ANWAR BAIG, CHAIRMAN CONSERVANCY MANAGEMENT COMMITTEE (CMC) vs GOVERNMENT OF PAKISTAN through Secretary Minist

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ANWAR BAIG, CHAIRMAN CONSERVANCY MANAGEMENT COMMITTEE (CMC) VS GOVERNMENT OF PAKISTAN through Secretary Ministry of Climate Change Ss. 42 & 286---Company with charitable and not for profit objects---Mismanagement of affairs---Invoking jurisdiction of High Court---Principle---Rule of Indoor Management---Applicability---Petitioners were members of Board of Directors of respondent company who alleged mismanagement in its affairs---Validity---Provision of S. 286 of Companies Act, 2017, retained right for minority shareholders and reduced threshold test from twenty percent of issued capital of respondent company to ten percent---Underlying rationale for prescribing a threshold to establish locus standi of minority shareholders to petition the Court and seek prevention against oppression and mismanagement was to ensure that not every grievance of an individual member was brought before High Court, as rule of indoor management was to remain alive and well---It was for such purpose that S. 286 of Companies Act, 2017 provided a mechanism empowering High Court to interfere with management of a company without requiring that the company be wound-up---Purpose of such provision was to protect interests of certain stakeholders, such as minority shareholders and creditors who had no general ability to exercise supervisory authority over Board of Directors or avail processes available within shareholders democracy to protect their interests---Respondent company was licensed under S. 42 of Companies Act, 2017, by SECP to pursue not-for-profit objects---According to Articles of Association of respondent Company, it was a public company limited by guarantee not having a share capital---While the Articles conceive that respondent company can have members, such members do not own share capital of the company---As respondent company did not have a share capital, such members therefore could not meet threshold test of owning ten percent of shareholding of the company as prescribed in S. 286 of Companies Act, 2017---Even if petitioners were members of respondent company in addition to being Directors, given that they did not own ten percent of paid-up share capital of the company, they would not qualify to file a petition under S. 286 of Companies Act, 2017---Petitioners had no locus standi to invoke jurisdiction of High Court under S. 286 of Companies Act, 2017---Petition was dismissed, in circumstances. Citation Name: 2023 CLD 1249 ISLAMABADBookmark this Case ANWAR BAIG, CHAIRMAN CONSERVANCY MANAGEMENT COMMITTEE (CMC) VS GOVERNMENT OF PAKISTAN through Secretary Ministry of Climate Change Ss. 42, 43 & 44---associations with charitable and not for profit objects---Regulator's powers---Scope---Scheme as prescribed in Ss. 42, 43 & 44 of Companies act, 2017, creates no rights for directors of such company to seek court intervention for the purposes of preventing oppression and mismanagement by fellow Board Members.

ANWAR BAIG, CHAIRMAN CONSERVANCY MANAGEMENT COMMITTEE (CMC) vs GOVERNMENT OF PAKISTAN through Secretary Ministry of Climate Change Ss — 2023 CLD 1249 ISLAMABAD

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