1988 PLP 1731 (CLC)

SALEEM AKHTAR, J.‑‑The petitioner is proprietor of firm known as Faria International. He published an advertisement in Daily 'Jang' dated 24th and 27th July, 1987 inviting capital from public. The advertisement reads as follows: "A well‑recognised establishment of importers and exporters requires capital at 7% P.M. Insurance guarantee will be provided for the capital. Faria International." The respondent tNo.2 served a notice dated 31‑3‑1987 on the petitioner calling upon him to show cause why he should not be prosecuted for violation of section 27‑A of the Banking Companies Ordinance. The petitioner replied this notice on 28‑9‑1987 and inter alia stated;

Due to unawareness of the Banking Companies Ordinance section 27‑A we published our advertisement in the Newspaper. As we came to know about the law, we stopped the same advertisement. As admittedly no fund collection by the Firm for inviting for joining any one in partnership prohibited under the law, we hope, we will be excused for the same." The respondent No.2 has started prosecution and the matter was fixed in the High Court when the petitioner was ordered to execute bond for personal appearance. The petitioner has challenged that section 27‑A of the Banking Companies Ordinance is illegal, ultra vires and violates Fundamental Rights relating to trade and business as guaranteed by the Constitution. Section 27‑A was added in the Ordinance by Finance Act, 1987 which ,reads as follows:‑ "27‑A. Restriction on advertising for deposits:‑‑ No company, firm or person, not being a banking company or a corporation or authority established by the Federal Government or a company duly authorised in this behalf by the Controller of .Capital Issues and Corporate Law Authority, or the Registrar Co operative Societies, shall invite deposits of money from the public through advertisement in‑the public media or by postal circulars, handbills, displays in public places or by any other means.", and Section 83 (ID) was also added simultaneously which reads as follows: ‑ "(ID) If any company, firm or person contravenes the provisions of section 27‑A, the Chief Executive of the company and its directors, every member of the firm and such person shall be punishable with simple imprisonment for a term which may extend to six months, or with fine which may extend to one hundred thousand rupees or with both. Mr. Syed Sami Ahmed the learned counsel for the petitioner has challenged section 27‑A on the ground that it cannot be given effect as it nullifies the right of the petitioner to invite capital from the public for the purposes of financing his business in terms of Explanation to section 5 (c) and is also derogatory to the Fundamental Rights conferred by the Constitution. The contention of the learned counsel is based on interpretation of section 5 (b) and (c) of the Ordinance which defines the words 'Banking' and 'Banking Company' as follows: ‑ "5. (b)‑ 'Banking' means the accepting, for the purpose of leading or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise; (c) 'Banking company' means any company which transacts the business of banking in Pakistan. Explanation; Any company which is engaged in the manufacture of goods or carries on any trade and which accepts deposits of money from the public merely for the purpose of financing its business as such manufacturer or trader shall not be deemed to transact the business of banking within the meaning of this clause." According to section 5 (b) acceptance of deposits of money from public for lending or investment purposes which is made repayable to the creditor on demand of any other manner and can be withdrawn by cheque, draft, order or in any other manner amounts to transacting banking business. The explanation to section 5 (c) clarifies that if any company which is engaged in manufacturing of goods or any trade accepts deposits of money from public for financing its own business of manufacturing and trading it will not amount to carry on the business of banking. ,By section 27‑A a restriction has been imposed that any person which is not a banking company or corporation or authority established by the Federal Government or a company duly authorised in this behalf by the Controller of Capital issues and Corporate Law Authority or the Registrar Cooperative Societies shall invite funds from public .through advertisement in public media or displaying in public. It therefore imposes restriction on inviting deposits through public media like television, radio, advertisement in newspaper using signboards at public places, distributing handbills or circulating advertisement by post, making announcement or displaying at public places or any other manner which includes public advertisement orally, visually, demonstrative or in writing. Having ascertained the nature of section 27‑A, it is to be considered whether it amounts to imposing restriction on trade or is a total prohibition on trade. It is an admitted position that inviting deposits of honey from public is not the business of the petitioner. He is engaged in import, export and manufacture of leather goods as well business of construction. Therefore, even if section 27‑A imposes any prohibition it is in respect of certain mode of advertisement for inviting deposits of money from public. It is not a prohibition on business itself. It merely regulates inviting of deposits of money from public. . The petitioner can hardly be aggrieved by section 27‑A. The contention that as the petitioner is prohibited from inviting capital through public media he cannot raise‑ funds and will not be able to run his business cannot be a ground for challenging section 27‑A. The petitioner can avail other means to raise fund for his business and by imposing restriction as contemplated by section 27‑A the petitioner has not been prohibited from carrying on his business. Section 27‑A prohibits invitation of deposit of money from public through public media by any person, firm or company which is not a banking company. We are unable to understand how section 27‑A is in conflict with section 5 (c). It merely imposes restriction which is in consonance with the object of the Ordinance and in furtherance of section 5 (c). The petitioner has claimed a right by invoking Explanation to section 5 (c). It is well settled that the object of an explanation to a provision of a statute is to clarify it and not to create any right independent of the provision to which it is appended. The learned counsel contended that the expression "or by any other means" conveys a meaning that a person cannot invite deposits of money from public in any manner whatsoever. In our view this contention is not well‑founded as the words "any other means" as used in section 27‑A do not mean in any other manner whatsoever. It is a well‑recognised principle of interpretation of statutes that if specific words are followed by general words then the meaning of the general words will be understood, comprise and include the same kind of meaning which is given to the preceding expression unless a contrary intention is expressed. Maxwell on "The Interpretation of Statutes", 12th Edition at page 297 has commented as follows:‑ "But the general word which follows particular and specific words of the same nature as itself takes its meaning from them and is presumed to be restricted to the same genus as those words. For. "according to a well‑established rule in the construction of statutes, generally terms following particular ones apply only to such persons or things as are ejusdem generis with those comprehended in the language of the Legislature". In other words, the general expression is .to be read as comprehending only things of the same kind as that designated by the preceding particular expressions, unless there is something to show that a wider sense was intended, as where there is a provision specifically excepting certain classes clearly not within the suggested genus." In the present case the preceding words are public media, by postal circulars, handbills displayed in public places which clearly mean that the mode of invitation should not be through public media, nor by visual, oral, written or demonstrative advertisement in public. Therefore, the words "any other means" will be taken to mean only such modes which are in the nature of public advertisement or publicity and will include advertisement through television, radio, cinema slide, neon signboards, boarding at public places, prints and slogans written on buses, vehicles, trains, public places and public announcement etc. In this background we will now consider the contention that section 27‑A contravenes Articles 4 and 18 of the Constitution. In fact the argument is based on Article 18 which reads as follows:‑ "

