1. DORAH PATEL, J.-The first respondent is a Company incorporated under the Pakistan Companies Act, 19.13 and I will refer to it in this judgment as the Company. The objects of the Company were, inter alia, to acquire and take over the business of Karam Chand Thapar and Brothers (Coal Sales)
2. Limited and the seven founder members of the Company included His Highness the Nawab of Bhopal, Nawabzada Rashidul Zaffar of Bhopal and one Mr. Karam Chand Thapar, who we were told controlled and managed Karam Cband Thapar and Brothers (Coal Sales) Limited, which owned, a factory in Mughalpura known as the Dry Ice and Carbonic Gas Factory- The Company wanted to buy this factory and sought the permission of the Controller of Capital Issues Pakistan for this purchase. The Controller of Capital Issues sanctioned the purchase on the condition that the Company would not pay in case to Karam Chand Thapar and Brothers (Coal Sales) Limited for this purchase, therefore, the Company purchased this factory by issuing to Karam Chand Thapar and Brothers' (Coal Sales), Limited 4,122 paid up shares of the Company. The result of this transaction was that Indian Hindus owned more than five thousand shares in the Company, whilst His Highness the Nawab of Bhopal and Nawabzada Rashidul Zaffar of Bhopal owned ten thousand and one hundred shares respectively. Later His Highness sold five thousand shares to a foreigner who never became an enemy subject. His' Highness died in 1960 and Nawabzada Rashidul Zaffar died in 1961. I will refer to them as the deceased, and on their death their shares devolved on their legal heirs, but as these legal heirs did not take any steps to have themselves registered as members of the Company, the shares were shown in the Company register of members in the names of the deceased. Mr. Iftikhar explained that this was on account of litigation in the High Court at Karachi between the legal heirs of His Highness. But this litigation was disposed of several years ago, yet the shares are still shown in the Company's register of members in the names of the deceased. The Indian Hindus, on the other hand, had started selling off their shares to Pakistanis, but as they held 848 shares at the time of the 1965 war with India by a notification of the West Pakistan Government dated 27-9-1965, the Company was taken over under rule 181 of the Defence of Pakistan Rules, 1965 as an enemy concern. However, on representations made by the Company, by another notification dated 17-1-1966, the name of the Company was deleted from the lift of enemy firms, but the 841 shares owned by the Indian Hindus shareholders remained vested in the Custodian of Enemy Property, who sold them to one Mr. A. R. Siddiqui in 1969. Mr. A. R. Siddiqui was also elected as Director of the Company, but after becoming a Director, according to the appellants, he sold off all his shares whilst according to the Company he remained a nominal shareholder in the Company.
3. Be this as it may, as the shares of the deceased remained in the Company's register of members on the names of the deceased, on the out--break of the 1971 war with India, the Company had again become an enemy firm within the meaning of rule 172(2) (c) of the Defence of Pakistan Rules, 1971. No steps, however, were taken by the Federal Government for a long time for taking over this Company as an enemy firm. But long after the cessation of hostilities, by a notification dated 6-11- 1973, the Federal Government notified that the assets of the company as well as of the Dry Ice and Carbonic Gas Factory had vested in the Custodian of Enemy Property as both these businesses were enemy firms.
4. Mr. A. R. Siddiqui made representations against this notification (to which I will refer as the impugned notification) but as his efforts were unsuccessful; he filed a writ petition on behalf of the Company in the Lahore High Court in 1971 "challenging the action of the Government in holding the Company as an enemy firm." This writ petition was dismissed by a learned Judge of the High Court on 14-6-1974 on the ground that the petitioner had an adequate alternative remedy under Martial Law Regulation No. 70 of 1970. And, for the purpose of this appeal, it is sufficient to point out that the Company then filed an application before the Special Tribunal constituted under paragraph 6 of Martial Law Regulation No. 70 of 1970 in order to challenge the impugned notification.
5. The impugned notification was challenged on many grounds, including mala fides and the Company also contended that the impugned notification was void, because it had been passed without hearing it. The Special Tribunal rejected these objections and as it took the view that a Company of which any member or shareholder was an enemy subject wag an enemy firm, it held that the real question for consideration in the case was whether any shareholder or member of the Company was an Indian national. Now, as explained earlier, 5,100 shares stood in the names of the two deceased in the Company's books, and as both the deceased were admittedly Indian nationals, the Company's defence was that an administration suit had been filed in the High Court in Karachi for the administration of the assets of one of the deceased namely His late Highness the Nawab of Bhopal and that this suit had been compromised. The Special Tribunal examined the evidence about this compromise and observed that its effect was that the five thousand shares standing in the name of the late Nawab on the date of his death :- "Were not excluded from the purview of the administration suit, but eventually the. Court, in agreement with the Administrators' report, assigned specific shares in favour of the respective claimants, some of whom were Indian Nationals. Since succession is never in abeyance, it shall be presumed that the Indian nationals who became entitled to specific shares in the applicant- Company, became entitled to them with effect from the date of death of His Highness Nawab Hamid Ullah Khan."
