' This is a petition under section 152 of the Companies Ordinance, 1984 seeking rectification of register of Membership through re-entry of the name of the petitioner which had been earlier deleted.
2. The respondent is a Company limited by guarantee and having no share capital. It is registered under the name "The Lahore Race Club" and is said to be functioning in terms of section 42 of the Companies Ordinance, 1984.
3. According to the petitioner, he was a Member of the respondent and his name was duly entered in the Register of Members and the number of Members is limited to 50 as per the Articles of Association.
4. The Stewards are elected annually in the General Meeting, while two Stewards are nominated by the Government of Punjab. The Control of the Race Club vests with the body of Stewards who elect a Chairman for presiding over the meetings. The Stewards also appoint Secretary of the Company
(Club) for keeping accounts, maintaining records and indulging in correspondence. The annual membership subscription has been fixed at Rs,50 payable. On the first day of January of the every calendar year, as per Article 7 of the Articles of Association.
5. In reply to the petition besides taking some preliminary objections, the respondent side maintained that this was not a case covered under the provisions of section 152 of the Companies Ordinance calling for rectification of the record, because the name of the petitioner had been struck of from the Membership Register on the ground that he had not paid the membership fee for the years 2003 and 2004.
6. Article 9 of the Articles of Association deals with the removal of the name of a Member from the Register of Members in the eventualities reflected in paragraph No,9(g). It reads as follows:-- "9. The Stewards may remove the name of any member from the Register of Members if such member:--
(g) fails to pay within two months any fees subscriptions, etc. Due to the Club after notice has been given by the Secretary."
7. This Court was informed that before taking any action against the petitioner, he was served with notices. The First notice was sent on 20th of January, 2003 demanding from him the payment of the annual subscription fee for the year, 2003. Whereas, the second notice was sent through registered A.D. On 16th of February, 2004, repeating the demand for payment of the annual subscription fee for the year 2003 and also asked for payment of the subscription fee for the year 2004 (Annexures "R-1" and "R-2"). Whereas, Annexure "R-5" shows the postal receipt, whereby the notice was sent.
8. It is the case of the petitioner that he received no notice and even if any notice was sent, it was sent at a wrong address.
9. This allegation is controverted. The address on the notices (Annexures "R-1" and "R-2") is the same and reads as follows:-- "Maj. Gen. (Retd.) Saeed-uz-Zaman Janjua 108-A, Street No,17, Ext. Shami Road, Lahore."
10. Annexure "R-3" is the list of Members with their addresses, where at Serial No,28, the same address has been mentioned.
11. It appears that the petitioner has two addresses and the other address is given in Annexure "E" to the petition, which shows the following address at Serial No,42 of the list:-- "Maj. Gen. Saeed-uz-Zaman Janjua, Near Rana Shaukat Mahmood's Farm, Badian Road, Lahore."
12. But the question for determination is whether the address previously given continues to be the address of the petitioner or he had left that address. On this, there is silence on his side, rather this fact that he also continued to have the address on which the notices were sent as another address, is not denied.
13. The petitioner attributes mala fides to the management of the Race Club while alleging that as he was critical of their mismanagement, they thought of removing him and in this connection he refers to a letter which was sent to him on behalf of the Stewards asking him to refrain from the litigation he was indulging against the Club.
14. But he has not attached any proof to show that he had paid the subscription fee for the years 2003 and 2004. Therefore, the action taken against him duly under the provisions of Article 9(g) of the Articles of Association =I ainst non-payment of the fee, remains unrebutted.
15. Section 152 of the Companies Ordinance, 1984 reads as follows:-- "Power of Court to rectify register.--- (1) If---
(a) the name of any person is fraudulently or without sufficient cause entered in or omitted from the register of members or register of debenture-holders of a company; or
(b) default is made or unnecessary delay takes place in entering on the register of members or register of debenture-holders the fact of the person having become or ceased to be a member or debenture-holder; ' the person aggrieved, or any member or debenture-holder of the company, or the company, may apply to the Court for rectification of the register.
(2) The Court may either refuse the application or may order rectification of the register on payment by the company of any damages sustained by any party aggrieved, and may make such order as to costs as it in its discretion thinks fit.
(3) On an application under subsection (1) the Court may decide any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register, whether the question arises between members or debenture-holders or alleged members or debenture-holders, or between members or alleged members, or debenture-holder or alleged debenture-holders, on the one hand and the company on the other hand; and generally may decide any question which it is necessary or expedient to decide for rectification of the register.
(4) An appeal from a decision on an application under subsection (1), or on an issue raised in any such application and tried separately, shall lie on the grounds mentioned in section 100 of the Code of Civil Procedure, 1908 (Act V of 1908)-
(a) if the decision is that of a Civil Court subordinate to a High Court, to the High Court; and
(b) if the decision is that of a Company Bench consisting of a Single Judge, to a Bench consisting of two or more Judges of the High Court."
16. This Court recollects the famous case of Bajaj Auto Limited v. N.K. Firodia AIR 1971 SC 321, wherein some principles have been laid down which structure discretion on the part of the Directors and in this connection the Stewards in the matter of rectification: firstly, whether they acted in the interest of the company, secondly; whether they acted on any wrong principle and thirdly, whether they acted with an oblique motive or for a collateral purpose. On the basis of this criterion, we have to see whether the discretion used by the Stewards pursuant to paragraph 9(g) of the Articles of Association was based on just and proper considerations and in the paramount interest of the company.
17. Prima facie, this is a case where the striking off the name was done because of the non- payment of the dues. The allegation of mala fides and oblique collateral considerations resulting in the removal of the name, involves a factual inquiry. Likewise, the controversy whether the notice was actually received by him or not prior to the termination giving an opportunity of depositing the fee, involves resolution of a factual question.
18. Section 152 of the Companies Ordinance, 1984 involves a summary jurisdiction where only prima facie facts are resolved in a summary way and the complicated and doubtful cases are meant to be referred to the plenary Court of civil jurisdiction. In this connection, reference may be made to the following cases: (1) Khurshid Ahmad Khan and another v. Pak Cycle Manufacturing Company Ltd. Shandara and 4 others PLD 1987 Lah. 1; (2) Waqar Ahmad Malik v. Bisvil Spinners (Pvt.) Ltd. And 11 others 1991 CLC Note 110 at p.89; (3) Sh. Mushtaq Ahmad v. Shaukat Soap Factory and others 1987 CLC 2079.
19. Consequently, for purposes of resolution of this factual controversy, the petitioner will have to seek remedy, if so advised, from the Civil Court of competent jurisdiction. However, as prima facie the respondent side has established having taken action under the provisions of Article 9(g) of the Articles of Association, this petition cannot proceed any further and it is dismissed.