PIA TURNED INTO PUBLIC LIMITED COMPANY INSTEAD OF CORPORATION

HOW PIA WAS CHANGED INTO PUBLIC LIMITED COMPANY WITH GOVERNMENT HAVING 51% SHARES ONLY FROM A CORPORATION THAT WAS MADE IN 1956 SECRETLY AND SILIENTLY WITHOUT THE EMPLOYEES BIENG IN KNOWLEDGE AND ALSO KEEPING IN DARK PEOPLE OF PAKISTAN BY NAWAZ SHARIF IN 2016 

PML  MUSLIM LEAGUE GOVERNMENT BY PASSING A ACT FROM PARLIAMENT OF PAKISTAN . CHANGED PIAC INTO PIAL 

KNOW THE DIFFERNECE BETWEEN THE PIAC CORPORAION AND CURRENT PIAL AS PUBLIC LIMITED COMPANY .  

THESE ARE THE FIRST STEPS TOWARDS PRIVITIZATIONS , A PROFITBALE AIRLINE COMPANY IS BEING MADE LOSS SHOWING BY FRAUD , AS THE BUYERS WANT TO GET IT ON LOW PRICE. 

 IT IS START OF LOOT BAZAR , AS THE CORE BUSINESS OF AIRLINE IS VERY PROFITABE BUT THE ALLIED ENTITIES ARE NOT PROFITTABLE LIKE REAL ESTATE AND HOTELS AND ENGINEERING SECTION AND ALSO CARGO BUSINESS AND THE PROCURMENT OF SPARES AND OIL ARE LOSS MAKING BUT ARE NOT FIXED BY CURRENT PIA MANAGERS , 

AS THE BUYERS WILL BUY THE PROFITABLE SECTION OF PIA AIRLINE AND LEAVE THE LOSS MAKING ENTITIES TO PAKISTAN GOVERNMENT A CUNNING SCHEME OF FRAUD UNDER PROCESS AND PIA EMPLOYEE WILL BE LAID OFF ON ONE PRETEXT OR ANOTHER BY MAKING THIER LIVES MISERABLE . 

The Pakistan International Airlines Corporation (Conversion) Act, 2016

ACT NO. XV OF 2016

[19th April 2016]

An Act to provide for setting up of the Pakistan International Airlines Corporation into a public limited company

WHEREAS it is expedient to provide for conversion of the Pakistan International Airlines Corporation into a public limited company under the Companies Ordinance, 1984 (XLVII of 1984) and to deal with ancillary matters;

It is hereby enacted as follows:---

1. Short title, extent and commencement.—(1) This Act may be called the Pakistan International Airlines Corporation (Conversion)Act, 2016.

(2) It extends to the whole of Pakistan.

(3) It shall come into force at once.

2. Definitions.—In this Act, unless there is anything repugnant in the subject or context,---

(a) “arrangement” means an arrangement in writing between the Company and any relevant entity setting forth the terms, conditions and manner of transfer of one or more assets of the Company to a relevant entity along with the consideration for the same, which transfer is subject to be provisions of section 4;

(b) “assets” includes all properties, rights and entitlements of every description and nature whatsoever, whether present or future, actual or contingent, and tangible or intangible, in Pakistan or elsewhere and includes but not limited to property held on trust, both movable and immovable, benefits, claims, receivables, cash balances, documents, investments, privileges and powers;

(c) “Company” means Pakistan International Airlines Corporation Limited incorporated under the Companies Ordinance;

(d) “Companies Ordinance” means the Companies Ordinance, 1984 (XLVII of 1984);

(e) “Company request” means a written request made by the Company to the Federal Government to issue an order pursuant to section 4 to effect transfer to a relevant entity of specified assets in terms of the relevant arrangement, provided nevertheless, such request may only be made once the Company has to that extent complied with the provisions of sub-section (3) of section 196 of the Companies Ordinance and the applicable code of corporate governance;

(f) “conversion” with all its cognate expressions means, in accordance with the provisions of this Act, the conversion of the Corporation into a Company;

(g) “commencing date” means the date of promulgation of this Act;

(h) “Corporation” means the Pakistan International Airlines Corporation established under the Pakistan International Airlines Corporation Act, 1956 (XIX of 1956);

(i) “liabilities” includes all borrowings, duties, obligations, loans encumbrances of every description and nature whatsoever in Pakistan or elsewhere, whether present or future, actual or contingent, and disclosed or undisclosed;

(j) “order” means any order issued by the Federal Government pursuant to sub-section (1) of section 4 and notified in the official Gazette and the expression “orders” shall be construed accordingly;

(k) “PIAC Act” means the Pakistan International Airlines Corporation Act, 1956 (XIX of 1956);

(l) “proceedings” includes any suit, arbitration or other legal or administrative proceedings applications, appeals, awards, reviews or revisions filed or pending;

(m) “relevant entity” means any body corporate or company owned or controlled by the Federal Government or the Federal Government itself;

(n) “specified assets” means the assets specified in the relevant arrangements;

(o) “undertakings” include all projects, ventures and operations undertaken by the Corporation, individually or collectively, in collaboration with some other person; and

(p) “validity period” means the period starting from the commencing date and ending on the second anniversary of the commencing date, or on such earlier date as may be notified by the Federal Government in the official Gazette.

