2003 PLP 463 (CLD)

1.753.000 3.71 - - 6 1‑2‑2001 - - 2.140.300 4.53 - - 7 1‑3‑2001 12.850.235 27.20 " " " " 8 2‑4‑2001 13.875,235 29.37 " " " " 9 28‑5‑2001 13.875.235 29.37 2.140.300 4.53 1.402.500 2.97 15% Bonus Sh, Alloted 2,081,285 321,045 210,375 15.956.520 29.37 2.461.345 4.53 1,612,878 2.97 10 1‑8‑2001 " " 2,686,845 4.95 1.813,875 3.34 11 1‑9‑2001 " " " " " " 12 1‑10‑2001 " " " " " " 13 1‑1 1‑2001 " " " " " " 14 1‑12‑2001 " " " " " " 15 1‑1‑2002 " " " " " " 16 1‑2‑2002 " " " " 2,012,375 3.70 17 20‑3‑2002 " " " " 2,137,375 3.93 Collectively defendants Nos. 1, 3 and 4 hold 38.25% shares in plaintiff No. 1 as on 20‑3‑2002. In the Banking Companies Ordinance, 1962, restriction is imposed on a Banking Company not to hold share in any company in any capacity may it be, as Pledgee, Mortgagee or absolute owner of an amount exceeding 30% of paid‑up capital of that company or of its own paid‑up share capital (section 23(2)). While in the latter Ordinance any proposed ‑ transaction for acquiring shareholding of more than 10% in a Life Insurance Company is subject to the permission of Securities and Exchange Commission of Pakistan It was argued that no such permission was obtained from the Securities and Exchange Commission, therefore, the acquisition of the shares in excess of 10% in an Insurance Company can neither be approved nor defendants could be allowed to exercise any right in relation thereto, including right of vote in any meeting. It was further argued though such devise of acquisition of share by the defendants beyond the permissible limit defendants Nos.1 and 2 have attempted to make the plaintiff No.1 as a subsidiary company which is forbidden in terms of section 23(2) and (3) of the Companies Ordinance, 1984. Mr. Khalid Anwer, learned counsel for the defendants conversely argued that there are no restriction on the Banking Company to carry on any other business in addition to the Banking Business as can be spelt out from section 7(1) of the Companies Ordinance. As discussed above, the prime and principal business of a Banking Company is to transit 'Banking Business' as enumerated under section 5(b) of the Ordinance, 1962. In view of the dicta laid down in the case of Habib Insurance Company Limited (supra) all the other clauses in the Memorandum are to be read ancillary and incidental to the main business. Contention of Mr. Khalid Anwer that under clauses (1) and (p) of the Memorandum corresponding to section 7(1)(1) and (m) respectively mandates, taking or otherwise acquiring and holding shares in any other company and managing the property and rights of the company. According to him, if the shares in the plaintiff No.1 are acquired then all rights attached thereto, including right to vote are exercisable by the shareholders in an effort to improve the working of the plaintiff No. 1 by participating in the decision‑making meeting. In doing so in fact they will protect their property so that its value may not diminish. Arguments are both ingenuous and interesting. It was urged that such course is in furtherance of developing and protecting its rights and interests in the share. According to him if the defendant No.1 prosper then ultimate benefit will go to the depositor whose funds are used for the purposes of investment. In order to appreciate the arguments, it will be advantageous the understood restriction on the nature of the subsidiary of a Banking Company which is defined under section 23 of the Banking Companies Ordinance, 1962. Section 23 lays down restriction on the nature of the subsidiary company. Subsidiary company is defined under section 3 of the Companies Ordinance, 1984 as follows: "

3. Meaning of "subsidiary" and "holding company". (1) For purposes of this Ordinance, a company or body corporate shall be deemed to be a subsidiary of another` if‑‑ (a) that other company or body corporate directly or indirectly controls, beneficially owns or holds more than fifty per cent. of its voting securities or otherwise has power to elect and appoint more than fifty per cent. of its directors: or (b) the first mentioned company or body corporate is a subsidiary of any company or body corporate which is that other's subsidiary. (2) For the purpose of this Ordinance, a company shall be deemed to be another's holding company if, but only if, that other is its‑subsidiary." Section 23 of the Banking Companies Ordinance, 1962 runs as follows: "Restriction on the nature of subsidiary companies.