Law: Companies (Issue of Capital) Rules, 1996

Section: 5,10

Law: Civil Procedure Code (V of 1908)

Section: O.XXXIXRr.1,2

Law: Companies Share Capital (Variation in Rights and Privileges) Rules, 2000

Section: 3,5

Companies (Issue of Capital) Rules, 1996--- ----Rr. 5 & 10---Companies' Share Capital (Variation in Rights and Privileges) Rules, 2000, Rr. 3 & 5---Civil Procedure Code (V of 1908), O. XXXIX Rr. 1 & 2---Issue of right shares by a listed company---Application for grant of injunction---Mandatory nature of requirements of R. 5 of Companies (Issue of Capital) Rules, 1996---Relaxation of the Companies (Issue of Capital) Rules, 1996---Scope---Phrase "not practicable"; connotation---Plaintiffs sought to restrain the Securities and Exchange Commission of Pakistan from giving approval to issuance of right shares in the Extraordinary General Meeting of the defendant Company---Contention of the plaintiff was inter alia that as per R.5 of the Companies (Issue of Capital) Rules, 1996, financial projections had to be signed by all directors who were present in the meeting in which issuance of right shares were approved; however in the present case one of the directors present in the meeting did not sign the financial projection---Contention of plaintiff Company, on the other hand, was that under R.10 of the Companies (Issue of Capital) Rules, 1996; the Authority/Commission could relax any of the Companies (Issue of Capital) Rules, 1996; subject to conditions it may deem fit---Held, that per R.10 of the Companies (Issue of Capital) Rules, 1996; relaxing of any of the Companies (Issue of Capital) Rules, 1996 could only be done in a situation which could be termed as "not practicable" and said phrase could only be relevant where it was beyond the control of the Company or it would be a circumstance in which in any given situation it was not possible for the Company to comply with any of the Companies (Issue of Capital) Rules, 1996---Non-signing of a document by a director, therefore, did not fall into such category and thus such issuance of rights shares could not be approved legally by the extraordinary general meeting of the defendant Company---High Court observed that said reason was sufficient to declare approval of issuance of right shares as void and High Court restrained the Securities and Exchange Commission of Pakistan from giving approval to the decision…

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