Lawyers Directory Listing
Chat with us free on WhatsApp — tell us your city and legal matter and our team connects you with the right lawyer. No form, no fee.
----Ss. 2 & 6-A read with Foreign Exchange (Prevention of Payments) Ordinance (XXIII of 1973), Foreign Exchange (Prevention of Payments) (Amendment) Act (VI of 1974) and Foreign Exchange Repatriation Regulation, 1972 (M. L. R. 104), para. 6‑Interpretation of statutes-- Rules and directions made or given under M. L. R. 104‑Not to be inconsistent with provisions of Regulation‑Rules or directions necessary for carrying out purposes of Regulation or those in regard to matters not provided for or insufficiently provided for in Regulation-- Such Rules or directions alone, held, could be made or issued under Regulation‑Certain provisions of Foreign Exchange (Prevention of Payments) Act, 1972 though clearly inconsistent with provisions of M. L. R. 104 yet Legislature not being constitutionally barred from modifying any earlier legislation and thereby express a different inten tion in matter falling within its legislative sphere, no exception, held, could be taken to provisions of Act of 1972 on such score.‑[Inter pretation of statutes].
Rashid‑ ul‑Daula v. Chief Administrator of Auqaf P L D 1971 S C 401 and In re : Special Reference under Article 187 of the Interim Constitution P L D 1973 S C 563 ref
-----Interpretation of statutes‑Trichotomy of power, doctrine of‑Act neither providing for different forums for adjudication of identical matters nor conferring any discretion upon Federal Government to refer a claim to one or more forums and its object being to refer claims made to Government against a person repatriating foreign exchange under M. L. R. 104 to an officer appointed by it, Act, held, declares a definite reasonable policy and also a definite reasonable stand and hence not bad on score of doctrine of trichotomy of powers.
Waris Meah v. The State P L D 1957 S C (Pak.) 157 ; East and West Steamship Co. v. Pakistan P L D 1958 S C (Pak.) 44 and State v. Zia‑ur-Rehman P L D 1973 S C 49 ref.
‑ Art. 175 (2)‑Legislature, powers of‑Appropriate Legislature acting within scope of its Constitutional powers‑Can take away or enlarge jurisdiction of any Court or enact that a particular matter shall not be determined by normal Courts‑Legislature cannot however abridge Constitutional jurisdiction and powers of superior Courts except by amendment of Constitution.‑[Legislation].
‑ S. 2‑Petitioner receiving rupee equivalent for repatriating his foreign exchange holding, on same date withdrawing this amount and deposit ing it same day with another Bank‑Amount thus deposited, held, not in specie obtained on repatriation of foreign exchange but "the amount representing the aggregate of the rupee equivalent of the amount so repatriated" and hence came within ambit of S. 2.
Law of Banking by Paget, 7th Edn. ref.
‑‑ Read with Constitution of Pakistan (1972), Federal Legislative List item 66‑Vires of statutes‑Foreign Exchange (Prevention of Payments) et‑r 1077‑Covered by item 66, Federal Legislative List, Constitution of Pakistan (1972) hence not beyond competence of Central Legislature.
Haider Automobile Ltd. v. Pakistan P L D 1969 S C 623 ; Ghulam Alt Shah v. State P L D 1970 S C 253 and Chief Administrator of Auqof P L D 1971 S C 401 ref.
‑‑ S. 2‑‑Provisions of S. 2 relating to deposit with State Bank‑Not to be read in isolation but to be read with other provisions contained in section relating to entertainment of claims against persons repatriating foreign exchange and adjudication of such claims‑Directions as to deposit of amounts received for repatriation of foreign exchange -Could be only in connection with determination of claims against person repatriating foreign exchange‑Such restriction reasonable in public interest and not hit by Arts. 20 & 21 of Constitution of Pakistan (1972).
Farzand Ali v. Province of West Pakistan P L D 1970 S C 98 ref:
‑‑ Authority to legislate‑Includes authority to legislate with retrospec tive effect.
Haider Automobile Ltd. v. Pakistan P L D 1969 S C 623 and Aminullah v. Pannu Ram P L D 1967 S C 2,89 ref.
‑‑ vires of statutes ‑Law even though applied or applicable to a single individual does not by itself make such law unconstitutional or ultra vires.
F. B. Ali v.State PLD 1975SC506ref.
‑‑ Contention that act invalid or coram non judice at time of its being done could not be validated‑Held, not correct‑Acts done without legal cover or legal authority could be subsequently validated by express validating legislation.
State v. Zia‑ur‑Rehman P L D 1973 S C 49 ; Jalaluddin v. State P L D 1965 S C 261 ; Muhammad Yousuf v. Chief Settlement Commissioner P L D 1968 S C 101 and Mamukarrjan Cotton Factory v. Punjab Province P L D 1975 S C 50 ref.
‑‑ Art. 199‑Writ petition‑Laches‑Impugned directions issued on 21‑3‑1972 and 28‑8‑1972 but writ petition challenging such directions filed on 9‑7‑73‑Petition, held, barred by laches, hence, liable to dismissal.‑[Laches].
Sind Industrial Estates Ltd. v. First Assistant Judge, Hyderabad P L D 1960 Kar. 826 and Settlement Authority v. Akhtar Sultana P L D 1976 S C 410 ref:
‑‑‑‑ Art. 199‑‑Writ petition‑Acquiescence‑Petitioner proved to have acquiesced in the impugned directions voluntarily‑Writ petition, hence, dismissed.‑[Acquiescence].
Abdullah Mohammad Peermohamed v. Karachi Municipal Corporation P L D 1971 Kar. 130 ; State v. Abdul Qayum 1.972 S C M R 693 and Abdul Hakeem v. Central Board of Revenue P L D 1975 Lab. 287 ref
‑ Arts. 199‑Writ petition‑Material facts, suppression of‑Wrong ‑and false statements, assertion of‑Petitioner failing to refer to material correspondence between parties, and also making wrong statements in his petition‑Writ petition, in circumstances, held, liable to dismissal.‑ [Mala fide].
Sind Industrial Estates Ltd. v. First Assistant Judge, Hyderabad P L D 1960 Kar. 826 ref.
A. .K. Brohi for Petitioner.
Sayeed A, Sheikh for Respondents Nos. 1 and 2.
