1. SAIYED SAEED ASHHAD, C.J.---In this Constitutional petition, the petitioner has sought the following reliefs:- "In view of the above submission, it is respectfully prayed that the Honourable High Court may be pleased to quash the letter dated 14-3-1990, the notice dated 2-5-1990 and Notice dated 12-6-1990 and declare the same without lawful authority and therefore of no lawful effect.
2. Restrain the respondent from taking any action in pursuance of the impugned notices; grant costs of proceedings; and grant any other, better relief(s) that this Honourable Court may deem fit and proper in the circumstances of the case."
3. The brief facts of the case as available from the memo. of petition are that petitioner is a company registered under the Companies Ordinance, 1984 carrying on the business of engineering and contracting and is registered under the Employees' Old-Age Benefits Act, 1976 (hereinafter referred to as the Act of 1976) with the Employees' Old-Age Benefits Institution (hereinafter referred to as the Institution). It was further submitted that they had been paying contribution as provided by the Act of 1976. On 14-3-1990, letter dated 14-3-1990 purporting to be demand/show-cause notice was received from one Assistant Director, R and C, Karachi City Region of the Institution calling upon the petitioner to make payment of Rs.4,61,165 as it was found that a sum of Rs.3,07,443 was due and payable by the petitioner towards the contribution under section 9 of the Act of 1976 and a sum of Rs.1,53,722 was the statutory increase under section 13 of the Act of 1976. It was also submitted that the demand/showcause notice was without lawful authority as no inquiry or proceeding for determination of the amount allegedly due and payable by the petitioner was undertaken by the Institution and accordingly the same was challenged through letter of their Advocate dated 27-3- 1990 which was replied to by respondent No.1 through their Advocate's letter dated 9-4-1990. From the letter dated 9-4-1990, it transpires that the officers of respondent No.1 had calculated the dues on the basis of income-tax returns of the petitioner which according to the petitioner was a grave illegality as respondent No.1 was not required to take into consideration the income tax returns for the purpose of determining or calculating the contributions to be made by the petitioner. This was followed by a notice of demand dated 2-5-1990 which was contested by reply/letter dated 4-6- 1990 rebutting the claim and also informing them that the determination was not made in accordance with the procedure prescribed under the Employee's Old-Age Benefits Institution Regulation, 1980 (hereinafter referred to as the Regulation of 1980) but respondent No.1instead of adjudicating the case in accordance with law got issued warrants of distress under section 83 of the Land Revenue Act, 1967 for attachment of the immovable property of the petitioner. It was further submitted that as the petitioner had no other alternative and adequate remedy, they were left with no other option but to file this Constitutional petition.
4. Counter-affidavit was filed by one Syed I.H. Zaidi, Director, Karachi City Region, respondent No.1, wherein it was stated that the petitioner had defaulted in payment of contribution for the period from July, 1985 to June, 1989 and the amount of contribution was determined by checking the books of account i.e. general ledger and salary wages registers maintained by the petitioner whereafter the demand was raised. It was further submitted that as the demand was raised after determination, coercive process of recovery was resorted to under the Land Revenue Act on failure of the petitioner to make payment of the outstanding contribution together with the increase thereon. It was further submitted that the petitioner could have invoked the jurisdiction of this Court only after payment of the determined amount had been made under protest. It was further submitted that equally adequate and efficacious remedies were available to the petitioner under sections 33, 34 and 35 of the Act of 1976 but without exhausting the same it had approached the is Court which was against the settled principle that a Constitutional Petition would not be maintainable unless the party had exhausted all the remedies available to it under a particular statute.
