinance was promulgated on 8-10-1979 and its objects were to check the growth of illegal banking business by various so-called investment companies, which were defrauding the public.
3. The respondent, State Bank of Pakistan. On 23-10-1979/5-11-1979 had served two notices each on the appellants, as they were carrying on business in contravention of subsection (1) of section 27 of the Ordinance and they were called upon to submit the informations and documents referred to in said notices. The appellants submitted their reply, which was found unsatisfactory, therefore, the notice dated 17-11-1979 was served upon them mentioning therein that they were carrying on business of banking in contravention of section referred to above and it was proposed to make declaration to that effect under section 43-B(1) of the Ordinance. The appellants comprehensively in writing explained their point of view in relation to said notice and were given personal hearing by the respondent.
4. The respondent on 16-6-1980 published a declaration under section 43-B of the Ordinance in English daily newspaper "Dawn" to the effect that the appellants had contravened section 27(1) of the Ordinance by illegally carrying on the banking business.
5. In order to appreciate the contentions raised in these appeals it would be advantageous to reproduce below various sections of the Ordinance, which have been referred to in support of the contentions raised on behalf of the parties.
(i) Definitions.---In this Ordinance unless there is anything repugnant in the subject or context:
(b) "banking" means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise;
(c) "Banking company" means any company which transacts the business of banking in Pakistan; Explanation.---Any company which is engaged in the manufacture of goods or carries on any trade and which accepts deposits of money from the public merely for the purpose of financing its business as such manufacturer or trader not be deemed to transact the business of banking within the meaning of this clause:-- Unamended section 27(1)
27. Licensing of banking companies.---(1) Save as hereinafter provided, no company shall carry on banking business in Pakistan unless it holds licence issued in that behalf by the State Bank and any such licence may be issued subject to such conditions as the State Bank may think fit to impose.
Amended Section 27(1)
27. Licensing of banking companies.---(1) No individual or association or body of individuals, not being a company, shall carry on banking business in Pakistan and, save as hereinafter provided, no company shall carry on banking business in Pakistan unless it holds a licence issued in that behalf by the State Bank, and any such licence may be issued subject to such conditions as the State Bank may think fit to impose.
27-A Prohibitoin of advertising for deposits and collection.- Notwithstanding anything contained in any other law for the time being in force, no company, firm or person, not being a banking company or a corporation or authority established by the Federal Government or a company duly authorised in this behalf by the Controller of Capital Issues or the Corporate Law Authority or the Registrar Cooperative Societies shall solicit or invite deposits of money from the public' through advertisements in the public media or by postal circulars, handbills, displays in public places or by any other means, or collect or receive any deposits of money in pursuance thereof.
43-B, Power to make declaration.---(1) Where the State Bank after making such inquiries as it may deem fit, is of opinion that he company (firm)' or person referred to in section 43-A is transacting in any manner or form whatsoever the business of banking in contravention of subsection (1) of section 27, [or is receiving or has received deposits of money in contravention of section 27-Al the State Bank may, after giving the company, (firm) or such person an. Opportunity of showing cause against the proposed action being taken, make a declaration to that effect:--
6. It is noted that unamended subsection (1) of section 27 provided that no company could carry on banking business in Pakistan unless it held licence issued by the State Bank of Pakistan. The amended subsection (1) of section 27 has enlarged the scope of the above subsection by providing that no individual or association or body of individual shall carry on banking business in Pakistan save as provided in said subsection. Under section 27-A, save as provided in said section, no company firm, or person could solicit or invite deposits of money from the public through advertisement in the public media or by postal circulars, handbills, displays in public places or by any other means, or collect or receive any deposits of money in pursuance thereof. Section 27-A was added in 1990. It is not attracted to the circumstances of this case. It has been quoted above to demonstrate the sequence of the law on the subject under discussion and also to manifest the steps taken by the Legislature to combat the menace of the companies floated for banking business in violation of section 27(1). Sole object of above provisions is to effectively check the growing trend of illegal banking business by various so-called investment companies, which were defrauding the public by offering of high rate of interest up to 5 to 7% per month.
7. Vide order, dated 18-3-1990, leave to appeal was granted to consider the following:-- "(1) Whether the High Court has incorrectly interpreted the concept of banking business?
(2) Whether it is a necessary condition that the business of banking must be transacted with members of the general public?
(3) Whether the mere borrowing of money from family members can constitute banking business?