Saleem Akhtar for Respondent No. 3
G. H. Mallick for Respondent No. 4.
Dates of hearing : 4th and 29th March 1977.
‑This petition calls in question the legality of the directions of the State Bank of Pakistan, respondent No. 2, issued to the respondents Nos. 3 and 4, requiring them to deposit with it the funds held by the petitioner in his respective accounts with them, and the action of respondents Nos. 3 and 4 in complying with the said directions.
2. The relevant facts for the purpose of this petition, shortly stated, are that on the promulgation by the Chief Martial Law Administrator, on 13‑1‑1972, of the foreign exchange repatriation regulation (1972 M. L. R 104) the petitioner declared and repatriated foreign exchange amounting to 170,000, through the Standard Bank, respondent No. 4, of which he was at that time the Managing Director. In consequence, respondent No. 4 received on behalf of the petitioner a sum of Rs. 20,90,496.77, being the rupee equivalent of the foreign exchange repatriated by the petitioner. Additionally, respondent No. 4 received on behalf of the petitioner a further sum of Rs. 19,55,197.45, being the bonus amount to which the petitioner was entitled under paragraph 3(3) of the said Regulation. This amount was transferred, under instructions from the petitioner, by two separate entries, one dated 21‑4‑1972 and the other dated 29‑6‑1972, to the account of the Rawalpindi Engineering Company. a private Company owned and controlled by the petitioner and his family. So far as the first amount of Rs. 20,90,486.77 is concerned, the petitioner withdrew the said amount from respondent No. 4 on 21‑4‑1972 and deposited it with respondent No. 3. The petitioner thereafter drew some cheques on respondent No. 3, but the same could not be cashed, and the persons presenting the cheques were verbally informed that respondent No. 3 had been instructed by respondent No. 2 not to allow operation of the petitioner's account. Respondent No. 3 subsequently, by its letter dated 30‑6‑1972, informed the petitioner that they had acted upon the advice of respondent No. 2.
3. On 3‑8‑1972, the President promulgated the Foreign Exchange (Prevention of Payments) Ordinance, 1972, which inter alia authorised the Stan; Bank to direct any authorised dealer in foreign exchange through whom any person had repatriated any foreign exchange under; M: L. R. 104 to deposit with the State Bank the rupee equivalent of the amount repatriated and any other amount payable because of such repatriation. In purported exercise of the above power, respondent No. 2 wrote a letter, on 28‑8‑1972, directing respondent No. 4 to deposit with it the aggregate rupee proceeds of the bonus vouchers issued to the petitioner on repatriation of his foreign exchange holding. A similar letter was also issued to respondent No. 3 in respect of the rupee equivalent of the foreign exchange repatriated by the petitioner. In consequence of these letters, respondent No. 3 deposited with respondent No. 2 the amounts of Rs. 20,90,486.77 lying in the account of the petitioner with it. Similarly, respondent No. 4, on 4.9‑1972, reversed the entries in favour of the Rawalpindi Engineering Company, and deposited the amount of Rs. 19,55,197.49 with respondent No. 2. It may be mentioned here that the entries in favour of the said company were reversed at the request of the petitioner himself, who had obtained permission from respondent No. 2 in this behalf.
4. On 25‑9‑1972, the Federal Legislature enacted the Foreign Exchange (Prevention of Payments) Act, 1972, which replaced the Ordinance promulgated on 3‑8‑1972 and authorised the State Bank to direct not only an authorised dealer through whom any repatriated amount was received, but also any other person with whom such amount or any part thereof, and any other amounts payable in respect of such repatriation, had been deposited, to deposit the same with the State Bank. Subsequently, on 10‑10‑1973, the Foreign Exchange (Prevention of Payments) Ordinance, 1973. was passed, which amended the aforesaid Act and gave it retrospective effect from 10‑3‑1972. The aforesaid Ordinance. in turn, was replaced on 8‑2‑1974 by the Foreign Exchange (Prevention of Payments) (Amendment) Act, 1974, which contained a new section validating all directions or instructions issued by the State Bank, from the date of the commencement of the Act first named till 29‑9‑1972, to any person or authorised dealer in foreign exchange. The present petition was filed on 9‑7‑1973, but after the promulga tion of the amending Ordinance of 1973 and the amending Act of 1974, an amended petition was filed on 25‑2‑1975.
5. Since the main contentions of the learned counsel for the parties involve the interpretation of sections 2 and 6‑A of the Foreign Exchange (Prevention of Payments), Act, 1972 (hereinafter referred to as the said Act), which sections, as already stated, were given retrospective effect from 10‑3‑1973, by the Foreign Exchange (Prevention of Payments) Ordinance, 1973, and the Foreign Exchange (Prevention of Payments) (Amendment) Act, 1974, it would be convenient to set forth the said two sections. They read as follows:‑--
"2.‑(1) Notwithstanding anything contained in the Foreign Exchange Repatriation Regulation, 1972 (M. L. R. 104), as continued in force by Article 280 of the Interim Constitution of the Islamic Republic of Pakistan, the State Bank of Pakistan may, and if so required by the Federal Government by order in writing shall, direct‑--
(a) an authorised dealer in foreign exchange through whom any person has repatriated any amount of foreign exchange to Pakistan in pursuance of the said Regulation; or
(b) any other person with whom the whole or part of the rupee equivalent of the amount so repatriated and other amount payable in respect of such repatriation is or has been deposited, to deposit with the State .Bank, within the time specified by it, the amount representing the aggregate of the rupee equivalent of the amount so repatriated and any other amount payable in respect of such repatriation or, as the case may be, the party thereof so deposited.
(2) Any person or authority to whom any amount of money is payable by the person repatriating the amount of foreign exchange or who has against such person any claim the value of which can be expressed in terms of money may, within such time and in such manner as the Federal Government may by notification in the official Gazette specify, apply to the Federal Government for payment of the amount so payable or, as the case may be, of the amount representing the value of such claim.
(3) Upon the receipt of an application under subsection (2), an officer authorised by the Federal Government in this behalf may, after making such inquiries as he may consider necessary, make such order as he may deem fit:
Provided that, while making such an order, the officer shall have due regard to an order of the Federal Government, if any, specifying the person or authority whose claim against the person repatriating the amount of foreign exchange shall be paid in priority to all other debts and claims ;
Provided further that no order for the payment of money to any person or authority shall be so made unless the person repatriating the amount of foreign exchange has had an opportunity of showing cause against it.
