' C.M.A. No,4424 of 2003 is an application for stay filed by the plaintiffs whereas .C.M.A. No,5284 of 2003 is one for vacation of the same filed by defendants Nos.1, 2 and 3 (as an ex parte stay had already been granted to the plaintiffs) and hence they are being disposed of together.
2. Briefly stated the facts of the matter per the plaintiffs are that the defendant No,7 viz. Jahangir Siddiqui & Co. Limited is a public limited company in which initially plaintiff No,1 i.e. Jahangir Siddiqui, International Finance Corporation and M/s. Bear Sterns Netherlands Holding B.V. Held a sizeable number of shares being subscribers to the public offering of the Company's shares in 1992.
They had also entered into a joint venture agreement whereby they had come to a certain understanding vis-a-vis their respective rights and obligations as major shareholders of the Company. However, in the year 1996 Bear Sterns sold its shares in the defendant No,7 to defendant No,1 Company which were transferred in the name of defendant No,4 being a sister company of the former with the result that the joint venture agreement aforementioned was terminated and the plaintiff No,1, International Finance Corporation, and defendant No,1 entered into another agreement dated 19-6-1997 in order to regulate their rights and obligations as shareholders of defendant No,7 (hereinafter shareholders agreement). Thereafter in accordance with this agreement plaintiff No,1 transferred some of his shares to his son and wife plaintiffs Nos.2 and 3 respectively with the result that they collectively hold 11,216,977 fully paid up shares of defendant No,7 whereas the defendants Nos.2 and 3 presently hold 6,719,997 shares of aforementioned Company which were transferred to them by defendant No,1 as well as later on purchased per the terms of the Shareholders Agreement (hereinafter Albaraka Shares). The entire controversy between the parties is as regards the interpretation of section 9 of the Shareholders Agreement which postulates inter alia that whenever any party to the Agreement proposes to sell its shares in the Company to a third party, the other parties would have the right of first refusal. It is the plaintiff's case that the defendants Nos.1 to 4 through their authorized representative Mr. Khalid Bhaimian commenced negotiations with the plaintiff No,1 for sale of the Albaraka shares and in this regard some correspondence was exchanged between the parties, copies of which are available on record as Annexures C, D and F, which per the plaintiff are evidence of the fact that Mr. Khalid Bhaimian had accepted the plaintiff No,l's offer for purchasing the Albaraka shares at Rs.23.47 per share but later on backed out. Thereafter the plaintiff No,1 received a letter dated 4-8-2003 (Annexure "I") from Crosby Limited. Hong Kong indicating that they had entered into a transaction for purchasing the Albaraka shares through Mr. Munir Kamal, (defendant No,5). Per the plaintiff such conduct on behalf of the defendants Nos.1 to 4 was totally mala fide as on the one hand they were negotiating with the plaintiff No,1 whereas on the other they were trying to sell the shares to third parties. As a further example of such mala fide conduct, the defendants Nos.1 to 4 issued instructions to the defendant No,7 Company vide letters dated 6-8-2003 to transfer the Albaraka shares from the C.D.C. Account of defendant No,7 to that of first Crescent Modaraba, defendant No,6, copies of such letters are filed as Annexures K, L and M. According to the plaintiff, since the shares are book entries recorded in the Register of Central Depository Company, Pakistan Limited and once the shares are transferred from the' account of defendant No,7 to that of First Crescent Modaraba the title would also pass to the latter company, since section 11 of the C.D.C. Act creates an absolute bar on the rectification of the register hence the effect of such transfer would result in the defendants Nos.1 to 4 ceasing to have any title over the shares which would also defeat the plaintiff's preemption rights in terms of the shareholders agreement per section 11 aforementioned.
Finally, it is the plaintiff's case that per the mandate letter dated 29-5-2003 issued to defendant No,5 by the defendants Nos.1 to 4, the former has been authorized to sell the Albaraka shares at an expected price of Rs.12 per share subject to the preemptive rights of the plaintiff No,1 and hence they are entitled to the right of first refusal at this price. Hence the suit for specific performance of the agreement between the parties contained in the Shareholders Agreement viz. The right of first refusal at Rs.42 per share; permanent injunctions etc., restraining the defendants Nos.1 to 5 from either selling the shares to anybody else and transferring them to the account of First Crescent Modaraba. Interim injunction on the above lines was granted vide order dated 11-8-2003 in C.M.A.