(4) Whether the principle of ejusdem generis is applicable in relation to the definition of 'banking'?
(5) Whether the impugned order by the State Bank could have been passed without giving any reasons?
(6) Whether the State Bank failed to note that a discretion had been conferred on it under section 43-B the Banking Companies Ordinance, 1962?"
8. Mr. Afsar Ali Abidi, learned counsel for the appellants almost repeated the same arguments, which were advanced before High Court and the same after having been considered were repelled by cogent reasons.
9. It was argued on behalf of the appellants before High Court that appellants never accepted any deposits from public, as such, one of the ingredients of the term "banking", as defined in clause(b) of section 5 was missing in these cases and that the appellants had taken the deposits from the members of Habib family or the sisters concern belonging to said family resultantly the amendments introduced by the amending Ordinance were not applicable to the appellants.
10. As against above, it was contended on behalf of the respondent that it was a disputed question of fact if the deposits were accepted from members of Habib family or the companies, in which they had interest or from the public, as well. It was also argued that, in any case, in the Memorandum of the two appellants' companies there was no restriction that the deposits were to be received only from the members of Habib family or from the companies in which the members of the said family had interests. Also, it was urged that members of Habib family were indefinite, therefore, they would fall within the purview of public and that it did not make any difference if the appellants had obtained deposits from limited number of persons. Learned counsel appearing for the respondent also submitted that the appellants obtained deposits from persons, who were not shareholders of the company. Articles of association of the company disclosed Mr. N.M. Uqaili, as Chairman of the appellants, who was not a member of the Habib family. Learned counsel also stated that the record revealed that the appellants received deposits from their clients and invested those funds in their own names like any bank. He also pointed out that the list of depositors (Annexure A to the petition before High Court) showed that their clientele was not restricted to five clients as was claimed by the appellants, but it consisted of 30 accounts holders out of which 5 accounts showed deposits as on 22-10-1979. Learned counsel also contended that "Banking" has been defined by statute in Pakistan and any reference to its connotation or meaning under English Common law such as bank, banker, banking or banking company is not relevant, as the definition of Banking in the Ordinance, 1962 is self-expalnatory, comprehensive and defines its limits. The expression "otherwise" twice used in the definition of banking is a word of enlargement and its scope cannot be curtailed on the principle of ejusdem generis.
11. Learned High Court having taken into consideration the case-law cited by learned counsel for the parties reached the conclusion that Memorandum of the appellants' companies indicated that there was no restriction, as to the persons or the companies from whom or which the money deposits were to be accepted by the appellants. Learned High Court concluded that it could safely be said that appellants were free to accept the deposits from the public for lending or investing.
12. Above findings of High Court is perfectly correct and is in consonance with material brought on record. Members of Habib family being indefinite would fall within the purview of public irrespective of the fact that the deposits were obtained from a limited number of them. Members of Habib family or pertaining to a community besides being members as such, are public within the meaning of section 5(b)(c) of the Ordinance.
13. It was also argued before the High Court that unless the appellants would have allowed "withdrawal' of money deposited with them by cheque, draft, order or otherwise, their business would not come within the purview of the banking definition quoted above. It was also argued that the word "otherwise" was to be construed "ejusdem generis" and that the other mode of withdrawal should be of the same specie, as by cheque, draft or order. The rule of ejusdem generis has been defined in Black's Lew Dictionary, Firth Edition at page 464, as follows:- "Ejusdern generis. Of the same kind, class, or nature. In the construction of laws, wills, and other instruments, the 'ejusdem generis rule' is that where general words follow and enumeration of persons or things, by words of a particular and specific meaning, such general words are not to be construed in their widest extent, but are to be held as applying only to persons or things of the same general kind or class as those specifically mentioned U.S v. Labrecque, D.C.N.J., 419 F. Supp.
430, 432; Alek sick v. Industrial Accident Fund, 116 Mont. 127, 151 P.2d 1016, 1021. The rule, however, does not necessarily require that the general provisions be limited in its scope to the identical things specifically name. Nor does it apply when the context manifests a contrary intention.
' Under 'ejusdem generis' canon of statutory construction, where general words follows the enumeration of particular classes of things, the general words will be construed as applying only to things of the same general class as those enumerated. Campbell v. Board of Dental Examiners, 53 Cal App. 3d 228, 125 Cal, Rptr. 694, 696."
