IN THE SUPREME COURT OF PAKISTAN 
  
 
(Appellate Jurisdiction) 
 
 
 
 
 
PRESENT: 
 
 
Mr. Justice Mian Saqib Nisar 
 
 
Mr. Justice Sh. Azmat Saeed 
 
 
Mr. Justice Maqbool Baqar  
 
 
CIVIL PETITION NO.2093 OF 2015 
(On appeal from judgment dated 5.5.2015, 
passed by the Islamabad High Court, 
Islamabad, in FAO No.25/2012) 
 
 
Pakistan Telecommunication Authority 
(PTA), Islamabad through its Chairman. 
  
… Petitioner 
 
Versus 
 
Pakistan Telecommunication Company 
Limited, 
Headquarters, 
G-8 
Markaz, 
Islamabad. 
  
 
… Respondent 
 
 
For the Petitioner 
: Mr. Afnan Karim Kundi, ASC a/w 
Syed Rifaqat Hussain Shah, AOR 
Mr. M. Khurram Siddiqui,  
Director (Law), PTA and 
Mr. Gul Hassan,  
Assistant Director (Law), PTA 
 
  
For the Respondent  
: Mr. Azid Nafees, ASC 
 
  
Date of Hearing 
: 26.10.2015 
  
 
JUDGMENT  
 
  
 
SH. AZMAT SAEED, J.- This Civil Petition for 
Leave to Appeal is directed against the judgment dated 
13.04.2015 (announced on 05.05.2015) whereby an 
Appeal 
under 
Section 
7(1) 
of 
the 
Pakistan 
Telecommunication 
(Re-organization) 
Act, 
1996,  
CP.2093/2015. 
2 
hereinafter called to as “Act of 1996”, filed by the 
Respondent 
Pakistan 
Telecommunication 
Company 
Limited (Company) was allowed and the Order dated 
03.05.2012 
impugned 
therein 
was 
set 
aside. 
Furthermore, Regulation 18(2) of the Number Allocation 
& Administration Regulations, 2005 hereinafter referred 
to as “Regulations of 2005” was held to be void and ultra 
vires the Act of 1996.   
2. 
 
The brief facts necessary for adjudication of the 
lis at hand are that the Petitioner is an Authority 
established under Section 3 of the Act of 1996 authorized 
to carry out, inter alia, the functions of regulating the 
establishment, operation and the maintenance of the 
Telecommunication System and for the provision of 
Telecommunication Services in Pakistan. The Respondent 
is a Company, which is a Licensee in terms of the Act of 
1996 vide License dated 15.04.1997, subsequently, 
modified on 13.06.2005. Purportedly in pursuance of the 
Act of 1996, Regulations of 2005 were issued (since 
substituted by the Number Allocation & Administration 
Regulations, 2011). In terms of Regulation 18(1) of the 
Regulations of 2005, a Licensee is required to pay an 
annual charge specified therein in respect of number(s) 
CP.2093/2015. 
3 
allocated to such Licensee. Such charges as specified in 
the Regulations of 2005 are payable by 31st July, each 
year. It appears that the Respondent Company did not 
pay such charges, as claimed by the Petitioner Authority 
for the years 2005 to 2011 in terms of Regulation 18(1) of 
the Regulations of 2005, despite repeated demands. 
Eventually, the annual charges as claimed by the 
Petitioner Authority were deposited by the Respondent 
Company in the year 2011. However, the Petitioner 
Authority on account of late payment of the aforesaid 
charges had also raised a claim of 10% penalty in terms 
of Regulation 18(2) of the Regulations of 2005. Such 
amount was not paid or deposited by the Respondent 
Company.  
3. 
 
In the above backdrop, the Petitioner Authority 
issued a Show Cause Notice dated 09.08.2011 to the 
Respondent Company under Section 23(3)(c)(i) of the Act 
of 1996, claiming a balance amount of more than Rs.46 
million in terms of Regulation 18(2) of the Regulations of 
2005. The Respondent Company disputed the said 
liability. However, vide Order dated 03.05.2012, the 
Respondent Company was held liable to pay the said 
amount of penalty and stood exposed to further 
CP.2093/2015. 
4 
proceedings in terms of the Act of 1996 and the Rules 
and Regulations framed there-under. 
4. 
 
Aggrieved, the Respondent Company filed an 
Appeal i.e. FAO No.25 of 2012 under Section 7(1) of the 
Act of 1996 against the Order dated 03.05.2012 before 
the learned Islamabad High Court. After hearing the 
parties, the learned Single Judge of the Islamabad High 
Court vide judgment dated 13.04.2015 (announced on 
05.05.2015), allowed the Appeal and also held Regulation 
18(2) of the Regulations of 2005 void being ultra vires the 
Act of 1996. However, it was held that the Petitioner 
Authority was vested with the power to proceed under 
Section 23(3)(c)(i) of the Act of 1996 and levy a fine in 
terms thereof. The aforesaid judgment dated 13.04.2015 
(announced on 05.05.2015) was challenged by the 
Petitioner Authority through the instant Civil Petition for 
Leave to Appeal. Pursuant to a detailed Order dated 
05.10.2015 of this Court, notices were issued to the 
Respondent Company, who had entered appearance.  
5. 
 
The learned counsels for the parties have been 
heard and the available record perused.  
6. 
 
