Revocation of licence

2019 MLD 1955 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Revocation of licenceScope

Plaintiff assailed direction of Regulatory Authority whereby it had directed the plaintiff to pay certain amount of sum as compensation to the families of deceased and injured persons involved in a road accident

Regulatory Authority had during pendency of suit cancelled the license of plaintiff for non-compliance of said direction

Validity

Everyone had a right to enjoy freedom of doing lawful business and trade but at the same time he was obliged to follow the law, regulating/governing such right

Negligence or violation of obligation/duty exposed him to legal action, but compliance with regulations could not be achieved unless authorities were always on their toes to ensure a sense of fear prevailed in public that no single negligence/violation would go unchecked

Plaintiff had consented to proposal of restoration of its license by Regulatory Authority on payment of compensation amount

Purpose of the suit stood served and the same was dismissed as such.

2017 CLD 1127 SECURITIES-AND-EXCHANGE-COMMISSION-OF-PAKISTAN Judicial Precedent

Ss. 42 & 439Companies (General Provisions and Forms) Rules, 1985, R.6Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33Grant of licence and direction that the Association be registered as a company with limited liabilityRevocation of licenceClub was issued a licence under S.42 of the Companies Ordinance, 1984, in pursuance whereof a company was incorporated

After grant of licence and registration of club as a company, Commissioner (C.L.D.) of the Commission, received a complaint that a club, with the same name, was already in existence since many decades and it had similar object as the present club

Commissioner (C.L.D.) instead of taking any instant action, forwarded the complaint to the club for verification of the alleged concealment of facts

Allegation contained in the complaint was denied by the club

Commissioner (C.L.D.) being dissatisfied with the response of the club issued show-cause notice

Concealment of fact having been proved, Commissioner (C.L.D.) in exercise of powers under S.42(4) of the Companies Ordinance, 1984 revoked the licence granted to the club and advised the Registrar concerned to initiate proceedings under S.439 of the Companies Ordinance, 1984 against the club

Validity

Licence was a privilege or permission granted to the licensee and the person who granted the licence, could revoke that for any reason, even before time and date fixed for its expiration

Prior to revocation of licence, licensor was required to give an opportunity of hearing to the licensee, which in the present case was given to the club

Mechanism provided in S.42(4) of the Companies Ordinance, 1984, being in line with the verdicts of the courts, Commissioner (C.L.D.) had committed no illegality or irregularity by revoking the licence

Section 439 of the Companies Ordinance, 1984, had no relevance to adjudicate the issue of concealment of facts while obtaining the licence under S.42 of said Act

Club should have been dealt only under the mechanism provided under S.42 of the Companies Ordinance, 1984

After revocation of licence, company could not continue its operation without making required amendments in constitutional documents

Impugned order to the extent of revocation of licence, was maintained, but case was remanded to the extent of initiation of proceedings against the Club under S.439 of the Companies Ordinance, 1984, with direction to the Commissioner (C.L.D.) to decide that issue accordingly.