ORDER SHEET
IN THE HIGH COURT OF SINDH, KARACHI.
R.A. No. 103 of 2014
(Old R.A.No.103 of 2014 Hyd)
Applicants: Sindh Travel services (Pvt.) Ltd. and others
through Syed Naeem Bukhari and Mr. Ajaz
Janjua advocates.
VERSUS
Respondent No.1: Normeen Shafi through
Ms. Farida Mangrio Advocate.
Respondents No.2 & 3: None present for respondents No.2 & 3.
Dates of hearing: 04.05.2016, 18.05.2016, 03.06.2016 and
22.08.2016.
Date of announcement: 19.09.2016.
O R D E R
MUHAMMAD IQBAL KALHORO, J: Ms. Normeen Shafi, who is respondent No.1 in this revision application, being alarmed by the alleged sale of her 434 shares in Sindh Travel services/Applicant No.1 (‘the company’) founded by her father, in favour of applicants Nos.2, 3 and 4 namely Mian Naeem Afzal, Saleem Khawar and Naeem Tahir Saeed, filed a civil suit No.93 of 2005 for declaration, cancellation, accounts and permanent injunction against them in the Court of 5th Sr. Civil Judge Hyderabad. She has stated therein that after death of her father on 17.03.1996, her brother Amjad Safi (respondent No.2 here) though fraud and misrepresentation had secured a power of attorney from some of the share-holders of the company (which include her mother, sisters and brothers) in favour of applicant Naeem Tahir Saeed (the defendant No.5 in the suit). She was owner of 9% of shares in the company but had not received any income or dividends accruing thereon since death of her father. She in this regard lodged the claims and protested but to no avail. She further states that in January 2004 her brother Amjad Shafi approached her for a settlement, and made an offer along with four (4) cross-cheques dated 17.01.2004 amounting to Rs.12 lac as part payment of her shares and obtained her signatures on some blank papers and forms. She, however, at that time had made it clear to her brother, to which he had agreed, that unless valuation of her shares and company’s assets were determined, there would be no settlement. And if it did not happen, she would continue to remain owner of her shares. But thereafter despite her demands, oral and written, her brother failed to settle the issue and make balance payment as per correct value of her shares. She has denied any agreement of sale of her shares with the above named three applicants and has asserted that her brother is in collusion with them and is claiming to have prepared transfer deeds in respect of her shares in their favour. It is in this backdrop that she has sought (i) declaration to the effect that she is owner of her shares; (ii) cancellation of transfer deeds relating to her shares in favour of these three applicants and; (iii) directions to the defendants to declare all the assets of the company and give complete accounts thereof.
2. Initially, her plaint was returned by the trial court for want of territorial jurisdiction vide order dated 22.11.2005. Learned appellate court also confirmed the said view in appeal on 06.09.2006. But this court in civil revision application set aside both the orders on 16.05.2011 and remanded the case to the trial court for decision on merits. The said decision was challenged by the applicants before the Honourable Supreme Court in C.P.No.1138 of 2011 during the pendency of which the trial court dismissed the suit on merits hence the same was withdrawn by the applicants on 27.11.2012.
3. It may be noted that respondent’s brother namely Amjad Shafi (defendant No.1 in the suit) did not appear in the trial and was declared ex-parte on 14.11.2011. The applicants, however, contested the suit. In the written statement, they denied the case of the respondent/plaintiff. They also raised objection to the territorial jurisdiction of the court at Hyderabad on the ground that subject transaction dated 30.01.2004 whereby shares of the respondent (Ms. Normeen Shafi) were purchased by them took place at Islamabad, she received payment there and also executed transfer deeds in their favour at Islamabad where not only company’s registered office was located, but company’s sole property, that is, ‘Tures Motel’ was also situated. It is further stated by them that the respondent (the plaintiff) had written letters to different authorities withdrawing all her allegations against her brother Amjad Shafi. In 2003, the applicants had purchased shares from other family members of the respondent and her shares were purchased in January 2004 at her own desire expressed through a letter by her to the Board of Directors of the company and at the time of the purchase, she came in Islamabad with share certificates that she surrendered, signed transfer deeds and other documents in presence of the witnesses and received pay orders. Shares of her brother Amjad Shafi were purchased in October 2004 and lastly shares of her sister Nazmeen Shafi were purchased in the court on 10.03.2007. That transfer of shares and change in the members of Board was communicated to SECP and duly approved by it. And before purchasing the entire shares of the company, its sole property, the Tures Motel, was already in their possession on lease. Lastly they have stated that no cause of action has accrued to the respondent to file suit against them and if there is any, it is against her own brother against whom she has an alleged claim of balance payment.
