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Official Citation: 2024 IHC 172875
Court / Jurisdiction: Islamabad High Court
Parties: Hyderabad Chamber of Commerce & Industry vs Ministry of Commerce etc.
Ruling Summary: This decision was rendered by the Islamabad High Court, officially reported as 2024 IHC 172875. In this matter between Hyderabad Chamber of Commerce & Industry and Ministry of Commerce etc., the court adjudicated key questions of statutory construction, procedural regularity, and legal precedent under Pakistani law.
Core Holding: The honorable bench evaluated governing statutory provisions and judicial authorities to establish the rights of the parties, delivering the binding reasoning set out below.
COURT: Islamabad High Court (Honourable Mr. Justice Miangul Hassan Aurangzeb) AUTHOR JUDGE: Honourable Mr. Justice Miangul Hassan Aurangzeb DECISION DATE: 22-MAY-2024 CASE NO: Writ Petition-158-2023 CITATION: 2024 IHC 172875 PARTIES: Hyderabad Chamber of Commerce & Industry VS Ministry of Commerce etc. LAW / SECTION: - SUBJECT: Miscelleneous, Other REMARKS: Petitioner seeks to set aside the issuance of a fresh license dated 20.04.2022 to respondent No.5. . ============================================================ JUDGMENT SHEET IN THE ISLAMABAD HIGH COURT, ISLAMABAD JUDICIAL DEPARTMENT
W.P.No.158 of 2023 Hyderabad Chamber of Commerce and Industry Versus Ministry of Commerce and others
Date of Hearing: 10.05.2024 Petitioner / Appellant by: M/s Ali Nawaz Kharal, Hassan Muneeb Zia, Ayesha Tauqeer Aslam, Narmeen Jamal, Malik Qamar Abbas, Advocates. Respondents by: Mr. Arshid Mehmood Kiani, learned Deputy Attorney-General. Ms. Asia Batool, learned Assistant Attorney General. Malik Ghulam S abir, Advocate for respondent No.5 in writ petition No.158/2023 and for the applicant in C.M. No.969/2022 in C.M.A. No.56/2022. M/s Muzaffar A. Mirza, Chief Prosecutor and Hasnain Raza, SPP, SECP. Pir Shah Gul Ahmad, Deputy Director, D.G.T.O. _____________________________________________________________________
MIANGUL HASSAN AURANGZEB, J :- Through this judgment, I propose to decide Appeal No.56/2022 and writ petition No.158/2023 since they entail certain common features. 2. Through Appeal No.56/2022 filed under Section 21(4) of the Trade Organizations Act, 2013 ( “the TO Act, 2013 ”) the appellant, Hyderabad Chamber of Commerce and Industry ( “Old-HCCI”), impugns the order dated 01.04.2022 passed by the C ommittee of the Federal Cabinet whereby its appeal ag ainst the order dated 27.01.2020 passed by the Directorate General of Trade Organizations ( “DGTO”) was turned down. Through the said order dated 27.01. 2020, the licenc e issued to the Old- HCCI was cancelled. 3. Through writ petition No. 158/2023 the petition er, Old-HCCI, questions the grant of licenc e dated 20.04.2022 by the Ministry of Commerce to the New-HCCI under Section 3 of the 2013 Act. 4. The record shows that on 16.03.1959, the Ministry of Commerce, Government of Pakistan granted a licenc e to Hydera bad Chamber of Commerce and Industry with the direction that it be registered as a 2 C.M.A. No.56/2022 & W.P. No.158/2023
company with limited liability. On 14.07.1960, the Old-HCCI was incorporated as a company under the provisions of the erstwhile Companies Act, 1913. On 07.05.2008, the Minis try of Commerce renewed the licence of the Old-HCCI as a trade organization under the provisions of Section 3 of the Trade Organizations Ordinance, 2007 (“the TO Ordinance, 2007”). This licenc e was valid for a period of three years and was due to expire on 06.05.2011. 