3. Conversion of Corporation into a Company.—(1) The Corporation shall be deemed to have been converted into a public company limited by shares with effect from the commencing date.

(2) As and from the commencing date,---

(a) the Company shall be deemed to hold and own all assets and liabilities of the Corporation without any conveyance, alienation or assignment and without any further act, deed or registration and without discharging or invalidating any contract; and

(b) without prejudice to the generality of the foregoing clause, the Company shall,---

(i) be entitled to the benefit of all notifications, licenses, permissions, sanctions, authorizations, concessions, decrees, air service agreements, orders and benefits whatsoever issued or granted in favour of the Corporation as on the commencing date, including, butnot limited to the permission connected with the listing of the securities of the Corporation on the relevant stock exchanges; and

(ii) be deemed to have taken over and shall be entitled to enforce, all rights, licenses, grants and concessions and to have assumed all liabilities of the Corporation and shall be liable to pay and discharge all liabilities of every description and nature whatsoever of the Corporation.

(3) The shareholders of the Company shall be deemed without any fresh issuance of shares to own and hold the same number of fully paid shares with such rights and privileges (including as to class, kind and face value) as they owned and held in the Corporation on the commencing date; and the authorized capital of the Company shall be deemed to be equivalent to the authorized capital of the Corporation as on the commencing date and no fee or charges shall be payable in this regard.

(4) An proceedings of every description and nature whatsoever by or against or relating to the Corporation pending on the commencing date in any court, tribunal, or other authority shall be continued, defended, prosecuted and enforced by or against or relating to the Company in the same manner and to the same extent as they would have been continued, defended, prosecuted and enforced by or against or relating to the Corporation, and the same shall not abate, be discontinued, prejudiced or otherwise affected by the provisions of this Act.

(5) The Company shall be deemed to be the successor-in-interest of the Corporation, and the name of the Company shall be deemed to have been substituted for the name of the Corporation in all contract, agreements, licenses, orders, certificates, powers of attorney, consents, undertakings, leases, grants, concessions, records of Central Depository Company^. of Pakistan Limited and all other instruments or documents of every description and nature whatsoever relating to the Corporation and no objection shall be entertained by any court, tribunal or authority in regard to such substitution or on the ground that any such contract, agreement or document as aforesaid was, or is, I, or with, the name of the Corporation and not the Company.

(6) All employees of the Corporation shall be deemed to be employees of the Company on the same remuneration and other conditions of service, rights and privileges including but not limited to the provisions as to their pension, provident fund and gratuity, as the case may be, and other matters as were applicable to them before the conversion, including all existing retirement benefits of the employees whether funded or non-funded:

Provided that,---

(i) notwithstanding anything contained in this Act or any other law, or any decision of any court or tribunal, the employees of the Company shall continue to be governed by non-statutory contractual terms, conditions, rules and regulations of service and such terms, conditions, rules and regulations which shall not acquire, or be deemed to have acquired or be treated as laving acquired, statutory status;

(ii) no person deemed to be employed by the Company under this section shall be entitled to any compensation or benefit as a consequence of the conversion of the Corporation into a Company;

(iii) the salaries, emoluments and all other terms of service of employees, whether permanent or contractual, shall not be changed to their disadvantage; and

(iv) pensions and other existing obligations of the Corporation to retired employees shall not be changed to their disadvantage.

(7) Notwithstanding the provisions of section 146 of the Companies Ordinance, the Company shall, upon conversion, continue all business and undertakings of the Corporation as were being carried on immediately prior to the commencing date.

4. Power to pass orders for^-the transfer of assets.—(1) During the validity period and subject to a prior Company request, the Federal Government may issue orders providing for the transfer of specified assets to a relevant entity substantially on the terms set forth in the relevant arrangement.

(2) The orders shall be binding on the Company, the relevant entity and any other person having any right, claim or liability in relation to the Company or any relevant entity.

(3) As and from the date specified in the order, the specified assets shall, by virtue and to the extent provided in the relevant order, stand transferred to, and vest in, the relevant entity, without any conveyance, alienation or assignment and without any further act, deed or registration and without discharging or invalidating any contract, and be subject to the terms of the relevant order in all cases.

(4) Representation on the Board of Directors and all other rights and privileges of shareholders of the Company, or any of its subsidiary companies carrying on air-transport business, shall be proportionate to their share-holding.

Explanation.—Management control of the Company and any of its subsidiary companies in the above circumstances shall continue to vest in the majority share-holder, which shall be the Federal Government and whose share shall not be less than fifty one percent.

(5) The Federal Government shall carry out or cause to be carried out valuation of the assets of the Company, and its subsidiary companies carrying on air-transport business, by a recognized valuator before transferring any shares of these companies to a third party.

