' ANWAR ZAHEER JAMALI, J.-This High Court Appeal under section 3 of the Law Reforms Ordinance, 1972 read with section 15 of the Code of Civil Procedure (Amendment) Ordinance, 1980, is directed against the' order dated 9-1-2006 passed by learned Single Judge of this Court in Suit No,68 of 2004, whereby plaint in the suit was rejected under Order VII, Rule 11, C.P.C.
2. In a nutshell, relevant facts leading to his litigation are that the appellant had instituted a suit for declaration and permanent injunction against the respondents by making averments in, the plaint that it is a company incorporated under the laws of Cayman Islands, British West Indies and is one of-the original subscribers of the respondent No,2. While the Respondent No,2 is a company incorporated in Pakistan on 9-11-1995 under the Companies Ordinance, 1984 for the purpose of establishing a refinery, for refining crude oil and producing and selling petroleum products of all kinds. The appellant-company, looking to the experience of respondent No,1, gained by him during his previous employment with Gulf Oil in Singapore and in the capacity of General Manager of Attock Refinery Limited, at the, time of sponsoring the respondent No,2 company, before its incorporation, had offered to engage him to perform certain services on the terms and conditions initially "set out in the letter dated 1-3-1994. While the respondent .No,3 is also one of the original sponsors of respondent No,2 company.
3. The dispute highlighted in the suit relates to 10,85,000 fully paid ordinary shares of Rs,10 of respondent No,2 which were sent to the respondent No,1 with a blank verified transfer deed, as a joining incentive. According to the case of the appellant, the respondent No,1 was only entitled for these shares if he had served their company at least for a period of five years, with other terms and conditions reduced into writing in the form of letters dated 1-3-1994, 21-5-1995, 22-5-1995 and 28- 8-1996. Further case of the, appellant it that when respondent No,1 had resigned from the service of respondent No,2, respondent No,2 had issued a letter dated 30-9-1996 calling upon him to surrender the above referred disputed share certificates and blank transfer deed forthwith to the respondent No,2, but this demand was refused by respondent No,1 vide his letter dated 7-10-1996.
Thereafter, on 22-12-2003 respondent No,1 wrote another letter to the Chairman of respondent No,2, giving him the option for exercise of right of first refusal in respect of 10,85,000 fully paid-up ordinary shares of the respondent No,2 company as contemplated in the letter dated 28-8-1996, which gave cause of action to the appellant for institution of present suit for declaration and permanent injunction with the following prayers:-- "(i) Make a declaration that legal and beneficial right, title and interest in the Shares vests in the Plaintiff and not the Defendant No,1;
(ii) Issue a permanent injunction restraining the Defendant No,1 from selling/transferring or agreeing to sell/transfer the aforesaid Shares to any third party or from dealing with the aforesaid Shares in any manner whatsoever that defeats or is intended to defeat the Plaintiff's right title and interest in the aforesaid shares;
(iii) Issue a permanent injunction restraining the Defendant No,2 from registering the sale/transfer of the aforesaid Shares in the name of the Defendant No,1 or in the name of any person claiming any right title or interest in the aforesaid Shares through or under the Defendant No,1;
(iv) Grant any other better or further relief a may be deemed appropriate by this Hon'ble Court in the facts and circumstances .Of the case; and
(v) Grant costs.
' Ad interim orders are also solicited."
4. The plaint in the suit was accompanied with an application under Order XXXIX, Rule 1, C.P.C., being C.M.A. No,219 of 2004, wherein the appellant has prayed for grant of restraint order in their favour in the following terms:-- "It is respectfully prayed on behalf of the plaintiff above named that for reasons, amongst others, disclosed in the accompanying affidavit, this Hon'ble Court may be pleased to restrain the Defendant No,1 from selling/transferring or agreeing to sell/transfer the suit Shares to any third party or from dealing with the aforesaid Shares in any manner whatsoever that defeats or is intended to defeat the Plaintiff.s right title and interest in the said Shares and to also restrain the Defendant No,2 from registering the sale/transfer of the aforesaid Shares in the name of the Defendant No,1 or in the name of any person claiming any right title or interest in the aforesaid Shares through or under the Defendant No,1, until disposal of the above titled suit.
