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Petitioner: FAQIR MUHAMMAD VS Respondent: MUHAMMAD SHAKIL
Court Name: Lahore High Court Judge(s): Abdus Sattar Asghar Title: FAQIR MUHAMMAD vs MUHAMMAD SHAKIL Case No.: Civil Revision No,3700 of 2011Revision No,3700 of 2011 Date of Judgment:2013-05-14 Reported As: PLJ 2013 Lahore 383, 2013 CLD 2284 Result: Revision dismissed
Judgment ORDER ' ABDUS SATTAR ASGHAR, J.-This Civil Revision under section 115 of Civil Procedure Code, 1908 is directed against the judgment and decree dated 30-6-2011 passed by learned Civil Judge Nankana Sahib whereby petitioner's suit for recovery of damages amounting to Rs,25,000 against Muhammad Shakil respondent has been dismissed. It further assails the judgment and decree dated 28-9-2011 passed by learned Additional District Judge Nankana Sahib whereby petitioner's appeal was also dismissed. 2. It is argued by learned counsel for the petitioner that both the learned courts below misconceived while rendering the impugned judgments and decrees considering it a case of malicious prosecution instead of defamation; that the impugned judgments and decree are against law and facts, based on misreading and non-reading of evidence causing serious miscarriage of justice and liable to set aside. 3. Arguments heard. Record perused. 4. Succinctly facts leading to this Civil Revision are that petitioner lodged a suit for recovery of Rs,25,000 as damages for defamation, loss of reputation, mental and physical torture allegedly caused by the respondent by filing an application before District Police Officer Nankana Sahib on 7-3-2009 attributing false implication of theft of bite cattles against the petitioner and imputing derogatory statements against the petitioner in the locality, brotherhood and relatives of the petitioner. Respondent was proceeded against ex parte evidence. Petitioner produced Alamdar Hussain ASI Incharge Complaint Office DPO Nankana Sahib. He brought original record of application No, 154-RC dated 7-3-2009 and produced a copy thereof (Exh.P-1) and report thereupon (Exh.P-2). Petitioner himself, appeared in the witness box as P.W.2 and reiterated his
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assertions as set-forth in the plaint. He also produced Mehboob Ali (P.W.3) who corroborated the petitioner. 5. It is settled principle of law that defamation is the publication of a statement which reflects on a person's reputation and tends to lower him In the estimation of right thinking members of society generally or tends to make them shun or avoid him. Defamation ordinarily takes the form of two separate torts i,e, libel and slander. There is no cavil to the proposition that libel is actionable per se and injury to reputation will be presumed. However, whether the case is one of libel or slander the following elements must be proved A by the claimant:- ' (a) The imputation must be defamatory; (b) It must identify or refer to the claimant; (c) It must be published/communicated to at least one person other than the claimant. 6. In the instant case documentary evidence produced by the petitioner fails to contain any defamatory imputation. Exh.P-1 and Exh.P-2 do not reveal that respondent had levelled any allegation of theft of cattles against the petitioner' therefore the contents of the petition (Exh.P-1) do not fall within the ambit of libel. As regards the other part of the petitioner's plea that respondent has been giving defamatory, statement against him in the locality before the other members of the society, suffice to say that Mehboob Ali (P.W.3) appearing in the witness box has categorically stated that petitioner bears a good reputation and commands the honour and respect in the area. He has not stated that the alleged imputation of the respondent had lowered* the respect or reputation of the petitioner in his estimation or in the estimation of right thinking members of the society in general or made him shun to avoid the petitioner. Petitioner has not been able to establish the allegation against the respondent for causing defamatory imputation amounting to libel or slander to claim any damages. 7- I do not find any misreading or non-reading of evidence, material illegality or irregularity in the impugned judgments and decrees passed by learned courts below. 8. For the above reason this Civil Revision having no merit is dismissed in limine. (f) status and implications of any lawsuit or judicial proceedings of material nature, filed by or against the Public Sector Company; (g) any show cause, demand or prosecution notice received from any revenue or regulatory authority, whleh may be material; (h) material payments of government dues, including Income tax, excise and customs duties, and'other statutory dues Including penal charges thereon; (1) inter-corporate investments in and loans to or from associated concerns in which the business group, of which the Public Sector Company is a part, has significant interest; (j) policies related to the award of contracts and purchase and sale of raw materials, finished goods, machinery etc; (k) default in payment of principal or Interest, including penalties on late payments and other dues, to a creditor, bank or financial institution or default in payment of public deposit; (l) failure to recover material amounts of loans. Advances, and deposits made by the Public Sector Company, including trade debts and inter-corporate finances; (m) any significant accidents, dangerous occurrences and instances of pollution and environmental problems involving the Public Sector Company: (n) significant public or product liability claims made or likely to be made against the Public Sector Company, including any adverse judgment or order made on the conduct of the Public Sector Company or of any other company that may bear negatively on the Public Sector Company; (o) disputes with labour and their proposed solutions, any agreement with the labour union or collective bargaining agent and any charter of demands on the Public Sector Company; (p) payment for goodwill, brand equity or intellectual property;