(6) The Public Procurement Regulatory Authority Ordinance, 2002 (Ordinance XXII of 2002) and rules framed thereunder, as presently applicable, shall continue to apply to all transactions under this Act.

5. Guarantees to remain in force.—Notwithstanding the repeal of the PIAC Act, all guarantees given by the Federal Government to any person, including foreign or local institutions, to secure any of the liabilities of the Corporation shall remain in full force and affect as though they were given on behalf of the Company.

6. Waiver from taxes, duties, fee etc.—The Federal Government may, by notification in the Official Gazette, waive any tax, duty, fee or any other charge that may be payable unler any Federal law for the time being in force.

7. Name and Headquarters of Company.—(l) The name of the Company shall not be changed without the consent, in writing, of the Federal Government.

(2) The Headquarters of the Company and any of its subsidiary companies carrying on air-transport business shall be at Karachi.

8. No gain or loss.—Neither the conversion nor the transfer of any asset of the Company through an order shall given rise to any gain or loss under the Income Tax Ordinance, 2001 (XLIX of 2001).

9. Act to override.— The provisions of this Act and the orders issued hereunder shall have effect notwithstanding anything to the contrary contained in any other law for the time being in force.

10. Removal of transitional difficulties.—if any difficulty arises during the validity period in giving effect to any provision of this Act, the Federal Government may, by notification in the official Gazette, make such provisions as may appear to it to be necessary for the purpose of removing such difficulty.

11. Repeal.—(1) The PIAC Act is hereby repealed.

(2) On repeal of PIAC Act under sub-section (1), nothing contained in the said Act shall be applicable to the Company, its shareholders or any other person that may have had interest in the Corporation immediately prior to the conversion.

PIA CORPORATIONS ACT 1956 WHICH WAS REMOVED

he Pakistan International Airlines Corporation Act, 1956

¹ACT NO. XIX OF 1956

[18^th April, 1956]

An Act to establish the Pakistan International Airlines Corporation

            WHEREAS it is necessary to provide for the establishment of a Corporation to facilitate acquisition of the air‑transport under­taking of the Orient Airways Limited, and to make further and better provision for the operation and development of air‑transport services and purposes connected therewith;

            It is hereby enacted as follows:---

            1. Short title, extent and commencement.^___(1) This Act may be called the Pakistan International Airlines Corporation Act, 1956.

            (2) It extends to the whole of Pakistan.

            (3) It shall come into force at once.

            2. Interpretation. In this Act, unless there is anything repugnant in the subject or context,---

(a) “Board” means the Board of Directors of the Corporation;

²[(aa) “Chairman” means Chairman of the Board;]

(b) “Corporation” means the Pakistan International Airlines Corporation established under this Act; and

(c) “prescribed” means prescribed by rules or regulations made under this Act.

¹ For Statement of Objects and Reasons, See Gaz. of Pak., 1956, Ext., dated the 5^th April, 1956, p. 586.

² Cl. (aa) ins. by the Pakistan International Airlines Corporation (Amdt.) Act, 1975 (1 of 1976), s. 2 (w.e.f. 8^th January, 1976).

3. Establishment and incorporation.^___ (1) As soon as may be after the commencement of this Act, the ¹[Federal Government] shall establish a Corporation to be called the Pakistan International Airlines Corporation.

(2) The Corporation shall be a body corporate by the name of the Pakistan International Airlines Corporation, having perpe­tual succession and a common seal with power, subject to the provisions of this Act, to acquire and hold property both movable and immovable and to carry out the functions and duties of the Corporation under this Act, and shall by the said name sue and be sued.

4. Functions of the Corporation.^___ (1) It shall be the function of the Corporation to take over the undertaking of the Orient Airways Limited hereinafter in this Act referred to as the “said Company” and all such under-­takings of the ¹[Federal Government] as were undertaken for the purposes of the Corporation and, subject to the provisions of the ²[Civil Aviation Ordinance, 1960] to provide and further develop safe, efficient, adequate, economical and properly co‑ordinated air‑transport services, internal as well as international ; and the Corporation shall so exercise its powers as to secure that air‑transport services are developed to the greatest possible advantage in the interests of the country.

(2) Without prejudice to the generality of the powers conferred by sub‑section (1) the Corporation shall in particular have power,---

(a)        to operate any air‑transport service or any flight by aircraft for a commercial or other purpose, and to carry out all forms of aerial work;

³[(aa)   to acquire, own, run, manage, or participate in the running or management of, any hotel or business connected therewith;]

¹ Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government” (w.e.f. 28^th July, 1975).

² Subs. by the Federal Laws (Revision and Declaration) Ordinance, 1981 (27 of 1981), s . 3 and II Sch.

³ New cl. (aa) ins. by the Laws Amendment Ordinance, 1965 (39 of 1965), s. 3, (w.e.f. 4^th October, 1965).

