2013 PLP 1872 (SCMR)

MUHAMMAD ATHER SAEED, J.

This civil petition for leave to appeal has been filed against the judgment of the learned Division Bench of the Lahore High Court, Lahore dated 11-9-2012 in Intra Court Appeal No.290 of 2012 whereby the learned Division Bench had disposed of the Intra Court Appeal filed by the present petitioner against the judgment of the learned Single Judge dated 11-4-2012 in Writ Petition No.1163 of 2011. However, the learned Division Bench had upheld the decision of the learned Single Judge in remanding the matter back to Securities and Exchange Commission of Pakistan (hereinafter referred to as 'the SECP') for decision by the competent authority but had modified the judgment to the extent that they had directed that the entire commission should hear the matter. The present petitioner being aggrieved by the order of the remand has filed this Civil Petition for leave to appeal.

2. Brief facts of the case are that petitioner is holder of 0.001% share in United Bank Limited which was controlled by a consortium of companies consisting of Bestway (Holding) Ltd. (BHL) and its sponsor (for ease of reference hereinafter referred to as "BG") and Abdul Dhabi Group (for ease of reference hereinafter referred to as "ADG") which holds about 61.87% shares and controls United Bank Limited. Somewhere in December 2010 BG intended to take over some of the shares held by ADG and addressed a letter dated 26th November, 2010 to the SECP seeking a clarification whether the purchase of aforesaid shares would attract the provisions of the Listed Companies (Substantial Acquisition of Voting Shares and Take-Overs) Ordinance, 2002. Vide letter dated 1st December 2010 a Director Enforcement working with the SECP responded to the aforesaid letter stating that proposed acquisition of shares by BG from ADG shall not attract the provisions of section 6 of the Listed Companies (Substantial Acquisition of Voting Shares and Take-Overs) Ordinance, 2002. Being aggrieved by the above-mentioned letter the petitioner challenged it through a writ petition filed before the learned Lahore High Court, Lahore. The learned Single Judge after setting aside the above letter, remanded back the matter to the SECP for decision by the competent authority envisaged under the law on the objections raised by the petitioner within three months. He also directed that till then the acquirers' share in UBL respondent No.4 target company shall not be transacted or transferred by the respondents Nos.5, 6 and

7. Being aggrieved by the judgment of the learned Single Judge, the petitioner filed Intra Court Appeal before the learned Division Bench which was disposed of with certain modifications as mentioned above, however, as pointed out the petitioner being still not satisfied filed this civil petition for leave to appeal.

3. We have heard Mr. Imtiaz Rashid Siddiqui, learned Advocate Supreme Court for the petitioner, Mr. Abdul Hafeez Pirzada, learned Senior Advocate Supreme Court for respondents Nos.5-7, Mr. Babar Bilal, learned Advocate Supreme Court for respondent No.3 and Syed Ali Zafar, learned Advocate Supreme Court for respondent No.4.

4. Learned Advocate Supreme Court for the petitioner submitted that under the Companies Act 1984, the matter cannot be remanded to the SECP and has to be decided by the Court itself. He submitted that there were no disputed facts and only question of law was to be determined as to whether in case of a transaction between the share-holders forming major consortium, the requirement was that at the time of such acquisition the other share holders should also be informed about the acquisition and should be given an option to sell their share in the company to the acquirer at the price reserved for such acquisition. He submitted that at the time of acquisition the value of the share of UBL was Rs.40 per share whereas the shares were being acquired at Rs.80 per share and therefore the option should have been given to the other share-holders but the other members and shareholders were not provided this option although it was a mandatory condition for acquisition of shares. He submitted that only under C.P.C. and under Special Laws the appellate authority has the powers to remand the case back to the lower forum and no such powers are provided under the Securities and Exchange Commission Act, 1997 and therefore the judgment of the learned High Court is against the law. He further submitted that this Court has held in number of cases that the Courts should very rarely exercise the authority of remanding the matter and should decide the cases themselves. In this connection he relied on a judgment of this Court in the case of Chairman, WAPDA, Lahore and another v. Gulbat Khan reported as 1996 SCMR 230 in which it has been held that remand of case being not a routine matter, it should not be adopted as a matter of course to allow any party or Authority to fill in lacuna or to improve its case. He further submitted that it is also a settled law that where the matter is unlawful or invalid the entire edifice collapses and therefore, this Court should allow this civil petition and set aside the impugned judgment and decide the question of law itself. He, therefore, prayed that the impugned judgment should be set aside and this Court may decide the proposed question itself.

