' S. ALI ASLAM JAFFERI, J.---By a common short order dated 18-9-2001 reproduced below, we had disposed of/allowed these three petitions having common points of law and facts. Now we propose to record the reasons for the same.
' SHORT ORDER ' For reasons to be recorded we would allow this petition to the extent that the respondent No,2 is directed to give effect to his order dated 5-9-2001 to the extent to which the present position of the petitioners is concerned and would accordingly declare that the petitioners' membership of the respondent No,1 can be declined only after appropriate amendments are made in the Articles of Associations and till the same is done the petitioners are entitled to enjoy all rights of membership including participation in election against seats reserved for town associations. It is however clarified that the respondents Nos,1 and 2 will pass appropriate orders in accordance with law in respect of the appeal and the petition preferred before them by the respondent No,3 in accordance with law and uninfluenced by the observations made by this Court. There shall be no order as to costs."
2. The petitioners (1) Gharo Association of Trade and Industry, (2) Dhabeji Association of Trade and Industry and (3) Pipri Association of Trade and Industry claim that they are members of Chamber of Commerce and Industry, Karachi (hereinafter referred as KCCI) as is evident from Article 4(b) of the Memorandum and Articles of the Association of KCCI (incorporated on 28-10-1959). Each petitioner bears a licence granted by the Government of Pakistan, Ministry of Commerce under section 3 of the Trade Organizations Ordinance, 1961 and has been enjoying all the rights and privileges of class (ii) membership of the KCCI. On 27-6-2001 applications were addressed to the Secretary of the KCCl/respondent No,3 enclosing therewith the requisite documents for renewal of the membership by the petitioners but their request for renewal of their membership was declined and they were informed by the Secretary of KCCI that the Managing Committee by its resolution dated 31-7-2001 has de-affiliated the membership of the petitioners, The petitioners thereafter made applications/representations to the respondent No,2 who is Director, Trade Organizations, Ministry of Commerce, Government of Pakistan informing him that in order to eliminate the petitioners from taking part in the annual election, ruling group of the KCCI with ulterior motive was unlawfully withholding the membership of the petitioners and the names of the petitioners were not included in the list of the members issued by respondent No,3. The Director Trade Organizations, after hearing the representatives of the contesting parties passed the following order on 5:9-2001:- "The three Town Associations namely Pipri, Dhabeji and Gharo will remain affiliated with Karachi Chamber until the Chamber gets the approval of its resolution from its General Body in extraordinary general meeting and the Federal Government."
3. It is worth to state that in reply to a letter dated 6-8-2001 from the President of KCCI regarding de-affiliation of petitioners associations. The Section Officer of the Ministry of Commerce by his letter dated 22-8-2001 had directed the respondent No,3 to follow the procedure laid down in Article 28(b) and 38(1) of the Memorandum and Articles of the Association of the KCCI which deals with and lays down a procedure for de-affiliating a member. It shall be beneficial to reproduce the said Articles 28(b) and 38(1) in order to show the procedure which is to be followed for de- affiliating any member:-- 28 (b) "Notwithstanding anything contained in Article 28(a) no special or extraordinary resolution, particularly concerning amendments to the Memorandum and Articles of Associations of the Chamber, shall be deemed to have been carried unless it has received the votes of three-fourth majority of the Members present in person or in the case of members for Mofussil towns by proxy and entitled to vote on such resolution.
38(1) The Managing Committee shall have the power to pass and to bring into effect such by-laws as may be considered to be in the interest of or conducive to the objects of the Chamber subject to confirmation by the General Body."
4. It appears that no heed was paid to the aforesaid order dated 5-9-2001 of the Director, Trade Organizations and a final list of the voters was issued on 6-9-2001 showing the number of the affiliated Town Associations to be (5) instead of (8) by de-affiliating the petitioners Associations.
The respondent No,3 instead of making compliance of the relevant provisions of the Memorandum and Articles of Association and in utter disregard and violation of the same insisted to act upon and implement the resolution of the Managing Committee to de-affiliate and disenfranchise the petitioneRs,
5. It was under these circumstances that the petitioners challenged the action of the respondent No,3 praying that resolution dated 31-7-2001 of the Managing Committee of KCCI and the impugned order dated 27-8-2001 cancelling/de-affiliating the membership of the petitioners by respondent No,3 and disenfranchising the petitioners from taking part in the election, be declared as unlawful, arbitrary, ultra vires, void ab initio and without any authority or jurisdiction. The petitioners also prayed that the respondents Nos,1 and 2 be restrained from implementing the decision of the Managing Committee of respondent No,3 being illegal, unlawful, arbitrary and against the principles of natural justice. The petitioners further prayed that they be allowed to continue as members class (ii) and the respondent No,3 be directed to implement the order of respondent No,2 dated 5-9-2001 restoring the membership of the petitioners and allowing them to participate in the election.