No,4424 of 2003 filed for this purpose by the plaintiffs.
3. In the written statement filed by the defendants Nos.1, 2 and 3 the execution of the Shareholders Agreement between the parties thereto are not denied and neither the exchange of correspondence filed along with the plaint. However, it is these defendants' case that the preemption rights which are being claimed by the plaintiffs at Rs.42 per share re the Albaraka shares have never crystallized in their favour per section 9 of the Shareholders Agreement.
According to these defendants such pre-emption rights would only accrue in favour of any party when the party proposing to sell its shares has received a bona fide a third party offer for purchase of the said shares at a price and on terms acceptable to the seller and who then in exercise of its right to sell extends an offer to the other parties the right to match the said price as per the bona fide third party offer. Since these defendants have never received any bona fide third party offer or accepted the same there could not be any offer for sale of the shares to the other parties to the Shareholders Agreement. Hence per the answering defendants no cause of action has accrued to the plaintiffs for filing of the suit in terms of the Specific Relief Act.,
4. As far as the allegations regarding transfer of the Albaraka shares from the sub-account maintained by the defendant No, 7 to that maintained by defendar No,6 these defendants' case is that such transfer is the right and in terms of the relevant law would not amount to a transfer of title in favour of defendant No,6.
5. Finally, as far as the plaintiffs' assertion that Mr. Kahlid Bhaimian, the authorized person of the defendants Nos.1 to 4 had offered Albaraka shares to the plaintiffs at a price of Rs.23.47 per share being the average price quoted at the Karachi Stock Exchange during the preceding three months, the same has been totally denied by these defendants. Consequently, it has been prayed by the answering defendants that the suit be dismissed. Similarly, C.M.A. No,5284 of 2003 has been filed for the purpose of seeking the vacation of the interim order passed earlier in C.M.A. No,4424 of 2003 in favour of the plaintiffs.
6. Mr. Iqbal Bawany, learned counsel for plaintiffs Nos. 2 and 3 has firstly submitted that the defendants Nos.1 to 4 had in principle decided to disinvest their shares and offered the same at a price of Rs.23.47 per share to the plaintiff No,1 being the average price as quoted at the Karachi Stock Exchange during the immediate preceding months which is evidenced vide letter dated 21- 2-2002 addressed to plaintiff No,1 by Mr. Khalid Bhaimian the authorized representative of these defendants, a copy of which is filed as Annexure "D". Such offer was accepted by the plaintiff No,1 per letter dated 16-12-2002, Annexure "E". However, Mr. Khalid Bhaimian vide Fax dated 18-12-2002 declined to sell the shares at Rs.23.47 per share on the basis that this would be at a substantial discount of the then net asset value of the company and as also these defendants were not distress sellers. In any event, per learned counsel, the exchange of the afore mentioned correspondence amounted to an agreement between the plaintiff No,1 and Albaraka as regards the sale of Albaraka Shares in principle to the former the only item remaining was the determination of the price by the parties. Hence, the pre-emption rights as contained in section 9 of the Shareholders Agreement had crystallized in favour of the plaintiff No,
1. Per section 9(b) of the same, which provides inter alia, that whenever any party proposes to sell its shares it shall extend a first offer of purchase to the other parties. Per learned counsel the price of the shares proposed to be sold is to be determined in accordance with the formula given in section 9(e) viz. (i) a bona fide third party offer and where this is not available then (ii) at the daily average price of the shares quoted on the Karachi Stock Exchange during the immediate preceding three months. Where neither of the above prices are available/ applicable then the price would be as determined by an independent third party chosen by the offerer and the offerees. Per learned counsel, none of the foregoing methodologies was adopted either by defendants Nos.1 to 3 or by the plaintiff No,1 but the price was unilaterally fixed by the former themselves at Rs.42 per share vide letter dated 29-5- 2003 issued to Mr. Munir Kamal, defendant No,5 who was the agent of the defendants Nos.2 to 3, copy of which has been filed as Annexure "J". Per learned counsel the said mandate letter authorizing Mr. Munir Kamal to sell the Albaraka shares at a price expectation of Rs.42 per share binds the defendants Nos.1 to 3 to sell the said shares to the plaintiff No,1 at this price as the agreement to sell had already been concluded much earlier. Learned counsel has referred to section 2(7) of Sale of Goods Act according to which the shares of a limited company are goods and per section 9(1) the price in a contract of sale may be fixed by the contract or may be left to be fixed in a manner thereby agreed or may be determined by a course of dealing between the parties. In support of his submissions learned counsel has relied upon Hysons Steel Mills Limited v.
