1. SAIYED SAEED ASHHAD, C.J.--- This High Court Appeal has been filed against the order of a learned Single Judge of this Court dated 22.8.2002 in Suit No. 347/2002, whereby the application under Order XXXIX, Rules 1 and 2, CPC filed on behalf of respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4 was decided in the following terms: "That the defendants Nos. 1, 3 and the Directors of defendant No. 1 who are acting together may attend the meeting that may be held as per requisition vide Notice dated 22.3.2000, date to be announced by plaintiff No. 1 within 7 (seven) days from the date of order. However, the defendants Nos. 1, 3 and 4 and the Directors of the defendant No. 1 are restrained from exercising any right to interfere in the management or in a bid to influence or in any manner exercise their rights to elect the Directors. Such share-holders may however, be entitled to all the dividends and profits that may be declared or announced by the plaintiff No. During the pendency of the suit. The defendants Nos. 1, 3 and 4 and any other person claiming through or under them or their nominees are restrained from exercising their rights to seek election for them on the Board of Directors of plaintiff No. 1 till the decision of the suit. Since serious and intricate questions of law are involved determination of which also to some extent rest on evidence that may be required to be recorded.
2. The defendants are directed to file their Written Statement without any delay, whereafter the case may immediately by setup for settlement of issues and appropriate order for recording of the evidence at an early date may be passed."
3. The brief facts which have led to the filing of this High Court Appeal are that respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4 filed a suit in this Court being Suit No. 347/2002, wherein they had sought the following reliefs:- "(i) Declaration to the effect that the shares acquired by the defendants Nos. 1 and 2 either in their name or in the name of their nominees, concerns or units have been acquired in violation of the provisions of law and public policy;
(ii) grant a permanent injunction against the defendants and each one of them including their nominees/ persona acting for them or their industrial concerns from acquiring any further shares of the plaintiff and from exercising any right or receiving any benefits, bonus shares and right of voting at the share-holders meeting;
(iii) grant a Permanent Injunction against the defendants from seeking election for themselves or their nominees, employees, representatives or agents as Directors on the Board of the plaintiff directly or indirectly for the benefit and in violation of the fiduciary obligation to the plaintiff;
(iv) grant a Mandatory Injunction and a direction to the defendants to dis-invest and sell in the open market all the shares in the plaintiff company acquired by them in excess of the law for the time being in force whether such has been purchased by the defendant No. 1, defendant No. 2 or in the names of the concerns of the defendant No. 2 or in the name of their nominees;
(v) to Order penalties against the defendants for violation of the provisions of law in accordance with law for the time being in force;
(vi) grant costs of the suit; -or
(vii) grant any other/further/additional relief that this Hon'ble Court may deem fit and proper in the circumstances of the case."
4. Appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4 denied the contents and the allegations made in the plaint. It was denied that they had acquired shares of AICL in violation of any provisions of law and insisted that the same were obtained in accordance with law.
5. Appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4 also submitted that having acquired the shares of AICL in a lawful manner they had the right not only to retain the said shares but were also entitled to enjoy and exercise all the rights made available to a share-holder by the provisions of the Companies Ordinance, 1984.
6. Very lengthy arguments were advanced by Mr. Anwar Mansoor Khan, the learned counsel appearing on behalf of {{BLUR PAGE}} AICL. Mr. Khalid Anwar, the learned counsel appearing on behalf of MCBL, Mian Muhammad Mansha, MCBL Employees Pension Fund and MCBL Employees' Provident Fund. The learned Single Judge after hearing the arguments of the learned counsel for the parties, referring to the various provisions of the Banking Companies Ordinance, 1962 (hereinafter referred to as. "the Ordinance of 1962"); the Insurance Ordinance, 2000 (hereinafter referred to as "the Ordinance of 2000"); the Insurance Act, 1938 (hereinafter referred to as "the Act of 1938"); the Companies Ordinance, 1984 (hereinafter referred to as "the Ordinance of 1984"); and the Memorandum and Articles of Association of MCBL, by very lengthy order spreading over 40 pages decided the injunction application on the terms reproduced herein above. Feeling aggrieved and dissatisfied with the above order they have assailed the same by means of this High Court Appeal.
