' SALMAN HAMID, J.--- This is a suit for recovery of amount of Rs,3,150,000/ with mark-up @ 14% from the date of sale of shares till payment and for delivery of 1,000,000 shares of Japan Power Generation Ltd. And for appropriate action by defendants Nos.3 and 4 against defendants No,1 and 2 with cost by the plaintiff filed on or about 12-6-2006.
2. It was claimed by the plaintiff that the defendant No,2 which was a listed-company with the defendant No,4, on 2-7-2003 brokered a deal, whereby the plaintiff sold 385,000 shares of Unity Modaraba to it (plaintiff) and in return bought 1,000,000 shares of Japan Power Generation Ltd.
From the plaintiff. In consideration of the this deal/trade, a sum of Rs,3,100,000 was paid by the plaintiff to defendant No,1, (Chief Executive of defendant No,2) which was the difference between the sale and purchase on lump sum basis. Unity Modaraba shares which were not included in CDC, then were duly handed over to defendant No,2.
3. In terms of this arrangement 100,000 shares of Japan Power Generation Ltd. Being in electronic form and included in the CDC list and which were in the custody of defendant No,2 were to be deposited in plaintiff's investor Account No,7495. According to the plaintiff this deal was complete and final and that the defendant No,2 confirmed and authenticated it. Proper Sale Bill (exhibit P/3) for Unity Modaraba and Purchase Bill (Exhibit P/2) for Japan Power Generation Ltd. Were brought on record, evidencing above transaction.
4. In addition to the above deal, it was further the case of the plaintiff that 210,000 shares of Usman Textile, 2,00,000 of which were purchased by the plaintiff from the sponsor and rest from the market were also shifted to defendant No,2. This movement of the shares, according to the plaintiff being in the electronic form was verifiable from its paper trial. It was alleged by the plaintiff that despite above huge transaction, the defendants Nos.1 and 2 failed to honour their obligations. The claims of the plaintiff till the filing of the suit remained unsettled because of suspension of defendant No,2.
5. It was further the case of the plaintiff that before filing of this suit, correspondence was exchanged between the plaintiff and defendants Nos.1 and 2 and at no stage of time it was disputed or denied by these defendants that they do not owe to the plaintiff. It as, however, always requested that sometime be allowed to them and that all the outstanding money would be cleared soon after the revival of defendant No,2. The due amounts and shares not coming forth, despite acknowledgement and assurances of payments, present suit was filed.
6. As against the above claim of the plaintiff, in the joint written statement of defendants Nos.1 and 2, they say of the plaintiff was denied inasmuch as it was categorised as, a "fake story". The defendants Nos.1 and 2 disputed the filing of the suit by raising the objection that no cause of action accrued to the plaintiff against them and that the suit was time-barred and the various annexures, annexed to the plaint were either made-up or fake or ignorance in respect thereof was pleaded. Liability to pay back was altogether disputed. It was the case of the defendants Nos.1 and 2 that the plaintiff expressed his interest in the business of trade and shares and in line to such an interest sale of shares of Unity Modaraba followed through, which was nothing but reinvestment in the share of defendant No,2, which at that time was standing @ 9.50 per share. Plaintiff looked forward that the value of shares of defendant No,2 would go up and that he shall earn huge profits.
7. It was also mentioned that since October, 2003 the defendant No,2's business was suspended, therefore value of its (defendant No,2) shares went down, considerably. It was also mentioned by the defendants Nos.I and 2 that the plaintiff purchased shares of Japan Power Generation Ltd.
Through defendant No,2 but it was common practice for shares' traders to purchase and resell the same on their instruction at the price which go well with them. With regard to the forwarding of Purchase Bill and Sale Bill, it was mentioned that the were issued only to keep the accounts in order.
It was mentioned that all the reinvestment with respect to the shares of the plaintiff were carried out under his specific instructions. As to the United Textile's shares, it was mentioned by defendants Nos.1 and 2 that the shares were transferred to defendant No,2 for trading purpose which was again on the instruction of the plaintiff and, therefore, by no way the defendant No,2 was under any obligation either to pay for the shares of Usman Textile or for transfer of Japan Power Generation Ltd.'s shares to the account of the plaintiff. It was specifically mentioned that it was purely a business transaction in which the plaintiff sustained losses
8. However in their written statement, the defendants Nos.1 and 2 expressed their hopefulness that upon revival of defendant No,2, its shares would regain value and the plaintiff will have an opportunity to earn profits. The correspondence which were relied upon by the plaintiff, regardless of the above transaction and the acknowledgment of liability to pay by the defendants Nos.1 and 2 to the plaintiff were denied and/or disputed. It was portrayed that either such letters were never received by them (defendants Nos.1 and 2) or were the letters, manufactured solely for the purposes of the present suit. Dismissal of suit was prayed for.