‑‑‑ (1) A Banking Company shall riot form any subsidiary company except a subsidiary company formed for one or more of the following purposes, namely:‑‑ (a) the undertaking and executing of trusts; (b) the undertaking of the administration of estates as executor, trustee or otherwise; (bb) the carrying on the business of Modaraba under the provisions of the Modaraba Companies and Moduraba (Floatations and Control) Ordinance, 1980 (XXXI of 1980); (c) the providing of safe deposit vaults; (d) with the previous permission in writing of the State Bank, the carrying on of the business of Banking exclusively outside Pakistan; [x] [(dd) the conduct of any form of business permitted by section 7; or] (e) such other purpose's as are incidental to the business of Banking. (2) Save as provided in subsection (1), no Banking Company shall hold shares in any company whether as pledges, mortgagee or absolute owner, of an amount exceeding thirty per cent. of the paid‑up share capital of that company or thirty per cent. Of its own paid‑up share capital and reserves, whichever is less: Provided that any Banking Company which is on the date of commencement of this Ordinance holding any shares in contravention of the provisions of this subsection shall not be liable to any penalty, therefore, if it reports the matter without delay, to the State Bank and if it brings its holding of shares into conformity with the said provisions within such period, not exceeding two years, as the State Bank may think fit to allow. (3) Save as provided in subsection (1) and notwithstanding anything contained in sub section (2), a Banking Company shall not, after the expiry of one year from the date of commencement of this Ordinance hold shares, whether as pledgee, mortgagee or absolute owner, in any company in the management of which any Managing Director or Manager of the Banking Company is in any manner concerned or interested." In view of the limitation prescribed under section 23(1) acquisition of shares in AIC Company does not fall under clause 23(1)(a) to (e) reproduced above, at the best it could hold share in any company within limits of 30% of paid‑up capital as provided for, subsidiary company, can only be founded by a Banking Company for the purpose as are incidental to the business of Banking. Admittedly, the defendant No. 1 hold controlling shares directly itself and indirectly through defendants Nos.3 and 4 as is reflected from the Abridge Prospectus of Nishat Group referred in narrative above and also as per tabulated shareholding referred to above in the name of two Trust Funds. Company law recognizes amalgamation and merger of two companies pursuant to scheme of Amalgamation as may be approved by the Court of law in terms of section 284 of the Companies Ordinance, 1984. Corresponding provisions providing amalgamation of a Banking Company with another company are laid down in sections 47 and 48 of the Banking Companies Ordinance, 1962. Similarly provision for the amalgamation of Insurance Company is provided for in section 68 of the Insurance Ordinance, 2000. The word "amalgamation" under the Black's Law Dictionary, Sixth Edition, means "union of different races, or diverse elements, societies, unions, associations, or corporations, so as to form a homogeneous whole or new body; interfusion; intermarriage; consolidation; merger; coalescence; as, the amalgamation of stock". "Merger" is also defined under the Black's Law Dictionary (Sixth Edition), "it means the fusion or absorption of one thing or right into another; generally spoken of a case where one of the subjects is of less dignity or importance than the other". Besides above conventional mode acquiring interest and rights in another company recognized under law, another mode not uncommon in commercial world is popularly known as "Takeover". In the scheme of arrangement for the purposes of amalgamation or merger rights of various class of stake holders to some extent are taken care of as the schemes are subject to approval and judicial scrutiny, thereby rights of all the class of stake holders receive statutory protection and judicial security. Whereas, in a takeover bid, such rights, under the present scheme of law in Pakistan, are not protected and secured. "Takeover" is defined under the Black's Law Dictionary (Sixty Edition) as "an attempt by an outside corporation or group, usually called the aggressor or "insurgent", to wrest control away from incumbent management of target corporation. A takeover attempt may involve purchase of shares, a tender offer, a sale of assets or a proposal that the target merge voluntarily into the aggressor". Indeed, take over may not be employed a mean of merging or amalgamating two or more companies which are going concern the aggressor or raiding company may acquire the control of another company or .the target company discreetly for more than one reason. For instance, shares of a viable company are available at a considerable low value then its actual or potential value or that, it has substantial tangible assets and properties which could be easily appropriated and taken over by the raiding company or to destabilize or eliminate its competitor, with monopolistic tendency, or it may be for lust of financial/ economical power. Since such take‑over are I usually not always viewed as friendly gesture. In case, where take‑over bid, is aimed at to subdue and assume the control of target company for object other than mere investment, if such be the case then it is construed as a hostile takeover in a bid to dethrone the existing management or to cripple the running of business by interfering in the regular affairs of the business activity or to influence the policy decision of the target company for its own purpose and object whatever it may be. From bare reading of section 23 read with sections 47 and 48 of the Banking Companies Ordinance, 1962 and section 67 of the Insurance Ordinance, 2000. It is clear that law restricts and prohibits amalgamation of a Banking Company with J any other company not having object similar to that of a Banking Company nor a Banking Company can form a subsidiary company for a purpose other than setout in section 23(1) likewise, amalgamation of an Insurance Company with any company other than Insurance Company is not permissible. It is settled proposition of law that what cannot be done directly, cannot be achieved in directly. Such rule was observed lastly by apex Court in the case of Mian Muhammad Nawaz Sharif (supra) at page

