Bajwa Industries Ltd vs Muhammad Jehangir

Stereo. H C J D A 38.

Judgment Sheet

IN THE LAHORE HIGH COURT AT LAHORE

JUDICIAL DEPARTMENT

Regular First Appeal No. 402 of 2008 Bajwa Industries (Pvt) Ltd. Muhammad Jahangir

JUDGMENT

Date of hearing: 25.02.2014______________________________________ Appellant by: Khawaja Abrar Majal, Advocate for the appellant.____ Respondent by: Ch.Aamar Rehman, Advocate for respondent._______ AALIA NEELUM, J.- This appeal is directed against the judgment and decree dated 22.06.2006 passed by the learned Civil Judge Ist Class, Gujranwala whereby suit of the appellant for recovery of Rs.50,11,676/- was dismissed without costs.

2.Briefly, the facts of the case, are that the appellant runs the business in the name and style of Bajwa Industries (Pvt) Ltd, G.T. Road, Gujranwala and manufacturing quality sanitary fittings. The appellant filed a suit for recovery of Rs.50,11,676/- for an order placed by the respondent/defendant on 30.09.1999 to the appellant/plaintiff company for preparation and supply of sanitary fittings and fixtures of sanitary. The cost of the order agreed between the parties was Rs.25,86,000/-upon which sale tax was Rs.4,65,480/-and the respondent/defendant made the payment of Rs.20,00,000/- through draft No.LDC-005231/75 dated 30.11.1999 whereas balance amount of Rs.10,51,480/- had to pay after delivery of requisite items. After preparation of the goods, the appellant company had intimated the respondent through notice, who under one pretext or other, neither took the

delivery of articles nor made reply to the notice, due to which the appellant’s company had faced huge loss and claimed Rs.50,11,676/-detail of which is as under:-

i)Balance amount Rs.10,51,480/-

ii)Storage charges Rs.05,00,000/-

iii)Packing & re- Rs.08,00,000/- packing charges.

iv)____________ Rs.05,10,196/-

v)Currency. Rs.15,00,000/-

vi)Mental agony. Rs.05,00,000/-

vii)Misc. charges. Rs.01,50,000/-

3.The respondent/defendant had resisted the suit by pleading that suit is false, as respondent/defendant had never made the order for the supply of sanitary articles; further pleaded that the respondent had purchased the agriculture land from Ch.Riaz Bajwa etc and payment was made through draft No.LDC-005231/75 dated 30.11.1999.

4.Out of the divergent pleadings of the parties, the following issues were framed on 30.05.2002 which are as under:-

i)Whether the plaintiff had been sending the assignments of the goods at the given price to the defendant, on credit, at later’s request.?

OPP

ii)Whether the plaintiff is entitled to decree for recovery of suit money on the various accounts and heads as narrated.? OPP

iii)Whether the plaintiff has no cause of action.?

OPD

iv)Whether the suit is barred by law.? OPD

v)Whether the defendant is entitled to special cost, if so, to what extent.? OPD

vi)Relief.

5.The parties in order to prove their case, led their respective evidence. The learned trial court after evaluating the evidence of both the parties, dismissed the suit filed by the appellant/plaintiff vide judgment & decree dated 22.06.2006.

6.The learned counsel for the appellant has argued that right of cross-examination on DW-1 was struck down by the learned trial court and examination-in-chief of DW-1 can not rebut the statement of Chief Executive of the appellant’s company. Learned counsel has further stated that the Chief Executive is legally authorized to institute the suit under Order XXIX Rule 1 of Civil Procedure Code. Adds that the impugned judgment of the learned court below is based on misreading and non-reading of evidence and as such the same is not sustainable in the eyes of law and that the impugned judgment is based on surmises and conjectures.

7.On the other hand, the learned counsel for the respondent raised a preliminary objection that appeal is time barred. It is argued that the judgment and decree was passed on 22.06.2006, the appellant filed an appeal on 18.09.2006, however, the office raised certain objections on the appeal and ultimately appeal was returned for removing said objections within specified time of three days whereas appeal was presented on 04.11.2008 after removing of said objections. Learned counsel has further argued that the suit as well as the appeal was filed through Ch.Riaz Mehmood Bajwa, Chief Executive of the Company but no authorization letter is available on the record, i.e. either with suit or instant appeal, therefore, the appeal is not competent on this score alone and the same is liable to be dismissed. Adds that the respondent put his defence to the appellant/plaintiff and he admitted plea of the respondent/defendant; that during

cross-examination PW-1 deposed that Company resolution was passed for filing the suit whereas the same was not filed with the suit so the appellant was not authorized to file the suit as well as the appeal and as such the same is liable to be dismissed.

8.We have carefully gone through the record and considered the submissions of the learned counsel for the parties.

9.First of all we will decide the preliminary objection raised by the learned counsel for the respondent that the appeal was filed by the appellant against the impugned judgment and decree, on 18.9.2006, upon which office raised certain objections on the appeal and ultimately the appeal was returned to the appellant for removing the said objections within specified time of three days whereas the appeal was presented by the appellant on 04.11.2008 after removing the objection that the present appeal is time barred. The Hon’ble Supreme Court of Pakistan in the case of Farman Ali v. Muhammad Ishaq and others (PLD 2013 Supreme Court 392) while interpreting Rule 9 and 9-A of the High Court Rules and Orders held that a revision which was originally filed within time prescribed by law but was deficient in some respect and such deficiencies were not supplied and made up in the given time, cannot be termed to be barred by time. Rule 9-A of the High Court Rules and Orders is reproduced as under:-

9-A. A list of petitions, appeals etc. ordered to be returned shall be notified on the Notice Board and petitions, appeals, etc. not received back within seven days of the publication of the list shall be placed before the Judge of the High Court for order on a date to be notified by including such petition in a motion cause list. It is clarified that any delay in placing such petition

before the Court or issuing the list shall not furnish any justification for non-receipt of the returned petition in time and non-compliance of the objection taken within time specified by Deputy Registrar (Judicial)”.