5. Mr. Abdul Hafeez Pirzada, learned Senior Advocate Supreme Court for respondents Nos.5-7 opposed the arguments of the learned counsel for the petitioner and supported the impugned judgment. He submitted that the learned Single Judge had infact allowed the writ petition by setting aside the impugned letter in the writ petition. He, however, said that the Court rightly held that Securities and Exchange Commission being regulatory authority should first decide the question which has been posed before it and in this case the learned High Court has directed the SECP to decide the matter in the light of the objections of the petitioner and therefore petitioner is not an aggrieved persons and he will be heard by the entire commission. He took us through the extracts from the judgment of the learned Division Bench and specially read out paragraphs 9 and 11 to point out that the learned Division Bench after examining the law had come to the conclusion that SECP is a regulatory authority and has requisite powers under section 20(4)(j) and section 6(p) of the Securities and Exchange Commission of Pakistan Act, 1997, inter alia, to regulate the matters relating to substantial acquisition of shares and the merger and take-over of companies. They also came to the conclusion that Securities and Exchange Commission has the power to take actions in accordance with law which is necessary in order to enforce and give effect to the Act and other laws which include Takeover Ordinance and in terms of section 29(b) of this Ordinance the commission has powers to issue such directives, codes, guidelines, circulars or notifications as may be necessary to carry out the purpose of Ordinance and the Rules and the Regulations made thereunder. They, therefore, upheld the order of remand and modified the order to the extent that the case will be heard by the entire commission which will take up the matter, hear all the concerned parties and decide the same in accordance with law through a reasoned order. The petitioner was also given liberty to file additional documents and take all legal and procedural objections that it may wish to raise before the commission. He submitted that minority shareholders did not suffer any loss as the price of share of UBL today is Rs.119 per share and therefore, he submitted that petitioner has no cause of grievance and prayed that this petition being meritless may be dismissed. The other ASCs for other respondents adopted the arguments of Mr. Abdul Hafeez Pirzada, learned Senior Advocate Supreme Court.

6. We have examined the case in the light of arguments of the learned counsel for the parties and have perused the records of the case including the impugned judgments and law on the subject.

7. The first argument of the learned Advocate Supreme Court for the petitioner was that in matter pertaining to SECP there is no power to remand the case back to the lower fora. On this point he relied on the judgment of Chairman Wapda (quoted supra) in which this Court had held as under:-- "

9. From these judgments it is well-settled that the Federal Service Tribunal has the power to set aside or substitute any sentence as provided by law. It is not necessary that in all cases where question of sentence arises the case should be remanded to the authority/competent Authority to reconsider, rehear or re-write the order. If the documents and material on record are insufficient to pass a judgment, then the Court may remand the case. But where on examining the material on or undisputed facts which are brought on record, the Court comes to the conclusion that the sentence or order passed is completely arbitrary and illegal, it is not necessary to remand the case for re-writing the judgment. The principles for remand of case are no longer unsettled. The primary rule is that where there is adequate evidence on record to decide the case itself the Court is not under an obligation to make order of remand. Reference can be made to Pramtha Narth Chowdhury and others v. Kamir Mondal and others (PLD 1965 SC 434), Fateh Ali v. Pir Muhammad and another (1975 SCMR 221), Arshad Ameen v. Messrs Swiss Bakery and others (1993 SCMR 216) and Syed Abdul Hakim and others v. Ghulam Mohiudddin (PLD 1994 SC 52). In certain cases there may be some technical error due to which the Court may consider the remand. However, in cases of lack of bona fide, bias, prejudice and arbitrariness, it will not be safe to remand the case to the same authority for re-writing the judgment or re-hearing." There is no cavil to the above observations of their lordships but a perusal of the above extract makes it clear that this Court has not completely barred the remand of the case but had only held that as far as possible the matter may be decided by the Court itself. In this case the learned Single Judge has set aside the impugned letter and therefore the application of the respondent seeking clarification was pending before the SECP and therefore, the Court had rightly directed the SECP to dispose of that application in accordance with law. This direction in our view does not fall in the category of the cases which cannot be remanded to the lower fora. Even otherwise this was not an appeal or revision filed under the provisions of Securities and Exchange Commission of Pakistan Act but relief was sought directly under Article 199 of the Constitution of the Islamic Republic of Pakistan 1973 through a writ petition and this Court has inherent jurisdiction to dispose of the petitions in any manner it deems lawful. This argument of the learned counsel, therefore, does not hold ground and is repelled. A perusal of the impugned judgment shows that the Court has decided the question before it in the following manner:-- "