18. Subject to such qualifications, if any, as may be prescribed by law, every citizen shall have the right to enter upon any lawful profession or occupation, and to conduct any lawful trade or business: Provided that nothing in this Article shall prevent‑ (a) the regulation of any trade or profession by a licensing system; or (b) the regulation of trade, commerce or industry in the interest of free competition therein; or (c) the carrying on, by the Federal Government or a Provincial Government, or by a corporation controlled by any such Government, to any trade, business, industry or service, to the exclusion, complete or partial, of other persons." The opening words of the Article 18 are very significant. It is the right of every citizen to adopt any lawful profession or trade, subject to such qualifications as may be prescribed by law. Therefore, it is only a lawful trade or occupation which can be adopted and it is subject to such conditions or restrictions as may be imposed by law which should be reasonable. In Government of Pakistan v. Akhlaq Hussain P L D 1965 SC 527 while considering Fundamental Right No.8 as provided by the Constitution of Pakistan (1962) which was similar to Article 18, Yaqoob Ali, J. (as he then was) at page 595 of the report observed as follows:‑

"The provisions in Fundamental Right VIII that a citizen 'possessing such qualifications, if any, as may be provided by a system of licensing" empower the Legislature as well as the authorities concerned to impose restrictions on the exercise of the right. They must, however, be reasonable and bear true relation to 'trade' or 'profession' and for purposes of promoting general welfare. Even in those countries where the right to enter upon a trade or profession is not expressly subjected to condition similar to Fundamental Right VIII, it was eventually found that State has, in the exercise of its 'police power' the authority to subject the right to a system of licensing i.e. to permit a citizen to carry on the trade or profession only if he satisfies the terms and conditions imposed by the prescribed authority for the purpose of protecting and promoting general welfare, e.g; Nashville Co. v. Alabama (1888) 128 US 96, Carotene Products Co. v. U.S. (1944) 323 US 18, Corn Products v. Eddy (1919) 249 JS 427, Booth v. Illinois (1902) 184 US‑425 (429) West Coast Hotel v. Parrish (1937) 300 US