5. The TO Act, 2013 was enacted on 20.02.2013. Section 6(1) of the said Act requires a trade organization to renew its licenc e every five years, whereas Section 6(2) provides that an a pplication for the renewal of licenc e shall be made to the DGTO ninety days prior to its expiry . In terms of the proviso to Section 6(2) the DGTO, on sufficient cause bein g shown, by an order in writing, may extend the said period but not for a period exceeding thirty days. Section 7(1)(a) of the TO Act, 2013 provides that the licenc e granted to a trade organization shall be cancelled by the Federal Government where a trade organization fails to apply for the renewal of the licenc e granted under Section 3 of the said Act within the prescribed or extended period allowed by the DGTO. 6. Apparently, through notice dated 12.12.2011, the DGTO had required the Old-HCCI to apply for the renewal of its licenc e. No response was given to the said notice by the Old-HCCI. On 21.06.2013, the DGTO issued a final notice to the Old-HCCI requiring it to file an appeal before the Secretary, Commerce Division under the provisions of Section 21(2) of the TO Act, 2013 before 30.06.2013 , failing which the licenc e would be cancelled under Section 7 of the TO Act, 2013. 7. The Old-HCCI’s case is that on 27.06.2013, it applied for the renewal of its licenc e in the format provided in Schedule B to the Trade Organization Rules, 2013 ( “the TO Rules, 2013 ”) and also deposited the requisite appeal fee. Through letter dated 31.07.2013, the DGTO pointed out nine deficiencies in the Old-HCCI’s appli cation for the renewal of its licence. After the Old-HCCI c leared some of the deficiencies the DGTO , vide letter dated 18.12.2013 , required the following documents from the Old-HCCI to be furnished within a period of ten days so that the remaining deficiencies in its application for the renewal of its licence are cleared:- 3 C.M.A. No.56/2022 & W.P. No.158/2023
“i. Performance review report as required under rule 23(2) of TORs, 2013. ii. Hyderabad Chamber of Commerce & Industry ha s been furnished only Acknowledgment of filling certain documents with Securities & Exchange Commission of Pakistan. Chamber may be required to furnish complete Corporate Compliance Certificate from SECP. iii. An updated hard copy of the memorandum and articles of association of the trade organization as approved by the Ministry of Commerce and SECP. iv. An updated soft copy of the memorandum and articles of association of the trade organization as approved by the Ministry of Commerce and SECP.”
8. On 12.05.2014, t he DGTO sent a reminder to the Secretary General of the Old-HCCI with the warning that if the required documents are not furnished within seven days, it would render the Old-HCCI’s licence liable to cancellation. After this wakeup call, the Old-HCCI, vide letter dated 19.05.2014, applied to the Securities and Exchange Commission of Pakistan (“SECP”) for the issuance of a corporate compliance certificate . In terms of Rule 10(2) (b) of the TO Rules, 2013, the licenc e of a trade organization can be renewed for a further five years subject to inter alia the condition that it has been reporting corporate compliance to the SECP and the DGTO. Vide letter dated 27.05.2014, the SECP informed the Secretary of the Old-HCCI that the corporate compliance certificate could not be issued since the matter regarding the election of the directors of the Old-HCCI was pending before a Court. 9. On 06.01.2015, the DGTO issued a notice to the Secretary General of the Old-HCCI calling upon him to show cause as to why the appli cation for the renewal of its licenc e should not be rejected due to its failure to fulfill the requirements specified in the DGTO’s letters dated 31.07.2013, 18.12.2013 and 12.05.2014. Vide letter dated 18.02.2015, the DGTO gave a period of fifteen days to the Old-HCCI to clear the deficiencies in the application for the renewal of its licenc e. Perusal of the said letter shows that the only two documents that the Old -HCCI was required to submit was (i) a soft copy of its Memorandum and Articles of Association ma de in accordance with the requirements of the TO Act, 2013 and the TO Rules, 2013 and (ii) the corporate compliance certificate issued by the SECP. Vide letter dated 04.03.2015, the DGTO informed the Old -HCCI that the 4 C.M.A. No.56/2022 & W.P. No.158/2023
