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Petitioner: Dr. AMIR BUX CHANNA VS Respondent: ISRA ISLAMIC FOUNDATION (GUARANTEE) LTD.Honorable Justice Muhammad Shafi SiddiquiArshad Tayebally and Omer Memon,Raashid Anwar
2023 C L D 691 [Sindh] Before Muhammad Shafi Siddiqui, J Dr. AMIR BUX CHANNA through Attorney and another---Petitioners Versus ISRA ISLAMIC FOUNDATION (GUARANTEE) LTD. through Secretary and others---Respondents Judicial Company Miscellaneous No. 29 of 2020, decided on 9th December, 2022. (a) Companies Act (XIX of 2017)--- ----S. 286---Affairs of company---Coram to file application---Threshold of 10% of membership---Application was filed by two members which met the criteria but one petitioner withdrew and a new member was inducted---Objection was raised by respondent to maintainability of application---Validity---Maintainability of application was to be judged on the day it was presented---After withdrawal of one member it was cured by a bona fide attempt when a new member was added as co-petitioner---Application was maintainable in circumstances. (b) Isra University Act (V of 1997)--- ----Ss. 7(1) & 30---Foundation formed under the Companies Law---Vacancies of university, filling of---Nomination and appointment---Distinguished---Respondent university was a private institution and petitioners assailed its affairs regarding filling of vacancies, number of its members and finances etc.---Validity---Fundamental difference between nomination and an appointment was that the former represented interest of the nominating authority and was to serve at its pleasure whereas the latter was in relation to an independent position and was to serve in accordance with terms and conditions of the post to which he or she was appointed---Private universities are regulated and governed but cannot be taken over---Respondent university was a statutory body but it remained a private university (since it had been established by the Foundation and not the State) and did not perform any sovereign functions though operate and function within the frame of Isra University Act, 1997---Superior Courts have consistently refused to issue writs of quo warranto to private universities even though they were established through statutes---If High Court was to approve nomination of Chancellor by the Foundation, subject to approval and appointment by Board of Governors of University, it would amount to rewriting S. 7(1) of Isra University Act, 1997---There was no such requirement in S. 7(1) of Isra University Act, 1997, or any other provision as the same would destroy the distinction between 'nominate' and 'appoint' that had been intentionally created by the Legislature in Isra University Act, 1997 and every person to be nominated under the Isra University Act, 1997, would then also have to be appointed by the Board of Governors---This would necessitate rewriting of all provisions that related to nominated posts under Isra University Act, 1997 and defeat the purpose and intent of Isra University Act, 1997, which was to provide the Foundation a role in the affairs of the University through Chancellor and instead would make the foundation subservient to the Board of Governors---Such appointment of Chancellor would destroy the very fabric that had distinguished nomination and appointment---High Court restored the Foundation to its original members as it stood in year 2011 prior to induction of new members---High Court declared that the council so restored would be at liberty to amend Memorandum and Articles of Association and consequently induct any or as many member council as the amended Articles permitted---High Court directed that the restored council would announce a date of meeting for nominating a Chancellor and until then Registrar of University was to perform daily functions in routine; that audit of Foundation (IIF) would be conducted for last ten years and claim of rent was neither illegal nor illogical but should be fair as far as quantum was concerned---Application was allowed accordingly. Rajahmundry Electric Supply Corporation Ltd. v. A. Nageshwara Rao AIR 1956 SC 213 (215 Para 5); Jagdish Chand Mehra v. New India, Embroidery Mills AIR 1964 Punjab 401 (Page 402 Para 