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Petitioner: SHAMIMUR REHMAN VS Respondent: GOVERNMENT OF PAKISTAN AND OTHERS
Court Name: Sindh High Court Judge(s): Abdul Hafeez Memon, S. A. Nusrat Title: SHAMIMUR REHMAN vs GOVERNMENT OF PAKISTAN AND OTHERS Case No.: Constitutional Petition No, 863 of 1973 Date of Judgment:1980-04-08 Reported As: PLD 1980 Karachi 345 Result: Petition allowed
JUDGMENT
JUDGMENT ' S. A. NUSRAT, J.-This petition has been brought to challenge the Martial Law Regulation No, 103 and the Order No, 22 of 1972, issued thereunder. The said Regulation and the Order, were published on 31-12-1971 and 22-4-1972 respectively in the Gazette of Pakistan, Extraordinary. The resultof the making of the above instruments was that the Company, known as `Rehmania Fauji Sugar Mills Limited", stood dissolved and the petitioner and his mother, Begum Shamim Khatoon, who were promoters of the company and their group, were divested of all their interest in the Company and deprived of the control and Management of its Sugar Mill and all rithts, properties, assets, debts, liabilities and obligations of the Company were forthwith transferred to the respondent No, 2. 2. The facts disclosed in the petition are: that the petitioner and his mother had promoted and got incorporated a company styled as 'Rehmania Fauji Sugar Mills Limited' in 1969, as a Company limited by shares under the provisions of the Companies Act, 1913. The initial participants in the equity of the Company were mainly two groups of shareholders viz. The Rehmania Group, comprising the petitioner and his family, friends and associates and the Army Welfare and Rehabilitation Directorate (hereinafter referred to as "the Directorate"). ' The initial paid up capital of the Company was Rs, 2.50 crores and the contribution made by the Rehmania Group and the Army Welfare and Rehabilitation Directorate was as under:- {{TABLE}} (a) The petitioner, his family and associates . . . ; ...... Rs, 1,00,00,000. (b) The Army Welfare and Rehabilitation Directorate........... Rs, 25,00,000. {{TABLE}}
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' The balance amount of Rs, 1,25,00,000, was to be subscribed by the public and other financial Institutions on the issuance of invitation for public subscription. Meanwhile through the efforts of the Rehmania Group bridging loans were obtained from the following two institutions, repayable on receipt of public subscriptions: {{TABLE}} (1) P. I. C. I C Rs, 50,00,00. (ii) I. D. P Rs, 75,00,000. TOTAL . . . . Rs, 1,25,00,000. {{TABLE}} ' Further amounts, as under, were procured by issuing debentures:- {{TABLE}} (1) National Investment Trust .. Rs, 10,00,000. (ii) Investment Corporation of Pakistan................ Rs, 25,00,000. (iii) Army Welfare and Rehabilitation Directorate Rs, 40,00,000. (iv) Petitioner and his Rs, 25,00,000. Associates TOTAL Rta. 1,00,00,000. {{TABLE}} ' In addition, the following foreign exchange loans were procured for the purchase of machinery and spare parts. Etc. {{TABLE}} (i) Suppliers' credit by Messrs A. W. Smith ......................... 20,50,000. (ii) National and Grindlays Bank through its London Office . . . 2,00,000. (iii) P. I. C. I. C. 60,000. {{TABLE}} ' Besides the petitioner, his family and the associates and their concerns had advanced a sum of Rs, 59,14,739, as short term loan, excluding a sum of Rs, 30, lakhs, which was advanced directly to the Company by the standard Bank Ltd. The petitioner and his group were, in this manner, responsible for making arrangement for a sum of Rs, 3,39 crore for financing the company". ' The petitioner and his mother, Mst. Shamim Khatoon, had also obtained a personal loan of Rs, 90 lakhs from the Directorate under a loan agreement dated 21-1-1970, which provided for payment of interest at the rate of 6 per cent per annum to the Directorate, from the date of the advance until the going into commercial production of the Mill, whereafter the rate of interest was to be paid at 10 per cent per annum till the entire loan was paid off. Additionally the Directorate was entitled to 5% in the net profits of the Company. The said loan was secured by means of a bank guarantee which provided for the pledging of fully paid-up shares of the Company of the value of Rs, one Crore, on the basis of the above facts it is asserted that the petitioner and his group had, with such fitness and their efforts, established the Sugar Mill in question at Khoski, District Badin. The Mill had successfully gone into production and within the short period ending 30th September, 1972. Made a net profit of Rs, 1,14,83,652, which finds support from the audited balance-sheet of the Company brought on the record by the petitioner. 3. The respondent No, 2 has filed an elaborate counter affidavit in reply to the petition, and the same has been adopted by the first respondent. According to the facts stated therein, the Chairman, Agricultural Development Corporation bad visited Tando Bago on 23-1-1968, when certain Army settlers of the area prevailed upon him to set up a sugar Mill in their cane growing area. The Chairman, in turn, requested the Adjutant General to persuade the Fauji Foundation (the respondent No, 2 herein) to set up the required Sugar Factory at Khoski. The Adjutant General, however, informed him that Fauji Foundation was unable to handle the project as it stood fully committed to the establishment of a petro Chemical Complex at Karachi. The matter was then