application for the renewal of its lic ence will be processed subject to the submission of a corporate compliance certificate. 10. It is necessary at this stage to detail the history of the litigation with respect to the elections of the Executive Committee of the Old -HCCI. Apparently, suit No.1408/2012 was filed before the Hon'ble High Court of Sindh by members of the Old-HCCI voicing grieva nces pertaining to the election of the Executive Committee conducted in 2012. Vide order dated 20.09.2012, the Hon'ble High Court of Sindh issued an injunc tive order which had the effect of the previously elected Executive Committee to continue working beyond its term. The Old-HCCI asserts that it was due to the said injunctive order that elections of the Executive Committee could not be held between 2012 an d 2018. It also asserts that as its licence was not renewed due to the said injunctive order, the SECP was not issuing a corporate compliance certificate. The said suit was decreed vide judgment dated 05.08.2013 wherein it was held inter alia that the exis ting Executive Committee of the Old-HCCI would continue to hold their offices until the next elections. 11. On 25.09.2013, some members of the Old-HCCI filed suit No.1204/2013 before the Hon'ble High Court of Sindh. Again vide order dated 25.09.2013, the process of the election of the Executive Committee was stayed. On 11.06.2015, the said stay order was recalled and on 03.02.2020, the said suit was dismissed as withdrawn. 12. On 03.09.2015, suit No.1648/2015 was filed by some members of the Old-HCCI befo re the Hon'ble High Court of Sindh and on 03.09.2015 a status quo order was issued , as a result of which elections of the Executive Committee of the Old-HCCI were not held. This injunctive order was vacated on 20.03.2018 and the said suit was dismissed for non- prosecution on 20.11.2019. 13. It was not until 27.05.2018 that elections of the Executive Committee of the Old-HCCI were held. Even by this stage, the Old-HCCI’s application for the renewal of its licence was pending with the DGTO. 14. On 03.06.2019, the Old-HCCI filed writ petition No.2275/2019 before this Court praying for a direction to the SECP to issue a corporate compliance certificate to the petitioner. Furthermore, the Old-HCCI had also sought a direction to be issued to the DGTO to renew it s licenc e. 5 C.M.A. No.56/2022 & W.P. No.158/2023
Since the Old-HCCI’s licence had expired on 06.05.2011 and had not been renewed at any material stage, another party forming itself as the Hyderabad Chamber of Commerce and Industry ( “New-HCCI”) had, on 26.04.2019, applied to respondent No.2 for the issuance of a licence. The New-HCCI had filed an application to be impleaded as a respondent in writ petition No.2275/2019. The stance of this party was that by operation of Section 4 of the TO Act 2013, the licence granted to the Old-HCCI prior to the enactment of the 2013 Act stood revoked. The New -HCCI’s grievance was that its application for the grant of a licence was not processed by the DGTO due to the pendency of litigation before this Court. Vide order dated 16.10.2019, the said writ petition w as disposed of with the direction to the DGTO to decide (i) the Old-HCCI’s applicati on for the renewal of its licence, and (ii) the New -HCCI’s appli cation for the grant of a licenc e strictly in accordance with the law. 15. Vide order dated 10.01.2020, the DGTO turned down the Old -HCCI’s application for the renewal of its licen ce. Furthermore, the DGTO issued a notice to the Old -HCCI to show cause as to why its licen ce should not be cancelled under Section 7 (f), (g) and (h) of the TO Act, 2013 and the TO Rules, 2013 . It was also ordered that the New -HCCI’s appli cation for the grant of a licenc e shall be processed in accordance with the said Act and Rules. 16. On 14.01.2020, a reply to the said show cause notice was submitted on behalf of the Old -HCCI seeki ng the withdrawal of the DGTO’s order dated 10.01.2020. Vide order dated 27.01.2020, the DGTO cancelled the Old-HCCI’s licence. Aggrieved by the said order, the Old -HCCI preferred an appeal before the Federal Government under Section 21(2) of the TO Act, 2013. Vide order dated 01.04.2022, the said appeal was dismissed. Appeal No.56/2022 against the said order dated 01.04.2022 has been filed by the Old-HCCI under Section 21(4) of the TO Act, 2013 before this Court. 17. On 20.04.2022, licenc e No.307 was grant ed by the Federal Government to the New -HCCI under Section 3 of the TO Act, 2013 . The grant of the said licenc e has been questioned by the Old -HCCI in writ petition No.158/2023, which was filed on 17.01.2023. 18. Respondent No.5 in writ petition No.158/2023 is Adeel Siddique, who is the sole proprietor of Premier Paint Industry, which is a Corporate 6 C.M.A. No.56/2022 & W.P. No.158/2023