7. We have heard the arguments of Mr. Khalid Anwar, the learned counsel appearing on behalf of appellants Nos. 1 and 2 defendants Nos. 1 to 2 namely, MCBL and Mian Muhammad Mansha, and respondents Nos. 5 and 6/defendants Nos. 3 and 4 MCBL Employees' Pension Fund and MCBL Employees' Provident Fund respectively; Mr. Anwar Mansoor Khan, the learned counsel appearing on behalf of respondents Nos. 1 to 4/plaintiff Nos. 1 to 4 namely, AICL, Abdul Hamid Adamjee, Abdul Razzak Adamjee and Ashraf Adamjee; Mr. Abrar Hassan, the learned counsel appearing on behalf of respondent No. 7/defendant No 4 namely, State Bank of Pakistan (hereinafter referred to qi I',a4 ;Mr. Aga Faquir Muhammad the learned druluel 'kkeittrngon`'lbena1f of respondent No 8/defendant No. 6 namely, Securities and Exchange Commission of Pakistan (hereinafter referred to as "SECP").
8. Arguments were also advanced by Ms. Rahat Konain Hasnain, General Counsel of SECP. Both Mr. Khalid Anwar and Anwar Mansoor Khan the learned counsel appearing on behalf of the contesting parties and requested that this appeal may be disposed of finally at Katcha Peshi stage. M/s. Abrar Hassan, Aga Faquir Muhammad and Rahat Konain Hasnain did not object to the above proposal and it was agreed that this appeal would be disposed of finally at the Katcha Peshi stage after being admitted to regular hearing, if so required.
9. Mr. Khalid Anwar, the learned counsel for appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4 vehemently assailed the order of the learned/Single Judge and submitted that the same was passed on conjectures, surmises and presumptions and also on consideration, of matters, questions and issues which had no relevance whatsoever with the issue and the question involved in the suit, viz. Whether the appellants had any intention or desire of raiding and taking over in a hostile manner the control and manage'ment of AICL. He further submitted that the learned Single Judge had failed to appreciate that it was for the respondents Nos. 1 to 4/plaintiffs Nos.
1. To "4to establish beyond any reasonable doubt that appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4 had acquired the shares of AICL with the object of hostile take over and seizure of the management and control of AICL without which he ought not to have come to the conclusion that the appellants had the intention or desire to take over and seize the management and control of AICL in a hostile manner against the provisions of law. He further submitted that assuming for the sake of arguments that the appellants and respondents Nos. 5 and 6/defendants Nos. 1 to 4 had the intention or the desire to act for accomplishing the above hostile take over, the learned Single Judge even did not point out the provisions of the law which would act as a bar or prohibition restraining appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4 from seizing and taking over the control and management of AICL in a hostile manner and in pursuance whereof he could make an order restraining them from accomplishing the alleged hostile take over. Mr. Khalid Anwar further submitted that apart from the above the learned Single Judge had also erred in accepting and mentioning certain factual aspects relating to the quantity of shares acquired and held by appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4 in AICL and as to how the quantity and the number of shares held by them would enable them to take over the management and control of AICL. Mr. Khalid Anwar further submitted that undue consideration and importance had been given by the learned Single Judge to the various provisions of the Ordinance of 1962, the Act of 1938, the Ordinance of 2000 and the Securities and Exchange Commission of Pakistan Act, 1997 (hereinafter referred to as "the Act of 1997") without taking into consideration the elementary question as to whether respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4 have been able to make out a prima facie case which was the first and foremost requirement for grant of injunctions/stay in their favour.
10. Mr. Anwar Mansoor Khan, the learned counsel appearing on behalf of respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4, on the other hand fully supported and endorsed the impugned order by submitting that in the facts and, circumstances of the case it was an appropriate, proper and just order not warranting any interference. In his arguments he reiterated the facts contained in the plaint and which he had advanced by way of arguments before the learned Single Judge. He submitted that appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4 had acquired the shares of AICL in a surreptitious, discrete and schematic manner with a view to acquire majority shareholding in AICL so as to make a corporate raid on AICL for hostile take over of the management and control thereof and to oust the present management thus, the control of respondents, Nos. 2 to 4/plaintiffs Nos. 2 to 4, the original/successors of original. Directors who had floated AICL, over AICL. He reiterated that respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4 had violated the provisions of the Ordinance of 1962, the Act of 1938, the Ordinance of 2000 and the Ordinance of 1984 in acquiring the shares of AICL. However, Mr. Anwar Mansoor Khan was unable to establish and demonstrate as to who appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4 had violated the provisions of the aforesaid statutes when MCBL acquired shares of AICL to the extent of 29.37%, which did not violate the provisions of Section 23 of the Ordinance of 1962, and how MCBL Employees' Pension Fund and MCBL Employees' Provident Fund in acquiring respectively 4.95% and 3.70% shares totalling 8.65% shares of MCBL violated the provisions of Section 67 of the Ordinance, 2000. He also failed to satisfy us that acquiring of shares to the extent of 29.37% by MCBL was violative of Section 23(2) of the Ordinance of 1962.
