J.M. No. 3/01 ATTA-UR-REHMAN, J.--- This is a petition filed by Muhammad Mohsin Butt under Sections 290, 291 and 292 of the Companies Ordinance, 1984 (the Ordinance), for rendition of accounts/division of assets and properties of S.M. Corporation (Pvt.) Ltd. (the company), inter alia praying therein for direction to respondent No. 6 to make payment of dividends declared in past as well as payment of future dividends to the petitioner; and not to restrain the petitioner from entering the factory premises and inspect its accounts and operations etc.
2. The counter-affidavit and affidavit-in-rejoinder were filed by the respondent and petitioner respectively. The respondent in their counter-affidavit stated that the petitioner had sold off his entire share holdings to the other directors and had received full consideration therefor, In this rejoinder the petitioner denied even entering into such a sale as alleged in the counter-affidavit and claimed that the documents relied upon by the respondents were false and fabricated.
J.M. No. 1/2002 and C.M.A. No. 1587/03 For the Petitioner: Anwar Mansoor Khan, Advocate.
Naraindas Motiani, Advocate.
For the Respondent: Rasheed A. Razvi, Advocate.
For Amicus Curiae: Badaruddin Vellani, Advocate.
3. This is a petition under Section 309 read with Section 305 of the Companies Ordinance, 1984 filed by M. Masood Butt for-winding-up of S.M. Corporation (Pvt.) Ltd. Inter alia praying therein for appointment of a Liquidator to take over the assets and accounts of the Company including all assets of the respondents that have been secured and made from the funds of the Company.
Counter- affidavit/objections have been filed on behalf of the respondent Company whereby it denied all averments made in the petition. Petitioner No. 1 has filed a rejoinder to the counter- affidavit wherein he denied the averments made by the respondents and reiterated the contents of the main petition.
C.M.A. No. 1587/03
4. Muhammad Mohsin Butt who is the petitioner in J.M. No. 3/2001 has moved this application under Order 1, Rule 10, CPC on similar grounds praying to join in as an Intervenor in J.M. 1/2002. This application is being opposed by all the parties on the same grounds as those taken by them as respondents in J.M. No. 3/2001.
5. The Petitions Nos. 3/2001, 1/2002 and the C.M.A. No.' 1587/03 being connected with each other were heard together.
J.M. No. 23/2001 For the Petitioner: Iqbal Bawany, Advocate.
For the Respondents Nos. 1 and 3 to 12: Mansoorul Arfeen, Advocate.
For the Respondent: in person.
For Amicus Curaie: Badaruddin Vellani, Advocate.
6. This is a petition under Section 152 of the Ordinance filed by Khadim Ali Shah Bukhari & Co. Ltd.
For rectification of the Register of the Members and for entering their name as Member claiming to be the holder of 1,800,0 shares having purchased the same from the respondent No. 12 and amending form "A" of M/s. National Technology Development Corporation Limited, the respondent No. 1 Company, In reply respondents Nos. 1, 2 and 12 have filed their counter-affidavits while respondent No. 1 filed an affidavit adopting the counter-affidavit/reply filed by the respondent No. 2 whereas respondents Nos. 13 to 15 have filed their comments. Respondents Nos. 1, 2, 11 and 12 inter alia denied the averments made in the petition and stated that the shares said to be in possession of the petitioner were not issued by the Company and that the respondent No. 12 had never sold them to the petitioner.
J.M. No. 48/2000 For the Petitioner: In person.
For the Respondents Nos. 1 to 5: Mansoorul Arfeen, Advocate.
For the Intervenor: Iqbal Bawany, Advocate.
For Amicus Curaie: Badaruddin Vellani, Advocate.
7. This is a petition under Sections 161, 152 read with Sections 290 and 233 of the Ordinance filed by Rauf Bakhsh Qadri and it also pertains to National Technology Development Corporation Limited praying ' therein for directions to the respondents to convene an Extra-Ordinary General Meeting
(EOGM) of the members for holding election of the Directors on the basis of their share-holding; and for rectification of the Register of Members (ROM) in line with last filed Form-A by the respondent No. 1 based on the transactions recorded in the petition. The respondents Nos. 1 and 2 filed their counter-affidavit and denied that the petitioner owned 6,698,365 shares as claimed in the petition; and submitted the ROM did not confirm his claim.
8. The Petitions Nos. 23/2001 and 48/2000 are connected and therefore, were heard together.
9. In the hearing of the above petitions, the counsels appearing for the respondents raised a common plea that the disputes involved in the petitions and the CMA were intricate questions of facts which could only be decided in a full-fledged inquiry in a civil suit and not through these petitions which were to be adjudicated in a summary procedure under sub-section (3) of Section 9 of the Ordinance. Their contentions, in other words, is that Section 9 of the Ordinance provides that all proceedings, are to he taken in a summary manner, and as a result the questions raised by the petitioners/Intervenors cannot be decided merely on the pleadings submitted by the parties.
According to them, under the Ordinance evidence is not to be recorded and not in depth inquiry, like in a civil suit, could be conducted.* They referred to a number of cases from both Indian and Pakistani jurisdiction in which it was held that where intricate question of facts were involved, the parties ought to be directed to resolve their disputes through regular suits.
10. In view of the submissions of the counsels for the respondents, as and when any dispute or controversy as to the facts has been raised by the respondents, this Court had no option but to dismiss the petition and to direct the parties to approach the Civil Court, It was observed that invariably in all cases presented to the Court, one or another fact was always disputed or controversial; which meant that this Court, without applying its mind and entering into inquiry/investigation in regard to those disputed facts, was to direct the parties to first get a decree from the Civil Court and its hierarchy which would take a period of two to three decades, and then to come back to this Court for the redressal of their original grievance. If this proposition was to be accepted, in my humble opinion it would result in a serious contradiction, as on the one hand there is an Ordinance, comprising of 514 sections, which has been enacted exclusively for dealing with controversies and. Disputes between the members and members and companies etc. As early as possible but not later than 90 days under Section 9, while on the other hand almost in every matter where the facts were controverted by the other side, the Court would retract its jurisdiction from the matter, and refer it to the Civil Court. Keeping the above incongruity in mind. I framed the following questions:--
(1) What is the scope of Section 9(3) viz-a-viz the other sections of the Ordinance, namely 152, 290 and 506 etc. While the Court adjudicates the matter on the basis of facts?
(2) Whether in summary proceedings the Court can embark upon recording evidence and decide the question of title of Share-holders in a petition under Section 152 of the Ordinance, or should it direct the parties to have the same decided through civil suit?
(3) What is the import of the cases of Latif Ansari and another Vs. Pakistan Industrial Promoter Ltd.
(1988 CLC 1541) and Industrial Development Bank of Pakistan Vs. Sarelo Cement Ltd. Company (1993 CLC 1540)?
11. The learned counsels were asked to assist the Court and Mr. Badarudmin Vellani a Senior Counsel of this Court was appointed ta act as Amicus Curaie. Mr. Vellani argued and in his written notes submitted that:--
(i) The Court having jurisdiction under the Ordinance is, by virtue of Section 7(1) thereof, the High Court at the place where the registered office of the company is situated (the "Court").
While the Federal Government may, by notification in the official Gazette, empower a Civil Court to exercise the jurisdiction conferred by the Ordinance on the Court, no such notification has as yet been issued by the Federal Government.
(ii) " Section 9(1) of the Ordinance requires that all matters coming before the Court under the Ordinance should be disposed of, and judgment should be pronounced, as expeditiously as possible and in any event within 90 days, It has been held that the 90 days' period is merely directory and not mandatory. See Punjab Lamp Works Limited v. Investment Corporation of Pakistan [1988 CLC 2127 (Kar.)].
(iii) Section 9(3) of the Ordinance further requires that the Court should follow the summary procedure. That sub-section reads as follows:-- In the exercise of its jurisdiction as aforesaid, the Court shall, in all matters before it, follow the summary procedure.
(iv) The expression "summary procedure" is not defined or explained in the Ordinance.
(v) Section 260 of the Code of Criminal Procedure, 1898 permits certain offences to be tried in a "summary way" and considers matters tried in the summary way as "summary trials" and decided "summarily". The expressions summary way, summary trial and summarily are not defined or explained in the Code, but cases under this section suggest that "as a rule, summary procedure should be confined to cases of simple nature where not much evidence is needed, It is inappropriate for cases of a complicated or serious nature". (Page 1319 The Code of Criminal Procedure, Volume II, Revised and Enlarged Edition, 2000, by Shaukat Mahmood and Nadeem Shaukat, Note 4 under Section 260).
(vi) The procedure under Order 37 of the Civil Procedure Code, 1908 for the enforcement of rights with respect to negotiable instruments is. Termed as a summary procedure. However, the rules under that order do not state that the Court is required to follow a summary procedure. Under this order the defendant has to seek the leave of the Court to defend the suit, which leave is granted where the defendant, is able to show that he has a probable defence and may be granted unconditionally or conditionally. Also, Rule 7 of that order provides that save as provided in the earlier rules of that order, the procedure to be followed is the same as the procedure in suits instituted in the ordinary manner.
(vii) The expression "summary proceedings" is defined in the following two dictionaries as:--
(a) Black's Law Dictionary (sixth edition, page 1204, second column):-- Any proceeding by which a controversy is settled, case disposed of, or trial conducted, in . a prompt and simple manner, without the aid of a jury, without presentment or indictment, or in other respects out of the regular course of the common law. In procedure, proceedings are said to be summary when they are short and simple in comparison with regular proceedings; e.g, conciliation or small claims Court proceedings as contrasted with usual civil trial.