687. Therefore, there is no difficulty in arriving at a conclusion that objects both of Banking Company and that of Insurance Company are altogether distinct and separate. Law restricts carrying on Banking and Insurance business under two different Legislatures neither of the company, I can carry on business of either, other than its own. Therefore, the Banking Company, prima facie, cannot undertake the business of Insurance Company and likewise Insurance Company cannot undertake business of the Banking Company. As there is a specific prohibition of amalgamation of two types of company under the Banking Companies Ordinance, 1962 and Insurance Ordinance, 2000 respectively and so also restrictions are placed in forming subsidiary company. Admittedly Mr. Ali Munir, Senior Executive Vice‑President of M.C.B., holding share: qualifying to elect him as Director in AIC, and his apparent interest in the management and affairs of AIC is manifest from the Notice of Change of Auditors, such being the position, in terms of subsection (3) of section 23 of Banking Companies Ordinance, 1962. Banking Company (M.C.B.) prima facie cannot hold share in any capacity in which Managing Director or Manager of Banking Company is in any manner concerned or interest. Contention of Mr. Khalid Anwer, learned counsel for defendants Nos.1 and 2 is that the shares that were acquired by the defendant No.1 were in terms of section 67 of the Insurance Ordinance, 2000 which was promulgated on 19th August, 2000 is prospective in operation. Any acquisition of more than 10% interest in the defendant No.1 cannot be construed violative of section 67 (ibid). According to him, it is only required that 10% shares acquired in any one year are to be reported to the SECP according to him, the shares were acquired progressively and after promulgation of the Ordinance, 2000 very nominal shares were acquired. Argument appears to be impressive and ingenious. In order to appreciate such arguments perusal of section 67 of the Insurance Ordinance would be beneficial which runs as follows: "

67. Approval of acquisition or transfer.‑‑‑(1) Any proposed transaction for the acquisition of a shareholding of more than ten per cent. (10%) in an Insurance Company, or in the case of a non‑life insurer, of the whole or any part exceeding ten per cent. (measured by either the premium income or the sum of the liabilities for unearned premium and outstanding claims and the premium deficiency reserve proposed to be acquired) of the business located in Pakistan of an insurer (whether in one or a number of related transactions and whether at the same or different times) shall not proceed unless, on application by the transferor, approval is given by the Commission. Explanation.‑‑‑A number of transactions shall be deemed to be related if there being more than one purchaser, those purchasers are acting together or in concert or if, in all the facts and circumstances of the case, there is such a relationship between the purchasers or such common purpose between them so that it would be reasonable to conclude that the transactions are related. (2) The application required under subsection (1) shall be made in such form and shall be accompanied by such documents as may be prescribed. (3) The Commission may, within 15 days from the receipt of the application, require the applicant to submit such further documents and information as may be required for it to make an informed decision about the transaction in the interests of policy holders and shareholders and the applicant shall provide the same within a period of seven days or such later period as the applicant may in writing request. (4) If after sixty days of the receipt of the application or the receipt of any additional material under subsection (3), approval has not been granted or a notice given to the applicant declining approval, the Commission shall be deemed to have given its approval. (5) Approval given or deemed to be given by the Commission under this section shall not preclude the necessity of obtaining any such approval or consent required to be obtained from the Commission under the provisions of any other applicable law." From a bare reading of above provision, it is clear that any proposed transaction for the acquisition of a shareholding of more than 10% in an Insurance Company of Pakistan, whether in one or a number of related transaction and whether at the same or different time shall not proceed unless on application by the transferor approval is given by the Commission. In case, where there are number of purchasers and relationship inter se is apparently for common purpose than in terms of section 67, all such transactions treated by one and same person. Contention of Mr. Khalid Anwer, that, such