(b)        to provide for the instruction and training in matters connected with aircraft or flight by aircraft of persons employed or desirous of being employed either by the Corporation or by any other person ;

(c)        with the previous approval of the ¹[Federal Govern­ment], to promote any organisation outside Pakistan for the purpose of engaging in any activity of a kind which the Corporation has power to carry on ;

(d)       to acquire, hold or dispose of any property, whether movable or immovable, or any air‑transport under­taking ;

(e)        to repair, overhaul, reconstruct, assemble or recondi­tion aircraft, vehicles or other machines and parts, accessories and instruments thereof or therefor and also to manufacture such parts, accessories and instru­ments, whether the aircraft, vehicles or other machines are owned by the Corporation or by any other per­son ;

(f)        to do all things incidental to or connected with any of the matters referred to in sub‑section (1) and in clauses (a) to (e).

(3) In discharging its functions the Corporation shall have careful regard to business principles.

5. Administration of the affairs of the Corporation.^___ (1) The general direction and the administration of the Corporation and its affairs shall vest in the Board of Directors which may exercise all powers and do all acts which may be  exercised or done by the Corporation.

(2) The ¹[Federal Government] may, as and when it considers necessary, issue directives to the Corporation on matters of policy, and such directives shall be binding on the Corporation. If a question arises whether any matter is a matter of policy or not, the decision of the ¹[Federal Government] shall be final.

¹ Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government” (w.e.f. 28^th July, 1975).

¹[6. The Board of Directors.^___ (1) The Board of Directors shall consist of the follow­ing ²[eleven] Directors, namely:---

(a)        The Chairman;

(b)        ³[eight] Directors to be nominated by the Federal Government; and

(c)        two Directors to be elected by shareholders other than the Federal Government.

            (2) Every Director, other than the Chairman, shall,---

(a)        perform such special duties as the Board may, by regulations, assign to him; and

(b)        receive such remuneration, fees or allowances, and enjoy such privileges, as the Federal Government may determine].

            7. Terms of office of Directors.^___ (1) An appointed Director ⁴*        *            * shall hold office for a term of three years unless sooner removed by the ⁵[Federal Government], and may be appointed thereafter for a further term or terms of such duration as the ⁵[Federal Government] may in appointing him therefor, determine.

            (2) An elected Director ⁶*    *     * shall hold office for a term of three years and continue in office after the expiry of his term until his successor is elected, and shall be eligible for re‑election.

¹ The original section 6 has been Subs. by the Pakistan International Airlines, Corporation (Amdt.) Act, 1975 (1 of 1976), s. 3 (w.e.f. 8^th January, 1976), which have successively been amended by the Pakistan International Airlines Corporation (Amdt.) Ordinance, 1959 (19 of 1959), s. 2 (w.e.f. 2^nd April, 1959), the Pakistan International Airlines Corporation (Amdt.) Ordinance, 1960 (40 of 1960), s. 2 (w.e.f. 6^th October, 1960), and F.A.O., 1975, Art. 2 (w.e.f. 28^th July, 1975) to read as above.

² Subs. by the Pakistan International Airlines (Amdt.) Ordinance, 1983 (4 of 1983), s. 2, for “ten”.

³ Subs. ibid., for “seven”.

⁴ The words “other than the Managing Director” were first ins. by Ord. 19 of 1959, s. 3 and then omitted by Act 1 of 1976, s. 4.

⁵ Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government”.

⁶ The original words  “or a Director who is deemed to be elected” omitted by Ord. 19 of 1959, s. 3.

            (3) A casual vacancy in the office of a Director shall be filled by appointment or election, as the case may be, and a Director elected to fill a vacancy shall hold office for the unexpired period of the term of his predecessor:

            Provided that it shall not be necessary to elect a Director to fill a casual vacancy of an elected Director occurring within three months of the end of the term in which it occurs.

            (4) Directors who are not servants of the Government shall be paid such fees for attending the meetings of the Board or of any executive committee appointed by the Board of which they are members as may be prescribed by the Board.

            (5) No act or proceeding of the Board shall be invalid merely on the ground of the existence of any vacancy in, or any defect in the constitution of the Board.

            ¹[8. Chairman.^___ (1) The Federal Government shall appoint a Chairman of the Board, who shall be the chief executive of the Corporation.

            (2) The Chairman shall, unless removed earlier, hold Office for a period of three years on such terms and conditions as the Federal Government may determine; and shall, subject as aforesaid, be eligible for re-appointment.

            (3) The Chairman shall exercise such powers and perform such functions as may be assigned to him by the Board or as the Federal Government may, from time to time, determine.

            (4) The Chairman shall receive such remuneration, fees or allowances, and enjoy such privileges, as the Federal Government may determine.

¹ Ss. 8 and 8A have been subs. by the Pakistan International Airlines Corporation (Amdt.) Act, 1975 (1 of 1976), s. 5 (w.e.f. 8^th January, 1976), for the original s. 8 which has successively been amended by the Pakistan International Airlines Corporation (Amdt.) Ordinance, 1959 (19 of 1959), s. 4 (w.e.f. 2^nd April, 1959), the Pakistan International Airlines Corporation (Amdt.) Act, 1966 (17 of 1966), s. 2 (w.e.f. 18^th June, 1966), and F.A.O., 1975, 1975, Art. 2 and Sch. (w.e.f. 28^th July, 1975), to read as above.

