22. Register of certificate holders. (1) Every modaraba company shall maintain a register of "Certificate holders" in the manner required in respect of register of share-holders under the Companies Act, 1913.

(2) The following provisions shall apply to the registration of the transfer of Modaraba Certificate, namely:-

(a) an application for the registration of the transfer of certificates in a modaraba may be made either by the transferor or the transferee, and the modaraba company shall enter in its register of Certificate-holders the name of the transferee in the same manner and subject to the same conditions as if the application for registration was made by the transferee:

Provided that, where such applications made by the transferor, no registration shall be made if objection is taken by the transferee within two weeks from the date of receipt of a notice of such application issued to him by the modaraba company;

(b) for the purpose of clause (a) notice to the transferee shall be deemed to have been duly given if despatched by prepaid post to the transferee at the address given in the instruments of transfer and shall be deemed to have been delivered in the ordinary course of post;

(c) it shall not be lawful for the modaraba company to register transfer of a certificate of the modaraba unless the proper instrument of a transferee duly stamped and executed by the transferor and the transferee has been delivered to the modaraba company alongwith the relative modaraba certificate:

Provided that, where it is proved to the satisfaction of the directors of the modaraba company that an instrument of transfer signed by the transferor and transferee has been lost, the modaraba company may, if its directors think fit on an application in writing made by the transferee and bearing the stamp required for an instrument of transfer, register to transfer with notice to the transferor on such terms as to indemnity as the directors of the modaraba company may think fit;

(d) if a modaraba company refuses to register the transfer of any certificate, the modaraba company shall, within two months from the date on which the instrument of transfer was lodged with the modaraba company, send to the transferee and the transferor notice of the refusal indicating reason for such refusal.

(4) The following provisions shall apply to succession to a certificate in the case of death of the holder, namely :-
(a) the legal heirs of a deceased Certificate-holder, according to Shariat shall be the only persons to be recognized by the modaraba company as having any title to his certificates;
(b) any person who becomes entitled to a certificate in consequence of the death of the Certificate holder may be registered as a Certificate holder on producing such evidence as may be required by the modaraba company;
(c) any person who becomes entitled to a certificate in consequence of the death of the holder may, instead of being registered as the holder himself, elect to have some other person to be named by him registered as a transferee of such certificate;
(d) the person electing to have some other person registered as a holder in accordance with the above provision shall testify to such election by executing an instrument of transfer in favour of his nominee;
(e) such instrument of transfer shall be presented to the modaraba company together with such other evidence as the directors of the company may require to prove the title of the transferee, and there upon the transferee shall be registered as holder.

23. Annual list of Certificate-holders and summary.- (1) Every modaraba shall within eighteen months from its floatation, and thereafter once at least in every year, make a list of all persons who on the date of the re-opening of the register of certificates-holder relative to declaration of final dividend or, where there is no such date in any particular year, as on 31st December of the year, are Certificate-holders and all persons who have ceased to be Certificate-holders since the date of the last return or in the case of the first return since the floatation of the modaraba.

(2) The list shall state the names, addresses, and occupations of all past and present Certificate-holders therein mentioned, and the number of certificates held by such of the existing certificates holders at the date of the return, specifying certificates transferred since the date of the last return, or in case of the first return, of the floatation of the modaraba by persons who are still members and persons who have ceased to be certificate-holders respectively and the dates of registration of the transfers, and shall contain a summary distinguishing between certificates issued for cash and certificates issued as fully or partly paid up as bonus certificates or issued as fully or partly paid certificates otherwise than in cash, and specifying the following particulars, namely :-
(a) the amount of the certificates of the modaraba and the number of certificates into which it is divided;
(b) the number of certificates taken from the commencement of the modaraba up to the date of the return;
(c) the amount called up on each certificate;
(d) the total amount of calls received;
(e) the total amount of calls unpaid;
(f) the total amount of the sums (if any) paid by way of commission in respect of any certificates or allowed by way of discount in respect of any certificates since the date of the last return or so much thereof as has not been written off at the date of the return;
(g) the names and addresses of the persons who at the date of the return are the directors of the modaraba company and of the persons (if any) who at the said date are the managers or officers of the modaraba company, and the changes in the personnel of the directors, managers and officers of the modaraba company since the last return together with the dates on which they took place; and
(h) the total amount of debt due from the modaraba in respect of all mortgages and charges which are required to be registered with the Registrar under these rules.

