Law: Companies Ordinance, 1984

Section: 57

Companies Ordinance (XLVII of 1984)---Ss. 57 & 62---Securities and Exchange Ordinance (XVII of 1969), Ss. 18-A & 22---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Constitution of Pakistan, Arts.23 & 24---Offering shares to general public for subscription---Submission of multiple and fictitious applications for subscription of shares---Failure to deposit confiscated subscription money---Shares of appellant corporation were offered to the general public for subscription---After the initial public offering, the appellant reported 228 cases comprising 457 applications being multiple and/or fictitious in violation of S.18-A of the Securities and Exchange Ordinance, 1969--- Appellant was advised; to deposit the confiscated subscription money of 336 applications in the Commission's Bank; to refund the subscription money of 2 applications; and to issue 59,500 shares against 119 applications---Despite repeated reminders, appellant deposited Rs.388,500 only out of total confiscated money and failed to deposit the balance confiscated money of 299 applications amounting to Rs.3,139,500 within stipulated period, which tantamount to non-compliance of orders of the Commission---Section 18-A of Securities and Exchange Ordinance, 1969, had given the Commission power to confiscate money in case of violation of its provisions---Power entrusted to the Commission to confiscate the application money was to create deterrence in the market and to ensure that no applicant indulged in malpractice of making fictitious or multiple applications---Provisions of S.18-A of Securities and Exchange Ordinance, 1969, was reasonable restriction in public interest and was not violative of Arts.23 & 24(1)(2) of the Constitution---Fundamental right to acquire, hold and dispose of the property envisaged by Arts.23 & 24(1)(2) of the Constitution, was not an unfettered right, but was subject to the applicable laws of the country---Right to confiscate the application money had to be determined by an authority which was entrusted with the powers to protect the investor and regulate the market---Neither a company nor the offerer had been conferred upon such…

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