11. M/s. Abrar Hassan, Aga Faquir Muhammad and Rahat Konain Hasnain appearing on behalf of respondents SBP and SECP respectively adopted the arguments of Mr. Khalid Anwar, Advocate. Mr. Abrar Hassan submitted that the observations made by the learned Single Judge appearing on typed page 37 of the order against SBP were absolutely uncalled for inasmuch as appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4 had not committed any illegality or irregularity nor violated any statutory provision which would have warranted SBP to intervene or to take any action against them and requested that such observations/remarks be deleted.
12. Mr. Aga Faquir Muhammad drew our attention to the remarks of the learned Single Judge on typed page 36 of the order against SECP and submitted that these were uncalled for inasmuch as no occasion had arisen wherein SEEP was required to take any action against the appellants/defendants .Nos. 1 and 2 as according to its information they had not committed any illegality or irregularity or violated the provisions of any of the statutes mentioned herein above which would have required it to act and requested that the same may be deleted. Ms. Rahat Konain Hasnain while adopting the arguments of Mr. Khalid. Anwar, further submitted that according to the scheme of the Ordinance of 1984, it was well-settled that the management of the company must be in the hands of the persons who enjoy the confidence of the majority of the share-holders and further submitted that no law existed under which the appellants/defendants Nos. 1 and 2 could be stopped or prohibited from participating in the annual general meeting of AICL on the basis of their shareholding in AICL merely on the perception of respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4 that if appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos.
13. 1 to 4 were allowed to attend the annual general meeting they would dethrone the present management and would themselves take over the control of AICL.
14. It is the case of respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4 that appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4 had clandestinely, discreetly and in an schematic manner acquired shareholding of AICL in their names in excess of the limit provided by various statutes with the object of dethroning its present management and to seize the same. The above concern of respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4 was on account that appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4 held majority of the total shares of AICL inasmuch as appellant No. 1/defendant No. 1 held about 30% shares; respondents Nos, 5 and 6/defendants Nos. 3 and 4 held 10% shares and appellant No. 2/defendant No. 2 held another 11% shares, thus making a total holding of 51% of the shares which would enable appellant No. 2/defendant No. 2, who has direct control over appellant No. 1 and respondents Nos. 5 and 6/defendants Nos. 1, 3 and 4 to dethrone the present management of AICL and assist in hostile take over and control thereof by forcibly appointing directors and Officers of his choice. To establish the above possibility respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4 were required to bring on record substantive reliable and creditable material . In reality, however, there is no material.On record to support the contention of Mr. Anwar Mansoor Khan that appellant No. 2/defendant No. 2 had succeeded in acquiring 51/o shareholding of AICL through himself and appellant No. 1 and respondents Nos. 5 and 6/defendants Nos., 1., 3 and 4. A detailed break-up of the shareholding of appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4 has been given in paragraph 18 of the plaint in Suit No. 347 of 2000, according to which, the group of appellant No. 2/defendant No. 2 which consists of himself, appellant No. 1 MCBL, respondent No. 5, MCBL employees' Pension Fund, respondent No. 6 MCBL Employees' Provident Fund and other associates/companies of appellant No. 2/defendant No. 2 has a shareholding of 40.35% at the huge cost of Rs.1,25,00,000/-. According to Mr. Anwar Mansoor Khan it was not done solely by way of investment for earning dividends on such shares or for earning profits in case of enhancement of price of the shares of AICL and such activity led to an irresistible inference and presumption that the main object of appellant No. 2/defendant No. 2 in acquiring such large number of shares of AICL was not merely for the purpose of investment for earning dividends and profits by disposal thereof on enhanced prices but to dethrone the present management of AICL, hijack the same by way o hostile take over and control over the present management and running of AICL. AICL has