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take up by the G. H. Q. With the Government of West Pakistan which was asked to arrange for a suitable party for doing the needful. It is averred that it was on account of the efforts of ,the then Chief of the Army Staff that the Provincial Government proposed the name of Mr. Inamur Rehman, and he was then granted permission for setting up of the Sugar Mill at Khoski.Lt is alleged that the land for the mill was also acquired with the assistance of the G. H. Q. And the PICIC was given an undertaking that the Director, Welfare and Rehabilitation, who also happened to be a Director of the Company, will advance a loan to the Company to the tune of Rs, 50, lacs in order to meet the local cost of the project. The Director, Welfare and Rehabilitation, also gave an undertaking to the PICIC that the shares worth Rs, 50, lacs will be subscribed by the G. H. Q. On public issue, subject to the consent of the Controller of Capital issues. The PICIC was also assured that the Director, Welfare and Rehabilitation, will subscribe fully to the shares which were intended to be issued to the Cane growers of the area, in case the same were not subscribed them. It is alleged that apart from the investment made to the tune of Rs, 1.55 Crore the G. H. Q. Had thus entered into firm, written and binding commitments to render financial assistance to the extent of Rs, 110 lacs as mentioned above which would have aggregated to the total involement of Rs, 2,65 Crores. ' The aforesaid sweeping allegations have been denied by the petitioner and it is asserted that major financial arrangement had been made by the Rehmania Group in the manner first above- mentioned. ' The Counter affidavit goes on to say that the promoters of the Company were shown undue favour by the then Adjutant General, Major General Khudadad Khan, in connection with the advancement of the loans from the welfare funds of the Army. The said General was allegedly removed and a probe was ordered into the affairs of the welfare funds, when startling facts, of which no particulars are given, relating to the misappropriation of the said funds were brought to light. ' It is stated that it was in the wake of such probe that the whole case was presented to the.President during the course of a meeting held on 23-12-1971, when significantly enough the Managing Director of the Fauji Foundation was also present. ' Three proposals were put up for consideration in the said meeting and, it is stated, that the President decided in favour of the last proposal: that the Rehmania Fauji Sugar Mills be wound up as a limited company and sold and transfserred on reasonable terms to Fauji Foundation as a going concern. The Martial Law Regulation 103, in the circumstances, was promulgated incorporating the said decision. ' As the Regulation was self-operative and came into effect immediately, the Company, Rehmania Sugar Mills Ltd., was forthwith dissolved, and transferred to respondent No, 2 with all its rights, properties, assets, debts, liabilities and obligations. The terms and conditions of transfer were later determined by an order issued as Notification No, 22 of 1972, dated 20th April, 1972, which was published in the Gazette of Pakistan, Extraordinary, of 22-4-1972. 4. The petitioner has challenged the Regulation and the Order issued thereunder on several grounds: the frontal attack being that the said instruments were conceived in bad faith and are mala fide pieces of purported legislation. The other grounds of attack are: that the Regulation cannot pass muster as law or a valid piece of legislation, and it was a mere executive fiat reflecting the will of the individual; that no law sequestrating the proprietary rights of an individual could be passed by the Federal Government, much less by a person wielding the power of the State falling into his hands, in the exercise of the power of 'eminent domain' except for 'public purpose' or in the 'public interest'; and lastly, the provisions contained in the Regulation amounted to entrenchment on the field of judiciary. ' The order issued under the Regulation has also been challenged on similar and certain other grounds which will be discussed later.