            8A. Managing Director. ^___ (1) There shall be a Managing Director of the Corporation, who shall be appointed by the Federal Government after consultation with the Chairman.

            (2) The Managing Director shall hold office for such period, and be subject to such terms and conditions of service, as the Federal Government may determine after consultation with the Chairman.

            (3) The Managing Director shall exercise such powers and perform such functions as may be prescribed by the Board and as the Chairman may assign to him from time to time.].

            9. Disqualification of Directors.^___ (1) No person shall be appointed or elected or shall continue to be a Director who,---

(a)        is or at any time has been convicted of an offence involving moral turpitude; or

(b)        is or at any time has been adjudicated insolvent; or

(c)        is found lunatic or becomes of unsound mind; or

(d)       is a minor.

            (2) No person ¹[other than the ²[Chairman]] ³[or a person specified by the Federal Government] shall be appointed or elected or shall continue to be a Director who is or who becomes a member of the salaried staff of the Corpora­tion.

            (3) No Director shall continue in office after absenting himself from three consecutive meetings of the Board without the leave of the Chairman or, in the case of the Chairman, of the ⁴[Federal Government].

¹ Ins. by the Pakistan International Airlines Corporation (Amdt.) Ordinance, 1959, (19 of 1959), s. 5.

² Subs. by the Pakistan International Airlines Corporation (Amdt.) Act 1976 (1 of 1976,) “s. 6 for Managing Director”.

³ Ins. by the Pakistan International Airlines (Amdt.) Ordinance, 1981 (18 of 1981), s. 2.

⁴ Subs. by F.A.O., 1975, Art. 2, and Table for “Central Government”.

            10. Appointment of officers, etc. ¹[(*)] The Corporation may appoint such officers, advisers and employees as it considers necessary for the efficient perfor­mance of its functions on such terms and conditions as it may see fit ²[:]

            ²[Provided that, if the Federal Government so directs, the Corporation shall appoint an officer, adviser or employee having such qualifications, on such terms and conditions and for performance of such functions as the Federal Government may specify.]

³*                     *                       *                       *                       *                       *                 *

            11. Meetings of the Board.^____(1) The meetings of the Board shall be held at such time and such places as may be prescribed:

            Provided that a meeting may also be otherwise convened by the Chairman when he so thinks fit and shall be convened if two or more Directors so request in writing addressed to the Chair­man.

            Quorum. (2) To constitute a quorum at a meeting of the Board not less than ⁴[three] Directors shall be present.

            (3) Each Director including the Chairman shall have one vote, and in the event of an equality of votes the Chairman shall have a casting or a second vote.

            (4) ⁵[In the absence of the Chairman], the Directors present shall choose one from among themselves to be the Chairman of the meeting.

¹ Sub-section (1) which was re-numbered by ord. 53 of 1984 has been omitted by the Pakistan International Airlines (Amdt.) Act, 1989 (7 of 1989), s. 2.

² Subs. and added by the Pakistan International Airlines (Amdt.) Ordinance, 1980 (24 of 1980), s. 2.

³ Sub-section (2), (3) and (4) which were Added by Ord. 53 of 1984, has been omitted by Act 7 of 1989, s. 2.

⁴ Subs. by the Pakistan International Airlines Corporation (Amdt.) Ordinance, 1959 (19 of 1959), s. 6, for “five”.

⁵ Subs. and shall be deemed to have been so subs. by the Pakistan International Airlines Corporation (Amdt.) Act, 1966 (17 of 1966), s. 3, (w.e.f. 18^th June 1966) for “if for any reason the Chairman is unable to be present at a  meeting”.

12. Head Office. The Corporation shall establish its head office in Karachi and may establish offices within Pakistan and abroad if the Board so thinks fit.

13. Deposit account. The Corporation may open an account in the National Bank of Pakistan or in any scheduled bank in Pakistan or, with the prior approval of the ¹[Federal Government], in any other bank in Pakistan. The Corporation may open an account outside Pakistan in any bank which may be a scheduled bank according to the law of the country in which the account has to be opened, or with the prior approval of the ¹[Federal Government] in any bank.

14. Investment of funds. The Corporation may invest its funds in any securities of the ¹[Federal Government] or a Provincial Government.

15. Borrowing powers. The Corporation may, with the previous sanction of the ¹[Federal Government] and on such terms and conditions as may be approved by the Government, borrow in Pakistan currency or in foreign currency.