(4) Tire officer making an order under subsection (3) shall forward a copy thereof to the State Bank who shall make to the person or authority specified in the order the payment required by the order, if any.
(5) The deposit by an authorised dealer of foreign exchange or any other person referred to in subsection (1) of any amount of money he is required to deposit with the State Bank under subsection (1), and the payment by the State Bank of any amount of money in pursuance of an order under subsection (3). shall be a full discharge of the authorised dealer or that other person or as the case may be, of the State Bank form all liabilities in respect of the amount so deposited or paid.
6‑A. Validation.‑---All directions or instructions issued by the State Bang of Pakistan from the date of the commencement of this Act till the 25th day of September, 1972, to any person or authorised dealer in foreign exchange as specified in clauses (a) and (b) of sub section (1) of section 2 of the said Act to withhold payment to any person of any amount repatriated under the Foreign Exchange (Repatriation) Regulation, 1972, and of any amount payable in respect of such repatriation, shall be deemed to have been validly issued under this Act."
6. Mr. A. K, Brohi has assailed the impugned directions of respondent No. 2 and compliance therewith of respondents Nos. 3 and 4 on various grounds. His first ground of attack is that the said Act and the Ordinance and Act amending the same are in derogation of M. L. R. 104, in that while the Martial Law Regulation guaranteed repayment in rupees of the amount of foreign exchange repatriated, the Ordinances and the Acts in
question sought not only to confer power on the Government and the State Bank to give directions in respect of that amount, but also conferred powers upon the Federal Government to entertain claims in respect of that amount and to set up authorities for adjudication of such claims, thereby diverting the judicial determination of an issue to a non judicial forum. The precise argument in respect of the first part of the above contention was that under the Interim Constitution no Martial Law Regulation, which had been saved under that Constitution arid specified in the VIlth Schedule thereof, could be amended by any Legislature except with the previous sanction of the President, as provided in Article 280 of that Constitution. When we drew the attention of the learned counsel to the provisions of clause (2) of Article 144 of that Constitution, which inter alia provides that no Act of the Federal Legislature shall be invalid by reason only that some previous sanction or recommendation was not given, if assent to that Act was given by the President, the learned counsel gave up this part of his argument.
7. In support of iris contention that the provisions of the said Act
and of the Ordinances and Act amending thereto are in derogation of
M. L. R. 104, Mr. Brohi submitted that whereas the Martial Law Regulation
gave a solemn undertaking that persons declaring and repatriating foreign
exchange by the specified dates shall not only be allowed rupee equivalent
thereof by the State Bank, but shall further be allowed a bonus of 45 % on
the repatriated foreign exchange, the said Act not only authorises the State
Bank to direct an authorised dealer in foreign exchange through whom any
person has repatriated an amount of foreign exchange or any other person with
whom the whole or any part of the rupee equivalent of the amount so repat
riated and any other amount payable in respect of such repatriation has been
deposited to deposit the same with the State Bank, but further confers autho
rity on the Federal Government to entertain claims in respect of the amounts
payable to the persons repatriating foreign exchange and to refer such
claims for adjudication to non judicial forums. Mr. Saeed A. Shaikh
attempted to argue that these provisions in the said Act are not inconsistent
with the provisions of M. L. R. 104, and in support of his contention he
relied upon the provisions of paragraph 6 of the Regulations, which confer
powers on the Central Government to make rules and to issue directions
as it may consider necessary for the purposes of the Regulation and further
lay down that such rules or directions may provide for matters for which
no provisions or no suffcient provisions exist in the Regulation. We find
ourselves unable to agree with the contention of the learned counsel, for
not only are such rules and directions not to be inconsistent with the provisions
of the Regulation but further only such rules or directions may be made
or issued as are necessary for carrying out the purposes of the Regulation
or are in regard to matters in respect of which no provisions or no sufficient
provisions exist in the Regulation. In our view, the provisions of th
ton. e said.
Act, to which Mr. Brohi has taken exception, are clearly inconsistent with the provisions of the Regulation. That this was also the view of the Legislature A is made clear by the non absente clause in section 2 of the said Act and the need for validating the directions and instructions issued by the State Bank. However, there being no constitutional bar on a Legislature to modify any earlier legislation and thereby express a different intention, so long as such modification is constitutionally within its legislative sphere, no exception on the above score can be taken to the provisions of the said Act. Mr. Saeed A. Shaikh further submitted that in any case the Legislature, acting within the scope of its constitutional authority, was not bound by the acts of its predecessor and in support of his contention he referred us
to two decisions of the Supreme Court, reported in P L D 1971 S C 401, and P L D 1973 S C 563. In the latter case, reference was made to the observation of Blackstone to the effect that "Acts of Parliaments. derogatory from the power of subsequent Parliaments, bind not" (vide Cooley's Constitutional Limitations, Vol. I, Eighth Edition, p. 247).
8. In regard to the last part of his contention on this point, namely the purported conferring of powers under the said Act upon the Federal Government to refer claims against non judicial forums and thereby, as he expressed it, "diverting judicial determination of an issue to a non judicial forum", Mr. Brohi submitted that the confirment of such powers was hit by the dictum laid down by the Supreme Court in the case of Waris Ueah v. The State (1) and that the diversion of such issues for determination of non judicial forums was in violation of the scheme of trichotomy of powers, which is an essential feature of a Federal form of Government. In Warm Mesh s case, the Supreme Court held that the amendment effected in the Foreign Exchange Regulation Act, 1947, by Act XXXII of 1956, whereby power was purported to be conferred upon the Central Government or the State Bank to determine whether an offender under the original Act was to be tried under the ordinary law, or an Adjudication Officer or by a Tribunal, each with different power and procedure and entailing in each case punishment of unequal nature and description, was discriminatory being in violation of Article 5 of the 1956 Constitution and was for that reason void. It may, however, be pointed out that the said Act, unlike the impugned legislation in Waris Meah's case, neither provides for different forums for adjudication of identical matters nor does it confer any discretion upon the Federal Government to refer a claim to one or the forum. The object B of the said Act appears to be that whenever any claim thereunder is made to the Federal Government against a person repatriating foreign exchange under M. L. R. 104, such claim is to be referred by it to an officer appointed by it. In East & West Steamships Co. v. Pakistan (2), Muhammad Munir, C. J. (as he then was), reiterated the statement of law made in Jibendra Kishore's case that equality is not violated by the mere conference of unguided power but only by its arbitrary exercise by those upon whom it is conferred, and that "if a statute declares a definite policy, there is a sufficiently definite standard for the rule against the delegation of Legislative Power, and also for equality if the standard is reasonable", and if no standard is set u
to avoid the violation of equality, those exercising the power must act a though they were administering a valid standard". In the instant case, the law declares a definite policy and also a definite standard, which, in c our humble opinion, is reasonable, and hence it is our view that the said
Act is not hit by the dictum laid down in Waris M
eah s case.
