| Case ID |
2ac0f064-0342-41a7-b36e-919a20eb699b |
| Body |
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| Case Number |
Appeal No. 33 of 2017 |
| Decision Date |
Apr 09, 2019 |
| Hearing Date |
Feb 21, 2019 |
| Decision |
The Appellate Bench set aside the impugned order and remanded the matter with direction to the authorities to call/inspect the books of accounts and other relevant record of the company to verify the appellant's claim. If the books of accounts and other relevant record have no information regarding the assets of the company, then the appellant cannot be penalized. Conversely, if there is information regarding the company's assets, the matter will be referred to the competent court for adjudication. The imposition of the penalty of Rs. 500,000 was deemed a violation of Article 12(1)(b) of the Constitution, which prohibits imposing a penalty greater than or of a kind different from the penalty prescribed at the time the offence was committed. |
| Summary |
This case revolves around the appeal filed against the imposition of a penalty for a false statement made in an auditor's certificate. The Securities and Exchange Commission of Pakistan (SECP) had previously removed the company's name from the register based on the auditor's certificate stating that the company had no assets or liabilities. However, the company later sought restoration of its name, claiming it possessed land. The SECP issued a show cause notice and penalized the company based on the auditor's certificate. The appeal challenged the validity of the penalty, citing that the applicable law at the time prescribed a lower penalty. The appellate bench found that the SECP had exercised its powers incorrectly and emphasized the need for an inquiry into the company's actual records to determine the validity of the penalty imposed. The case discusses key legal principles regarding retrospective application of laws, the nature of penalties under the Companies Ordinance, and the procedural requirements for enforcing penalties. It highlights the importance of verifying claims with proper documentation before imposing penalties, ensuring compliance with constitutional protections against retrospective punishment. |
| Court |
Securities and Exchange Commission of Pakistan
|
| Entities Involved |
Prince Flexipack (Pvt.) Limited,
Messrs M. Nazir and Company
|
| Judges |
SHAUZAB ALI, COMMISSIONER (SMD),
AAMIR ALI KHAN, COMMISSIONER (SCD-PRDD)
|
| Lawyers |
Muhammad Nazir, FCMA
|
| Petitioners |
Saif Ullah,
Sardar Azam Mehmood Kasana
|
| Respondents |
Mahboob Ahmad, Additional Registrar (CCD-SECP)
|
| Citations |
2019 SLD 2594,
2019 CLD 1015
|
| Other Citations |
Not available
|
| Laws Involved |
Companies Ordinance, 1984,
Constitution of Pakistan, 1973
|
| Sections |
439,
492,
12,
12(1)(b)
|