7); Prof. Dr. Asad Aslam Khan v. Government of Punjab 2021 PLC (C.S.) 304; Waseem Majid Malik v. Federation of Pakistan 2020 CLD 1207; Dr. Muhammad Iqbal Zafar v. The Province of Punjab 2019 PLC (C.S.) 63; Salman Shahid v. University of Management and Technology 2022 CLC 1328; Aown Abbas Bhatti v. Forman Christian College PLD 2018 Lah. 435 and Anoosha Shaigan v. Lahore University of Management Sciences PLD 2007 Lah. 568 ref. (c) Interpretation of statutes--- ----Reading down, principle of---Applicability---Principle of reading down is applied when a provision is capable of more than one interpretation and one or more of those interpretations would render the other provisions either redundant or illusory or in conflict with main frame of the Statute---In such cases, Courts read down the provision in a manner that saves the provision. Peoples University of Medical and Health Sciences for Women v. Pakistan Ministry of Health PLD 2021 Sindh 256; Muhammad Arif Ice Factory v. Federation of Pakistan 2021 PTD 1608 and Province of Sindh v. M.Q.M. PLD 2014 SC 531 rel. Arshad Tayebally and Omer Memon for Petitioners. Raashid Anwar for Respondent No. 1. Mamoon N. Chaudhry for Respondent No. 2. Nemo for Respondent No.3. Dates of hearing: 6th, 22nd, 29th September, 4th, 5th, 6th, 7th, 10th, 12th and 13th October, 2022. JUDGMENT MUHAMMAD SHAFI SIDDIQUI, J.---Before I start considering the respective arguments of the counsels1 who assisted me, I feel necessary to give a brief history that led to these multiple disputes amongst the educators. 2. Prior to formation of respondent No.1 i.e. Isra Islamic Foundation (IIF) under the Companies Law, a raw idea was conceived by a group of individuals working in Saudia Arabia, who later claimed themselves as founding members of respondent No.1. This group was able to convince those who matters in Kingdom of Saudi Arabia and the idea of these individuals was initially forwarded by Imam and Khateeb of Holy Mosque i.e. Sheikh Muhammad Subail Abdullah who on 20.06.1986 claimed to have laid down the foundation stone. This event was then followed when the purported founding members approached Mufti-e-Azam Abdul Aziz Bin Abdullah i.e. the General Director for Scientific Research Initiative Advocacy in Saudi Arabia who issued certificate of notification on 25th Moharram 1409 Hijri/7th September, 1988. These founding members then carried this certificate of Mufti-e-Azam with them to all mosques of Riyadh, Jeddah and Dammam etc. During Jumma prayers the Imams of different mosques were then used to deliver Sermons to apprise people about the foundation of this charitable institute and convince them for donations. Those Nimazis and pilgrims, influenced and convinced, contributed whole heartedly and generously towards the cause. It is claimed that approximately 1.5 Million Saudi Riyals were collected in that period through this campaign. Respondent No.2 claimed to have brought this money in Pakistan and invested, which has now transformed into a fortune and hence the fight among the founders commenced. 3. A statutory entity was then formed as respondent No.1 i.e. Isra Islamic Foundation (Guarantee) Limited on 28.08.1990 (IIF) to bridle this fortune collected by them. It is now that so called founding members have their respective disagreement over the fortune that led to filing of not only this JCM but as a sequel to it, numerous suits have been filed; summary of which is as under:-
S. No.
Suit No.
Parties
Date of filing
Subject matter
1.
Suit 1841/2020
UMER KAZI AND OTHERS v. ASADULLAH KAZI AND OTHERS
24-Nov-20
Plaintiffs seeking declaration, permanent injunction that Impugned notifications are illegal (Impugned letter dated 19-Oct-2020, whereby Isra University (herein after referred as "IU") asked the Isra Islamic Foundation (herein after referred as "IIF" to withdraw notification nominating the chancellor being without due process. and Notification issued by IU dated 20-Oct-2020, whereby it was clarified to all concerned that nomination regarding Chancellor was not received by IU from IIF and District and Session Judge Hyderabad has granted ad interim order by restraining Dr. Hameedullah Kazi and Ghulam Qadir Kazi in interfering the university affairs)
2.