Trading Corporation of Pakistan (PLD 1971 Kar. 492) and Pakistan State Oil Co. Ltd. v. Burmah Oil Co.
Ltd. (1987 CLC 272). Further learned counsel has submitted that although shares fall within the definition of goods under the Sale of Goods Act, the superior Courts have granted specific performance of contracts with regard to sale of shares as in the case of Bank of India Ltd. And others v. Jamsethji A.S. Chinoy and others (AIR (37) 1950 Privy Council 90), Jainarayan Ram Lundia v. Surajmull Sagarmull and others (AIR (36) 1949 Federal Court 211). As regards the general principle pertaining to the grant of injunctions etc., learned counsel has submitted that where substantial questions of fact have to be decided by recording of evidence, the Courts are required to preserve the suit properties until the decision of the suit. In support of which he has cited Bindeshawar Narayan Singh and others v. Managing Committee, Shri Sundar Lal Hindi High School and others (AIR 1982 Guhati 69) and Shaikh Muhammad Taqqi v. Muhammad Anwar Khan Ghori (1983 CLC 1085).
7. Learned counsel has further submitted in August, 2003 the price of the Company's Share had suddenly gone up to Rs.107.70 and hence the defendants Nos.1 to 3 were reluctant to sell the shares at the price of Rs.42 per share. In this context learned counsel has also referred to the letter written by Crosby Limited to the plaintiff No,1 dated 4-8-2003 (Annexure "I") which would show that these defendants were secretly trying to sell their shares in the open market in order to defeat the preventive rights of the plaintiffs. As a further example of such mala fide conduct, per learned counsel the defendants Nos. 1 to 4 issued instructions to the defendant No,7 company vide letters dated 6-8-2003 to transfer the Albaraka shares from the C.D.C. Account of defendant No,7 to that of First Crescent Modaraba, defendant No,6. Copies of such letters are filed as Annexures K, L and M.
According to learned counsel, since the shares are book entries recorded in the Register of Central Depository Company, Pakistan Limited and once the shares are transferred from the account of defendant No,7 to that of First Crescent Modaraba the title would also pass to the latter company, since section 11 of the C.D.C. Act creates an absolute bar on the rectification of the register. Hence the effect of such transfer would result in the defendants Nos.1 to 4 ceasing to have any title over the shares which would also defeat the plaintiff's pre-emption rights in terms of the Shareholders Agreement per section 11 afore mentioned.
8. Finally learned counsel has submitted that the written statement and counter-affidavit filed on behalf of defendants Nos.1 to 3 cannot be considered since they have been signed and filed by one Muhammad Suhail purportedly their attorney on the strength of three power of attorneys executed by Mr. Khalid Bhaimian in his capacity as the Managing Director of these defendants. Per learned counsel no board resolution has been filed authorizing Mr. Bhaimian to do so and neither have the memorandum and articles of association of these companies been filed wherein such power had been delegated to Mr. Khalid Bhaimian. Hence in the eye of law, these defendants are unrepresented before this Court. For this proposition, learned counsel has relied upon M/s. Muhammad Siddiq Muhammad Umer v. Australasia Bank (PLD 1966 SC 648), Abdul Rahim v. U.B.L.
(PLD 1977 Karachi 62) and Iftikhar Hussain Khan of Mamdot v. Ghulam Nabi Corporation Ltd. (PLD 1971 SC 550).
9. For all the foregoing reasons, learned counsel has prayed that the interim order passed earlier in favour of the plaintiffs be confirmed.
