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Stereo. H C J D A 38.

Judgment Sheet

IN THE LAHORE HIGH COURT AT LAHORE


JUDICIAL DEPARTMENT

I.C.A No. 918 of 2010


JUDGMENT
Date of Hearing

01.10.2014

Appellant by

Mr.Hasham Ahmad Khan, Advocate.

Respondent by

Ch. Muhammad Khalid Dogar, Advocate.


Mr.Waqas Qadeer Dar, Deputy Attorney
General.

Ijaz ul Ahsan, J: The appellant is aggrieved of an order


dated 20.10.2010 passed by a learned Single Bench of this
Court. Through the impugned order a constitutional petition
filed by respondent No.1 was allowed and a demand of
Rs.19,000/- as service and warranty charges made by the
appellant and respondent No.4 was declared to have been
created without lawful authority and of no legal effect.
2.

Facts of the case are that respondent No.1 booked a

tractor through respondent No.4 by availing a loan facility from


Zarai Taraqiati Bank Limited, Pasroor. The appellant asked
respondent No.1 to present a demand draft for delivery of the
tractor and the same was presented. Subsequently, a further
amount of Rs.19,000/- was demanded as service and warranty
charges which was challenged before this Court through a
constitutional petition.
3.

It appears that the actual price of the tractor was

Rs.3,20,000/- and the demand of Rs.19,000/- was over and


above the said price by way of service and warranty charges.

I.C.A No. 918/2010

Page (2)

The said charges were contested on the ground that the same
were violative of SRO No.839(I)/98 issued by the Federal
Government. After hearing the parties, the learned Single
Bench allowed the petition and held the claim of the aforenoted
amount of Rs.19,000/- to have been created without lawful
authority. The said order is impugned in this appeal.
4.

The learned counsel for the appellant has mainly argued

that the appellant as well as respondent No.4 are private


persons. No writ could be issued against them in terms of
Article 199 of the Constitution of Islamic Republic of Pakistan,
1973. He maintains that it is an established principle of law that
an order under Article 199 of the Constitution can only be made
against a person who is performing functions in connection
with the affairs of the Federation, a province or a local
authority. He maintains that the appellant does not fall in any of
the aforesaid categories and being a limited company with
private management and shareholders was not amenable to the
constitutional jurisdiction of this Court.
5.

The learned counsel for the respondent, on the other

hand, has supported the impugned judgment. He maintains that


an unlawful demand had been raised by the appellant company
and this Court has the jurisdiction to interfere in matters, in
which injustice is being done. Further the appellant company is
regulated by the Securities and Exchange Commission of
Pakistan, which is a state functionary, as such the learned
Single Bench was justified in interfering in the matter and

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I.C.A No. 918/2010

issuing a writ restraining the appellant from recovering


warranty and service charges of Rs.19,000/- from respondent
No.1 in an illegal and unlawful manner.
6.

We have heard the learned counsel for the parties and

gone through the record. The only question requiring


determination by this Court is whether a writ could be issued
against a private company, which has private management and
private shareholders. On hearing the learned counsel for the
parties and examination of the record, our response to the said
query is in the negative for the following reasons:i)

This

Court

exercises

jurisdiction

subject

to

the

Constitution and the law. Writ jurisdiction is exercised under


Article 199 of the Constitution of Islamic Republic of Pakistan,
1973. The relevant portion of Article 199 of the Constitution is
reproduced below for ease of reference:-

199 Jurisdiction of High Court.


(1) Subject to the Constitution, a High Court may, if it is satisfied
that no other adequate remedy is provided by law,(a) on the application of any aggrieved party, make an order(i) directing a person performing, within the territorial
jurisdiction of the Court, functions in connection with the
affairs of the Federation, a Province or a local authority,
to refrain from doing anything he is not permitted by law
to do, or to do anything he is required by law to do;
or...

A plain reading of the portion of Article 199 of the


Constitution reproduced above indicates the following:I-

Constitutional jurisdiction of the High Court can


be invoked subject to the satisfaction of the High

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I.C.A No. 918/2010

Court that no other adequate remedy is provided


by law.
II-

On the application of any aggrieved party.

III-

An order can be issued by this Court directing a


person

performing,

within

the

territorial

jurisdiction of the Court, functions in connection


with the affairs of the Federation, a Province or a
local authority,..
ii)

The word person has been defined under Article 199 of

the Constitution in the following terms:"person" includes any body politic or corporate, any
authority of or under the control of the Federal
Government or of a Provincial Government, and any Court
or tribunal, other than the Supreme Court, a High Court or
a Court or tribunal established under a law relating to the
Armed Forces of Pakistan

There is no denial of the fact that the appellant is a


limited company incorporated under the provisions of
Companies Ordinance, 1984. It is neither owned nor controlled
by the Federal Government, a provincial government or a local
authority. I have specifically asked the learned counsel for the
parties if the Federal Government or the Provincial Government
holds majority shares or management control of the appellant. It
is admitted by both the learned counsel that such is not the case.
It is pointed out that both administrative and financial control of
the appellant company is with the board of directors of the
company, which consists of private individuals. Neither the
federal government nor a provincial government or a local
authority has anything to do with the management or control of

