' SHAHID ANWAR BAJWA. J.--- Brief facts of the case are that respondent No.1, Trading Corporation of Pakistan (hereinafter referred A to as TCP) incorporated under the Companies Ordinance, 1984 filed Civil Suit against the following:
(a) Messrs Cargil Incorporated (appellant No.1) (hereinafter referred to as the Cargil), It is a company incorporated under the Laws of the United States of America.
(b) Messrs Alam and Alam of Karachi (appellant No.2) (hereinafter referred to as the Alams).
(c) Messrs Bridge Stock Eduljee and Company of Karachi (respondent No.2) (hereinafter referred to as Bridge Stock).
2. It was stated in the plaint that a contract was entered into between TCP and Cargil on September 3, 1981 and according to this contract Cargil issued Invoice on October 12, 1981 having sold to plaintiff commodity of "Crude Degummed Soya Bean Oil" in bulk weighing 15,749.344 metric tons at "0" and "F" at Karachi. Quantity received at Karachi 15,554,264 metric tons causing a loss to the TCP by short receipt of 195.080 metric tons. Quantity was sent on board a Chartered Russian Flag being Motor Tanker Komandarm Fedko showing quantity of oil as 15,799,344 metric tons as evident from the Tanker's Bill of Lading. Suit was, therefore, filed on 21-1-1982 with a prayer for decree of US$ 101,980.02 etc. Written statement was filed by Cargil, quantity of sale was admitted. It was claimed that quantity was handed over to carrier who in receipt thereof issued their clearance on board tankers Bill of Lading and Mates Receipt which showed receipt and stowage of the consignment. Consequently, liability of Cargil was denied and it was stated that liability, if any, is of Shipping Company. Alams also filed written statement and so did Bridge Stock, Trial Court framed 16 issues, vide order dated 29-7-2003 suit was dismissed by the trial Court holding, inter alia that Carrier Company was a necessary party, Appeal No.206 of 2003 was filed and the appellate Court vide order dated 6-9-2004 allowed the appeal, Appellate Court held that carrier was not necessary party as they were made party through local agent who executed custbms bond. It also held that Alam acted as commission agent who undertook survey responsibilities at the end of seller to the buyer. He being commission agent responsible for delivery of goods and since he took commission for entire quantity of goods sold. Evidence showed that he has received extensive amount of commission which was due was payable by the appellant. Being aggrieved by the order of appellate Court IInd appeal has been filed.
3. Learned counsel for appellant made the following submissions:
(i) Bill of Lading stating weight etc., it is prima facie evidence and acknowledgment of correct weight. Therefore, short landing, if any, was not responsibility of Cargil but was responsibility of carrier.
(ii) Carrier was not made party. Defendant No.3 is agent of carrier but was not party and moreso because it is the agent for limited purpose. Claim of respondents, if any, is against carrier.
(iii) Alleged short landing of 195,080 metric tons was within the limit of 0.5 per cent permissible allowance.
(iv) P.W. 1 at Page 73/75 in his cross-examination admitted that he did not know whether there was any short shipping. Weight of cargo can vary due to temperature and density.
(v) It is not the case of short shipping but it is the case of short landing.
(vi) Plaint was signed by one Misbahul Haq who did not have authority or resolution of Board of Directors authorizing him to sign the plaint.
(vii) C.M.A. No.2970 of 2009 was filed during pendency of IInd appeal with a copy of Resolution passed by the Board of Directors of TCP on 1-9-2009. It was at a very belated stage. In any case no subsequent act can cure the fatal defect in filing the case in first place.
(viii) Findings of the appellate Court are against evidence.
(ix) Decree was not in accordance with Judgment and was' in violation of Order XLI, rule 35, C.P.C.
' Learned counsel relied upon Burjorjee Cowasjee and Co. v. Habib Insurance Co. Ltd., Karachi PLD 1975 Kar. 195 and British India Steam Navigation Co. Ltd. And another v. M.A. Wadud and Co. And others PLD 1968 Dacca 860 to contend that Customs Agent is merely agent of the carrier for the purpose of customs formalities and cannot be liable on his own position. Learned counsel further relied upon Messrs Tar Muhammad Janoo and Co. v. Messrs Maladivian National Corporation (Ceylon) Ltd. And another PLD 1969 Kar. 495 and Messrs Crescent Sugar Mills and Distillery Ltd. v.
Messrs American Export Isbrandt Sen Inc and 2 others PLD 1983 Kar. 29 to contend that Bill of Lading is acknowledgment of consignment on board and therefore it was responsibility of carrier to deliver proper quantity. Learned counsel further relied upon Dr. S.M. Rab v. National Refinery Ltd. PLD 2005 Kar. 478 and Messes Mohammad Siddique Mohammad Umer and another v. The Australasia Bank Ltd. PLD 1966 SC 684 to contend that there must be resolution by the Board of Directors before the suit is filed and subsequent ratification cannot cure the defect.
