A Full Bench of the Federal Shariat Court, headed by Chief Justice Haziqul Khairi, has started examination of the Companies Ordinance 1984 about whether any section or provision of the Ordinance is repugnant to the injunctions of Quran and Sunnah.
The sections under examination deal with incorporation of companies and matters incidental thereto, Memorandum of Association, prohibition with respect to the names of companies, revocation of licence in associations not for profit, offer of shares or debentures for sale by certain persons, restrictions as to allotment of shares, transfer of shares to nominee of a deceased member, transfer by nominee or legal representative, class and kinds of share capital, prohibition to accompany to purchase its shares or shares of its holding company, certain mortgages and charges to be void if not registered, disqualification for appointment as receiver or manager, restriction on commencement of business, circumstances in which election of directors may be declared invalid, ineligibility of certain persons to become director, loan to directors, prohibition regarding making of political contributions, restriction on appointment of chief executive, restriction on chief executive to engage in business competing with business of company, bar on appointment of managing agents, sole purchase, sales agents etc, certain restrictions of declaration of dividends, power of registrar to call for information or explanation, no compensation to be payable for annulment or modification of contract, no right to compensation for loss of office, application for winding up of company or an order under section 290, management by administrator, serving of other proceedings, preferential payments, penalty for fraud by officers of companies which have gone into liquidation, penal provisions, restrictions on canvassing for sale of securities, notice of appointment of receiver, appeal against acquittal, payment of compensation in cases of frivolous prosecution, revision and review, protection of acts done in good faith and penalty for wrongful withholding of property.
It was considered appropriate to frame some issues in the form of questions so that the scholars and jurisconsults prepare their papers on some definite lines. The questions framed were as under: What is the meaning of 'partnership' in Islam and what is the extent of liability of the members in it? What is the meaning of 'Mudaraba' in Islam and up to what extent are the parties liable if the loss is more than the investment/capital?
Does the concept of limited liability exist in Islam?
Does the concept of legal personality exist in Islam?
Who will be responsible in a 'Mudaraba' business if the loss is more than the capital, or in case of insolvency?
Can restriction be imposed on number of persons for registration under Companies Ordinance 1984 in an Islamic economy?
What is the meaning of 'baia-bil-Murabaha' in Islam? What role can a bank play in the business of the people in Islam? Does the present law about liquidation and insolvency correspond with the Islamic injunctions? Is it permissible in Islam to permit operation of sick units, which are a source of permanent financial loss to the public exchequer?
The Court adjourned hearing to a date in office, with the direction to Federal and Provincial Governments, Securities and Exchange Commission of Pakistan (SECP), and chambers of commerce at Karachi, Lahore and Islamabad to file their comments, if any, within two months.