disclosure was made in the returns required to be filed under the Companies Ordinance, 1984, is substantial compliance, such arguments are not tenable. Insurance Ordinance, 2000, requires independent application by the acquirer before acquisition of shares exceeding 10% in Insurance which admittedly was not done. It was argued that, for the reason, no form of application since had been prescribed. It was argued that for the reason no form of application has since been prescribed. It may be observed that requirement to seek prior approval from the Commission as mandated in term of section 67(1) of the Insurance Ordinance, 2000 cannot be dispensed with, simply because no particular form of application has been prescribed, as the requirement to seek prior approval is separate and distinct requirement that may be necessary under provision of any other law [see section 67(5)]. Absence of prescribed form of application is also no excuse to seek approval as required under subsection (1) of section 67 of O the said Ordinance, as form of application is merely powers conferred under the Ordinance to the Commission are merely enabling provision, failure to prescribe form of application will not render the requirement to seek prior approval of Commission nugatory, despite absence of prescribed form and defendant No.1 could have made its intention of acquiring share beyond 10%. Prima facie, absence of such approval, renders the acquisition of shares questionable. Since defendant No.1, by virtue of it being one of the major contributory to the Trust Funds of defendant No.3 and exercise controlling influence, all the transaction by them, prima facie, appears to be related transaction in concert for the attainment of some common purpose as major percentage of shares by defendants Nos.3 and 4 were acquired after the promulgation of Insurance Ordinance, 2000 i.e. after 18‑9‑2000 and apparent after the defendant No.1 as is reflected from the schedule of such acquisition of share. Before promulgation of the Ordinance, 2000 on 18‑9‑2000, Insurance Act, 1938, was in the field. Under section 35 of the Act of 1938, no insurance business could be transferred to or amalgamated with business other than to that of any other Insurance Company/that too in accordance with scheme prepared under that section and sanctioned by the Court. It, therefore, follows that prior to the Ordinance, 2000, Insurance Business could not have been transferred to a Company other than Insurance Company. When Insurance Business could not have been transferred under the Act of 1938, then conversely no such business could have been acquired by a non‑insurance Company, any proposition to the contrary would be in apparent negation of statutory provision. It may be observed that institute of managing agent has been done away with in 1972 and through device of acquiring shares and managing the control of any other company may it be in the form of subsidiary or associated company of the Banking Company under the present of law, cannot be approved. Prima face, under section 209 of the Companies Ordinance, 1984 a company holding share in another company either in its own name or in the name of its nominee has authority to exercise rights attached to such shares including appointment or get elected any person as Director in such company of which it hold share or beneficial interest. Such exercise of right commensurate with the number or value of such interest held as may be permissible under the law. The question is whether the defendant holding such sizable number of share directly or indirectly in AIC, is permitted under the law to hold such share and so also exercise rights attached thereto is indeed debatable. Adverting to other arguments of Mr. Khalid Anwer, learned counsel, in terms of clause (b) of the Memorandum, the Banking Company indeed was authorized to invest in the shares of another company for the purposes of investment. Apparently, the defendant No.1 is under the influence and control of defendant No‑2, and shares in plaintiff No. 1 are held in the name of Directors of defendant No. 1 and shareholding in the name of defendants Nos.3 and 4 could, prima facie, be said to be related inter se. When number of purchasers of the shares are acting together or in concert or if on account of the relationship between them appears to so proximate and influence of one can easily be inferred on other than the purpose of gaining control over the management in business of the plaintiff No.1 is apparent and obvious. Fact that said shares were only acquired when the prices were falling and shares were retained not for the purposes of trading to earn profit as there was no selling of the shares by the defendant No.1 and its other aides. Key business of a Banking Company is lending or investment as provided for under section 5(b) of Ordinance, 1962, Investment has not been defined in the Ordinance, 1962. In Black's Law Dictionary (Sixth Edition), it is defined as "an expenditure to acquire property or other assets in order to produce Revenue; the asset so acquired. The placing capital or laying out of money in a way intended to secure income or profit from its employment; to purchase securities of a more or less permanent nature, or to place