Law:

Section:

Companies Ordinance (XLVII of 1984)---.--- ---.----S. 224---.---Companies (General Provisions and Forms) Rules, 1985, R.16---.---Trading by shareholder of company---.---Failure to tender amount of gain of such trading to company and intimation to that effect to the Registrar of Companies and the Securities and Exchange Commission---.---Bank, which was a beneficial owner of more than ten percent ordinary shares of the Issuer Company; made sale and purchase transaction---.---Ordinary shares of the Issuer Company within period of less than six months and had made gain on account of such transaction---.---Bank under provisions of S. 224 of the Companies Ordinance, 1984 was required to make a report and tender the amount of such gain to the Issuer Company and simultaneously send an intimation to that effect to the Registrar of Companies and the Commission---.---Neither the accrual of said gain as reported in Part-D of the prescribed returns of beneficial ownership were filed with the Commission on Form 32, nor was the same tendered to Issuer Company by the Bank---.---Commission had ample powers under S.224 of the Companies Ordinance, 1984 to take adverse action against any person found in contravention of said section---.---Transactions in the present case, were done in the ordinary course of business, however, tenderable gains were made on the sale and purchase transaction in the ordinary shares of the Issuer Company within the period of less than six months---.---Gains made by the Bank, in circumstances, would vest in the Issuer Company---.---Since the penal provision was stringent in nature, in applying such a provision, there had to be a substantial finding of guilt in relation to the person on whom the fine or penalty was being levied---.---In the present case, the appellant was a well-reputed Bank and had normally ensured compliance with the provisions of the Companies Ordinance, 1984 and the law; contravention of S. 224 of the Companies Ordinance, 1984, in circumstances, could not be considered to be a wilful or negligent act on the part of the Bank---.---Impugned order was set aside to the extent of fine imposed on the appellant Bank---.---Amount of…

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