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The Trade Organizations Ordinance, 1961

ORDINANCE XLV OF 1961

An Ordinance to provide for the regulation and control of trade organizations

Whereas it is expedient to provide for the regulation and control of trade organizations and for matters ancillary thereto;

Now, therefore, in pursuance of the Proclamation of the seventh day of October 1958, and in exercise of all powers enabling him in that behalf, the President is pleased to make and promulgate the following Ordinance:---

1. Short title, extent and commencement.-(1) This Ordinance may be called the Trade Organizations Ordinance, 1961.

(2) It extends to the whole of Pakistan.

(3) It shall come into force at once.

2. Definitions.-In this Ordinance, unless there is anything repugnant in the subject car context,---

(1) “Act” means the Companies Act, 1913 (VII of 1913);

(2) “Administrator” means an Administrator appointed under section 10 and includes an officer empowered by the Federal Government to perform the functions of the Administrator under this Ordi­nance;

(3) “articles” means the articles of association of a trade organization;

(4) “Director” means the Director of Trade Organizations appointed by the Federal Government and includes an officer empowered by the Federal Government to perform the functions of the Director under this Ordinance;

(5) “Executive Committee” means the Board of Directors, the Executive Committee, the managing committee or other body, by whatever name called, of a registered trade organization responsible for the management or conduct of the affairs of such trade organization;

(6) “licence” means a licence granted or deemed to be granted under subsection (1) of section 3;

(7) “member of the Executive Committee” includes a Director where the Executive Committee is a Board of Directors, and the Chairman, Vice-Chairman, President and Vice-President of the Executive Committee;

(8) “memorandum” means the memorandum of association of a trade organization;

(9) “register” means the register of companies required to be kept under the Act;

(10) “registered trade organization” means a trade organization” registered under the Act as a company in pursuance of a licence;

(11) “registrar” means the registrar as defined in clause (15) of subsection (1) of section 2 of the Act; and

(12) “trade organization” means an association which,-

(a) is capable of being formed as a limited company within the meaning of the Act;

(b) is formed or intended to be formed with the object of promoting any trade, commerce or industry or any group or class thereof, or for representing for any purpose, in any manner and to any extent, any trade, commerce or industry or any group or class thereof; and

(c) prohibits payment of any dividend to its members and applies or intends to apply its profits or other income for achieving its objects.

3. Licencing and registration of trade organization.-(1) Notwithstanding anything contained in the Act or in any other law for the time being in force relating to registration of societies, bodies or associations of persons, no trade organization shall be registered under the Act or such other law unless it holds a licence granted by the Federal Government authorizing it to be so registered.

(2) No licence shall be granted for registration under the Act to a trade organization unless it is,---

(a) a Federation of Chambers of Commerce and Industry, organized on all-Pakistan basis, to represent Chambers and Associations referred to in clauses (b) and (c);

(b) a Chamber of Commerce and Industry, organized to represent trades and industries of specific areas;

(c) an Association of trade or industry or of both, organized on all-Pakistan basis, to represent specific trades or industries or both;

(d) a Town Association, organized to represent trades and indus­tries at a place at which there is no Chamber of Commerce and Industry; or

(e) a Group, organized to represent specific trades or industries or both of specific areas;

           Provided that a licence for registration as a Federation of Chambers of Commerce and Industry shall not be granted to more than one trade organization:

(3) A licence may be granted on such conditions and subject to such regulations as the Federal Government may think fit to impose or prescribe and such conditions and regulations shall be binding on the trade organiza­tion concerned and shall, if the Federal Government so directs, be incorporated In the articles and memorandum of such trade organization or in one of those documents.

(4) Any licence granted under section 26 of the Act before the commence­ment of this Ordinance to a trade organization of any type specified in sub­section (2) shall be deemed to be a licence granted under subsection (1) and all such licences granted before such commencement to other trade organiza­tions shall stand revoked.

