MARKETING OF PETROLEUM PRODUCTS (FEDERAL CONTROL)
ACT XVII OF 1974
An Act to provide for the management
and development of marketing facilities in petroleum products.
Whereas it is expedient to provide for the management and development of marketing facilities in petroleum products and for matters connected therewith; it is hereby enacted as follows:-
1. Short title, extent and commencement. (1) This Act may be called the Marketing of Petroleum Products (Federal Control) Act, 1974.
(2) It extends to the whole of Pakistan.
(3) It shall come into force at once.
2. Definition. In this Act, unless there is anything repugnant in the subject or context, (a) ‘bank rate’ means the bank rate determined and made public under the provisions of the State Bank of Pakistan Act of 1956 (XXXIII of 1956) ; (b) ‘Board of Management’ means the Board of Management set up under section 7; (c) ‘corporation’ means a corporation or authority wholly owned or controlled by the Federal Government to which a marketing company is transferred under this Act; (d) ‘creditor’ means any person to whom a marketing company owes any amount of money; (e) ‘debtor’ means a person who owes any amount of money to a marketing company; (f) ‘managed company’ means a company in respect of which a Managing Director has been appointed; (g) ‘Managing Director’ in relation to a marketing company, means the Managing Director appointed by the Federal Government under this Act, in respect of such company; (h) ‘marketing company’ means a company which has, during the twelve months preceding the commencement of this Act, been wholly or mainly engaged in purchasing or obtaining petroleum products from local refineries, or from or through sources abroad, for selling, distributing or marketing directly or through its agents or dealers at its dispensing outlets or filling stations; (I) ‘petroleum products’ means motor gasolene, diesel oils, kerosene and furnace oil; (J) ‘previous management’ means a person, board of directors or other body or authority in which the management of a marketing company vested immediately before the appointment of a managing Director in respect thereof; (k) ‘shareholder’ means a share-holder in the share capital of a company, and includes a stockholder; (L) words and expressions used but not defined in this Act, shall have the same meaning as in the Companies Act, 1913 (VII of 1913).
3. Declaration. It is hereby declared that development under Federal control of marketing in petroleum product is necessary in the public interest.
4. Act to override other laws. The provisions of this Act shall have effect notwithstanding anything contained in the Companies Act, 1913 (VII of 1913), or Companies (Managing Agency and Election of Directors), Order, 1972 (P.O. No. No. 2 of 1972), or any other law for the time being in force or any agreement, contract, memorandum or articles of association of a company.
5. Power to take over management or acquire shares or business of marketing company. (1) The Federal Government may if it considers necessary in the public interest so to do, by an order, (a) take over the management of any marketing company and, as from the date of such order, the previous management shall stand divested of such management; (b) acquire the whole or a portion of the shares from all or any of the shareholders of such marketing company and as from the date of such order, the shares so acquired shall vest in the Federal Government : provided that no order shall be made under this section for the acquisition of the shares held in a marketing company by an institution owned or controlled by the Federal Government, including the National Investment Trust and the Investment Corporation of Pakistan or the shares held by a foreign investor: Provided further that the Federal Government may by notification in the official Gazette, exempt from acquisition shareholdings of any shareholder up to such maximum amount as may be specified in the notification.
(2) Where the Federal Government makes an order under sub-section (1) for taking over the management of any marketing company, no dealings or business relating to the shares of such company shall be transacted on any stock exchange and no transfer of such shares shall be registered in the share register of the company for a period of ninety days from the date of such order or such shorter period as may be notified by the Government.
6. Appointment of Managing Director. (1) Where the Federal Government has made an order under section 5 in respect of a marketing company, it may appoint a Managing Director in respect of such company.
(2) Upon the appointment of a Managing Director in respect of a marketing company, the administration and the management of the affairs company shall vest in the Managing Director, and any person or authority exercising or having the right to exercise, immediately before such appointment, any powers or functions in relation to the management of the company shall cease to exercise or to have the right to exercise such powers or functions.
(3) The Managing Director shall; (a) hold office during the pleasure of the Federal Government; (b) in the discharge of his functions, be subject to such orders and such directions of the Federal Government and of the Board of Management as the Federal Government or the Board of Management may from time to time give in writing; and (c) receive such remuneration and be subject to such other terms and conditions of appointment and service as the Federal Government may determine.
(4) The Managing Director appointed in respect of a marketing company shall exercise and perform all the powers and functions of the board of directors of the company.
7. Board of Management. (1) The Federal Government may set up a Board of Management to control, manage and direct the affairs of the marketing companies in respect of which Managing Directors have been appointed.
(2) The Board of Management shall consist of a Chairman and such number of members, not exceeding nine, as the Federal Government may appoint.
(3) The Board of Management shall be a body corporate having perpetual succession and a common seal, with power to acquire and hold property and shall by its name sue and be sued.
(4) The Chairman and members of a Board of Management shall hold office during the pleasure of the Federal Government on such terms and conditions as it may determine.
8. Functions of the Board. (1) The Functions of the Board of Management shall be to ensure that the marketing companies in respect of which it is to exercise and perform its powers and functions under this Act are managed efficiently and in accordance with sound business principles and in respect of any such marketing company the Board may, from time to time. (a) exercise such of the powers of the Managing Director and issue such directions to him as it may consider necessary; (b) require the Managing Director to furnish it with such information relating to the affairs of the company in respect of which he is the Managing Director as the Board of Management may require in connection with the performance of its functions; and (c) remove from office its auditor and appoint another person who is a Chartered Accountant within the meaning of the Chartered Accountants Ordinance, 1961 (X of 1961), to hold that office for such period and such remuneration payable by the marketing company as the Board of Management may determine.