16. Audit.^____ (1) The accounts of the Corporation shall be audited by not less than two auditors holding certificates under section 144 of the Companies Act, 1913 (VII of 1913), who shall be appointed by the ¹[Federal Government], in consultation with the Comptroller and Auditor‑General of Pakistan hereinafter referred to as the Auditor-­General, on such remuneration, to be paid by the Corporation, as the ¹[Federal Government] may fix, and the Auditor‑General shall have the power to give directions to the auditors in regard to the extent and method of their audit subject to the provisions of the Companies Act, and to prescribe the forms of accounts to be maintained by the Corporation consistent with the requirements of that Act.

¹ Subs. by F.A.O., Art. 2 and Table  for “Central Government”. (w.e.f. 28^th July, 1975).

(2) Notwithstanding the provisions of the preceding sub-­section, the Auditor‑General, where the ¹[Federal Government] is required under section 26 to make good any losses sustained by the Corporation shall, and in other cases may, either of his own motion or upon a request received in this behalf from the ¹[Federal Government], undertake such audit of the accounts of the Cor­poration at such time as may be considered necessary, and the Corporation shall, at the time of such audit, produce the account books and connected documents at such place or places as the Auditor‑General may fix, and furnish such explanations and infor­mation as the Auditor‑General or an officer or officers authorized by him in this behalf may ask for.

(3) Every auditor appointed under sub‑section (1) shall be given a copy of the annual balance sheet of the Corporation and shall examine it together with the accounts and vouchers relating thereto, and shall have a list delivered to him of all books kept by the Corporation and shall at all reasonable times have access to the books, accounts and other documents of the Corporation, and may in relation to such accounts examine any Director or officer of the Corporation.

(4) The auditors shall report to the shareholders upon the annual balance sheet and accounts and in their report they shall state whether in their opinion the balance sheet is a full and fair balance sheet containing all necessary particulars and properly drawn up so as to exhibit a true and correct view of the state of the Corporation’s affairs, and in case they have called for any explanation or information from the Board, whether it has been given and whether it is satisfactory.

(5) The Board may at any time issue directions to the auditors requiring them to report to it upon the adequacy of measures taken by the Corporation for the protection of its shareholders and creditors or upon the sufficiency of the inform­ation and other means placed at the disposal of the auditors in auditing the affairs of the Corporation.

¹ Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government” (w.e.f. 28^th July, 1975).

            ¹[17. Accounts.^___ (1) A statement of its accounts audited by the auditors referred to in the preceding section and a report by the Directors thereon shall be furnished to the ²[Federal Government] by the Corporation ³[within seven months of the close] of every financial year.

            ⁴[(2) The ²[Federal Government] shall, as soon as possible, lay the statement and report, received by it under sub‑section (1) before the National Assembly.]

            18. General meetings.^__ (1) A general meeting (hereinafter referred to as the annual general meeting) shall be held at the head office of the Corporation annually within six months from the date on which the annual accounts of the Corporation are closed, and a general meeting may be convened by the Board at any other time.

(2) The shareholders present at the annual general meeting shall be entitled to discuss the annual accounts, the annual report of the Board on the working of the Corporation, and the auditors' report on the annual balance sheets and accounts.

            (3) Every shareholder holding a share of Rs. 10 shall be entitled to a vote, and to an additional vote for every additional share of rupees ten ; and for this purpose two shares of rupees five each shall be reckoned to be the equivalent of a share of rupees ten.       

¹ Section 17 was renumbered as sub‑section (1) of that section by the Pakistan International Airlines Corporation (Amdt.) Act, 1958 (16 of 1958), s. 2 (with effect from the 18th April, 1956).

² Subs. by F.A.O., 1975, Art. 2, and Table for “Central Government” (w.e.f. 28^th July, 1975).

³ Subs by the Pakistan International Airlines Corporation (Amdt.) Ordinance, 1959 (49 of 1959), s. 2, for “as soon as possible after the end” (w.e.f. 3^rd September, 1959).

⁴ Sub-section (2) added by Act 16 of 1958, s. 2.

19. Declaration of fidelity and secrecy. Every Director, auditor, officer or servant of the Corporation shall, before entering upon his duties make a dec­laration of fidelity and secrecy in the form set out in the Schedule to this Act.

20. Indemnity of Directors.^___ (1) Every Director shall be indemnified by the Cor­poration against all losses and expenses incurred by him in the discharge of his duties except such as are caused by his own willful act or default.

            (2) A Director shall not be personally responsible for the acts of any other Director or of any officer or servant of the Corporation for any loss or expense resulting to the Corporation by reason of the insufficiency or deficiency in value of or title to any property or security acquired or taken on behalf of the Corporation, or by the wrongful act of any person under a liability to the Corporation, or by anything done by him in good faith in the execution of the duties of his office.

            21. Transfer to the Corporation of the undertaking of the Orient Airways Ltd.^____ (1) On such date as the ¹[Federal Government] may by notification in the official Gazette appoint (hereinafter in this Act referred to as “the appointed date”), which shall be as soon as may be after the appointment of the first Board of Directors, under sub‑section (1) of section 6, the entire undertaking of the said Company shall be transferred to and vested in the Corporation.