(b) P. Maranatha Aiyar's The Law Lexicon (2nd Edition, Reprint 2002, page 1835):- "Summary": Performed or effected by a short method; done without delay; carried out rapidly by the omission of certain formalities; "Summary Jurisdiction": In English law the grant of "summary jurisdiction", or the decision of matters in a "summary manner", implies some substitution of a short and quick remedy instead of, or as an alternative to, the more elaborate process of the common Law; "Summary proceedings": Proceedings have been classified as regular or summary. When a Court acts or professes to act upon common-law principles, its proceedings are called regular, and not summary, however expeditiously it may act; but when a Court of common-law jurisdiction is by some law authorized to act differently from the common-law mode it is called a summary proceeding, a summary proceeding being defined to be a form of trial in which the established formal course of a legal proceeding is disregarded.
(viii) Thus, sub-section (3) of Section 9 of the Ordinance merely directs the Court to conduct the case before it under the Ordinance in a manner which is expeditious and simple, without having to follow all the procedures required in the case of a regular suit. This, however, does not mean that the Court cannot record evidence and make all the inquiries which it may consider necessary or expedient for arriving at a decision in the case before it.
(ix) Section 152 of the Ordinance grants to the Court the power to rectify the share register, which is required to be maintained by a company under Section 147 of the Ordinance and in which is entered the names, shareholdings and other particulars of the shareholders of that company and which is prima facie evidence of the Share-holders of the company and the number of shares held by them (Section 155 of the Ordinance). This section provides as follows:--
(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; dr 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 any application under sub-section (1) the Court may decide any question relating to the title of any person who is 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-holders 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 sub-section (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.
(x) Thus, where the name of a person is entered in or omitted from the register, fraudulently or without sufficient cause, oi where the fact that a person has become or has ceased to be a share- holder is not entered h the register or where there is a delay in making such entry, then the person aggrieved or any share-holder or the company itself may apply to the Court for the rectification of the register. The Court may on considering such an application order the rectification of the register, direct payment by the company of damages suffered by the aggrieved party, and make such other orders as it may in its discretion think fit. In deciding the application the Court may also decide any question relating to the title of any person who is a party to the application. Such questions may be decided whether relating to disputes between Share-holders or between alleged share-holders or between Share-holders or alleged Share-holders and the company. The Court is also empowered to decide any question which it is necessary or-expedient to decide in connection with the rectification of the register.
(xi) All of the above questions have to be decided in a summary way as directed by Section 9(3) of the Ordinance. That is, the Court must decide the above questions in an expeditious and simple manner. This, however, does not mean that the Court should not apply its mind to the matters in hand or that the Court cannot take into account all available evidence or that the Court should not or cannot make all such inquiries as it deems necessary to decide the matter.
(xii) The corresponding section- in the repealed Companies Act, 1913 (the "1913 Act") was Section 38.
That section provided as follows:-
(1) If--
(a) the name of any person is fraudulently or without sufficient cause entered in or omitted from the register of members of a company; or
(b) default is made or unnecessary delay takes place in entering on the register of members the fact of the person having ceased to be a member; the person aggrieved, or any member 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 and 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 any application under section 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 alleged members, or between members or alleged members 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: Provided that the Company may direct &n issue to be tried in which any question of law may be raised; and an appeal for the decision on such an issue shall lie in the manner directed by the Cod#of Civil Procedure, 1908, on the grounds mentioned in Section. 100 of that Code.
(xiii) Section 38 of the 1913 Act is almost identical to Section 152 of the Ordinance. The principal difference is that Section 12 of the Ordinance contains no reference to debenture-holders and the proviso to sub-section (3) of Section 38 . Of the 1913 Act which does not appear in Section 152 of the Ordinance, except for the latter portion of the proviso which is now more elaborately set out in sub- section (4) of Section 152 of the Ordinance. The first part of the proviso to Section 38(3) of the 1913 Act contemplates the possibility of a matter on a question of law being tried separately from the application under that section for the rectification of the register. Similarly, Section 152(4) of the Ordinance while making provision for appeals, refers to the possibility of some issue which arises in the application under Section 152 of the Ordinance being tried and decided separately. Thus, both Section 38 of the 1913 Act and Section 152 of the Ordinance contemplate the possibility of an issue which arises in the course of an application for rectification of the register to be tried and decided separately from the application for rectification.
(xiv) The corresponding sections in the English and -Indian Companies Act provide as follows:--
(a) In England: Section 359 of the Companies Act, 1985 (the "English Act"):-
(1) If--
(a) the name of any person is, without sufficient cause, entered in or omitted from a company's register of members, or
(b) default is made or unnecessary delay takes place in entering on the register the fact of any person having ceased to be a member, the person aggrieved, or any member 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 and payment by the company of any damages sustained by any party aggrieved.
(3) On such an application the Court may decide any question relating to the title of a 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 alleged members, or between members or alleged members on the one hand and the company on the other hand, and generally may decide any question necessary or expedient to be decided for rectification of the register.
(4) In the case of a company required by this Act to send a list of its members to the registrar of companies, the Court, when making an order for rectification of the register, shall by its order direct notice of the rectification to be given to the registrar.
(a) In India: Section 155 of the Companies Act, 1956 (the "Indian Act"):--
(1) If--
(a) the name of any person--
(i) is without sufficient cause, entered' in the register of members of a company, or
(ii) after having been entered in the register, is, without sufficient cause, omitted therefrom; or
(b) default is made, or unnecessary delay takes place, in entering on the register the fact of any person having become, or ceased to be, a member; the person aggrieved, or any member of the company, or the company, may apply to the Court for rectification of the register.
(2) The Court may either reject the application or order rectification of the register; and in the latter case, may direct the company to pay the damages, if any; sustained by any party aggrieved.
In either case, the Court in its discretion may make such order as to costs as it thinks fit.
(3) On an application under this section, the Court-
(a) 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 alleged members, or between members or alleged members on the one hand and the company on the other hand; and
(b) generally, may decide any question which it is necessary or expedient to decide in connection with the application for rectification.
(4) From :any order passed by the Court on the application, or on any issue raised therein and tried separately, an appeal shall lie on the grounds mentioned in Section 100 of the Code of Civil Procedure, 1908 (5 of 1908)--
(a) if the order be passed by a District Court, to the High Court;
(b) if the order be passed by a Single Judge of a High Court consisting of three or more Judges, to a Bench of that High Court.
(5) The provisions of sub-sections (1) to (4) shall apply in relation to the rectification of the register of debenture-holders as they apply in relation to the rectification of the register of members.
(xv) The provisions of the corresponding sections in the English Act and the Indian Act are materially similar to the provisions of Section 152 of the Ordinance, except that Section 152 of the Ordinance (as did Section 38 of the 1913 Act) in addition to contemplating entries or omissions from the register "without sufficient cause" specifically contemplates "fraudulent" entries or omission from the register.
(xvi) Neither the 1913 Act nor the English Act nor the Indian Act made any provision for the manner in which the application for rectification of the register or any other application under those statutes were required to be decided. That is, the application for rectification was not required to be decided summarily, nor was the Court obliged to follow the summary procedure while deciding such applications.
(xvii) Palmer's Company Law, 24th Edition, Volume 1, at page 809, paragraph 51-14, provides an illustrative list of cases in which orders have been made under Section 390 of the English Act as follows:-- Where the applicant was induced to take shares by misrepresentation; where the company improperly neglected to register a transfer; where shares had been issued to the applicant as paid up without filing a contract in compliance with what is now Section 88 of the Act of 1985; where shares where improperly forfeited; where the company, acting on a forged transfer, had removed the name of the applicant, the real Owner; where there was a dispute between the vendor and the purchaser of shares; where shares had been irregularly allotted to an applicant; where the signatory of an underwriting letter not constituting a contract had been placed on the register; where a share-holder, who made an ultra vires surrender of his shares to the company, claimed to have his name reinstated In the same book at pages 810 to 811, paragraph 51- 15 the following statement is made in regard to the procedure in Scotland under Section 390 of the English Act: Procedure in Scotland Section 359 is regarded as a summary procedure available as an alternative to the ordinary jurisdiction of the Courts, It is normally invoked by petition at the instance of the company, a registered member or a person claiming to be registered, It is always for the Court to determine, in the exercise of its discretion whether it would be more convenient to dispose of the issue raised in the petition process or by ordinary action. A petition under Section 359 is, however, appropriate where the issues raised are simple and do not require complex investigation of the facts.
(xviii) In India since 1991 the Company Law Board, and thereafter since 2002, the National Company Law Tribunal (which is the successor to the Company Law Board), has been given the. Power to rectify registers. At the same time the provisions of Section 155 of the Indian Act have been repealed.
(xix) Applications for rectification of the register, whether under the 1913 Act or the Ordinance or the Indian Act, have always been tried in a summary manner. However, in a number of these cases it has been held that where complicated questions of fact are involved the parties should be directed to have the issue in controversy first decided by a Civil Court of general jurisdiction and not by the Company Law Judge under the relevant section of the act or Ordinance concerned. This view has been expressed in a number of decisions by various Courts in Pakistan and in India, in many cases by simply concluding that the facts involved are complicated and as such the matter and the rights of the parties should be decided in a proper suit tried in the normal course and that thereafter the Company Law Judge could order the rectification of the register according to the decision of the Civil Court. However, certain Courts in India have held that the Company Law Judge does have the jurisdiction to decide complicated questions of facts and law which may arise in any application to rectify the register. The decisions of the Courts in Pakistan and in India are discussed below.
