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Lahore

August 31, 2010

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SECP barred from receiving ‘contribution’

SECP barred from receiving ‘contribution’
LAHORE
The Lahore High Court on Monday restrained the Securities and Exchange Commission of Pakistan from receiving Rs 250,000 as “contribution” from Asian Mutual Insurance for maintaining the Insurance Ombudsman office .
The court also issued notices to the federal government and the SECP. The court passed the order on a petition of AMIC filed through its counsel Asjad Saeed who pleaded that the SECP issued a circular on July 30 under section 126(4) of the Insurance Ordinance 2000, requiring the petitioner-company to deposit Rs 250,000 in the federal insurance ombudsman’s bank account to maintain the insurance ombudsman’s secretariat.
The petitioner-company challenged the circular on the grounds that it was violative of fundamental rights and against injunctions of Islam as under article 227(1) of the constitution no law could be enacted which was repugnant to Islam.
The counsel pointed out that the Supreme Court had held that under Islamic principles, access to justice was the most important right of citizens and the state was duty bound to provide necessary machinery without charging any fee. Therefore, promulgation of section 126(4) and requiring Rs 250,000 from the petitioner-company was violation of basic rights.
The counsel said section 126(4) also violated Article 18 of the constitution as the it deprived the petitioner-company of its freedom to trade and business. The petitioner-company prayed to the court to declare section 126(4) ultra vires of constitution and declare the circular requiring Rs 25,0000 illegal.
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