' Ad interim orders in this regard are also solicited."
5 For grant of such interim relief, in the supporting affidavit to the application, Mr. Saleemuzzaman, attorney of the appellant company, has-agitated the same facts and grounds as urged in the plaint. The respondent No,1 in his detailed counter-affidavit to the said application spreading over forty five paragraphs strongly denied any claim of the appellant in respect of 10,85,000 ordinary shares of appellant-company given to him by respondent No,2 'as a joining incentive in terms of the letter dated, 1-3-1994. He also denied the subsequent letters dated 21-5-1995/22-5-1995, and stuck to his stand, unfolded in his letter dated 30-8-1996. He also made reference to the parawise averments made in the plaint to deny the claim of the appellant in toto and claimed exclusive lawful right of ownership over the said disputed shares.
6. After hearing the arguments of the parties counsel on C.M.A. No,219 of 20Q4, the learned Single Judge passed the impugned order wherein, inter alia, he examined in detail the question of limitation for filing of the suit by the appellant and came to the conclusion that the suit instituted by the appellant on 15-1-2004 was hopelessly out of time and consequently on this ground he rejected the plaint in the suit.
7. Mr. Rasheed A. Razvi, learned counsel for the appellant in his arguments made detailed reference to the averments made in the plaint by the appellant and also referred to various letters produced by the appellant along with their plaint and contended that if the learned Single Judge had followed the well-settled principle of law, that for the purpose of examining the question of rejection of plaint under Order VII; Rule 11, C.P.C., averments made *the plaint are deemed to be correct, and correctly applied it to the case of the appellant then there was no occasion for rejection of plaint in the suit, but the learned Single Judge while holding so committed an error of law. He further contended that in the present case the question of limitation was a mixed question of facts and law, therefore, the learned Single Judge was not justified in ordering rejection of plaint at the early stage of the proceedings, without affording proper opportunity to the appellant to lead their evidence in this context. r. Razvi, however, did not dispute that the period of limitation for filing of the instant suit by the appellant was governed by Article 120 of the Limitation Act, which provides six years period of limitation from the date when the cause of action and accrued to a party. But at the same time he also made reference to section 23 of the Limitation Act and contended that the case of the appellant was that of a continuing cause of action against the respondent No,1 for the wrong committed by him, therefore for computing the period of limitation, time should have been reckoned from 6-1-2004, as per Para. 3.1 of the plaint and not from 30-8-1996 as held by the learned Single Judge.
8. Reverting to the merits of the case as regards the claim of the appellant over the 10,85,000 shares, given by respondent No,2 to the respondent No,1, as a joining incentive, he contended that respondent No,1 could have claimed the entitlement of these shares only after meeting the other requisite conditions, as subsequently, mutually agreed and reduced into writing vide letter dated .28-8-1996 which, inter alia, provided minimum period of service of respondent No,1 with the respondent No,2 for five years. He urged that the substantial amount in the shape of 10,85,000 shares of the respondent No,2 company was not offered to the respondent No,1, as bounty or mere joining incentive of the respondent No,2 company, thus, the respondent No,1, who admittedly resigned from the service of the appellant on 30-8-1996, cannot lay any claim over these shares. In support of his arguments Mr. Rasheed A. Razvi placed reliance on the following cases:--
(1) A. Ismailjee and Sons Ltd. v. Pakistan PLD 1986 SC 499.
(2) The Commissioner of Income Tax v. M/s.Kotak and Co. PLD 1958 Karachi 606.
(3) H.B.F.C. v. Shahinsha Cooperative Building Society 1992 SCMR 19.
(4) Niranjan Das v. S. M. Charu Bala Das PLD 1964 Dacca 406.
(5) Custodian of Enemy Property v. Hoshang M.Dastur PLD 1977 Karachi 377.
(6) Abdul Sattar and Co. v. Dada Ltd. PLD 1979 Karachi 88.
(7) Brothers Steel Ltd. v. Mian Mairajuddin PLD 1995 SC 320.