Suit 1842/2020
UMER KAZI AND OTHERS v. ASADULLAH KAZI AND OTHERS
24-Nov-20
Plaintiffs seeking declaration, permanent injunction that Impugned notifications are illegal (Impugned letter dated 19-Oct-2020, whereby Isra University (herein after referred as "IU") asked the Isra Islamic Foundation (herein after referred as "IIF" to withdraw notification nominating the chancellor being without due process and Notification issued by IU dated 20-Oct-2020, whereby it was clarified to all concerned that nomination regarding Chancellor was not received by IU from IIF and District and Session Judge Hyderabad has granted ad interim order by restraining Dr. Hameedullah Kazi and Ghulam Qadir Kazi in interfering the university affairs)
3.
Suit 1872/2020
UMER KAZI AND OTHERS v. ASADULLAH KAZI AND OTHERS
24-Nov-20
Impugned Notifications of IU dated 24.10.2020 (abolishment of Pro-Vice Chancellors Positions), 03.11.2020 (Fixation of the Salary of VC), 17.11.2020, (Disciplinary Action/Termination from Service of Prof: Dr. Hameedullah Kazi), 17.11.2022 (Office Order that those members/Director of IIF working in IU will have same pay and benefits as entitled to others) and 20.10.2022 (Show cause Notice to Mr. Ahmed Waliullah Kazi) as ultra Vires to Isra University Act-1997, seeking permanent Induction for any actions to be taken on basis of above notifications
4.
Suit 1873/2020
AHMED WALIULLAH KAZI v. NAZIR LEGHARI AND OTHERS
27-Nov-20
Plaintiffs seeking declaration, permanent Injunction that he was lawfully appointed As Acting VC of IU.
5.
Suit 810/2021
NAZEER ASHRAF LAGHARI AND ANOTHER v. UMAR KAZI AND OTHERS
27-Nov-20
Plaintiffs seeking declaration and permanent Injunction that 1. officers and authorities are responsible for affairs of IU and not Defendants. 2. Plaintiff No.1 is on tenure post and cannot be removed or suspended 3. Plaintiff No.2 is the registrar of IU. That Defendant be restrained from removing them.
6.
Suit 2383/2021
ISRA UNIVERSITY v. ISRA ISLAMIC FOUNDATION (GUARANTEE) LIMITED AND OTHERS
1-Apr-21
Suit for Declaration and Permanent Injunction, filed on behalf of IU, that all affairs be governed and managed by university and defendants be restrained to interfere or disposing any property of IU. (20 Prayers)
7.
Suit 2604/2021
ISRA UNIVERSITY AND OTHERS v. ASADULLAH KAZI AND OTHERS
14-Oct-21
Plaintiff impugned 3 Show causes dated 04-08-2021, issued by defendant 3 (As registrar) as per decision of BoG to Plaintiff Nos. 2 to 4, seeking suspension of these notifications.
8.
Suit 2604/2021
NAZEER ASHRAF LEGHARI v. PROVINCE OF SINDH AND OTHERS
10-Nov-21
Impugned Notification (Circular) of IU dated 05.11.2021, with subject "UPDATE OF ISRA UNIVERSITY" that Mr. Assadullah Kazi has accepted resolution of the BOD of IIF dated 18-10-2020 and withdrawn his petition (JCM 29/2020), in consequential effect Mr. Hameedullah Kazi is Chancellor, plaintiff seeking declaration that its without law full Authority and any inductions to Foundations' council of Management in excess of 10 are unlawful and Void ab-initio. That Foundation may be restrained from appointing Chancellor until JCM-29/2020 is decided. That no interference be allowed by Defendants in the performance of plaintiffs function as VC and Acting Chancellor.
9.
