Haji KHUDA BUX NIZAMANI Versus ELECTION TRIBUNAL

SABIHUDDIN AHMED, J.‑‑ ‑The petitioner filed his nomination papers as. a candidate for the National Assembly Constituency No. NA‑214 Sanghar‑I. At the time of scrutiny certain objections were raised as to his candidature including the objection preferred by the respondent No.3 to the effect that he was a defaulter in the payment of utility bills "outstanding against him being owner of M/s. Khairpur Textile Mills and Ismail Textile Mill, Khairpur." It appears from the order of the Returning Office that it was contended on behalf of the petitioner , that he had paid his share of dues in respect of his share holding and could, therefore, not be treated as defaulter. The Returning Officer, the respondent No.2, however, overruled the objections and accepted the nomination papers filed by the petitioner.

2. The respondent No.3, thereafter, approached the learned Election Tribunal through an "appeal" against the decision of the Returning Officer contending that an amount of Rs.3,044,000 in respect of two Textile Mills was outstanding even after payment of Rs.2,70,000. Neither the exact amount due in respect of the two mills was mentioned in the memo. of appeal nor was it stated whether they were proprietary concerns of the petitioners, partnership firms or incorporated companies. It was only stated that the petitioner was "a defaulter of H.E.S.C.O: (WAPDA Khairpur) where he is was running two Textile Mills named Khairpur Textile Mills and Ismail Textile Mills". However, copies of the applications for grant of connection purported to be signed by the petitioner in respect of the two mills were annexed wherein under the column "name of applicant or in case a company, of the Managing Director", the petitioner's name as Managing Director of Khairpur Textile Mills Ltd., and Ismail Textile Mills Ltd. was declared. Annexure "C" to' the memo. of appeal contains a statement signed by the Revenue Officer, H.E.S.C.O. to the effect that Rs.8,58,,000 were due against Ismail Textile Mills and Rs.2,456,794 against Khairpur Textile mills.

3. Apparently without adverting to the question of maintainability of appeal or serving a show‑cause notice under the suo motu jurisdiction of the Tribunal notice of appeal was served upon the petitioner and after hearing the parties through their respective learned counsel, the Tribunal accepted "appeal" and rejected the nomination papers of the petitioner. This order has been called in question through this petition under Article 199 of the Constitution.

4. This petition was presented on Saturday 14‑9‑2002 and was placed before one of us (Sabihuddin Ahmed, J.) as the Senior Puisne Judge for urgent orders as the Honourable Chief Justice was not available. Since the last date for finalizing the list of candidates was to expire and Honourable Mr. Justice Ali Aslam Jafri (who regularly sits in DB‑II; was out of station, special Division Bench was constituted with Honourable Mr. Justice Amir Hani Muslim at the motion state who was available at that time. We also requested learned Attorney‑General for Pakistan, who happened to be available at Karachi to assists us. Learned Attorney‑General suggested that passing of an interim order might amount to interruption of the electoral process, but the interest of the petitioner could always be protected in view of the pronouncement of the Division Bench judgment of this Court in Babar Khan Ghori v. Election Tribunal No. 1 (1998 CLC 1304) to the effect that even after lapse of time for finalization of the list could be revised under the directions of the Court. As regards the maintainability of this petition both learned counsel or the petitioner as well as the learned Attorney‑General appear to be of the view that since the impugned order was passed by a Tribunal (though comprising of two Honourable Judges of this Court) and not the High Court itself and in deference to some recent observations, of the Honourable Supreme Court (where orders of the learned Tribunals were sought to be assailed before the apex Court) it could not be said that petitions under Article 199 were not maintainable. The Bench, therefore, admitted the petition and fixed it for regular hearing today. By an order of the Honourable Chief Justice it was fixed for hearing before this Bench. Since the impugned order was passed by a Tribunal consisting of two Honourable Judges of this Court we thought that it might perhaps have been more appropriate that the petition be heard by a larger Bench. Nevertheless, since, there is an element of great urgency involved, this Bench had been specifically constituted to hear this case, no objection to the hearing of the petition by this Division Bench was taken by any of the parties and in law there was no embargo upon its hearing by a Division Bench, we proceeded to hear learned counsel and decide the petition on merits.