(8) Muhammad Ahmed v. Associate Engineering Concern (Pvt.) Ltd. 1998 CLC 426.
(9) Bashir Ahmed and others v. Muhammad Aslam and others 2003 SCMR 1864.
(10) Mst. Bolo v. KokIan AIR 1930 PC 270.
(11) Karanamurthi Thevar v. Ramanatha Thevar AIR 1946 Madras 248.
(12) Muhammad Ali and 7 others v. Sakar Khanoo Bai PLD 1984 Karachi 97.
(13) Jumma Khan and others v. Mahmud Khan and others 1973 SCMR 289.
(14) Mst. Izzat v. Allah Ditta PLD 1981 SC 165.
(15) Khushi Muhammad and 3. Others v. Mst. Zainab Bibi and 20 others 1981 SCMR 814.
(16) Mst. Zarifan v.Mst. Rahmati 1987 SCMR 66.
(17) Wali and 10 others v. Akbar and others 1995 SCMR 284.
(18) Haji Kadir Bux v. Province of Sindh and another 1982 SCMR 582.
(19) Muhammad Munir and others v. Mst. Sharifan and others 1989 MLD 3350.
(20) Jurawan Singh and others v. Ramsarekh Singh and others AIR 1935 Cal.
405.
(21) Sheo Prasad Sonar v. Manager Manhar and another AIR 1914 All.
531.
(22) Nur Muhammad v. Gauri Shankar and another AIR 1920 Lah.
195.
(23) K.A. Srinivasa Ayyangar v. Ramanujachariar AIR 1941 Madras 498.
(24) Mukhedo Singh and another v. Harakh Narayan Singh and others AIR 1931 Patna 285.
(25) Wali and 10 others v. Akbar and 5 others (1995 SCMR 284.
(26) Muhammad Matin v. Mrs. Dino Manekji Cinoy PLD 1993 Karachi 387.
9. A review of these cases, shows that the first two cases relate to the contention of Mr. Razvi with reference to sections 4 and 19 of the Sales of Goods Act, 1930. The next four cases deal with the proposition advanced by the learned counsel that the document of a contract is to be considered and read as a whole and it is to be interpreted keeping in view the conduct of the party, prevailing circumstances and any oral evidence which may be available for consideration. The cases at.
Serial Nos.7 and 8, support the submissions of the learned counsel regarding non-compliance of section 155 read with section 76 of the Companies Ordinance 1984 and its effect to the facts and circumstances of the instant case,. Case No,9 in the list relates to the submission that simple evasive denial by a party and concealment of material facts in order to deprive the other party from its lawful entitlement cannot be given due weight. The cases at Serial Nos.10 to 20 deal With the submission of the learned counsel with reference to the scope and applicability of section 23 of the Limitation Act. The cases at Serial Nos.21 to 23 amplify the view that where a party has not availed an earlier cause of action, he will not be prevented for availing himself of a later one. The next two cases deal with the proposition of continuing or successive cause of action and its effect to the Limitation Act. While the last case is relevant for examining the question of grant of interim injunction with reference to the three ingredients, viz. Prima facie case, balance of convenience and irreparable loss and injury.
10. Conversely, Mr. Munib Akhter, learned counsel for the respondent No,1 strongly supported the view taken by the learned Single Judge in his impugned order as regards the question of limitation.