4. The trial court framed the issues on the points of maintainability of the suit; execution of transfer deeds in respect of subject shares; company’s accounts; and as to whether the plaintiff/the respondent had received consideration of her shares. The parties led evidence in support of their respective cases. Respondent, however, could not succeed and her suit was dismissed vide judgment dated 03.10.2012. The appeal preferred by her against that judgment was allowed vide impugned judgment dated 08.02.2014 prompting the applicants to file instant revision application.
5. Besides rendering oral submissions in favour of their respective cases, learned counsel for the parties have also submitted written synopsis on the salient features of the case. Learned counsel for the applicants in support of his points relied upon the citations reported in PLD 1975 SC 624, 2003 CLC 1196, 2004 YLR 577, 2012 CLC 389 (Sind), PLD 2012 Lahore 445, PLD 2008 Karachi 536, 2003 YLR 3309 (Karachi)PLD 1980 Karachi 477, PLD 2003 SC 159, 2000 MLD 1117, PLD 1982 Karachi 71, PLD 1996 367, 2012 CLC 1663, 2012 CLC 912 Sindh at 917, 2013 YLR 443 Sindh, 2012 CLR 120 Lahore, 2005 MLD 657, 1984 CLC 1456 and PLJ 1986 Karachi 73.
Whereas to support her contentions, learned counsel for respondent No.1 relied upon the case laws reported in PLD 1983 SC 53, AIR 1923 Lahore 484, 1982 CLC 1275, PLD 1989 Karachi 404, 2003 SCMR 132, 2007 CLD 637, 2007 CLD 648, 2004 SCMR 1259.
6. I have considered their submissions, perused the record and have very respectfully taken guidance from the case laws cited at the bar. From a perusal of plaint and evidence of respondent No.1 (Ms. Normeen Shafi), it becomes obvious that her main grievance is against her brother (Amjad Shafi, defendant No.1 in the suit) who, she alleges, by committing fraud had secured a power of attorney from the share-holders of the company including her in favour of defendant No.5 (Naeem Taher/applicant No.3); that despite her complaints and protests, he did not give her any dividends on her shares; and that he finally approached her for a settlement on her shares, and then without settling their correct value, he gave her four cheqes of an amount of Rs.12 (twelve) lac and obtained her signatures on some blank papers. That she (thereafter) repeatedly demanded from said brother the correct value of her shares but to no avail. She in such backdrop has claimed in her evidence to have been defrauded by said brother (Amjad Shafi). She has denied selling her shares to the applicants and has stressed that no agreement in this behalf was executed with them or transfer deeds signed by her in their favour. Record reflects that in support of her said assertions, she has examined only her sister Nazmeen Shafi at exhibit 32 (she is the one who had subsequently sold her shares to the applicants in the court), who has simply deposed that the plaintiff has not received any amount of her shares, which in fact is not the respondent’s case even. She does not seem to support her sister on the material facts of her case as in her evidence she has not stated that her sister has been defrauded by their brother Amjad Shafi, or that she had not sold her shares to the applicants or she had sold her shares subject to final determination of their value as affirmed by the respondent. So virtually except the word of the respondent, there is no material in support of her case. In contrast, the applicants in the evidence have produced all the necessary documents, which, among others, are the sale agreement, respondent’s letter to the Board of Directors of the company showing her desire to sell her shares, the transfer deeds dully stamped and the letters written by her to various entities, official and private, withdrawing her complaints against her brother Amjad Shafi, and expressing resolution of the dispute with him. These all documents are signed by the respondent and in my view are sufficient to show that she of her own choice had entered into sale of her shares and had received the money in this regard. Her contention that such sale was conditional to a final settlement of value of her shares is not supported by any oral or documentary evidence. It may be noted that she has not denied her signatures on all these documents but claims that her signatures were obtained by her brother on blank papers. Such claim seemingly does not inspire confidence and more so in such event, burden in terms of Article 117 and 118 of Qanhun-e-Shahadit, 1984 was on her to prove that she had signed all those papers blank. The record, however, does not reflect that except her own word she has produced any evidence in this behalf. It is also relevant to note here