(xx) The Courts in Pakistan have held as follows:--
(a) 2003 CLD 1442 [Lahore] [at pages 1443 and 1446] Muhammad Aslam Javed and another v. Malik Ijaz Ahmad Decided by his Lordship Muhammad Sair Ali, J. On 10th April, 2003.
This is an appeal against the appellate order passed by the Additional District Judge, Okara, remanding the case for hearing by the Civil Court. The impugned order held that the Civil Courts at Okara had jurisdiction to try the civil suit filed by the respondent seeking "declaration qua his continued status as a director of the company and for cancellation of the deeds of share transfer, letter of resignation and for perpetual injunction", It was contended by the appellant that the High Court had exclusive jurisdiction in matters relating to the rectification of the register. The respondent argued that complicated questions based upon allegations of fraud, forgery of documents and fraudulent violation of law having been raised in the civil suit such questions require detailed proof through evidence and as such these issues must be determined through a civil suit. The Court concluded at page 1446 that:-- Examination of the provisions of Section 152 of the Companies Ordinance reveals that if the name of any person is fraudulently and without sufficient cause omitted from the register of members of a company, the person so aggrieved can apply to the Court for rectification of the register. Upon filing of such application, the learned Company Judge of the Court is required to proceed expeditiously upon the said application by following a "summary procedure" under Section 9 of the Companies Ordinance. Such summary procedure does not visualize holding of a trial or an inquiry through a detailed evidence upon allegations of fraud, forgery and fabrication of documents etc. As have been pleaded and raised in civil suit of respondent. Such suit is, therefore, obviously triable under Section 9 of the Civil Procedure Code, 1908 by a Civil Court which is a Court of general jurisdiction in all civil matters.
(b) 2003 CLD 201 [Lahore] [at pages 203 and 204] Rohail Hashmi and others v. Nabeel Hashmi and others Decided by his Lordship Naseem Sikandar, J. On 17th May, 2002.
The petitioners claim to be Share-holders of more than 20% of total issues capital of Rs. 50 lacs in a company. While the respondents claimed that there had been a settlement through which the petitioners had sold their share-holdings to the respondents and that in order to formalize the settlement, the petitioners filed a suit which was later withdrawn. The respondents produced a copy of the order and a copy of the compromise (known as an afeltration award), but the petitioners claimed that these documents are not genuine. There being disputed questions of fact the Court concluded that it could not determine such matters in its summary jurisdiction. At page 203, paragraph 3, it held that:- After hearing the learned counsel for the parties on the preliminary objection raised by the respondents I am persuaded to agree that the disputed questions of fact as to the genuineness of the aforesaid documents cannot be resolved in summary jurisdiction. The reliance of the learned counsel for the respondent in re: Zakir Latif Ansari and others v. Pakistan Industrial Promoters Limited and others (1988 CLC 1541); re: Bhai Aziz-ur-Rehman and others v. Messrs Ghafir Textile Mills Limited, Karachi and others (1987 CLC 577) and re: Sheikh Mushtaq Ahmad v. Shaukat Soap Factory and others (1987 CLC 2079) is pertinent and relevant, In the last-mentioned case Mr. Khalil-ur- Rehman Khan, J. As his Lordship then was, while refusing to interfere on a petition under Section 152 of the Companies Ordinance observed that the jurisdiction of the High Court in Company matters being summary in nature it could not be allowed to be invoked for resolution of disputes of complicated nature necessitating regular trial.
Accordingly, in this case in order to determine the genuineness of the documents, the parties were advised to approach a Civil Court of competent jurisdiction, and once the petitioners' ownership of the shares was established the petitioners could approach the Court in summary jurisdiction for relief under both Section 152 as well as Section 290 of the Companies Ordinance, 1984.
(c) PLD 2001 Lahore 523 [at page 527] Syed Shafqat Hussain v. Registrar, Joint Stock Companies, Lahore Decided by his Lordship Nasim Sikandar, J. On 25th May, 2001.
In this case the petitioner claimed that his shares were transferred through forged documents and in a clandestine manner and he was shown to have resigned from the directorship of the company. The respondent argued that since the petition contains intricate questions of law and fact, which could not be resolved without recording evidence from both sides, it was not possible to resolve this issue in summary proceedings under Section 9 of the Companies Ordinance.
His Lordship referred to a number of decisions relied upon by the respondent including the following:-- Khurshid Ahmed Khan v. Pak Cycle Manufacturing C". Ltd. (PLD 1987 Lah. 1): Powers vested in Court under Section 152 has to be exercised in cases where legal title in the applicant was clear, and, in a complicated or doubtful case, summary jurisdiction ought not to be exercised.
In re: Salauddin Khan v. Al-Mansoor Ltd. And 2 others (PLD 1987 Lah. 569): Petitioner having claimed fraud, the application could not be entertained under Section 152.
In re: Akbar Ali Sharif v. Syed Jamaluddin (1991 MLD 203): If a case is one of difficulty and complication, it should more appropriately be decided in a regular trial; summary procedures are not intended for settling controversies under several heads necessitating a regular trial; And at page 527 in paragraphs 11 and 12 concluded as follows:--
11. It will be noted that the case of the present petitioner is not free from some difficulties. He seeks the restoration of his name in the register of members of the company after resolution of his claim that a fraud was played upon him. As said above, such like controversy can only be resolved after hearing the parties and permitting them to adduce evidence.
12. The allegations of commission of fraud and fabrication of documents made in the petition cannot be resolved without framing of issues and recording evidence. That exercise is not germane to summary proceedings under Section 9 of the Companies Ordinance, 1984. The petitioner is advised to approach a Civil Court of competent jurisdiction to get the issues determined.
Thereafter in case of favourable judgment he can always approach the High Court again under Section 152 of the Ordinance with a similar prayer for rectification of the register of the Company.
(d) 1991 MLD 203 [Karachi] [at page 207] Akbar Ali Sharif v. Syed Jamaluddin and % others Decided by his Lordship Syed Haider Ali Pirzada, J. On 12th August, 1990.
In this case the petitioner sought rectification of the register under Section 152 of the Companies Ordinance and the respondent alleged that the petitioner had sold the shares in question and had received full consideration for such shares. The respondent also argued that the petition was not maintainable as the summary procedure could only be followed in non-controversial matters. At page 207 the Court held:-- It is settled legal position that when serious disputes are involved, proper forum for their adjudication is a Civil Court. The superior Courts have expressed the view that the summary remedy under Section 152 of the Ordinance is not available to the litigant as of right without the Court having direction to refuse it. The superior Courts have also expressed the view that if the case be one of difficulty and complication, it should more appropriately be decided at a regular trial and that this provision is not intended for settling controversies under several heads refuse it. The superior Courts have also expressed the view that if the case be one of difficulty and complication, it should more appropriately be decided at a regular trial and that this provision is not intended for settling controversies under several heads necessitating a regular investigation. Having regard to the nature of the controversy and comparatively simpler facts of this case, it is a-case which can be suitably disposed of by this Court under Section 152 of the Ordinance, In determining whether judicial discretion be expressed by the Court for the purposes of directing or refusing rectification of register of members, depends on the facts of each particular case. I do not find any similarity between the comparatively simple matters in controversy in this case and these cases where serious disputes are involved. I do not find this to be a case in which I should have abstained from proceeding under Section 152 of the Ordinance. The contention of Mr. Iqbal Ebrahim as to the non- maintainability of these proceedings is devoid of force and this contention is, therefore, rejected.
The Court concluded that the allegation of sale and transfer of shares made by the respondent was not supported .By the documents submitted by the respondent and that in fact the respondent had failed to produce the share transfer deeds through which the alleged transfer of shares took place. At page 209 his Lordship concluded that:- I entertain no doubt in my mind that this relief contemplated by Section 152 of the Ordinance is eminently suitable in the facts of this case; when the name of a person who is a member of the Company has been struck off, the effect is the same as if his name had never been entered.
Striking out of his name from the register thus causes his name to be omitted from it, and against such an omission the section provides a remedy....... There is ample authority for the proposition that a colourable transaction, whereby shares of a genuine owner are transferred in consequence of a fraud or forgery cannot be allowed to stand.
(e) 1988 CLC 1541 [Karachi] [at pages 1542, 1544,1545,1546] Zakir Latif Ansari and another v. Pakistan Industrial Promoters Ltd.
Decided by his Lordship Saeed-uz-Zaman Siddiqui, J. On 28th April, 1988.
In this case the petition was filed by two Share-holders of the company with the prayer that the respondents may be directed to rectify the share register of respondent No. 1 by incorporating 1,45,210 shares therein allegedly held. The ratio decided laid down in above-cited cases seems to be that the jurisdiction of the Company Judge in proceedings for rectification of share register, being in the nature of a summary jurisdiction, it should be exercised only in cases which do not involve disputed and complicated question of title between the parties, It is further laid down in these cases that where such disputed and complicated questions arise in rectification proceedings, the parties may be directed to seek decision on such disputed points in a Civil Court.