5. Saeed Ahmed Memon, Managing Director of the petitioner filed his affidavit-in-rejoinder wherein attention was drawn to the contrary figures in the impugned notices/orders Annexures 'B', 'D-I' and 'F' relating to period for which the contribution was outstanding. In one of the notices/order the period was mentioned from July, 1985 to 1987 while in the counter-affidavit it was stated that the petitioners were in default for the period from July, 1985 to June, 1989 and it was submitted that this in itself would suggest that respondent No.1 had not applied his mind or had conducted any proceedings for determining the amount of contribution allegedly due and payable and had in an arbitrary and mechanical manner issued the demand. It was submitted that the above also confirmed the statement of the petitioner that the demand was raised on the basis of income tax returns which could not be taken into consideration for the purpose of determining the liability for payment of contribution under the Act of 1976. It was reiterated that recourse to Article 199 of the Constitution without exhausting the remedies provided under sections 33. 34 and 35 of the Act of 1976 was proper and valid inasmuch as in similar circumstances. High Court of Balochistan had entertained a writ petition filed by a party who had not exhausted the remedies under the aforesaid sections. It was further submitted that if any inquiry or proceedings were at all held by respondent No.1 for determining the amount, the same would have no sanctity in law as the petitioner was not given an opportunity to put forward his point of view.
6. We have heard the arguments of Mr. M. L. Shahan', Advocate for the petitioner and Mr. M.A.M.
7. Namazie, Advocate for the respondents.
8. Mr. M.A.M. Namazie vehemently objected to the maintainability of the Constitutional petition on the ground that the petitioner did not exhaust the remedies available to it under sections 33, 34, and 35 of the Act of 1976 and in view of the preponderance of case-law to the effect that a party would not be allowed to invoke the Constitutional jurisdiction of this Court under Article 199 of the Constitution of the Islamic Republic of Pakistan without first exhausting the statutory remedies available to him the Constitutional petition would not be maintainable and on such principle this Constitutional petition required dismissal on this ground alone.
9. Mr. M.L. Shahani on the other hand submitted that he has no grievance with the principle that a party could not be allowed to invoke the Constitutional jurisdiction of this Court under Article 199 of the Constitution without first exhausting all the remedies available to him but the questions to be considered for determining the maintainability of this Constitutional petition without first exhausting the remedies were; firstly, whether the alternative remedies provided by the Act of 1976 were adequate and efficacious so as to provide relief to the petitioner in view of the fact that the petitioner would have been required to approach the officers of the Institution of which respondent No. 1 was an employee and any officer or a forum prescribed by an officer would have leaning towards the Institution and could not be said to be an independent and impartial authority or forum; and secondly, that the demand/show-cause notice, notice of demand under section 81 and distress warrants issued under section 83 were without lawful authority, in violation of the provisions of law and void ab initio thus enabling the petitioner to challenge assail the same directly by way of a Constitutional petition under Article 199 of the Constitution without having recourse to the remedies provided by the Act of 1976. In support of his contention, he placed reliance on the case of (i) Khalid Mehmood v. Collector of Customs, Customs House, Lahore 1999 SCMR 1881 and (ii) Gatron (Industries) Limited v. Government of Pakistan and others 1999 SCMR 1072.
