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Petitioner: Dr. Amir Bux Channa & another VS Respondent: Isra Islamic Foundation (Guarantee) Ltd. JUDGMENT
Court Name: Sindh High Court Judge(s): Muhammad Shafi Siddiqui Title:Dr. Amir Bux Channa & another vs Isra Islamic Foundation (Guarantee) Ltd.
JUDGMENT
Reported As: 2022 SHC 548 Result: Order accordingly Judgment JUDGMENT Muhammad Shafi Siddiqui, J. Before I start considering the respective arguments of the counsels[1] 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.
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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. NoSuit No.PartiesDate of filingSubject matter 1.Suit 1841/2020UMER KAZI & OTHERS V. ASADULLAH KAZI & OTHERS24- Nov- 20Plaintiffs 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) 2Suit 1842/2020UMER KAZI & OTHERS VS ASADULLAH KAZI & OTHERS24- Nov- 20Plaintiffs 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) 3Suit 1872/2020UMER KAZI & OTHERS VS ASADULLAH KAZI & OTHERS24- Nov- 20Impugned 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 4Suit 1873/2020AHMED WALIULLAH KAZI VS NAZIR LEGHARI & OTHERS27- Nov- 20Plaintiffs seeking declaration, permanent Injunction that he was lawfully appointed As Acting VC of IU 5Suit 810/2021NAZEER ASHRAF LAGHARI &27- Nov-Plaintiffs seeking declaration and permanent Injunction that 1.officers and authorities are responsible for affairs of IU
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ANOTHER VS UMAR KAZI & OTHERS20 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 6Suit 2383/2021ISRA UNIVERSITY VS ISRA ISLAMIC FOUNDATION (GUARANTEE) LIMITED & ORS1- Apr- 21Suit 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) 7Suit 2604/2021ISRA UNIVERSITY & OTHERS VS ASADULLAH KAZI & OTHERS14- Oct- 21Plaintiff impugned 3 Show causes dated 04-08-2021, issued by defendant 3 (As registrar) as per decision of BoG to Plaintiff no 2 to 4, seeking suspension of these notifications. 8Suit 2604/2021NAZEER ASHRAF LEGHARI VS PROVINCE OF SINDH & OTHERS10- Nov- 21Impugned 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. 9Suit 3058/2021ISRA UNIVERSITY & ANOTHER VS DR. NAZIR ASHRAF LAGHARI & ANOTHER23- Dec- 21Impugned 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. 10Suit 231/2022ISRA ISLAMIC FOUNDATION (GUARANTEE) LTD & OTHERS VS OTHERS NAZIR ASHRAF LAGHARI & OTHERS11- Feb- 22Plaintiff's Seeking declarations that IIF is managing IU through Plaintiff N0 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 11Suit 380/2022NAZEER ASHRAF LEGHARI VS PROVINCE OF SINDH & OTHERS2- Mar- 22Plaintiff has challenged the Section 7(1) of the Act regarding Appointment of Chancellor as Ultra Vires to Article 25 and 25-A of the Constitution 1973 and Judgments of superior Courts. On the other hand he has also
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challenged the appointments of Defendant N0.3 and 4 and their actions being ultra vires to Article 9, 25 and 25-A of the Constitution.(17 Prayers ) 12Suit 1149/2022PROF. DR. HAMEEDULLAH KAZI & OTHERS VS ABDUL QADIR MEMON & OTHERS5- Aug- 22Plaintiffs 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 counsels 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:
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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 & 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 application[2] on 02.11.2021 (after a year) to withdraw himself from the proceedings to his extent, which was allowed[3]. 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 CMA 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 CPC should be read with Section 151 CPC, in view of facts of the case. I maintain the above reasons for allowing the intervener's application.
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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 Mehra[5] 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 S. 153-C, sub-cl. 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 & 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.