10. Mr. Muhammad All Saeed, learned counsel for plaintiff No,1 has supported Mr. Iqbal Bawany and adopted his arguments.
11. Mr. Sajid Zahid learned counsel appearing on behalf of the defendants Nos.1, 2 and 3 has on the other hand submitted that there are two methods whereby the Albaraka shares could be sold to any of the parties to the Shareholders Agreement. Firstly by consent between the parties at an agreed price and secondly through the mechanism provided in section 9 of the Shareholders Agreement. As to the first alternative, per learned counsel the correspondence on the record viz. Annexures D, E and F would establish that there was no agreement at all between the plaintiff No,1 and defendants Nos.1 to 3 as to any price at which the Albaraka shares could be sold to the latter and at the most this would denote that defendants Nos.1 to 3 did want to disinvest and had considered the plaintiff No,l's offer which was rejected. Per learned counsel the mandate given to Mr. Munir Kamal, Annexure "J", authorizing him to sell the Albaraka shares at a price of Rs.42.00 per share can hardly be termed as an agreement between the parties regarding the sale price of the shares. In support of this submission, learned counsel relied upon Sanwarmal Goenka v.
Soumyendra Chandra Gooptu (AIR 1981 Cal. 37). Secondly, as regards the mechanism in section 9 of the Shareholders Agreement this essentially postulates inter alia, that Albaraka (offerer) have obtained a bona fide third party offer for the shares in terms of section 9(e) and this has in turn been offered to plaintiff No,1 (offeree) in writing in terms of section 9(f). Per learned counsel, even this eventuality has not occurred since after the letter dated 18-12-2002 (Annexure F) written by Mr. Khalid Bhaimian to plaintiff No,1 whereby the price suggested by the latter was turned down, there is nothing on the record to establish that either any bona fide third party offer was received by Albaraka which was acceptable to them or the same was conveyed to the plaintiffs in terms of section 9(e) and (f). Per learned counsel neither Annexure "I" which is a letter dated 4-8-2003 from Crosby Limited to plaintiff No,1 regarding the purchase of Albaraka shares by the latter nor any other document on record would even remotely suggest that Albaraka had accepted a bona fide third party offer for the shares and in turn conveyed it to the plaintiffs per the requirements of section 9(e) and (f). Per learned counsel in so far as Crosby's letter is concerned, whilst a price was offered by this company for the Albaraka shares, it was not acceptable to the Albaraka Group and hence the matter ended in so far as Crosby was concerned.
12. Regarding the instructions issued by Albaraka vide letter dated 6-8-2003 addressed to defendant No,7 Company for transferring the Albaraka shares to the C.D.C. Sub-account of First Crescent Modaraba. Learned counsel has submitted that this amounted to the transfer of the Albaraka shares from one sub-account viz. That of defendant No,7 company to the other only and is a perfectly legal exercise. In this connection learned counsel submitted that before the Central Depository Company was established under the Act of 1997, the Albaraka shares scripts were kept with the defendant No,6 viz. First Crescent Modaraba and not with the defendant No,7 Company.
Subsequently, after the formation of the Central Depository Company there was no further requirement for the shares scripts to be maintained in physical form and hence the defendant No,7 company being a participant under the C.D.C. Act and the defendants Nos.2 and 3 being the account holders opened a sub-account with defendant No,7 company to keep the custody of the Albaraka shares, which is merely a book entry whereas the title in terms of section 4(5) of the Act vests in the sub-account holder. Thereafter, it was decided to move the shares from the account of defendant No,7 to that of defendant No,6. Consequently, the movement of Albaraka shares from one sub-account to the other does not mean that the title of the shares vests in any entity other than defendants Nos.2 and 3 per section 4(5) of the Central Depository Company Act, 1997.
13. As regards Mr. Iqbal Bawany's reliance upon section 9 of the Sales of Goods Act, Mr. Sajid Zahid has submitted that this is misplaced as this provision merely states that the price in a contract of sale may be fixed for the contract or may be left to be fixed in a manner thereby agreed or may be determined through the course of dealing between the parties. Per learned counsel since the parties never entered into any binding agreement i.e. There was no offer or acceptance there could not be any question of the consideration i.e. Determination of the price.
14. As to the power of attorney given to Mr. Khalid Bhaimian by defendants Nos.1 to 4, learned counsel has submitted that this is supported by the certificate from the company attaching relevant board resolutions of these defendants which had been filed subsequent to the written statement. Per learned counsel the purpose of a power of attorney is to ensure that the party on whose behalf the pleadings have been filed is being represented by the correct person, which has been clearly established through the afore mentioned board resolution/certificate. In support of his contentions, he relied upon Khyam Films v. Bank of Bahwalpur Ltd. (1982 CLC 1275), Muhammad Rafique v. Bawany Sugar Mills Ltd. (1999 M LD 3273), Fazal Rehman v. Khursheed Ali (2004 CLC 359) and Manager Jammu and Kashmir, State Property v. Khuda Yar (PLD 1975 SC 678).