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5. Before examining the contentions on merits, it is necessary to first dispose of the objection raised on behalf of the respondents with regard to the manner in which the plea of mala fide has come to be pleaded in the amended petition. ' It was contended that the petitioner having earlier pleaded male fide in the petition, as filed originally, was not to be raise the plea of another kind of mala fide, as was done in petition. ' In support of the objection the learned counsel relied upon the following passage from the judgment of the Supreme Court in Federation of Pakistan v. Saeed Ahmed Khan (I) at p. 170 : "Male fide is one of the most difficult things to prove and the onus is entirely upon the person alleging male fide to establish it, because, there is, to start with a presumption of regularity with regard to all official acts, and until that presumption is rebutted, the action cannot be challenged merely upon a vague allegation of male fide. As has been pointed out by this Court in the case of the Government of West Pakistan v. Begun Agha Abdul Karim Shorish Kaskmiri, mala fide must be pleaded with particularity, and once one kind of male fide is alleged, no one should be allowed to adduce proof of any other kind of male fide nor should any enquiry be launched upon merely on the basis of vague and indefinite allegations, nor should the person alleging mala fide be allowed a roving enquiry into the files of the Government for the purposes of fishing out some kind of a case." ' The above-mentioned observations are to be appreciated in the context the same were made. The Supreme Court had earlier, in the case of Abdul Baqi Baloch (2), observed that under a constitutional system, which provides for a judicial review of a executive actions, it was fallacy to think that such a judicial review must be in the nature of an appeal against the decision of the Executive Authority. Thereafter, while considering the scope of enquiry into the allegations of ma/a fide the following observations were made in Begun Agha Shorish Kashmiri's case (3) : "It is not to be turned into a roving enquiry permitting the detenu to bunt for some ground to support his ease of male fide nor should an enquiry be launched upon merely on the basis of vague and indefinite allegations. Male fide must be pleaded with particularity and once one kind of male fide is alleged, the detenu should not be allowed to adduce proof of any other kind of mala fide." ' It would thus appear that the above rule, consistently laid down by the Supreme Court relates to the power of the Court to make enquiry into the allegations of male fide within the ambit of its Constitutional Jurisdictio and it does not bar the right of any party to amend the pleadings. ' The objection also ignores the fact that the petition has since then been amended, pursuant to the order dated 28-2-1978 passed on the petitioner's Application under Order VI, rule 17, C. P. C. ' It is undeniable that amendment can be applied for under Order VI rule 17, C. P. C. At any stage of the proceedings and such right cannot curtailed. The power to permit amendment is discretionary with the Court within the limits of judicial principles. The amendment is to be allow where the applicant had acted in good faith, but refused where it w mala fide. Amendment is not allowed where the effect would be to change t very character of the petition or result in the substitution of the case (1) PLD 1974 SC 151 (2)PLD 1968 SC 313 (3)PLD 1969SC 14 of action. The power to grant amendment, being procedural, is to be u for the purpose of furthering the ends of justice. If found just and necessary, the Court may not hesitate in even allowing alternate and inconsistent pleas by way of amendment. ' No doubt the order allowing the petitioner's application for amendment was passed "subject to all just exceptions", but it cannot be taken to' mean that the order itself can be reviewed. All that is meant by the use of such words is that the allegations in the application for amendment, and the facts sought to be pleaded, are not to be taken as having been accepted by the, other side, who remains at liberty to challenge the same the other objection raised on behalf of the respondents
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was that the application for amendment was filed belatedly after the lapse of about 4* years. This objection has no force because the petitioner has a continuing cause of action by virtue of the impugned order issued under the Regulation. D The paragraph 2 thereof provides that nothing contained therein shall preclude the Fauji Foundation from taking action for recovery of moneys of the Company' misapplied, lost or misappropriated, against any Director, Managing Agents, Officers or any person responsible for such misapplication, loss or misappropriation. Besides the contravention of the provisions of the Regulation or any order made thereunder is made punishable with rigorous imprisonment of a term which may extend to one year or with fine or with both. According to these provisions, which are potent and of far-reaching consequences, the petitioner, as