9. So far as the objection to the impugned law on the score of
trichotomy of powers is concerned, no doubt, in the case of State v. Zia_ur
Rehman (3), Hamoodur Rehman, C. J. (as be then was), observed that
to
a case of a Government set up under a written Constitution, the functions
of the State are distributed amongst the various State functionaries and the normal scheme under such a system is to have a trichatomy of powers between the executive, the legislative and the judiciary, but in the same case he
pointed out that there is a distinction between "judicial power'. and "jurisdiction of Courts" and while jurisdiction of Courts may be controlled
or laid down by the Legislature, except as otherwise provided by the
(1) P L D 1957 S C (Pak.) 157 (2) P L D 1958 S C (Pas.) 44
(3) PLD1973SC49
Constitution, 'judicial power', which includes "what the existing law is in relation to something already done or happened is the function of the judiciary while the pre‑determination of what the law shall be for all future cases falling under its provisions is the function of the Legislature." Item 55 of the Federal Legislative List in the Interim Constitution brings within the scope of the Federal Legislature the jurisdiction and powers of all Courts, except the Supreme Court, in respect of matters within its legislative field, and even in respect of the Supreme Court, it conferred powers upon the Central Legislature to enlarge its jurisdiction and confer supplemental powers therein. So far the Permanent Constitution is concerned, Article 175(2) thereof expressly provides that "no Court shall have jurisdiction save as is or may be conferred on it by the Constitution or by or under any law. It is thus permissible for the appropriate Legislature, acting within the scope of its Constitutional powers, to take away or enlarge the jurisdiction of any Court or enact that a particular matter shall not be determined by normal Courts, except that the Legislature cannot abridge the Constitutional jurisdiction and powers of the superior Courts save by way of amendment of the Constitution.
10. The next contention of Mr. Brohi, and one on which he laid considerable stress, was that on deposit by the petitioner with respondent No. 3 the proceeds of his repatriated foreign exchange, the amount to his credit with the said respondent ceased to have the character of rupees equivalent of the repatriated foreign exchange and, therefore, it was out of reach of the Central Government or respondent No. 2 and hence could not be touched. His precise argument was that what could possibly be touched or ordered to be deposited with the respondent No. 2 was the rupee equivalent of repatriated foreign exchange, in specie, and since this characteristic of specie was lost the moment the money was deposited with respondent No. 3, when it became merged with the general funds of the said respondent, the attempt by the impugned legislation to reach at that money was an exercise in futility. In support of this contention of his, the learned counsel relied upon the following passage appearing in 'Law of Banking' by Paget, Seventh Edition;‑
"It is this purely debtor and creditor position which excludes any element or suggestion of trusteeship or fiduciary relation in the banker with regard to current account, the real point settled in Foley v. Hill (1848) 2 H L Cas. 28. The banker is free to use and does use the money as his own, like any other borrower; the customer has partied with control over it, like any other lender, retaining only his right to repayment. And as a consequence the banker is not as a general use concerned to enquire into the sources whence his customer derived the money, or to pay heed to the claims of third parties seeking to reach it in his bands as being by right theirs [Cf. Bodenham v. Hoskins (1852) 21 L J Ch. 864, Thonrson v. Clydesdale Bank Ltd. (1893) A C 282; on the first point. Calland v. Loyd (1840) 6 M & W 26, Gray v. Johnston (1868) L R 3 H L 1, on the second and see also Shaw (John) (Ranver's Lane) Ltd. v. Lloyds Bank 1845), Legal Decisions Affecting Bankers, Vol. V, 396, Journal of the Institute of Bankers, Vol. LXVI, 148].
On this ground Courts have refused to interfere by injunction restrain the banker from parting with moneys in his hands by honouring the cumtomer's cheques, through such moneys were alleged to be the direct produce of a theft [Fountaine‑-Besson v. Parr's Bunking Co. and Alliance Bank Ltd, (1895) 12 T L R 121. In that case the customer was not before the Court, but Kay, L. J., intimated that, in any event, the only injunction they could make was one restraining the customer from drawing, not the bank from paying cheques previously drawn."
11. We regret that we are unable to agree with the above submission of the learned counsel, for what the law empowers the State Bank to stop payment and the deposit of it is not the amount in specie obtained on repatriation of foreign exchange but "the amount representing the aggregate of the rupee equivalent of the amount so repatriated and any other amount payable in respect of such repatriation . . . . . . .".
12. The rupee equivalent received by the petitioner for repatriating his foreign exchange holding of 1,7,0,000 was an amount of Re. 20,90,486.72. g This amount was received by him in the Karachi Office of respondent No. 4 on 21‑4‑1972. On the same date, he withdrew this entire amount and deposited it that very day with respondent No. 3. The amount thus deposited, in our opinion, clearly was "the amount representing the aggregate of the rupee equivalent of the amount so repatriated", and consequently came within the ambit of section 2 of the said Act.