Member of the New -HCCI. He had filed application (C.M.No.969/2022) to be impleaded as a respondent in Appeal No.56/2022. Perusal of the order dated 27.01.2020 passed by the DGTO and the order dated 01.04.2022 passed by the Committee of the Federal Cabinet shows that respondent No.5 was heard before the said orders were passed. Therefore, respondent No.5’s application for impleadment as a respondent in Appeal No.56/2022 is allowed. 19. Learned counsel for the Old-HCCI, after narrating the facts leading to the filing of the instant petition, submitted that no opportunity of a hearing was afforded to the Old-HCCI by the DGTO before passing order dated 27.01.2020 w hereby its licenc e was cancelled; that Section 7 (2) of the TO Act, 2013 obligates the Federal Government to afford an opportunity of a hearing to a trade organization befor e the cancellation of its licence; that the DGTO’s order dated 27.01.2020 does not s pecify the sub-clause in Section 7 of the TO Act, 2013 which Old-HCCI was alleged to have violated; that by granting a licence to the New -HCCI, the DGTO has denied the Old -HCCI’s right for the grant of a de novo licence under Section 9 of the TO Act, 2013; that Section 2(f) of the TO Act, 2013 defines an “existing trade organization” to mean an organization licenc ed under the Trade Organizations Ordinance, 1961 (“the TO Ordinance, 1961”); that the “repealed ordinance” has been defined in Section 2(q) of the TO Act, 2013 to mean the TO Ordinance, 1961; that by virtue of Section 4(1) of the TO Act, 2013 , the licence granted under Section 3 of the repeal ed Ordinance to an existing trade organization stands revoked with effect from 30.12.2006 and such trade orga nization is required to apply for the grant of a fresh licence under the 2013 Act; that the Old-HCCI was not an “existing trade organization” as it was granted a licen ce under the TO Ordinance, 2007 and therefore it did not have to apply for a fresh licen ce; that by virtue of Section 36 of the TO Act, 2013 , anything done under the TO Ordinance, 2007 is save d and therefore the Old-HCCI’s licen ce granted under the provisions of the said Ordinance is also saved; that the licence dated 07.05.2008 granted to the Old-HCCI stood validated and protected under Section 36 of the TO Act 2013; that the concurrent orders dated 27.01.2020 and 01.04.202 2 passed by the DGTO and the Federal Government, respectively , are not supported by reasons inasmuch as 7 C.M.A. No.56/2022 & W.P. No.158/2023
they do not addres s the grounds taken by the Old -HCCI in its reply dated 14.01.2020 to the DGTO’s letter / show cause notice dated 10.01.2020; that the DGTO and the Federal Government concurrently erred by not appreciating that the SECP eventually issued a corporate complia nce certificate to the Old-HCCI on 17.01.2020, which is prior in time to the orders assailed in appeal No.56/2022; and that the said certificate was issued after the Old -HCCI satisfied all the requirements of the SECP listed in its letter dated 05.11.2019. Learned counsel for the Old-HCCI prayed for the writ petition to be allowed and for the said orders dated 27.01 .2020 and 01.04.2022 to be set-aside. 20. On the other hand, the learned counsel for respondent No.5 in writ petition No.158/2023 and intervene r in appeal No.56/2022 submitted that the licenc e dated 07.05.2008 granted to the Old -HCCI was valid for a period of three years , i.e. up to 06.05.2011; that the TO Act, 2013 was enacted on 20.02.2013 but it was not until 02.07.2013 that the Old -HCCI applied for the renewal of its licenc e; that Rule 10(3) of the TO Rules, 2013 requires a trade organization to app ly for the renewal of its licenc e to the DGTO on the format set out in Schedule -B to the said Rules; that along with the application for the renewal, the applicant is to provide documents listed in Rule 10(3); that Rule 22(c) requires a trade organization to