(5) A trade organization holding a licence may be registered under the Act as a company with limited liability without the addition of the word “Limited” to its name and on such registration shall enjoy all the privileges of a limited company and be subject to all its obligations except those of-

(a)   using the word “Limited” as any part of its name;

(b)  publishing its name; and

(c)   sending lists of members to the registrar.

(6) The Federal Government may, by notification in the Official Gazette, grant exemption to any trade organization from any provision of this section and such exemption may be for such period and subject to such conditions as may be specified in the notification.

4. Cancellation of licence and exemption.-(1) The Federal Government may, at any time, by notification in the Official Gazette,-

(a) revoke a licence granted to a trade organization;

(b) declare that all licences granted before the 19th February 1959, shall stand revoked on the date specified therein; and

(c)  cancel any exemption granted under subsection (6) of section 3.

(2) Upon the cancellation of exemption under clause (c) of subsection (l) or upon the expiry of the period for which exemption was granted, the trade organization concerned may within thirty days of such cancellation or expiry, apply for a licence.

5. Cancellation of registration.-(1) Notwithstanding anything contained in the Act, registration thereunder of-

(a) all trade organizations registered otherwise than in pursuance of a licence under section 26 of the Act except the trade organizations to whom exemption has been granted under subsection (6) of section 3;

(b) a trade organization originally registered in pursuance of a licence which was revoked before the commencement of this Ordinance;

(c) all trade organizations whose licences stand revoked under sub­section (4) of section 3;

(d) a trade organization whose licence has been or stands revoked under subsection (1) of section 4; and

(e) a trade organization, which, being entitled to make an application under subsection (2) of section 4, has not done so or whose application there­under has been rejected, shall stand cancelled and the registrar shall strike off the register, and publish in the Official Gazette, the names of all such trade organizations.

(2) All affairs of a trade organization whose registration stands cancelled under subsection (1) shall be wound up-

(a) in accordance with the provisions made in that behalf in its articles or memorandum, or

(b) in the absense of any such provision, as if a special resolution under subsection (2) of section 203 of the Act has been passed on the date on which the registration stands cancelled that it be wound up voluntarily.

6. Companies not to use certain words in their names.-(1) No company or trade organization other than a registered trade organization shall, after thirty days from the commencement of this Ordinance, use in its name or title the word “Federation” or “Chamber” or “Association”.

(2) Every company or trade organization other than a registered trade organization having in its name or title any of the words mentioned In sub­section (1) shall, within the period specified therein, by special resolution or In any other manner it thinks convenient, so change its name or title as to omit therefrom any such word.

(3) Where a company or trade organization changes Its name or title in pursuance of subsection (2), the registrar shall enter the new name or title in his register in place of the former name or title and issue a certificate of incorporation altered to meet the circumstances of the case and, upon the issue of such certificate, the change of name or title shall be complete.

(4) The change of name or title under this section shall not affect any rights or obligations of the company or trade organization concerned or render defective any legal proceedings by or against such company or trade organization and any legal proceedings that might have been continued or commenced by or against it by the former name or title may be continued by its new name or title.

(5) Nothing in this section shall apply to a company, association or body of persons formed for promoting art, science, religion, charity, sports, any profession other than trade, commerce or industry or any other useful object which the Federal Government may, by notification in the Official Gazette, specify in this behalf.

7. Classification and recognition of trade organizations.-(1) The Federal Government may,-

(a) classify registered trade organizations into various classes accord­ing to their status, importance or standing in the trade, commerce or industry;

(b) by an order in writing, grant recognition to any such trade organiza­tion : and

(c) accord such privileges to the trade organizations so recognized as it thinks fit.

(2) A trade organization recognized under subsection (1) shall be entitled, according as the Federal Government may direct, to-

(a) all the privileges accorded generally to trade organizations so recognized; or

(b) all the privileges accorded to the trade organizations of the class to which it belongs; or

(c) to such other privileges as may be accorded to it by the order granting recognition.

(3) The Federal Government shall publish in the Official Gazette the names of the trade organizations recognized under subsection (1).