13. It was next contended by Mr. Brohi that the Central Legislature was not competent to enact the impugned legislation inasmuch as the proceeds of repatriated foreign exchange do not fall within any of the items of the Federal or Concurrent Legislative Lists under the Interim or the Permanent Constitution. Mr. Saeed A. Shaikh, on the other hand, contended that the impugned legislation falls within items 28, 55 and 66 of the Federal Legislative List under the Interim Constitution, which correspond to items 9, 55 and 59 of the Federal Legislative List to the Permanent Constitution. We are not inclined to agree with the view that the impugned legislation is covered by item 28 of the Federal Legislative List in the Interim Constitu tion, which item relates to "foreign exchange", cheques, bills of exchange, Promissory Notes and other like instruments". In our opinion, however, the impugned legislation would be covered by item 66 of the Federal Legislative to the interim Constitution, which relates to "matters incidental or supplemental to any manner enumerated" in the Federal Legislative List. The impugned legislation is clearly in respect of the amount received by a person for repatriating foreign exchange and the claims of other persons in respect of the amounts so repatriated. In the case of Harder Automobile Ltd. v. Pakistan (PL D1969 S C 623), Hamoodur Rehman, C. J. (as he then was) observed as follows;‑
"The items in the legislative list, as was observed in the case of the United Provinces v. Mst. Atique Begum and others A I R 1941 P C 16 are not to be read in any narrow or pedantic sense. Each general word therein should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended within it. These items describe only comprehensive categories of legislation by a word of broad and general meaning. Thus, by being given the authority to legislate in respect of the Constitution, organisa tion, jurisdiction and powers of the Supreme Court, the Central Legislature, in my view, acquired the jurisdiction also to legislate with regard to the number of Judges to be appointed, the salaries to be paid to them and the terms and conditions upon which they were to serve in the Supreme Court."
14. In Ghulam AU Shah v. State (P L D 1970 S C 253), M. R. Khan, J., laid down the following text for determining the real field of legislation within which subject matter of any particular statute, lies:‑
"The rule is that where a Constitution Act distributes legislative powers between different law‑making bodies, a statute enacted by any such body should be examined to ascertain its pith and substance', or its true nature and character' for the purpose of determining the real field of legislation within which the subject‑matter of the statute lies. Placing reliance on a number of decisions of the Privy Council, Sir Maurice Gwyer, C. J., stated the rule in Subrahmanyarn v. Muttuswami Goundan, 1940 F C R 188, as follows;‑
It must inevitably happen from time to time that legislation, though purporting to deal with a subject in one list, touches alio on a subject in another list, and the different provisions of the enactment may be so closely intertwinded that blind adherence to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the Legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved by the Judicial Committee whereby the impugned statute is examined to ascertain its 'pith and substance', or its 'true nature and character', for the purpose of determining whether it is legislation with respect to matters in this list or in that."
15. In Rashid‑ud‑Daula v. Chief Administrator of Auqaf (P L D 1971 S C 401), Hamoodur Rehman. C. J. (as he then was), while repelling the contention that the West Pakistan Waqf Properties Ordinance, 1959, was invalid inasmuch as tome of its provisions were repugnant to the provisions of certain existing laws with respect to the subjects in the concurrent list, observed:----
"We cannot overlook the fact that from the very nature of things it is inevitable that there will be some amount of overlapping of subjects in the lists, for, no clear‑cut distinction between the scope and content of the various items enumerated in the lists is always possible if a purely literal meaning is given to the words employed to describe these items."
16. Even if we are wrong in the view that we have taken that the impugned legislation would be covered by item 65 of the Federal Legislative List of the Interim Constitution, we are of the humble view that in any case the impugned legislation would be saved from the challenge of having been enacted by an incompetent Legislature by the provisions of clause (1) of Article 139 of the Interim Constitution. The said clause inter alia empowers the Federal Legislature, during the period that a proclamation of Emergency subsists, to make laws notwithstanding anything contained in Articles 137 and 138 of the Interim Constitution, relating to powers of the Provincial Legislature, "to make laws, for a province or any part thereof with respect to any of the matters enumerated in the Provincial Legislative List, or to make laws whether or not for a Province or any part thereof, with respect to any matter not enumerated in any of the lists in the 4th Schedule." The Federal Legislature, had the power, under the Interim Constitution, during the subsistence of a Proclamation of Emergency to make laws not only in respect of matters not included within any of the legislative lists, which may be termed the residuary matters, but also to make laws with respect to matters included in the Provincial Field. Similar power is conferred upon the Federal Legislature under paragraph (a) to clause (2) of Article 232 of the permanent Constitution. It is not disputed that a Proclamation of Emergency was in force during the period i hat the impugned legislation was enacted. Mr. Brohi urged before us that the power of the Federal Legislature to make laws in respect of residuary matters was restricted to areas outside the Provinces, and he submitted that we may construe the expression "Whether or not for a Province or any part thereof" as lending support to his contention, but we find ourselves wholly unable to do so. In our respectful view the provisions of clause (2) of Article 139 of the Interim Constitution clearly empowered the Federal Legislature during the subsistence of Proclamation of Emergency to make laws in the residuary field for the whole or any part of Pakistan, including the whole or any part of a Province.
17. It was next contended by Mr. Brohi that in so far as the impugned legislation not only authorises the State Bank to direct that the rupee value and other amounts received on account of repatriation of Foreign Exchange holdings under M. L. R. 104 be deposited with it, but further provides for entertainment of claims against it by the Federal Government, it virtually amounts to exproprietary legislation and would thus be hit by Articles 20 and 21 of the Interim Constitution which correspond to Articles 23 and 24 of the permanent Constitution. Now as far as the attack based on Article 21 is concerned, the short answer is that "property" for the purposes of that Article has been defined to mean "immovable property, or any commercial or industrial undertaking or any interest in any such undertaking", butt does not include funds In bank unless they relate to a commercial on industrial undertaking. Furthermore clause (1) of the said Article does permit deprivation of property if it is in accordance with law. What its prohibits is the deprivation of property by an executive fiat. Now so far as the attack based on Article 20 is concerned, it may be pointed out that the right conferred by it on citizens to acquire, hold and dispose of property is not absolute but is subject to "reasonable restrictions imposed by law in the public interest." The words "public interest" are of the widest amplitude and would embrace everything that is for the public benefit or good. In Farzand All v. Province of West Pakistan (P L D 1970 S C 98), it has been held that "must of necessity be left to the Government itself to decide whether retirement of the officer concerned was in the public interest or not". The' provisions in section 2 of the said Act relating to deposit with the State Bank of the amounts received for repatriation of foreign exchange holding are not to be read in isolation but have to be read with the other provision contained in the said section relating to the entertainment of claims against the persons repatriating foreign exchange and the adjudication of such" claims. It thus appears to us that the directions as to deposit of the amount received for repatriation of foreign exchange could be only in connection with the determination of claims against the person repatriating the foreign exchange. In our opinion these would appear to be reasonable restriction in the public interest, which have undoubtedly been imposed by law.