5. Messrs I.H. Zaidi and Shehenshah Hussain learned counsel for the petitioner have assailed the order of the learned Tribunal on a number of grounds. In the first place it is contended that an appeal against acceptance of nomination papers of a candidate could only be preferred by another candidate and not any other person in terms of section 14(5) of the Representation of the People Act. Secondly it is argued that indeed under section 14(5‑A) inserted through Ordinance XXXVI of 2002 a Tribunal could, on the basis of material brought to its knowledge by any source, to the effect that a candidate whose nomination papers have been accepted is a defaulter of loan, Government dues or utility. charges or is otherwise disqualified from being elected, take suo motu notice and reject the nomination. Nevertheless, an order under the aforesaid provision of law could only de passed after giving show‑cause notice to the candidate and in the instant case this mandatory prerequisite of law was not complied with. Thirdly it was argued that the learned Tribunal failed to appreciate that the petitioner could not be treated as a defaulter in respect of utility dues of two limited liability companies and the learned Tribunal completely overlooked the well settled principle that a company is distinct legal entity from its share holders. Finally it was contended that the petitioner could not be held liable for the entire amount of utility bills allegedly payable by the two companies as there was no evidence to indicate that he was the, sole proprietor of two mills or they were partnership concerns

6. With respect the first, contention though the' learned counsel may be technically correct to the extent that an appeal against the order of the Returning‑ Officer could only be filed by a contesting candidate, .we are not inclined to attach much importance to this objection. Section 14(5‑A) does not require any information to be given in any' particular form and we are inclined to hold that the learned Tribunal was well within its jurisdiction to treat the memo. of appeal as an information and proceed according to the requirements of law.

7. The second objection, however, appears to have more merit. It is no doubt correct that substantial compliance with the principles of natural justice was effected when notice of the appeal was given to the petitioner. Nevertheless with profound respects it ought to have been kept in view that the Honourable Supreme Court has consistently held that when notice to a party is required by way of an express provision of law as distinguished from a mere principle of natural justice strict compliance ought to be made and mere substantial compliance might not be sufficient. We are constrained to record these observations in view of the tact that, adequate documentary material did not appear to come to the notice of the learned Tribunal in the absence of a proper show‑cause notice.

8. Indeed we are conscious of the physical constraints under which the learned Tribunals constituted under section 14(5) of the Representation of the People Act are required to work inasmuch as they have to dispose of number of appeals within a short period of time so as to ensure that the electoral process is not‑delayed, therefore, the Legislature had advisedly ordained that such appeals are to be "summarily decided". At the same time, however though the Legislature has conferred upon a Tribunal the power to suo motu reject the nomination papers of a candidate such power is predicated by the conditions' of a show‑cause notice to the candidate and the satisfaction of the Tribunal that the candidate is actually a defaulter or suffers from any disqualification. It may also be seen that the scheme of the electoral laws does not stipulate a large scale of disqualification of candidate prior to the poll but it is designed only to ensure that a person suffering from a disqualification does not occupy a representative office. This may be evident from a comparison of sections 68 and 70 of the Act relating to election petitions. Under section 68 the election of a returned candidate can be declared void if he was disqualified from contesting on the nomination day but under section 70 the election as a whole could be declared void only if the result was materially affected by reasons of failure of any person to comply with the provisions of law or the prevalence of extensive corrupt practices. In other words the mere factum of an unqualified person participating in the election may .not vitiate the election as long as he is not declared elected. We are, therefore, of the view that whereas an appear under section 14(5) by the very nature of things has to be summarily decided, the powers under section 14(5) need to be cautiously exercised after the Tribunal is fully satisfied that the candidate was actually a defaulter or otherwise disqualified from contesting election,

9. Coming to the mainstay of the petitioner's contention, Mr. Idrees Naqshbandi learned counsel entering appearance on behalf of the respondent No.3 candidly acknowledged that both the Textile Mills were owned by limited liability companies incorporated under the Companies Ordinance, 1984. Indeed the petitioner has filed copies of Form‑A in respect of both the companies, according to him he is still a shareholder and Chief Executive of the Khairpur Textile Mills Ltd., but share holding is confined to 76,000 shares out of total shares of 97,977. With respect to Ismail Textile Mills, he stated that though he was a Director of the Company at a time but disposed of his shares in 1986 and ceased to remain its Director. These factual assertions are not controverted by the respondent No.3, It is in fact even evident from the application for connection relied upon by the respondents that both companies have been described as limited companies. They state that the supply is required at the premises of Khairpur Textile Mills Ltd., and the bills and correspondence has also to be made at the same address. The petitioner's name only figures under the column in other words the application form itself indicates that if the applicant is a corporate entity the name of the Managing Director is to be mentioned.

