DANDOT CEMENT COMPANY LIMITED vs SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN Ss

Fields are extracted from the reported citation and judgment text. Where a detail is not stated in the record, it is not shown.

DANDOT CEMENT COMPANY LIMITED VS SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN Ss.263 & 265---Constitution of Pakistan, Art.199---Constitutional petition---Investigation into the affairs of a company, challenge to---Initiation on the basis of a shareholder's complaint---Complaint---Maintainability---Statutory threshold, requirement of---Potential misappropriation involving advance payment against purchase of land and failure in paying outstanding amount of provident fund, allegations of---Initiation of proceedings under inapplicable provision of law---Legality of proceedings---Briefly, the petitioner company challenged before the High Court under its constitutional jurisdiction a show cause notice issued by the Securities and Exchange Commission of Pakistan (SECP) under S. 265 of the Companies Ordinance, 1984, and a subsequent order appointing inspectors to investigate the affairs of the company on allegations relating to advance payment for purchase of land and non-payment of provident fund---The issue requiring determination before the High Court was "whether the SECP could lawfully invoke S. 265 to initiate an investigation on the basis of a single shareholder's complaint, without fulfilling the statutory requirements and threshold prescribed under S. 263 of the Companies Ordinance, 1984?"---Held: Impugned show cause notice was issued under S. 265 of the Ordinance, 1984 and a holistic reading of the same made it abundantly clear that the proceedings were not initiated by the SECP on its own and under its suo motu powers conferred by S. 265 by forming an in dependent and bipartisan opinion---Instead, the entire process was initiated on a complaint from an individual claiming to be a shareholder of the petitioner company---Thus, the SECP's issuance of the impugned notice under S. 265 of the Ordinance, 1984, based on a shareholder complaint, was fundamentally flawed because it failed to meet the legally required threshold, specifically, the complaint must have been filed by 10% of the total voting power of the shareholders---Proceedings commenced by the SECP under S. 265, an inapplicable provision, on the basis of a complaint by a shareholder of the petitioner company were in clear contravention of statutory requirements and thus vitiated the legality of the proceedings---Impugned notice issued on the basis of misappropriation of payment against purchase of the land was not in essence of the third round of proceedings since it was regarding the same issue, transactions and allegations---Since it was an admitted fact that the documents submitted by the petitioner company in respect of the land were already available with the SECP, who had not yet given any findings in respect of the same due to pendency of these proceedings, the department retained the liberty to initiate separate and independent proceedings, if required according to the law---Impugned show cause notice and order were set aside---Constitutional petition was allowed, in circumstances.

DANDOT CEMENT COMPANY LIMITED vs SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN Ss — 2026 CLD 281 ISLAMABAD

Case information

Judgment text as reported

Other judgments reported in 2026 CLD