10. Another ground on which the maintainability of the Constitutional petition was vehemently attacked by Mr. M.A.M. Namazie was that the petitioner failed to join the Institution which was a necessary party in the absence of which no relief could be granted to the petitioner. He further submitted that it was a settled principle of law that if the necessary or essential party in the absence of which neither a just or proper decision could be made nor the relief, if granted, could be provided was joined then the Constitutional petition would be liable to be dismissed on this ground alone. Elaborating his arguments, he further submitted that in the present case if this Court came to the conclusion that the demand/show-cause notice, notice of demand and the distress warrants were without lawful authority and of no legal consequence, then the actual person or the party affected would be the Institution which was established under section 4 of the Act of 1976 the management whereof, general supervision and control of its affairs vested in a Board of Trustees constituted under section 7 of the Act of 1976. He further submitted that by virtue of subsection (2) to section 4 the Institution has been made a body corporate having perpetual succession and a common seal, thus conferring on it the status of an independent juristic person. He further submitted that the officers or employees of the Institution could not be equated with the Institution as they were engaged by the Institution to perform its statutory obligations and duties and exercise powers. Holding an act of officer or employee as illegal or contrary to any provisions of the Act of 1976 would have a bearing on the interest of the Institution. He further submitted that in the present case if the impugned demand/show-cause notice, notice of demand and distress warrants were held to be without lawful authority, inoperative and of no legal effect and if directions for holding of a proper inquiry or proceedings for determination of the outstanding contributions were issued then there would be no proper person/party before the Court to whom such directions could be issued as the same could only be issued to the Institution which would give effect to the orders/directions of this Court and respondent No.1 or any of the other respondents would not have any authority or power to execute or implement the orders of this Court. In support of his contention that non-joining of a necessary or essential party would render a Constitutional petition as improper and liable to be dismissed, he placed reliance on the cases of (i) Moulvi Nur-uz- Zaman Chowdhury v. The Secretary, Education Department, Government of East Pakistan and 2 others PLD 1967 Dacca 179; (ii) Rawalpindi Improvement Trust, Rawalpindi v. The Government of Pakistan through the Secretary, Ministry of Rehabilitation and Works, Rawalpindi and others PLD 1970 Lahore 760; (iii) Sarfraz Ahmad v. Government of Sindh and others 1992 CLC 1367; and (iv)
11. Pakistan Medical and Dental Council v. Dr. Raza Muhammad Khan 1992 SCMR 1621.
12. Another ground on which the maintainability of this Constitutional petition was vehemently assailed was that the same had not been filed by a person/attorney duly authorized by the Board of Directors of the Company, which is a private limited company incorporated under the Companies Ordinance, 1984 as required by Order XXIX, rule 1, C.P.C. and the principle laid down by the Supreme Court. Mr. M.A.M. Namazie further submitted that provisions of law required that the person filing a suit or bringing an action on behalf of a public limited company should be either one of its Directors, the secretary of a principal officer duly authorized/ empowered by Board of Directors to exercise and perform all the powers to institute, conduct, defend, compound or abandon the legal proceedings. In support of his above contentions he placed reliance on the cases of (1) Messrs Muhammad Siddique Muhammad Umar and another v. The Australasia Bank Ltd. reported in PLD 1966 SC 684; and (2) Khan Iftikhar Hussain Khan of Mamdot v. Messrs Ghulam Nabi Corporation Ltd. reported in PLD 1971 SC 550. He concluded that neither Saeed Ahmad Memon had produced a copy of the Power-of-Attorney authorizing/empowering him to file/institute, conduct, defend, compound or abandon the legal proceedings nor produced the Articles of Association of the Company to show whether there was any article empowering the Managing Director to file/institute, conduct, defend, compound or abandon the legal proceedings on behalf of petitioner.
13. Messrs Razo (Pvt.) Ltd. and the petition was liable to be dismissed in view of the pronouncements made by the Supreme Court in the aforecited two cases.
14. Mr. M.L. Shahani controverting the arguments of Mr. M.A.M. Namazie, submitted that Saeed Ahmad Memon at the relevant time was Managing Director of the petitioner and would come within the definition of a "Director" which would empower him to file/institute, conduct, defend, compound or abandon legal proceedings on behalf of the petitioner-Company in view of Order XXIX, rule 1, C.P.C., according to which any suits or any pleadings may be signed and verified on behalf of the corporation by the Secretary or by any Director or other Principal Officer of the Corporation. Mr. M. L.
