-----------------------
PLJ 2006 Lahore
91 (DB)
Present: Ch. Ijaz Ahmad & Muhammad Khalid Alvi, JJ.
WAPDA and another--Appellants
versus
M/s. GHULAM RASOOL & Co. (Pvt.) Ltd. through its
MANAGING DIRECTOR--Respondent
MANAGING DIRECTOR--Respondent
R.F.A. No. 484 of 1999, heard on 28.4.2005.
Civil Procedure Code, 1908 (V of 1908)--
----O. XXIX, R. 1 & O. XIV, R.
1--Suit for recovery of specified amount--Preliminary objection raised by
defendant in written statement that suit had not been competently instituted by
plaintiff, was not framed by Court--Plaintiff had neither placed on record its
memorandum and Articles of Association nor pleaded that Technical Advisor was
duly authorized by company through resolution to institute suit, therefore,
objection raised by defendant in its written statement regarding incompetent
presentation of plaint did require framing of issue qua competency of person
who had signed plaint on behalf of plaintiff company--Power of attorney in
favour of person who had signed and verified plaint was not in accordance with
law as the same was not based on any resolution adopted by company in
accordance with its Memorandum and Articles of Association--Trial Court was
thus, under duty and obligation to frame proper issues to resolve controversy
between parties--Impugned judgment and decree was set aside and case was
remanded to Trial Court allowing parties to adduce evidence only to extent of
additional issue framed by the High Court and to decide the same afresh within
specified time. [Pp. 94, 95
& 96] A, B & C
NLR 1983 UC 184; NLR 1993 UC 54; NLR 1991
AC 432; PLD 1986 SC 684; PLD 1971 SC 550; 1982 CLC 2575; PLD 1975 Karachi 327;
PLD 1969 SC 278; PLD 1965 SC 690; PLD 1975 Lahore 7, ref.
Mr. Abdul Rehman Madni, Advocate for
Appellants.
Mr. Muhammad Raza Qureshi, Advocate for
Respondent.
Date of hearing : 28.4.2005.
Judgment
Ch. Ijaz Ahmad, J.--Brief facts out of
which the present appeal arises are that respondent/plaintiff who is a private
limited company filed a suit for recovery of Rs. 45,01,849/- plus mark up on
this amount as well as on the amount of Rs. 16,41,562/- on account of delayed
payment against the appellant in the Court of Civil Judge First Class Lahore on
8.9.94. The contents of the plaint reveal that the respondent-plaintiff was
awarded the work of Construction of Structures on Mitha Tiwana Drain RD O + 000
to 201 + 050 Mohajir Branch Unit of Thal Canal SCARP. The contract was executed
between the parties of value amounting to Rs. 2,95,54,775.00. The said work was
executed and completed till 31.12.90. The respondent-plaintiff submitted two
bill on escalation basis in terms of Clause 5(65) of the contract to the
appellant-defendant. The contents of the plaint further reveal that the said
bill were verified by the Project Director but in spite of repeated requests
the said amount was not paid by the appellant-defendant on unjustified grounds.
The defendant-appellant filed written statement controverted the allegations
leveled in the plaint including preliminary objections raised by the
appellant-defendant qua the maintainability of the suit on the ground that the
suit has not been competently instituted on behalf of respondent/plaintiff
company.
2.
Out of the pleadings of the parties the learned trial Court framed the
following issues:--
1. Whether
the suit is not maintainable in its present form? OPD.
2. Whether
the suit is time barred? OPD
3. Whether
this Court lacks territorial jurisdiction to adjudicate upon this matter? OPD
4. Whether
the plaintiff is entitled to a decree for recovery of dispute amount as claimed
in the main suit? OPP
5. Relief.
The trial Court decreed the suit vide
impugned judgment and decree dated 23.6.99. The appellant being aggrieved filed
this appeal.
3.