(x) The findings of Court below are perverse and not based on any evidence. In this regard he also relied upon Madan Gopal and 4 other v. Maran Bepari and 3 others PLC 1969 SC 617 and Mst.
Rehmat Bibi v. Fazal Muhammad and others 1987 SCM R 843.
4. Leaned counsel for respondent (TCP) made the following submissions:---
(i) That consignment was on the basis of "C" and "F" freight at Karachi, Therefore, it was responsibility of seller to ensure that proper quantity is received at Karachi.
(ii) Irrespective of any responsibility of carrier, responsibility of seller can not be wished away in view of the fact the TCP had paid for 15,749.344 metric tons at C and F price at Karachi and is therefore entitled to receive it.
(iii) TCP has received an amount of Rs.195,442,20 from insurance company and therefore TCP is prepared to reduce its claim by that amount.
(iv) Plaint has been signed by the Principal Officer of the company viz. General Manger of the Organization and therefore resolution was not necessary. In any case subsequently Board of Directors has passed requisite resolution. He relied upon Messrs ' Home Comforts v. Mirza Rashid Baig and others 1992 SCM R 1290, Muhammad Hafeez and another v. District Judge, Karachi East and another 2008 SCM R 398, Sarbaland v. Allah Loke and other 1996 SCM R 575, Syed Fakhar Mahmood Gillani v. Abdul Ghafoor 1995 SCM R 96 and. Abdul Rashid v.
Bashiran and another 1996 SCM R 808.
5. I. Have considered the arguments of the learned counsel and material placed on record as well as the case-law.
6. I propose to first deal with question whether plaint was filed competently or not? As stated above the plaint was filed under the signatures of one Misbahul Haq son of Late Sirajul Haq working as General Manager of TCP. In the body of the plaint there is no statement, whatsoever, as to how and on what basis was Mr. Misbahul Haq authorized to sign the plaint and set the bail of litigation rolling. It was specifically pleaded in para No.15 of written statement of Cargil that no power of attorney or authority of the signatory to the plaint has been filed with the plaint and as such plaint was contended to be not maintainable.
7. Issue No.4 was framed by the trial Court in the following words in this regard, "whether the plaint has been singed and verified by proper and duly authorized representative of the plaintiff? It so, its effect." The trial Court held that plaint has not been signed and verified by a proper and duly constituted representative of the plaintiff TCP. This was one of the grounds on which the trial Court dismissed the suit. The Appellate Court in its judgment did not frame any issue in this regard.
Therefore this particular aspect of the matter went unattended by the Appellate Court. Since a lot of emphasis has been placed on provisions of Order XXIX, (29) rule 1, C.P.C., the said rule is in the following words:--- "(1) Subscription and verification of pleading.--- In suits by or against a corporation, any pleading may be signed and verified on behalf of the corporation by the secretary or by any director or other principal officer of the corporation who is able to depose to the facts of the case."
8. In Dr. S.M. Rab's case respondent was a Public. Limited Company who had filed suit, which suit was decreed by a single Judge of this Court, against such decree High Court Appeal was filed.
Question was raised whether suit filed by a company was maintainable or not. Plaint was signed by one Ahmed Javed Assistant Manager Legal and unlike the plaint in the present matter, it had been stated in the plaint as to how and in what manner said Assistant Manager was legally authorized on behalf of company without proper seal of Board of Directors to institute the suit.
However with the plaint a letter of authority was enclosed which was issued by the Managing Director. The High Court held as under:--- "(23) In this authority letter again it has been nowhere disclosed/ mentioned that how the Managing Director of NRL could exercise power of delegation of authority on behalf of the company to Mr. Ahmad Javed, unless he was so empowered by the Articles of Association of the Company or there was some Board Resolution in his favour for this purpose with further power of delegation of powers on behalf of the Company. The legal point as to the consequences of non-conferring of proper authority on behalf of the Company through Board Resolution in favour of a person who had instituted the suit on behalf of company vis-a-vis maintainability of the suit in such situation, when came for consideration in the case of Khan Iftikhar Hussain Khan (supra), the apex Court observed as under: "On the facts of the present case I am satisfied that due notice of meeting was not given to the deceased appellant and therefore Resolution passed in the meeting of 28th September, 1951 cannot be said to be a valid one. In my opinion, no valid authority was conferred on Mr. Khursheed Mehmood and, therefore, he was not competent to institute the suit. I would, therefore, hold that the learned trial Judge was perfectly justified in dismissing the suit on this ground. "
(24) In view of the above discussed undisputed facts and the legal position about the mode of conferring authority on behalf of a public limited company we hold that Suit No.1001/1997 instituted on behalf of NRL by its Assistant Manager Legal was not competently instituted and it was thus not maintainable in law."