Director of the Rehmania Sugar Mills and the Management Company, was and continues to be under constant threat of accountability. It was pointed out by the learned counsel for the petitioner that the Fauji Foundation had already filed a Suit No, 1974, in this Court for the recovery of Rs, 95,280, against the petitioner, which is pending, and the petitioner may well be apprehensive of such or similar actions, as the Fauji Foundation continues to enjoy the, right of taking action against the petitioner on the basis of the above-mentioned provisions. ' It may further be mentioned that the main respondent No, 1 did not choose to file any counter- Affidavit against the petitioner's application for amendment. In the counter-Affidavit filed on behalf of the respondent 2, the facts stated by the petitioner in his supporting affidavit to the application, were met by a general denial. The explanation furnished by the petitioner for not having applied for amendment earlier, as given in the affidavit, was that at the time of the institution of the petition and until July, 1977, he could not muster courage to bring any allegation against the then President and the Chief Martial Law Administrator of Pakistan. It was averred that his father, Inamur Rehman, was placed under house arrest by Mr. Z. A. Bhutto within three days of his assumption of power, and since then, the petitioner's family had remained the victim of various recriminatory actions taken against them during his regime. The learned counsel for the petitioner further sought to place reliance on some allegations regarding punitive measures resorted to against certain persons during the former regime, as have been disclosed in the White Papers issued by the Government. It 'was contended by him that in any case the present Government was bound by its statements contained in the White Papers and was estopped from raising any objection with regard to the nature of mala fide pleaded by the petitioner. It is, however, not necessary to be drawn into any controversial issue as, in my opinion, the order of amendment, which was passed by another learned Division Bench of this Court, does not case for Review and the circumstances justified the passing of such Order. ' In the circumstances, the objections raised on behalf of the -respondents have no force and the allegation of mala fide, as pleaded in the amended ,petition, requires examination on merits. 6. As the challenge in his petition is to the Martial Law Regulation and the order issued thereunder by the then President and the Chief Martial Law Administrator, it is first to be seen whether the jurisdiction of this Court to examine the validity of the same is in any manner barred by virtue of the provisions contained in Article 281(1) of the Interim Constitution. Article 281(1) is as under :- "281.-(1) All Proclamations, President's Orders, Martial Law Regulations, Martial Law Orders, and all other laws made as from the Twenty-fifth day of March, 1969, are hereby declared, notwithstanding any judgment of any Court, to have been validly made by competent authority, and shall not be called in question in any Court.' ' The provision, by way of above Article, was made in the interim Constitution in the aftermath of the pronouncement of the historical judgment in Asma Jilani's case (I), declaring Agha General Muhammad Yahya Khan as an usurper and the finding that the proclamation of Martial Law on the 25th March, 1969, by him, was entirely illegal and all Martial Law Regulations, Martial Law Orders and other legislative instruments issued by him were, on this ground alone, void initio and were of no
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legal effect. The Supreme Court foresaw the difficulty which would have arisen as a result of such declaration and, therefore, found it expedient and necessary to take recourse to the application of the doctrine of necessity because, ignoring of the same was likely to result in disastrous consequences to the body politic, upsetting the social order itself.' The said doctrine, it was held, could be invoked in aid only after the Court had come to the conclusion that the acts of the usurper were illegal and illegitimate because then alone the question could arise as to how many acts, legislative or otherwise, called for condonation or maintenance notwithstanding their illegality in the wider public interest. This, the then learned Chief Justice called the principle of 'Condonation' and not "legitimization' The test of condonation was laid down as under:- (I) all transactions which are past and closed, for no useful purpose can be served by re-opening them, (2) all acts and legislative measures which are in accordance with, or could have been made under the abrogated Constitution or the previous legal order, i3) all acts which tend to advance or promote the good of the people, (4) all acts required to be done for the ordinary orderly running of the State and all such measures as would establish or lead to the establishment of, the objectives mentioned in the Objective Resolution of 1954." ' Lastly, it was held that such acts which would seriously impair the rights of the citizens, except