1984 PLP 2840 (CLC)

(a) Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance (V of 1970)‑‑ ‑‑‑S.2(2)‑‑Provisional Constitution Order (1 of 1981), Art.9‑‑ Scope of subsection (2) of section 2 of Ordinance‑‑Deeming provision and scope of a deeming provision., held, could not be extended beyond what was intended by Legislature‑‑Scope of such provision could not be extended to include an individual's relations who were not specified therein. (b) Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance (V of 1970)‑‑ ‑‑‑Ss.2(1)(d), 2(2) & 16(1)(h)‑‑Provisional Constitution Order (1 of 1981), Art.9‑‑ Registration‑‑Holding of other persons than persons specified in S.2(2) of Ordinance, held, could be included if an individual has power to exercise controlling influence directly or indirectly over shares of persons other than persons named in S.2(2)‑‑Conclusions, held further, should as a matter of fact be arrived on some material that factually individual concerned directly or indirectly held or controlled shares of persons other than persons mentioned in S.2(2) of Ordinance. (c) Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance (V of 1970)‑‑ ‑‑‑Ss. 2(1)(d), 2(2) & 16(1)(h)‑‑Provisional Constitution Order (1 of 1981)y Art.9‑‑Registration‑‑Authority while directing individual to get itself registered under section 16(1)(h), concluding as a matter of fact that factually individual held or controlled even shares of persons not covered by subsection (2) of section 2‑‑Order of Authority on this point based on presumption and not supported by any evidence‑‑Authority including shares of persons other than persons named in said provision of law for computing individual holding without any evidence on record that factually individual held or controlled directly or indirectly shares of said persons, not named in subsection (2) of section 2 of Ordinance‑‑Order of Authority, held, not lawful‑‑Case remanded to Authority to record evidence on point. Once an individual becomes registrable under section 16 of Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance, 1970 because he holds or controls directly or indirectly shares carrying not less than fifty per cent of the voting power in a public company owning assets valuing not less than 30 million rupees, the Authority under section 12(1)(b)(i) of the Ordinance can require the individual to divest himself of the ownership of the shares within such time and under such conditions as may be specified in the order. The above power in fact is a restraint on an individual's freedom to own property which restraint cannot readily be pressed into service by extending the scope of subsection (2) of section 2 of the Ordinance or by presuming without having any evidence or material that an individual directly or indirectly holds or controls even the shares of the persons not covered by subsection (2) of section 2 of the Ordinance. JUDGMENT Ajmal Mian, J. ‑‑The petitioner through this petition has impugned the order dated 23rd December,1982, passed by the respondent directing him to get himself registered under section 16(1)(h) of the Monopolies & Restric tive Trade Practices (Control & Prevention) Ordinance, 1970, hereinafter referred to as the Ordinance.

2. The brief facts leading to the filing of the above petition are that the respondent served a notice dated 4th January,1982, under section 19 of the Ordinance upon the petitioner calling upon him to show cause as to why penal action should not be taken against him under section 19 of the Ordinance on his failure to get himself registered. The above show‑cause notice was replied to by the petitioner through his Advocate's letter dated 10th January,1982, wherein it was pointed out that the petitioner holding in terms of section 2(2) of the Ordinance is 3,15,410 shares against the subscribed and paid up shares of 10,00,000 in the company namely Sapphire Textile Mills Limited (hereinafter referred to as the Company). There was exchange of some more letters between the petitioner's counsel and the respondent. However, eventually the above impugned order was passed. The petitioner being aggrieved by the above order filed a Misc. Appeal No.21/83 in this Court but the same was withdrawn on the basis of respondent's statement made before this Court on 21st August, 1983, that no appeal was competent. The petitioner has, therefore, filed the present petition and has impugned the above order.

3. In support of the petition Mr. Khalid Anwar, the learned counsel for the petitioner has urged that the respondent has acted in excess of jurisdiction in including the persons not mentioned in subsection (2) of section 2 of the Ordinance for the purposes of computing the petitioner's holding in the Company. On the other hand, it was urged by Mr.Mansoor Ahmed Khan, the learned counsel for the respondent, that subsection (2) of section 2 of the Ordinance is to be read with sub‑clause (d) of subsection (1) of section 2 of the Ordinance and that reference may also be made to the preamble of the Ordinance in order to understand the import of the Ordinance.