It is contended by the learned counsel for the 
Petitioner Authority that the learned High Court by way 
CP.2093/2015. 
5 
of 
the 
impugned 
judgment 
has 
misapplied 
and 
misinterpreted the provisions of the Act of 1996 as well 
as the Regulations of 2005. It is added that the said 
Regulations had been validly issued in exercise of the 
powers conferred by the Act of 1996 and are not in 
conflict with the parent statute and Regulation 18(2) of 
the Regulations of 2005 are not ultra vires the Act of 
1996. The learned counsel further contended that the 
Respondent Company deliberately delayed the payment 
of annual charges for the years 2005 to 2011 without any 
legal or factual justification and such delay in payment 
squarely falls within the purview of Regulation 18(2) of 
the Regulations of 2005, which perceives of a penalty @ 
10% on the amount due, which had been imposed upon 
the Respondent Company after due process of a service of 
Show Cause Notice, as envisaged in Section 23 of the Act 
of 1996 and affording a right of hearing. Hence, the 
impugned judgment is not sustainable in law and is 
liable to be set aside.  
7. 
 
The 
learned 
counsel 
for 
the 
Respondent 
Company controverted the contentions raised on behalf 
of the Petitioner Authority by contending that the 
Regulation 18(2) of the Regulations of 2005 is ultra vires 
CP.2093/2015. 
6 
the Act of 1996, as has been correctly held by the learned 
High Court, inasmuch as, it perceived for the imposition 
of penalty for late payment, which is not provided for in 
the Act of 1996. In fact, it is contended, that the 
Petitioner Authority is not entitled under the Act of 1996 
to impose or collect any penalty for late payment. In the 
alternative, it is contended that the amount claimed by 
the Petitioner Authority as the annual charges for the 
Numbers Allocation was not lawfully due under the law 
and has been deposited under protest, therefore, the 
question of imposition of penalty under the Regulation 
18(2) of the Regulations of 2005 did not arise. The 
learned counsel further contended that in terms of the 
License issued by the Petitioner Authority to the 
Respondent Company, the former was only entitled to 
impose and collect such charge/fine @ 2% and not @ 
10%, as has been imposed vide Order dated 03.05.2012, 
which has been rightly set aside by way of the impugned 
judgment.  
8. 
 
The Petitioner is a Regulatory Authority, 
established under Section 3 of the Act of 1996. Its 
functions are enumerated in Section 4, while its powers 
CP.2093/2015. 
7 
are set forth in Section 5 of the Act of 1996, the relevant 
portions thereof are reproduced hereunder: 
 
“5. 
Powers of the Authority.—(1) The 
Authority shall exercise all powers as 
shall enable it to effectively perform its 
functions specified in section 4.  
 
(2)  
In particular, and without prejudice 
to the generality of the foregoing 
power, the Authority shall-  
 
(a) 
 …………………………………… 
 
(b)  
monitor and enforce Licenses; 
 
(c) 
 ……………………………………… 
 
(d) 
……………………………………….  
 
(e) 
…….………………………………… 
 
(f)  
………………………………………. 
 
(g) 
………………………………………. 
 
(h) 
………………………………………. 
 
(i) 
………………………………………. 
 
(j) 
………………………………………. 
 
(k) 
………………………………………. 
 
(l) 
………………………………………. 
 
(m) 
………………………………………. 
 
(n) 
………………………………………. 
 
(o) 
issue 
regulations 
for 
exercising 
its 
powers 
and 
performance of its functions. 
 
(p) 
levy fee and other charges at 
such rates and in respect of 
such services as may be fixed 
by it from time to time not 
exceeding 
the 
limits 
as 
CP.2093/2015. 
8 
specified by a Committee of 
the Cabinet.  
 
(q) 
………………………………………… 
 
(r) 
……………………………………….”. 
(emphasis supplied) 
 
 
9. 
 
In exercise of the powers conferred under 
Section 
5(2)(o) 
of 
the 
Act 
of 
1996, 
reproduced 
hereinabove, the Regulations of 2005 were issued.  
10.  
Section 20 of the Act of 1996, subject to the 
proviso thereof, enjoins that no person shall establish, 
maintain or operate any Telecommunication System or 
provide any Telecommunication Service unless he has 
obtained a License from the Authority. It is not the case 
of the Respondent Company that it was exempted from 
obtaining such License. In fact, the Respondent Company 
has obtained a License in terms of Sections 20 and 21 of 
the Act of 1996 and the License includes Clause 1.3 
thereof, which is reproduced hereunder: 
“1.3. This License is subject to the 
Conditions included in Schedules 
2, 3, 4, 5, and 6 to this License, 
and any further Conditions duly 
added to this License pursuant to 
its terms and is subject to the 
Rules or Regulations issued from 
time 
to 
time 
by 
the 
Federal 
Government or the Authority.” 
 
(emphasis supplied) 
CP.2093/2015. 
9 
  
With 
regard 
to 
Numbers 
Allocation 
Charges, 
reference may be made to Clause 6.4 of the License, 
which reads as follows:- 
“6.4 The Licensee shall, following the 
Modification Date, pay the amount for 
all the number(s) allocated to it, in 
accordance 
with 
Numbering 
Plan 
Regulations issued by the Authority 
form time to time.”  
 
11.   
Thus, by virtue of the License and its terms and 
conditions, more particularly, Clauses 1.3 and 6.4 
thereof 
reproduced 
hereinabove, 
the 
Respondent 
Company is bound to comply with the provisions of the 
Regulations of 2005. Such Regulations were in force 
during the period in question.  
12.  
Regulation 18 of the Regulations of 2005, which 
is in issue, for ease of reference, is reproduced herein 
below: 
“18.  Number 
allocation 
fee.—(1) 
For 
each 
number(s) allocated to the applicant, the annual 
charges payable by 31st July each year shall be 
as follows: 
 
S.No. Number Category  
Annual 
Fee (Rs.) 
 