failed to bring on record a material or document from which it could be established the appellant No. 2/defendant No. 2 Mian Muhammad Mansha and his group of companies have acquired 51% shareholding in AICL. As a matter of fact, according to the version respondent No. 1/plaintiff No. J AICL, the shareholdin the group of appellant No. 2/defendant No. 2 lap Muhammad Mansha which Includes MCBL, MCBL Employees Pension Fund and MCBL Employees' Provident Fund other associates/companies holds 40.35% shareholding# in AICL which would neither provide the group of appellant No. 2/defendant No. 2 Mian Muhammad Mansha the requisite majority nor would give the authority and power to undertake a corporate raid by dethroning the present management of AICL, hostile take over of AICL and taking over the control and management thereof as admittedly such can be done only when appellant No. 2/defendant No. 2 Mian Muhammad Mansha and his associates/companies would be having shareholding of at least 51% in AICL. It is also pertinent to note that the 40.35% shareholding alleged to be held by appellant No. 2/defendant No. 2 Mian Muhammad Mansha is not in the name of appellant No. 2/defendant No. 2 Mian Muhammad Mansha but is being held in the name of appellant No. 1/defendant No. 1 MCBL, MCBL Employees' Pension Fund, MCBL Employees' Provident Fund and other associates companies of appellant No. 2/defendant No. 2. MCBL Employees' Pension Fund, MCBL Employees' Provident Fund and other associates/companies are independent legal persons and the shareholding by them are clearly in their names which cannot be utilized or taken advantage of by any other person or individual for adding to his shareholding for the purpose of acquiring majority shareholding inasmuch as MCBL Employees' Pension Fund and MCBL Employees' Provident Fund are separate legal entities and the shares held by them in their individual names cannot be claimed by appellant No. 2/defendant No. 2 Mian Muhammad Mansha or his other associates/companies to be belonging to them for the purpose of combining them collectively for providing their majority shareholding. Such can only be done by forming a consortium of MCBL, MCBL Employees' Pension Fund, MCBL Employees' Provident fund and other associates/companies of appellant No. 2/defendant No. 2. Mian Muhammad Mansha. There is no material on record from which it can be gathered that there was or is any move in this direction and the possibility of formation of consortium of the aforesaid companies, associates/individuals holding shares of AICL was or is in the offing. In the presence of these facts and circumstances, it was not known as to what was the grounds and reasons on the basis of which they had formed an opinion and were having a perception that appellant No. 2/defendant No. 2 Mian Muhammad Mansha had planned to dethrone the management in a hostile manner resulting in take over, seizure and control of the management of AICL. In view of the fact that there is nothing on record to indicate that appellant No. 2/defendant No. 2 Mian Muhammad Mansha, MCBL, MCBI Employees' Pension Fund, MCBL Employees' Provident Fund and his associates/companies over which he has control have been holding 51% shares of AICL, the conception of hostile take over and seizure of the management of AICL lingering in the minds of respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4 would appear to be imaginary, presumptive, conjectural and based on surmises. The fact that some of the persons/officers of appellant No. 1/defendant No. 1 MCBL have been holding 2,500 shares of MCBL, which would qualify them to propose themselves for appointment as director of AICL, and sending of letter/notice by any one of them to AICL .Calling upon it to change the Chartered Accountants would not be an indication or desire to do way with the present management of AICL and to bring in new management and control by appellant No. 2/defendant No. 2 Mian Muhammad Mansha.
15. The perception in the minds of respondents Nos. 1 to 4/defendants Nos. 1 to 4 regarding hostile take over, corporate raid, dethroning of the management, taking over the management and control of AICL by appellant No. 2/defendant No. 2 Mian Muhammad Mansha and his group is thus, a mere apprehension based on presumptions, surmises and conjectures and would require evidence to turn it into reality. From the material available on record the contention raised on-behalf of respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4 that there was imminent danger of hostile take over of the management of AICL by the group of appellant No.2/defendant No. 2 Mian Muhammad Mansha does not hold good and the matter required investigation by recording evidence of the parties.