6. We have heard Mr. S. Tariq Ali for respondent No,1, Mr. Khalid Javed for respondent No,3 and Mazhar Hussain the respondent No,2 in person.
7. Objections by way of counter-affidavit have been filed on behalf of respondent No,3 by its President M. Zubair Motiwala. It has been mainly contended on behalf of respondent No,3 that the action taken by the Managing Committee is just, legal and within the four-corners of the Memorandum and Articles of Association of respondent No,3. It has been further contended that Gharo Town, Dhabeji Town and Pipri Town are no more a part of Karachi District and the said three towns admittedly fall within the territorial jurisdiction of Thatta District, hence, they have no right to claim that they should be allowed to continue as a member of the Chamber of Commerce and Industry, Karachi. It has also been contended that in view of section 12 of the Trade Organizations Ordinance, 1961 no suit or any other legal proceedings can be filed in any Court and in fact the matter is to be decided through arbitration and any suit for proceedings are barred under the law.
It has also been contended that an appeal under section 15 of the Trade Organizations Ordinance, 1961 has been filed before the Government against the order dated 5-9-2001 which is pending adjudication.
8. Mr. S. Saeeduddin Nasir and Mr. Khalid Latif learned counsel for the petitioners have argued that the act of the Managing Committee of respondent No,3 is void ab initio as the procedure laid down in Articles 28(b) and 38(1) has not been followed. Learned counsel has further contended that it is the power of the General Body with 3/4th majority of the members present in person or in the case of members for Mofussil towns by proxy and entitled to vote on such resolution to amend the Memorandum and Articles of Association including Article 4(b) conferring membership upon to the petitioneRs, The Managing Committee alone has no such powers and the petitioners shall continue to be the members of class (ii) as per law until the resolution of the Managing Committee is approved by the 3/4th majority of the members of General Body of the KCCI and Article 4(b) is amended accordingly. So far the point regarding decision through arbitration is concerned, the learned counsel for the petitioners have argued that the respondent No,3 is bound to obey, execute and implement the lawful orders of respondent No,2 unless set aside by a competent authority and that the petitioners have prayed only for implementation of the said order which is still holding field and is being disobeyed, ignored and violated by respondent No,3 illegally and unlawfully. Hence, it is argued that there is no such dispute falling within the ambit of section 12 of the Trade Organizations Ordinance, 1961.
9. We have given due consideration to the arguments advanced by the learned counsel for the parties and have gone through the documents filed by them. Under Article 4(b) the Memorandum and Articles of Association of KCCI, names of the petitioners appear as member class (ii) of the respondent No,3. Under Articles 28(b) and 38(1) a procedure has been laid down for making any amendment in the Articles and Memorandum of Association of KCCI and as such it is the exclusive jurisdiction of the General Body to de-affiliate a member. In this view of the matter the action taken by the Managing Committee of the respondent No,3 unless approved by General Body by 3/4th majority of its members present in meeting or through proxy as laid down in Article 28(b) as referred to above, is ultra vires its powers and of no legal effect (illegal, unlawful, void and arbitrary). It is also against the principles of natural justice which clearly lays down that no one shall be condemned unheard. Admittedly the petitioners were neither given any notice nor they were heard by the Managing Committee before passing the impugned resolution.
10. Without adopting the procedure laid down by the Memorandum and Articles of Association, no office-bearer or the member of any Committee of respondent No,3 is authorized to de-affiliate or terminate the membership of the petitioners whose names appear as member in Article 4(b). We also find force in the contention of the learned counsel for the petitioners that the bar contained in section 12 of the Ordinance does not stand attracted under the circumstances as the petitioners have prayed for a direction for enforcement of the order dated 5-9-2001 passed by the respondent No,2 in discharge of his statutory duties which is binding upon respondent KCCI, unless set aside by the competent authority.
' We are, therefore, of the considered view that the order of de-affiliating the membership of the petitioners by the Managing Committee of respondent No,3 is illegal, arbitrary and without any lawful authority or jurisdiction. However, the respondent No,3 may proceed against the petitioners keeping in view the guidelines laid down by us in the above referred short order. The petitions were, therefore, allowed with no orders as to costs and the above are the reasons for the same.