Judgment Sheet
IN THE HIGH COURT OF SINDH AT KARACHI
High Court Appeal No. 140 of 2005
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Date |
Order with signature of Judge |
Present :
Mr. Justice Nadeem Akhtar
Mr. Justice Sadiq Hussain Bhatti
Appellant : M/S Rice Export Corporation of Pakistan,
[now Trading Corporation of Pakistan (Pvt.) Ltd.],
through Mr. Ashfaq Hussain Rizvi, advocate.
Respondents : M/S European Asian Agencies, Mohammad Younus,
Fawad Raza and Abid Raza, called absent.
Date of hearing : 08.09.2014.
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J U D G M E N T
NADEEM AKHTAR, J.– This appeal is directed against the judgment delivered and decree drawn on 02.05.2005 in the appellant’s Suit No.903/1985, whereby the said Suit was dismissed on the ground that the same was not competently filed on behalf of the appellant-corporation.
2. Relevant facts of the case are that Suit No.903 of 1985 was filed on 07.11.1985 by the appellant Rice Export Corporation of Pakistan (‘RECP’), now Trading Corporation of Pakistan (Pvt.) Ltd. (‘TCP’), against the respondents for recovery of Rs.32,711,365.76. The plaint was signed and verified by one S. M. Humayoon Akhtar, the General Manager of RECP. Upon service of summons, the respondents filed their written statement denying the claim of the appellant. On the basis of pleadings, three issues were framed whereafter evidence was led by the parties. Meanwhile, an application was filed by one of the defendants seeking rejection of the plaint on the ground that the Suit had been filed by an incompetent person without proper authorization / resolution from RECP. However, the said application was not pressed, and by consent it was decided that the question of maintainability of the Suit will be argued by the learned counsel for the parties. After hearing the learned counsel on this point, the learned single Judge concluded that the Suit was not competently filed as the person who had signed and verified the plaint had not been authorized to do so through a resolution by the Board of Directors of RECP. In view of the above finding, the Suit was dismissed by the learned single Judge through the impugned judgment and decree.
3. Syed Ashfaq Hussain Rizvi, learned counsel for the appellant, contended that in the normal course of its business, blanket authority used to be given by RECP to its officers to act on its behalf in order to safeguard its interest, and also to represent it in litigation before all forums. On our query, it was conceded by the learned counsel that no specific authorization or resolution from the Board of Directors of RECP was filed at the time of institution of the Suit in favour of the officer who had signed and verified the plaint. He, however, submitted that in the present case the officer who had signed and verified the plaint had the general authority to do so and to institute the Suit on behalf of RECP. The learned counsel referred to various inter-departmental memos and minutes of RECP in order to substantiate his above contention. It was urged that the material on record was not appreciated by the learned single Judge, and as such the ground on which the plaint was rejected is not sustainable. The learned counsel argued that if it is assumed that proper authorization had not been filed along with the plaint by RECP, such defect was merely a technical one and the same can be rectified in appeal. In support of his last submission, the learned counsel relied upon an unreported order passed by the Hon’ble Supreme Court of Pakistan on 01.03.2011 in Civil Appeal No.4-K/2009 (Trading Corporation of Pakistan V/S M/S Cargill Incorporated and others), wherein it was held that the defect of non-production of power of attorney before the civil Court at the time of filing of the plaint was of technical nature and was curable.
4. We have heard the learned counsel for the appellant at length and have carefully examined the material available on record. In order to appreciate the submissions made by him, we deem it necessary to briefly discuss the documents on which the appellant has placed reliance. Office note No.48 dated 18.09.1985 is available at page 269 wherein it is mentioned that the legal advisor of RECP had redrafted the plaint to be filed against the respondents for recovery of losses sustained by RECP, and approval from the Board of Directors was sought by circulation for approval of the draft plaint and filing the same before this Court as well as for payment of court fee and professional fee to the counsel. No officer was specifically proposed in this note to sign and verify the plaint or to institute the Suit. Through office note No.53 dated 23.09.1985, which is available at the back of page 269, the legal advisor was requested to have a second look at the draft plaint. Office note No.55 dated 24.09.1985 also available at the back of page 269, which is the last note before filing of the Suit, shows that the draft plaint had been approved and was sent to the legal advisor for preparation of “fair copy”. The subsequent notings are not relevant as they relate to mere forwarding of the signed amended plaint to the legal advisor in the years 1987 and 1988 ; whereas, the Suit was instituted on 07.11.1985 through the original pliant.