16. For grant of injunction under Order XXXIX of the Civil Procedure Code, the party seeking grant of injunction has to establish the existence of three essential ingredients, i.e. Existence of a prima facie case; likelihood of irreparable loss or legal injury for non-grant of temporary injunction; and that the balance of convenience ought to be in favour of the party seeking temporary injunction. It is also the requirement of law that all the three requisites/essential. Ingredients must be fulfilled before injunction can be granted in favour of a party and absence of any one of these essential ingredients would not warrant grant of injunction. It is also pertinent to note that Mr. Anwar Mansoor Khan, the learned counsel for respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4 had made a categorical statement before the learned Single Judge that there was no law in the statute book which provided a check or prohibition or regulated deceitful take over or provided protection against corporate raiders, which would give rise to the question as to what legal or fundamental right of respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4 would be violated, if assuming for the sake of argument, appellant No. 2/defendant No. 2 and his associates and other companies after acquiring 51% shareholding in AICL without violating the provisions of Section 23(2) of the Ordinance of 1962 and Section 67 of the Ordinance of 2000 had desired to take over the management thereof, because the relevant authorities could take action only if; (i) a Banking Company acquired shares in any company exceeding thirty percent of the paid up share capital of that company or thirty percent of its own paid on share capital; and (ii) any company acquired shareholding of more than ten percent in any Insurance Company without the approval of SECP in view of the provisions of Section 23 of the Ordinance of 1962 and Section 67 of the Ordinance of 2000 respectively.
17. The contention raised on behalf of respondent No. 1 to 4/plaintiffs Nos. 1 to 4 that appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4 had violated the provisions of Section 67 of the Ordinance of 2000 and Section 23(2) of the Ordinance of 1962 is without substance as it has not been established that appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4 had acquired the shareholding in AICL in violation of the provisions of the aforesaid two statutes. On the basis of such facts, sending of a notice/letter by a person/officer holding shares in AICL qualifying to offer himself for appointment as a director of AICL though belonging to the group of appellants Nos. 2/defendant No. 2 Mian Muhammad Mansha by calling upon AICL to change the Auditors/Chartered Accountants working as auditors would not amount to an intention or desire to take over and seize the management by making a hostile corporate raid but would be a desire to improve the management. It will be appropriate to mention here the contention advanced by Mr. Khalid Anwar that the person issuing the notice in his capacity as a share-holder AICL was dissatisfied and aggrieved by the present management on account of the mis-management, inefficiency, incompetency, financial corruption and losses resulting due to appointment of incompetent and below average persons on account of favouritism and nepotism and the present Auditors/Chartered Accountants had reported that the company did not follow the requirements of International Accounting Standard (IAS) 25; did not adopt the Technical Releases issued by the Institute of Chartered Accountants of Pakistan and did not follow the requirements of International Accounting Standard (1AS-19).
18. From the above discussion, it is difficult to hold that respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4 had succeeded in making a prima facie case inasmuch as the existence of a prima facie case is to be judged or made out on the basis of material/evidence on record at the time of hearing of the injunction application and such evidence or material should be of the nature that by considering the same the Court should or ought to be of the view that the plaintiff applying for injunction was in all probability likely to succeed in the suit by having a decision in his favour and that his case was not likely to fail on account of some apparent defects. It is also pertinent to note that in the counter-affidavit filed in reply to the affidavit in support of the injunction t application, preliminary objections were raised by appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4, some of which go to the very root of the case as they had described the suit as mala fide with the objective of preventing appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4 from attending the Annual General Meetings wherein the accounts of 2001 would be presented which had been prepared in contravention of law by underestimating the actual loss of Rs. 263 Million. Objection was also taken to the effect that the suit had been filed with a view to circumvent the provisions of the Ordinance of 1984 which confers upon a share-holder the right to attend the Annual General Meetings/Extraordinary General Meetings and to exercise right of casting vote as provided by Sections 158 and 160 of the Ordinance of 1984. Sub-section (5) of Section 160 specifically provides that no member holding shares or other securities carrying voting rights shall be debarred from casting his vote. It has thus, become all the more necessary to take into consideration the question of existence of a prima facie case. It is also an established principle of law that injunction cannot be granted or issued merely on the apprehension of a party approaching the Court. The party seeking injunction must establish that the adverse party committed an overt act or in all probability was likely to commit-an overt act which would result in causing legal injury or violation of his vested right, which is not the situation in the present case inasmuch as there is nothing on record to indicate that appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4 had planned or had desired to have dethroned the present management and seized the control and management of AICL. Great emphasis was laid by Mr. Anwar Mansoor Khan on the provisions of Section 23(1) of the Ordinance of 1962 and the Memorandum and Articles of Association of MCBL and it was submitted that the afore stated Section and the Memorandum and Articles of Association completely barred/prohibited MCBL from carrying an insurance business, therefore, acquiring a large number of shares of AICL by it was against the law and consequently, illegal. There can be no dispute with regard to the contention that MCBL is barred or prohibited from starting or carrying an insurance business in view of the above provisions of law but the real issue to be resolved is whether there was or is any desire, attempt or possibility of taking over the control and management of AICL by MCBL so as to require the concerned/relevant authorities to proceed against MCBL for violating the said provisions of law and stopping it from hostile take over, corporate raiding, dethroning the present management and seizing control and management. It will be very material and pertinent to mention here that respondents Nos. 2 to 4/plaintiffs Nos. 2 to 4 during the past two year disposed of their share holdings in AICL out of their own violation to make substantial capital gains because of enhanced value of its shares while showing no concern or making efforts to arrest the decline in the performance of AICL which resulted in the fall of its share prices to a considerable low value, which in itself would be a sufficient and strong indication of the below standard performance, mismanagement and the losses being suffered by AICL. Respondents Nos. 2 to 4/plaintiffs Nos. 2 to 4 who were out to earn money' by disposing of their shareholding of AICL when the value of its shares had soared in the stock market had very clearly and unequivocally expressed the extent of interest and concern they had for AICL and filing of the present suit by them would appear to be with a view to deprive the shareholders of their rights as was submitted by Mr. Khalid Anwar.
