1979 P Cr (PLP)

MUHAMMAD ZAHOORUL HAQ, J.

Complaint under section 13-1 of Capital Issues (Continuance of Control) Act, I of 1947 was made by Section Officer Ministry of Finance Government of Pakistan in the Court of City and Additional District Magistrate, Karachi against petitioners No. 1 to 6 before the Additional District Magistrate; Karachi on 15-2-1974. The same was forwarded to S. D. M. Cantt. for disposal according to law. The Assistant Commissioner & S. D. M. Cantt., Karachi took cognizance of the same complaint and issued summon to all the petitioners as accused persons. Proceedings continued for some time, but nothing was done and the petitioner thereupon moved the High Court under section 561-A, Cr. P. C. on 4th January, 1975 and prayed for the quashment of those proceedings. The complainant stated that permission had been granted to Gharo Textile Mills Ltd. on 28-10-1966 to issue capital of Rs. 15,00,000 and condition No. 7 of the consent order read as under :-- "the term of arrangement of Chief Executive; Chairman, M D etc. by whatever name called will be subject to prior approval of the controller of the capital issues." Complainant continued to allege that in September. 1970 one Mr. Mahboob Elahi, a Director of the said Company had informed the complainant that the Company bad appointed two persons (i) Mr: Mazhar Hussain Elahi and (2) Mr. Talib Hussain petitioners Nos. 2 and 3 as Managing Directors for a period of 20 years with irrevocable and unlimited powers. The petitioners are all directors of the said Company and since the two director had been appointed as Managing Directors without approval of the Controller of Capital issues the Company was asked to terminate the service of both the Capital' persons (who are now petitioners Nos. 2 and 3) and submit application accused persons for appointment of one Managing Director. The complainant continued to allege that the Company failed to comply with the above directions and the Company was again asked to terminate the services and submit compliance report by 10-71972. Since Company failed to send necessary compliance report therefore petitioners Nos. 1 to 6 were alleged to have violated paragraphs 6 and 7 of the Schedule annexed to the Capital Issues Exemption Order of 1967. Mr. Mohammad Hayat Junejo, learned counsel for by petitioner has submitted that the complaint was male fide and was designed to satisfy the private grudge of one director Mahboob Elahi who was having some dispute with the petitioner. He further states that much before filing of this complaint the petitioner had already called a General Meeting of the relevant Company on 12-8-1972 and terminated the services of petitioners Nos. 2 and 3 as Managing Directors and the information of this decision of the Company had been duly conveyed to the Controller of Capital Issue on 18-8-1972 and in fact these two directors had resigned prior to the decision of the General Body Meeting on 13-7-1972. Mr. Hayat hag further submitted that article 53 of the Articles of Association of the relevant Company which the counsel has filed, required that the General Body Meeting can take place only after 21 days notice, and that a decision of terminating the services of the Managing Directors can be taken only by the General Body of the Company which had made their appointment initially. Mr. Hayat has also relied upon P L D 1977 Lah. 779 where Mr. Justice Shamim Hussain Qadri has come to the conclusion that the Government could only control the remune ration of the Directors, but could not control their salary and any instructions issued to the contrary were ultra vires. Mr. Ghulam Ali Agha learned counsel appearing for the State agreed with the submissions made by Mr. Mohammad Hayat Junejo and he h submitted that there is no justification to file a prosecution against the petitioner when they had thus already removed the Managing Directors in compliance of the direction of the Controller of the Capital Issues. I am of the view that the submissions made by the petitioner's counsel and concede by the learned counsel for the State in respect of the merits of the com plaint are justified as the complaint itself shows that it has been made o the basis of information supplied by one Mahboob Elahi, who was the Director of the Company and the information was supplied in 1970 but nothing was done on the same till 1972. The petitioners bad committed a offence by making the initial appointment which was in contravention of paras. 6 and 7 of the Schedule, but since the complainant had suggested that the Director should be; removed and had required the compliance of its direction by 10-7-I9'12, it showed that the complainant was having an intention of not pursuing the matter any further if the Directors were removed by the Company within the time suggested. It is only the question of the complaisance not having been made within the given time of 1U-7-1972 which has made the complainant angry and prompted it to file the- complaint. But the complainant has not, taken into consideration the reasonable explanation which had been offered by the Company that it could not comply with the direction within the given time on account of the requirement of a notice of 21 days before calling a General Body Meeting of the Company. This was a correct explanation and should have ban ordinarily accepted by the complainant more particularly so when the explanation had been tendered about 2 years before the filing of the complaint. If the complainant was of the view that immediate compliance of it's directions was necessary and failure to do so deserved to be seriously taken notice of then they should have filed a complaint within a reasonable time, but they did not do so and it seems that they did not take a serious view of non-compliance within the given time and were satisfied that after all the Managing Directors had been removed and therefore the purpose of their direction had been achieved. After all it was only a technical offence that had been committed. The complainant waited for about 18 months before filing of the complaint arid what prompted them to move after so long a time is not explained in the complaint. Whatever may have prompted the complainant to make .a complaint after so much lapse of time and after compliance of their direction could not be a desire to secure compliance o their orders and it was therefore something extraneous. There is n explanation from the complainant as to hove they have thought to make such complaint after lapse of so much time and particularly after their direction had been complied with. Moreover there is no explanation offered as to why the Director of the Company Mr. Mahboob who had informed complainant had not been made an accused. After all every Director was! equally responsible therefore why pick and choose between them. Further more there was no question of any moral turpitude being involved in this) matter and therefore in the circumstances of this case I do not think it would enhance the interest of justice if the complaint is allowed to b4 proceeded with. In fact it would be very harsh to the petitioners to allow this complaint to continue after they have voluntarily terminated the appoint ment of the Managing Directors. More particularly so when the petition wall admitted in 1975 and the proceedings were stayed. I will therefore quash the proceeding pending in the Court of S. D. M., Cantt., Karachi against the petitioners under section 13-I of Act, I of 1947. Proceedings quashed.