10. Mr. Naqshbandi, however, attempted to argue that the respondent No.3 was entitled to recover electricity charges under the WAPDA Act and tire provisions of the Companies Ordinance were altogether irrelevant in the context. We requested learned counsel to point out any provision of the WAPDA Act dealing with recovery of electricity charges from consumers or overriding the provisions of the Companies Ordinance but he was not able to do so. He only referred to section 2(c) of the Electricity Act which defines a consumer to mean 'any person who is supplied with energy by a licensee or whose premises which for the time being connected for the purpose of supply of energy with the works of a licensee". Indeed section 12 of the WAPDA Act provides that WA PDA would be deemed to be a licensee for the purposes of the Electricity Act. However, it appeared that learned counsel had, misconceived the expression "person" .as being only confined to a natural person and not a juristic person. Indeed there can be no shadow of doubt that any corporate person would also fall within the definition of a consumer.

11. Mr. I. H. Zaidi learned counsel for the petitioner pointed out that it had been specifically urged on behalf of the petitioner that he could not be held personally liable for the dues of the Companies of which he was the Managing Director. In support of his contention he relied upon the following observations in the impugned order:‑‑

"The learned Advocate representing the respondent No. 1 attempted that under Companies Ordinance the dues or charges are not against the respondent No.1 personally. Therefore, he could not be treated as defaulter. According to the learned, counsel under law the Directors are to run the affairs of the Mills and not the Managing Director."

12. Nevertheless, these contentions were not taken consideration as is evident from the conclusions recorded by the learned Tribunal to the following effect:‑‑

"The electricity connection was obtained under WAPDA Act, therefore, it is governed by that Act. The respondent No. 1 is the partner who submitted the application forms for getting the connection, therefore, he is the electricity consumer. Under WAPDA Act the electricity consumer is responsible for the power consummation charges. Thus the respondent No.1 is the person responsible for payment of the electricity charges.

Even otherwise in view of section 25, Partnership Act the partners are jointly and severally responsible for the charges against the concern."

13. With profound deference to our learned brothers constituting the Tribunal, we are constrained to observe that it is one of the basic principle of Company Law that a company is a separate and distinct legal entity from its shareholders or Directors and the liability of share holders in the liability company is limited to the extent of the unpaid amount on his shares unless otherwise provided in its memorandum. This principle was apparently overlooked while holding the petitioner liable. At the same time it appeared somewhat unfortunate that the learned Tribunal proceeded to apply the principles of Partnership Act, though it seems apparent from the record that it was nobody's case, that the two Textile Mills were owned by partnership firms.

14. The learned Attorney‑General appearing at Court notice agreed that the impugned. order could not be defended on this ground though he contended that the veil of corporate personality might have to be lifted for the purposes of section 99(1‑A)(t) read with section 12(2)(d) and Explanation ‑‑ (ii) thereto. In other words his precise contention was that under section 12 (2)(d) a candidate had to file a declaration to the effect that he or his spouse or dependents or a business concern mainly owned by him is in default or utility charges etc. ; and the expression "mainly owned' has been explained to mean a holding or controlling a majority interest. in a business concern. Therefore, according to him a harmonious construction of the above provision and section 99(1‑A)(t) which disqualifies a person. in default of utility expenses might .require .that a person holding majority shares in corporate company may also be so disqualified. Nevertheless, since in the matter before us it is nobody's case that the petitioner possessed majority shares in either of the two companies this question would not arise and we would refrain from examining this contention.

15. Learned Attorney‑General, however, argued with a great deal of emphasis that notwithstanding the illegality in the impugned order, we ought to be conscious of the limitations on our jurisdiction under Article 225 of the Constitution. He argued that Article 225 of the Constitution explicitly provided that no election to a House of Provincial Assembly, could be called in question except by an election petition presented to such Tribunal and in such manner as may be determined by an Act of Parliament. He relied upon the pronouncement of the Honourable Supreme Court in Election Commission of Pakistan v. Javed Hashmi (PLD 1989 SC 396) where their Lordships had held that ate proceedings in the electoral process even prior to the poll were covered by Article 225 and the jurisdiction of this Court under Article 199 did not extend to interference with orders passed during such process. With his usual candour he also pointed out that in the subsequent case of Ghulam Mustafa Jatoi v. Additional District and Sessions Judge (1994 SCMR 1299), interference with the decision of a functionary under the electoral laws under Article 199 was held to be permissible under very limited circumstances and this view was followed in the subsequent cases of Aftab Shahban Mirani v. President of Pakistan (1998 SCMR 1863) and Chowdhri Nazir Ahmed v. Chief Election Commissioner (PLD 2002 SC 184).