4. Adverting to the above contentions of the learned counsel for the parties, it may be observed that it will be advantageous to refer to the preamble and the relevant provisions of the Ordinance, namely, section 2(1)(d) and subsection (2) of section 2 and section 16(1)(h), which read as follows:‑ PREAMBLE.‑ "An Ordinance to provide for measures against undue concentra tion of economic power, growth of unreasonable monopoly power and unreasonably restrictive trade practices. S.2(1). In the Ordinance unless there is anything repugnant to the subject or context:‑ (d) "Control", in relation to an undertaking, means the power to exercise a controlling influence over the management of the policies of the undertaking and in relation to shares, means the power to exercise a controlling influence over the voting power attached to such shares. (2) For the purposes of this Ordinance an individual shall be deemed to own, to hold or control a thing if it is owned, held or controlled by the individual or his spouse, or by a brother or sister of the individual, or by any of the lineal ascendants or descendants of the individual. S.16(1) In order that information relevant to the performance of its functions under this Ordinance is available to the authority, the following undertakings, individuals and agreements shall be registered with the authority in such manner as may be prescribed by rules, namely‑ (h) An holds or controls, whether directly or indirectly shares carrying not less than fifty percent of the voting power in undertaking owned by a public company the total value of the assets of which is not less than thirty million rupees."

5. It may be pointed out that the Ordinance was promulgated with the object to provide measures against undue concentration of economic power, growth of unreasonable monopoly and unreasonably restrictive trade practices. Whereas sub‑clause (d) of subsection (2) of section 2 of the Ordinance defines the word "control" in relation to an undertaking, means the power to exercise a contolling influence over the management or the policies of the undertaking and in relation to shares means the power to exercise a controlling influence over the voting power attached to such shares. It may further be noticed that subsection (2) of section 2 is a deeming provision and it provides that for the purposes of the Ordinance an individual shall be deemed to own, hold or control a thing if it is owned, held or controlled by the individual (which includes a Hindu undivided share) or his spouse or by the brother or sister of the individual or any of the lineal ascendants or descendants of the individual. It may also be noticed that under section 16(1)(h) of the Ordinance an individual who holds or controls whether directly or indirectly shares carrying not less than fifty per cent of the voting power in undertaking owned by a public company the total value of the assets of which is not less than thirty million rupees, is obliged to get himself registered with the respondent failing which penalty can be imposed in terms of section 19 of the Ordinance upto Rs.1 Lac.

6. The respondent in order to hold that the petitioner holds or controls shares carrying not less than fifty per cent of the voting power in the company included not only the persons specified in subsection (2) of section 2 of the Ordinance but also some other relations on the assumption that the petitioner indirectly has control over the votes of the said relations. It may be advantageous to reproduce herein below the relevant portion of the impugned order on the above point as it will facilitate in resolving the controversy in issue, which reads as follows:‑ NAME INDIVIDUALS RELATIONSHIP SHARES HELD AS PER SHAREHOLDERS list on 30.9.1979 PERCENTAGE i) Mr. Muhammad Abdullah Individual 47,500 4.75 ii) Mst. Shamshad Begum Wife 60,000 6.00 iii) Mr. Nadeem Abdullah Son 40,000 4.00 iv) Mr. Shahid Abdullah Son 57,910 5.79 v) Mr. Amir Abdullah Son 40,000 4.00 vii) Mr. Yousuf Abdullah Son 25,000 2.50 viii) Mst. Sumaira Abdullah Daughter 17,000 1.70 ix) viii) Mst.Hafiz Begum Sister 1,000 0.10 x) Mst. Zarina Begum Sister 1,000 0.10 xi) Mst. Gulshad Begum Sister 1,000 0.10 xii) Mr. Abdullah Shakoor Brother 15,000 1.50 xiii) Mst.Fehmeeda Begum Brother's wife 70,000 7.00 xiv) Mr. Jahangir Shakoor Minor nephew 55,000 5.50 xv) Naushaba Shakoor Minor niece 25,000 2.50 xvi) Mr. Muhammad Younas First cousin staff member and nominee of the individual 40,000 4.00 xvii) Mr. Muhammad Paternal‑uncle Yousuf staff member and nominee of the individual 2,500 0.25 Sapphire Agencies Ltd All shareholders. Are nominees of individual 53,720 5.37 5,51,630 55.16

7. It may be noticed that the respondent fogy purpose of computing the petitioner s holding or controlling power included the shares of his brother's wife, minor nephew and minor 'niece etc. If we were to exclude the shares of petitioner's brother's wife which represents 7% of the total paid up shares of the company, the petitioner's holding would be less than 50%, and, therefore, the petitioner would not be liable to get himself registered.