6. The Special Tribunal also considered the question of the devolution of the shares of the other deceased and held that they had been inherited by his widow, sons and daughters, who were all Indian nationals. Accordingly, in view of this conclusion that many shareholders in the Company were enemy subjects within the meaning of rule 172 of the Defence of Pakistan Rules, 1971, the Special Tribunal dismissed the Company's application by its well considered order dated 3-12-1974.
7. The Company challenged the Tribunal's order in a writ petition in the Lahore High Court. The petition was contested by the appellants who denied all the allegations made against them, including the allegation of mala fides. The learned Single Judge, who heard this writ petition, rightly held that the principal question in the writ petition was whether the shares of the deceased could be said to be owned by enemy subject, therefore, the learned Judge examined the provisions of the Companies Act, 1913 and Articles 42 to 44 of the Company and observed :- "The effect of this survey of law on the subject is that in the present case the succession to the membership or shareholding of two Indian nationals who died' before 1962, could not take place as a matter of course. Three important conditions had to be observed before claiming any such status for them. The first was their own consent to become members or shareholders of the Company. There is no evidence that they consented to become members. Secondly, the fulfilment of the procedural requirements of the law already set out. Thirdly, the approval of the Directors to register them as members, which they were not under any obligation to give. Therefore it has to be held that the petitioner was not when the impugned notification issued an enemy firm because none of its member, shareholder or Officer was an Indian national or enemy."
8. In view of this conclusion, the learned Judge held that the impugned notifica--tion was illegal and ultra vires and granted the Company a declaration that it was not an enemy firm.
9. The appellants filed a petition for leave against this judgment, and leave was granted by this Court on 17-12-1976 in order to examine the question whether the learned Judge had correctly applied the Defence of Pakistan Rules, 1971 (hereinafter called the said Rules) to the facts of the case.
10. As Mr. Lone submitted that the learned Judge had erred in holding that the first respondent was not ' an enemy firm within the meaning of rule 172 of the said Rules, it is neces3ary to examine this rule.
11. It reads; "172. Definitions.-In this Part ;
(1) "enemy subject" means-
(a) any individual who possesses the nationality of a State at war with, or engaged in military operations against, Pakistan, or having possessed such nationality at any time lost it without acquiring another nationality, or
(b) any body of persons constituted or incorporated in or under the laws of such State ;
(2) "enemy firm" means--
(a) any enemy subject who is carrying on any business in Pakistan, or
(b) any firm, whether constituted in Pakistan or not, of which any member or officer is an enemy subject and which is carrying on business in Pakistan, or
(c) any company,, whether incorporated in Pakistan or not, of which any member, shareholder or officer is any enemy subject, and which is carrying on business in Pakistan, or
(d) any firm, whether constituted in Pakistan or not, of which any member which in the opinion of the Federal Government is carrying on business in Pakistan-
(i) under the control whether direct or indirect of any enemy subject, or
(ii) wholly or mainly for the benefit of enemy subjects generally or any class of enemy subjects or any individual enemy subject ;
(3) .--------------------
(4) .----------------------
(5) -----------------------."
12. It is obvious from a perusal of this rule that a company became an enemy firm even if its members or shareholders was an Indian National at the date of the impugned notification, and so if the deceased were shown as the Company's members in the Company's register of members on the date of the impugned notification, it is clear that the Company was an enemy firm. Unfortunately, this aspect of the case escaped the attention of the learned Judge, who only examined the question whether the legal heirs of the deceased bad become members of the Company, and as they had not complied with the provisions of Article 43 of the Company, which prescribes the manner in which the heirs of a deceased member can become members of the Company, the learned Judge held that these legal heirs had not become members of the Company and that the Company was not an enemy firm. Now, according to Mr. Lone, on this finding that the legal heirs of the deceased had not become the members of the Company, the learned Judge should have held in view of Article 43 that the deceased continued to the members of the Company with the result that the Company was an enemy firm at the relevant date. Secondly, according to Mr. Lone, the provisions in the Company's Articles that the heirs of deceased members could become members of the Company only by complying with the formalities prescribed in the Articles was invalid, because it was against the principles of Muhammadan Law. Mr. Lone's third and alternative submission was that the learned Judge had placed upon the words "member" and "shareholder" in rule 172 the same meaning which they had in company law, but according to learned counsel, these words had to be construed independently of Company Law and had to be given the widest possible meaning in order to give effect to the objects of the Defence of Pakistan Ordinance, 1971 (hereinafter called the saidOrdinance), therefore, the further submission was that these words were wide enough to include the legal heirs of the deceased, even though they had not taken any steps to have themselves registered as shareholders in the Company's register of members.