5. Between 24.09.1985 when the above mentioned last note for preparation of fair copy of the plaint was issued, up till 07.11.1985 when the Suit was instituted, there is nothing on record to establish that the officer who had signed and verified the plaint on behalf of RECP had been specifically authorized by RECP to do so or to institute the Suit on behalf of RECP. Even a request or recommendation to this effect in favour of such officer is not available on record. In any event, the learned counsel has conceded that no specific authorization or resolution from the Board of Directors of RECP was filed at the time of institution of the Suit in favour of the officer who had signed and verified the plaint.
6. By strongly relying upon the resolution dated 07.10.2003 of the Board of Directors of TCP, it was vehemently argued by the learned counsel that if there was any lacuna or defect, the same had been fulfilled / cured by this resolution. We have examined this resolution which is typed on the letterhead of TCP. It simply states that RECP had filed Suit No.903/1985 against the present respondents under the authority of its (RECP’s) Board of Directors ; RECP had been merged / amalgamated into TCP in pursuance of this Court’s order ; and, the Board of Directors of TCP ratify and resolve that Suit No.903/1985 had been filed with proper authorization. This board resolution was passed by the Board of Directors of TCP presuming that the Suit had been filed under the authority of the Board of Directors of RECP. In our opinion, this board resolution is of no significance as the Suit was instituted by RECP on 07.11.1985 admittedly without proper authorization, much prior to the passing of the above resolution by TCP.
7. Rule 1 of Order XXIX CPC specifically deals with the signing and verification of pleadings in Suits by or against corporations. Under this Rule, pleadings in Suits by or against a corporation are required to be signed and verified on its behalf by its secretary or by any director or other principal officer who is able to depose to the facts of the case. A corporation, being a juristic entity, can take decisions or act only through its Board of Directors, and an authority or authorization by or on behalf of a corporation is deemed to be valid and legal only when it has the sanction or approval by its Board of Directors. It is well-settled that pleadings by or on behalf of a corporation / company are not competent unless the person / officer signing and verifying the same is so authorized by the Board of Directors of the corporation / company. If any authority is needed on this point, reference may be made to the leading case of Khan Iftikhar Hussain Khan of Mambot (represented by 6 heirs) V/S Messrs Ghulam Nabi Corporation Ltd., Lahore, PLD 1971 SC 550, which has also been relied upon in the impugned judgment by the learned single Judge. In the instant case, RECP, being a corporation, was required to authorize either its secretary or any director or other principal officer to sign and verify the plaint and to institute the Suit on its behalf. However, this legal requirement was admittedly not fulfilled.
8. A perusal of the unreported order passed by the Hon’ble Supreme Court on 01.03.2011 in Civil Appeal No.4-K/2009 relied upon by the learned counsel for the appellant, shows that a copy of the power of attorney was available on record, and after perusing the same, it was observed by the Hon’ble Supreme Court that it may not have been produced at the time of filing of plaint due to inadvertence. It was held that the defect of non-production of power of attorney at the time of filing of the plaint was of technical nature and was curable. With respect to the learned counsel, the cited case is of no help to the appellant as there existed a power of attorney which was not produced at the time of filing of the plaint, but a copy thereof was available on the record before the Hon’ble Supreme Court. Whereas in the instant case, the appellant not only failed to produce / file an authorization or power of attorney at the time of filing of the plaint, but also failed to show us any document to this effect from the entire record of the Suit and this appeal. To our mind, the question of non-production / non-filing of proper authorization or power of attorney by the appellant due to inadvertence, does not arise in the present case. The facts and circumstances of the cited case, being clearly distinguishable, are not applicable here. Therefore, the above defect cannot be deemed to be a technical one or curable.
9. With all humility, we would like to express our considered view that only such defects can be cured by the appellate Court, or by the trial Court in some cases, which are not fatal to the proceedings. The defect in the present case was a fatal one in view of the law laid down by the Hon’ble Full Bench of the Supreme Court in the case of Khan Iftikhar Hussain Khan of Mambot (supra). After giving due consideration to all the aspects of the case, we agree with the findings of the learned single Judge which do not require any interference. The appeal is, therefore, liable to be dismissed.
10. Foregoing are the reasons of the short order announced by us on 08.09.2014, whereby this appeal was dismissed with no order as to costs.
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J U D G E
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J U D G E