Making reference to the impugned order he contended that the learned Single Judge has carefully examined all the relevant facts stated in the plaint of the suit by the appellant, and rightly recorded his conclusion that the suit instituted by the appellant was governed by Article 120 of the Limitation Act, while the period of limitation had commenced running from 30-8-1996, thus, institution of suit by the appellant on 15-1-2004 was hopelessly time-barred. He further contended that the transfer of title in respect of the disputed share certificates was completed in all respects as soon as these shares certificates along with blank verified transfer deed were handed over to the respondent No,1 as his joining incentive. Thus, there was no occasion for the appellant to argue that it was a case governed by section 23 of the Limitation Act, which only applies to the cases of continuing cause of action. He contended that if the provision of section 23 of the Limitation Act, which has no applicability to the facts of the present case, is applied in the way as interpreted by the appellants' counsel, then no suit would become time-barred and it will be very convenient for every litigant to cover-up the period of limitation by making reference to certain facts which may attract the provision of section 23 of the Limitation Act. Continuing with his submissions on the point of limitation, Mr. Munib Akhter also made reference to Para 3.1 of the plaint to show that according to the appellant's own case the cause of action had first accrued in their favour on 30-8-1996, when the respondent No,1 asserted his ownership interest in the aforesaid shares and denied the claim of the appellant. According to the learned counsel, once the period of limitation had commenced from such date, it could not have stopped, as held in a number of cases by the Hon.Ble Supreme Court of Pakistan. Commenting upon the merits of the claim of the appellant in respect of the disputed 10,85,000 shares held by the respondent No,1, with blank verified transfer deeds, he contended that if holding of share certificates with blank transfer deeds in favour of the respondent No,1 is not approved/accepted as complete transaction of sale of such certificates, then the whole business of stock Exchange, which is based on such well recognized practice, will collapse. Thus, the appellant has no claim whatsoever over the disputed shares held by the respondent No,1, who is now free to sell his shares in the Stock Exchange, as even the option of first refusal provided in the letter dated 1-3-1994, to which respondent No,1 was committed, was not availed or responded by the appellant or the respondent No,3, Mr. Munib Akhter concluded his arguments with the submission that the instant appeal is liable to be dismissed. In support of his submissions he placed reliance on the following cases:--
(1) Maneckji Pestonji Bharucha and another v. Wadilal Sarabhai and Company AIR 1926 PC 38.
(2) Abdul Ghafur v. The Thal Development Authority, PLD 1958 (W.P.) Lahore 169.
(3) Nazakat Ali v. WAPDA and others 2004 SCMR 145.
(4) Haji Ghulam Rasul and others v. Government of the Punjab and others 2003 SCMR 1815.
(5) Cantonment Board, Rawalpindi v. Muhammad Sharif PLD 1995 SC 472.
(6) Khawaja Muhammad Afzal and another v. Sh. Muhammad Sadiq and others 1988 SCMR 179.
(7) Syed Niamat Ali and 4 others v. Dewan Jairam Dass and another PLD 1983 SdC 5.
(8) Jumma Khan and others v. Mahmud Khan and others 1973 SCMR 289.
(9) Mst. Izzat v. Allah Ditta PLD 1981 SC 165.
(10) Khushi Muhammad and 3 others v. Mst. Zainab Bibi and 20 others 1981 SCMR 814.
(11) Mst. Zarifan v. Mst. Rehmati 1987 SCMR 66.
(12) Wali and 10 others v. Akbar and 5 others 1995 SCMR 284.
11. A careful reading of the cases cited by Mr. Munib Akhter goes to show that the first case is the one which elaborates a situation, where once the shares and transfer deeds are handed over to the transferee the transaction of transfer of sale of shares is completed for all practical purposes.
This case is also elaborately discussed by the learned Single Judge in his impugned order. Cases at Serial Nos: 2 to 6 elaborate the principle of law that once the time for the purpose of limitation has begun to run it will not stop nor it can be suspended. The case at Serial No,7 deals with the scope and applicability of section 23 of the Limitation Act. Cases Nos.8 to 12 again refer to the core issue of the applicability of section 23 of the Limitation Act to the facts and circumstances of the present case or otherwise.
12. Mr. Rasheed A. Razvi, learned counsel for the appellant, in his reply arguments, has reiterated his earlier submissions with more vigor and contended that it seems ridiculous for the respondent No,1 to take away bounty in the shape of 10,85,000 fully paid ordinary shares of Rs,10, each of the appellant as a joining incentive without rendering any positive services for the said company, which must be the prime object of the appellant, and the respondents No,2 in attracting the respondent No,1, looking to his experience and skills in the relevant field of establishing a petroleum refinery.