(2) The undertaking so transferred and vested shall include all assets, rights, powers, authorities and privileges and all property, movable and immovable, including lands, works, workshops, aircraft, cash balance, reserve funds, investments and book debts and all other rights and interests arising out of such property as were immediately before the appointed date in the ownership, possession or power of the said Company in relation to the under­taking whether within or without Pakistan and all books of account and documents relating thereto, and all borrowings, liabilities and obligations of whatever kind then subsisting of the said Company in relation to the undertaking.

¹ Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government” (w.e.f. 28^th July, 1975).

(3) Subject to the other provisions of this Act, all contracts and working arrangements subsisting immediately before the appointed date as affecting the said Company shall, in so far as they relate to the undertaking of the said Company, cease as from the appointed date to have effect or to be enforceable against the said Company or any person who was a surety or had guaranteed the performance thereof, and shall be enforceable and of effect against or in favour of the Corporation in which the undertaking has vested as if instead of the said Company the Corporation has been named therein.

(4) Subject to the other provisions of this Act any proceed­ing or cause of action pending or existing immediately before the appointed date by or against the said Company in relation to its undertaking may as from the appointed date be continued or enforced by or against the Corporation in which it has vested by virtue of this Act as it might have been continued or enforced by or against the said Company if this Act had not been passed, and shall cease to be continued or be enforceable by or against the said Company or its surety or guarantor.

22. Certain existing arrangements to continue. All contracts and working arrangements made and all liabilities incurred by the ¹[Federal Government] before the appoint­ed date in connection with or for the purposes of the Corporation shall be deemed to be made or incurred by the Corporation and have effect accordingly.

23. Winding up and dissolution of Orient Airways Ltd.^___ (1) The said Company shall be wound up voluntarily of in accordance with the provisions of the Companies Act, 1913 (VII of 1913), relating to members voluntarily winding up:

(a)        the winding up of the said Company shall commence on the appointed date without the passing by the said Company of any special or other resolution for winding up:---

¹ Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government” (w.e.f. 28^th July, 1975).

(b)        the Directors of the said Company shall not be under any obligation to make any such statutory declaration as is required by section 207 of the Companies Act, 1913 (VII 1913); and  

(c)        the winding up of the said Company shall be conduc­ted by the Directors of the said Company in office at the appointed day who shall be deemed to be joint liquidators for the purposes of the said winding up with power to act by a majority of their number. In case of any of the joint liquidators ceasing to hold his office as joint liquidator by reason of his death, resignation or otherwise the remaining joint liquida­tors shall continue to function as joint liquidators until the winding up of the affairs of the said Com­pany is completed.

(2) For the purposes of the winding up and for any other purpose necessary for enabling it to give effect to the provisions of this Act, the said Company may after the appointed date retain temporarily for its own use such offices, books, accounts and documents and the services of such officers and servants on such terms and conditions as may be agreed between the Corporation and the said Company, or failing agreement, as may be determined by the ¹[Federal Government].

24. Valuation of assets of Orient Airways Ltd. and allot­ment of shares to the shareholders of Orient Airways Ltd.^____ (1) So soon as may be after the commencement of this Act, the ¹[Federal Government] shall through such persons and in such manner as it thinks fit, cause as expeditiously as may be a valuation of the net value of the assets of the said Company (after taking into account all the liabilities of the said Company) as on the 30th September, 1953, to be completed, and the valua­tion so made shall on being approved by the ¹[Federal Government] be notified in the official Gazette and shall be final ; and

¹ Subs. by F.A.O., 1975, Art. 2. and Table, for “Central Government” (w.e.f. 28^th July, 1975).

each shareholder of the said Company shall thereupon be entitled, subject to the provisions of section 25 to receive, in exchange for his shares in the said Company, shares in the Corporation of a value which shall be in proportion to the valuation of the total net assets of the said Company, as approved by the ¹[Federal Govern­ment] under this section, to the aggregate amount subscribed on the existing shares of the said Company.

            (2) No shareholder in the said Company shall be entitled to any other or further claim, in respect of the shares held by him in the said Company, in the winding up of the said Company or against the said Company or the Corporation.

            25. Share capital.^___ (1) The authorised share capital of the Corporation shall in the first instance be five crores of rupees.

            (2) The subscribed capital of the Corporation shall in the first instance be allotted and subscribed to as follows, that is to say,---

(a)        shares of the value of two crores and seventy‑five lakhs of rupees or of the value of the assets resulting from the investments made by the ¹[Federal Government] for the purposes of the Corporation, as on the 30th September, 1953, and assessed on the basis agreed upon between the ¹[Federal Government] and the said Company, whichever is less, shall be allotted to the ¹[Federal Government] ;

(b)        shares of the value of half a crore of rupees shall be offered to the public for subscription ; if any shares so offered are not subscribed to by the public under this clause within six months of the date when the shares are so offered, the ¹[Federal Government] shall subscribe to them ;

¹ Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government” (w.e.f. 28^th July, 1975).