9. In Australasia Bank's case, which incidently was decided by four members Bench of the honourable Supreme Court and, in their turn of course, all the four members rose to become Chief Justices of Pakistan. Honourable Supreme Court held that if power of attorney is given with seal of the company and signed by two Directors and the plaint is signed by such attorney and the case is instituted, it would be held to be competently filed. In Khan Iftikhar Hussain Khan of Mamdot's (represented by 6 heirs) v. Messrs Ghulam Nabi Corporation Ltd., Lahore PLD 1971 SC 550, it was held that in law a meeting of Directors is not duly convened unless due notice had been given to all the Directors and given facts of the case, since due notice was held not to have been so given, no authority was held to have been conferred upon the officer who instituted the suit. The Honourable Supreme Court upheld dismissal of the suit on this ground.
10. Messrs Razo (Pvt.) Limited v. The Director, Karachi City Region Employees Old Age Benefit Institution, and others- 2005 CLD 1208 is case decided by a Division Bench of this Court. In this case, a constitutional petition was instituted without resolution of Board of Directors. However after institution of constitutional petition such resolution was passed. Division Bench of the High Court laid down the law in the following words:- "From the discussion on this issue there is hardly any doubt with regard to the maintainability of this constitutional petition. The Constitutional petition was filed by a person who was not authorized/empowered to file the same on behalf of the petitioner Company Messrs Razo (Pvt.) Ltd.
As he was not duly authorized/empowered by means of a Resolution of the Board of Directors passed in a proper meeting of the Board of Directors. There is also no dispute with regard to the fact that the illegal/unauthorized act of Saeed Ahmed Memon in filing/instituting the above Constitutional petition without authority or power could not be ratified or clothed with legality by a subsequent Resolution by the Board of Directors conferring on him to file/institute, conduct defend compound or abandon the legal proceedings as the Supreme Court in the case, of (i) Messrs Muhammad Siddique Muhammad Umar and another (supra) and (2) Khan Iftikhar Hussain Khan.
Of Mamdot (supra) had pronounced that any proceedings or pleadings filed/instituted by a director, secretary. Or Principal officer on behalf of a private limited company not having been duly authorized by Resolutionby the Board of Directos to do so was liable to- be dismissed on this ground alone."
11. In Abubakar Saley Mayet v. Abbot Laboratories and another, 1987 CLC 367, relying upon Khan Iftikhar Hussain Khan of Mandot's case, it was held that suit filed by an officer of company who had no authority to do so would be nullity in the eyes of law and plaint was nonexistent for all intents and purposes. It was further held that Order XXIX C.P.C. Comes into operation only after proceedings have been validly instituted and cannot be utilized for unauthorized persons to prosecute suits on behalf of the Corporation. International Insurance Corporation and others v.
Pakistan National Shipping Corporation and others 2006 CLD 85, it was held that Order XXIX, C.P.C.
Only permits the person mentioned in it to sign and verify pleadings and does not deal with framing of the suit nor authorizes an institution of the suit.
12. Messrs Home Comforts's case, relied upon by learned counsel for the respondent, relates to ejectment application under Rent Restriction Laws and does not even involve this particular question, Same is the position in Muhammad Hafiz's case, Sarbaland's case is in respect of scope of scrutiny in second appeal. In Syed Fakhar Mahmood Gillani case learned counsel referred to the statement that presumption of correctness was attached to every official act done in discharge of duty. I am afraid it is of no help to the petitioner. Such presumption may be available to an act by a State functionary but not to an officer of a private limited company. Abdul Rashid case is also in respect of scope of scrutiny in second appeal.
13. As stated above, litigation between the parties started in 1983 and the Board woke up and passed a resolution on September 1, 2009. Appellant vehemently contended it was 26 years too late. The above discussion leads me to the conclusion that provision of Order XXIX, rule 1 , C.P.C.
Allows the person to sign on behalf of the corporation but E such person, unless he has been conferred an authority by the Board of Directors of the Corporation cannot act on part of the corporation. In S.M. Rab case, it was held that even an authority given by Chief Executive is not sufficient and in Mohammad Siddique case it was held that even a resolution passed by the Board of Directors without complying with legal requirements of holding meeting of Board of Directors will not be of any legal consequence in this regard. It is of course available to the Board, by resolution, to authorize certain officers of the organization to appoint attorneys for such purposes through instruments of such appointment as attorneys, duly and properly executed.
14. Such resolution of the Board must be passed before institution of proceedings and not after the proceedings had been instituted, As in Razo (Pvt.) Limited case the Division Bench of this Court has held that such proceedings instituted prior to passing of such resolution cannot be ratified or "clothed with legality" by subsequent resolution. Therefore I hold that in the eyes of law the plaint was incompetently filed. In law it is to be presumed that the plaint was never filed. In view of my above findings I do not think that it would be necessary to go to other submissions made by the learned counsel.
15. Therefore I allow this appeal, set aside the order of the appellate Court and restore the order of the trial Court. The Appeal is, therefore, allowed with costs.