15. For all the foregoing reasons, learned counsel has submitted that the interim stay earlier granted to the plaintiffs be vacated.
16. Mr. Nadeem Azhar Siddiqui, appearing for defendants Nos.4 and 6 has submitted that the role of these defendants is only to hold the custody of the shares in question and the transfer of the shares in the sub-account of the defendant No,7 to defendant No,4 (defendant No,6 has since merged with the defendant No,4) is perfectly legal in terms of the Central Depository Company .
Act, 1997. Per learned counsel despite such transfer the title to the shares are still with the defendant No,2, hence it would not be correct to say that where the custody of the shares is shifted the plaintiffs would have no remedy except damages and as much has not provided under section 11 of the Central Depository Company Act, 1997.
17. I have heard all the learned counsel and conclusions are as under:--
18. It would be seen that the entire controversy between the plaintiff No,1 and the defendants Nos. 1 to 3 is whether there exists a valid agreement between them as regards sale of the Albaraka shares to the plaintiff No, 1 at the price of Rs.42.00 per share. Such agreement, in my view, would entirely depend upon the interpretation of section 9 of the Shareholders Agreement which regulates the sale/transfer of the company's shares inter se as between the signatories to the same viz. Plaintiff No,1, International Finance Corporation and Dallah Albaraka (U.K.) Limited. Per section 9(b) of the Shareholders Agreement the parties extend to each other a first offer to purchase the shares of the company then owned by any of them which any party proposes to sell.
The price of such shares is to be determined in accordance with section 9(e) i.e. a bona fide third party offer received by the offerer failing which the average price of the shares quoted on the Karachi Stock Exchange for a period of three months prior to the offer. Where neither of these two hiethodologies are available for pricing the shares then the price would be determined by an independent third party chosen by the offerer and offerees. Further, per section 9(f) the procedure of offer and acceptance in respect of the shares is that the offer shall be delivered in writing to the offerees and shall remain in effect for 30 days from the receipt of such offer whicl shall include the number of shares offered, the price per share and in case of a bona fide third party offer a letter to that effect. Per section 9(g) an offeree shall notify the offerer and the other offeree in writing of its acceptance or its refusal within 30 days of receipt .Of the offer of shares and upon failure to do so within such period it shall be deemed that the offer is refused. Per section 9(h) upon receipt by the offerer. Of any notice for refusal of any offer or where offer is deemed to be refused the offerer shall offer the shares to the other offeree on the same terms and conditions which shall remain in effect for 14 days from the receipt of offer and finally per section 9(1) where both the offerees refused the offer or where such offer is deemed to be refused the ,offerer would be free to transfer the shares to any third party, following a bona fide third party offer or where this does not exist then on such terms and conditions as the offerer shall deem fit.
19. In view of the aforesaid provisions of the Shareholders Agreement regarding the sale/transfer of the ' company's shares it would now have to be seen whether there does exists a binding agreement between the plaintiff No,1 and defendants Nos.1 to 3 regarding the sale of the latter's shares to the former at the rate of Rs.42.00 per share. In this context, it appears that in the year 2002, the defendant No,1 had decidedto disinvest its shareholding in the company and accordingly Mr. Khalid Bhaimian its Chief Executive had written to plaintiff No,1 in such terms yide letter dated 21-2-2002 (Annexure "D") also at the same time referring to section 9 of the Shareholders Agreement regarding the right of pre-emption available to plaintiff No,
1. Thereafter, on 16-12-2002 (Annexure "E") plaintiff No,1 wrote to Mr. Kahlid Bhaimaian referring to their discussions in the matter regarding the latter's offer to purchase the shares and seeking further clarifications in this regard.
