PAKISTAN PAPER CORPORATION LTD. vs SECRETARY, FEDERAL MINISTRY OF FINANCE AND ANOTHER

' ALI NAWAZ BUDHANI, J.-Orders dated 9-4-1974 under section 22 of the Securities and Exchange Ordinance, 1969 imposing penalty of Rs, 6,000 and also further to pay Rs, 1,000 for every day from 10-4-1974 till the date up to which the default of non-submission of half-yearly accounts for the period ended 31st December, 1973 continued, is impugned by the petitioner in this Constitutional Petition. The petitioner has further impugned the order dated 24-3-1975 passed by the Finance Secretary dismissing his revision. The petitioner has also challenged the order dated 11-3-1974 refusing the extension of time for transmission of half-yearly accounts for the period ending 31st December, 1973.

2. The petitioner-Company was set up in the year 1967 with the investment of 22 crores provided mostly by the Semi-Government as well as foreign financing agencies with the approval of the Government of Pakistan and was under the management and control firstly of Hoti Group (Nawab Hoti of Mardan) till 15-6-1973 and secondly of Haji Hashim Group and since 12th June, 1974 the same is functioning under direct supervision of the Government Sponsored Financing Institutions (P. I. C. I. C.,

1. C. P. Etc.) which have re-organised in view of national importance which it had assumed after the loss of Karnaphuli Project in East Pakistan (now Bangla Desh). It is stated in the petition that the affairs of the Company were completely in chaotic conditions when the present management had taken control of the petitioner-Company on 12-6-1974 and to this fact the respondents were well aware of. This had also let for the preparation of account and annual report ending June, 1973 on 17-4-1974 and annual general meeting was then held on 11-5-1974 which, however, was held within 15th months of the date of previous annual general meeting which was held on 30.5-1973, within the requirements of section 78 of the Carr ponies Act.

3. Keeping in view the responsibility the petitioner-Company requested the respondent No, 2 on 28- 2-1974 for grant of extension of time for transmission of half-yearly accounts for the period ending 31st December, 1973. This request was not granted by one Mr. Muhammad Idrees, Assistant Chief of respondent No, 2.

4. On 26-3-1974 a show-cause notice under rule 13 of the Securities and Exchange Rules was issued contending therein that the failure to transmit half-yearly accounts in respect of the period ending 31st December, 1973 was wilful and thereby to show cause as to why the penalty under section 22 of the said Ordinance be not imposed upon the petitioner. Explanation was furnished that the default was due to circumstances beyond the control of the petitioner-Company as the accounts were in a chaotic condition and the same could not, therefore, be said to be wilful. However the penalty was ordered on 9-4-1974. The review petition was rejected on 24-3-1975.

5. Mr. Z. U. Ahmed, Advocate has argued on behalf of the petitioner and made his submissions while Mr. M. Akram Zuberi, Advocate argued on behalf of the respondents.

6. Mr. Z. U. Ahmed made submissions that the delay was not wilful and deliberate. The impugned order under section 22 of the Securities and Exchange Ordinance, 1969 contains the following para. :- "In view of the fact that two months time for submission of half-yearly accounts is quite sufficient, the request for extension of time limit was rejected. A show-cause notice dated the 26th March, 1974 was issued fixing the case on 9th April, 1974. In response to our show-cause notice, a letter dated 5th April, 1974 was received giving the same reasons for its failure to submit the half-yearly accounts as contained in its earlier letter dated 28th February, 1974. The explanation is obviously not acceptable and the default committed is wilful".

7. This impugned order is passed due to the fact that the default committed was wilful in nature.

The explanation was not accepted by the authority namely the respondent No,

2. It is to be seen that section 11 of the Securities and Exchange Ordinance, 1969 contemplates as under :- "11. Submission of returns.-(I) An issuer of a listed security shall furnish to the Stock Exchange, to the security holders and to the Central Government an annual report of its affairs and such statements and other reports as may be prescribed.

(2) Without prejudice to the provisions of subsection (1), an issuer of a listed security shall furnish to the Central Government such other documents, information or explanation relating to its affairs as the Central Government may, at any time, by order in writing, require."

8. Section 11 makes incumbent on the issuer of a listed security to furnish to the Stock Exchange, the Security holders and to the Central Government an annual report of the affairs or other report as may be prescribed. It is incumbent upon the Company to follow the rules. The learned counsel Mr. Z. U. Ahmed states that the default was not wilful as he had already requested for two months' time as an extension to furnish the required data. The request for extension by itself cannot be construed to be a ground that the documents proposed to be submitted were beyond the control and that the company was unable to do so under these circumstances which are beyond their control. Certainly the authority has granted already the time within., which the balance-sheets and accounts were to be submitted. This was considered by the authority to be sufficient. The learned counsel further referred to an authority where the meaning of wilful is given. The authority is reported in PLD 1966 Lah. 855. In this authority word "wilfully" is defined as meaning that the act is done deliberately and intentionally, not by accident or inadvertence, but so that the mind of the person who does the act goes with it. The words "wilful" and "intentional" are synonymous, "wilful" is more commonly used in the modern speech of bad conduct or actions other than of good, though it does not necessarily connote blame. The word "wilful" is defined in Black's Law Dictionary as act done with stubborn purpose but not with malice, as done intentionally, knowingly and purposely as destined from an act done carelessly, thoughtlessly, heedlessly or inadvertently.

9. Similarly the next authority is referred which is PLD 1954 Lah. 769. More or less the word "wilful" is meant to be intentional. The learned counsel Mr. Z. U. Ahmed emphasised the fact that he made a request for time to be extended which was misconstrued and the impugned order was passed considering the application for grant of extension to be a deliberate effort not to submit what is required by law.

10. We have, however, considered the point of Mr. Z. U. Ahmed raised in this case. It touches merely the factual aspect of the case and we need not go into the factual aspects and circumstances of the present petition. The impugned order is not perverse or without jurisdiction or arbitrary and hence we are not inclined to hold the same to be without lawful authority. Similarly the Review Petition is so worded that it touches the same factual aspects of this petition. We need not go into the facts so long we consider that the order was not perverse or arbitrary in nature. Besides the learned counsel for the petitioner did not impress us by showing us these circumstances which were beyond his control to submit the half-yearly balance-sheets and accounts to the authority.

Failure of the accountants of the petitioner to prepare the accounts in time cannot be considered to be beyond their control.

11. Under these circumstances we dismiss this petition. No order as u costs is made.