1. 
Six (or higher) digit number 
for 
PSTN/WLL 
& 
Mobile 
Phone Numbers 
 
0.50 
 
2. 
 
Short 
Codes, 
Carrier 
Pre-
selection Codes, NSPC, ISPC, 
SID, Toll Free Numbers, UAN, 
UIN, Premium Rate Service 
5000.00 
 
CP.2093/2015. 
10
numbers and other special 
numbers etc. 
 
 
Explanation: 
 
(a)  The annual standard rate of charge for most 
seven 
digit 
numbers 
including 
mobile 
numbers 
(excluding 
NDC) 
shall 
be 
as 
Rs.0.50/-; 
 
(b)  The maximum amount of charge that shall be 
imposed 
on 
any 
individual 
number 
is 
Rs.5,000. This maximum rate of charge shall 
be imposed on short codes as well; and  
 
(c) 
Payment of Annual Numbering Fee for 
number allocation shall be made in advance 
at the time of application; 
 
Provided that the Annual Numbering Fee 
shall not be charged for the numbers 
allocated for less than six (6) months. 
Provided further that annual charges shall be 
required for the subsequent years. 
 
(2)  The Licensee shall be liable to pay a penalty 
@10% on the amounts outstanding if the 
dues are not paid by 31st July each year. 
 
(3)  The Licensee may apply for refund of charges 
paid for allocation of numbers within 90 days 
from the date of allocation of the Number(s) 
subject to the condition that Licensee could 
not start its services under the circumstances 
beyond its control.  
 
Provided 
that 
the 
Authority 
may 
consider the matter and decide on merit 
which shall be final and binding on the 
Licensee.” 
(emphasis supplied) 
 
13.  
In the above circumstances, as per the terms 
and conditions of the License, the Respondent Company 
was required to make payment for the Numbers 
CP.2093/2015. 
11
Allocation at the rate specified in Regulation 18(1) of the 
Regulations of 2005 by or before the 31st July of each 
year. It is the case of the Petitioner Authority that in spite 
of various demands, in this behalf, the Respondent 
Company failed to deposit the amount in time for the 
period in question i.e. 2005 to 2011 and such payment 
was, in fact, belatedly made in the year 2011.  
14.  
Thus, prima facie, the Respondent Company 
had failed to comply with the terms of its License. Such a 
situation is dealt with by Section 23 of the Act of 1996, 
which for ease of reference, is reproduced herein below: 
“23. Issue of enforcement orders and 
penalties.—(1) 
Where 
a 
Licensee 
contravenes any provision of this Act or 
the rules made thereunder or any term 
or condition of the licence, the Authority 
[or any of its officers not below the rank 
of director] may by a written notice 
require the Licensee to show cause 
within 
thirty 
days 
as 
to 
why 
an 
enforcement order may not be issued.  
 
(2) The notice referred to in sub-section 
(1) shall specify the nature of the 
contravention and the steps to be taken 
by 
the 
Licensee 
to 
remedy 
the 
contravention.  
 
(3)  Where a Licensee fails to—  
 
(a)  
respond to the notice referred to 
in sub-section (1); or  
 
(b)  
satisfy the Authority about the 
alleged contravention; or  
 
CP.2093/2015. 
12
(c)  
remedy the contravention within 
the 
time 
allowed 
by 
the 
Authority, may, by an order in 
writing and giving reasons—  
 
(i) 
levy fine which may extend 
to three hundred and fifty 
million rupees; or  
 
(ii)  
suspend or terminate the 
License, impose additional 
conditions or appoint an 
Administrator to manage 
the affairs of the Licensee, 
but 
only 
if 
the 
contravention is grave or 
persistent.  
 
(4)  Without prejudice to the provisions 
of  sub-section (1) and sub-section (3), 
the Authority [or any of its officers not 
below the rank of director] may, by an 
order in writing, suspend or terminate a 
licence or appoint an Administrator, if 
the Licensee—  
 
(a) 
becomes insolvent or a receiver 
is appointed in respect of a 
substantial part of the assets;  
 
(b)  
being an individual, become 
insane or dies.  
 
Explanation.-—For the purpose of 
this section, the Administrator shall be 
appointed from amongst the persons 
having 
professional 
knowledge 
and 
experience of telecommunication.” 
 
(emphasis supplied) 
 
15.  
A perusal of the aforesaid provisions reveals 
that where a Licensee contravenes any of the provision of 
the Act of 1996, the Rules framed there-under or any 
term or condition of its License, such Licensee may be 
proceeded against under Section 23 of the Act of 1996. 
CP.2093/2015. 
13
Section 23(3)(c)(i), reproduced hereinabove authorizes the 
Authority to levy fine to a maximum limit of Rs.350 
million. Thus, the Petitioner Authority has been clothed 
with the jurisdiction, inter alia, to levy a fine in case of 
failure to comply with any term and condition mentioned 
in the License. The aforesaid Section is further 
supplemented 
by 
Rule 
9 
of 
the 
Pakistan 
Telecommunication Rules, 2000, hereinafter referred to 
as “Rules of 2000”, which is reproduced herein below for 
ease of reference:  
“9. 
Monitoring 
of 
compliance, 
enforcement and early termination.- 
(1) 
The 
Authority 
may 
monitor 
compliance by Licensees with their 
Licenses in accordance with the terms of 
their Licenses and the Act. 
 
(2)   If the Authority considers, 
whether or not as a result of any 
complaint or made by another person as 
a result of monitoring by the Authority, 
that the Licensee has contravened any 
condition of the License, the Authority 
may serve a written notice requiring the 
Licensee to show cause, within thirty 
days after the date of the notice, as to 
why an enforcement order should not be 
issued. 
 