In view of the dictum laid down by the Hon’ble Supreme Court of Pakistan in the above cited judgment, the present appeal is within time as the same was filed within the prescribed time period for filing appeal before this Court, therefore, preliminary objection raised by the learned counsel for the respondent is over ruled.

10.Admitted position in the present case is that the Chief Executive had filed a suit for recovery whereas from the averments of plaint as well as appeal, it appears that it is not mentioned in both i.e. suit and appeal, that how and under which capacity, the Chief Executive was legally authorized to file a suit on behalf of private limited company. The Chief Executive of the appellant company, Ch.Riaz Mehmood, PW-1 clearly stated during cross-examination that company had passed resolution but said document was not filed with the suit. We have noticed that the said Chief Executive was not authorized by the Board of Directors of the Company by means of a resolution passed in a meeting of the Board of Directors. Law requires that the person instituting legal proceedings on behalf of the Company incorporated under the Companies Ordinance, 1984 should be duly authorized through a resolution passed by the Board of Directors in a meeting of the Board of Directors duly convened for the purpose. It is held in the case of “Mamdot (represented by six heirs) v. Messrs Ghulam Nabi Corporation Ltd” ( PLD 1971 Supreme Court 550) which is as under:-

“Suit on behalf of Company by a person (Director-in- charge of Company)----Not competent unless he is so authorized by a resolution passed by Company’s Board of Directors---Meeting of Directors not duly convened unless due notice of it given to all Directors.”

Whereas learned counsel for the appellant has put lot of emphasis that under Order XXIX Rule 1 of Code of Civil Procedure, 1908 the Chief Executive was legally authorized to institute the suit. Order XXIX, Rule 1 of C.P.C is reproduced as under:-

“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”.

11.From the bare reading of Order XXIX, Rule 1 of C.P.C., it appears that Rule 1 of Order XXIX of C.P.C allows the person to sign or verify on behalf of the corporation validly instituted and does not authorize the institution of suits, it needs to reiterate that appellant/plaintiff company is a private limited company incorporated under the Companies Ordinance, 1984 and its Chief Executive should be duly empowered/authorized through a resolution by the Board of Directors to exercise and perform powers to institute. Reliance is placed on the case reported as “Mamdot (represented by six heirs) v. Messrs Ghulam Nabi Corporation Ltd, Lahore” (PLD 1971 SC 550). Therefore, we hold that in the eyes of law, the plaint as well as appeal was filed incompetently.

12.The appellant in order to prove company’s claim, himself appeared as PW-1 whereas respondent/defendant, Muhammad

Jahangir appeared as DW-1 who brought on record certified copies of plaint (Exh.D.1), order of temporary injunction (Exh.D.2) and order dated 05.11.2001 passed on application for withdrawal of amount (Exh.D.3). The said DW-1 was not cross- examined despite opportunities offered to the appellant/plaintiff. The record shows that examination-in-chief of DW-1 was recorded on 03.4.2006 and the case was adjourned on the request of the learned counsel for the appellant/plaintiff, thereafter cost was also imposed on the appellant/plaintiff and lastly due to non-appearance of the appellant/plaintiff, his right of cross-examination was closed on 05.6.2006. The examination- in-chief of DW-1 remained un-rebutted. The evidence brought on record by the respondent/defendant in rebuttal of the claim of appellant/plaintiff remained consistent with what he stated in the written statement. The respondent/defendant put his defence to PW-1, namely, Riaz Mehmood, who during cross- examination had admitted that he knows defendant from 1999 when agreement to sell was executed between him, his wife and the defendant along with his brother and he had received Rs.20,00,000/-as earnest money from the defendant and his brother, he also admitted that defendant and his brother have filed a suit for specific performance of agreement against him and his wife. From perusal of Exh.D.1 (suit for specific performance) it reveals that draft No.LDC-005231/75 worth Rs.20,00,000/-was given as earnest money to the defendant. It will be relevant to mention here that Exh.D.1 (suit for specific performance) was filed on 03.4.2006, which proves that payment of Rs.20,00,000/-was made through draft No.LDC-005231 dated 30.11.1999 on account of agreement to sell. It will thus be noticed that the appellant/plaintiff has neither produced any despatch book nor any witness from Courier Company to prove

that a notice was served on the respondent/defendant. We also noticed that the appellant/plaintiff had produced original notice (Exh.P.3) in evidence whereas it is not mentioned in the said notice that copy is retained in office for further and necessary reference. The appellant has failed to prove that any notice was given to the respondent. The appellant while appearing as PW-1 had stated during cross-examination that respondent/defendant had given written order qua preparing and supplying the goods whereas neither said written order was produced in the court nor such fact was mentioned in the plaint. It is settled proposition of law that if a party makes a claim and does not produce evidence to support his claim, said claim would fail and as such the appellant/plaintiff has failed to prove its claim by leading cogent and reliable evidence.

13.Since the suit as well as well as the present regular appeal was filed by a person who was not authorized to file the same on behalf of the appellant company, as held by the Hon’ble Supreme Court of Pakistan in the case of “Mamdot (represented by six heirs) v. Messrs Ghulam Nabi Corporation Ltd” (PLD 1971 SC 550) the authorization to file a suit becomes fatal to the maintainability of the suit.

14.For the reasons. discussed above, the appeal being not maintainable under the law as well as on merits, is accordingly dismissed with no order as to costs.

(Ali Baqar Najafi) (Aalia Neelum) Judge Judge

Approved for reporting.

Hamid/*