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(q) annual, quarterly, monthly or other periodical accounts as are required to be approved by the Board for circulation amongst its members; (r) reports on governance, risk and compliance issues; (s) whistle-blower protection mechanism; (t) report on Corporate Social Responsibility (CSR) activities; and (u) related party transactions. 8. Performance evaluation.-(1) The performance evaluation - of the members of the Board including the chairman and the chief executive shall be undertaken for which the Board shall establish a process, based on specified criteria, and the chairman of the Board shall take ownership of such an evaluation. The committees shall also carry out their evaluation on an annual basis. (2) Thd Board shall monitor and assess the performance of senior management on a periodic basis, at least once a year, and hold them accountable for accomplishing objectives, goals and key performance indicators set for this purpose. 9. Related party transactions.-(1) The details of all related party transactions shall be placed before the audit . Committee of the Public Sector Company and upon recommendations of the audit committee, the same shall be placed before the Board for review and approval. (2) The related party transactions which are not executed at arm's length price shall also be placed separately at each Board meeting along with necessary justification for consideration and approval of the Board on recommendation of the audit committee of the Public Sector Company. (3) The Board shall approve the pricing methods for related party transactions that were made on the terms equivalent to those that prevail in arm's length transaction only if such terms can be substantiated. (4) Every Public Sector Company shall maintain a party wise record of transactions. In each financial year, entered Into with related parties in that year along with all such documents and explanations. The record of related party transaction shall include the following particulars in respect of each transaction, namely:-- (a) name of related party; (b) nature of relationship with related party; (c) nature of transaction; (d) amouht of transaction; and (e) terms and conditions of transaction, including the amount of consideration received or given. (5) The Public Sector Company may seek a general mandate fronr Its members for recurrent related party transactions of revenue or trading nature or those necessary for Its day-to-day operations such as the purchase and sale of supplies and materials, but not in respect of the purchase or sale of assets, undertakings or businesses. A general mandate is subject to annual renewal. 10. Quarterly and Monthly Financial Statements and Annual Report.-(1) Every Public Sector Company shall, within one month of the close of first, second and third quarter of Its year of account, prepare a profit and loss account for. And balance-sheet as at the' end of, that quarter, whether audited or otherwise, for the Board's approval. Annual report including annual financial statements shall be placed on the Public Sector Company's website. (2) Every Public Sector Company shall also prepare monthly accounts, for circulation amongst the Board members. 11. Board orientation and learning.-(1) Orientation courses shall be held by a Public Sector Company, to enable directors, to better comprehend the specific context In which it operates,
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including Its operations and environment, awareness of Public Sector Company's values and standards of probity and accountability as well as their duties as directors. t (2) In order to ensure that the directors are well conversant with the corporate laws and practices, they are encouraged to have certification under an appropriate training or education program offered by any institution, local or foreign. (3) In order to acquaint the Board members with the wider scope of responsibilities concerning the use of public resources, to act in good faith and in the best interests of the Public Sector Company, at least one orientation course shall be arranged annually for the directors and the following information in writing, inter alia, shall be provided, namely: ~ (a) Public Sector Company's aims and objectives; (b) control environment and control activities; (c) key policies and procedures; (d) risk management and internal control framework; (e) background of key personnel, including their job descriptions; (f) delegation of financial and administrative powers; (g) board and staff structure: and (h) budgeting, planning and performance evaluation systems. i2. Formation of Board committees.- (1) The Board shall set up the following committees to support it in performing its functions efficiently, and for seeking assistance in the decision making process, namely: ~ (a) audit committee, for an efficient and effective internal and external financial reporting mechanism: (b) risk management committee, in case of Public Sector Companies either in the financial sector or those having ashets of five billion rupees or more, to effectively review the risk function: (c) human resources committee, to deal with all employee related matters including recruitment, training, remuneration, performance evaluation, succession planning, and measures for effective utilization of the employees of the Public Sector Company; (d) procurement committee, to ensure transparency in procurement transactions and in dealing with the suppliers; and (e) nomination committee, to Identify and recommend the candidates for the Board for the consideration of cut shareholders after examining their skills and characteristics that are needed in such candidates. (2) The Board committees shall be chaired by nonexecutive directors and the majority of their members shall be independent. However, the independent directors in the committees shall not be less than their proportionate strength during the first four years of this notification. The existence of such committees shall not absolve the Board from its . Collective responsibility for all matters.- Such committees shall have written terms of reference that define their duties, authority and composition, and shall report to the full Board. The minutes of their meetings shall be circulated to all Board members. (3) The Board shall concern itself with policy formulation and oversight and not the approval of individual transactions except which are of an extraordinary nature or involve materially large amount. 13. Chief Financial Officer, Company Secretary and Chief Internal Auditor - appointment and removal.- (1) The Board shall appoint a chief financial officer, a company secretary and a chief internal auditor. (2) The appointment, remuneration and terms and conditions of employment of the chief financial officer, the company secretary and the chief internal auditor of Public Sector Company shall be