(2) The exercise by the Board of Management under subsection (1) of the powers of a managing Director shall have effect as if it were the exercise of those powers by the Managing Director himself.
(3) It shall be the duty of a Managing Director to comply with all directions issued to him by the Board of Management under sub-section (1) and to furnish the Board of Management with the information required by it.
(4) The Federal Government may entrust to the Board o Management such other functions in relation to any other company or establishment as it may deem fit and upon such entrustment reference to ‘Managing Director’ in this section and in clause (b) of sub-section (2) of section 6 and sub section (2) of section 9 shall be deemed to include a reference to the person or authority in whom the management of the affairs of the company or establishment vests.
9. Fund of the Board. (1) There shall be constituted for the Board of Management a fund to which shall be credited all sums received by the Board under sub-section (2) and out of which shall be defrayed all expenditure incurred by the Board of Management, including expenditure on the emoluments of the Chairman, members, officers, servants, experts and consultants of the Board.
(2) The Managing Director in respect of every company shall make to the Board of Management each years such payment to enable it to defray its expenses as the Board may with the prior approval of the Federal Government in writing demand of him:
Provided that the aggregate amount of payments so demanded of the Managing Directors in any year shall not exceed by more than ten percent the amount of the estimated expenditure of the Board of Management in that year.
10. Officers, etc, of the Board. (1) The Board of Management may from time to time appoint such officers servants, experts and consultants as it may deem fit.
(2) The Board of Management may appoint one or more committees of the Board with such composition and to perform such functions as it may determine.
11. Adoption of balance sheet. The general meeting of a marketing company before which a balance sheet is laid shall not, if the Federal Government by order in writing so directs, have the authority to refuse to adopt the balance-sheet, but nothing in this section shall be construed to prevent any share-holder from expressing his view on the financial affairs of the company and a record of the proceedings of every such meeting shall be forwarded to the Federal Government not later than fifteen days of the meeting.
12. Regulations. (1) The Board of Management may, with the prior approval of the Federal Government, make such regulations as appear to it to be necessary for carrying out the purposes of this Act.
(2) In particular and without prejudice to the generality of the foregoing power, such regulations may provide for the manner of payment and collection of the payment required to be made by the Managing Directors under sub-section (2) of ‘section 9.
13. Delegation of powers, etc. (1) The Federal Government may, by notification in the official Gazette, direct that all or any of its powers under this Act shall, in such circumstances and subject to such conditions as may be specified in the notification, be exercisable also by the Board of Management.
(2) The Federal Government may from time to time issue such directions to, and call for such information or report from, the Board of Management as it may deem necessary.
(3) The Board of Management may, with the previous approval in writing of the Federal Government, direct that all or any of its powers under this Act shall, in such circumstances and subject to such conditions as may be specified by the Board of Management, be exercisable by the Managing Director.
14. Acquisition of shares. Where, under section 5 of this Act, the Federal Government orders acquisition of the whole or a portion of the shares of a marketing company, it shall acquire the shares from the share-holders of the company within a period of ninety days on payment of such compensation as may be determined by the Federal Government on the basis of the principles set out in the Schedule.
15. Reorganization of marketing company. (1) In respect of any marketing company, where the Federal Government holds or has acquired the whole or majority portion of the shares in the company carrying the controlling voting rights, the Board of Management may draw up a plan for the reorganization of such a company with a view to increasing its efficiency and rationalizing its operations, hereafter in this section referred to as the re-organization plan.
(2) The re-organization plan may include provisions for amalgamation of managed companies and may provide for a scheme for the reconstruction of any such company or companies, or amalgamation of any such two companies or more companies and such a scheme may provide for all or any of the matters contained in section 153 or 153B of the Companies Act, 1913 (VII of 1913), or for alteration of share capital or loan structure and alteration of existing or adoption of fresh memorandum of articles or association of such companies.
(3) The re-organization plan shall be submitted to Federal Government for approval and shall be simultaneously published in the official Gazette accompanied by a certified statement showing the value of the holdings of the shares or proprietary interests of the Federal Government, in the company covered by the plan on the date of the submission of the plan, and from the date of such submission, dealings in shares of companies covered by the plan in any of stock exchange shall remain suspended until the Federal Government has approved the re-organization plan.
(4) The re-organization plan shall be implemented and shall take effect in such manner and at such time and with such modifications as may be approved by the Federal Government.
[(5) After the Federal Government has approved the re-organization plan under sub-section (4), it may for the purpose of rationalizing the pay scales of the employees of the company reconstructed or amalgamated under the said plan, after the terms and conditions of service of such employees as to their remuneration and perquisites.
[Provided that the terms and conditions shall not be so altered under this sub-section as to be less favorable than those to which such employees were entitled before their transfer to the said company.]
Explanation. For the purposes of this section and section 27, the Federal Government shall be deemed to have a majority portion of the shares in a marketing company if the face value of the shares of such company owned or controlled by the Federal Government exceeds fifty percent of the total voting rights in the issued and paid up share capital of the company.
16. Continuance in service. In the case of a managed company, all persons employed in, by or for the purpose of business of the company, by whomsoever appointed or engaged, shall continue in their respective employments on the same remuneration and other conditions of service as were applicable to them immediately before the appointment of the Managing Director in respect of that company, unless the Managing Director directs otherwise in a particular case or their terms and condition of service are altered in accordance with the law or any rules applicable to such managed company.
17. Prohibition to obstruct. No person, other than the Board of Management shall except under the authority of the Federal Government, give any instruction to a Managing Director nor shall any person in any manner obstruct him in the discharge of his functions.