Suit 3058/2021
ISRA UNIVERSITY AND ANOTHER v. DR. NAZIR ASHRAF LAGHARI AND ANOTHER
23-Dec-21
Impugned Notification of IU dated 03.11.2021, which states that Chancellor of University Mr. Assadullah Kazi not attending the duties and his whereabouts could not be ascertained, so Mr. Nazir Ashraf Laghari VC in pursuance of section 7(5) of Act-1997 will perform functions of Chancellor and Impugned Circular dated: 11.11.2021, whereby it was circulated that in terms of Order dated 10-11-2021, passed by Hon'ble High Court in Suit 2604 of 2021, Prof: Dr. Nazir Ashraf Laghari VC of IU, remain Acting Chancellor As well . Plaintiff seeking suspension of these notification and circular.
10.
Suit 231/2022
ISRA ISLAMIC FOUNDATION (GUARANTEE) LTD AND OTHERS v. NAZIR ASHRAF LAGHARI AND OTHERS
11-Feb-22
Plaintiff's Seeking declarations that IIF is managing IU through Plaintiff Nos. 3 and 4 (Chancellor and Acting VC) in accordance with Act 1997, Defendants be restrained to disturb the ingress and egress of plaintiff's. Also seeking submission of list and students and collected fees from 26.11.2020
11.
Suit 380/2022
NAZEER ASHRAF LEGHARI v. PROVINCE OF SINDH AND OTHERS
2-Mar-22
Plaintiff has challenged the section 7(1) of the Act regarding Appointment of Chancellor as Ultra Vires to Articles 25 and 25-A of the Constitution 1973 and Judgments of superior Courts. On the other hand he has also challenged the appointments of Defendants Nos.3 and 4 and their actions being ultra vires to Articles 9, 25 and 25-A of the Constitution. (17 Prayers)
12.
Suit 1149/2022
PROF. DR. HAMEEDULLAH KAZI AND OTHERS v. ABDUL QADIR MEMON AND OTHERS
5-Aug-22
Plaintiffs Challenged the Statement given by Defendant No. 1 as malicious, defamatory and scandalous. That defendants through different media sources sought parents and students attention and published that persons occupying Islamabad and Karachi Campus are awarding fake degrees and collecting amounts.
4. I have heard learned counsel appearing for the parties and have perused the material available on record of this J.M. 29 of 2020. While I was hearing counsel, I thought of deciding the controversy, as raised in this JCM as this would perhaps serve the purpose. Most of the issues originated have a direct nexus with the proceedings of IIF and the conduct of council members of IIF and it may decide most of the controversies one way or the other. Thus, I propose to decide the main JCM (No.29 of 2020) and all counsel were in agreement to this disposal first. 5. The main document on the premise of which entire set up of ISRA/IIF is based is a certificate enunciating the preamble, true English translation of which is as under:- (Text is as provided and not opposed). "Dated 25th Muharram, 1409 Hijri Subject: Certificate of notification for an Islamic center of propagation and those responsible for it in the region of Sindh Pakistan. All praise is for Allah, to proceed, The idea of opening an Islamic center started in Sindh Pakistan due to the many difficulties. Islam is belief and methodology of life, and it will return to being strange amongst people as innovations; polytheistic ideas and destructive schools of thought spread. And when the economic; cultural; social and health level drops the enemies of Islam are able to spread Christianity and their hidden and destructive ideas among people, at times hiding behind the pretext of medicine, and at other times through the pretext of science and economic aid to those in need. From this perspective, a group of Islamic educators amongst doctors and others of Pakistani origin working as Professors in Saudi universities came forward and were given support by their colleagues among the Saudi doctors and teachers in bringing about this project aimed at reviving the spirit of tawheed and service to Islam by way of education and cultivation in areas of technology; medical care and social services. By Allah's praise, the project started, and this group of individuals, through their unique efforts; were able to buy some land approximately 30,366 square meters costing 1.5 million rupees in order to establish a masjid; a school and hospital large enough to contain 300 beds. The foundation rock was laid by Sheikh Muhammad bin Abdullah As-Subayel the imam and khateeb of the holy masjid in Makkah in brief and all praise is for Allah now the phases for implementation of the project have started and some people have participated in this project may Allah reward them