His Lordship after referring to provisions of Section 152 of the Companies Ordinance, held at pages 1545 and 1546 as follows:- No doubt sub-section (3) of Section 152 of the Companies Ordinance, 1984 confers discretion on the Company Court to decide any question relating to the title of any person who is party to the application to have his name entered 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-holders or alleged debenture-holders, on the one hand and the Company on the other hand, and also decide generally any other question which is necessary and expedient for decision of rectification of the register. There is, however, a long line of decision both pre-partition and post-partition wherein the Courts both in India and Pakistan consistently took the view that the proceedings for rectification of share register is in the nature of a summary procedure and, therefore, such jurisdiction will be exercised by the Company Judge in a case where facts are simple and undisputed and did not involve decision on intricate and disputed question of title between the parties in which case the parties may be left to settle their dispute in appropriate civil proceedings.............. It is also significant that under the new Companies Ordinance, 1984, Section 9 is introduced for the first time. No such provision either existed in the old Companies Act, 1913 or in the Indian or English law applicable in this regard. A careful examination of Section 9 of the Companies Ordinance, 1984 will show that the intention of the legislature in introducing this new provision in the Ordinance is to provide a very expeditious and summary disposal of petition/application filed under the provisions of the Ordinance. This lends further support to the conclusion that intricate and complicated questions of title between the parties could not appropriately be subject-- matter of decision in a petition under Section 152 of the Companies Ordinance............ I think that the contention of the learned counsel for the respondent No. 3 appears to be correct as keeping of the proceedings for rectification alive while directing the parties to have recourse to a Civil Court to determine the question of title first, may in certain cases, produce detrimental result on the working of a company. I accordingly dismiss the petition under Section 152 of the Companies Ordinance, 1984 but leave it open to the parties to approach appropriate Civil Court for determination of their respective rights in this regard as claimed by them. The dismissal of this petition will be no bar to the filing of another petition under Section 152 of the Companies Act after the decision of-the dispute finally by the Civil Court.
(f) PLD 1987 Lahore. 569 [at pages 570, 572 and 573] Salahuddin Khan v. Al-Mansoor Limited Decided by his Lordship Khalil-ur-Rehman Khan, J. On 21st July, 1987.
After referring to the various proceedings filed by the petitioner and the present status of those proceedings, his Lordship concluded at pages 572 and 573 in paragraphs 8 and 9 as follows:-- Thus the questions whether the letter dated 1.4.1985 was issued and signed by Syed Jamat Ali Shah respondent and if so, whether he was authorized by the respondent company to issue the same, require to be determined. This will necessarily entail holding of detailed inquiry and recording of evidence in respect of the disputed factual assertions. Including the one that due to persuation of common friends and relatives the respondents has promised to restore to the petitioner the disputed shares as well as the office of directorship. These questions cannot be gone into by this Court as the power vesting under Section 152 of the Companies Ordinance, 1984 is not to be allowed to be Invoked where the resolution of the questions raised required holding of detailed inquiry and going into complex questions of law and fact.................... The aforesaid view is to be applied more particularly now in view of the provisions contained in Section 9 of the Companies Ordinance, 1984 as sub-section (3) of Section 9 provides that the Court, in exercise of its jurisdiction, shall in all matters before it follow the summary procedure.
The proceedings under Section 152 of the Companies Ordinance are to be restricted to the correction of error or removal of defects or imperfections of the kind mentioned in the section.
Again, if the case be one of difficulties, complexities and complications it should more appropriately be left to be decided at a regular trial as this power is not intended for settling the controversies under several heads necessitating a regular investigation, It may be added that whether judicial discretion should be exercised by the Court for the purpose of directing or refusing the rectification of register of members depends on the facts of each particular case. I am clear in my mind that the instant case does not fall within the ambit of the provisions of Section 152 of the Companies Ordinance as for all intents and purposes, specific performance is being sought of the promise made in the, letter dated 1.4.1985.
(g) 1987 CLC 2079 [Lahore] [at pages 2080, 2081 and 2084] Mushtaq Ahmed v. Shaukat Soap Factory Decided by his Lordship Khalil-ur-Rehman Khan, J. On 6th April, 1987.
In this case the petitioner sought directions for the issuance of share certificates and rectification of the register by restoring thereto the name of the petitioner. The petitioner also sought an order restraining the respondents from interfering in the performance of his duties and functions as a director of the company, In addition to documentary evidence oral evidence was also led in this case regarding the matter in controversy. His Lordship then concluded at page 2084, paragraph 9, as follows:-- It is apparent that serious questions of law and fact require to be determined in the case. Obviously without holding a detailed inquiry, it will not be appropriate to determine these disputed questions.
It has been consistently held by superior Courts that though power to rectify the Register of Members is very wide yet this jurisdiction being summary is not to be allowed to be invoked for resolution of disputes of complicated nature necessitating a regular trial, It is equally well- established that these proceedings are not intended to be used for deciding disputes requiring .
Investigation, In such a situation the parties should be left to have the controversy resolved through a regular suit, In this petition in view of the allegations made it is necessary to decide as to when the petitioners became aware of the transfer of the shares from their names to the contesting respondents. The question of transfer of shares and of limitation requires to be determined in a regular suit, It would not be proper for this Court to decide this question in summary proceedings under Section 152 of the Companies Ordinance, 1984. The petitioners, if so advised, may establish their claim in a regular suit before the Civil Court, where the parties will be entitled to raise all the pleas available to them under law.
(h) PLD 1987 [Lahore] 1 [at page 4] Khurshid Ahmad Khan v. Pak-Cycle Manufacturing Company Limited Decided by his Lordship Khalil-ur-Rehman Khan, J. On 21st September, 1986.
In this case it was held at page 4, paragraph 7 as follows:- The power vested in Court under Section 152, is to be exercised in cases where legal title in the applicant is clear, as in a complicated or doubtful case, summary jurisdiction ought not to be exercised. This was so held as early as the year 1877 in the matter of the Diamond Rock Boring Company Ltd. (1877 2 Q.B.D. 463. It is true that this section gives the judge wide discretion in deciding matters relating to the rectification of Register of Members but that would mean - that each and every controversy raised respecting the shares or rights claimed with regard thereto can be considered and determined by the Court, In a case where sale of shares is not complete, remedy under general law is to be availed of by instituting proper proceedings in the Civil Courts of plenary jurisdiction. The summary proceedings under Section 152, Companies Ordinance, 1984, cannot be resorted to when the suit for seeking same relief has become barred by time under the Limitation Act. Again the discretion vesting in the Court will not be exercised in favour of the party guilty of laches. The delay in a given case may give rise to equitable considerations and disentitle a party from seeking a particular relief, In the instant case, sale of shares was not complete.
Learned counsel for the petitioners was not in a position to urge that suit for specific performance if now filed, will not be liable to be discussed as barred by time. The petitioners in the circumstances noted above are not entitled to invoke jurisdiction vesting in this Court under Section 152, Companies Ordinance. For the reasons given above, there is no alternative but to dismiss this petition.
(xxi) Thus, it will observe that the Courts in Pakistan have generally adopted the view that where complicated or serious questions of facts or law are involved, the Courts have been inclined to exercise their discretion and have refused the application for rectification of the register under Section 152 of the Ordinance. There is only one case, Akbar Ali Sharif v. Syed Jamaluddin (1991 MLD 203), where the Court concluded that the allegations made by the respondent were not substantial and were in fact fraudulent and that as such the case of the petitioner was established and the register was ordered to be rectified. However, at the same time the Court will not exercise its discretionary jurisdiction under Section 152 of the Ordinance where the petitioner is in effect attempting to secure some other relief, such as, specific performance of a contract. Such a matter ought to be decided by the Civil Courts.
(xxii) However, in Industrial Development Bank of Pakistan v. Sarela Cement Limited Company (1993 CLC 1540 [Quetta]) his Lordship Iftikhar Muhammad Chaudhry, J., in a winding-up petition has concluded that the summary procedure does not bar the recordal of evidence and the careful consideration of facts while exercising jurisdiction under the Companies Ordinance, 1984. In this regard his Lordship, at page 154 "A", held as follows:-- Under Section 9(3) of the Ordinance the Court seized with the matter, has been empowered to follow the summary procedure. No doubt by adapting summary proceedings a lengthy procedure provided under the Civil Procedure Code can only be curtailed. However, to effectively decide the matter Courts are under obligation to carefully apply their judicial mind, so the cases are disposed of by an intelligent judicial act and if need be the point for determination be also noted down in the pecuniar circumstances of the case, evidence be also recorded and thereafter on the basis of material produced in support of contentions the dispute should be resolved.
(xxiii) There is no provision in the Indian Act which requires the Company Judge to follow the summary procedure, In regard to the jurisdiction and power to order rectification of registers, the Courts in India have held as follows:--
(a) (1994) 79 Comp. Cases 163 (Delhi FB) [at pages 165, 176, 177 and 178] Ammonia Supplies Corporation Private Ltd. v. Modern Plastic Containers Pvt. Ltd. and others Decided by their Lordships Y.K. Sabharwal, R.L. Gupta and J.K. Mehra, JJ. On 11th October, 1993 At page 165 of their Lordships set out the question in issue as follows:-- The short point for determination in this matter is the nature of jurisdiction the Company Courts exercises under Section 155 of the Companies Act, 1956, (for short "the Act"), while dealing with petitions seeking rectification of the register of members. Whether the jurisdiction is of summary nature and can the Company Court decline to entertain a petition which involves complicated and disputed questions of facts requiring extensive evidence, is the main question that is required to be answered by us in this reference. The other question is whether the jurisdiction of the Civil Court to entertain disputes relating to title to shares is barred.