(3)  If the Licensee appears before 
the Authority to give an explanation, or 
submits a written explanation to the 
Authority, within the period specified in 
sub-rule (2), to the satisfaction of the 
Authority, the enforcement order shall 
not be issued. 
 
CP.2093/2015. 
14
(4)  If the Licensee fails to respond 
to the notice referred to in sub-rule (2) 
or satisfy the Authority in respect of the 
alleged contravention in accordance with 
sub-rule (3), the Authority may issue an 
enforcement 
order 
requiring 
the 
Licensee to remedy the contravention 
within such period, which shall be less 
than thirty days from the date of service 
of 
the 
enforcement 
order, 
as 
the 
Authority 
may 
reasonably 
consider 
appropriate. 
 
(5)  If the Licensee fails to comply 
with the enforcement order served under 
sub-rule (4), the Authority may, by 
further enforcement order in writing 
hereinafter referred to as "final order":- 
 
(a)  levy a fine which may extend to 
three   hundred and fifty million 
rupees; or  
 
(b)  in the case of a grave or persistent 
contravention 
of 
its 
License, 
require the Licensee to cease that 
contravention 
within 
such 
further period of time, not being 
less than thirty days from the 
date of service of the final order, 
as the Authority may reasonably 
consider 
appropriate, 
failing 
which the Authority may take 
action under sub-rule (6) in 
respect of such contravention. 
 
(6)  Subject to sections 23 and 24 
of the Act, the Authority may terminate 
the License on service of not less than 
thirty days a notice in writing to the 
Licensee if the Licensee:- 
 
(a)  commits a grave, or persistent, 
contravention of its License and 
fails to comply with a final order 
which order has not been set 
aside by, or is not the subject of 
any appeal or other proceedings 
before any court, the Authority 
or the Federal Government as 
referred to in section 7 of the 
CP.2093/2015. 
15
Act, served in respect of that 
contravention within the period 
specified in that order, or any 
longer period allowed to the 
Licensee by the Authority; 
 
(b)  fails to pay any overdue fee 
under the License, which fee is 
not the subject of any dispute in 
good faith between the Licensee 
and the Authority and in respect 
of 
which 
any 
appeal 
or 
proceedings have been initiated 
by the Licensee, within sixty 
days following service on the 
Licensee 
of 
written 
notice 
requiring payment together with 
a written warning that action 
will be taken under this sub-
rule if the contravention is not 
remedied 
within 
the 
period 
specified in the notice; or 
 
(c)   becomes insolvent or if a receiver 
is appointed in respect of a 
substantial part of the assets 
used 
by 
the 
Licensee 
for 
undertaking activities under the 
License.” 
(emphasis supplied) 
 
 
16.  
In the above circumstances, it is clear and 
obvious that the Petitioner Authority could impose a fine 
in case of failure to make payments on the due dates in 
terms of Regulation 18(1) of the Regulations of 2005 due 
compliance whereof is a condition of the License (Clauses 
1.3 and 6.4). This aspect of the matter has been 
acknowledged and accepted in the impugned judgment 
itself, more particularly, in para 13 thereof, which is 
reproduced hereunder: 
CP.2093/2015. 
16
“13. The Act has, however, vested power 
in the Authority to, inter alia, levy fines 
under section 23(3)(c)(i) of the Act if the 
Licensee has contravened any term or 
condition of the License. This punitive 
power has been explicitly provided by 
the legislature. It was alleged in the 
show cause notice that the appellant 
had delayed the payment pursuant to its 
obligations under the relevant Clause of 
the License and, therefore, it may have 
considered 
the 
above 
provisions 
of 
section 23 of the Act.”  
 
17.  
In pith and substance, it appears to be the case 
of the Respondent Company, which has found favour 
with the learned High Court by way of the impugned 
judgment that in terms of Regulation 18(2) of the 
Regulations of 2005, a penalty has been imposed, which 
is not envisaged in the Act of 1996, except under Section 
31 thereof pertaining to the offences and penalties, which 
is not attracted to the facts and circumstances of the 
instant case. In short, it is contended that a fine could be 
imposed as envisaged by Section 23 of the Act of 1996 
but not a penalty, as provided in Regulation 18(2) of the 
Regulations of 2005. The entire argument, in this behalf, 
is based upon assumption that the penalty and the fine 
are two mutually exclusive concepts.  
18.  
In order to resolve the aforesaid controversy, it 
appears to be imperative that the true meaning and 
scope of the terms “penalty” and “fine” be explored. In 
CP.2093/2015. 
17
Wharton’s Law Lexicon, Fourteenth Edition by A.S. 
OPPE, “Penalty” is defined as follows:-  
“Penalty:  
1. 
A sum agreed to be paid on non-
performance of the condition of a bond. 
See Bond 
 
2. 
A sum agreed to be paid on breach 
of an agreement or any stipulation of it. 
See 
LIQUIDATED 
DAMAGES, 
and 
NOMINE POENE. The fact that the 
parties state expressly in their contract 
that the sum named is ‘liquidated 
damages’ will not prevent the Court from 
deciding that it is a penalty. ‘The cases 
upon the subject of penalty or liquidated 
damages are very numerous. The result 
of them seems to be this, that what the 
Courts look at is the real intention of the 
parties as it is to be gathered from the 
language 
they 
have 
used’ 
(Lea 
v. 
Whitaker, (1872) L. R. 8 C. P. p. 73, per 
Keating, 
J.). 
The 
words 
are 
not 
conclusive ; the essence of penalty is a 
payment stipulated as in terrorem  of the 
offending 
party 
: 
the 
essence 
of 
liquidated 
damages 
is 
a 
genuine 
covenanted pre-estimate of loss, Dunlop 
Co. v. New Garage Co., 1915, A. C. 79, 
approved in Widnes Foundry (1925) Ltd. 
V. Cellulose Acetate Co. Ltd., 1931, 2 K. 
B. 393, and 1933, A. C. 20. 
 