Learned counsel for the appellant submits that learned trial Court has
not framed proper issues specially with respect to preliminary objection raised
by the appellant-defendant in its written statement that the suit has not been
competently instituted on behalf of the respondent-plaintiff company. He
further submits that it is the duty of the trial Court to frame proper issue
but the trial Court failed to perform its duty as it has not framed issue qua
the competency of Muhammad Iqbal Qureshi to file the suit on behalf of the
respondent-company. He further submits that no resolution of the company has
been placed on record authorizing any person to verify and file the plaint on
behalf of the company. Suit was not properly instituted, therefore, findings on
the other issues have no relevancy unless and until the suit is properly
instituted before the trial Court on behalf of the respondent-company. In
support of his contention he relied upon PLD 1991 Lahore 381 (Premier Sugar Mills case).
4.
Learned counsel for the respondent submits that issues were framed on
2.2.95. The appellant defendant did not raise any objection with regard to
non-framing of issue as being now claimed. He further submits that this is mere
irregularity, which can be cured at any stage even otherwise the
Respondent-plaintiff has specifically mentioned and highlighted facts in para 1
of the plaint that Mr. Muhammad Iqbal Qureshi has been duly authorized to sign
and verify the pleadings. Therefore, appellant is not within its right to raise
this plea at such belated stage on the well known principle of estoppel and
waiver.
5.
We have given our anxious consideration to the contentions of the
learned counsel for the parties and perused the record ourselves. It is better
and appropriate to reproduce the relevant paragraphs of plaint, written
statement, and Order XXIX Rule 1 Of the CPC to resolve the controversy between
the parties.
Relevant Paragraph of Plaint.
1. That
the plaintiff is private limited company duly registered under the law. Mr.
Muhammad Iqbal Qureshi who has signed and verified the plaint is the Technical
Advisor of the plaintiff company is acquainted with the facts of the case and
duly authorized to sign and verify the pleadings."
Relevant paragraphs of written statement
1. Preliminary
Objection No. 1. The suit has not been competently instituted on behalf of the
plaintiff-company.
Reply on merits of Para No. 1 The
corporate status of the plaintiff and Defendant No. 1 is not denied. The
answering defendants do not admit that Mr. Muhammad Qureshi has been
competently authorized to sign and verify the pleadings or institute the suit.
Order XXIX Rule 1 CPC
1. Subscription
and verification of pleading.--In suits by or against a corporation, any
pleading may be signed and verified on behalf of the corporation by the
secretary or by any director or other principal officer of the corporation who
is able to depose to the facts of the case.
6.
The status of respondent/plaintiff as a private limited company is not
disputed between the parties. Order XXIX Rule 1 CPC regulates the procedure of
signing and verification of pleadings on behalf of the corporation. It
postulates that three types of person can perform this act i.e. the Secretary,
any Director or other Principal Officer of the Corporation. The present plaint
filed by the respondent was signed and verified by Mr. Iqbal Qureshi as its
Technical Advisor. Undoubtedly he was neither Secretary nor a Director of the
respondent company. In the capacity of Technical Advisor whether he fell in the
category of Principal Officer of the Corporation or not has not been
adjudicated upon by the learned trial Court.
7.
For valid institution/presentation of a plaint on behalf of a
company/corporation two distinct authorities are required. First requirement is
that it should be signed and verified by a person competent to do so. For this
purpose Order XXIX Rule 1 provides the guide line as observed above. The second
step is the requirement of authorization to institute suit on behalf of company
to any person through a resolution adopted in a meeting held for the said
purpose in accordance with its Memorandum and Articles of Association duly
registered under Section 30 of the Companies Ordinance, 1984. A similar
distinction in the above referred two steps was highlighted in NLR 1983 U.C.
184 in the following words:--
"The provisions of Order 29 Rule 1
CPC deal only with the subscription and verification of pleadings in suits by
against the corporations. In other words, the rule merely authorized the
persons mentioned therein to sign and verify pleadings on behalf of a
corporation. The rule does not authorize such institute suit on behalf of the
corporation. Substantial question in issue herein is whether Mr. Tarras was
authorize by societe Dumes to institute the present suit. Therefore, merely
because the person signing the plaint was Principal Officer of the company is
not sufficient to establish that he has authority to bring the suits on behalf
of the company".
Further reference can be made to NLR 1993
U.C. 54 (Millat Tractor Ltd. vs. Tawakal Ullah Chaudhary), NLR 1991 A.C. 432
(Millat Tractor Ltd. vs. Tawakal Ullah Chaudhary), PLD 1986 SC 684 (M.