On 18-12-2002, (Annexure "F") Mr. Khalid Bhaimian responded by refusing such offer which according to him was at a substantial discount on the current net asset value of the company; hence, the plaintiff No,1 was requested to reconsider his offer. It appears that there the matter ended as there is nothing on the record to establish otherwise. Thereafter, on 29-5-2003 defendant No,1 appointed Mr. Munir Kamal, defendant No,6 (Annexure "J") as its Financial Advisor authorizing him to sell the shares at a price expectation of Rs.42.00 notwithstanding the sellers willingness to consider all offers in that area from prospective buyers. Such mandate letter was attached to the letter written by' Crosby Ltd. Dated 4-8-2003 addressed to plaintiff No,1 advising him that they had entered into a transaction to purchase the shares in question through Mr. Munir Kamal per the mandate letter. Consequently, it was queried whether the shares had been offered to plaintiff No,1 by the defendant No, 1 in terms of the Shareholders Agreement.
20. Upon a bare perusal of the afore mentioned correspondence on the record which has been admitted by the parties, it would be seen that it hardly fulfils the requirement of section 9 so as to create a binding agreement between the defendants Nos.1 to 3 and the plaintiff No,1 for the sale of the Albaraka shares to the latter at a price of Rs.42.00 per share. This is for the simple reason that neither has any offer been made by defendant No,1 in writing to the other signatories of the Shareholders Agreement per section 9(f) and nor have any of them accepted/rejected the said offer in terms of section 9(g). For that matter not even the price of the shares has been determined in accordance with section 9(e). In my opinion the correspondence on the record would at the most denote that initially some negotiations took place between the plaintiff No,1 and defendant No,1 as to the disinvestment of the latter's shares but the same did not achieve finality as the parties could not agree to a price for the shares. It was Mr. Iqbal Bawany's contention that the parties had taken a route other than section 9 of the Shareholders Agreement in order to reach an understanding regarding the sale of the shares. In fact according to learned counsel the parties had in principle agreed to the sale of the shares per Annexures D, E and F and only the price remained to be negotiated which was finally achieved through Annexure "J" the mandate letter given to Mr. Munir Kamal viz. At the rate of Rs.42.00 per share. I am afraid, with respect to learned counsel, the only attraction of this argument is its novelty because firstly in my opinion, section 9 of the Shareholders Agreement in no uncertain terms gives to each ofthe parties thereto a very valuable right of preemption as regards the sale/transfer of any parties' shares. Consequently, where any two parties do agree as to the price of the shares which are to be disposed by one in favour of the other, it would have to be with the concurrence of the third party since its right of preemption is involved. In this regard it is significant to note that the concurrence of the International Finance Corporation is entirely missing. Hence there is nothing on the record to establish that a route other than section 9 of the Shareholders Agreement was adopted by the parties to the same in order to create any right in favour of the plaintiff No,1 for purchase of the Albaraka shares. Secondly, even otherwise it would be seen that a binding agreement consists of an offer, acceptance and consideration and unless all of these ingredients are present no one can claim a binding agreement against any other person. As observed earlier, the initial correspondence exchanged between the parties in the year 2002 hardly amounts to an agreement since the offer given by plaintiff No,1 was not acceptable to the defendant No,
1. Again the mandate letter on its own or read with the Annexures D, E and F can again not amount to a binding agreement. I have no cavil with the argument advanced by Mr. Iqbal Bawany that according to the Sale of Goods Act the price between the seller and buyer can be determined through a course of dealing between the parties but such has not been demonstrated by the plaintiffs in this matter. The cases cited by learned counsel viz. Hysons Steel Mills Limited v. Trading Corporation of Pakistan and Pakistan State Oil Co. Ltd. v. Burmah Oil Co. Ltd. (supra) are not relevant to the facts of the present matter as in the first case it was found that a reasonable price for the goods in question has to be determined in accordance with section 9(2) of the Sale of Goods Act with reference to the market rate which had not been done and hence the Umpire's decision as to such price without reference to the market rates was set aside and the matter remanded back to him for reassessment of the price. Similarly, in the second case, the plaintiff and the defendants Nos.1 and 2 held controlling shares in the defendant No,3 company and according to the participation agreement between such defendants the shares held by each of such company if sold were first to be offered to the other participants. It was held that where one of the participants had agreed to sell its shares to an outsider without obtaining the consent of the other participants in terms of the agreement between the parties, an injunction would be issued prohibiting such sale/transfer at the behest of any of the other participants. Again as observed above, this has not been demonstrated by the plaintiffs.