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I.C.A No. 918/2010

the appellant. As such the mere fact that the appellant is


registered under the Companies Ordinance, 1984 and the
regulatory authority for the companies is the Securities and
Exchange Commission of Pakistan which is run and controlled
by the federal government would not bring the appellant within
the purview of the definition of a person performing functions
in connection with the affairs of the federation, the province or
a local authority.
iii)

In Salahuddin and 2 others Vs. Frontier Sugar Mills

& Distillery Ltd. Tokht Bhai and 10 others (PLD 1975 SC


1974), the Honble Supreme Court of Pakistan dealt with a
similar proposition and held as follows:However

private

organization

or

persons,

as

distinguished from government or semi-government


agencies and functionaries cannot be regarded as
persons performing functions in connection with the
affairs of the Federation or a Province simply for the
reason that their activities happen to be regulated by
laws made by the State. Accordingly, a joint-stock
company, incorporated under the Companies Act, for the
purpose of carrying on commercial or industrial activity
for the benefit of its shareholders, cannot be regarded as
a person performing State functions
iv)

The question of maintainability of constitutional petitions

against limited companies has recently been examined by the


Honble Supreme Court of Pakistan in a judgment reported as
Abdul Wahab and others Vs. Habib Bank Ltd. and others

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I.C.A No. 918/2010

(2014 PLC (C.S). 393. Mian Saqib Nisar, J writing for the
Apex Court has held as follows:It is an admitted position that the Bank has been
privatized and the majority shareholding thereof, has
been acquired and is vested in Agha Khan Foundation,
there also is no discord that the Board of Management of
HBL

is

predominantly

represented

by

the

said

foundation. However, in order to bring the Bank within


the purview and the connotations(s) of a person and
authority appearing in Articles 199, 199(5) and
199(1)(c) of the Constitution and also for the purposes of
urging that appropriate order, in the nature of a writ can
be issued independently by this Court under Article
184(3) (Constitution), to the Bank, the learned counsel
for the petitioners has strenuously relied upon the
function test; and in this respect it is submitted that the
State/Federation has a considerable, shareholding in the
Bank and representation in the managing affairs thereto
therefore it shall qualify having the status of a
person/authority within the meaning of the law; besides,
the Bank is being regulated by and under the authority of
the State Bank of Pakistan thus on this account as well it
(Bank) has the status mentioned above, therefore, this
Court should exercise its jurisdiction in terms of the
Article supra. In this context, it may be held that for the
purposes of resorting to the function test, two important
factors are the most relevant i.e. the extent of financial
interest of the State/Federation in an institution and the
dominance in the controlling affairs thereof. But when
queried, it is not shown if the State/Federation has the
majority of shareholding, or majority representation in
the Board of Management of the Bank. As regards the
authority and the role of the State Bank of Pakistan (in
the above context), State Bank of Pakistan is only a

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regulatory body for all the banks operating in Pakistan in


terms of Banking Companies Ordinance, 1962 and
suffice it to say that such regulatory role and control of
State Bank of Pakistan shall not clothe the Bank, with the
status of a person or the authority performing the
functions in connection with the affairs of the Federation.
Rather it shall remain to be a private entity. In support of
the above, reliance can be placed on two judgments of
this Court reported as Salahuddin and 2 others vs.
Frontier Sugar Mills and Distillery Ltd. Takht Bhai and
10 others (PLD 1975 SC 244), which prescribes that
regulatory control does not make a person performing
functions in relation to the federation or a province;
likewise in Pakistan Red Crescent Society and another v.
Syed Nazir Gillani (PLD 2005 SC 806) it was held such
control must be particular to the body in question and
must be persuasive.. on the other hand, when the
control is merely regulatory whether under the statute or
otherwise it would not serve to make the body a State
therefore, we have no hesitation to hold that the Bank is
a private institution for all intents and purposes. And we
vide short order dated 17.10.2012 has deferred our
decision on the issue if such a private person is amenable
to writ jurisdiction in the context of Article 199(1)(c) of
the Constitution..
v)

Admittedly the appellant is a private Company and

cannot be regarded as a person performing functions in


connection with the affairs of the federation or the province. In
these circumstances, a writ could not have been issued against
the appellant in exercise of powers under Article 199 of the
Constitution of Islamic Republic of Pakistan, 1973.

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I.C.A No. 918/2010

7.

For the reasons recorded above, this appeal is allowed.

The

impugned

order dated

20.10.2010

announced

on

29.10.2010 is set aside. Consequently Writ Petition No.8786 of


2006 is dismissed. No order as to costs.

(FAISAL ZAMAN KHAN)


JUDGE
A.Rehman.

(IJAZ UL AHSAN)
JUDGE