Siddique's case) PLD 1971 SC 550 (Iftikhar Hussain Khan of Mumdot's case), 1982
CLC 2575 (Phool Muhammad vs. Abdul Ghaffar) and PLD 1975 Karachi 327 Mushtaq Ahmad'.
8.
The plaintiff/respondent has neither placed on record its Memorandum and
Articles of Association nor has pleaded that Mr. Iqbal Qureshi was duly
authorized by the company through a resolution to institute the
present suit, therefore, the
objection raised by the appellant in its written statement regarding
incompetent presentation of plaint did require framing of an issue.
9.
A private limited company is established by joining two or more persons
to run a joint business in the name of a company by getting it registered under
the Companies Ordinance, 1984. In this way, the private limited company
acquires the status of a juristic person. The object of having an authorization
of the company through a resolution for the institution of a suit is that all
the share holders/directors are involved for taking a decision as to whether
the company as a whole intends to institute legal proceedings or not. A
Director or a Principal Officer of the company on his own without authorization
of the company cannot take a decision for institution of a legal
proceedings/suit. However for the purposes of signing and verification of
pleadings such a person can act as permitted by Order XXIX Rule 1 CPC.
10.
Mr. Muhammad Iqbal Qureshi while appearing as PW-1 stated that company
had authorized him to institute the instant suit. He also submitted a special
power of attorney Ex. P1 issued in his favour. Perusal of Ex. P1, indicates
that this special power of attorney was executed by one Amanant Ali Khan, Chief
Executive of the respondent in favour of Muhammad Iqbal Qureshi. This power of
attorney is not in accordance with law as the same is not based on any
resolution adopted by the company in accordance with its Memorandum and
Articles of Association. This action is unilateral act on the part of the Chief
Executive of the company. As against this, if there is resolution of the
company which show the will and command of all the Members/Shares
Holders/Directors of the company for the purposes of initiating a legal action.
Meaning thereby that the company as a juristic person has expressed through
resolution its willingness to reap the fruits of the legal action and also to
face any adverse consequence thereof If any person associated with the company
in any capacity files a suit without such authorization, the company as a
juristic person can neither take advantage nor can suffer any consequence on
account of such presented plaint, therefore, the same has to be termed as an
incompetently presented suit.
11.
In view of the aforesaid circumstances it was duty and obligation of the
trial Court to frame proper issues to revolve the controversy between the
parties but the trial Court has not framed proper issues with regard that the
plaint has not been competently signed, verified and instituted on behalf of
the respondent-plaintiff company. Therefore, finding on other issues are
redundant because this is the basic issue qua the maintainability of the suit
filed by the respondent-plaintiff company which is admittedly not framed by the
trial Court as is evident from the issues framed by the trial Court reproduced above.
It is settled principle of law that a Judge must wear all the laws of the
country on the sleeve of his robe. Any failure of the counsel to properly advise
him is not
a complete excuse in the matter
as the law laid down in Muhammad Sarwar's case (PLD 1969 SC 278). It is also
settled principle of law that question of law on the basis of provision of law
can be raised at any stage as law laid down by the Hon'ble Supreme Court in PLD
1965 SC 690 (Haji Abdullah Khan's case). It is also settled principle of law
that nobody should be prejudiced by the act of the Court as the law laid down
by this Court in Mian Irshad Ali's case (PLD 1975 Lahore 7). It is an omission
of the Court, not to frame proper issues, therefore, parties were not properly
put to notice to produce their evidence in terms of the issues framed by the
Court, therefore, we set-aside the impugned judgment and decree and remand the
case to the trial Court after framing the following additional issue:
"Whether Mr. Muhammad Iqbal was
lawfully authorized to sign and verify the plaint and whether he was
competently authorized by the company to institute the suit, if not, its
effect? OPP.
The parties are directed to appear before
the Senior Civil Judge concerned on 10.5.05 who is directed either to hear the
case himself or entrust the same to any competent Court to allow the parties to
adduce evidence only to the extent of additional issue. Then decide the case
afresh in accordance with law within four month seven at the cost of day-to-day
proceedings. The trial Court shall of course decide the case in accordance with
law after recording evidence, without being influenced by the observation of
this Courts.
(A.A.) Case
remanded.