3.    A sum recoverable by action from a 
person infringing a statute. See PANAL 
STATUTES. 
 
4.   A sum, also called a fine, recoverable 
in a Court of Summary Jurisdiction 
from a person infringing a statute.” 
 
In Stroud’s Judicial Dictionary Of Words And 
Phrases, Fifth Edition Volume 4 By Johns S. James, the 
meaning of “Penalty” and “Fine” describes as under: 
CP.2093/2015. 
18
“Penalty.  
 
(1) “‘Penalty’ is an ambiguous word. A 
penalty may be the subject-matter of an 
information, or of a complaint” (per 
Wright J., R. v. Lewis [1896] 1 Q.B. 
665). See Chisholm v. Mackenzie, 30 
S.L.R. 604, cited PAIN. 
 
(2) 
Where an Act imposes a penalty for 
anything done (Crepps v. Durden, 2 
Cowp. 640, cited NECESSITY) or omitted 
to be done (Llewellyn v. Glamorgan Vale 
Railway 
[1898] 
1 
Q.B. 
473, 
cited 
OWNER) on a day, that generally means 
only one penalty for the entire day; e.g. a 
man may “exercise his ordinary calling 
on a Sunday” on any number of times 
on a particular Sunday but will only be 
liable to one penalty therefore under 
Sunday Observance Act 1677 (c. 7) 
(Crepps v. Durden). So, only one penalty 
could be recovered for each day that a 
railway 
company 
offended 
against 
Railway Clauses Consolidation Act 1845 
(c. 
20), 
s.54, 
by 
not 
making 
a 
substituted road for an existing road 
which the company had interrupted 
(Llewellyn v. Glamorgan Vale Railway).”  
 
3) “The civil liability arising from a 
breach of a statutory duty is of a wholly 
different nature from a penalty for such 
a breach. The former gives no cause of 
action unless damage to a third party 
follows from it, and then, in general, 
gives ground for an action for the 
amount of such damage at the suit of 
such third parties. But penalties for 
breaches 
of 
statutory 
duties 
apply 
whether damage has been caused or 
not” (per Fletcher Moulton L.J. In David 
Britannia Merthyer Coal Co. [1909] 2 
K.B. 149 (Sub Nom. Britannic Merthyr 
Coal Co. v. David [1910] A. C. 74), Cited 
Mine See DUTY. See also Simmons v. 
Newport, etc [1921] 1KB 616; Couch v. 
Steel, 23 L.J., QB 125). 
 
CP.2093/2015. 
19
Fine:  
(1) ”Fine, finis. here (litt. s.194 signifieth 
a pecuniarie punishment for an offence, 
or a contempt committed against the 
King,  and regularly to it imprisonment 
appretaineth. And it is called finis, 
because it is an end for that offence. 
And in this case a man is said facere 
finem de transgressione,  etc.., cm rege, 
to make an end or fine with the King for 
such a transgression. It is also taken for 
a sum given by the tenant to the lord for 
concord and an end to be made. It is 
also taken for the highest and best 
assurance of lands, etc.” (Co. lit 126 b). 
See further Termes de la ley; cowel; 
jacob; 5 encyc. 341-343; for form of fine 
of lands. See 2 b1. Com App. XIV. CP.  
REDEMPTION.” 
 
  
In the Oxford Companion to Law by David M. 
Walker, the term of “Penalty” and “Fine” is stated as 
under:  
“Penalty.  
A 
sum 
of 
money 
payable 
as 
compensation or as punishment. Many 
statutes 
impose 
penalties 
for 
non-
implement of a public duty. Penalties 
may be agreed upon by the parties, as in 
a bond subject to a condition, where a 
party binds himself to pay a sum, 
frequently double the amount secured, if 
the condition is not complied with. 
Parties to a contract may agree that, in 
the event of a beach, the one in breach 
will pay to the other an agreed sum; if 
this sum cannot be regarded as a 
genuine pre-estimate of the damage 
likely to be sustained by a breach of 
contract, but is rather a sum stipulated 
in terrorem of the party in breach, it is 
deemed to penalty and is irrecoverable 
so far as in excess of the damage 
actually sustained. 
 
CP.2093/2015. 
20
Fine: 
(I) In criminal law, a sum of money, 
ordered to be paid to the Crown by an 
offender by way of punishment. At 
common law a fine was one of the 
penalties for a misdemeanour. In 1861 
statute permitted a fine for certain 
felonies but only in 1948 were courts 
empowered generally, to fine persons 
convicted  of felonies Magistrates’ courts 
have limits set on the amount of fine 
imposed for various kinds of offences 
and statutory offences normally provide 
for fines within stated limits as the, or a, 
penalty. Payment of a fine may be 
enforced 
by 
the 
Crown 
suing 
the 
offender in the civil courts, or, after 
judicial inquiry into his means, by 
imprisoning for default in payment.” 
 