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Point/Question No.(i) 17. Since respondent No.1 is an outcome and creation of Memorandum & 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 & Articles of Association. These statutory companies are regulated and governed by Securities & Exchange Commission of Pakistan. Whosoever has donated or contributed in a cause prior to the formation of respondent No.1 is now immaterial as it is now the company which governs and regulates it through its members, as entrusted to it, ever since it was incorporated. The assets in the shape of moveable and immovable belongs to the foundation and regulated by its members, hence nothing will impress me if it is said that the funds were contributed by some individuals as these are now under the clutches of foundation (IIF) and the question of lifting of veil is not a fundamental requirement in these proceedings. I am proceeding with these matters, considering that the funds and donations are now rest with the IIF. 18. Article 5 of Articles of Association is crucial. When these Articles of Association of Foundation were made at the time of incorporation of Foundation, it was as under: "No person shall be admitted as a member of foundation unless he is approved and admitted by the Council and the Council shall have full discretion as to admission and may refuse to admit any person to membership assigning any reason whatsoever." 19. While reading and interpreting Article 5 above, it is necessary to oversee Article 32 and 33 of Articles of Association which are reproduced as under:- "32. The number of members of the Council shall not be less than seven and more than ten. The affairs of the Foundation shall be managed by the Council of Management comprise of following designation: 1.President 1 2.Vice President 1 3.General Secretary1 4.Joint Secretary 1 5.Treasure 1 6.Ordinary Members2 to 5 7 to 10 33. The first Council of Management shall be comprised of the following with designation shown against each and they shall carry on till the 1st. Annual General Meeting of the Foundation in which the first election of the Council shall be held: 1.Dr. Ghulamqadir Kazi President 2.Dr. Asadullah Kazi Vice President 3.Dr. Ghulam Hussain SiddiqiGeneral Secretary 4.Dr. Nazir Ahmed Leghari Joint Secretary 5.Dr. Amir Bux Channa Treasurer 6.Mr. Saleem Kazi Member 7.Dr. Muhammad Saleh MemonMember" 20. The first Council of the management, as formed, was of seven individuals and respective designations were assigned, as disclosed above. It shows with clarity that the maximum cap of members/ directors of the council could have been only ten, though initially they were seven (minimum requirement), as inducted to Council. Any change in this number of members/directors of the Foundation could only be done by amending Article 32, in accordance with Article 5 of Articles of Association as written above, which may cause any amendment in the corresponding Articles such as 32, which fixes minimum and maximum members of council.
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21. No doubt the first induction to this Council of Foundation was made in the year 2011 i.e. on 28.07.2011, as disclosed in the minutes of the meeting held. This meeting shows that five persons were inducted as members/directors of the Council. These members/new directors may have been in close relations with any of the then existing council member but then their induction could only be through a lawful process. This induction apparently was in violation of Memorandum & Articles of Association of the Foundation, particularly Article 5, 32 and 33 thereof, which had maximum cap of 10 members of the Council, which was exceeded when the aforesaid five members were inducted and it was never amended by the existing council. It cannot be seen as past and close transaction because material change to corresponding Article 32 was brought recently and that too in presence of newly inducted council members. 22. The second indictment of 2017 was via meeting of 08.04.2017. This meeting was held in the absence of three out of five foundation members who chose to remain absent. They may have chosen to remain absent but the responsibility of attending members was by application of law. Six persons were inducted as members/directors of the Council and though it may have been stated that most of them were in close relations with respondent No.2 as it included his son and daughter but the fact remains that it is to be executed in terms of requirement of Memorandum & Articles of Association of the foundation. 23. The significant part of the subsequent meeting was that those who were illegally inducted as members/directors of the Council without any amendment in Articles 32 and 33 respectively, voted for the additional/second illegal induction, referred above. It is in this meeting when respondent No.2 resigned as president and chief executive officer of the foundation as perhaps there was apparently a clash of interest in being chairman of the foundation and Vice Chancellor of the University, as identified by Pakistan Council of Philanthropist (PCP). 24. Mr. Asadullah Qazi, ex-petitioner No.2, though himself was a beneficiary then took notice while he was incharge and issued notification on 28.08.2018 that such inductions were in violation of Memorandum & Articles of Association and withdrew them as being unlawful and thus nullified the action of their induction…
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