13. We have carefully considered the submissions of the learned counsel, perused the material placed on record and have also carefully gone through the various cases cited by the learned counsel at the bar. There is no cavil to the principle of law propounded in these cases, but the applicability of the rule laid down therein is to be seen on the basis. Of peculiar facts and circumstances of this case, as stated in the plaint of the suit and other material on record. The case of the appellant is that it is a company incorporated under the laws of Cayman Islands, British West Indies and one of the original subscribers of respondent No,2 Company, who had approached the respondent No,1, looking to his experience gained during his previous employment with Gulf Oil Singapore and as General Manager of Attock Refinery Limited, to perform certain services for them in setting up their project of oil refinery. The first letter in this context is the letter dated 1-3-1994, which reads as under:- "1st March, 1994 Mr. Aman ur Rahman 83, 11th Avenue F-10/1 Islamabad.
' Dear Aman ' I am pleased to advise that the Sponsors of the company have invited you to join them in the establishment and running of a Petroleum Refinery in Pakistan. They have decided to offer you a joining-in incentive consisting of 1,085,000 fully paid Ordinary Shares of Rs,10 each, of the proposed company to be issued either in your name or that of your nominees. The Sponsors would also like you to join the Board of Directors and to head the company as its Chief Executive Officer. The compensation package will be settled by mutual consent at the time of financial closure.
' The sponsors accept your desire to continue to remain Islamabad based and also agree to your request to be replaced in as the Chief Executive Officer of the company once the plant comes on stream. It is also mutually agreed that after handing over the charge as Chief Executive Officer you will continue to work as Director Technical with direct responsibilities to look after the technical aspects of the refinery including optimization of feedstock purchases and produce disposal, planning and initiating studies for Plant Expansion/Modernization and spearheading the implementation of the decisions approved by the Board of Directors. You will also be the primary contact for the Ministry of Petroleum.
' It must be noted that should you or your nominees at any stage decide to dispose of any shares the undersigned will have the right of first refusal to purchase these shares.
' Kindly sign and return the duplicate of this letter to confirm your acceptance of the terms mentioned in the foregoing paragraphs.
' Kind regards.
' Sincerely (Sd)
' Parvez Abbasi."
14. Admittedly, after the receipt of this letter the respondent No,1 has joined the appellant-company by accepting such offer and had worked there without any further dispute till 21-5-1995, when the respondent No,3 addressed another letter to him, unilaterally incorporating herein the condition of five years active involvement of respondent No,1 in the management of the company from the commencement of production. This letter, according to the appellant, was followed by letters dated 22-5-1995 and 28-8-1996, further unilaterally imposing other conditions upon the respondent No,1 and going to the extent of superseding and terminating all terms and conditions earlier agreed between the respondent No,1 and the respondent No,2. This situation was met by the respondent No,1 through his letter dated 30-8-1996, which clarifies his stance about the controversy. For conveniences sake, same is reproduced as under:-- "Aman ur Rahaman No,83,11th, Avenue, F 10/1, Islamabad.
Tel: 9251 280740 Fax: 9251 281 223 Dear Posy, August, 30, 1996 ' I am disappointed at your letter but do not wish to get involved in rebuttals. At his stage 20 months since we first talked about it-I note the untenability of the situation where I am expected to be totally working for the project at zero 'real' compensation. I still cannot figure out how you expect to execute a project, the majority shares of which will not be with you, on the basis of `free' services by all those about you. This alone makes the project a very special one, in fact and public service venture: I believe you should have budgeted and kept sufficient funds locally to cater for local expenses, of which staff expenses is not an insignificant part.
' While I find it distasteful, I must touch on the subject of the sign-up bonus since you bring it up time and again. I have explained to you several times that this is not a 'gift' . It is a normal package given to attract people of particular background and experience and demanded by them for just such cases where the projects go away or there is a fall-out with the owners. Furthermore as of now the 'shares' are of no value or consequence and will not be till after the company is listed. On my side the 'real' price I have paid is in lost opportunities and possibly loss of credibility in the industry and association in the project which is still adrift and still faces horrendous obstacles.
' In view of all that has happened on this subject culminating in this recent letter of yours, I have decided to re-establish my relationship on an arms length basis. Please consider this my resignation from the CEO position. As a professional my services are available at the price that needs to be renegotiated. I am not in the job market and therefore have no interest in a full time situation. I am available as a consultant on a retainer-cumactual out-of-pocket basis, operating out of Islamabad. Unless very urgent matters need me to travel. If this interest you, we can proceed further.
