JAHANGIR MUGGO vs SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN Ss — 2022 CLD 1325 ISLAMABAD

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JAHANGIR MUGGO VS SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN Ss. 221(5) & 256--- Constitution of Pakistan, Art. 199---Constitutional petition--- Affairs of company--- Investigation---Principle---Opinion formation, absence of---Petitioners assailed show cause notices issued to them by Securities and Exchange Commission of Pakistan regarding investigation into the affairs of company in question---Validity---In order to investigate into affairs of company, report under S. 221(5) of Companies Act, 2017, was necessary which had close connection with S. 256 of Companies Act, 2017---Any report complied under such provisions could logically form basis of an investigation sought to be conducted by the Commission into the affairs of company in question---Investigation into affairs of company was a serious matter and entailed consequences, both financial as well as goodwill of that corporate entity---Such powers could not be used lightly by the Commission---Powers to investigate into the affairs of company were circumscribed by provisions of S. 256 of Companies Act, 2017---In case suo motu powers were required to be exercised by the Commission, minimum requirement mentioned in S. 257(1)(13) of Companies Act, 2017 had to be looked into---Such powers were to be preceded by formation of an opinion and thereafter a show cause notice giving the company an opportunity of hearing could be issued---In case there was no formation of opinion by the Commission, investigation could not be initiated in a mechanical fashion---Securities and Exchange Commission of Pakistan failed to prove any opinion which was formulated independently while considering minimum requirement of investigation into the affairs of company excluding orders of Company Judge and no justiciable reasoning was rendered in writing---High Court set aside show cause notices issued by the Commission as order passed by Securities and Exchange Commission of Pakistan by issuing show cause notice was nullity in the eyes of law---Constitutional petition was allowed, in circumstances.

JAHANGIR MUGGO vs SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN Ss — 2022 CLD 1325 ISLAMABAD

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