2025 PLP 913 (CLD)

SYED AHSAN RAZA KAZMI, J.

The petitioner has filed this Writ Petition under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973, challenging the validity of two letters dated October 21, 2024, and October 22, 2024. The first letter, authored by the Executive Members of the Bahawalpur Chamber of Commerce and Industries (BCCI) was addressed to the Director General of the Trade Organization/Respondent No.2 with a request that the Director General advised the Secretary General of the BCCI/Respondent No.3 to convene an executive meeting. The reason stated for this request is that a majority of members have lost Confidence in the President of the BCCI and seek to move a No Confidence Motion against him. The second letter, authored by Respondent No. 2/Director General of Trade Organization directs the Secretary General/Respondent No.3 to convene a meeting of the Members Executive Committee to formally table the No Confidence Motion against the President of BCCI. The petitioner challenges the legality of these letters and the proposed No Confidence Motion arguing that such actions have no legal basis in the governing documents of the Trade Organization.

2. Learned counsel for the petitioner argues that a thorough examination of the Articles of Association (AoA), Memorandum of Association (MoA), Trade Organization Act, 2013 (the "Act"), and Trade Organization Rules, 2013 (the "Rules"), reveals that none of these legal instruments contain any provision or clause pertaining to a No Confidence Motion. Therefore, any action or proceedings initiated by the respondents on this basis lacks legal standing. The only available recourse under the aforementioned Act, Rules and Articles is the cancellation of Membership on the grounds of alleged misconduct, which can only be executed following a proper inquiry and investigation. Adds further that applying the provisions of the Company Act, 2017 alongside the Act is illegal. Furthermore, the petitioner contends that impugned letters blatantly violate section 24-A of the General Clauses Act, 1897, as they fail to adhere to the principles of lawful authority and due process. Lastly, an objection was raised on Respondent No.3 for not holding a proper resolution.

3. On the other hand, learned counsel for Respondent No.4 contradicted petitioner's contention by raising a preliminary objection regarding maintainability of the instant writ petition. The respondents argue that the Articles of Association (AoA) and Memorandum of Association (MoA) are subservient to the Act and the Act explicitly stipulates that the Companies Act, 2017 applies to a registered Company, therefore, the applicability of the Companies Act is a legal requirement rather than a matter of discretion. In response to objection regarding non-submission of resolution, Respondent No.3 while relying on Rana Basit Rice Mills Private Limited v. Shaheen Insurance Company and another (2021 CLD 960) submitted that in a case where any member/shareholder/director/official of a company is sued in his personal capacity, there is no need of a Board resolution. Furthermore, the arguments presented by the learned counsel for Respondent No.4 have been fully endorsed and adopted by the learned counsel representing the remaining respondents.

4. The arguments of learned counsel for both the parties have been heard and record has been carefully examined.

5. It can be safely observed that a company has a separate legal identity. To sue or initiate legal action on its behalf, authorization through Board Resolution is required. However, if a company official is sued personally, no Board Resolution is needed, as individuals and the company are legally distinct entities. Reliance is placed upon judgment reported as SDO, PESCO Daudzai Sub-Disvison Ring Road, Peshawar and others v. Wadan Sher (2023 SCMR 236).

6. The respondents have raised a preliminary objection, asserting that the writ petition is not maintainable. They contended that the petitioner has an alternative and equally efficacious remedy available under section 21(2) of the Act. Thus, the availability of an alternate remedy renders the current petition non-maintainable.

7. In rebuttal, the petitioner argued that the Act and Rules do not provide any explicit guidelines or provisions for initiating a No Confidence Motion. Furthermore, the petitioner contends that section 21(4) of the Act only permits an appeal against a final order or decision. In the present case, no such final determination has been made, leaving the petitioner without a suitable alternate remedy. Consequently, the petitioner asserts that approaching this Court remains the only viable legal recourse available to the petitioner.

8. In order to examine the contentions raised by both the parties it would be advantageous to reproduce section 21 of the Act.

21. Appeal. (1) Any person or trade organisation aggrieved by any decision or order of the Administrator may, within fourteen days of communication of such decision or order, prefer appeal to the Regulator. (2) Any person or trade organisation aggrieved by any decision or order of the Regulator may, within fourteen days of communication of such decision or order, prefer appeal to the Federal Government whose decision, subject to subsection (4), shall be final. (3) On appeal under subsection (1) the Regulator or, as the case may be, under subsection (2) the Federal Government may suspend the operation or execution of the decision or order appealed against until the disposal of such appeal. (4) Any person aggrieved by the final order or decision or the Federal Government, involving a question of law, may, within thirty days of such order or decision, prefer appeal to the High Court.