Their Lordships after referring to Krishna Sugar Mills (AIR 1966 Punj. 44), Public Passenger Service Ltd. v. M.A. Khadar (1966 36 Comp Cas.), Hamam Singh v. Bhagwan Singh [1992] 74 Comp. Cas. 726 (Delhi), Punjab Distilling Industries Ltd. [1973] 43 Comp. Cas. 189 (Delhi), Public Tustee v. Rajeshwar Tyagi [1973] 43 Comp. Cas. 371 (Delhi), held at pages 176 and 177 as follows:- The object of Section 155, in our view, is to be provide remedy in non-controversial matters or in matters where a quick decision is necessary and can be rendered in order to obviate irreparable injury to a party. Section 155 is ordinarily not intended for settling controversies necessitating a regular investigation and in such cases the Company Court can decline to entertain petitions in exercise of its discretionary power and say that since serious disputes are involved, the proper forum for their adjudication is a Civil Court. Section 155(3) only shows that questions relating to title can also be examined by the Company Court but that is also possible without detailed examination of complicated questions of fact and law, requiring extensive oral and documentary evidence and it cannot be inferred from Section 155(3) that the remedy is not summary, It would depend on the facts of each case, It is not necessary in every case where questions relating to title may be involved that there has to be a detailed examination and determination of oral and documentary evidence, the question is not whether the Company Court has no jurisdiction but is can the Court in its discretion decline to exercise it where disputed and complicated questions are involved requiring examination of extensive oral and documentary evidence. We do not think that a respondent would be able to oust the jurisdiction of the Company Court by a mere assertion of the reply about fraud or forgery or want of consideration, In such a case, the Company Court can and certainly would examine whether the said assertion is being made only with a view to oust the jurisdiction of the Company Court or the assertions are such which would require detailed examination of evidence, In the former case the Company Court would proceed with the adjudication of a petition under Section 155. In the latter case, the Company Court would be justified in exercise of its discretion to reject the petition and .Relegate the parties to a regular civil suit, It has to be borne in mind that the power to rectify the register of members is discretionary and so the power to decide questions relating to title as is apparent from a bare reading of sub- section (3) of Section 15 of the Act. We do not agree with the contention that the jurisdiction of wide amplitude would be rendered fruitless and nugatory and the purpose behind introducing Section 155 would be defated, if it is held that the Company Court exercises summary jurisdiction under Section 155 of the Act............................. A long line of decision has clinched the issue and in our view the matter is no more res integra and is covered by the decision of the Supreme Court in the case of Public Passenger Service Ltd. [1966] 36 Comp. Cas. I holding that the Court may refuse relief under Section 155 in exercise of its discretionary jurisdiction and relegate the parties to a suit where by reason of its complexity or otherwise the matter can be more conveniently decided in a suit. We may also notice two other Judgments cited by learned counsel for the petitioner; one of the Kerala High Court in Mathew Michael v. Teekay Rubbers (India) Ltd. [1983] 54 Comp. Cas. 88 and the other of the Madras High Court in Mrs. E.V. Swaminathan v. K.M.M.A. Industries and Roadways Pvt. Ltd.
[1993] 76 Comp. Cas.
1. As both the decisions are primarily based on the judgment of the Gujarat High Court, which has been discussed by us herein-before, it is not necessary to again separately deal with these cited decisions, In our view the law has been correctly laid down by this Court in the case of Punjab Distilling Industries Ltd. [1973] 43 Comp. Cas. 189 (Delhi). The contrary view expressed in Harnam Singh [1992] 74 Comp. Cas. 726 (Delhi) is not correct.
It was concluded by their Lordships at page 178:
(1) The jurisdiction exercised by the Company Court under Section 15 of the Act is discretionary and summary in nature.
(2) In exercise of discretionary and summary jurisdiction, the Company Court can decline to entertain petitions involving disputed and complicated questions requiring examination of extensive oral and documentary evidence.
(3) The remedy of suit for adjudication of disputes relating to title to shares is not barred.
(b) (1993) 76 Company Cases 1 [at pages 8, 9,10, 11, 13, 14 and 17] Mrs. E.V. Swaminathan v. K.M.M.A. Industries and Roadways Private Limited and others.
Decided by his Lordship Lakshmanan, J. On February 27, 1992.
In this case the petitioner had filed a petition under Section 155 of the Indian Act with a prayer to rectify the register of members and to enter the petitioner's name in the register of members. The issued and subscribed capital of the respondent company was divided into 1,275 shares out of which the petitioner holds 775 equity shares. The remaining 500 shares were held by the respondents. Since the books were kept by the respondent's husband it was alleged that the shares of the petitioner have been transferred to the son of the respondent and no board meeting was held in order to approve any such transfer.
It was argued that the proceedings under Section 155 of the Indian Act being summary in nature the Court ought to exercise its discretion and dismiss the petition and that the Court ought not to delve deep into the facts of the case.
Oral and documentary evidence was submitted by both parties.
In considering the scope and ambit of proceedings under Section 155 of the Indian Act his Lordship referred to several cases of the Courts in India as follows (pages 8 to 11):- In Indian Chemical Products Ltd. v. State of Orissa [1966] 36 Comp. Cas. 592, it has been held by the Supreme Court as follows (page 597):-- "The jurisdiction created by Section 38 is very beneficial and should be liberally exercised."
In Public Passenger Service Ltd. v. M.A. Khadar (1966 1 Comp. LJ 1 (SC), it was held that if, by reason of complexity or otherwise, the matter can more conveniently be decided in a suit, the Court may refuse the relief under Section 155 in exercise of its discretionary jurisdiction and relegate the parties to a suit, It is necessary to observe that the Supreme Court has not stated that if the dispute involves questions of. Law and fact, the Company Court should have no jurisdiction. The Supreme Court has only stated that it would be open to the Company Court to refuse the relief under Section 155 of the Act if the matter could be more conveniently tried in a suit.
In Shri Gulabrai Kalias Naik v. Laxmidas Lallubhai Patel of Baroda (1978) 48 Comp. Cas. 438, one of the questions before the Judge was whether the Company Court would entertain a petition for relief under Section 155 of the Companies Act if it involved disputes on questions of fact. The head note reads as follows:- "There is nothing in the language of Section 155 which even remotely suggests that the jurisdiction conferred on the Court is of a summary nature and that it precludes a full inquiry in respect of the title to shares. On the other hand, sub-section (3) of Section 155 gives discretion to the Court, 'to decide any question which it is necessary or expedient to decide in connection with the application for rectification'. This expression is wider in amplitude than the well- known expression 'questions which are ancillary or incidental to the main question'. The jurisdiction conferred by Section 155(3) is a comprehensive jurisdiction which enables the Court in an application under Section 155 to examine all questions, complex, intricate or otherwise, relating to the title to shares, and further enlarges the jurisdiction of the Court set up under the Companies Act to decide all those questions1 which the Court considers necessary or expedient to decide in connection with the application for rectification, In other words, when an application for rectification of the register of Share-holders is made, it would be open to the Court, while considering the main relief, to decide all questions that may arise in such an application on rival contentions. To illustrate, if a petitioner asserts his title to the shares and the respondent contends that the title was acquired by a forged document, forgery would be put in issue and it would be necessary to decide the issue of forgery before the main prayer for rectification of register can be granted.
Section 155(3) is in pari materia with Section 116(3) of the U.K. Companies Act, 1948. But, in England, under relevant rules under Section 116, an application for rectification of the share register has to be made by originating summons or originating petition, while in India it has to be made by way of petition. A petition is more or less analogous to a suit. This procedural distinction must be borne in mind while examining English decisions. Under the Indian Companies Act, 1913, power was conferred on various High Courts to make their own rules for regulating the practice and procedure in matter arising under that Act...................... This has to be taken into consideration that the ratio of some of the decisions of the Bombay High Court which held that jurisdiction under Section 155 is of a summary nature."
The learned Judge, Desai, J. (as he was then) has arrived at the conclusion which he did do on a lucid analysis, after careful study, .................... Of the relevant sections and rules under the English Companies Act, 1948 and the Companies Act, 1956, and the relevant decisions on the question.
Desai, J. Has also considered the decision of the Supreme Court in Public Passenger Service Ltd. v.
M.A. Khadar (1966) 1 Comp. LJ 1 (SC), and held that the question of jurisdiction of the Court under Section 155 of the Act was not canvassed before the Supreme Court and that the Supreme Court did not decide that when complicated questions of fact and law are to be raised under Section 155, the Court would become functus officio.
The learned Judge further observed as follows (page 456 of 48 Comp. Cas.):-- "Therefore, both on principle and on authority, it becomes crystal clear that a petition under Section 155 cannot straightaway be disposed of by merely saying that as complex and complicated questions of title are raised, the matter ought to be decided by way of a suit and the party ought to be relegated to a suit. At best, it-can be said that the question is addressed to the discretion of the Court and, if the Court exercises discretion one way, namely to undertake to hear the petitions, its decision cannot said to be one without jurisdiction. The Companies Act, 1956 is a very comprehensive statute, It is possibly one of the lengthiest statutes. There are as many as 658 Sections, It has created certain rights, It creates a special machinery for enforcement of these rights and resolution of disputes arising in respect of rights under the Act. Membership of a company confers right and right is created by the Companies Act. To exercise the right, evidence of membership is necessary and the Act casts an obligation to maintain a register of members.