18. It was next contended by Mr. Brohi that a Legislature is not competent to make laws having retrospective effect prior to the Constitution by which it was established. The precise argument in this behalf was that whereas the Legislatures which enacted the impugned legislation were established under the Interim and Permanent Constitutions, sections 2 and 6‑A of the said Act have been given effect from 10‑3‑1972, that is from a date prior to the Interim Constitution, which constitutionally is not permissible. Mr. Saved A. Shaikh, on the other hand, countered that a Legislature acting within its field has power to make laws from any date and no bar is contained either in the Interim or the Permanent Constitution prohibiting the Legislature from enacting laws prior to the coming into force of the said Constitution. In the case of Raider Automobiles Ltd., to which we have already referred, Hamoodur Rehman, C. J. (as he then was), while repelling the contention that a Statute could not take away a vested right, observed: "The Legis lature however, which is competent to make laws, has full and plenary powers in that field and can even legislate retrospectively or retroactively." In Amanulluh v. Pannu Ram (P L D 1967 S C 289), Yaqub Ali, J. (as he then was), while repelling the contention that a legislative body cannot frame laws effective from a date earlier than the formation of that body, observed alt follows:---
"On the contrary the established rule is that subject to any constitu tional bar there is no legal limit to the making and unmaking of laws by the Legislature. Similarly it is within the domain of the Legislature to appoint a date for the commencement of laws made by it including a date preceding the making of the laws. In short the authority to legislate includes the authority to legislate with retros pective effect."
19. There are a large number of laws which have been given effect from date prior to the establishment of the Legislature which made them or even the enforcement of the Constitution under which such Legislature was established, and the Supreme Court bas held such laws to have been competently made. One such law is the Punjab Cotton Control (Validation of Levy of Fees) Ordinance, 1971.
20. It was next contended by Mr. Brohi that though the impugned law has a pretended general application, in that it purports to apply to every person who comes within its ambit, it was clearly meant to apply only to the petitioner, and hence the law is discriminatory and violative of the equality clause of the Constitution. Assuming, as contended by Mr. Brohi, that action under the impugned law has been taken only against the petitioner, that by itself would not make the law invalid. The law itself has clearly a general application, though Mr. Brohi chose to describe it as "pretended generalization", and as we read it, it authorises every one having a claim against a person, who has repatriated any foreign exchange, to submit his claim against such person to the Federal Government and thereupon the Federal Government is required to refer the claim for adjudication to an officer appointed by it. We, therefore, are unable to agree with the sub mission of Mr. Brohi that the law was meant to strike solely against the petitioner. Even if the impugned law was applied only to the petitioner, t that by itself would not make the law unconstitutional or ultra vices. In' F. B. Alt v. State (P L D 1975 S C 506), Hamoodur Raman, C. J. (as ha then was), relying on the decision from the American Jurisdiction in Timley v. Anderson (171 U S 318) and a passage from Willis's treaties on 'The Constitution Law of the United States', page 80, observed: "Thus even a law applying to one person or one class of parsons is constitutional if there is sufficient basis or reason for it.
21. It was finally contended by Mr. Brohi that an act which was invalid or coram non judice at the time that it was done could not be validated. In support of his contention, Mr. Brohi placed reliance on the decision of their Lordships of the Supreme Court in Federation of Pakistan v. Saeed Ahmed (PLD 1974SC151). It has, therefore, to be seen what exactly was decided by their Lordships in that case. Their Lordships, in that case, had before them a number of appeals filed by the Government against the decision of the High Court to the effect that, notwithstanding the amendment made in clause (2) of Article 281 of the Interim Constitution by the Constitution (Sixth Amendment) Ordinance, 1973, no change bad taken place in the jurisdiction of the High Court under Article 201 of the said Constitution to examine cases to the limited extent that the actions purported to be taken were without jurisdiction or coram non judice and/or mala fide actions. The contention by the Govern ment before the Supreme Court was that as regards the action taken against the respondents under M. L. Rs. 58 of 1969 and 114 of 1972, the intention of the law‑giver was that they too should be fully protected from scrutiny by Courts, including tree Supreme Court and the High Court, and, therefore, the authority competent to amend the Constitution forthwith brought in the Sixth Amendment to make good the short comings pointed out in the terminology of the original Article 281 (2) of the Interim Constitution to make clear the intention of the Constitution‑makers. Repelling these contentions, it was observed by Hamoodur Rehman, C. J. (as ha then was) as follows:‑---
"Let us now examine as to what exactly has been done by President's Order No. 3 of 1973 and Article 281 of the Permanent Constitution. The President's Order No. 3 of 1973 has merely added in that last one but line of clause (2) of Article 281 of the Interim Constitution after the words "shall be deemed" the words "notwithstanding any judgment of any Court" and then in the last line after the words "taken or done" added "and shall not be called in question in any Court" and provided that the above‑mentioned two additions "shall be deemed always to have been so inserted". It will be noticed that no change has been made in the earlier provisions of the clause at all. Whit then is the result Does the clause, as now amended, mean anything more than this that the ouster of jurisdiction will operate wits: regard to those acts which under the earlier provisions "shall be deemed, notwithstanding any judgment of any Court, to be and always to have been validly made. The question, therefore, still remains as to what is to be deemed under these provisions of clause (2) to have been validly done, taken or made. The words "notwith standing any judgment of any Court" were, it appears, introduced to take away the effect of the decision of this Court to the case of Miss Asma Alani under which these acts would have been invalid. This does not affect the decision in Zia‑ur‑Rehman's case, because there, the interpretation of these very words came up for consideration. and it was held that the validity sought to be conferred by those words did not extend to acts done, orders made or proceedings taken without jurisdiction. coram non judice or mala fide, because, such acts, orders or proceedings could neither be done to the exercise of powers derived from President's Orders, Martial Law Regulations, Martial Law Orders, Enactments, Notifications. Rules, Orders or Byes laws, or even in the purported exercise of those powers."