money or property in business venture or real estate, or otherwise by it out so that it may produce Revenue or gain or both in 9 future". A distinction between the business of investment and the purchase of sale of investment by a person is enumerated in the case of Commissioner Income‑tax (supra) (PLD 1969 Karachi 278, at page 291) is as follows: "The principle underlying the above definitions is that in order to constitute a business, there must be a continuous exercise of activity for the purpose of gain. This element of continuity is essential to constitute a business of investment. The reason for this condition is that in modern society people no longer hold their savings in gold or cash but are encouraged to invest their savings in property and securities, yet a man who invests his savings in buying a property would not be said to be carrying on a business if he lets out the property on rent, nor would a person who has purchased shares out of his savings be said to carry on business merely because he derives income from his investments. If, however, he regularly buys and sells property or shares, so as to make profit out of the fluctuations in the prices of property or shares, then it would be said that he was carrying on the business of investment; there is thus a fundamental distinction between the business of investment, and the purchase and sale of investments by a person." From the perusal of the above observation and from the tend of arguments and pleadings, prima facie, the acquisition of share by the defendant No.1 is not the investment made in the shares of the plaintiff No.1 by the defendant in furtherance of its principal object as defined ; under sections 5(b) and 7(1) of the Ordinance, 1962 read with object clause 3(a) as enumerated in its Memorandum. Apparently and prima facie, it appears to be a bid to takeover the plaintiff No. 1 through backdoor or speaking in corporate parlance it amounts to 'hostile takeover'. As already observed above, when the law provides a particular thing to be done in a particular fashion or manner than it is to be done in same fashion and manner. Both, the Banking Ordinance and Insurance Ordinance. 2000 lay down the manner in which the business in other company I could be acquired and not otherwise. Such acquisition of the share is apparently and prima facie against the mandate of law. The question that may arise is when a company is considered to be holding shares for they purpose of investment and to earn the profit out of investment attending circumstances are to be seen. It has come on record that Mr. Ali Munir one of the Senior Executive Vice‑President of the defendant No.1 also holds 2500 shares in the plaintiff No.1 Company, after the counter‑affidavit has been filed by the defendant No.1 in this matter had served a notice dated 10th April, 2002 expressing his intention to move for substitution of the Auditors of the Company. No doubt shareholders are within their rights to exercise all rights as are attached to the shares but such exercise of the right at this juncture certainly demonstrate that the defendant No.1 is tightening the nose around the plaintiff No.1 and is serious to participate and involve itself in the business of the plaintiff No.1 and is serious to influence the policy decision if not meddling in its affairs. As rightly pointed out by learned amicus curiae, that defendant No.6, State Bank of Pakistan, is regulatory agency for the purpose of a Banking Company and exercise authority and control over the working and .functioning of M.C.B., the defendant No.1 State Bank of Pakistan, though a pro forma party in instant proceeding ought to have taken note of acquisition of shares by the defendant No. 1 in AIC and if shares acquired by defendants Nos.3, 4 and so also by Mr. Ali Munir and others are also accounted for being in proximate relationship with each other, where possibility of influence by M.C.B., over the Trust Funds and other persons could not be altogether ruled out, then shareholding exceeds 30% as mandated under section 23 of the Ordinance, 1962. Even, defendant No.6, the Security and Exchange Commission‑ of Pakistan established under section 3 of Security and Exchange Commission of Pakistan Act, 1997, authorized to regulate under section 200) of the Act of 1997, substantial acquisition of shares and mergers and takeover of companies. Question as to what is substantial acquisition of shares is indeed a relative term. It may vary from company to company. Even the Commission, has not taken note of such acquisition of shares, on the contrary the representative of the Commission at Karachi, attempted to avoid the responsibility to assist the Court on the issue, which conduct cannot be approved of. The Commission, in terms of section 279 of the Companies Ordinance, 1984 has power to impose restrictions on shares and debentures in certain cases, where during the course of any investigation, the Commission is of opinion that such transaction would be prejudicial to the public interest. To attend to such situation in the wake of allegation of hostile takeover, elaborate legislation have been made in U.S.A., Austria and Germany. In India, it is regulated under SEBI (Substantial Acquisition of Shares and Takeover) Regulation, 1994. Even in U.K. there is self regulatory code known as 'City Code', though not legally enforceable but, its existence is taken into account by the Courts and on occasion is recognized as representing the required or desired practice [see Morqan Crucible Co. PLC v. Hill Samuel Bank Ltd. (1991) 1 All ER

