Law: Companies Ordinance, 1984

Section: 224

Companies Ordinance (XLVII of 1984)--S. 224---Modarba Companies and Modarba (Floating and Control) Ordinance (XXXI of 1980), Ss.11 & 32---Modarba Companies and Modarba Rules, 1981, R.10---Prudential Regulations for Modarba, Regln.7(3)---Investment made by Directors of the company in associated companies---Imposition of penalty---On the examination of annual audited account of the relevant year of the company, it was observed that the company had violated provisions of Rules and Regulations---Registrar issued show-cause notice to appellants under S.32 of Modarba Companies and Modarba (Floating and Control) Ordinance, 1980, for failure to comply with the provisions of R.10 of Modarba Rules, Regln.7(3) of Prudential Regulations for Modarba---Penalty of Rs.5000 was imposed on each appellant for violation of R.10 of the Modarba Rules; and imposed penalty of Rs.50,000 on each appellant for violation of Regln.7(3) of Prudential Regulations for Modarba---Objection of appellants' counsel that the Prudential Regulations for Modarba was not published in the official Gazzete, did not have any basis as the Prudential Regulations were additional conditions for authorization to float a Modarba in S.11 of Modarba Ordinance, 1980 and were not required to be published in the official Gazzete---Conditions were introduced by the Commission through Circular dated 20-4-2000 and were widely disseminated to the Modarba Companies---In the present case, the investments were made by appellants in the associated companies and the t1i,poltants could not be allowed to take a plea that a decision of such nature was done carelessly, thoughtlessly, heedlessly or inadvertently---Registrar (Modarba) on taking cognizance of the offence, withdrew the facilities of the company---Taking a lenient view, penalty was set aside to the extent of Directors, excluding the Chief Executive Officer, who was directed to pay the penalty as per impugned order. PLD 2005 Lah. 261; PLD 2004 SC 261; 2008 SCMR 1717: PLD 2010 Kar. 236; 1984 CLC 2456: 2002 CLC 1925 .and PLD 1984 Kar. 315 ref. ORDER This order shall dispose of Appeal No. 19 of 2010 filed under section 33 of the Securities send Exchange Commission of…

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