1. Mushir Alam, C.J.--Through instant appeal, appellant has impugned the order dated 5/5/2008 passed by the learned Single Judge of this Court on an application underSection 12(2) read with Section 151 CPC seeking set aside of the ex-parte judgment dated 16/12/2005 and decree dated 24/1/2006 passed in Suit No. 879/2003 on the ground, inter alia, that the judgment and decree have been obtained by misrepresentation and fraud by the Respondent No. 1 (CAA).
2. It appears that the Respondent No. 1 entered into an agreement with TDI International Holdings (Pvt.) Limited, the Respondent No. 2 therein, for installation of the advertisement and hoardings on terms and condition agreed between the parties. It seems that transactions were, signed and executed by the appellant herein as a Director of the company. It seems that since dues were not paid followed by the suit against the Respondent No. 2 i.e. TDI International Holdings (Pvt.) Ltd. and the appellant herein was one of its Directors. The suit proceeded and ultimately it was decreed as recorded above. When the execution proceeded the appellant learnt about the exparte judgment and decree and filed the application under Section 12(2) CPC in JM No. 30/2007. It was stated that the appellant was the Paid Director of the company and not the shareholder in the company and the company TDI International. Holdings entered into an agreement with CAA.
3. It is further case of the appellant that he is only a paid employee, had no liability and even he has not assumed any liability of the company. Learned Judge in chamber in consideration of the fact that the service was affected and there is a business relationship between the appellant and the company, therefore, CAA cannot be deprived of the fruit of the judgment and decree.
4. The matter was proceeded on several dates only to satisfy the Court, first, as to the liability of the Paid Director in a foreign company carrying on business in Pakistan but the same was adjourned at the request of Mr. Sanaullah Qamar, learned counsel for Respondent No. 1.
5. Learned counsel for the appellant contends that liability of a directed is limited, to the extent of shareholding and in the instant case the appellant was not the shareholder but he was a paid employee as per his contract of service which is available on record and such fact is not disputed by the learned counsel for Respondent No. 1. In aid of his contention, he has placed reliance on 2001 YLR 526.
6. Today, Mr. Sanaullah Qamar, learned counsel for Respondent No. 1, has fairly conceded that the liability of a director is limited as merely signing the correspondence on behalf of the company will not make such person liable, for the acts and deeds of the company. In support of his contention, he has relied upon the case laws reported in (i) 2006 CLD 191, (ii) 2001 YLR 526 and (iii) PLD 2000 Lahore 414.
7. We have heard the arguments advanced by Learned counsel for the parties, perused the material available on record and thoroughly examined the case laws cited at bar.
8. It appears that the suit was filed against the company TDI International Holdings by CAA and the liability, if at all, stands against the company TDI International Holdings. From the. entire material available on record, including the application under Section 12(2) CPC, it appears that the appellant was merely a paid director in the light of the judgment referred to by the appellant as well as by the Respondent No. 1 which becomes clear that the appellant cannot be held liable for the acts and deeds of a company as the company is a separate and distinct legal entity from its shareholders and directors. Any liability against the company cannot be foisted unless it is shown that such directors or shareholders have assumed any responsibility to discharge such liability in terms of Section 111 of the Companies Ordinance, 1984.
9. In this view of the matter, this appeal is allowed, the impugned order dated 5/5/2008 is reversed the application under Section 12(2) CPC filed in JM No. 30/2007 is granted and judgment and decree against the appellant is set aside. However, the respondent. No. 1 will be at liberty to pursue its decree against the company TDI International Holdings (Pvt.) Limited, the Respondent No. 2.
10. The instant appeal in above terms stands disposed of coupled with the listed applications.