16. Learned Attorney‑General attempted to argue that Ghulam Mustafa Jatoi's case was one of an exceptional nature where after acceptance of the nomination papers of the appellant on 1‑9‑1993, the Returning Officer rejected the same 13 days thereafter without serving any notice upon the appellant and by that time the last date for filing an appeal before the Tribunal had expired. The appellant moved the High Court under Article 199 of the Constitution but the petition came to be dismissed in view of the pronouncement in Javed Hashmi's case mentioned above. It was under these circumstances that their Lordships of the Honourable Supreme Count allowed the appeal holding that when the appellant had no remedy left to seek redress the Constitutional jurisdiction of this Court under Article 199 could be invoked. He attempted to argue that present case was distinguishable from that of Ghulam Mustafa Jatoi inasmuch as the petitioner was duly heard by a Tribunal comprising of two Honourable Judges of this Court.

17. With the greatest deference to our learned colleagues and with profound respects to the erudition of the learned Attorney‑General, we regret we are unable to agree might be worthwhile to reproduce para. 26 of the unanimous pronouncement of, the five members' Bench in Ghulam Mustafa Jatoi's case authored by Ajmal Mian, J. (as his Lordship then was):------

"The upshot of the above discussion is that generally in an election process the High Court cannot interfere with by invoking its Constitutional jurisdiction in view of Article 225 of the Constitution. However, this is subject to an exception that where no legal remedy is available, to an aggrieved party during the process of election or after its completion, against an order of an election functionary which is patently illegal/without jurisdiction and the effect of which is to defranchise a candidate, he can press into service Constitutional jurisdiction of the High Court. The majority view in the case of Election Commission of Pakistan v. laved Hashmi (supra) is not applicable. We may clarify that we do not intend to overrule the above majority view in the above case. The above case in fact is distinguishable from the instant case for the reasons already discussed hereinabove."

18. Having carefully gone through the entire judgment, we are of the considered view that the judgment did not proceed merely on certain enquiries but their Lordships were clearly laying down a principle of law that where a candidate was being disenfranchised or barred from contesting elections and the electoral law does not provide any remedy to him to seek redress the jurisdiction of this Court under Article 199 of the H Constitution can always be invoked. In the case of Aftab Shahban Mirani (1998 SCMR 1863) their Lordships upheld the pronouncement of a Full Bench of the Lahore High Court where an order of rejection of nomination papers passed by the Chief Election Commissioner himself (in respect to the election of the President of Pakistan) was set aside by the Court in the exercise of jurisdiction under Article 199 of the Constitution and their Lordship reiterated the above principle holding that if the High Court had not allowed the respondent No. 1 to participate in the elections he would have been ousted from the arena of the elections for t9te said office.

19. Indeed we share the concern of the learned Attorney‑General to the effect that by indiscriminate entertainment of Constitutional petitions against orders passed by Statutory Authority or Tribunals as flood gate of litigation might ensue which could gravely impair the electoral process, which might inevitably postpone completion of the electoral process. In fact it was this concern which persuaded us to take up the petition for regular hearing without loss of a single working day from the date of passing of the impugned order. Nevertheless, we are confident that such situations would be few and the Courts would not be inclined to delve into unnecessary' factual controversies resolved by appropriate Tribunals. It may also be stated that had it been a case of unlawful acceptance of nomination papers it could perhaps be successfully urged that the aggrieved candidate could always assail the election of his rival, if declared elected through a petition under section 68(a) of the Representation of the People Act. Nevertheless, as held in Ghulam Mustafa Jatoi's case such remedy is not available to the petitioner under section 68, the exercise of jurisdiction under Article 199 of the Constitution would be entirely appropriate. On merits, perhaps the petitioner has made out a stronger case because in Ghulam Mustafa Jatoi's case the question of his being a defaulter or otherwise was required to be adjudicated upon while in the present case (and we are constrained to say so with all respects) the rejection was premised on an entirely erroneous concept of law.

20. Learned Attorney‑General further argued that it might not be appropriate to exercise discretionary jurisdiction under Article 199 on the ground that there were allegations as to the petitioner being a bank defaulter which were disposed of by the Returning Officer in a cursory manner and were not considered by the learned Tribunal. We agree to the extent that such allegations could have been scrutinized more appropriately and the learned Tribunal could possibly issue a show‑cause notice requiring him to explain the same. Nevertheless, we cannot assume the jurisdiction of the Tribunal and it would be entirely unwarranted to debar him from contesting elections in the absence of sufficient proof as to his being disqualified. Even otherwise the law regarding disqualification of the candidate ought to be strictly construed. In any event if he is elected and his nomination is found to be invalid the same could always be assailed by way of an election petition under section 68(a) of the Representation of the People Act. For the foregoing reasons we allowed this petition in terms of the short order passed on 16‑9‑2002.

S.A.K./K‑72/K Petition allowed