13. I would first examine the meaning of the word "member", and Mr. Iftikhar submitted that the word "member" had been defined in section 30 of the Companies Act, and as the Legislature is presumed to be aware of the laws, if it had intended to alter the meaning of the word "member" as defined in the Companies Act, it would have added the definition of the word "member" to the many definitions contained in section 2 of the said Ordinance and in rules 2, 14, 38 and 42 of the said Rules, but as it did not; the submission was that the Legislature did not want to alter the meaning of this word as defined in section 30.
14. Section 30 of the Companies Act reads; "30.-(1) The subscribers of the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration shall be entered as members in its register of members.
(2) Every other person who agrees to become a member of a Company, and whose name is entered in its register of members, shall be a member of the Company."
15. Apart from the subscribers of the memorandum of a company, this definition does not define how a person can become a member of a Company. That is left to agreement between him and the Company, which means that the question whether a person is a member of any particular Company or not must depend upon the Articles of Association of that Company, because the Company is bound by its own Articles of Association, therefore, in the instant case also; in order to determine whether the legal heirs of the deceased are members of the Company, we have to examine its Articles, and as I will presently show, the legal heirs of the deceased are not members of the Company, because they have not taken any steps to become members of the Company.
16. Nor is there any provision in the Companies Act by virtue of which these legal heirs could have become members of the Company, despite their failure to comply with the provisions of the Company's Articles. In order to overcome this difficulty, Mr. Lone submitted that the meaning of the word "member" in clause (c) of sub-rule 1 of rule 172 of the said Rules was wider than that of the word "member" in the Companies Act and could therefore include the legal heirs of a deceased member. But, as submitted by Mr. Iftikhar, if the Legislature had intended to alter the meaning of the word "member" in this or any other manner, it would have enacted R accordingly. As it did not, I cannot do better than quote here a passage from the judgment of Hamoodur Rehman, J. (as he then was) in Abdul Barn and others v. West Pakistan Soil Reclamation Board, Lahore and others (PLD1966SC451). The question in this -case was whether the words "occupier's rates" in the Punjab Soil Reclamation Act, 1972 had to be given the same meaning as ink the Canal and Drainage Act of 1873. In answering this question in the affirmative Hamoodur Rehman, J. (as he then was) observed; "Where certain words have been given a statutory definition in one statute and the same words are used in a similar connection in a later statute then, in the absence of any contrary indication in the later statute, it may be presumed that the same meaning attaches, to the said words."
17. I respectfully agree with this dictum. I also do not find anything in the said rules to indicate that the Legislature had intended to alter the meaning of the word "member" in the said Rules, the more so, as the meaning which this word bears in the Companies Act has become the ordinary meaning of the word "member", when used in connection with membership of a Company.
18. I observed that the legal heirs of the deceased had not become members of the Company, because they had not taken any steps in this respect, and the steps to be taken are contained, according to both the learned counsel, in Article 48 of the Company's Articles of Association.
19. Further, as according to Mr. Lone, this Article had also been misread by the learned Judge, it is necessary to examine it in details as well as Articles 42 and 44. But, before I do so, I would observe here that these Articles are somewhat similar to Articles 21, 22 and 23 of Table A of the Companies Act.
20. Articles 42, 43 and 44 read :- "42. The executors or administrator of a deceased member or the person or persons to whom succession certificate, or letters of administration as the case may be, has been granted by a competent Court in respect of shares, held by such deceased member shall be the only persons recognised by the Company as having any title to the shares registered in the name of such member . . . . . Before recognising any executor or administrator or legal representative the Directors may require him to a grant of probate, or "letters of administration" or succession certificate or other legal representation . . . . . It shall be lawful for the Directors to dispense with the production of probate or latters of administration or such other legal representation upon such terms as to indemnity or otherwise as the Directors in their absolute discretion may consider necessary.
43. Any person entitled to any share by way of transfer, succession or otherwise shall apply to the Company to have his name registered in the Company's Register of Shareholders and thereupon the Directors may demand such evidence to prove his title as may seem satisfactory to it and on proof of 'this, the name of the transferee, successor etc., shall be entered into the register of the Company but before such entry is made the original member of the Company shall be deemed to remain holder of the shares.
44. . . . . . Any person becoming entitled to or to transfer shares in consequences of the death or . . . .
21. Upon producing such evidence that be sustains the character in respect of which he proposes to act under this Article, or of his title as the Directors think sufficient, may with the approval of the Directors (which they shall not be under any obligation to give) be registered as a member in respect of such shares, or may, subject to the regulations as to transfer herein--before contained transfer such shares."