22. After referring to certain contentions raised by the learned Attorney- General and the learned Advocate‑General, Punjab, the learned Judge further observed ;‑
"The question, therefore, that arises is ; Is the ouster of jurisdiction as complete as it is now sought to be urged The learned Attorney General himself had conceded before the High Court and has not resiled from that position before us that acts done. proceedings. taken or orders made incompetently without jurisdiction would not be covered by the ouster clause. If in addition to this we now find that the ouster clause does not affect appeals or revisions, if any, permissible under those Orders, Regulations, Enactments, Notifications, Rules, Orders or Bye‑Laws, then the ouster clause is not as comprehensive as is now sought to be urged. There are obviously certain limitations. What these limitations are will be apparent from what has been conceded; namely, acts which have not been validated. Acts which are done without jurisdiction do not qualify for validation under these provisions. Similarly, acts which were open to challenge even under the measures under which they were taken or done or purported to be so taken or done, are not validated. If so, then do acts which are coram non judice or mala fide stand on a different footing We think not. As we have already indicated in our Judgment in Zia‑ur‑Rehman's case, mala fide acts cannot qualify for validation under the provisions of clause (2) of Article 281, because, they are neither acts duly done nor acts purported to be done either in the exercise of or in the purported exercise of powers derived from such Orders, Regulations, Enactments, Notifications, Rules, Orders or Bye‑Laws. Indeed, mala fide acts stand on the same footing as acts done without jurisdiction. Similarly, acts corarn non judice also stand on the same footing, because, these words literally mean that they have been done by an authority or a body exercising judicial or quasi‑judicial powers which was not properly constituted even under the law under which it was set up and that its decision is not a decision of a competent authority. If this be so then such acts do not also qualify for validation and they have not been saved from scrutiny by the ouster clause, no matter how widely that ouster clause may be worded. The ouster is of necessity to be limited upon a proper construction of the provisions of clause (2) of Article 281 only to those acts, orders or proceedings which qualify for validation."
23. It will thus be seen that what their Lordships were holding in Saeed Ahmed's case was that the ouster clause in Article 281 of the Interim Constitution, even after its amendment, did not save "acts, orders or proceedings, which are done, taken or made without jurisdiction, male fide or coram non judice", and not that acts which had been done without legal cover or legal authority could not be subsequently validated by express validating legislation. In the earlier case of State v. Zia‑ur‑Rehman, it was held that because of the different phraseology adopted in clause (1) and clause (2) of the Interim Constitution the contention of the Legislature qua the two clauses was not the same and the validity given by clause (2) does not have "the effect of validating acts done coram non judice or without jurisdiction or male fide. Thus both in the above case and in Saeed Ahmed's case their Lordships of the Supreme Court were interpreting the will of the Legislature and not holding that acts which were previously done without lawful authority cannot be validated by subsequent legislation. The Supreme Court has in a number of reported cases upheld the validity of validating legislation. In consequence of the decision of the Supreme Court in the case of Jalaluddin v. State (P L D 1965 S C 261), to the effect that the exercise of powers by subordinate Settlement Authorities invested with the delegated powers of the Chief Settlement Commissioner to hold that a single house occupied in parts consisted of more than one residential unit was a final order, not subject to appeal or revision, the Legislature amended section 31 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958, by Ordinance XVIII of 1965 by adding a third subsection to it, expressly providing that such orders shall be and shall always be deemed to have been subject to appeal and revision, and also a further supporting validating clause, validating the actions taken, orders passed, rules made or notification issued under the aforesaid Act before the promulgation of the said Ordinance. The amending and validating provisions came up for consideration before the Supreme Court in the case of Muhammad Yousuf v. Chief Settlement Commissioner (P L D 1968 S C 101), and Cornelius, C. J. (as he then was), observed as follows;‑
"The effect of this validation clause was clearly to oblige all Courts before which any order of the relevant kind was brought up for examination to assume for the purposes of its decision that the order at the time that it was made was one that was subject to the provisions of Chapter VI. That obligation applies to the Supreme Court, notwithstanding the contrary view expressed In Jalaluddin's case on pure construction of the relevant provision."
24. Reference may also be made to two more decisions of the Supreme Court. In the case of Dossa Ltd. v. Province of Punjab (1973SCMR2), the Supreme Court considered the validity of the Punjab Cotton Control (Validation of Levy of Fees) Ordinance, 1971, which was given retrospective effect and validated the levy of cotton fee on ginning factories run by diesel engines. It may be mentioned that this Ordinance was passed after the Lahore High Court had held that no cotton fee could be levied under the Punjab Cotton Control Act, 1949, on ginning factories run on diesel engines. Repelling the contention that the Ordinance could not validate something which was void ab initio, Anwarul Haq, J. observed ‑‑
The last contention, namely that the Ordinance of 1971, could not validate something which was void ab Aitio in terms of the Act of 1949, loses sight of the fact that it is open to the Legislature to confer retrospective operation on the laws made by it. A reference to the provisions of this Ordinance leaves no doubt that the law‑maker expressly made its operation retrospective with the avowed object of conferring validity on a demand which was not valid under the original Act of 1943."
25. Finally, on this point we may refer to the decision of the Supreme Court in the case of Mamukanjan Cotton Factory v. Punjab Province (PLD 11975SC50).
In that case, Mr. Brohi, appearing in support of the petitions before the Supreme Court contended that the Punjab Cotton Control (Validation of Levy of Fees) Ordinance, 1971, purported to enable the Provincial Govern ment to retain and claim, what according to the judgments of the High Court, the Government could not have, at the material time levied and collected, and since the judgments of the High Court were in exercise of its constitutional jurisdiction, while the validating Ordinance, on the other, hand, was sub‑constitutional legislation, the validating Ordinance could not undo or destroy, what he described as the "end product" of the constitu tional jurisdiction. Repelling this argument, Muhammad Gul, J. observed as follows:‑
"The argument, in my opinion, is without any substance and which if accepted would lead to startling results. It would strike at the root of the power of the Legislature, otherwise competent to legislate on a particular subject, to undertake any remedial or curative legislation after discovery of defect in an existing law as the result of the judgment of a superior Court in exercise of its constitutional jurisdic tion. The argument overlooks the fact that the remedial or curative legislation is also 'the end product' of Constitutional jurisdiction in the cognate field. The argument, if accepted; would also seek to throw into serious disarray the pivotal arrangement in the Constitution regarding the division of sovereign power of the State among its principal organs, namely the executive, the Legislature and the judiciary, each being the master of its own assigned field in the Constitution."