These provisions comprehend a possible dispute. The Act creates a machinery and forum for resolution of disputes. If such be the comprehensive legislation and if the dispute involves interpretation of some of the provisions of the Companies Act, when a right to shares is asserted and denied, it would be rather inappropriate to say that a Civil Judge who is ordinarily not called upon in his work-a-day life to deal with the provisions of the Companies Act to deal with and decide it.-Therefore, in my opinion, even complex and complicated questions of title can be appropriately examined in a petition for rectification made under Section 155 of the Companies Act."
In Mathew Michael v. Teekoy Rubbers (India) Ltd. [1983] 54 Comp, as 88, the Kerala High Court has held as follows (head note):-- "Though the Company Court in India is empowered under Section 155 of the Companies Act, 1956, to decide 'any question which it is necessary or expedient to decide in connection with the application for rectification' and the jurisdiction conferred is wide and comprehensive and being a summary one, Courts have been reluctant to interfere with the decision of the directors in matter of registering transfers, where the articles of association confer on them an absolute direction, which is always presumed to have been exercised bona fide..."
After referring to the above cases his Lordship held as follows:- At page 11:-- The above pronouncements lend full support to my view that even complicated and complex questions of title can be appropriately examined in a petition for rectification made under Section 155 of the Act.
In my considered view, there is no limitation on the powers of this Court in regard to the manner in which the power has to be exercised under Section 155(3) of the Act.
At pages 13 and 14:-- There is nothing in Section 155(3) or under the rules to suggest that, if complicated questions of fact or law require to be decided, the Company Court should throw up its hands in despair and direct the parties to resort to ordinary Civil Courts....................... Hence, in my view, the Legislature has not fettered the powers of the Court under Section 155 and it being a beneficial provision, the power of the Court should be liberally exercised.
At page 17:-- Even assuming that the jurisdiction under Section 155 if discretionary, such discretion should be exercised in favour of the petitioner, because of the fact that parties have, on trial, elaborately let in voluminous evidence. The matter has been pending in Court for more than a decade. The parties are closely related. Hence, on the facts of this case and in the interest of justice and the issues involved, this Court has to exercise its discretion in favour of the petitioner without driving the parties to the agony of continuing the litigation before some other forum. The contentions that the petitioner is guilty of delay has been raised only at the Bar and not in the pleadings.
(c) (1993) 2 Comp. LJ 327 (Karnataka) [at pages 332, 333, 334, 335 and 345] Muniyamma and others v. Arathi Cine Enterprises (Pvt.) Ltd.
Decided by their Lordships K.A. Swami and D. R. Vithal Rao, JJ. On 7th January, 1992.
This was an appeal against the decision of the Company Judge exercising his discretion and dismissing the petition for rectification of the register under Section 155 after having recorded evidence in regard to the various allegations made by the parties. The conclusion of the Company Judge was described in the following terms of page 332 paragraph 8:-- The learned Company Judge first considered the scope of Section 155 of the Act and held that the proceedings under Section 155 was a summary proceeding and if a finding could be arrived at summarily, the exercise of power under Section 155 would be arbitrary; that the jurisdiction is discretionary; and equitable principles governed the exercise of jurisdiction; that if the conduct of the parties-complained of was unfair and unjust in relation to the subject-matter of the litigation and the equity sued for would be very relevant for exercise of jurisdiction. The aforesaid propositions were derived from the decision of the Supreme Court in Public Passenger Service Ltd. v. M.A. Khadar ( 1966) 1 Comp. LJ 1 (SC); (1986 36 Comp. Cases 1 (SC); AIR 1966 SC 489.
At page 333 paragraph 8:- The learned Company Judge considered it safe to fall back on the ground that the jurisdiction was discretionary, summary and was also concerned with equities. He was also of the view that........................... No injustice would be caused to the parties if the Court declined to exercise the jurisdiction under Section 155 of the Act. Accordingly, the learned Company Judge dismissed the petitioner keeping it open to the petitioners to establish their right, if any, by resorting to any other remedy.
Their Lordships then at page 333, paragraph 11, stated the points which arose for consideration in the appeal as follows:- We have been taken through the oral and documentary evidence and also the judgment of the learned Company Judge, In the light of the contentions urged on both sides, the following points arise for consideration:--
(1) Whether respondents Nos. 3 to 6 have proved that the petitioners sold and transferred their shares to them for valuable consideration?
(2) Whether the transfer of shares of the petitioners was effected in accordance with law? If not, whether it is valid in law?
(3) Whether it is just and proper to go into the transfer of shares of other members of the company who are not before the Court and grant rectification of the register of the members of the first respondent-company relating to those Share-holders?
(4) Whether the order under appeal is sustainable in law and on facts?
(5) To what reliefs the petitioners/appellants are entitled?
With regard to point (3) above, their Lordships referred to certain cases of the Courts in India as follows (pages 344 to 345, paragraphs 47A to 52):- The Supreme Court in Public Passenger Service Ltd. v. M.A. Khadar(1966) 1 Comp. LJ 1 (SC); (1966) 36 Comp. Cas. 1; AIR 1966 SC 489 has held that (head note of AIR):-- "Where by reason of its complexity or otherwise, the matter can more conveniently be decided in a suit, the Court may refuse relief under Section 155 in exercise of the discretionary jurisdiction and relegate the parties to a suit."
In that case, it was held that as the case did not involve complicated question, there was no necessity tb drive the parties to a suit, It was also pointed out that the rectification of the share register should be allowed if the name of the person after having been entered in the register was without sufficient cause omitted from it. There was no sufficient cause for the omission of the name of the shareholder from the register, and the omission was due to invalid forfeiture, In that view of the matter, it was held that the forfeiture was invalid. Therefore, it was necessary to grant relief to restore the names of the Share-holders.
In Indian Chemical Products Ltd. v. State of Orissa (1966) 2 Comp. LJ 63 (SC); (1966) 36 Comp. Cas.
592; AIR 1967 SC 253, the provisions of Section 38 of the Act were considered. The provisions contained in Section 38 of the Indian Companies Act, 1913, were similar to Section 155 of the Act (Companies Act, 1956). In that case, the State of Orissa claimed that by reason of successive constitutional changes, the shares held by the Maharaja Mayathan became vested in the State of Orissa, therefore, it be entered in the register of members of the company. The board of directors refused to register the State of Orissa as successor to the shares held by the Maharaja. Therefore, a petition under Section 38 of the Indian Companies Act, 1913, was filed in the High Court of Orissa and the same was allowed, In the appeal, the Supreme Court confirmed the order of the High Court and held as follows (at page 596):-- "Though the State of Orissa had acquired title to the shares by operation of law, by way of abundant caution, it obtained a deed of transfer and lodged it with the company together with the share scrip. The transfer deed was duly stamped and complied with all the formalities required by law. The claim of the State of Orissa based upon the transfer deed was within the purview of Article
11. Even with regard to this claim, the Courts below concurrently held that the board of directors acted mala fide in refusing to register the transfer. This finding is amply supported by the materials on the record."
Ultimately, in para 11 of the judgment, the Supreme Court held as follows (at page 597):-- "The Maharaja of Mayathan has ceased to be the owner of the shares. The State of Orissa is now their owner and has the legal right to be a member of the company, and is entitled to say that the company should recognize its membership and make an entry on the register of the fact of its becoming a member and its predecessor-in-title having ceased to be a member. The name of the State of Orissa has without sufficient reason been omitted from the register, and there is default in not entering on the register, the fact of the Maharaja having ceased to be a member. The Court's jurisdiction under Section 38 is, therefore, attracted. The High Court rightly ordered the rectification in the exercise of its summary powers under Section 38. The jurisdiction created by Section 38 is very beneficial and should be liberally exercised. We see no reason why the Court should deny the applicant relief under Section 38. The directors of the applicant company on the most frivolous of objections have prevented the State of Orissa from becoming a member for the last 16 years, It is a matter of regret that justice has been obstructed so long. There is no merit in this appeal."
Therefore, it is clear from the aforesaid decision that even a complicated question as to whether the board of directors acted mala fide in refusing to register the State of Orissa as a member of the company was gone into in a petition filed under Section 38 of the Indian Companies Act, 1913, and it was approved by the Supreme Court, It was also specifically observed that the jurisdiction created by Section 38 was very beneficial, and should be liberally exercised. The learned Company Judge has also noticed this decision.
The High Court of Gujarat in Gulabrai Kalidas Naik v. Laximidas Lallubhai Patel of Ba rod a (1978) 48 Comp. Cas. 438, has taken a view that in a proceeding under Section 155 of the Companies Act, even if the relief sought for involves complicated questions, they can be gone into, and if a case is made out, the relief can be granted. The same is the view expressed by the High Court of Kerala in K.P. Anthony v. Thandiyode Plantations (P) Ltd. (1987) 3 Comp. LJ 154 (Ker); (1987) 62 Comp. Cas.
553.
After referring to the above cases their Lordships, at page 345, paragraph 53, concluded as follows:-- Thus, the conspectus of these decisions lead us to a conclusion that even though the proceeding under Section 155 is a summary proceeding, as it is a relief provided under the statute, in a proper and appropriate case, it is open to the Court, to grant relief even though it may involve complicated questions of law and facts. Whether in a particular case, relief should be granted or not, because the jurisdiction is discretionary as the word used is "may" in Section 155 of the Act, would depend upon the facts and circumstances of the case, but the exercise of jurisdiction cannot be refused on the ground that it involves complicated questions of law and facts. Of course, the propriety of the petitioners and their conduct having a bearing on the subject-matter of the petition would be relevant to the decision as to whether the discretion should or should not be exercised, In the instant case, in the light of findings recorded, it is not possible to agree with the view of the learned Company Judge that the petitioners are not entitled to the discretionary relief, In a case like this, declining to exercise the jurisdiction would amount to failure to exercise the jurisdiction.