9. The defendant No,3 in their written statement stated that since the defendant No,2 was found violating Clause D(2) of the Code of Conduct read with Rule 12 of the Brokers and Agents Registration Rules 2001, in terms of its (defendant No,3)'s Order. No,SMD/SE/2(103)/2003 dated 9-10- 2003, membership of the defendant No,2 was suspended in stipulations of Rule 8 of above mentioned Rules 2001 after accord of proper hearing. Maintainability of the suit against them (defendant No,3) was thus challenged.
10. In their written statement, the defendant No,4 stated that the suit was not maintainable against them and there, was no previty of contract between the plaintiff and the defendant No,4 and that the defendant No,4 was not a party to the dispute between the plaintiff and defendants Nos.1 and
2. Prayer for dismissal of suit was raised.
11. On pleadings, issues were framed by this Court on 5-5-2008 which were as follows:---
(1) Whether the suit is time-barred?
(2) Whether the plaintiff was doing the business by trading in shares with the defendants Nos.1 and 2? ,
(3) Whether the plaintiff sold 38,500 shares of Unity. Modaraba to the defendant No,2 and purchased in turn one million shares of Japan Power Generation Ltd. From the defendant No,2?
(4) Whether the plaintiff paid further sum of Rs,3,000,000/- by Cheque No,5083606 as difference between the sale and purchase of shares?
(5) Whether one million shares of Japan Power Generation Ltd. Purchased by the plaintiff remained in possession of the defendant No,2, to be deposited in plaintiff's CDC Investor's Account No,7495?
(6) Whether the defendant No,2 paid the amounts of Usman Textile shares or shares of Japan Power Generation Ltd. Moved to plaintiff's CDC Investors Account No,7495?
(7) Whether the defendant No,2 from 13-1-2004 up to 31-5-2006 made the commitments to honour its obligations towards plaintiff's claim?
(8) Whether the letter from 13-1-2004 up to 31-5-2006 by the defendant No,2 is false and fabricated?
(9) Whether the plaintiff has reinvested his funds in the shares of the defendant No,2 on his own instructions and incurred normal business losses, therefore, the plaintiff has no claim against the defendants Nos.1 and 2?
(10) What should the decree be?"
12. On the above issues, only the plaintiff and defendant No,1 led evidence. Plaintiff filed his affidavit in evidence (Exhibit P/1). Other documents those were filed by the plaintiff were exhibited as/from Exhibits P/2 to P/24. In evidence, the plaintiff reiterated his claim as was raised in the plaint; was cross-examined, whereafter side closed. Defendant No,1 also filed affidavit in evidence (Exhibit D/1) without any supporting documents; was cross-examined by the plaintiff's face and side closed.
13. The first issue was with regard to the limitation period in filing the present suit. It was claimed by the defendants. Nos.1 and 2 that the suit was beyond the constraint period. No specific Article of the Limitation Act, 1908 was mentioned by the defendants 1 and 2 raising the plea of limitation. The burden of this issue was on the defendants Nos.1 and 2. Record of the file would show that the suit was presented on 12-6-2006, wherein recovery of amount and return of shares was sought.
According to Exhibits P/2, P/3 and P/4 dated 4-7-2003 and 5-10-2003 respectively and the correspondence for recovery of such amounts exchanged between the parties up to at least April, 2005 and May, 2006 wherein, according to the plaintiff the defendants Nos.1 and 2 addressed letters to him (plaintiff) acknowledging their (defendants Nos.l and 2's liability). Even if the very first date i,e, 4-7-2003, available on Exhibits P/2 and P/3 is taken to be the starting point, for the purposes of calculation of limitation for the present suit, it was within time. Limitation for filing suit for compensation for breach of promise to do anything at a specified time or upon happening of specific contingency under Article 65 of the Limitation Act, 1908 is provided as three years, to. Be calculated from the time specified arise or the contingency happens. Similarly under Article 115 of the Limitation Act, 1908 three years' limitation is provided for compensation for breach of any contract, express or implied, not in writing registered and not specifically provided for in the Limitation Act, 1908, for which the limitation starts to run when it is broken or (where there are successive breaches) when the breach in respect of which the suit is instituted occurs, or (where the breach is continuing) when it ceases. Present suit having been filed on 12-6-2006 was within the period of limitation of three years, calculating it from,4-3-2003. This issue is decided in favour of, the plaintiff.