15. Shahani further submitted that rule 1 of Order XXIX, C.P.C. has specifically conferred powers of signing and verifying pleadings on behalf of a corporation on a Director or any secretary or any other principal officer and such powers would include the power to file/institute, conduct, defend, compound or abandon the legal proceedings. Mr. M.L. Shahani produced a copy of the Resolution said to have been passed by the Board of Directors in its emergency meeting held on 29-11-2000 authorizing Mr. Saeed Ahmed Memon, the Director of the Company, who at the time of filing/instituting of this Constitutional petition was the Managing Director, to file this Constitutional petition in this Court against the Institution and also ratifying the act of filing this Constitutional petition, engaging counsel, swearing affidavits and submitted that in view of the above Resolution the requirements of the principle enunciated by the Supreme Court in the cases of Messrs Muhammad Siddique Muhammad Umar and another (supra) and (2) Khan Iftikhar Hussain Khan of Mamdot (supra) would appear to have been fulfilled, the objection raised with regard to the maintainability of the petition would have no substance and was to be overruled.
16. Of the three objections raised by Mr. M.A.M. Namazie with regard to the maintainability of this Constitutional petition, the third objection relating to the authority or power of Saeed Ahmed Memon to file/institute, conduct, defend, compound or abandon the legal proceedings is most important and relevant inasmuch as if it is found that Saeed Ahmed Memon had no authority or power to file/institute, conduct, defend, compound or abandon the legal proceedings on behalf of the petitioner then the same would warrant dismissal on this ground alone. The question of power or authority of a Director/ Secretary/Principal Officer of an incorporated company for filing or instituting legal proceedings has been discussed at length in the aforecited two cases and it will be useful to reproduce the relevant portions from the two judgments of the Supreme Court. In the case of Messrs Muhammad Siddique Muhammad Umar and another (supra) the relevant portions from the judgment are as under:-- "(1) It was apparent from the pleadings that the suit was being instituted by a constituted attorney of a public limited company. He could only do so if he was duly authorized in that behalf and occupied one or other of the offices mentioned in Rule 1 of Order XXIX of the Civil Procedure Code. A copy of the power-of-attorney had been produced which showed that Muhammad Khan had been empowered in that behalf but the question still remained to be ascertained as to whether those who gave him that power were competent to do so, as the authority was on behalf of a public limited company. For this purpose a reference to the Articles of Association of the Company was certainly necessary to sue whether the Directors were competent to delegate such power."
17. "(2) We have referred to these provisions in order to indicate that once the authority of Muhammad Khan to present the plaint was challenged, a reference not only to the power-of-attorney was called for but also to the Articles of Association of the Company."
18. In the case of Khan Iftikahr Hussain Khan of Mamdot (supra) authority of a person filing the suit on behalf of a private limited company was not held to be valid authority though such authority was purportedly conferred on him on a meeting of Directors on the ground that there was no evidence to establish that the meeting of Directors was duly convened which required service of due notice of the meeting on all the Directors. The relevant portion of the judgment is as under:-- "On the facts of the present case, I am satisfied that due notice of the meeting was not given to the deceased appellant and, therefore, the resolution passed in the meeting of 28th September, 1951, cannot be said to be a valid one. In my opinion, no valid authority was conferred on Mr. Khurshid Mahmood and therefore, he was not competent to institute the suit. I would, therefore, hold that the learned trial Judge was perfectly justified in dismissing the suit on this ground."
19. Coming to the arguments of Mr. M.L. Shahani that admittedly Saeed Ahmed Memon was not duly authorized/empowered by means of a Power-of-Attorney in pursuance of meeting of Board of Directors at the time of filing of this Constitutional petition but he was authorized to do so and his act of filing the same had been specifically ratified by the Board of Directors in an emergent meeting which would provide sanction and legality to his act of filing or instituting this Constitutional petition without having authority or power to do the same at the time of institution.
20. This contention is without any substance and does not merit consideration. The Board of Directors can confer authority/power on a Director or an officer or secretary of a private limited company in pursuance of resolution of the Board of Directors in a meeting duly convened with prospective effect but such power/authority cannot be conferred retrospectively nor there is any provision in law which would enable the Board of Directors to confer such authority/power retrospectively and also to ratify the acts wrongfully or illegally done by a Director/Principal Officer/ secretary of a private limited company. The provisions of ratification as envisaged in the Contract Act are not attracted to this situation as in the Contract Act the power of ratification has been specifically conferred on a Principal by virtue of which he can ratify acts of his duly authorized agent which at the time of performance the agent was not empowered or authorized to undertake or perform.