9. A bare reading of the section 21 of the Act establishes that the Act, provides a specific channel for addressing grievances. The aggrieved person must exhaust this avenue before seeking further recourse. The petitioner's case falls within the purview of section 21(2) as the Regulator/Respondent No.2 had directed the Secretary General of the Trade Organization/Respondent No.3 to convene a meeting of Executive Members. If, for instance, it is admitted that these directions were erroneous as per stance of the petitioner, even then the petitioner's appropriate course of action was to seek redress by filing an appeal before the Federal Government as provided under the Act.

10. This Court's Constitutional jurisdiction cannot be invoked as a routine matter of right. Instead, it has specific limitations that must be considered when exercising its discretionary powers. Article 199 of the Constitution outlines these limitations, including the requirement that alternate remedies must have been exhausted. In this case, the petitioner failed to provide a valid reason for not utilizing the available alternate remedy, which is a statutory, time-bound, and legislatively prescribed solution. This view has also been expressed in case law cited as Ms. Saba Gul v. Government of Pakistan through Secretary Commerce and 3 others (2020 CLD 251).

11. In response to the respondents' arguments that the provisions of the Act necessitate that a registered organization must conduct its affairs in accordance with the Companies Act, 2017, the petitioner asserts that applying the Companies Act, 2017 alongside the Act is unlawful and contradicts the principle of harmonious interpretation. The petitioner argues that a special law (Trade Organisation Act) should take precedence over a general law (Companies Act, 2017).

12. The Court finds that the petitioner has clearly misconstrued the Act by overlooking its explicit provisions enabling the application of the Companies Act, 2017 in conjunction with it. The Act references the Companies Ordinance, 1984, which has been repealed and replaced by the Companies Act, 2017. Consequently, all references to the term "Ordinance" within the Act must now be interpreted as references to the Companies Act, 2017. A "Registered Trade Organization" is by definition, an entity incorporated under the Companies Act, 20172. To obtain a license, a trade organization must be registered as a company with limited liability under the Companies Act, 20173. Additionally, license holders are required to apply for incorporation within 30 days and secure incorporation within 90 days

4. This position is further supported by a judgment of the Islamabad High Court, which unequivocally affirms that the Companies Act applies to proceedings related to registered trade organizations. See Pakistan Poultry Association through Secretary General v. Regulator of Trade Organizations and another (2024 CLD 1266).

13. In light of the foregoing discussion which has unequivocally established the applicability of the Companies Act, 2017 to trade organizations in governing their affairs, BCCI licensed under section 3(2)(b) of the 2013 Act and registered under section 42 of the Companies Act, 2017 must comply with the Companies Act, which governs corporate formation, operation, and management, ensuring standards of conduct, accountability, and transparency. Specifically, section 190 of the Companies Act, 2017, outlines the process for removing a chief executive by requiring a majority vote from the board of directors. Additionally, Clause 14(1) of BCCI's license requires compliance with the Companies Act. Therefore, any breach of the Companies Act would constitute a breach of the Rules and the license terms. Section 14(3)(g) of the Act empowers the Regulator to direct trade organizations to comply with the Companies Act, 2017. In this case, the Regulator directed BCCI to convene an executive committee meeting to discuss a "No Confidence Motion." His direction are at par with section 190 of the Companies Act, 2017. Thus, Respondent No.2 (the Regulator) was well within its authority to issue the impugned direction.

14. The case law cited by the learned counsel for the petitioner as Malik Shahid Mehmood v. Malik Afzal Mehmood and others (2011 SCMR 551), Rahat and Company through Syed Naveed Hussain Shah v. Trading Corporation of Pakistan Statutory Corporation Finance and Trade Center through Secretary or Chief Executive Officer (PLD 2020 SC 366), M/s. Sui Northern Gas Pipelines Ltd. v. Noor CNG Filling Station (2022 SCMR 1501), Jameel Qadir and another v. Government of Balochistan, Local Government, Rural Development and Agrovilles Department Quetta through Secretary and others (2023 SCMR 1919), Nadir Khan v. Qadir Hussain and others (2024 SCMR 770) and M/s. Asghar Oil Services (Pvt.) Ltd. through Director v. Federation of Pakistan through Secretary Ministry of Energy (Petroleum Division) Islamabad and 2 others (2023 CLC 182) being distinguishable is not applicable to the facts and circumstances of the instant case.

15. In light of the above discussion, the instant petition is not maintainable on availability of an alternate efficacious remedy under Section 21(2) of the Act and the directions issued by Respondent No.2 are lawful and in conformity with the Act. Consequently, this Writ Petition is hereby dismissed. UN/M-63/L Petition dismissed.