19. Mr.-Khalid Anwar submitted that the suit was filed with mala fide intention in order to cover the follies, illegalities and irregularities being committed by respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4 in running and managing the affairs of AICL and to circumvent the provisions of the Ordinance of 1984 so as to deprive or prohibit the appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4 from exercising their rights of attending the annual general meeting and casting their votes therein. Sections 158 to 160 of the Ordinance of 1984 deal, with various provisions as to the meetings and votes and give right to a member/share-holder holding shares or other securities carrying voting rights to cast his vote and further that he shall not be debarred from casting his vote. The respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4 in the aforesaid suit have sought a prayer that the appellants Nos. 1 and 2 and respondents Nos. 5 and 6/defendants Nos. 1 to 4 be debarred from exercising their right of voting in the share-holders meeting which prayer would apparently appear to be contrary to the provisions of Section 160(5) of the Ordinance of 1984 and would require serious consideration as to its availability and legality.
20. While going through the impugned order of the learned Single Judge, it transpired that the learned Single Judge had not at all entered into a discussion with regard to the essential requirements which were to be established for the purpose of grant of, injunction in favour of respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4. The learned Single Judge had also not adverted to the provisions of Order XXXIX of the Civil Procedure Code and without concluding as to whether a prima facie case was made out; whether respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4 would suffer irreparable loss or injury; and whether the balance of connivance was in their favour, had granted the stay/injunction as prayed by them. The learned Single Judge was under a legal obligation to have taken into consideration the provisions of Order XXXIX of the Civil Procedure Code while deciding an injunction application under the above Order, for making an assessment relative to the existence of a prima facie case in favour of respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4 and to decide whether irreparable loss or injury would have ensued to them by not granting the injunction and whether the balance of convenience was in their favour without which no injunction could have been granted in their favour. The learned Single Judge had also made certain adverse observations/remarks in his impugned order against SECP and SBP which appear on typed page 36 of the order (page No. 125 of the file) and page 37 of the order (page No. 127 of the file) and have been underlined in red ink. From the facts on record we find that these adverse observations/remarks were uncalled for as neither SECP nor SBP had allowed commission of any irregularity or irregularity nor had attempted to avoid the responsibility to assist the Court inasmuch as the question as to whether MCBL Employees Pension Fund and MCBL Employees Provident Fund could be said to be subsidiary companies of MCBL required to be decided after proper enquiry and investigation and it could not be said that cumulative shareholding of 38.02% of the aforesaid three legal entities would be considered to be the shareholding of MCBL alone so as to be violative of Section 23(2) of the Ordinance of 1962. Similarly, in the presence of comments of SECP, it cannot be said that they had avoided the responsibility to assist the Court. Same is the case with the adverse observations/remarks against SBP which appear on typed page 37 of the order (page No. 127 of the file). Both the aforesaid remarks are expunged.
21. For the foregoing facts, reasons and discussions we fined that no case was made out for grant of injunction in favour of respondents Nos. 1 to 4/plaintiffs Nos. 1 to 4 and the learned Single Judge had erred in allowing the application and granting the stay in terms of the order reproduced herein above. The said impugned order cannot be sustained. Accordingly, this appeal after being admitted to regular hearing is allowed. The impugned order dated 22.8.2002 is set aside and the injunction applicable filed on behalf of respondents Nos.4/plaintiffs Nos. 1 to 4 stands dismissed .
22. The parties to bear their own costs.