11. At this stage, following question requires determination by this Court:-- Whether there is any restriction on the powers of SECP to examine a transaction involving substantial acquisition of shares, if necessary, investigate allegations of violation of Takeovers Ordinance and pass appropriate orders? After considering the arguments of the learned counsel for the parties, examining the law on the subject and going through the record, in our opinion, the answer to the afore-noted question has to be in the negative for the following reasons:- I. Admittedly, SECP is a Regulatory Authority and enjoys the requisite powers under sections 20(4)(j), 6(p) etc. of the SECP Act, 1997 inter alia to regulate matters relating to substantial acquisition of shares and the merger and take-over of companies. It also inter alia enjoys power to take whatever action in accordance with law, and is necessary, in order to enforce and give effect to the Act (the Ordinance, the Law of Insurance) or any other law. To our mind the expression any other law includes the Takeovers Ordinance. In terms of section 29(b) of the Takeovers Ordinance, the Commission has the power to issue such directives, codes guidelines, circulars or notifications as may be necessary to carry out the purpose of Ordinance and the Rules and Regulations made there-under, Further, the listed companies (Substantial Acquisition of Voting Share and Takeovers) Regulations 2008 empower the Commission to take action against any person who contravenes or otherwise fails to comply with any of the provisions of the said regulations. We are, therefore, of the view that being the primary regulatory authority under the SECP Act as well as the Takeovers Ordinance, there is no restriction on the Commission to deal with the matters agitated by the parties before it provided that its orders are supported by the relevant law, rules and regulations, are issued after hearing the parties who may be affected by its orders. This subject always to the fact that such orders are justiciable by courts and authorities of competent jurisdiction in appropriate proceedings under the law. II. The basic grievance of the appellant as disclosed in the petition is that the sale/purchase of shares inter se BNG & ADG was allegedly in violation of the Securities and Exchange Commission Act, 1997 and the Takeovers Ordinance read with Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations, 2008. As held above, the Commission being the primary regulatory authority in such matters under the law has the requisite powers to determine such questions in accordance with law. In view of the fact that the impugned letter issued by SECP which furnished the basis for the petitioner to challenge the same before this Court, has already been set aside, the only document left in the field is the letter sent by BG to SECP and the representation filed by the appellant. Both the said matters directly relate to the regulatory functions of SECP and hence within its jurisdictional parameters. These will be deemed to be pending before SECP and will be decided after hearing the parties for reasons to be recorded in the writing in accordance with law. The interests of the appellant have already been secured by the learned Single Judge by directing that the acquires' share in CLD shall not be transacted or transferred by respondents Nos.5, 6 and 7 acquirers. Further, pending fresh decisions, status quo with respect to title of the shares of the management of the target company has also been directed to be maintained. We are, therefore, in no manner of doubt that the interests of the petitioner have adequately and sufficiently been safeguarded till the final decision of the matter. Further we are not convinced that any prejudice would be caused to the petitioner by reason of this matter being referred to the concerned regulatory authority. We, therefore, confirm and reiterate the impugned order passed by the learned Judge in Chambers."

8. We are of the considered opinion that the learned Division Bench of the High Court has very ably dealt with the questions before it and conclusions reached by it are unexceptionable and no interference is called from this Court. This petition, therefore, being without merit is dismissed and leave to appeal refused. MWA/A-29/SC Petition dismisse