DIAMOND INDUSTRIES LIMITED vs M. ZAFAR-UL-HAQ HIJAZI and 2 others
The petitioner, Diamond Industries Limited, sought leave to appeal against the judgment of the Peshawar High Court dismissing its company case, which had challenged a show-cause notice and subsequent proceedings initiated by the Securities and Exchange Commission of Pakistan for the appointment of an inspector to investigate the company's affairs under Section 25 of the Companies Ordinance, 1984. The core legal question concerned the appropriate appellate remedy against interlocutory orders passed by a learned Judge in Chambers of the High Court in company matters. The Supreme Court held that orders passed in exercise of original civil jurisdiction in such matters are appealable via an Intra Court Appeal before a Division Bench of the High Court, rendering the direct petition for leave to appeal before the Supreme Court non-maintainable. The key principle laid down is that interlocutory orders of a Single Judge in company matters must first be challenged through an Intra Court Appeal before the High Court's Division Bench before approaching the apex court.
- Whether an Intra Court Appeal before a Division Bench of the High Court is the remedy against interlocutory orders passed in company matters?
- Can a petition for leave to appeal be maintained against an interlocutory order of a Single Judge without exhausting the remedy of Intra Court Appeal?
- Under which statutory provision can the Securities and Exchange Commission appoint an inspector to investigate a company's affairs?
- Section 25, Companies Ordinance 1984
- Section 33, Securities and Exchange Commission of Pakistan Act 1997
- Section 10(2), Companies Ordinance 1984
- Section 15, Code of Civil Procedure (Amendment Ordinance, 1980 1980)
Abdul Hameed Dogar, J.--Petitioner Diamond Industries Limited seeks leave to appeal against the judgment dated 11.6.2001 passed in Company Case No, 13 of 2000 by a learned Judge in Chambers of the Peshawar High Court, Peshawar, whereby the same was dismissed.
2. The facts relevant for filing the instant petition are that the petitioner-company was issued a show-cause notice on 11.9.1999 by the Security and Exchange Commission of Pakistan (hereinafter referred to as `the Commission') through its Commissioner Enforcement (ENF) as the why Inspector - should not be appointed to investigate the affairs and the management of the Company as required under Section 25 of the Companies Ordinance, 1984 (hereafter called as 'the Ordinance') as it showed loses, thus necessitated the examination of the financial statement. This was objected but however, after giving an opportunity of hearing to the company, an order appointing the Inspector was passed. The petitioner-company assailed the same in appeal under Section 33 of the Securities and Exchange Commission of Pakistan Act, 1997 (Act XLII of 1997) (hereinafter called as the Act') before the Appellate Bench of the Commission which was accepted and the said order was set aside.
3. Thereafter, another show-cause notice was issued on 7.8.2000 under the same provisions of law to show-cause as to why Inspector should not be appointed to investigate the affairs of the company on various grounds including non-payment of return to the share-holders, uncalled for heavy expenditures, deviations from memorandum of association etc. This too, was challenged before the Appellate Bench of the Commission which was rejected vide order dated 5.12.2000 and subsequently maintained by Company Judge of Peshawar High Court vide impugned order.
4. In the case of Brother Steel Mills Ltd. and others v. Main Ilyas Miraj and 14 others (PLD 1996 SC 543) and an unreported judgment in the case of Ch. Muhammad Hussain v. Pakistan Industrial and Credit Investment Corporation Ltd. & others (CMA No, 948 of 2002 in CA No, 648 of 2002 decided on 25.7.2002), this Court has held that all orders passed under sub-section (2) of Section 10 of the Ordinance in exercise of original civil jurisdiction of the High Court as per provisions of Section 15 of the Code of Civil Procedure (Amendment Ordinance, 1980 (X of 1980) are appealable before a Division Bench of the High Court.
5. In the case in hand identical questions of law and fact are involved. The impugned order being an interlocutory in nature is governed by the aforesaid provisions of law against which an Intra Court Appeal before a Division Bench is the only remedy.
6. Accordingly, the petition being not maintainable is dismissed and leave refused.