148. Unfortunately in Pakistan, neither any legislation is in force nor there is any such 'self‑regulatory code' like 'City Code'. Even regulatory agencies like State Bank and 'SECP' are sitting idle, the indifferent attitude both the regulatory agencies displayed to this import issue despite specific directions by the Court, speaks for itself and needs no further comment. Fact that SECP, under given circumstances has authority to pass orders when the company affairs are under its investigation. Since SECP is not seized of any investigation. This Court, therefore, under circumstances has jurisdiction to examine the vires of transaction of acquisition of shares of AIC by M.C.B. and others. Subject‑matter of suit. Learned counsel for the defendants Nos.1 and 2 rightly pointed out that the proposed AGM scheduled to be held on 7th May, 2002 was only for the purpose of adopting the audited accounts for the year ended December 31, 2000 and not for the purpose of election of Directors, therefore, the apprehension of the plaintiffs are absolutely ill‑founded. I have perused the notice of 41st AGM proposed to be held on 7‑5‑2002 to transit the following business: (1) To receive, consider and adopt the audited accounts for the year ended December 31, 2001 and the Directors and Auditor's reports thereon. (2) To appoint Auditors and fix their remuneration. Learned counsel for the defendants highlighted the financial irregularities that led the plaintiff No. 1 to suffer loss last year inasmuch as bad business wiped out almost 95% of its capital. Such financial mismanagement has necessitated the change of auditors in order to improve the financial position and to expose the illegalities and financial in, discipline displayed by the person presently having the control of the plaintiff No.

1. Mr. Anwer Mansoor, learned counsel concedes to such factual aspect and contends that he has approached this Court to seek restraining orders not only for the purpose of seeking protection against the interference by outsiders and Corporate Raider who intend to highjack the plaintiff No.

1. It is admitted that the defendant No. 1 together with defendants Nos.3, 4 and others, hold substantial share in AIC, even little more than the majority shares as apprehended by the plaintiffs, if rights attached thereto, are exercised it may amount to virtual takeover of the plaintiff No. 1 company. Right to elect the Directors, to participate in the management through its elected representatives, to table and vote on resolution at a meeting of the company and right to earn dividends and profits on the shares held by it are but few of the valuable rights that, are attached to any shares. The question that needs serious consideration is whether the shares of the plaintiff held by the defendants could be construed to be in the course of its normal business for the purpose of investment then it being the property of the defendant No. 1 are they entitled to exercise such control and take measure to manage developed and deal with any part of the shares, while doing so exercise all or any rights attached thereto, if so to what extent such rights could be exercised by the defendants or any of them. Whether such statutory rights can be restricted, abridged, controlled or regulated in case where the shares are held as an investment indeed is not free from doubt and whether the plaintiffs through lf injunctive order may seek restraint on exercise of such right by the shareholders. In circumstances, where prima facie, it appears that the Banking Company cannot hold share more than 30% in terms of section 23 of the Ordinance of 1962 and where the share in an Insurance Company were acquired against the provision of section 35 of the Insurance Act, 1938 without following the provisions thereof as on the own showing of the defendant No.1 major shareholdings were acquired prior to promulgation of Insurance Ordinance, 2000. It was also pointed out that election of Directors was to be held sometime in the month of June, 2002. Under the facts and circumstances of the case, I deem appropriate to pass the following orders: 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 22‑3‑2002, 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 shareholders may, however, be entitled to all the dividends and profits that may be declared or announced by the plaintiff No. 1 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 Director 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. The defendants are directed to file their written statement without any delay, whereafter the case may immediately be set up for settlement of issues and appropriate orders for recording of the evidence at an early date may be passed. The upshot of the above discussion, this listed application i.e. C.M.A. No.2034 of 2002 under Order 39, rules 1 and 2 of Civil Procedure Code is allowed in terms set out above. S.A.K./A‑380/K Appeal allowed.