22. It is a common ground between the learned counsel that neither the heirs nor the executors of the deceased nor the heirs themselves had taken any steps under these Articles for transferring the shares of the deceased to the names of their heirs, therefore, as I observed earlier, none of the heirs had become members of the Company or rightly held by the learned Judge. But, as the learned Judge held that the heirs of the deceased had not become members of the Company, he should have examined the further question, as to who were the members of the Company at the date of the impugned notification, and precisely because the heirs of the deceased had not become members of the Company, the obvious question which required examination was whether the names of the deceased could have been struck off from the register of members maintained by the Company under section of the Companies Act. And I may explain here that this section imposes an obligation on all companies to maintain a register of members containing, the particulars specified in the section. The particulars include the details of the shareholdings of every member and the date "at which any person ceased to be a member"; and the effect of section 40 is that these entries in the company's register "shall be prima facie evidence" of the shares held by a member, therefore, as according to Mr. Iftikhar, the deceased had ceased to be the members of the Company on their death, the Company should p have produced its register of members in support of this plea, and its failure so to do leads to an adverse inference against the submission that the deceased had ceased to be its members. It is, however, not necessary to go further into this aspect of the case, because Mr. Iftikhar did not even claim that the names of the deceased had been removed from the Company's register of members, and it is also not possible to envisage how their names could have been removed from this register, as no application was ever filed for the transfer of their shares to the names of their legal heirs. Mr. Iftikhar also did not` refer us to any provision in the Companies Act under which the Company could have removed the names of the deceased from its register of members, but he assumed that death automatically terminated the membership of a company. It does for some purposes, but it cannot for all purposes, because the activities of a company cannot be suspended on the death of a member.
23. Thus, for example, a company may have occasion to enforce calls against its members, and this presents no problem with regard to members who are alive. But in the case of members who are dead, no matter how diligent the legal heirs be to have the shares of a deceased member transferred to their names, it would take time to produce the requisite documents such as probate in support of such a claim for transfer. Again, if during this period a company has to enforce calls against its members, and if a deceased member cannot be treated as a member of the company, the Company would be powerless to enforce its claim in respect of shares owned by a deceased member. Similarly on the view that membership of a company termintes on the death of the member, the legal heirs of a deceased member would not for example be entitled to claim the benefit of right shares which may be issued by a company on account of an increase in its capital.
24. As this would be both unjust and absurd some provision has to be made for the interregnum between the death of a member and the transfer of his shares to the person or persons entitled to them on his death, and as the Companies Act does not contain any provision in this respect, companies have to make their own rules in the light of their own requirements, therefore, Mr. Lone referred us to the second part of Article 43 of the Company's Articles of Association and submitted that this Article bad been misread by the learned Judge.
25. This Article relates to the transfer of shares "by way of transfer, succession or otherwise" and prescribes that the name of the transferee shall be entered as a member in the company's register of members if the claim for the transfer of the shares is allowed. The Article then reads : "but before such entry is made the original member of the company shall be deemed to remain holder of the shares." There is absolutely no ambiguity about these words. Their effect, as submitted by Mr. Lone is that a deceased member has to be treated as a member of the Company in the absence of anything to the contrary in the other Articles of Association or in the Companies Act. And Mr. Iftikhar was not able to refer us to any provisions to the contrary in the Companies Act or in the Company's Articles of Association. But I must emphasise here that my observations have reference to the narrow question whether Article 43 in its entirety is valid for the purpose of determining the nationality of the shareholders of the Company.
26. It is true that this Article creates a legal fiction, but it is the Company which has created this fiction and do not see how it can be permitted to` challenge it. Nor could Mr. Iftikhar advance any argument to show that this legal fiction was not valid. And in my humble opinion, this fiction furnishes a reasonable solution of what would otherwise be a dilemma, therefore, similar provisions are not infrequently found in the Articles of Associations of commercial and industrial companies.
27. Thus, for example, Buckley in his Treatise on the Companies Act (12th Edn., page 817) observes; "A member of a joint stock Company is not in the legal sense a partner with his co-members ; his death does not, as in a partnership dissolve his connection with the Company. Until something is done to transfer the interest, the dead shareholder, that is, his estate-remains a member, and his representatives are, on the one hand, entitled to receive dividends, and on the other are, in their representative capacity, liable for calls, and a notice served at the registered address of the dead shareholder will (if the company is not aware of his death) have the same effect (in the absence of express provision) to the contrary in the articles as if he were living. As between the deceased share holder and the Company, the estate of the deceased shareholder is liable to the same extent as the shareholder himself would have been liable if living. Out of his estate must be paid, of course calls made in his lifetime, and also calls made after his death, so long as the shares are left in his name, and as respects the latter the liability is not confined to obligations incurred before his death."
28. Similarly, Palmer in his Company Law (22nd Edn)., para. 37.09 states; "Although the articles generally provide that calls are to be made on the "members", a deceased member, whilst his name remains on the register, is to be treated as a continuing member so far as may be necessary to make his estate liable."
29. It is strange that there is no pronouncement by this Court or by the High Courts of this country on the precise question under consideration, therefore, Mr. Lone with his usual industry referred us to English cases in support of his submission and I would only refer here to the three leading cases which are to be found in all the books.