(d) (1987) 67 Comp. Cas. 553 (Kerala) [at pages 558, 559, 561] K.P. Antony v. Thandiyode Plantations P. Ltd. And others Decided by their Lordships V. Sivaraman Nair and K. John Mathew, JJ. On 29th July, 1986.
This was an appeal from the decision of the Company Judge declining to exercise jurisdiction under Section 155 of the Indian Act on the grounds that there was no instrument of transfer (as required by Section 108) and that no details of the Share-holders had been described. The Company Judge also held that it would not be desirable to pronounce on this question of title until the scope of the agreement in dispute was settled.
At page 558 their Lordships compared Section 38 of 1913 Act and Section 155 of the Indian Act as follows:-- "It may be noticed that the present section omits the first part of the proviso contained in Section 38 of the Indian Companies Act, 1913, to the effect that the "Court may direct any issue to be tried in which any question of law may be raised" and refers in subsection (4) only to "the Court on the application or on any issue raised therein and tried separately". From this, it would appear that the order passed by the Court is not based on any summary decision. Clause (a) of sub-section (3) of Section 155 empowers the Court to decide "any question relating to the title of any person who is a party to the application". Clause (b) of sub-section (3) empowers the Court to decide "any question which it is necessary or expedient to decide in connection with the application for rectification."
Under sub-section (1) of Section 2, jurisdiction to decide questions under the Companies Act is the exclusive jurisdiction of the Court as defined in that sub-section, namely, in an application under Section 155, the High Court having jurisdiction in relation to the place at which the registered office of the company concerned is situate.
Their Lordships then referred to certain cases of the Courts in India as follows (at page 559):-- In Madras-Bangalore Transport Co. P. Ltd. v. K.A. Sebastian [1975] KLT 655, this Court relied upon a large number of decisions from Mohideen Pichai Taranganar v. Tinnevelly Mills Co. Ltd., (AIR 1928 Mad. 571), Public Passenger Service Ltd. v. M.A. Khadar [1966] 36 Comp. Cas. 1 (SC), to hold that where by reason of its complexity or otherwise, the matter can more conveniently be decided in a suit, the Court may refuse relief under Section 155 and relegate the parties to a suit ..................................................... In Mathew Michael and others v. Teekoy Rubbers (India) Ltd. (1983) 54 Comp. Cas. 88 the Court considered the scope of Section 155 of the Companies Act and held as follows:-- "There appears to have been some controversy regarding the nature of the Company Court's jurisdiction in proceedings for rectification. As pointed out in Shri Gulabrai Kalidas Naik v. Laxmidas Lallubhai Peal of Baroda (1978) 48 Comp. Cas. 438, the English Courts were always taking the view that the jurisdiction was summary in nature. That was because under the Rules framed, an application for rectification had to be made by originating summons. But in India the Company Court is approached under S. 155 with a 'petition', which is more or less analogous to a suit. Some of the earlier Bombay decisions were rendered under Rules framed by the High Court. These decisions cannot apply to petitions under S. 155 where the Court empowered to decide 'any question which it is necessary or expedient to decide in connection with the application for rectification'. The jurisdiction conferred by S. 155(3) is wide and comprehensive and the Judge is in agreement with the view taken in Gulabrai's case that it is not summary."
Their Lordships concluded at page 561 as follows:-- On a consideration of the rulings of different Courts, the Judges are of the view that the reason of the Gujarat High Court in Shri Gulbrai Kalidas Naik v. Laxmidas Lallubhai Patel of Baroda (1978) 48 Comp. Cas. 438, which is accepted in Mathew Michael and others v. Teekoy Rubbers (India). Ltd.
(1983) 54 Comp. Cas. 88 is to be preferred to the other decisions as far as the scope of Section 155 of the Companies Act is concerned.
(c) (1983) 54 Comp. Cas. 88 (Calcutta) [at page 92] Mathew Michael and others v. Teekoy Rubbers (India) Ltd., PalaI and another Decided his Lordship M.P. Menon, J. On 30th March, 1981.
In this case the petitioner acquired shares of a company but the company refused to register the shares exercising the discretion granted to the directors by its articles of association to refuse without assigning any reason for transfer of shares. The petitioner sought rectification of the share register.
As regards the power of the Court to order rectification of the register under Section 155 of the Indian Act, his Loreship- held as follows (at page 92):- There appears to have been some controversy regarding the nature of the Company Court's jurisdiction in proceedings for rectification. As pointed out in Shri Gulabrai Kalidas Naik v. Laxmidas Lallubhai Patel of Baroda (1978) 48 Comp. Cas. 438, the English Courts were always taking the view that the jurisdiction was summary in nature. That was because under the Rules framed, an application for rectification had to be made by originating summons. But in India the Company Court is approached under S. 155 with a 'petition', which is more or less analogous to a suit. Some of the earlier Bombay decisions were rendered under Rules framed by the High Court. These decisions cannot apply to petitions under S. 155 where the Court is empowered to decide 'any question which it is necessary or expedient to decided in connection with the application for rectification'. The jurisdiction conferred by S. 155(3) is wide and comprehensive and the Judge is in agreement with the view taken in Gulabrai's case that it is not summary.
12. Mr. Vellani argued that while accepting the view that the jurisdiction under Section 155 of the Indian Act and Section 38 of the 1913 Act is summary in nature the Courts differ on whether the discretion granted by that section should not be exercised where complicated or serious questions of fact arise. The decisions under Section 38 of the 1913 Act hold that in complicated cases this discretion should not be exercised and the parties should be left to have their dispute resolved in a Civil Court. The cases quoted above under Section 155 of the Indian Act suggest that it is a matter for the Company Judge to decide whether or not on the material before him he is able to determine the respective rights of the parties and that neither the section nor the summary nature of the proceedings bars the Company Judge from undertaking an inquiry as regards the respective rights and titles of the parties.
13. Mr. Vellani further argued that if under the summary procedure the Company Judge was not required to consider and decide on complicated questions of law or fact and was in such cases required to refer the matter to the Civil Courts, then the only jurisdiction effectively left to the Company Judge under Section 152 of the Ordinance (or under any of the other provisions of the Ordinance, such as, Section 290 - oppressive management, and Section 305 - winding-up. Of a Company), would be to endorse the decision of the Civil Court. This, Mr. Vellani argued, could not have been the legislative intent. For example, Section 152 of the Ordinance empowers the Company Judge to determine entries and omissions from the register of members which are fraudulent or have been made or omitted without sufficient cause and to decide all questions relating to the title; Section 290 of the Ordinance empowers the Company Judge to pass such orders as he may think fit to bring to an end the matter complained of and to regulate the conduct of the company affairs where it is alleged that the affairs of the company are being conducted in an unlawful or fraudulent manner or in a manner oppressive to the members or creditors; Section 305 of the Ordinance grants to . The Company Judge extensive powers to order the winding-up of a company and for this purposes to determine whether the company has engaged in fraudulent activities or is carrying on its business in a manner oppressive to its members or whether it would be just and equitable to windup the company. Each of these sections requires the Company Judge to undertake an enquiry with respect to serious issues of fraud, oppression, unlawful actions and misconduct, before coming to any conclusion, In any given case it may not be possible to determine such serious \ questions without recording evidence or making a detailed enquiry.
Surely, it could not have been the legislative intent that in all such cases the Company Judge should refuse to exercise jurisdiction on account of the provisions of Section 9(3) of the Ordinance and to refer the matter to the Civil Court. The High Court in exercise of its company jurisdiction has all the powers of the Civil Court, In this regard Mr. Vellani referred to Rule 7 of the Companies (Court) Rules, 1997 which provides that "save as provided by the Ordinance or by these Rules, the practice and procedure of the Court and the provisions of the Code of Civil Procedure, 1908 as far as applicable shall apply to all proceedings under the Ordinance and these Rules".
14. Mr. Vellani while concluding his submissions argued, on the basis of the cases referred to above and the provisions of Sections 9(3) and 152 of the Companies Ordinance,. 1984, that:--
(a) The Court may under Section 152 of the Companies Ordinance, 1984 order rectification of the register of members where the entry to a person's name in or the omission of his name from the register is fraudulent or otherwise without sufficient cause.
(b) In the process of determining whether or net to order the rectification of a register of members the Court may consider and deal with and determine all questions relating to title and all such questions as may be necessary or expedient to decide whether or not rectification of the register should be ordered.
(c) The Court has a discretion whether or not to order rectification of the register of members.
(d) In the past, the Courts in Pakistan, while exercising this discretion in cases where they have been of the view that complicated questions of facts and law are involved, have refused to order the rectification of the register of members. However, the exercise of this discretion in this manner has been based on an assumption that since the process required to be followed under the Companies Ordinance, 1984 (and previously under Section 38 of the 1913 Act) is a summary procedure, complicated questions of fact and law cannot be considered in such proceedings.
(e) However, there is nothing in the Companies Ordinance, 1984 which prevents the Court from entering into an enquiry, requiring the filing of evidence by way of affidavits and, if and to the extent considered necessary or required, recording oral evidence. This view is supported by Industrial Development Bank of Pakistan v. M/s. Sarela Cement Limited Company (1993 CLC 1540 [Quetta]) and the cases of the Courts in India referred to above.