26. Mr. Saeed A. Shaikh, the learned counsel for respondents Nos. 1 and 2, opposed the grant of the petition on two further grounds, namely that it was barred by laches and by reason of acquiescence by the petitioner in the impugned directions of respondent No. 2, and that further, the petition suppresses material facts and thus the petitioner has disentitled himself to relief 9n the exercise of our Constitutional jurisdiction. In support of his first contention, the learned counsel referred us to two circumstances. The first was that whereas the first direction given by respondent No. 2 to respondent No. 3, not to allow operation of the petitioner's account with it, was issued on 21‑3‑72, and even the subsequent direction to respondents Nos. 3 and 4 by respondent No. 2, to deposit with it (State Bank) the equivalent of the amounts received by the petitioner on account of repatriating foreign exchange was issued on 28‑8‑197t, it was not till 9‑7‑73 that the present petition was first filed. The learned counsel for the Government accordingly urged that the petition was barred by laches. In support of this contention the learned counsel has relied upon the decisions in the cases of Sind Industrial Trading States Ltd. v. first Assistant Judge, Hyderabad (P L D 1960 Kar. 826) and Settlement Authority v. Akhtar Sultana (P L D 1976 S C 410). In the Karachi case, the cause of action arose on 5th March, 1928, in connection with an award of a civil Court under the Land Acquisition Act, 1894, while the writ petition was filed on 29th March, 1959, and the explanation for laches was found inadequate. 1t was held that there was inordinate delay m filing the writ petition which was fatal to the petition. In the case before the Supreme Court, the facts were that certain property was auctioned on 20‑6‑1962, pursuant to the orders of the Government. The respondent, who had earlier submitted a C. H. form for the transfer of the house to her, not only did not question the auction ordered by the Government but also participated in it, became its purchaser and even paid 1/4th of its price.
Subsequently, on 12‑12‑62, that is some six months later, she filed a writ petition for the first time challenging the auction. It was held:‑----
"The facts disclose that though soon after the 7th June, 1962, she knew that her application for the transfer of the cottage had been rejected and that the cottage was going to be put to auction, yet she took no steps to stop the auction. On the contrary she herself participated in the auction. And even after the auction she kept silent for six months. In these circumstances her writ should have been dismissed by laches."
We, therefore, find that the petition suffers from laches.
27. Mr. Sated A. Shaikh also referred us to certain correspondence to show that the petitioner had acquiesced at least m the order of respondent No. 2 regarding the amount of Re. 19,55,197.55 and the reversal of entries by respondent No. 4 in respect of that amount. As already pointed out by us, the said amount was transferred by respondent No. 4, at the request of the petitioner, who was then its Managing Director, by two entries, dated 21‑4‑1972 and 29‑6‑1972 respectively, to the account of the Rawalpindi Engineering Company, a family concern of the petitioner. On 2‑9‑1972, some five days after respondent No. 2 had issued the second of the impugned directions to respondents 3 and 4, directing them to deposit with it all the amounts received by the petitioner on account of the repatriation by him of his foreign exchange holdings, the petitioner wrote a letter to the Executive Director of respondent No. 2, wherein he "humbly" requested him to "advise the Standard Bank that the credit provided to Rawalpindi Engineering Co. Ltd., by utilising the sale proceeds of the Bonus Vouchers may be reversed and the funds so obtained remitted to the State Bank of Pakistan". On the same, the petitioner personally saw Mr. Mohomed Yousuf, Executive Director of respondent No. 2, and wrote him a letter confirming "that the Standard Bank will reverse the entries relating to the credit proceeds of the Bonus Vouchers in question to the account of the Rawalpindi Engineering Company Ltd. revalidated as of the date when the proceeds were credited". in reply to this letter, Mr. Mohammad Yousuf wrote to the petitioner, confirming that the above action proposed by the petitioner had been agreed upon, without prejudice to any action that may be taken against him in regard to the irregularities committed by him in this respect, and asking that respondent No. 4 should obtain proper authority from the Rawalpindi Engineering Company. Such authority having been obtained and the entries in favour of the said Company having been reversed, the above amount was deposited by respondent No. 4 with respondent No. 2 in accordance with the latter's directions of 28‑8‑1972. In view of these facts, we are of the humble opinion that the petitioner had acquiesced in the directions of the State Bank at least in regard to the abovesaid amount of Re. 19,55,197.55. We are unable to agree with the submission of Mr. Brohi that such acquiescence was "forced acquiescence" and the petitioner had no other alternative because of the blocking of his account by the State Bank.
28. In support of his contention that acquiescence or compromise disentitles the patty acquiescing or compromising to the discretionery relief in the exercise of our Constitutional jurisdiction, Mr. Saeed A. Shaikh relied upon the decisions reported in P L D 1971 S C 120 at p. 160 (1), 1972 S C M R 693 at p. 695 (2) and P L . D 1975 Lah. 287 at p. 292. These decisions undoubtedly support him.
29. Mr. Saeed A. Shaikh also contended that the petitioner bad further disentitled himself to relief through this petition as he had not only suppressed certain material facts but even made wrong and false statements. In regard to suppression of material facts, the learned counsel submitted that the petitioner had failed in his petition to refer to the correspondence between him and respondent No. 2 in pursuance to which entries in favour of Rawalpindi Engineering Company were reversed at the request of the petitioner, and the amount covered by these entries was deposited with the State Bank. He further referred to the fact that whereas in sub‑pare. (d) of para. 20 of the amended petition, it is asserted that the fourth respondent acted illegally in unilaterally reversing the entry and remitting the funds to the State Bank of Pakistan, the correct position, as is made manifest from the correspondence between the State Bank and the petitioner was that the entries in question were reversed specifically at his request and he bad only sought permission from the State Bank for the fourth respondent to do so. In the case of Sind Industrial Trading Estates Ltd., to which we have already made reference, the petitioners therein did not in their petition make a reference to a letter by the Assistant Commissioner. Hala, to, their Assistant Engineer stating that one of the parties had accepted the compensation "under protest and submitted an application under section 18 of the Land Acquisition Act on the grounds of inadequacy of compensation", and on the contrary asserted in the petition that the said party had accepted compensation under the award "without protest whatsoever", though a copy of the letter was appended to the petition as an Annexure. This was held to be a good ground for the dismissal of the petition. We are in respectful agreement with the view taken in the above reported case.
30 For the reasons discussed by us above, we are of the view that there is no merit in this petition. We would accordingly dismiss the same with costs.
S. A. M. Petition dismissed.
Dealing with a matter like this? Connect with a verified advocate in your city — free on SJP Lawyers Directory.
🔍 Find a Lawyer