(3) The above list and summary shall be contained in a separate part of the register of certificate-holders and shall be completed within thirty days form the date referred to in sub-rule (1) and the modaraba company shall forthwith file with the Registrar a copy signed by a director or by the manager or secretary of the modaraba company together with a certificate from such director, manager or secretary that the list and summary state the facts as they stood on the day aforesaid.

24. Inspection of register of certificate holders.- (1) The register of certificate holders and the index thereof shall at all times be kept at the registered office of the modaraba company, and, except when closed under the provisions of this rule, shall during business hours be open, subject to such reasonable restriction as the modaraba company may lay down in the prospectus, for inspection by any certificate-holder, or any other person on payment of five rupees, or such less sum as the modaraba company may require, for each inspection and for making extract therefrom.

(2) Any certificate holder or other person may require a copy of the register, or of any part thereof, or of the list and summary required by these rules, or any part thereof, on payment of one rupee for every hundred words or fractional part thereof, required to be copied and the modaraba company shall cause any copy so required by any person to be sent to that person within a period of ten days, exclusive of non-working day and days on which the transfer books of the modaraba are closed, commencing on the day next after the day on which the requirement is received by the modaraba company unless the person concerned asks for receiving personal delivery, at a later date.

(3) If any inspection required under this rule is refused or if any copy required under this rule is not sent or delivered within the period specified under sub-rule (2) Registrar may, without prejudice to any penalty to which the company or any director or any officer thereof may be liable under the Ordinance, on representation, by an order compel an immediate inspection of the register and the index or direct that copies required thereof shall be sent to the persons requiring them.

25. Power to close register. A modaraba company may, on giving seven days' previous notice by advertisement in some newspapers circulating in the Province in which the registered office of the modaraba company is situate, close the register of certificate- holders for any time or times not exceeding in the whole forty- five days in each year and not exceeding fifteen days at any one time.

26. Return as to allotment. (1) Whenever a modaraba company floats any modaraba and makes any allotment of its certificates, the modaraba company shall, within one month thereafter-
(a) file with the Register a return of the allotments, stating the number and nominal amount of the certificates comprised in the allotment, the names and addresses of the allottees and the amount paid or if any due or payable on each certificate; and
(b) in the case of a certificate allotted as fully or partly paid up otherwise than in cash produce for the inspection and examination of the Registrar a contract in writing constituting the title of the allottee to the allotment together with any contract of sale, or for services or other consideration for which the allotment was made such contract being duly stamped, and filed with the Registrar verified copies of all such contracts and return stating the number and nominal amount of certificates so allotted the extent to which they are to be treated as paid up, and the consideration for which they have been allotted.

(2) Where such a contract as is referred to in sub-rule (1) is not reduced to writing, the modaraba company shall, within one month after the allotment,. file with the Registrar the required particulars of the contract stamped with the same stamp duty as would have been payable if the contract had been reduced to writing, and these particulars shall be deemed to be an instrument within the meaning of the Stamp Act, 1899, and the Registrar may, as a condition of filing the particulars, require that the duty payable thereon be adjudicated under section 31 of that Act.