379. It may be added that as held in Eric R. Co. v. Williams (1914) 23 US 685, in the exercise of its police power the State cannot resort to arbitrary or oppressive means to pursue its ends or objectives, but anything that it may do should be shown to bear a real and substantial relation to the pursuit of general welfare. The right is, thus, not unfettered; but, as said a little while ago, the restrictions must be reasonable in that the qualifications must bear a true relation to trade and profession and for purposes of promoting general welfare

It is also a settled principle that in some cases power to regulate would include power to prohibit; e.g., Commonwealth of Australia v. The Bank of South World (1950) A C

235. To sum up the restrictions imposed by the Legal Practice (Disqualifications) Ordinance (II of 1964) are reasonable and in the interest of general welfare. The Ordinance, is therefore, a valid law and the learned Judges of the High Court were in error in striking it down on the ground of repugnancy with Fundamental Right No.8." In Hamdard Dawakhana v. India A I R 1960 SC 554 the prohibition imposed by the Drug and Magic Remedies (Objectionable Advertisements) Act on publication of advertisements in respect pf magic remedies in the newspaper and other forms of publications was challenged on the ground that it was an abridgement of the freedom of speech. It was held that the advertisement related to trade or commerce and was intended to prevent unethical advertisement in order to discourage self‑medication. The restriction was imposed in the interest of general public and was held to be valid. The learned counsel for the petitioner has referred to Hughes v. State of New South Wales (1954) 3 AER

607. This was an appeal by Special Leave to Privy Council from the judgment of the High Court of Australia. The appellants 'carried business as a motor carrier of general merchandise between Sydney of New South Wales and Brisbane in the State of Queensland'. They challenged the licensing imposed by an Act passed by the Parliament of State of New South Wales on‑ the ground that it infringed section 92 of the Constitution of the Commonwealth of Australia which provides that inter‑state trade shall be absolutely free. Considering the provision of section 92 which guarantees completely free interstate trade and commerce it was held that imposition of licence for trade, grant of which depended on the discretion of an officer was restriction which infringed section

92. This rule does not apply to the present case as not absolute freedom of trade has been guaranteed by Article 18 which is completely different from section 92, Mr. S.Sami Ahmed also referred to Saghir Ahmed v. U.P., P L D 1956 SC (Ind.) 148 in which the question whether the word "restriction" in Article 19 (6) of the Constitution of India include prohibition or total deprivation as well was kept open. The first unambiguous judicial pronouncement was made by the Supreme Court of India in Narendra Kumar v. India A I R 1960 SC 430 where it was held that "restriction" includes "prohibition". Similar view was expressed by our Supreme Court in Akhlaq Hussain's case quoted above. It seems to be well‑settled that limited right .is vested in Government to prohibit the trade which is illegal, immoral or prejudicial and injurious to the health and welfare of the public. In the present case only restriction has been imposed on side of advertisement for inviting deposits of money from public. As such restriction is for the welfare of the general public in our view. It does' not violate. Fundamental Right as guaranteed by Article 18 of the Constitution. A person can adopt any lawful trade or occupation but the Government has the power to regulate it and impose restrictions for protecting public interest or for promoting general welfare. If the public interest demands in certain cases it can even prohibit any trade or business. The restrictions, however, should be reasonable and should have nexus with the trade. In the present case the restriction has been imposed on invitation of deposit of money from public by advertising through public media. Now‑a‑days advertisement through public media is a great power to attract and influence people. The restriction was imposed to save public from throwing their money in the hands of persons who though no entitled to carry banking business invite from public deposits of money on attractive terms and returns and ultimately vanish like thin air. The unwary public in the hope of reaching el dorado in a short time is cheated, defrauded and rendered penniless. As the restriction is to regulate trade and business and in the interest of public welfare it does nod offend Article 4 or

18. We, therefore, dismiss the petition in limine. A. A./F‑71/K Petition dismissed.