(f) In exercising the discretionary power vested in the Court under Section 152 of the Companies Ordinance, 1984, the Courts have been reluctant to allow such process to be used to enforce contractual rights, such as, seeking specific performance of a contract.
(g) All proceedings under the Companies Ordinance, 1984 are summary proceedings, that is, an enquiry is required to be made and the Court has to consider and determine the issues raised by the parties and thereafter deliver its judgment, in a simple and expeditious manner. This, however, does not mean that the Court cannot record evidence and make all such inquiries as it considers necessary in the circumstances.
(h) The summary procedure does not exclude the consideration by the Court of controversial facts and does not bar the Court from adjudicating on such facts, and if required recording evidence in regard to such facts. Court need not direct the parties to have their dispute decided in a civil suit.
15. Mr, Motiani agreed with the contentions of Mr. Vellani an 'submitted that in his cases the Court may frame the questions for determination and thereafter record the evidence to come to the right conclusion. He further submitted that if the contention of the respondent is accepted that would mean an exercise in futility for his client as by the time he obtains a decree from the civil proceedings most likely neither his client will survive nor the company.
16. Mr. Bawany and Mr. Rauf Bukhsh Qadri though agreed with the proposition that this Court has jurisdiction to embark upon a detailed enquiry, even by framing the points for determination and recording evidence, to finally adjudicate the matter without referring it to the Civil Court; Mr. Bawany, however, submitted that his case does not require any evidence as he is in possession of original shares and the Company is bound to register the name of his clients in the Register of the Company.
17. Mr. Arfeen contended that a factual inquiry cannot be conducted by this Court and it has to be decided through the Civil Court. He further contended that the controversy as to the shares in custody of Mr. Bawany's client as well as the claim of Mr. Qadiri as to the number of shares owned by him could only be decided after recording evidence and making a full-fledged inquiry through a civil suit and not in the summary proceedings before this Court.
18. Mr. Razvi and Mr. Khan also supported Mr. Arfeen and submitted that the proceedings under the Ordinance being summary in nature no detailed investigation/inquiry could be made and the jurisdiction to declare the title only rested with the Civil Court under Section 42 of Specific Relief Act.
The case of Khairuddin and others Vs. Settlement Commissioner and others (1998 SCMR 988) was referred. This was an appeal by leave of the Court before the Hon'ble Supreme Court of Pakistan against a judgment passed in the writ jurisdiction by the High Court of Lahore. The Hon'ble Supreme Court was pleased to observe that the disputed question of fact cannot be determined in the Constitutional jurisdiction which is summary in its character.
19. I considered the submission of the counsels. Learned Amicus in his submissions placed almost all the decided cases pertaining to the questions under consideration. The relevant portions of the judgments/orders have been reproduced above.
20. With utmost respect to my learned brother Judges who have held that the disputed and controverted question can only be decided by a Civil Court and not by the Company Judge, it is observed that to substantiate their view, no legal basis or provision of law has ever been quoted; all relevant judgments were based on the proposition that the proceedings under the Company Law are summary in nature and the Courts always subscribed to this view, It is further observed that the Courts while ousting their own jurisdiction in matters where disputed questions of fact were involved have omitted to take into consideration certain directions of the various provisions of the Ordinance whereby the Court is empowered to decide even complicated questions which are discussed hereafter.
21. At this point I would like to refer to some of the relevant provisions of the Ordinance. The sub- clause (a) of sub-section (1) of Section 152 provides that if the name of any person is substituted fraudulently or without sufficient cause entered in or omitted the Court may order for the rectification of register of members (ROM), In sub-section (3) ibid the Court is empowered to decide any question relating to the title of any person when an application is made under sub- section (1).'Under Section 290 of the Ordinance the Court is to first satisfy itself that the applicant is a member and not holding less then 20% percent shares, In the same section the Court is empowered to pass any fit order in case it is found that the affairs of the company are being conducted or are likely to be conducted in a unlawful or fraudulent manner or a manner not provided for in its memorandum or in a manner oppressive to the members or any of the members etc. Section 305 while empowering the Court to wind-up the Company, the conditions for which are enumerated in clauses (a) to (h). Sub-clause (f) ibid and its sub-clauses state that the Court is required to be satisfied before ordering the winding-up.
22. From the preamble of the Ordinance, it is apparent that the purpose of the Ordinance is to consolidate and amend the law relating to the companies and certain other association for the purpose of the healthy growth of the corporate enterprises, protection of investors and creditors, promotion of investment and development of economy and matters arising out of or connected therewith. The purpose of the Ordinance obviously is to adjudicate all matters falling under the Ordinance finally to achieve the results for which the Ordinance has been enforced.
23. The question arises that how the Court can without entering into a detailed inquiry pertaining to the provisions of Sections 152, 290 and 305, referred above, satisfy itself and adjudicate the matter finally resolving the disputes between the parties? Can the Court without entering into in-depth investigation by recording evidence, give any finding as to 'fraudulent' action or 'sufficient' cause as provided under Section 152(1)(a). Can the Court under Section 152(3) decide the question of title of any person without determining the points to that effect and recording the necessary evidence?
Where, under Section 290(1) the applicant claims himself to be the member holding not less then 20% shares and the same is denied by the other side, can the Court give any finding in affirmative or negative without entering into a detailed investigation, which will again require evidence?
Whether the Court, without entering into the investigation and recording evidence, can opine under sub-section (2) of Section 290 that the company's affairs are being conducted in an unlawful and fraudulent manner or in the manner not provided for in its memorandum or in a manner oppressive to the members etc. As provided under sub-section (1) of Section 290. Similarly under Section 305 without in-depth inquiry including the recording of evidence can the Court be satisfied for winding-up the company if the case falls amongst others under sub-clauses (ii), (iii) and (iv) of clause (f) ibid.
24. Therefore, the obvious answer to the above questions would be in the negative. Final adjudication of the controversies indicated hereinabove can only be done after framing the points for determination and recording the evidence where serious disputes as to the documents etc. Arises between the parties, It is, however, correct that in all cases the investigation may not be in- depth but can be conducted by looking into the documents and evidence filed alongwith the pleadings.
25. My learned brother, Abdul Qadeer Chaudhry, J., as he then was very aptly in the case of Kabiruddin Vs. Syed Sibtain Ahmad (1987 CLC 604-07 Kar.), while dealing with a case under the Sindh Rented Premises Ordinance, 1979, observed that "The intention of the law is to shorten the litigation and not to involve the parties in multiple litigation". As mentioned before the proposition which has been followed by most of the Courts is that where the intricate or complex Courts of fact are involved the parties are directed to get the matter settled in a civil suit before the Civil Court.
The natural consequence of the above is that the Court pulls its hands away from the Case before it and the parties are left to go through the rigors of a complicated and complex procedure of the civil suit which goes on for decades. With the respect to the learned Judges deciding those cases, in my humble opinion this can never be the intention of the legislature while directing the Courts to adopt summary procedure under Section 9 ibid. Obviously, the Court is not to follow the same complicated procedure as in a civil suit and its technicalities but required to adjudicate the same expeditiously in a manner it deems fit and appropriate in the circumstances of each case.
26. The sum-up of the dictionary meanings of 'summary proceedings' referred above is that the case is to be disposed of promptly in simple manner out of the regular course of the common law.
No where is there a restriction on the forum in recording the evidence for final conclusion. If the matter can-be decided by apparent perusal of the pleadings, ' it may be done so and if the Court deems necessary to frame point of determination and record evidence, the Court must not hesitate to do the needful on the ground that intricate and complex question of facts are involved.
The decisions of the Indian jurisdiction appear to have considered this aspect in the larger interest of the parties and encouraged the Courts to exercise the power conferred upon them liberally. See (1993) 76 Company Cas.
1. I am of the considered view that there is no limitation on the powers of the Court in regard to the manner in which the power has to be exercised under the Ordinance; and that the power should be liberally exercised without driving the parties to agony by ordering the litigation to be carried out before some other forum.
27. The upshot of the above is as follows:--
(a) The summary procedure appearing in Section 9 of the Ordinance does not exclude the consideration by the Court of controversial facts nor does it restrict it from deciding such controversies.
(b) There is no legal impediment in the Ordinance for the Courts entering into any inquiry, framing the points of determination, requiring oral evidence or evidence through affidavits.
28. The cases in hand, in my opinion, are covered by the Ordinance and the factual controversies raised therein are to be adjudicated by this Court. The controversies, however, are of the nature; which cannot be decided without any investigation/inquiry or by recording evidence. I, therefore, find it necessary to first determine the disputed points and thereafter call for evidence.
29. All-these matters are adjourned and on the next date' of hearing this Court will determine the controversial points involved in the matters.
30. The Petition No. 1/2004 which is under Section 305 for winding-up of the Company be heard after the decision in the Petition and C.M.A. No. 1587/2003 filed by Mohsin Butt.
31. I am grateful to Mr. Badaruddin F. Vellani, Advocate, learned Amicus Curiae and appreciate for readership beneficial assistance for coming to the above conclusion. I also record appreciation for the able assistance provided by Mr. Mansoorul Arfeen, Mr. Iqbal Bawany, Mr. Rasheed A. Razvi, Mr. Anwar Mansoor Khan, Mr. Naraindas Motiani and Rauf Bukhsh Qadri (in person).