8. Amendment, repeal, etc., of articles, memorandum, etc., of trade organizations.-(1) Notwithstanding anything contained in the Act or in any other law for the time being in force or in the articles or memo­randum,-

(a) a registered trade organization shall not rescind, amend or otherwise modify its articles or memorandum without the prior approval of the Federal Government; and

(b) the Federal Government may, whenever It considers expedient to do so, by order in writing, direct any such trade organization to rescind, amend or otherwise modify its articles, memorandum, rules or bye-laws or to make any rule or bye-law, in such manner and within such period as may be specified in the order.

(2) If any registered trade organization fails or neglects to comply with the direction under clause (b) of subsection (1), the Federal Government may, by notification In the Official Gazette, rescind, amend or other­wise modify the articles, memorandum, rules or bye-laws of such trade organization, or make any rule or bye-law in the manner specified in the direction or with such modification as it thinks fit, and any such rescission, amendment, modification or making shall be deemed to have been duly done by the trade organization in accordance with the Act or its articles or memorandum or in the manner it is otherwise competent to do so.

9. Registered trade organizations to be subject to the control of Director.(1) All acts and proceedings of a registered trade organization shall be subject to the control of the Director and the affairs of such trade organization shall be managed and conducted in such manner as the Director may, from time to time, direct.

(2) Notwithstanding anything contained in any law for the time being in force or In the articles or memorandum of a registered trade organization and without prejudice to the generality of the foregoing provision, the Director may-

(a) require any such trade organization or any competent person connec­ted therewith to furnish him with any information, documents and returns relating to the affairs of such trade organization or to answer orally or other­wise any query with respect thereto;

(b) inspect, with or without prior notice, any office of such trade organization including any of Its branch or regional, circle, zonal or liaison office, or any record or document found therein;

(c) attend any meeting of the general body or the Executive Committee of such trade organization or of any committee or other body set up or appointed to transact any business, or to conduct any affair, of such trade organization;

(d) watch and supervise, or cause to be watched and supervised, any election held by, or for the purpose of electing persons to the Executive Committee or other body including a regional, circle or zonal body of any such trade organization;

(e) within thirty days of the announcement of the results of any election held by any such trade organization, or any body exercising any function relating thereto for the purpose of electing any person to the Executive Committee or other body including regional, circle or zonal body of such trade organization or for any other purpose and with the approval of the Central Government, annul such election if he is satisfied,-

(i) upon his own knowledge; or

(ii) after such investigation as he may think fit to make; or

(iii) upon a report made by a person authorized by him to make investiga­tion for the purpose, that the irregularities in the conduct of such election justify such annulment and, by order in writing, direct fresh election to be held within such period as may be specified in the order;

(f) if he considers it necessary for smooth and efficient functioning of any such trade organization remove, or cause to be removed, any member of the Executive Committee, not exceeding a total of five in any calendar year, of such trade organization and fill up, or cause to be filled up, the resultant vacancy;

(g) suspend, or cause to be suspended, for a specified period, any member, not exceeding a total of fifteen In one calendar year, of any such trade organization and cancel, or cause to be cancelled, any such suspension or the suspension of any member otherwise than by or at the instance of the Director;

(h) remove, or cause to be removed, from the membership register, the name of any member, not exceeding a total of fifteen in one calendar year, of any such trade organization, and re-instate, or cause to be re-instated, in the membership register, any member so removed or removed otherwise than by or at the instance of the Director;

(i) cancel, suspend or modify any resolution adopted or any decision taken, by the general body or the Executive Committee of such trade organization if,-

(i) he considers it necessary in the public interest or for orderly working of the trade organization; or

(ii) in his opinion such resolution or decision is not in conformity with the provisions of the articles or memorandum or any rules or regulations made thereunder .

10. Supersession of Executive Committee and appointment of Admi­nistrator.-(1) Where the Federal Government is of opinion that the affairs of a registered trade organization are not being properly managed and that the interests of trade and industry so require, it may, by order in writing, super­sede the Executive Committee of such trade organization for such period, not exceeding three years, as may be specified in the order;

Provided that no such order shall be made unless the Executive Committee has been given a notice in writing of, and afforded an opportunity to make a representation against, the intended supersession.