(3) If the Registrar is satisfied that in the circumstances of any particular case the period of one month specified in sub-rules (1) and (2) for compliance with the requirements of those sub-rules is inadequate, he may extend that period as he thinks fit, and in that event, the provisions of sub-rules (1) and (2) shall have effect in that particular case as if for the said period of one month the extended period allowed by the Registrar were substituted:

Provided that in case of default in filing with the Registrar within the time specified in sub-rules (1) and (2) document required to be filed by this rule, the modaraba company, or any person liable for the default, may apply to the Federal Government for relief, and the Federal Government if satisfied that the omission to file the document was accidental or due to inadvertence or that on other grounds it is just and equitable to grant relied, may make an order extending the time for filling of the document for such a period as the Federal Government may think proper.

27. Certain mortgages and charges to be void if not registered. (1) Every mortgage or charge created by a modaraba and being either:-
(a) a mortgage or charge for the purpose of securing any issue of Participation Term Certificate (PTC) ;or
(b) a mortgage or charge on any immovable property wherever situate, or any interest therein; or
(c) a mortgage or charge on any book debts of the modaraba; or
(d) a mortgage charge, not being a pledge, on any movable property of the modaraba except stock-in-trade; or
(e) a floating charge on the undertaking or property of the modaraba; shall so far as any security on the modaraba property or undertaking is thereby conferred, by void against the liquidator and any creditor of with the instrument, if any, which the mortgage or charge is created or evidenced, or a verified copy thereof, are filed with the Registrar for registration in the manner required by these rules within twenty-one days after the date of its creation, but without prejudice to any contract or obligation for repayment of the money thereby secured, and on a mortgage or charge thus becoming void under this rule the money secured thereby shall immediately become payable:

Provided that:-
(i) in the case of mortgage or charge created out of Pakistan twenty- one days after the date on which the instrument or copy could, in due course of post, and if despatched with due diligence, have been received in Pakistan shall be substituted for twenty-one days after the date of the creation of the mortgage or charge, as the time within which the particulars and instrument or copy are to be filed with the Registrar; and

(ii) where the mortgage or charge is created in Pakistan but comprises property outside Pakistan, the instrument creating or purporting to create the mortgage or charge or a copy thereof verified in the required manner may be filed for registration notwithstanding that further proceedings may be necessary to make the mortgage or charge valid or effectual according to the law of the country in which the property is situate; and

(iii) where a negotiable in instrument has been given to secure the payment of any book debts of a modaraba, the deposit of the instrument for the purpose of securing an advance to the modaraba shall not, for the purpose of this rule, be treated as a mortgage or charge on those book debts; and

(iv) the holding of PTC entitling the holder to a charge on immovable property shall not be deemed to be an interest in immovable property.

(2) Where any mortgage or charge on any property or a company required to be registered under sub-rule (1) has been so registered any person acquiring such property or any part thereof, or any share or interest therein, shall be deemed to have notice of the said mortgage or charge as from the date of such registration.

28. Registration of charge on properties. Whenever the modaraba acquires any property which is subject to a charge of any such kind as would, if it had been created by the modaraba after the acquisition of the property, have been required to be registered under these rules, the modaraba shall cause the required particulars of the charge, together with certified copy of the instrument, if any, by which the charge, was created or is evidenced, to be delivered to the Registrar for registration in the manner required by these rules within twenty-one days after the date on which the acquisition is completed:

Provided that, if the property is situate and the charge was created outside Pakistan, twenty-one days after the date on which the copy of the instrument could in due course of post, and if despatched with due diligence, have been received in Pakistan shall be substituted for twenty-one days after completion of the acquisition as the time within which the particulars and the copy of the instrument are to be delivered to the Registrar.

29. Prosecution of delinquent directors of modaraba company.- (1) If it appears to the Tribunal it. the course of a winding up that any post or present director, manager or other officer of the modaraba company or any member of the modaraba company has been guilty of any offence in relation to the modaraba for which he is criminally liable, the Tribunal may, either on the application of any person interested in the winding up or of its own motion, direct the liquidator either himself to prosecute the offender or to refer the matter to the Registrar.