8. From the above‑quoted provision of the Ordinance, it is evident that under subsection (2) of section 2 the holding of the persons mentioned therein will be considered as the holding of the individual and this is because of the deeming clause. On the basis of the above subsection (2) of section 2 of the Ordinance, it will be presumed that the individual holding covers the share of his relations mentioned therein notwithstanding that the said relations may not be even on speaking terms with the individual. The question, therefore, arises whether this deeming provision can be extended as to include even those relations which are not specified in subsection (2) of section 2 of the ordinance. In this regard it may be pertinent to refer to the case of Choudhary Ata Muhammad and 10 others v. Federal Land Commission etc. 1979 C L C 294, in which a Division Bench of the Lahore High Court while construing clause (b)(ii) of subsection (4) of section 184 of the Land Revenue Act has made reference to the observation of James L.J. in the case of ex parte Walton, In re: levy, reported in 17 Ch. D 746 to the following effect:‑ "When a statute enacts that something shall be deemed to have been done, which in fact and in truth was not done, the Court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to." The Division Bench also referred to certain observations of the Hon'able Supreme Court of Pakistan in the case of Begum B.H.Syed v. Mst. Afzal Jahan Begum and another P L O 1970 S C 29, which reads as follows: "It is true no doubt that where the statute says that you must imagine the state of affairs, it does not say that having done so you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs. But at the same time it cannot be denied that the Court has to determine the limits within which and the purposes for which the Legislature has created the fiction."

9. We are also inclined to hold that the scope of a deeming provision cannot be extended beyond what was intended by the Legislature. We are, therefore, of the view that the scope of subsection (2) of section 2 of the Ordinance which is a deeming provision cannot be extended as to include an individual's relation who are not specified therein. In other words, inter alia the petitioner's brother's wife could not have been included for computing the petitioner's holding in terms of subsection (2) of section 2 of the Ordinance. However, this is not the end of the matter as by virtue of clause (d) of subsection (1) of section 2 and clause (h) of subsection (1) of section 16 of the Ordinance the holding of other persons than the persons specified in subsection (2) of section 2 of the Ordinance can be included in an individual has the power to exercise controlling influence directly or indirectly over the shares of the persons other than the persons named in subsection (2) of section 2 of the Ordinance. But in order to press g into service the above category of the persons within the holding of an individual, it is necessary that the respondent should as a matter of fact conclude on the basis of some material that factually the individual concerned directly or indirectly holds or controls the shares of the persons other than the persons mentioned in subsection (2) of section 2 of the Ordinance. The distinction is that under subsection (2) of section 2 of the Ordinance by virtue of deeming provision the holding of an individual shall be deemed to include the holdings of the persons named therein without any evidence, but in case the respondent wishes to include the holding of any other person other than the persons specified in subsection (2) of section 2 of the Ordinance for the purpose of computing the holding of an individual, it cannot be done without evidence on the basis of presumption. The respondent in the impugned order has not concluded as a matter of fact that factually the petitioner holds or controls even the shares of the persons not covered by subsection (2) of section 2 of the Ordinance. The impugned order on his aspect is based on presumption and is not supported by any evidence. It may be pertinent to observe that once an individual becomes registrable under section 16 of the Ordinance because he holds or controls directly or indirectly shares carrying not less than fifty per cent of the voting power in a public company owning assets valuing not less than 30 million rupees, the Authority under section 12(1)(b)(i) of the Ordinance can require the individual to divest himself of the ownership of the shares within such time and under such conditions as may be specified in the order. The above power in fact is a restraint on an individual's freedom to own property which restraint cannot readily be pressed into service by extending the scope of subsection (2) of section 2 of the Ordinance or by presuming without having any evidence or material that an individual directly or indirectly holds or controls even the shares of the persons not covered by subsection (2) of section 2 of the Ordinance.

10. We, therefore, allow this petition and declare the impugned order as without lawful authority as the respondent has also included the shares of other persons than the persons named in subsection (2) of section 2 for computing the petitioner's holding without having any evidence on the record that factually the petitioner holds or controls directly or indirectly the shares of the aforesaid persons not named in the above subsection (2) of section 2 of the Ordinance. However, we remand the case to the respondent with the direction to record evidence on the point whether the petitioner directly or indirectly holds or controls the shares of the persons other than those mentioned in subsection (2) of section 2 of the Ordinance in order to attract section 16 of the Ordinance.

11. The petition stands disposed of in the above terms with no order as to costs. M.Y.H. Appeal allowed.