ISLAMABAD: The Supreme Court on Friday declared the appointment of Chairman Securities and Exchange Commission of Pakistan (SECP) Muhammad Ali Ghulam Muhammad illegal and directed the federation to immediately fill the post while adhering to the provisions of the SECP Act in a credible and transparent manner.
On October 9 last year, a sacked official of SECP's Law Division Muhammad Ashraf Tiwana filed a petition against the appointment of Muhammad Ali Ghulam Muhammad as the Commissioner/Chairman of the Commission, and pleaded that the court declare his appointment violative of the fundamental rights granted in the Constitution.
A two-member bench of the Justice Jawwad S Khawaja and Justice Khilji Arif Hussain ordered the federation and the SECP to bear the costs of the petitioner in a three-page-long short order. The court ruled that the selection and appointment of Muhammad Ali Ghulam Muhammad as Commissioner/Chairman SECP does not meet the requirements of the SECP Act 1997.
Through its order, the bench termed the insertion of Section 5(5) in the SECP Act violative of the Constitution, saying it" must be replaced appropriately by provisions ensuring due process and adherence to Articles 9, 10A, 14, 18 and 25 of the Constitution".
The court also asked the authorities concerned to send a copy of the order to each member of the Securities and Exchange Policy Board for action deemed appropriate in relation to the governance structure and decision-making policies of the SECP. The bench also sought report from the Board within 45 days on the performance of the SECP. However, a copy of the order was also sent to the Secretary of the Ministry of Finance to enable the federal government to comply with the law and legal principles enunciated by the apex court.
The court also directed the Finance Ministry to submit a report within 45 days directing the Secretary (Finance) to also look into the petition and documents placed on file (including those filed by the Ministry itself) to examine wrongdoings/shortcomings, if any, within the Ministry and the decision-making processes of the Federal Government under the SECP Act.
IN THE SUPREME COURT OF PAKISTAN (Original Jurisdiction)
Present
---- Mr Justice Jawwad S. Khawaja
---- Mr Justice Khilji Arif Hussain
Constitution Petition No 59 of 2011 and CMAs Nos. 326 and 633 of 2012 and Crl. O. P. 94 of 2012 in Const. P. 59/2011. (Petition under Article 184(3) of the Constitution)
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Muhammad Ashraf
Tiwana etc --------- Petitioner(s)
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Versus
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Pakistan etc.
Respondent(s)
For the Petitioner(s): Mr Afnan Karim Kundi,
ASC (in both cases)
Assisted by Barrister
Momin Ali Khan
(Advocate)
In Const. P. 59/2011:
For respondents-1&3: Mr Anwar Mansoor
Khan, Sr. ASC
Mr Naveed Akhtar,
S.O. Finance Division
For respondents-2,5&6: Mr Muhammad Akram
Sheikh, Sr. ASC assisted
by Barrister Sajeel
Sheryar and Chaudhry Hasan
Murtaza Mann
(Advocates)
For respondent-4: Mr Salman Akram
Raja, ASC assisted by
Malik Ghulam Sabir
Advocate Mr Sameer
Khose Advocate
Ms Aneesa Agha
Advocate
Malik Ahsan
Mehmood Advocate
Ms Zainab Qureshi
Advocate
In Cr1. O.P.94/12:
For respondent-1: Mr Anwar Mansoor
Khan, Sr. ASC
For respondent-2: Mr Muhammad Akram
Sheikh, Sr. ASC
Amicus Curiae: Nemo
For SECP: Mr Muzaffar Ahmed
Mirza, Dir, Litigation.
Date of Hearing: 09.04.2013
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ORDER Jawwad S. Khawaja, J: This petition has raised important questions of public importance relating to the enforcement of fundamental rights guaranteed in Chapter I of Part II of the Constitution. The salient aspect of this petition relates to the functioning and governance structure of the Securities and Exchange Commission of Pakistan (SECP) which is the apex regulator inter alia, of the corporate sector and the capital markets of the country.
2. Over the course of several days, we have heard and noted in detail, the submissions of learned counsel representing the parties. For reasons to be recorded we hold, declare and direct as under:-
3. That: (a) the selection and appointment of respondent No 4 namely, Muhammad Ali Ghulam Muhammad as Commissioner and Chairman SECP does not meet the requirements of the Securities and Exchange Commission of Pakistan Act 1997 (the SECP Act);
(b) as a consequence, the notification No SRO 21 (KE)/2011 dated 24th December 2010 appointing Mr Muhammad Ali Ghulam Muhammad as Commissioner and Chairman SECP is set aside;
(c) the Federal Government shall, without delay, make appointments to statutory positions in SECP which meet the requirements of the SECP Act including Sections 5, 6 and 7 thereof, in a credible, rigourous, transparent and open manner, through a selection and appointment process undertaken with due diligence and deliberation which manifestly and demonstrably ensures that the appointees meet the requirements of law as enunciated by precedent, including mutatis mutandis, the principles of law determined in the case of Muhammad Yasin vs. Federation of Pakistan (PLD 2012 SC 132);
(d) the insertion of section 5(5) in the SECP Act through the Finance Act 2003 was violative of the Constitution and in particular Article 73 thereof;
(e) Clause 3(1) of Chapter 11 of the SECP Service Rules (HR Handbook), which allow for termination simpliciter (without cause) of employees of SECP, is ultra vires the Constitution and inter alia, the SECP Act;
(f) the above Clause must be replaced appropriately by provisions ensuring due process and adherence, inter alia to Articles 9, bA, 14, IS and 25 of the Constitution and which are consistent with the provisions of the SECP Act ensuring independent and objective decision making without fear or favour, required of an independent regulator;
(g) the prayer in the petition for striking down the order dated 13.6.2011 terminating the employment of the petitioner is disallowed as not pressed, but without prejudice to his rights/remedies, if any, before a competent forum in accordance with law;
(h) respondent No 1 (Federation) and respondent No 2 (SECP) shall bear the costs of the petitioner.
4. A copy of this Order shall be sent to each member of the Securities and Exchange Policy Board for action deemed appropriate by said Board in relation to the governance structure and decision making policies of SECP as per requirements of the SECP Act and for consideration on issues of policy-making highlighted by the present petition and for the effective performance of the Board's functions under the SECP Act, particularly section 21 thereof. The Board having, inter alia, the duty to "oversee the performance of [SECP] to the extent that the purposes of the [SECP] Act are achieved", shall look into this petition and documents placed on file and after making such further inquiries as may be deemed appropriate by it, submit within 45 days, a report as to the performance of the SECP.
5. A copy of this Order shall be sent to the Secretary, Ministry of Finance to enable the Federal Government to remain compliant with the law and legal principles enunciated by this Court, in terms of Article 189 of the Constitution. The Secretary (Finance) shall also look into this petition and documents placed on file (including those filed by the Ministry itself) to examine wrongdoings/shortcomings, if any, within the Ministry and the decision-making processes of the Federal Government under the SECP Act. A report in this respect shall be submitted in Court within 45 days.
Judge
Judge
Islamabad
Announced on 12.4.2013
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