immensely. From what we know of the urgent need of the Muslims for such projects, then we encourage the people of good to contribute to whatever they deem for to the people that are carrying this project forward as they are known to us as trustworthy; up righteous and honest. We ask Allah to give them the ability to carry out this project in the best possible way ad accept their efforts and all those that aid them. The founders for this project are as follows: 1. Dr. Ghulam Qadir Qazi (Pakistani), Head of the Project, Assistant Professor, Department of Ophthalmology, University of King Faisal, Faculty of Medicine and Medical Sciences. P.O. Box 2114 Dammam, KSA. 2. Dr. Yahya Nassir Khawaji (Saudi), Project Secretary, Deputy Head and Assistant Professor, Faculty of Medicine, University of King Faisal. P.O. Box 2114 Dammam, KSA. 3. Dr. Amir Bakhsh Channa (Pakistani), Member, Assistant Professor, Faculty of Anesthesia, Kind Saud University, Riyadh, KSA 4. Dr. Ghulam Hussain Siddiqui (Pakistani), General Secretary of the Project, Co-teacher, College of Engineering, Kind Saud University, Riyadh, KSA. 5. Dr. Asadullah Qazi (Pakistani) Member, Professor, Department of Geological Engineering, Faculty of Earth Sciences, Abdul Aziz University, Jeddah, KSA. 6. Dr. Nazir Ahmed Laghari (Pakistani) Member, Eye Specialist, Military Hospital, Riyadh, KSA. 7. Sheikh Abdul Qadir bin Habibullah Sindhi (Saudi) Member, Lecturer at the Islamic University, Madina, KSA. 8. Dr. Aadil Abdul Aziz Arashood (Saudi) Member, Assistant Professor, Department of Ophthalmology, Faculty of Medicine, King Faisal University, P.O. Box 2114 Dammam, KSA." Preliminary issue of maintainability 6. Mr. Omer Memon and Mr. Raashid Anwar have assisted me on the subject issue. The JCM was filed under section 286 of the Companies Act, 2017 by (i) Dr. Aamer Bux Channa and (ii) Mr. Asadullah Qazi. These are two out of five founders of ISRA Islamic (Guarantee) Foundation, as not disputed. 7. After filing of this JCM on 12.11.2020, Mr. Asadullah Qazi, being original petitioner No.2, subsequently moved an application2 on 02.11.2021 (after a year) to withdraw himself from the proceedings to his extent, which was allowed3. It is this preliminary objection which has been raised by respondent's counsel that on account of withdrawal of petitioner No.2 from the petition, minimum threshold i.e. 10% shareholding, to maintain a petition under section 286 of Companies Act, 2017 ceases from the date of withdrawal of petitioner No.2. It is claimed by the respondent that as there were 19 council members (in terms of subsequent induction, challenged in this J.C.M), minimum of two petitioners is required to maintain the petition to represent 10% cap of shareholding. This threshold is required to be maintained throughout till its disposal, as argued. 8. Followed by withdrawal of petitioner No.2, an intervener's application bearing C.M.A. No.430 of 2021 was filed on 23.11.2021, by Prof. Dr. Nazir Ashraf Leghari (another founding member of the foundation). Until hearing of the main JCM, none of the respondents filed any counter-affidavit or objections to this application. Although this may not be the consideration for allowing the application to become a party, but Prof. Dr. Nazir Ashraf Leghari was/is otherwise a proper and necessary party on numerous counts such as he being one of the founding member, certain directions having been issued as being Vice Chancellor of the University in relation to monetary aspects of the matter, signing of some transactions of the Bank account of the university, being managed by Nazir of this Court, and also that on 20.11.2021 while hearing Suit No.2604 of 2021 with consent, interim order passed in the pending proceedings ordered to continue, irrespective of withdrawal of Mr. Asadullah Qazi, petitioner No.2. 9. Although the last above reason could have been a tentative assessment, but in substance Prof. Dr. Nazir Ashraf Leghari who initially did not join the proceedings, sailing in the boat of petitioner No.1 and has submitted same grounds to be a party as petitioner No.2. The intervener application was also allowed to maintain 10% threshold, by short order while main JCM was reserved on 13.10.2022. For Identification, the newly added petitioner is identified as 2A. The strict principles of Order I, Rule 10, C.P.C. should be read with section 151, C.P.C., in view of facts of the case. I maintain the above reasons for allowing the intervener's application. 