(2) If it appears to the liquidator in the course of a voluntary winding up that any past or present director, manager or other officer of the modaraba company or any member of the modaraba company has been guilty of any offence in relation to the modaraba or modaraba company for which he is criminally liable, he shall forthwith report the matter to the Registrar and shall furnish to him such information and give to him such access to and facilities for inspecting and taking copies of any documents, being information or documents in the possession or under the control of the liquidator relating to the matter in question, as he may require.

(3) Where any report is made under sub-rule (2) to the Registrar, he may, if he thinks fit, cause an enquiry to be conducted in the matter.

(4) If on any report to the Registrar under sub-rule (2) it appears to him that the case is not one in which proceedings ought to be taken by him, he shall inform the liquidator accordingly, and thereupon, the liquidator may himself take proceedings against the offender.

(5) If it appears to the Tribunal in the course of winding up that any past or present director, manager or other officer of modaraba company or any member of the modaraba of the modaraba company has been guilty as aforesaid, and that no report with respect to the matter has been made by the liquidator to the Registrar, the Tribunal may, on the application of any person interested in the winding up or of its own motion direct the liquidator to make such a report, and on a report being made accordingly, the provisions of this rule shall have effect as though the report had been made in pursuance of the provisions of sub-rule (2).

(6) If, where any matter is reported or referred to the Registrar under this rule. he considers, that the case is one in which a prosecution ought to be initiated he shall take action accordingly:

Provided that no prosecution shall be initiated without first giving the accused person an opportunity of making a statement in writing to the Registrar and of being heard

(7) When any proceedings are instituted under this rule it shall be the duty of the liquidator and of every officer and agent of the modaraba company past and present (other than the defendant in the proceedings) to give all assistance in connection with the prosecution which he is reasonably able to give, and for the purposes of this sub-rule the expression "agent" in relation to a modaraba company shall be deemed to include any banker or legal advisor of the company and any person employed by the modaraba or modaraba company as auditor, whether that person is or not an officer of the company.

(8) If any person fails or neglects to give assistance in the manner required by sub-rule (7), the Tribunal may, on the application of the Registrar, direct that person to comply with the requirements of the said sub-rule, and where any such application is made with respect to a liquidator, the Tribunal may, unless it appears that the failure or neglect to comply was due to the liquidator not having in his hands sufficient assets of the company to enable him so to do, direct that the costs of the application shall be born e by the liquidator personally.

30. Responsibility for fraudulent trading of persons concerned. If in the course of winding up or enquiry of a modaraba it appears that any business of the modaraba has been carried on with intent to defraud creditors of Certificate-holders of the modaraba or for any fraudulent purpose, the Tribunal on the application of the Registrar or the liquidator or any creditor, may, if it thinks proper so to do, declare that any persons who were knowingly parties to carrying on of the business in the manner aforesaid shall be personally responsible, without any limitation of liability for all or any of the debts or other liabilities of the modaraba as the Tribunal may direct.

31. Loan or contribution to associated undertakings, etc.- No loan or contribution shall be made by the modaraba to any of the associated undertakings of the modaraba companies or political parties or other organisations of political nature.

32. Advisory Committee. (1) The Federal Government may, for the purpose of obtaining advice and assistance in carrying out the purposes of the Ordinance and the rules, constitute an Advisory Committee.

(2) The Committee shall consist of:
(a) a Chairman to be nominated by the Federal Government;
(b) the Registrar;
(c) a nominee of the Institute of Chartered Accountants of Pakistan;
(d) the President of the Federation of Pakistan, Chambers of Commerce and Industry;
(e) the President of the Karachi or Lahore Stock Exchange, as the Federal Government may specify;
(f) the Managing Director of Bankers Equity Limited or National Investment (Unit) Trust or of the Investment Corporation of Pakistan, as the Federal Government may specify; and
(g) not more than five persons to be appointed by the Federal Government.

(3) The persons referred to in clauses (e) and (f) of sub-rule (2) shall be appointed on the basis of rotation.

(4) Unless the Federal Government otherwise directs, the Chairman and a member of the Committee shall hold office for a period of three years and shall be eligible for re-appointment.