21. For all the foregoing reasons, in my opinion, the plaintiffs have not demonstrated. Any prima facie case in their favour for the grant of the injunction as prayed. It is settled law that in order to obtain an injunction there must be a prima facie case, it must be shown that unless such injunction is granted it would result in irreparable damage to the applicant and the balance of convenience should be in favour of granting the same.. Where any of these ingredients are missing the injunction cannot be granted. As I have come to the conclusion there is no prima facie case, therefore, in my opinion no injunction can be granted as prayed for by the plaintiffs.
22. Next I would take up the objection of Mr. Lqbal Bawany as to the competency of one Mr. Muhammad Sohail so sign and verify the written statement as well as swear the counter-affidavits on behalf of defendants Nos. 1, 2 and 3 on the strength of the power of attorneys given in his favour by Mr. Khalid Bhaimian in his capacity as the Chief Executive of these three defendants. Per learned counsel neither the Memorandum or Articles of Association of these Companies have been filed which would denote that the power to sign and verify pleadings etc., in a Court of Law had been delegated to Mr. Khalid Bhaimian nor any Board Resolution to this effect. In this regard it would be seen that per Order XXIX, rule 1, of the C.P.C. In suits filed by or against Corporations, any pleading may be signed and verified on behalf of the Corporation or by any Director or other Principal Officer of the Corporation, who is able to depose to the facts of the case. However, this rule does not address the issue as to such person's competence/authority to file the suit/written statement before the Court, which means that where this is challenged such a person must establish the same. Normally this is done by the production of a power of attorney from the Board of Directors authorizing such a person to file the suit/written statement etc. Or a Board Resolution to this effect as usually the Board of Directors of a Company are authorized by the Articles of Association to deal with all legal matters including filing/defending of suits and other proceedings in a Court of Law. In the present case it appears that when the written statement was filed on behalf of defendants Nos.1, 2 and 3 on 13-1-2004 it was verified and signed by one Mr. Muhammad Sohail in his capacity as duly constituted attorney of such defendants on the strength of powers of attorney executed in his favour by Mr. Kahlid Bhaimian in his capacity as the Managing Director of these Companies all dated 14-8-2003. Subsequently copies of Certificates were issued by the Company Secretary of these Companies dated 29th March, 2004, to the effect that Mr. Khalid Bhaimian was fully empowered under the Laws of U.K. To appoint Lawyers and to issue requisite power of attorneys/authorization to that effect. Such copies were filed by counsel of these defendants through statement dated 30th March, 2004. Consequently in my view, prima facie, it has been established that Mr. Muhammad Sohail did have the authority from defendants Nos.1, 2 and 3 to file written statements on their behalf and so also swear counter-affidavits etc. In this Court. In any event as the objection regarding the authority of Muhammad Sohail has been taken by the plaintiffs it would only be just and proper to frame an issue in this regard and an opportunity be given to the defendants Nos.1, 2 and 3 to lead evidence in order to prove such authority. In this regard reference can be made to the case of Abdul Rahim v. U.B.L. (supra) wherein certain principles were laid down regarding the competency of a person to file pleadings before a Court of Law and it was held inter alia that even where there is a default in the compliance of Order XXIX, rule 1, C.P.C. It can be cured after the suit has been instituted. Similarly reference can be made to the case of Fazal Rehman v. Khursheed Ali (supra) where it was held that even where no specific power had been given to an attorney by a Principal to do a particular act, this lacuna could be cured through ratification by the Principal which could be expressed as well as implied.
23. Lastly I would revert to Mr. Iqbal Bawany's contention with reference to the transfer of the Albaraka shares from the C.D.C., Account of defendant No,7 to that of defendant No,6 which according to learned counsel was a mala fide act intended to defeat the plaintiffs preemption rights. As I have already come to the conclusion that the plaintiffs have not displayed any prima facie case in their favour with regard to such pre-emption rights, I am of the opinion at this stage that the discussion of this issue would only be an academic exercise. Hence this issue would be decided at the time of final disposal of this matter.
24. In view of the foregoing discussion, I would, therefore, dismiss C.M.A. 4424 of 2003 filed by the plaintiffs and allow C.M.A. 5284 of 2003 filed by defendants Nos.1, 2 and 3. Interim orders passed earlier are vacated.