' While I believe that the 'sign up' bonus has already been earned, ' I am willing to consider any constructive alternate in exchange for it, for the shares themselves are no longer of interest to me.
' One last and important issue. Please ensure that the tax deducted for the period ending June, 1996 is paid on the first working day from the receipt of this letter and the receipt couriered to me immediately. I have already submitted the deduction certificate given to me by Najmi and my tax consultants are holding back the submission of my papers till the receipt for the amount, the company claims to have deducted, is attached with the returns. I would also request that the balance of the payment including and up to August also be couriered to me as a demand draft in my name payable at a bank in Islamabad."
15. As evident from the record, the respondent No.l has clearly \ demonstrated his position as regards the disputed shares of the company,whereafter the appellant had also written letter dated 30-9-1996, replied by respondent No,1 on 7-10-1996, but thereafter there was complete pause till 22-12-2003 when the respondent No,1 abiding by the terms of initial agreement between the parties in the form of letter dated 1-3 1994, extended the option of first refusal to the respondent No,2. This letter was responded by respondent No,3 vide his reply dated 26-12-2003, and followed by the institution of Suit No,68 of 2004 against respondents on 15-1-2004.
16. The learned Single Judge in his impugned order has carefully examined and discussed all these eventualities step-by-step and making reference of provisions of Sales of Goods Act and the Limitation Act, has recorded his conclusion that issuance of 10,85,000 fully paid-up ordinary shares of the company in favour of respondent No,1 with duly signed blank transfer deed and its physical delivery to him had completed the transaction of sale of these shares in all respect as far back as in the year 1994, therefore, there was no such dispute which is to be resolved now as regards the ownership of these share certificates between the parties. The learned Single Judge has also examined the question of limitation as regards the maintainability of this suit and rightly applied the provisions of Article 120 of the Limitation Act to record his conclusion that, if any, cause of action had accrued to the appellant for filing of this suit the same had accrued in their favour on receipt of letter of respondent No,1 dated 30-8-1996 wherein he had completely explained his position, and once the period of limitation had commenced in the year 1996 from such date it stood expired much before the institution of the suit in the year 2004, and that the plea of continuing cause of action visualized under section 23 of the Limitation Act had no applicability in this regard to the facts and circumstances of the present case. Such conclusion recorded in the impugned order seems to be based on sound reasoning and proper appreciation of relevant provisions of law and thus unexceptionable. There is no denial of the fact that respondent No,1 is not the signatory of any of the letters 'dated 21-5-1995, 22-5-0995 or 28-$-1996, and such correspondence on behalf of the appellant contained only their unilateral decisions, which prima facie seems to be not binding upon the respondent No,1. There is also no denial of the fact that the transaction of sale of 10,85,000 fully paid-up ordinary shares of the respondent No,2 company had taken place in the manner that the physical delivery of such shares along with blank transfer deed was made to respondent No,1 as his joining incentive in terms of-letter dated 1-3-1994. There is also no denial of the fact that vide letter dated 30-8-1996 the respondent No,1 had explained his position relating to all these disputes to the appellant and thus, if any, cause of action had accrued to the appellant for filing of the suit, that had accrued to them on receipt of such letter of respondent No,1, and therefore, the period of limitation as provided under Article 120 of the' Limitation Act was to be computed from such date.
The fact that abiding by the terms of the letter dated 1-3-1994 the respondent No,1 had addressed the letter dated 22-12-2003 to the respondent No,2 company has therefore neither given any fresh cause of action to the appellant nor has extended the period of limitation for any action against him, which had expired much earlier to the issuance of this letter. In the facts and circumstances discussed above, we find that the arguments advanced by Mr. Rasheed A. Razvi with reference to application of section 23 of the Limitation Act are also misdirected and not available to the appellant to cover-up the period of limitation for the purpose of instant case.
17. This being the position, this appeal being devoid of merits is accordingly dismissed.