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determined with the approval of the Board. (3) The chief financial officer, the company secretary, or the chief internal auditor of Public Sector Company shall not be removed except with the approval of the Board. 14. Role and qualification of Chief Financial Officer and Company Secretary,-(1) The chief financial officer shall be responsible for ensuring that appropriate advice is given to the Board on all financial matters, for keeping proper financial records and accounts, and for maintaining an effective system of internal financial control. ,. (2) No person shall be appointed as the chief financial officer of a Public Sector Company unless he is,- (a) a member of a recognized body of professional accountants with at least five years relevant experience, in case of Public Sector Companies having total assets of five billion rupees or more; or cu> (b) a person holding a master degree in finance from a university recognized by the Higher Education Commission with at least ten years relevant experience, in case of other Public Sector Companies. (3) The company secretary shall be responsible for ensuring that Board procedures are followed, and that all applicable laws, rules and regulations and other relevant statements of best practice are complied with. Where the company secretary is not separately appointed, the role of company secretary may be combined with chief financial officer or any other member of senior management. (4) No person shall be appointed as the company secretary of a Public Sector Company unless he is a,- (a) member of a recognized body of professional accountants; or (b) member of a recognized body of corporate or chartered secretaries; or (c) person . Holding a master degree in business administration or commerce or being a law graduate from a university recognized by the Higher Education Commission with at least five years relevant experience. (5) No person shall be appointed to the positions of the chief financial officer and company secretary unless he is fit and proper for the position. 15. Requirement to attend Board Meetings.-(1) The chief financial officer and the company secretary of a Public Sector Company shall attend ail meetings of the Board:- Provided that unless elected as a director, the chief financial officer and. The company secretary shall not be deemed to be a director or entitled to cast a vote at meetings of the Board for the purposes of these rules: Provided further that the chief financial officer and the company secretary shall not attend such part of a meeting of the Board, which involves consideration of an agenda item relating to them or that relating to the chief executive or any director. (2) In pursuance of sub-rule (1), the Board shall ensure that the; chief financial officer and the company secretary attend Board meetings, wherever required. 16. Financial Reporting Framework.-Every Public Sector Company shall adopt International Financial Reporting Standards, as are notified by the Commission under clause (i) of subsection (3) of section 234 of the Ordinance. 17. Directors' report to the Shareholders.-(1) The Board shall submit an annual report to the shareholders. (2) The Board shall make the following statements and provide the following information In their report to the shareholders, prepared under section 236 of the Ordinance, namely:- (a) the Board has complied with the relevant principles of corporate governanee, and has Identified the rules that have not been complied with, the period in which such non-compliance
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continued, and reasons for such non-compliance: . (b) the financial statements, prepared by the management of the Public Sector Company, present fairly its .State of affairs, the result of its operations, cash flows and changes in equity; (c) proper books of account of the Public Sector Company have been maintained; (d) appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates ate based on reasonable and prudent judgment; (e) they recognize their responsibility to establish and maintain sound system of internal control, which Is . Regularly reviewed and monitored: and (f) the appointment of chairman and other members of Board and the terms of their appointment along with the remuneration policy adopted are in the best interests of the Public Sector Company as well as in line with the best practices. (3) The disclosure of an Executive's remuneration ,1s an important aspect for a Public Sector Company. The annual report of a Public Sector Company shall contain a statement on the remuneration policy and details of the remuneration of members of the Board. Separate figures need to be shown for salary, fees, other benefits and other performance- related elements. (4) The directors' report of a Public Sector Company shall also include the following, where applicable, namely: - (a) where the Public Sector Company is reliant on a - subsidy or other financial support from the Government, a detailed disclosure of the fact; (b) significant deviations from last year In operating results of the Public Sector Company shall be highlighted and reasons thereof shall be explained; (c) key operating and financial data of last six years shall be summarized; (d) key performance indicators of the Public Sector Company relating to its social objectives and outcomes which significantly reflect the work and impact-of Public Sector Company and a comparison of actual results with the budgeted figures. Such indicators shall focus on as to how well the Public Sector Company, has responded to accountability requirements, improved service delivery, reduced costs and adherence to the principles of environmental and corporate social responsibilities; (e) where any statutory payment on account of taxes, duties, levies and charges is overdue or