30. I would begin with the case reported as In re : Agriculturist Cattle Insurance Company ((1870) 5 C A 725) which is more than a hundred years old. The company in this case was a joint stock Company which was governed by a deed of settlement, but nothing turns on this and one of the questions in the case was whether a dead member could be treated as a shareholder for the purpose of claims by the. Company for calls on the shares of a deceased shareholder. After analysing the difference between a firm and a joint stock Company, James, L. J., observed at page 735 :----- "Starting then, with this view of the relation which exists between the associates in a joint stock adventure, the presumption is that the death of a shareholder makes not the slightest difference, either in right or liability ; that the executor of a deceased shareholder, who succeeds in point of property to the share, takes it (of course in his executorial character) on exactly the same terms and conditions as every other owner of a share-equal benefit, equal liability ; and the deed has therefore to be scrutinized, not to see whether it gives or creates such equal benefit and liability but whether it takes away the one or releases the other."
31. After examining the Articles of the Company's deed of settlement, James, L. J., then observed; "The object of these provisions is so plain, so reasonable, so natural, that it is impossible to draw from them any implication adverse to the conclusions to be drawn from the nature of the association or the rest of the deed. The dead shareholder remains-that is, his estate remains -a member, but the association would of course like something more than a dead man or an estate . . . . . ."
32. Lindiey, L. J., had occasion to examine the same question nearly fifteen years later in New Zealand Gold Extraction Company (Newberyvautin Process) Limited v. Peacock ((1894) 1 Q B 622). The plaintiff-Company had made a call of 10 shillings of each share and notice of this call was sent to all the plaintiff's shareholders. One Mr. Peacock was a member of the plaintiff company, and as its Articles prescribed that notices to members should be sent to the address registered by them with the plaintiff a notice of the call was sent to Mr. Peacock at his registered address which was returned by the Postal authorities to the plaintiff-Company with the endorsement "gone--away".
33. Mr. Peacock was, however, dead at the date of the issue of this notice and whilst his executors were not aware that he owned shares in the plaintiff-Company, the plaintiff was not aware that Mr. Peacock had died. The plaintiff thereafter went into voluntary liquidation, and as the liquidator had meanwhile learnt of Mr. Peacock's death, he called upon the defendants as his executors to pay the call. As they declined, there was litigation and the contention of the defendants was that no notice of a call had been served, because Mr. Peacock died before the call was made and it was further contended that no call could be made upon a dead man nor could any notice of a call be given to a dead man. In upholding the liquidators' claim Lindley, L. J.. Observed at page 631 :----- "After his death, and before the fact of his being a shareholder came to the knowledge of his executors, the call was made, and it is said that, he being dead, the directors could not make a call on him, and that, his executors not having been made members of the Company in his place there was no member in respect of his shares to whom notice could be given in accordance with the articles, and that consequently the call cannot be enforced against his estate. Notice of the call was sent addressed to him at his registered place of address, but it came back to the company marked `Gone away'.
34. The question is whether under these circumstances his executors are liable to pay the call out of his assets. Let us go by steps. He became a member, but his executors did not become members, and were not bound to become members against their will. The Articles are so drawn that they do not provide for dead men, nor for notice to dead men, nor for notice to any body in the place of dead men.
35. It is said that it is part of the bargain between the shareholders and the Company that if a member dies and the Company are going on and have no notice of his death, his estate cannot be called upon to pay calls. On the construction of the articles, I think it is obvious that no such bargain was intended. We must put a reasonable construction on the articles, and I have no doubt that the key to the difficulty is to be found in the suggestion made by Mr. Buckley, and that until notice of his death reaches the Company calls may be made in respect of his shares by notices sent to his registered address just as if he were still a member. I have no doubt at all that that is the true construction of the articles. In order not to make these articles absurd, we must hold that a deceased member remains a member until notice is given."
36. Devey, L. J., concurred with this judgment and observed that - "a deceased member or his estate remains a member for the purpose of the articles so long as his name remains on the register without notice to the Company of his death."
37. In James v. Auena Ventura Nitrate Grounds Syndicate Limited ((1896) 1 Ch. 456), the question was not of a claim by a company against a shareholder who was dead, but of a claim by the estate of a deceased shareholder. The facts of the case were that the defendant had increased its share capital and the shares which were being issued had to be offered in accordance with the defendant's Articles to "members" in proportion to their existing shares. One Mr. James was a shareholder of the defendant, but he died before the new shares were actually issued. His widow proved his will and as soon as she learnt about the allotment of new shares she applied to the defendant's directors for the new shares which she claimed in the right of her deceased husband.