in so far they may be designed to advance the social welfare and national solidarity, could not be condoned. ' The judgment in Asma Jilani's case was announced on 20th April, 1972, and the new Parliament met on the following day for approving the Interim Constitution and it peremptorily proceeded to take remedial measures for avoiding the unprecedented consequences arising out of the said decision, by incorporating Article 281 in the interim Constitution. In doing so the Parliament accepted the declaration of the Supreme Court with regard to the illegitimacy of Yahya Khan's rule and the futility of the laws passed by him. (1) PLD 1972 SC 139 8. The Article 281 was examined by the Supreme Court in State v. Ziaur-Rehman (1), and the following interpretation was given to clause (2) thereof:- "That the validity given by clause (2) of Article 281 of the Interim Constitution to acts done or purported to be done in exercise of the powers given by Martial Law Regulations and Orders since repealed or even in the purported exercise of those powers do not have the effect of validating acts done coram non judice or without jurisdiction or mala fide." ' It was contended by the learned counsel for the petitioner that the discussion in the above judgment was confined to the provisions contained in clause (2) of Article 281 of the Interim Constitution alone whereas, according to the learned counsel for the respondents, the judgment was also conclusive with regard to the interpretation of clause (1) of Article 281 as well. The judgment in the circumstances needs closer study, which I hereby venture to undertake. The Article 281 (1) makes no distinction between the Martial Law Regulations and the Martial Law Orders and the other laws passed by General Muhammad Yabya Khan and late Mr. Zulfiqar Ali Bhutto. The reason is too obvious to be ignored. The power was transferred by General Yahya Kban, on his stepping down from the office on 20th December, 1971, to late Mr. Zulfiqar All Bhutto under his Presidential Proclamation dated 20th December, 1971 which is to the following effect :- "Whereas by the Proclamation of 25th March, 1969, I, General Agha Mahammad Yahya Khan, H. Pk., J. J., declared that the whole of Pakistan shall be under Martial Law and also assumed the powers of Chief Martial Law Administrator and the command of all the Armed Forces of Pakistan ; ' And whereas I have decided to relinquish the office of Chief Martial Law Administrator and the command of all the Armed Forces of Pakistan. And whereas it is necessary that Mr. Zulfikar All Bhutto should assume the powers of the Chief Martial Law Administrator and the Command of all the Armed Forces of Pakistan ;
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' Now, therefore, I hereby declare that said Mr. Zulfikar Ali Bhutto shall be the Chief Martial Law Administrator and shall command all the Armed Forces of Pakistan and shall also be the President of Pakistan." ' As General Yahya Khan was himself an usurper, the transfer of power by him to his successor could not be blessed by him with any purity and the power which had fallen from his tainted hands remained no less tainted in the hands of the recipient of such power. Mr. Zulfiquar All Bhutto became the first Civil Martial Law Administrator in the history of Pakistan by virtue of the above- mentioned Proclamation issued by General Yahya Khan and, in the circumstances, all Martial Law Regulations, Martial Law Orders and other Legislative instruments promulgated and issued by him in the exercise of such authority suffered from the same infirmity which attached to the exercise of power by General Yahya Khan himself. It was, therefore, natural that the Martial Law Regulations and Martial Law Orders and the laws passed by General Yahya Khan and his successor Mr. Zulfikar All Bhutto were treated at par in clause (1) of Article 281 of the Interim Constitution. This is pointed, out because the impugned Regulation and the Order were issued by Mr. Z. A. Bhutto in his above- mentioned capacity. (1) PLD 1973 SC 49 ' The official version given by the then learned Attorney-General to the Supreme Court in Ziaur- Rehman's case, regarding the object of incorporating Article 281 in the Interim Constitution, has important bearing on the point in issue. It appears at page 78 of the report and is as under :- "The learned Attorney-General points out that because this Court had in Asma Jilani's case declared General Muhammad Yahya Khan to be an usurper, all legislative measures promulgated by him became void ab initio and could be validated by the Courts, the National Assembly wanted to remove this difficulty as a number of important measures had been introduced in the interest of restoring a democratic government by the chosen representatives of the people, maintaining the integrity of the country and for bringing about social and economic reforms. Confusion and uncertainty could not be allowed to prevail. This Court had decided that the Courts would only be in a position to ,condone, on the basis of the doctrine of necessity, some of these acts, legislative or otherwise, but such…
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