21. Thus, the ratification essentially presupposes the existence of relationship of Principal and agent.
22. No such relationship existed between petitioner Messrs Razo (Pvt.) Ltd. and Saeed Ahmed Memon.
23. Furthermore, the action of ratification of Board of Directors in ratifying the acts of Saeed Ahmed Memon in filing the above Constitutional petition without authority/power would have no basis or sanction unless it would be established that the Directors have been empowered or authorized by the Articles of Association of the company to ratify the illegal or unauthorized acts of Director, Secretary or Principal Officer. This is based on the observations of the Supreme Court in the case of Messrs Muhammad Siddique Muhammad Umar and another (supra) relevant portion of which has been reproduced herein above, whereby determining the power of constituted attorney to file/institute, conduct, defend, compound or abandon the legal proceedings, it was to be examined whether those who gave such powers were competent to do so as the authority was on behalf of a private limited company requiring reference to the Articles of Association of the Company. The issue whether conferment of power/authority on a Director, Secretary or Principal Officer subsequent to the filing/instituting of the suit by him and the defect in institution of the suit unauthorizedly and incompetently could be cured was considered in the case of Abdul Rahim and 2 others v. Messrs United Bank Ltd. of Pakistan reported in PLD 1997 Karachi 62. In the above case it was held that the defect could not be successfully rectified and would be incurable.
24. The law requires that the person filing/instituting legal proceedings on behalf of a company incorporated under the Companies Ordinance, 1984 should be duly empowered/ authorized by the Board of Director-sin a meeting of the Board of Directors, duly convened according to the Articles of Association of the Company. It is a settled principle of law that when the .law .requires the doing of a thing in a particular manner then it can be done in that manner only and all other manners of doing such an act cannot be resorted to. If any authority is required in support of the above, the same is available from the judgment of Hakim Ali v. Muhammad Saleem and others reported in 1992 SCMR 46. In view of the above principle the illegality in the finding/instituting the Constitutional petition could not be regularized subsequently by conferring power/authority on the person for filing/ instituting the above petition at a later date with retrospective effect.
25. From the discussion on this issue there is hardly any doubt with regard to the maintainability of this Constitutional petition. The Constitutional petition was filed by a person who was not authorized/empowered to file the same on behalf of the petitioner-Company Messrs Razo (Pvt.)
26. Ltd. as he was not duly authorized/empowered by means of a Resolution of the Board of Directors passed in a proper meeting of the Board of Directors. There is also no dispute with regard to the fact that the illegal/unauthorized act of Saeed Ahmed Memon in filing/instituting the above Constitutional petition without authority or power could not be ratified or clothed with legality by a subsequent Resolution by the Board of Directors conferring on him to file/institute, conduct defend, compound or abandon the legal proceedings as the Supreme Court in the cases of (1) Messrs Muhammad Siddique Muhammad Umar and another (supra) and (2) Khan Iftikhar Hussain Khan of Mamdot (supra) had pronounced that any proceedings or pleadings filed/instituted by a Director, Secretary or Principal Officer on behalf of a private limited company not having been duly authorized by Resolution by the Board of Directors to do so was liable to be dismissed on this ground alone.
27. We do not consider it necessary either to discuss and decide the first two legal objections raised by Mr. M.A.M. Namazie with regard to the maintainability of the Constitutional petition or to examine the matter on merits with regard to the legality or otherwise of the orders passed by the respondents. However, the petitioner will be at liberty to have access to the appropriate forum/remedies available to it under the Act of 1976.
28. For the foregoing reasons and discussion we find that this Constitutional petition is not maintainable and subject to the observations hereinabove with regard to the right of the petitioner to have recourse to the appropriate forum/remedies under the Act of 1976, this Constitutional petition stand dismissed.