38. As the directors repudiated her claim, she issued a writ against the defendant for a declaration that in view of the defendant's resolution about increase of its capital, she was entitled as the personal representative of the late Mr. James to an allotment of shares on the basis of his share-- holding at the date of his death. Chitty, J., dismissed the action "holding that the plaintiff was not a "member" of the Company" and this was on the view that a "member" did not mean a deceased member. In allowing the appellant's appeal, Lord Herschell observed at page 464; "It is no doubt the fact that, strictly speaking, although Mr. James's name was, at the time of the resolution of April, 1893, still on the register, he was not, being dead, a member of the Company. It seems to me, however, perfectly*clear that the word "member", as used in some of the articles of the company, must be held to include those whose names are on the register, though they are no longer living. The article, for example, which in the case of this company is sub--stituted for Article 72 of Table A authorizes the directors to distribute the profits of the Company "between the members" by way of dividend. It cannot be doubted that they would be warranted in paying the proportionate share of the profits to the representative of a deceased member, although the word "member" only. Is used, or that such representative would be entitled to claim that dividend. For this purpose the deceased member must still be regarded as a member within the meaning of the article. In a somewhat similar case the late Lord Justice James said "the estate is the member". This is, of course, a metaphorical expression, but it sufficiently indicates the legal situation of the parties.
39. Again, where a liability arises with respect to the shares-as, for example, where a call is made on the "members"--it seems equally free from doubt that the liability attaches to the estate of the deceased member, and must be discharged by his representative, even though, being deceased, he is no longer, strictly speaking, a member of the. Company. Other instances might be cited where the articles require this effect to be given to the use of the word "member", but those I have given will suffice. I can see no sufficient reason why the estate of a deceased member should be subject to the burdens of membership and should not have every pecuniary benefit accruing to the shares in respect of which he is registered."
40. In British India Banking and Industrial Corporation Ltd. Vithaldas Dhanjl & Co. v. Shiva Chedumbarlah (AIR 1934 Bom. 469), the Bombay High Court expressly approved of the view taken by Davey, L. J., in the New Zealand Gold Exhibition Co. (Newbery Vautln Process)'s case, and, although it is a judgment of first impressions, the same view was taken by Patna High Court in Mt.
41. Sumitra Kuer and others v. Sitamarhi Sugar Works Ltd. And others (AIR 1938 Pat. 287). However, the Allahbad High Court appears to have struck a discordant note in People's International Bank Ltd. v.
42. Ram Chander Shukul and others (AIR 1930 All. 50). I say appears, because the question was of the liability of a deceased contribu--tory, and the learned Judges have expressed their regret in their judgment that they were "not in a position to find out, at present, in what capacity (the contributory) was held liable, "therefore, I can only refer to the facts as far as they can be gathered from the judgment. These facts appear to be that the plaintiff, which was a bank, had gone into liquidation some years before the dispute between the parties in the suit. The District Judge of Allabbad was the Court under whose supervision the plaintiff was being wound up at the date of the suit, and as one Chandra Bali Shukla, the father of one of the respondents, bad been a shareholder of the plaintiff, the District Judge had passed an order directing him to pay the amount due from him as a contributory. But Chandra Bali Shukla had died before this order was passed. This was discovered when the order was sent to a mofussil Court for execution. In this background, the respondents filed a suit for a declaration that the order passed against their father as a contribu--tory was not binding on them "in as much as Chandra Bali Sbukla was already dead at the date of the order." The liquidator of the plaintiff, who contested the suit, contended that the impugned order was valid, presumably on the ground that death did not terminate the relationship between a company and its shareholders. The question thus raised was of great importance, but the learned Judges of the High Court rejected it with the observation; "We are not in a position to find out, at present, in what capacity Mr. Chandra Bali Shukla was held liable. Assuming that be was a contributory, an order against a contributory can be valid when it is obtained in his lifetime. There can be no doubt as to the liability of his estate, but to fix it with liability those persons who represent the estate should be brought on the record before an effective order may be made."
43. I respectfully agree with the observation that the amount due from Chandra Bali Shukla as a contributory could only have been recovered by taking proceedings against his estate, but I am somewhat puzzled by the observation, because the judgment states that the impugned order bad been passed against Chandra Bali Shukla and not against the respondents. Further, as the plaintiff was in liquidation, I am also intrigued by the observation of the learned Judges that they were not in a position "to find out . . . In what capacity Mr. Chandra Bali Shukla was held liable." Be this as it may, even though I agree with the view that the heirs of a deceased shareholder are not liable for the debts of the deceased, except to the extent of the estate inherited by them from the deceased, this does not mean that "an order against a contributory can be valid only when it is obtained in his life time." With respect, the shareholders of a company may be scattered through the length and breadth of a country. They may even die abroad. How then is a company to know of the death of one of its shareholders ? Again, even if a company learns of the death of a shareholder bow is it to know who are the heirs or executors of the deceased shareholder ? Normally, a Company has no means of tracing the executors or heirs of a deceased member, except in the unlikely event of these heirs or executors informing it of their willingness to discharge the liability of the deceased member out of his estate, therefore, on the view taken by the learned Judges it would be almost impossible for a company to enforce its claim against deceased shareholders. As that would be both absurd and unjust, with the utmost respect, I am unable to agree with the view of the learned Judges of the Allahbad High Court, and I have no hesitation in following the view of that great Judge, Lindley, L. J., and the view taken in the other English cases to which I have referred.