(emphasis supplied) 
 
 
  
In the Black’s Law Dictionary, Tenth Edition by 
Bryan A. Garner, the meaning of “Penalty” and “Fine” is 
stated as follows: 
“Penalty:   
(15c) I. Punishment imposed on a 
wrongdoer, 
usu. 
In 
the 
form 
of 
imprisonment or fine, esp, a sum of 
money exacted as punishments for 
either a wrong to the state or a civil 
wrong 
(as 
distinguished 
from 
compensation for the injured party’s 
loss). Though usu. for crimes penalties 
are also sometimes imposed for civil 
wrongs. 
 
Civil penalty (17c) A fine assessed for a 
violation of a statute or regulation. 
 
 
 
 
 
CP.2093/2015. 
21
Fine: 
5.  A pecuniary criminal punishment or 
civil penalty payable to the public 
treasury. Fine, vb 
 
“this word is ambiguously 
taken 
in 
our 
law, 
for 
sometimes it is taken for a 
sum 
of 
money 
or 
mulct 
imposed or laid upon an 
offender 
for 
some 
offence 
done, and then it is also 
called 
a 
ransom. 
And 
sometimes it is taken for an 
income, or a sum of money 
paid at the entrance of a 
tenant 
into 
his 
land: 
[sometimes as a sum paid for 
the renewal of a lease, and 
sometimes as a sum paid for 
the renewal of a lease, and 
denominated 
a 
fine 
for 
renewal:] and sometimes it is 
taken for a final agreement or 
conveyance upon record, for 
setting and securing of lands 
and tenements.” 1 Edward 
Hilliard 
Sheppard’s 
Touchstone 
of 
Common 
Assurance 
2B 
(Richard 
Preston ed., 7th ed.  1820) 
(brackets in original)” 
 
(emphasis supplied) 
 
In the Law Dictionary with Pronunciations by James 
A. Ballentine  1948 Edition, the meaning of “penalty” is 
described as under:  
“Penalty: 
A word which when used in a contract is 
sometimes 
construed 
as 
meaning 
liquidated damages, as where the sum 
named is reasonable, and the actual 
damages are uncertain in amount and 
difficult of proof. If, however, it is called 
CP.2093/2015. 
22
a penalty in the contract, it will be held 
to be a penalty if there is nothing in the 
nature of the contract to show a 
contrary intent. See 15 Am Jur 679; 
19 Am Jur 100 
 
An exaction in the nature of punishment 
for nonperformance of an act, or for the 
performance of an unlawful act, and 
involving 
the 
idea 
of 
punishment, 
whether enforced by a civil or criminal 
action or proceeding. See Hall v Norfolk  
& Western Railroad Co.,  44 W. Va 36, 
41 L.R.A.  669, 67 A.m. St. Rep 757, 28, 
S. E. Rep 669.” 
 
(emphasis supplied) 
 
The question as to the meaning, the word “penalty” 
came up for interpretation before the Indian Supreme 
Court in the judgment, reported as N.K. Jain and others 
v. C.K. Shah and others (AIR 1991 SC 1289), wherein it 
was observed as under:- 
“10. In the common parlance the word 
'penalty' is understood to mean a legal 
or official punishment such as a term of 
imprisonment. In some contexts it is 
also understood to mean some other 
form of punishment such as fine or 
forfeiture for not fulfilling a contract. 
But in gathering the meaning of this 
word, the context in which this is used 
is significant. In the Act, as already 
noted, Section 14 deals with penalties 
and enumerates various contraventions 
or 
non-compliances 
which 
are 
punishable with imprisonment. Every 
contravention mentioned in each of the 
sub-sections 
is 
punishable 
with 
imprisonment and for offences covered 
by Sections 14(1A), 14(1B) and 14(2A) 
minimum imprisonment is also made 
compulsory. The imposition of fine also 
CP.2093/2015. 
23
is prescribed. The penalties mentioned 
in this connection would indicate that 
the Legislature envisaged that a penalty 
should necessarily mean imprisonment 
or 
at 
least 
imposition 
of 
fine. 
……………………………………………………
………………………………………………….
However, we shall proceed to consider 
some of the submissions made on this 
aspect. The learned counsel referred to 
certain standard books on words and 
phrases. In Butterworths' Words and 
Phrases, legally defined Third Edition 
page 343 the meaning of the word 
'Penalty' is given as that the word 
‘penalty’ is large enough to mean, is 
intended to mean, and does mean, any 
punishment whether by imprisonment 
or otherwise. Blackburn, J. in R. v. 
Smith, [1862] Le Ca 131 at 138, 
observed as under:  
"I consider that the word "penalty" falls 
to be read in a wide popular sense, …. 
and I select two definitions adequately 
conveying that sense. The late Mr. 
Roberton Christie The Encyclopedia, 
Vol. I 1, p 204) said: “Penalty in the 
broad sense may be defined as any 
suffering in person or property by way of 
forfeiture, 
deprivation 
or 
disability, 
imposed as a punishment by law or 
judicial authority in respect of ... an act 
prohibited 
by 
statute.” 
The 
Oxford 
Dictionary 
echoes 
the 
same 
wide 
conception by referring to "a loss, 
disability or disadvantage of some kind 
... fixed by law for some offence.  
The meaning of the word 'penalty' as 
given in the Collins English Dictionary, 
is as under:  
"Penalty: 
1. 
a 
legal 
or 
official 
punishment, 
such 
as 
a 
term 
of 
imprisonment. 2. some other form of 
punishment, such as a fine or forfeit for 
not 
fulfilling 
a 
contract. 
3. 
loss, 
suffering, or other unfortunate result of 
CP.2093/2015. 
24
one's own action, error, etc. 4. Sport, 
games etc. a handicap awarded against 
a player or team for illegal play, such as 
a free shot at goal by the opposing team, 
loss of points, etc. "  
In addition, the learned counsel also 
relied on some decisions of foreign 
courts where the meaning of the word 
'penalty' was considered. In People ex rel 
Risso v. Randall, 58 N.Y. 2d 265, 268 
Misc.1057, it was held that:  
"A "penalty" may refer to both criminal 
and civil liability, being denied as penal 
retribution, punishment for crime of 
offense, the suffering in person, rights or 
property which is annexed by law or 
judicial decision to commission of a 
crime or public offense."  
In City of Fort Wayne v. Bishop, 92 N.E. 
2d 544, 547, 228 Ind. 304, it was 
observed as under:  
"The 
term 
"penalty" 
embraces 
all 
consequences visited by law on heads of 
those who violate police regulations and 
extends to all penalties whether exigible 
by state in interest of community or by 
private persons in their own interest, 
even when statute is remedial as well as 
penal."  
In City of Cincinnativ. Wright, 67N.E.2d 
358, 361, 77 Ohio App.261, it was noted 
that:  
"The word "penalty" is not confined to 
punishment or crime; it has a broader 
meaning in law of contracts; it is used 
as contradistinguished from liquidated 
damages. It is also used to indicate the 
sum to be forfeited on breach of a bond. 
And in common parlance it expresses 
any disadvantage resulting from an act.” 
 