(c)        shares of the value of one crore of rupees or of the value of the net assets of the said Company as on 30^th September 1953, as determined by the valuation made and approved under section 24, whichever is less shall be allotted to the shareholders of the said Company in consideration of the acquisition of the undertaking of the said Company as fully paid‑up shares ¹[;]

            ²[Provided that all shares not so allotted before the commencement of the Pakistan International Airlines Corpor­ation (Amendment) Ordinance, 1962, shall, upon such commence­ment, stand allotted to, and be held by, the ³[Federal Govern­ment.].

            ⁴[(2A) If, before the expiry of a period of three years from the commencement of the aforesaid Ordinance, any person to whom a share has not already been allotted under clause (c) of sub‑section (2) applies to the Corporation for the allotment of shares to which he may be entitled under that clause, the ³[Federal Government] may, on the recommendation of the Board, and after making such enquiries as it may consider necessary, transfer to such person, out of the shares held by it under the proviso thereto the shares to which, in the opinion of the ³[Federal Government], such person is so entitled.]

            (3) The Corporation may increase its capital whenever it thinks fit with the previous sanction of the ³[Federal Government], and the ³[Federal Government] may impose such conditions as it considers necessary when sanctioning any increase.

            (4) The ³[Federal Government,] ⁵[whether by itself or together with any financial institution,

¹ Subs. by the Pakistan International Airlines Corporation (Amdt.) Ordinance, 1962 (23 of 1962), s. 2, for full stop (w.e.f. 31^st May, 1962).

² Proviso added, ibid.

³ Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government”. (w.e.f. 28^th July, 1975).

⁴ New Sub-section (2A) ins. by the Pakistan International Airlines Corporation (Amdt.) Ordinance, 1962 (23 of 1962), s. 2.

⁵ Ins. by the Pakistan Airlines (Amdt.) Act, 1985 (15 of 1985), s. 2.

banking company, insurance Corporation or statutory Corporation owned, managed or controlled by it,] shall not at any time hold shares of value less than 51 per cent of the value of the shares issued by the Corporation.

            (5) All transfers of the shares of the Corporation shall be subject to the provisions of this Act, and the rules made thereunder.

            26. Limited guarantee against loss. The ¹[Federal Government] shall make good any losses sustained by the Corporation during the three years next after 30^th September, 1953, but not thereafter unless otherwise deter­mined by the ¹[Federal Government].

            27. Liquidation of Corporation. No provision of law relating to the winding up of companies or corporations shall apply to the Corporation and the Corporation shall not be wound up save by order of the ¹[Federal Government] and in such manner as the ¹[Federal Government] may direct.

            28. Provisions relating income-tax and Super-tax. For purposes of the ²[Income-tax Ordinance, 1979 (XXXI of 1979)] the Corporation shall be deemed to be a company within the meaning of that Act, and shall be liable to income-tax and super-tax accordingly on its income, profits and gains.

            29. Power of ¹[Federal Government] to make rules. The ¹[Federal Government] may make rules ³ not inconsistent with this Act for the purpose of giving effect to the provisions of this Act and where the rules made under this section are inconsistent with the regulations made under the next succeeding section the rules shall prevail.

            30. Power of Board to make regulations. The Board may with the previous sanction of the ¹[Federal Government], make regulations⁴ not inconsistent with this Act to provide for all matters for which provision is necessary or expedient for the purpose of giving effect of the provisions of this Act.

¹ Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government” (w.e.f. 28^th July, 1975.)

² Subs. by the Federal Laws (Revision and Declaration) Ordinance, 1981 (27 of 1981), s. 2 and II Sch., for “Income Tax Act, 1922”.

³ For the Pakistan International Airlines Corporation Rules, 1958, Gaz. of Pak., 1958, Pt. III, pp. 41^___ 46.

⁴ For Regulations made under this section, see Gaz. of Pal., 1958, Pt. VII, pp. 13^___ 16.

31. Rules and regulations to be held before the legislature. All rules and regulations made under this Act shall be published in the official Gazette, and shall come into force upon such publication and shall be laid thereafter as soon as may be before the National Assembly.

32. [Repeal of Ordinance I of 1955 and XXVIII of 1955] Rep. by the Repealing and Amending Ordinance, 1965 (10 of 1965), s. 2 and Ist. Sch.

THE SCHEDULE

(See Section 19)

DECLARATION OF FIDELITY AND SECRECY

            I, ………………………………. Hereby declare that I will faithfully, truly and to the best of my judgment, skill and ability, execute and perform the duties required of me as a Director, officer, employee or auditor (as the case may be) of the Pakistan International Airlines Corporation, and which properly relate to any office or position in the said Corporation held by me.

            I further declare that I will not communicate or allow to be communicated to any person not legally entitled thereto any information relating to the affairs of the Corporation nor will I allow any such person to inspect or have access to any books or documents belonging to or in the possession of the Corporation and relating to the business of the Corporation.

Signed before me

……………….                                                                            Signature ……………….

……………….                                                                            Signature ……………….

Dated….…….                                                                            Signature ……………….