44. This examination of the case-law supports Mr. Lone's submission. It is also obvious that the provisions in Article 43 of the Company's Article that a member "shall be deemed to remain holder of the shares" despite his death is based on judgments which go back to more than a hundred years, and the interpretation thus placed on these and similar words by the superior Courts for so long a period of time should not be lightly disturbed. Accord--ingly, in all the circumstances discussed, I have no doubt that this provision that a deceased member "shall be deemed to remain holder of the shares" is valid, subject to the qualification I suggested earlier. But this conclusion is fatal to the Company's case.
45. Mr. Iftikhar then feebly submitted that this Article was of no avail to the appellant's case because a dead person could not have any nationality. The submission overlooks the nature of a deeming clause, and the words in Article 43 which I quoted are a deeming clause. The effect of these words is that a deceased member has to be treated as if he were alive, and this means that R the shares in dispute in this appeal were owned at the relevant time by persons who were Indian nationals, therefore, it is clear that the Company was an enemy firm on the date of the impugned notification.
46. Mr. Lone then attempted to persuade us to hold that the word "share--holder" was wide enough to include the legal heirs of a deceased shareholder who was a Muhammadan, as held by the Special Tribunal. But in view of my finding that the deceased remained members of the Company at the relevant time, it is not necessary to examine this submission and I would leave it open for determination on a more suitable occasion. However, as I do not agree with the finding of the learned Judge that the Company was not an enemy firm, it becomes necessary to examine the Company's plea that the impugned notification was mala fide. The plea, in this respect, is somewhat complicated. The Company had dismissed two of its employees in 1973. Their names were Mr. Bashir Ahmad and Mr. Islam Din, and, according to Mr. Iftikhar, these disgruntled employees had illegally colluded with officials in the Government to have the impugned notification issued, and, in this connection, the further plea was that the said Mr. Bashir Ahmad was a relation of the then Federal Finance Minister, and that the Political Secretary of the said Minister had warned the Company to re-instate Mr. Bashir Ahmad but as Mr. Siddique had declined to comply with the Finance Minister's request to re-instate his relation, the submission was that Mr. Bashir Ahmad and Mr. Islam Din had illegally connived with the Federal Finance Minister to declare the Company an enemy firm. Mr. Lone vehemently denied these allegations and submitted that the Company had been mismanaged. In support of this submission, he relied on the reports of the enquiries conducted from time to time into the working of the Company and on the other evidence produced before the Special Tribunal and as the Special Tribunal had- rejected the allegation of mala fides on the basis of the evidence before it, learned counsel's further submission was that this Court was not competent, in its limited constitutional jurisdiction, to set asides the Special Tribunal's finding on a question of fact which was within the conclusive jurisdiction of that Tribunal, as the finding was supported by evidence.
47. The Special Tribunal was unable to accept the Company's plea about the alleged conclusion between the then Federal Finance Minister and Mr. Bashir Ahmad, because this plea was not supported by any independent evidence. The Special Tribunal then pointed out that the enquiries "made by the Government led the Government to the belief that the (Company) was not being administered properly." And as the reports of these enquiries were also challenged on the ground of mala fides the Special Tribunal repelled this contention with the observation that the Enemy Property Management Board had conducted its enquiries in 1972, long before the dismissal of Mr. Bashir Ahmad and Mr. Islam Din. Additionally, after scrutinizing the Company's balance-sheets, the Special Tribunal held that a resolution of the Company's Board of Directors dated 5-9-1968 had enabled the Company to write off nearly Rs. 5 lacs, and that in consequence the Company had "become disentitled to claim repatriation of the said amount payable by I. M. Thapar of India. Thus the applicant-Company contravened the pro--visions of section 10 (of the Foreign Exchange Regulation Act, 1947)". Finally, after reviewing the balance-sheets of the Company, the Special Tri-- bunal observed: "The assets of the Company were worth more than five lacs of rupees in 1949. As would appear from the profit and loss account Exh. R/68, applicant-Company oversince 1957 was running on loss.
48. The accumu--lated loss comes to Rs. 7,60,610 on 30-2-1972. When Government took over the assets and properties of the Company, they made a profit of about Rs. 10 lacs during short period of 10 months. Ordinarily, a private enterpriser is expected to give better performance than an official Custodian. The irresistible conclusion is that the balance sheets since 1955 to 1972 do not reflect the real financial position of the Company. If income from 1956 to 1972 is calculated proportion--ately to the income during the ten months when it was under Government control, the irresistible conclusion is that the management had been draining away every large amounts and was maintaining fictitious records. To say the least, this was a case in which the property, which should have been treated as enemy property, were being mismanaged. The Government's decision to take it over for administration and disposal was, therefore, fully justified."