annually submit by 31 st December to the DGTO a list of its members as on 30th November; that Section 6(1) of the TO Act, 2013 provides that a licenced trade organization shall require renewal of its licen ce every five years whereas Section 6(2) requires the application for the renewal of its licence to be made to the DGTO ninety days prior to its expiry; that in terms of Section 4 of the TO Act, 2 013, the licenc e granted to the Old - HCCI stood revoked with effect from 30.12.2006; that a trade organization whose licenc e st ands revoked by operation of Section 4 is required to apply for the grant of a fresh licenc e; that after th e enactment of the TO Act, 2013 , the Old-HCCI had to apply for a fresh licence and not for the renewal of its existing licence; that the reason why a trade organization was required to apply for a fresh licence was because in terms of Section 12 of the TO Act, 2013 , the Memorand um and Articles of Association of a trade organization had to be in accordance with the basic template approved by the Federal Government; that it is not the Old-HCCI’s case 8 C.M.A. No.56/2022 & W.P. No.158/2023
that it had applied for a fresh licence; that there was no need for a formal order for the cancellation of the Old -HCCI’s licence since it stood revoked by operation of law , i.e. Section 4 of the TO Act, 2013; that the Old -HCCI did not even apply for the renewal of its licence ninety days before its expiration; that since the Old -HCCI’s licence expired more than ten years ago, the DGTO could not renew its licence; and that the concurrent orders dated 27.01.2020 and 01.04.2022 passed by the DGTO and the Federal Government, respectively, do not suffer from any jurisdictional infirmity so as to warrant interference in the Constitutional jurisdiction of this Court. Learned counsel for respondent No.5 prayed for the appeal as well as the writ petition to be dismissed. 21. The learned Deputy Attorney -General adopted the arguments of the learned counsel for respondent No.5. 22. By way of rejoinder, the learned counsel for the Old-HCCI submitted that the Old-HCCI does not come within the meaning of an existing trade organization as it was granted a licence under the provi sions of the TO Ordinance, 2007 and not the TO Ordinance, 1961 and therefore there was no need for it to apply for a fresh licence; that the power to cancel the licence of a trade organization vests in the Federal Government and not the DGTO; that although under Section 22(1) of th e TO Act, 2013 , the Federal Government may, by notification in the official Gazette , direct that all or any of its powers under the said Act may be exercisable by the DGTO, the power to cancel licences of trade organizations has not been delegated by the F ederal Government to the DGTO; that the order for the cancellation of the Old -HCCI’s licence has been passed by the Deputy Director in the office of the DGTO and not by the Director General, Trade Organizations himself; and that the DGTO had violated the m andatory requirement of affording an opportunity of a hearing to the Old-HCCI under Section 7(2) of the TO Act, 2013 and therefore the order for the cancellation of its licence is not sustainable. 23. I have heard the contentions of the learned counsel fo r the contesting parties and have perused the record with their able assistance. The facts leading to the filing of the instant appeal and petition have been set out in sufficient detail in paragraph s 2 to 18 above and need not be recapitulated. 9 C.M.A. No.56/2022 & W.P. No.158/2023
24. I propose first to decide w hether it was obligatory on the Old -HCCI to have applied for a fresh licence under Section 4 (1) of the TO Act, 2013 and whether its failure to do so would result in the revocation of its licence. Section 4(1) of the said Act reads thus:- “4. Revocation of licences of existing trade organisations.___ (1) Except as hereinafter provided and notwithstanding anything in any other law for the time being in force and memorandum and articles or association for any trade organisation, any licence granted under section 3 of the repealed ordinance to an existing trade organisation shall stand revoked with effect from the 30th December, 2006 and such trade organisation shall be required to apply for grant of licence under this Act by the date notified by the Federal Government.” (Underlining is mine for emphasis)