14. Second, third, fourth, fifth and sixth issue, in my view are interconnected, all of which relate to the trading, purchasing and selling of the shares and non availability of entry in respect thereof in plaintiff's CDC Account No,7495. It has come on record through evidence of defendant No,1 that the execution of Exhibits P/2, P/3 and P/4 was not disputed or denied. In fact it was mentioned in affidavit in evidence, filed by the defendant No,1 that "the alleged receipts were issued only to keep the account in order". Therefore, execution of these documents were admitted impliedly, by deposing on oath that it was for the purposes of keeping accounts which lead to the fact of trading, selling and purchasing of shares and related acts therewith. Moreover in cross- examination, the defendant No,1 categorically, without any qualification/reservation, accepted that Exhibits P/16, P/17, P/19, P/20, P/21, P/22(i) and P/22(ii) had been executed by him inasmuch as it was mentioned by defendant No,1, "that all these exhibits borne (bear) my signature". Such admission on the part of the defendant No,1 by itself shows that indeed there was transaction with regard to the trading, selling and purchasing of shares inasmuch as in all such exhibits/documents, same was referred to and discussed. Needless to mention that these exhibits were in conjunction and in relation to Exhibits P/2, P/3 and P/4 and have direct bearing on the issues involved. There was no contrary evidence from the side of the defendant No,2. No witness came from the side of defendant No,2. In absence of any rebuttal from the side of the .Defendant No,2 and the admission of liability on the part of the defendant No,1, all these issues are also decided in favour of the plaintiff.
15. Coming to seventh and eight issue, again I see them inter linked and connected. The defendant No,1 categorically admitted in his cross-examination the execution and/or exchange of correspondence between the plaintiff and defendant No,1 wherein downright.The liability to pay to the plaintiff was acknowledged and its satisfaction by them (defendants Nos.1 and 2 in favour of the plaintiff) was not disputed or denied. Beaming the admission of execution of exhibits; mentioned hereinabove, and also the fact that the defendant No,1 in his cross-examination' admitted that, "I do admit my liability for payment of plaintiff's claim" and there being nothing in rebuttal and/or to the contrary from the side of the defendant No,2, suggesting that it (defendant No,2) is not liable to pay, leaves no room that the commitments to honour its obligations towards plaintiffs claim was not made and that the letters were false and fabricated. These two issues, are therefore, decided in favour of the plaintiff.
16. With regard to the ninth issue, if the plaintiff had not reinvested his funds in the shares of the defendant No,2 on his (plaintiff's) own instructions and incurred normal business losses therefore, the plaintiff has no claim against the defendants Nos. ] and 2, it may be observed that since it has amply come on record through evidence of defendant No,1, coupled with his admission, as reproduced above, that the amounts are due and payable by the defendants Nos.1 and 2 to the plaintiff which were towards buying and selling of shares and trading thereof, it cannot be said that the plaintiff had invested funds and sustained losses. Again it may be emphasized once again that there was no evidence available on record from the side of defendant No,2 which would suggest to the contrary. This issue also goes in favour of the plaintiff.
17. As regards tenth and final issue i,e, "what should the decree be?" it may be observed that the defendant No,1 in his cross-examination has categorically admitted that, "I do admit my liability for payment of plaintiff's claim". Therefore, there is no ambiguity as to why the claim of the plaintiff is not satisfied. However, since the plaintiff has claimed the above amounts and return of shares from the defendants Nos.1 and 2 jointly and severally, and the fact that the defendant No,2 being a juristic person is a legal entity, separate from its shareholders, the admission of liability by defendant No,1 in no way can be treated admission of liability by defendant No,2. At the Same time, this court also cannot A lose sight of the fact that the defendant No,2 despite service and thereafter despite filing of written statement chose not to lead any evidence, challenging the claim of the plaintiff against it (defendant No,2). Such being the position and the fact that by jointly and severally it means that. When two or more members declare themselves jointly and severally bound, means that they render themselves liable to a joint action against all as well as to a separate action against each, in case conditions of the bond ue not complied with. In the case in hand there is prayer for decree against defendants Nos.1 and 2 jointly and severally. Despite such prayer and the fact that defendant No,2 earlier in time entered appearance and also filed their written statement which was a written statement on behalf of defendant No,1 as well, who is the chief executive of defendant No,2, later on chose not to contest the matter at all. Nothing on record has been brought by the defendant No,2, not to accept the claim of the plaintiff against it (defendant No,2). In view of this situation, and the fact that liability to pay has not been denied by defendant No,2 on one hand and liability to pay has been admitted by defendant No,1, who is the chief executive of defendant No,2, this court is left with no choice but to decree the suit in the terms that the defendants Nos.1 and 2 shall pay to the plaintiff jointly and severally Rs,3,150,000/- and also deliver 1,000,000 shares of Japan Power Generation Ltd. The amount of which comes to Rs,4,500,000/- and in the alterative pay an amount of Rs,4,500,000 from 4-7-2003 till payments with mark-up at the latest prevailing bank rate. The plaintiff is also entitled to cost of the proceedings.
18. The suit is decreed in terms hereof.