(emphasis supplied) 
 
CP.2093/2015. 
25
 
This Court in the case, reported as Abdul Hameed 
Talib v. Addl. District Judge (PLD 2013 SC 775), 
interpreted the meaning of “fine” as follows: 
“The definition (of fine) whereof is “a 
sum of money as a penalty by a Court of 
law” OR “a punishment to pay a sum of 
money for the breach of the law”. As it is 
a penalty and a punishment which has 
been imposed by the law itself, thus the 
Tribunal is left with no discretion to 
waive it off, exonerate or absolve a party 
coming before it, from such a fine.” 
 
  
At this juncture, it may be appropriate to refer the 
judgment, reported as R.S. Joshi etc. v. Taluka Sahakari 
etc. (AIR 1977 SC 2279), wherein the Supreme Court of 
India had borrowed the meaning of “penalty” and “fine” 
from the American Jurisdiction in a case, reported as 
Gosselink v. Campbell, 4 Iowa, 300, wherein it was 
observed as under: 
 
 
“The terms ‘fine’, ‘forfeiture’ and 
‘penalty’ are often used loosely, and even 
confusedly; but when a discrimination is 
made, the word ‘penalty’ is found to be 
generic in its character, including both 
fine and forfeiture. A ‘fine’ is a pecuniary 
penalty, and is commonly (perhaps 
always) to be collected by suit in some 
form. A ‘forfeiture’ is a penalty by which 
one loses his rights and interest in his 
property.” 
(emphasis supplied) 
 
19.  
An over view of the aforesaid reveals that the 
penalty implies a loss, disability or disadvantage of some 
CP.2093/2015. 
26
kind visiting a person or his property on account of his 
own actions or omissions. It has both criminal and civil  
dimensions. In the former, it denotes a punishment 
imposed on a wrongdoer in the form of term of 
imprisonment or a sum of money exacted from him for 
violation of the law. While in Civil Law, it may arise from 
a breach of statutory duty or a contractual obligation 
with its inherent limitations and peculiar remedies, the 
details whereof are not necessary for the adjudication of 
the lis at hand. It is a word of great amplitude.  
  