25. Section 2(f) of the TO Act, 2013 defines an “existing trade organization” to mean an organization licenc ed under the TO Ordinance, 1961 whereas “repealed ordinance” has been defined i n Section 2(q) of the TO Act, 2013 to mean the TO Ordinance, 1961. 26. As mentioned above, the Old-HCCI was first granted a licence by the Ministry of Commerce on 16.03.1959. Subsequently on 14.07.1960, it was incorporated as a company under the provisions of the erstwhile Companies Act, 1913. The Old -HCCI operated as a trade organization under the provisions of the TO Ordinance, 1961 until the promulgation of the TO Ordinance, 2007. By operation of Section 4(1) of the TO Ordinance, 2007, any licence granted to a trade organization under the provisions of the TO Ordinance, 1961 stood revoked with effect from 30.12.2006. Such trade organization was required to apply for the grant of a fresh licence under the provisions of the TO Ordinance, 2007. By virtue of Section 4(3) of the TO Ordinance, 2007, a trade organization to which a licence had been granted under the TO Ordinance, 1961 and ha d applied for the grant of a licence under the TO Ordinance, 2007, continue d to function as a trade organization until the F ederal Government decide d the application for the grant of a licence. 27. In the case at hand, the Old-HCCI functioned as a trade organization for decades until the promulgation of the TO Ordinance, 2007. Since by virtue of Section 4(1) of the TO Ordinanc e, 2007, the Old -HCCI’s licence stood revoked with effect from 30.12.2006, it applied for a fresh licence 10 C.M.A. No.56/2022 & W.P. No.158/2023
under the provisions of the TO Ordinance, 2007 and on 07.05.2008, a licence was granted to it by the Federal Government. 28. The TO Act, 2013 was ena cted on 20.02.2013. Section 4(1) of the said Act is in pari materia to Section 4(1) of the TO Ordinance, 2007. Only the licences granted to trade organiz ations under the provisions of the TO Ordinance, 1961 stood revoked by operation of Section 4(1) of TO Act, 2013 and not those that were granted under the provisions of the TO Ordinance, 2007. Section 36 of the TO Act, 2013 provides that anything done, actions taken, orders passed, instruments made, proceedings initiated, process es or communications issued, powers conferred, assumed, and exercised by the Federal Government or the DGTO on or after 04.10.2007 and before the commencement of the TO Act, 2013 shall be deemed to have been validly done, made, issued, taken, init iated, conferred, assumed and exercised and the provisions of the said Act shall have, and shall be deemed always to have had, effect accordingly. By dint of Section 36 ibid, the licence dated 07.05.2008 granted to the Old-HCCI under the provisions of the TO Ordinance, 2007 would be deemed to have been granted under the provisions of the TO Act, 2013. Therefore, the contention made by the learned counsel for respondent No.5 that by operation of Section 4(1) of the TO Act, 2013, the Old -HCCI’s licence stood revoked or that it had to apply for a fresh licence is devoid of merit. 29. If the argument of the learned counsel for respondent No.5 that the Old-HCCI had not been granted a licence under the provisions of the TO Ordinance, 1961 is accepted, then the Old -HCCI would not come within the meaning of an “existing trade organization” as defined in Section 2(f) of the TO Act, 2013 and consequently neither would its licence liable to be revoked under Section 4(1) nor would it be obligated to apply for a fresh licence. 30. This Court, vide unreport ed order dated 18.12.2023 , passed in writ petition No.4239/2023 titled “Mirza Abdul Rehman and others Vs. Director General Trade Organization and others ,” spurned a similar contention as the one raised by the learned counsel for respondent No.5 by holding as follows:- “3. Learned counsel for respondent No.3 contended that since the license that was…
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