Prosecution by Commission

2014 CLD 83 ISLAMABAD Judicial Precedent

Ss. 17 & 24Securities and Exchange Commission of Pakistan Act (XLII of 1997), Ss. 29 & 38Brokers and Agents Registration Rules, 2001Constitution of Pakistan, Art.199Constitutional petitionProsecution by CommissionIllegalities committed by brokerPetitioner invested in stock exchange through his broker and suffered huge loss

Grievance of petitioner was that instead of taking penal action against broker, Securities and Exchange Commission of Pakistan, transferred his complaint for arbitration on the claim

Validity

Discretion vested with Securities and Exchange Commission under S.29 of Securities and Exchange Commission of Pakistan Act, 1997, was to be exercised with caution by applying yardstick for examining every case on its own merits

Specific allegation of non-provision of documents and loss of billions of Rupees could not be treated in causal manner and could not be set aside by taking the stance that it would open floodgate of such complaints

Function of the Commission was not of mere post office but of an agency, under duty, to conduct prosecution of offences in fit cases and such fitness could only be determined through investigation/inquiry, conducting a speaking order

Securities and Exchange Commission of Pakistan, on receipt of complaint was duty bound to conduct preliminary inquiry for ascertaining as to whether any offence falling under S.17 of Securities and Exchange Ordinance, 1969, was prima facie made out or not

In case offence was made out, the Commission should have itself proceeded with the same in terms of Ss.29 & 38 of Securities and Exchange Commission of Pakistan Act, 1997

After preliminary probe, if the complaint did not find trace of such violation/offence, it could be referred to alternate dispute resolution by treating same as a dispute complaint

High Court set aside the action of Securities and Exchange Commission of Pakistan sending complaint of petitioner for arbitration, as the same was unjust and improper

High Court directed Securities and Exchange Commission of Pakistan to proceed with complaint of petitioner

Constitutional Petition was allowed in circumstances.