outstanding, the amount together with a brief description and reasons for the same shall be disclosed; (f) significant plans and decisions, such as corporate restructuring, business expansion and discontinuance of operations, shall be outlined along with future prospects, risks and uncertainties surrounding the Public Sector Company; ' (g) a statement as to the value of investments of provident, gratuity and pension funds, based on their respective audited accounts, shall be included; (h) the number of Board meetings held during the year and attendance by each director shall be disclosed; and (i) the pattern of shareholding shall be reported to disclose the aggregate number of shares (along with details, stated below) held by,- (1) Government; (ii) associated companies, undertakings and related parties (name wise details); (Hi) mutual funds; (iv) directors, Chief Executive, and their spouse and minor children (name wise details); (v) Executives; (vl) Public Sector Companies and corporations;
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(vil) banks, development finance institutions, non-banking finance companies, insuranpe companies, takaful companies, and modarabas; and (viii) shareholders holding fi^e percent or more voting rights in the Public Sector Company (name wise details). 18. Disclosure of Interests by Directors and Officers.- (1) Every director of a Public Sector Company, if he or his relative, is in any way, directly or indirectly, concerned or interested in any contract or arrangement entered into, or to be entered into, by or on behalf of.The Public Sector Company shall disclose the nature of' his concern or interest at a meeting of the directors. , (2) Any other officer (including the Chief Executive and other Executives) of a Public Sector Company, if he or his relative, is in any way, directly or indirectly, concerned or interested in any proposed contract or arrangement by the company shall disclose to the Company through a communication to the company secretary, the nature and extent of his interest in the transaction. Such officer and the company shall ensure that such information is properly placed and considered by any forum where the matter relating to such proposed contract or arrangement is to be discussed and approved. (3) If a director or officer has an existing Interest, before joining the Board, he shall disclose such interest to the Board, which shall take such facts into Consideration for any current and future decision making. 19. Directors' Remuneration.-(1) There shall be a formal and transparent procedure for fixing the remuneration packages of individual directors. No director shall be involved in deciding his own remuneration. (2) Directors' remuneration packages shall encourage value creation within the company, and shall align their interests with those of the company. These shall be subject to brior approval of shareholders or Board as required by company's Articles of Association. Levels of remuneration shall be sufficient to attract and. Retain the directors needed to run the company successfully. (3) Subject to the provisions of the company's Articles of Association, the shareholders or Board shall determine the scale of remuneration for non-executive directors. However, it shall not be at a level that could be perceived to compromise their independence. '(4) The Public Sector Company's annual report shall contain criteria and details of the remuneration of each director, including salary, benefits and performance linked incentives. 20. ResponsibUity for financial reporting and corporate compliance.--No Public SeGtor Company shall circulate Its financial statements unless the chief executive and the chief financial officer, present the financial statements, duly certified under their respective signatures, for consideration and approval of the audit committee and the Board. The Board shall, after consideration and approval, authorize the signing of financial statements for issuance and circulation. 21. Audit Committee.-(J) The Board-shall establish an audit committee, whose members shall be financially literate and majority of them, including its chairman, . Shall be Independent Non- Executive Directors, subject to the provisions of sub-rule (2) of rule 12. The names of members of the audit committee shall be disclosed in each annual report of the Public Sector Company. (2) The chairman of the Board as well as the chief executive of the Public Sector Company shall not be a member of the audit committee. (3) The chief financial officer, the chief internal auditor,' and a representative of the external auditors shall attend all meetings of the audit committee at which issues relating to accounts and audit are discussed:-- Provided that at least once at year, the audit committee shall meet the external auditors without the presence ' of the chief financial officer, the chief internal-auditor and other executives being
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present, to ensure independent communication between the external auditors and the audit committee: Provided further that at least once a year, the audit committee shall 'meet chief Internal auditor and other members of the internal audit function without the chief financial officer and the external auditors being present. (4) The Board shall determine the terms of reference of the audit committee. The terms of reference shall be in writing, specifying the mandate of the audit committee. The audit committee shall have full and explicit authority to Investigate any matter within its terms of reference and shall be provided with adequate resources and access to all relevant Information. (5) The audit committee shall, inter alia, be responsible for recommending to the Board the appointment of external auditors by the Public Sector Company's shareholders and shall consider any questions of resignation or removal of external auditors, audit fees and provision by external auditors of any service to the Public Sector Company in addition to audit of its financial statements. In the absence of strong grounds to proceed otherwise, the Board shall act in accordance with the recommendations of the audit committee in all these matters. However, the Board shall not be…
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