14. Above rule was interpreted in the cases reported as (1) Don Basco High School v. The Assistant Director, E.O.B.I. And others (PLD 1989 SC 128) and (2) Jamat-i-Islami Pakistan through Syed Munawar Hassan, Secretary General v. Federation of Pakistan through Secretary Law, Justice and Parliamentary Affairs (PLD 2000 SC 111).
' In the Don Bosco's case it was observed that above doctrine would apply when the following conditions exists-
(1) the statute cotains an enumeration by specific words:
(2) the members of the enumeration constitute a class;
(3) the class is not exhausted by the enumeration;
(4) a general term follows the enumeration; and
(5) there is not clearly manifested an intent that the general term be given a broader meaning than the doctrine requires."
' In the case of Jamat-i-Islami with reference to above rule, it was observed that it would apply when there was nothing in the provisions or Act to show a wider sense was not intended or the intention to give to the general term a broader meaning than the doctrine requires was not manifested. Further, it was observed that "the general expression is to be read as comprehensive only things of the same kind as, that designated by the preceding particular expressions, unless there is something to show that wide sense was intended".
15. Learned High Court on above point concluded that word "otherwise" used in the definition of the word 'banking' after the words withdrawal of cheques, draft or order would carry wider meaning and would include any mode of withdrawal, and reached the following conclusion:-- ' "In our view, while construing the word 'otherwise' in relation to clause (b) of section 5 of the Ordinance, we will have to address ourselves as to the object for which the Ordinance was brought about. The object seems to be to prohibit the taking of deposits from the public in order to eliminate the possibility of the members of the public being defrauded. If we were to give narrow construction then a number of the investment companies which were recently floated in Pakistan and which defrauded the members of the public to the tune of billions of rupees would not be covered by the definition of the term 'banking' as the withdrawal of the amounts by the depositors of the money with such investment companies was not by cheque, draft or order."
16. Even otherwise, it is noted that above doctrine is only a rule of construction and not of substantive law. It provides a mode of interpretation, which is always subject to the intention of the Act. It would not apply if the intention of the Act suggests to the contrary.
17. It was argued on behalf of the appellants before the High Court that the amendments by Ordinance No,LVI of 1979 have been made applicable, retrospectively. Learned High Court having taken into consideration all the contentions raised in this behalf, observed as follows;- ' "We are inclined to hold that it is not necessary to decide the question whether the provisions of the amending Ordinance can be made applicable retrospectively as the question is, whether at the time of service of the notices the petitioners were carrying on the banking business and while deciding the above question, the factum what they were doing previously might be relevant. Since admittedly there were certain transaction after the enforcement of the amending Ordinance the provisions of the latter could have been pressed into service, as observed, inter alia, in the above unreported judgment."
18. Above findings are in accordance with the material available on record and not open to any criticism.
19. Relying upon the cases reported as (i) Mohinder Singh Gill and another v. The Chief Election Commissioner, New Delhi and others (AIR 1978 SC 851), (ii) Syed Ali Abide Zaidi and others v. Deputy Settlement and Rehabilitation Commissioner, Gujranwala and others (PLD 1967 Lahore 836) and
(iii) Brigadier His Highness Nawab Muhammad Abbas Khan Abbasi, Ameer of Bahawalpur v.
Government of Pakistan through the Joint Secretary, Ministry of States and Frontier Regions.
Rawlapindi and 23 others (PLD. 1978 Lahore 1166) it was urged before High Court and also before us that since impugned declarations did not contain any reasons, as such, the same were invalid and stood vitiated. In reply to above submission, it was argued on behalf of the respondent that the appellants were issued show-cause notices, were heard personally, and thereafter, impugned declarations, were issued in terms of section 43(B) of the Ordinance, which does not require for giving the reasons.
20. It is clear from record that necessary inquiries in respect of the appellants were made and it was found that the appellants were transacting business of banking in contravention of subsection
(1) of section 27. Neither before High Court nor before this Court the factum of holding enquiry by the respondent was challenged. Only information to be conveyed was that the appellants were transacting the business of banking in contravention of subsection (1) of section 27, which was done and so was mentioned in the impugned declarations. Statements of facts coupled with show-cause notices were served upon them, which comprehensively provided them to know about material quoted against them by the respondent. Besides, full opportunity of personal hearing was afforded. It being so this contention was also repelled by the High Court, by assigning reasons, which are unassailable.
21. In consequence, we do not find any merits in these appeals and the same are dismissed.