10. The question of maintainability of JCM 29 of 2020 on this reasoning as such stands diluted by the induction of intervener as co-petitioner, and it was only for a short period when petitioner No.2 (earlier one) suddenly, without informing petitioner No.1, withdrew himself from the proceedings and no sooner it was realized, the intervener application was filed to rescue the petitioner No. 1 from the situation, if at all any deficiency existed, which I doubt in view of following understanding of law. 11. Notwithstanding the above independent conclusion, when this JCM was filed it was filed by two petitioners and those two petitioners contributed towards minimum threshold of 10% to maintain this petition under section 286 of Companies Act, 2017 on the purported membership of 19 council members. This apparently, under the above circumstances, seems to be a case of first impression, as stated, as no one has cited any judgment of this Court and/or of apex Court that could have ideally encountered the situation especially in company matters. The case law however has developed in the neighbouring jurisdiction to cover the issue conclusively, such as in the case of Rajahmundry Electric Supply Corporation Ltd.4, and also in the case of Jagdish Chand Mehra5 where identical issue was discussed. 12. Maintainability of the petition has to be adjudged on the day of its presentation and the event subsequent to it may not ordinarily come in the way. In the case of Rajahmundry ibid view as expressed on the subject is as under:- "The number of members of the Company is stated to be 603. If, therefore, 65 members consented to the application in writing, that would be sufficient to satisfy the condition laid down in section 153-C, sub-clause 3(a)(i). But it is argued that as 13 of the members who had consented to the filing of the application had, subsequent to its presentation, withdrawn their consent, it thereafter ceased to satisfy the requirements of the statute, and was no longer maintainable. We have no hesitation in rejecting this contention. The validity of a petition must be judged on the facts as they were at the time of its presentation, and a petition which was valid when presented cannot, in the absence of a provision to that effect in the statute, cease to be maintainable by reason of events subsequent to its presentation. In our opinion, the withdrawal of consent by 13 of the members, even if true, cannot affect either the right of the applicant to proceed with the application or the jurisdiction of the court to dispose of it on its own merits." 13. Similar is the view in the case of Jagdish (supra) which was later in time. 14. Thus, my conclusion on the issue of maintainability, as raised, is that it was never an issue as the event of maintainability on the above count has to be judged on the day this petition was presented and notwithstanding above it was even cured by a bona fide attempt when petitioner No.2A was added as co-petitioner. Merit/posed questions 15. The submissions of learned counsel, including those which may embark upon functioning and operation of the Isra University under Isra University Act, 1997 give rise of some multiple issues. The key issues as arises out of the JCM, being respondent No.1 as a key element to be probed, certain questions/points have been surfaced as I discovered, these are: i) Whether induction of members/directors to the Council of Management of the Foundation in the year 2011 and 2017 whereby minimum number of directors/members was taken beyond 10, was violative of the law and/or Memorandum and Articles of Association of the foundation? ii) Whether the Foundation and University have been separated and segregated in the practical and legal sense or does the foundation has any right to interfere in governing the affairs of University? iii) Whether forensic audit be conducted to ascertain if the funds of the Foundation (incoming and outgoing) were embezzled and if yes by whom? 16. These are some of the core points which I feel go to the root of the dispute and conclusion of these may decide the wrongs being done and/or the culprits. Point/Question No.(i) 17. Since respondent No.1 is an outcome and creation of Memorandum and Articles of Association, it is to be seen that its operation and function should also be within the frame of its constitution i.e. Memorandum and Articles of Association. These statutory…
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