2018 PLP 1194 (CLD)
SHAUKAT SHAFI SECURITIES (PVT.) LIMITED — Appellant Versus EXECUTIVE DIRECTOR, (PRPD), SECP, ISLAMABAD — Respondent
| Citation | 2018 PLP 1194 (CLD) |
| Forum / Court | Securities and Exchange Commission of Pakistan |
| Bench Members | N/A |
| Parties | SHAUKAT SHAFI SECURITIES (PVT.) LIMITED — Appellant Versus EXECUTIVE DIRECTOR, (PRPD), SECP, ISLAMABAD — Respondent |
| Primary Law | Securities Act (III of 2015) |
Q1: What are the key laws and sections cited in 2018 PLP 1194 (CLD)?
This judgment primarily cites: Securities Act (III of 2015) as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 2018 PLP 1194 (CLD)?
The case was heard and decided by the Securities and Exchange Commission of Pakistan bench comprising: N/A.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 2018 PLP 1194 (CLD) (SHAUKAT SHAFI SECURITIES (PVT.) LIMITED — Appellant Versus EXECUTIVE DIRECTOR, (PRPD), SECP, ISLAMABAD — Respondent). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Representation
- Asif Khan, Deputy Director (SMD) and Salman Arshad, Deputy Director (SMD) for Respondent.
Headnotes / Summary
S. 150
Securities Brokers (Licensing and Operations) Regulations, 2016, Regln.6(4)
Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33
Failure to file online monthly statements of net capital balance and liquid capital
Appellant-company allegedly, in contravention of Pakistan Stock Exchange notice and Regln.6(4) of the Securities Brokers (Licensing and Operations) Regulations, 2016, failed to file online monthly statements of the net capital balance and liquid capital for relevant months, despite reminders; whereupon penalty of Rs.300,000 was imposed on the appellant-company for said failure, after issuance of show cause notice
Appellate Bench of the Commission had observed while adjudicating the matter, that Executive Director of the Commission, had not applied its judicial mind
Executive Director in order to establish the said violation had relied upon Regln.6(4) of Securities Brokers (Licensing and Operations) Regulations, 2016, and the Pakistan Stock Exchange Notice
None of the said provisions, required online filing of statements
Show-cause notice, did not contain any such allegation
Appellate Bench of the Commission being a quasi-judicial body had to see, whether the Adjudicating Authority had applied the relevant law in letter and spirit or failed to demonstrate the desired application of law
Appellant-company had been penalized for the violation, which neither was alleged in the show-cause notice, nor was the same a requirement of law
Entire proceedings against the appellant, including impugned order, were absolute nullity
Impugned order was set aside having been passed without any legal sanction.
Judgment & Decree
1. This Order is in the matter of Appeal No. 46 of 2017, filed by Shaukat Shafi Securities (Pvt.) Limited (the Appellant) against the Order dated 28/04/17 (the Impugned Order) passed by the Executive Director (the Respondent) under section 150 of the Securities Act, 2015 (the Act).
2. Brief facts of the case are that it has been alleged by the Respondent that the Appellant in contravention of Pakistan Stock Exchange (the PSX) Notice No. PSX/N-5086 dated September 15, 2016 (the PSX Notice) and regulation 6(4) of the Securities Brokers (Licensing and Operations) Regulations, 2016 (the Regulations) had failed to file online monthly statements of net capital balance and liquid capital (the Statements) for the months of October 2016 and November 2016 and December 2016 (Default Period). The PSX further directed the Appellant vide reminders dated December 16, 2016, and January 18, 2017, to file the Statements within 15 days of the subsequent month. The Securities and Exchange Commission of Pakistan also issued a reminder on December 28, 2016.
3. In view of above stated violation, a Show Cause Notice dated 14/02/17 (the SCN) was issued however, the Appellant has not responded. Hearing in the mater of SCN was held on 02/03/17, which was attended by Mr. Usman Shafi. The SCN proceeding was concluded through the Impugned Order and a penalty of Rs. 300,000/- was imposed on the Appellant by the Respondent.
4. The Appellant has challenged the Impugned Order before the Appellate Bench (the Bench) through the instant Appeal and requested to set-aside the Impugned Order whereas, the Respondent has prayed to dismiss the Appeal.
5. The Bench has heard the parties and perused the record. It has been noticed by the Bench with great concern that while adjudicating the matter the Respondent has not applied a judicial mind. The Respondent, to establish the violation of non-filing of online Statements had relied upon the Regulation 6(4) of the Regulations and the PSX Notice, however, none of these provisions require online filing of the Statements. The most astonishing fact of the case is that the Impugned Order has been passed for non-filing of online Statements, however, the SCN does not contain any such allegation.
6. The Bench is the appellate quasi-judicial body of the Commissions therefore, while deciding appeals under section 33 of the SECP Act, 1997, it has to see whether the adjudicating authority has applied the relevant law in letter and spirit or failed to demonstrate the desired application of law. In the present case, the Appellant had been penalized for the violation, which neither was alleged in the SCN, nor was it a requirement of the law. Accordingly, the entire proceedings against the Appellant, including the Impugned Order are absolute nullity. Therefore, the Bench, hereby set aside the Impugned Order being passed without any legal sanction. The Appeal is allowed without any order as to cost. HBT/11/SEC Appeal allowed.