The “fine” on the other hand is a form of “penalty” 
which implies the payment of money by way of 
punishment usually imposed for breach of law. It also 
appears that it is difficult to define “fine” without 
referring to the concept of “penalty”, thus, it can safely be 
said that “fine” is a form of “penalty”. All fines are 
penalties but all penalties are not necessarily fines. In 
short, a fine is a pecuniary penalty. It is also apparent 
that both the terms “penalty” and “fine” in a statutory 
construction may sometime be used loosely but a true 
import of the term would obviously depend upon the 
subject matter and the object of the Statutory Instrument 
CP.2093/2015. 
27
wherein such term has been employed that too with 
reference to the context in which it is used. 
20.   
In the instant case, in terms of Regulation 18(2) 
of the Regulations of 2005, a Licensee, who fails to make 
payment of the dues under Regulation 18(1) of the 
Regulations of 2005 is liable to suffer a penalty 
equivalent to  10% of the amount due, i.e. a peculiarity 
disadvantage resulting from a violation of the Regulations 
of 2005, which a Licensee is required to comply with  in 
view of Clauses 1.3 and 6.4 of his License Agreement but 
also constitutes a breach of Section 23 of the Act of 1996. 
Thus, when examined with reference to the subject and 
object of the Act of 1996 and the Rules of 2000 and the 
Regulations of 2005 framed there-under and in the 
context in which the term “penalty” has been used, there 
is no manner of doubt that for all intents and purposes, 
it is a fine. It is a common ground between the parties 
and as is also obvious from the provisions of the Act of 
1996 that the said Statute provides specifically for 
imposition of a fine in terms of Section 23 of the Act of 
1996.  
21.   
The reference to Section 5 sub-section 2(p) 
made in the impugned judgment (apparently at the 
CP.2093/2015. 
28
behest of the learned counsel for the Respondent 
Authority) appears to be of limited relevance. The said 
provision of law pertains generally to levy of fee and other 
charges. The payment in terms of Regulation 18(1) of the 
Regulations of 2005 is described as a fee/charge therein 
and the power to impose a fine is specifically mentioned 
in Section 23 of the Act of 1996, which perhaps is the 
appropriate provision of law for determining the vires and 
Regulation 18(2) of the Regulations of 2005. 
22.   
Perhaps the Regulation 18(2) of the Regulations 
of 2005 may not be happily worded and could have been 
constructed with a greater care and accuracy. It is an 
ancient 
and 
consistently 
applied 
principle 
of 
Interpretation of Statutes that where “object and 
intention of statute is clear it must not be reduced to a 
nullity by the draftsman’s unskillfulness or ignorance” 
(The Interpretation of Statutes 7th Edition by Sir Peter 
Mexwer).   
23.  
Even otherwise, it is a settled law that the 
Courts should always lean in favour of validity of a 
Statutory Instrument and should be slow to strike it 
down and an interpretation, which saves the law, should 
be adopted rather than holding a law to be invalid, 
CP.2093/2015. 
29
unconstitutional or ultra vires. Reference, in this behalf, 
may be made to the judgments reported as (1) Mehreen 
Zaibun Nisa and others v. Land Commissioner, Multan 
and others (PLD 1975 SC 397), (2) Multiline Associates v. 
Ardeshir Cowasjee and 2 others (PLD 1995 SC 423), (3) 
Messrs Elahi Cotton Mills Ltd and others v. Federation of 
Pakistan through Secretary, M/o Finance, Islamabad and 
6 others (PLD 1997 SC 582), (4) Federation of Pakistan 
through Secretary, Ministry of Finance and others V. Haji 
Muhammad Sadiq and others (PLD 2007 SC 133), (5) 
Syed Aizad Hussain and others v. Motor Registration 
Authority and others (PLD 2010 SC 983), and (6) Dr. 
Tariq Nawaz and another v. Government of Pakistan 
through the Secretary, Ministry of Health, Government of 
Pakistan, Islamabad and another (2000 SCMR 1956).  
24.  
A perusal of Section 23 of the Act of 1996 
reveals that it deals with contravention of any provision 
of the Act of 1996 or the Rules framed there-under for 
any term or condition of a License and in terms of 
Section 23(3)(c)(i) of the Act of 1996, a fine may be 
imposed in this behalf to a maximum of Rs.350 million. 
Regulation 18(2) of the Regulations of 2005 deals only 
with one of such contravention i.e. Regulation 18(1) of 
CP.2093/2015. 
30
the Regulations of 2005 for which a penalty/fine @ 10% 
per annum is provided. Obviously, the quantum of fine, if 
imposed, would be subject to a maximum limit 
mentioned in Section 23 of the Act of 1996. In the instant 
case, the fine sought to be imposed is less than the 
amount mentioned in Section 23(3)(c)(i) of the Act of 
1996. In view of the above,  it is difficult to hold that 
Regulation 18(2) of Regulations 2005 is ultra vires the 
parent statute i.e. the Act of 1996 and the findings to the 
contrary by way of the impugned judgment are not 
sustainable.  
25.  
A feeble attempt was made by the learned 
counsel for the Respondent Company to canvass that no 
amount was due under Regulation 18(1) of the 
Regulations of 2005, therefore, proceedings under 
Section 23 of the Act of 1996 to impose penalty/fine in 
terms of Regulation 18(2) of the Regulations of 2005 
could not be initiated. Suffice it to say, that the payment 
due under Regulation 18(1) of the Regulations of 2005 
has admittedly been made by the Respondent Company. 
The Show Cause Notice in terms of Section 23 of the Act 
of 1996 was issued by the Petitioner Authority only with 
reference to the imposition of the penalty/fine in terms of 
CP.2093/2015. 
31
the Regulation 18(2) of the Regulations of 2005 and the 
Order dated 03.5.2012 in this behalf was passed by the 
Petitioner Authority, which was challenged by way of an 
Appeal filed under Section 7(1) of the Act of 1996 by the 
Respondent Company. It has not been held in the 
impugned judgment that the Respondent Company is not 
liable for the amount due in terms of Regulation 18(1) of 
the Regulations of 2005. The Respondent Company has 
not challenged the said judgment before this Court. The 
liability of the Respondent Company in terms of 
Regulation 18(1) of the Regulations of 2005, since paid, is 
not the subject matter of the instant lis. 
26.  
The 
learned 
counsel 
for 
the 
Respondent 
Company, while relying upon Clause 6.6 of the License  
Agreement has attempted to argue that the amount of 
penalty under Regulation 18(2) of the Regulations of 
2005 should be calculated @ 2% and not @ 10%. The 
Clause in question is of general import and perhaps 
relates to all fee payable by a Licensee, while Regulation 
18.2 of Regulations of 2005 is specific in nature and 
applies to amounts due only under Regulation 18.1 of the 
Regulations of 2005, therefore, must prevail. Secondly, if 
the argument of the learned counsel for the Respondent 
CP.2093/2015. 
32
Company is accepted, the liability, in fact, would 
increase, manifold as Clause 6.6 of the License 
Agreement pertains to the additional payment unpaid fee 
@ 2% per month, while, in the instant case, the amount 
under the Regulation 18(2) of the Regulations of 2005 is 
calculated @ 10% per every year. In the above 
circumstances, we find ourselves unable to agree with 
the learned counsel for the Respondent Company or 
sustain the impugned judgment.  
27.  
Consequently, this Civil Petition is converted 
into appeal and the same is allowed. The impugned 
judgment dated 05.5.2015 of the learned Islamabad High 
Court, Islamabad is hereby set aside.  
 
 
 
 
 
 
 
Judge 
 
 
 
 
 
Judge 
 
 
 
Islamabad, the 
 
Judge 
26th October, 2015 
‘Not Approved For Reporting’ 
Safdar/* 
 
 