49. Mr. Lone took us through the evidence in support of the Special Tribunal's findings against the Company, and it is clear that this is not a case of no evidence, nor was Mr. Iftikhar able to refer us to any evidence which had been misread or ignored by the Special Tribunal.
50. Mr. Iftikhar then reminded us that the Company had been declared an enemy firm during 1965 emergency by a notification dated 21-9-1965, but as this notification had been withdrawn on 17-7- 1964, learned counsel's submission was that there was no justification for declaring the Company an enemy firm again during the 1971 emergency, and further as the impugned notification had been issued long after the cessation of the hostilities with India, the further submission was that this delay in declaring the Company an enemy firm was itself a strong piece of evidence in support of the Company's allegations of mala fides against the appellants. The argument assumed that the Government was justified during the 1965 emergency in withdrawing the notification declaring the Company to be an enemy firm, and as Mr. Lone challenged this assumption, Mr. Iftikhar pointed out that the notification of 17-1-1966 by which the Company had ceased to be an enemy firm had been issued in accordance with the policy decision of the Federal Government that Indian Muslims should not be treated as enemies for the purpose of the Enemy Property Laws, and even Mr. Lone admitted that the Federal Government made a policy decision during the earlier emergency as submitted by Mr. Iftikhar. But his contention was that the Government was entitled to change its policies in the light of the changing political situation. Mr. Lone's sub--mission is correct. And as the Courts do not interfere with policy decisions of the Government, the fact that first appellant had revised its policies during the 1971 emergency is neither any evidence of mala fides, nor does it furnish any ground whatsoever to the Company for challenging the impugned notification.
51. Mr. Iftikhar's further submission was that the impugned notification had been issued under rule 185 of the said Rules, but as this rule did not take away the right of an aggrieved party to be heard, learned counsel's submission was that the impugned notification was illegal because it had been passed without hearing the Company and further according to learned counsel, if the Company had been given a hearing, it would have been able to convince the appellants that no case had been made out for taking it over under rule 185. Now although the impugned notification was passed without hearing the Company, the Company was entitled to challenge it under paragraph 6 of Martial Law Regulation 70 of 19'0, before the Special p Tribunal, and as it exercised this right, Mr. Lone submitted that the alleged illegality in the impugned notification (which he denied), had been cured in view of the rule laid down by this Court in Collector, Sahiwal and 2 others v. Muhammad Akhtar (1971 SCMR 681). In this case, Hamoodur Rahman, C. J., observed at page 684:- "The Courts in Pakistan have, however, taken the view that where the giving of a notice is provided for by the statute itself, the failure to give such a notice is fatal and cannot be cured. But where there is no specific statutory provision and reliance is only placed on the princi--ples of natural justice and audi alteram parten, there if at some stage or other the person aggrieved has been given a fair opportunity of presenting his point of view, then the defect, if any, in the initial order may be deemed to have been curedif the statutory provision for notice be of a mandatory nature, then an order without any notice would be wholly void; but if there be no such provision or if the provision be merely of a directory nature, then, wherever a violation of this principle of natural justice is alleged, the Court may call upon the party alleging the same to prove prejudice before it sets aside the order, Such prejudice would obviously not be there if it is found that the party had been actually given a full hearing by the appellate or revisional authority and afforded every opportunity of showing cause against the allegations made. To the same effect is the view of the Peshawar High Court in the case of Charsaddah Sugar Mills Ltd. v. Government of Pakistan PLD 1971 Pesb. 210."
52. Mr. Lone also drew our attention to the fact that the view taken in this case had been re-affirmed by the Full Court in Sind Employees' Social Security Institution and another v. Dawood Cotton Mills Ltd, and Sind Employees' Social Security Institution and another v. Adam,Jee Cotton Mills Ltd (PLD1977SC177). As the observa--tion of Hamoodur Rahman, C. J., in the Collector of Sahiwal's case thus state the settled law, next question for determination is "whether in words of Hamoodur Rahman, C. J., the Company had been given a fair oppor--tunity of representing his point of view" by the Special Tribunal. Now in my opinion, there cannot be any doubt about the answer to this question. The Special Tribunal rejected the Company's claim after giving it full opportunity to present all its pleas, and Mr. Iftikhar also did not have any grievance on this score. In these circumstances, it is not necessary to examine the learned counsel's submissions on the proper construction of rule 185, of the said Rules, as the respondent has been fully heard by the Special Tribunal.
53. I would, therefore, set aside the judgment under appeal, recall the writ issued by the High Court and restore the order of the Special Tribunal, but for the reasons given herein. The appeal is thus allowed, but as it turned on a difficult question of law on which there was no pronouncement by the superior Courts of the country, I would not award any costs.
54. ANWARUL HAQ, C. J.-I agree.
55. MUHAMMAD AKRAM, J.-I agree.
56. MUHAMMAD HALEEM, J.-I agree.