(2) Where-

(a) an Executive Committee is superseded under subsection (l), or

(b) it is not, In the opinion of the Central Government, possible for any reason to reconstitute the Executive Committee at the due time of such reconstitution; or

(c) the Executive Committee is debarred by an order of any Court, from discharging its functions, the Federal Government may appoint, for such period, not exceeding three years, as it may think fit, an Administrator to take over the functions of such Committee and to manage and conduct the affairs of the trade organization;

Provided that if the period of supersession is terminated or the Executive Committee is reconstituted or the order of the Court is vacated before the expiry of the period for which the Administrator shall have been appointed, the Federal Government may direct the Administrator to relinquish the functions taken over by him in favour of the Executive Committee.

(3) Upon the appointment of an Administrator under clause (a) or clause (b) of subsection (2), the members of the Executive Committee shall be deemed to have vacated their respective offices.

11. Administrator to act under the control of Director.-(1) The Admi­nistrator shall manage and conduct the affairs of the registered trade organiza­tion under the supervision and control of the Director and in accordance with the rules, if any, made in this behalf by the Federal Government and, until such rules are made, in accordance with such directions as the Director may, from time to time, give.

(2) The rules and directions referred to in subsection (I) may provide for,---

(a) the appointment of an advisory committee consisting of persons selec­ted from the members of the trade organization to assist the Administrator In the discharge of his functions;

(b) holding of elections for the purpose of reconstitution of the Executive Committee at any time considered appropriate before the expiry of the term of appointment of the Administrator;

(c) compliance with the provisions of sections 130, 131, 131-A, 132, 132-A, 133, 134 and 135 of the Act to the extent applicable to the trade organization except those relating to the laying of the income and expenditure account and reading of the auditor’s report in the general meeting;

(d) withholding, during the period of supersession of the Execu­tive Committees, on the general meeting of the trade organization other than tire meeting to hold elections for reconstituting the Executive Com­mittee;

(e) conduct of any business, during the period the general meeting remains withheld, which requires the approval or assent of the members at a general meeting;

(f) the pay, allowances, remuneration and other privileges of the Administrator and the members of the advisory committee; and

(g) such other matters as are necessary for efficient management or the affairs of the trade organization.

(3) Any expenditure incurred in connection with the management of a trade organization by the Administrator including pay, allowances and remuneration of the Administrator and the members of the advisory com­mittee shall be met as expenses, and be a charge on the income, of the trade organization.

12. Restriction on suits against trade organisations.-(1) Notwithstand­ing anything contained in any law for the time being in force or in the articles or memorandum of a registered trade organization, no suit or other legal proceedings shall be instituted or commenced against such registered trade organization questioning the validity or propriety of any act or proceeding of such trade organization or of the Executive Committee or other body thereof, or the constitution of, or election or appoint­ment to, such Committee or body, by any member of such trade organization or by, or by any member of, any other trade organization unless such member or other trade organization has made an application, accom­panied by such fee not less than one thousand rupees as may be prescribed by rules, referring the matter to the Arbitration Tribunal consti­tuted for the purpose of deciding such references by the Federation of Chambers of Commerce and Industry registered under the Act in pursuance of a licence and such Arbitration Tribunal has given Its decision or award thereon.

(2) The Arbitration Tribunal constituted under subsection (1) shall consist of not less than three and not more than five members appointed by the said;

Federation of Chambers of Commerce and Industry and shall conduct its proceedings and give its decision or award in accordance with the rules made in this behalf.

(3) Nothing In this section shall affect any suit or other legal pro­ceedings instituted or commenced before the commencement of this Ordi­nance.