that in the plaint she has alleged fraud, manipulation and misrepresentation against her brother Amjad Shafi and dispute with him on account of non-payment of dividends on her shares, but then surprisingly at his instance she put signatures and that too prematurely on a number of blank papers and did not realize its consequences. Such assertion of the respondent is simply untrustworthy. The documents, which also include transfer deeds, contain unequivocally the signatures of respondent, which she has not denied, and there is no reason to infer that she signed them blank or without knowing the consequences thereof. Notably her remaining siblings (as they are 5 brothers and 4 sisters) also did not come forward to support her case on the point of fraud or on the fact that she had received lesser value of her shares than due at the relevant time. During the course of arguments, in order to appreciate the case of respondent, I had asked her learned counsel to explain the circumstances under which she had to surrender possession of her share certificates to the applicants; her reply was that it was done on her brother’s assurance of final settlement. But, in additional synopsis submitted later on, learned counsel has taken the stance that after death of respondent’s father the company’s documents either came in her mother’s possession, or the person managing documentary affairs of the company and then the company was run and managed by her brother Amjad Shafi implying that she had never remained in possession of her share certificates. From such faltering stance, it becomes obvious that the respondent has no justification to show as to why she is not in possession of her share certificates, if she did not surrender them at the time of sale. And against it the applicants’ possession of these certificates and other documents lends credence to their claim of acquiring the same from respondent only after she sold them.
7. Learned counsel for the respondent in her arguments also contended that sale of the respondent’s shares was against the scheme provided in clauses 14 to 17 of Articles of Association of the company. She also maintained that requirement of section 76 of the Companies Ordinance, 1984 was mandatory for transfer of shares to take effect. And since the same was not complied with in the present case, the entire exercise of selling her shares was illegal and invalid. I have read the subject clauses and ibid provision of law. Clause 14 is to the effect that no transfer of any shares shall be made or registered without the previous permission of the directors who without assigning any reason could refuse to grant such permission. Clause 15 speaks of the amount of fee to be charged on such transfer. Clause16 evinces that no share can be sold, mortgaged or otherwise disposed of by any member to a non-member without the previous sanction of the directors. The instrument of transfer has to be accompanied by the certificate of shares is the condition envisaged in clause 17. Admittedly, before the subject sale of the shares dated 30.01.2003, the applicants had already bought shares of most of the shareholders and were themselves directors of the company as is evident from Form-A dated 16.12.2003 (Annual Return of Company Having Share Capital available at page No. 291 of the file). Therefore they were not in need of any formal permission for transfer of subject shares in their favour. There is also no question of shares being sold by the member to the non-members to invoke clause 16. The fact that the applicants are in possession of the share certificates indicates that instruments of transfer were accompanied by these certificates hence there is no violation of clause 17. The record does not reflect either that transfer of respondents’ shares was in breach of section 76 of the Ordinance. Respondent herself through a letter showed her desire to sell shares and subsequent to which transfer deeds were prepared, which are duly stamped. Deputy Director Law at Company Registration Office at Karachi Shoukat Hayat Ali Zai (exb.33) has produced all necessary documents including Form-A showing transfer of shares of respondent in favour of the applicants duly recorded. All these documents have neither been challenged by the respondent nor has she doubted their authenticity.
8. In view of foregoing discussion, I am of the view that impugned judgment of the appellate court is contrary to evidence and relevant law and therefore is liable to be set aside. Resultantly, this revision application is allowed. The impugned judgment is set aside and to that of the trial court whereby the suit was dismissed is restored. There is no order as to costs.
JUDGE