13. Compulsory membership of registered trade organizations.-(1) Not­withstanding anything contained in any other law for the time being in force or in the articles or memorandum of association of any trade organiza­tion or other company or in any agreement or other instrument, the Federal Government may;---

(a) subject to any rules made in this behalf, by order in writing, direct any person, partnership firm, company or other concern engaged In any trade, commerce or industry to be a member of a registered trade organiza­tion specified In the order; or

(b) if it considers expedient in the interest of trade, commerce or industry, by notification In the Official Gazette, direct all such persons, firms, companies or concerns or any class thereof engaged in trade, commerce or indus­try as may be specified in the notification subject to exception, if any, to be members of the registered trade organization or organizations specified in this behalf in such notification.

(2) Upon the issue of an order or notification under subsection (1) the registered trade organization concerned shall admit as its member any person, firm, company or concern directed to be its member by such order or notification.

14. Restriction on membership.-No person shall be a member of more than such number of trade organizations as the Federal Government may, b; notification in the Official Gazette, specify in this behalf.

14A. Restriction on holding office. No person convinced for an offence under this Ordinance shall hold, or be eligible for holding, any office in a registered trade organization unless a period of six years has elapsed after the date of his conviction.

15. Appeal.-(1) Any person or any trade organization aggrieved by any decision or order of the Administrator or the Director may, within fourteen days of such decision or order, appeal to the Director against the decision or order of the Administrator, and to the Federal Government against the deci­sion or order of the Director, and the decision of the Federal Government on such appeal shall be final.

(2) Upon an appeal under subsection (1), the Director or the Central Government, as the case may be, may stay the implementation or execu­tion of the decision or order appealed against until the disposal of such appeal.

16. Delegation of powers.-(1) The Federal Government may, by noti­fication In the Official Gazette, direct that all or any of its powers under this Ordinance shall, in relation to such matters or subject to such conditions as may be specified therein, also be exercisable by the Director.

(2) The Director may, by order in writing, authorize the Administrator or any other officer to exercise and perform any of his powers and functions under this Ordinance.

17. Federal Government may carry out the functions of the Director.­ Notwithstanding anything contained in any other provision of this Ordinance, the Federal Government may, by notification in the Official Gazette, direct that the powers and functions of the Director shall, under such circumstances, or in such cases, as may be specified in the notification, be exercised and performed by the Federal Government and upon such notification reference to the Director in the relevant provisions of this Ordinance shall be construed as reference to the Federal Government and such provisions shall have effect accordingly.

18. Penalties.-Whoever contravenes any provision of this Ordinance or any rule or order made or any direction or instruction given there­under, or obstructs any officer or person acting under or in pursuance of any such provision, rule, order, direction or instruction shall be punish­able with imprisonment which may extend to one year or with fine which may extend to one thousand rupees or with both and, in the case of con­travention of the provisions of section 13 or of any order or notification issued thereunder, with a further fine which may extend to one hundred rupees for every day of the period during which such contravention continues.

19. Offences by companies or other bodies.-Where a person guilty of an offence punishable under section 18 is company or other body corporate, every managing director, director, manager, secretary or other officer or agent thereof shall, unless he proves that the offence was committed without his knowledge or that he exercised due diligence to prevent its commission, be deemed to be guilty of such offence.


Section 14-A was ins. By the Trade Organizations (Amdt.) Ordinance, 1962 (42 of 1962). S.4.

20. Cognizance and trial.-No Court shall take cognizance of an offence punishable under section 18 except upon a complaint in writing made by the Director or an officer authorized by him in this behalf and no Court inferior to that of a Magistrate of the First Class shall try any such offence.

21. Presumption as to orders.-Where an order purports to have been made or signed by an authority or person in exercise of any power conferred lay or under this Ordinance, a Court shall presume that such order was so made by that authority or person.

22. Indemnity-(1) An order made under this Ordinance shall not be questioned in any Court.

(2) No suit, prosecution or other legal proceedings shall lie against any person for anything which is, in good faith, done or intended to be done in pursuance of this Ordinance or any rule or order made or any direction given thereunder.

23. Power to make rules.-The Federal Government may, by notifica­tion in the Official Gazette, make rules for carrying out the purposes of this Ordinance.

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