SD 251 per MT. Learned counsel submitted that Omacon's bid was accepted, resulting in a contract between the parties. Omacon was required to furnish a bid bond under the Tender which it did, but that it thereafter failed to provide the performance bond as required under the contract. For this breach, the defendant cancelled the contract and forfeited the bid bond. Thereafter, the present suit was filed on or about 31-12-2005, in which Omacon is not a plaintiff. As noted above, the plaintiff is a sole proprietorship. It is the proprietary concern of one Mr. Azhar Hussain Shah, who trades under the name and style of Messrs of U.K. International. The suit was not however brought by Mr. Shah in his personal name. Rather, the title of the suit disclosed the plaintiff as "Messrs UK International, Proprietorship Concern, through its sole proprietor, Azhar Hussain Shah". I may note that the suit is for recovery of the amount of the bid bond (USD 63,000) and damages in the amount of USD 2 million.
3. Learned counsel for the defendant submitted that the plaintiff was admittedly Omacon's agent for the transaction. Section 230 of the Contract Act expressly provided that an agent was neither liable for nor could sue on any contract unless there was a contract to the contrary. The section presumed such a contract in respect of three situations (or exceptions as they are commonly referred to) as stated therein. The plaintiff therefore had to show that it came within one of the said exceptions and it was only then that the suit was at all maintainable.
' However, the applicability of the section, and hence of the exceptions, was postulated on the contract having been entered into by the agent on behalf of the principal. Here, the bid had been made by Omacon directly. The fact that the offer bore the plaintiff's stamp and signature as well was irrelevant. The contract was directly between Omacon and the defendant. Therefore, the plaintiff could not rely on the aforesaid exceptions and hence had no standing to file the suit. The plaint was liable to be rejected. As regards the second ground, learned counsel submitted that the suit as filed was not properly framed. While a sole proprietorship could, under Order XXX, Rule 10, C.P.C., be sued in the trading name, it could not bring suit in the said name. The suit had to be brought in the personal name of the proprietor. If not, then it was fatally defective. That was precisely the position here and hence for this reason as well, the suit was liable to be dismissed.
Learned counsel relied on certain case-law in support of his submissions, which I will consider later.
4. Learned counsel for the plaintiff opposed the application. He submitted that it was an admitted position that the offer made on the Tender bore the stamp and signature of the plaintiff. Therefore, it could not be said that the contract had not been entered into on behalf of the principal (Omacon) by the agent (the plaintiff). Certain other acts in relation to the Tender, including furnishing the bid bond, had also been done by the plaintiff. Section 230 was applicable and the plaintiff's case came within the first exception ("contract is made by an agent for the sale or purchase of goods for a merchant resident abroad"). Therefore, the plaint could not be rejected on this ground. As regards the second ground it was submitted that the suit was properly framed but that even if (which was not admitted) there was any error in this regard, it was a mere irregularity, which could be easily cured. The plaint could not be rejected. It was prayed' that the application be dismissed. Learned counsel also relied on certain case-law. Learned counsel for the defendant exercised his right of reply.
5. I have heard learned counsel as above, examined the record and considered the case-law relied upon. I begin with the first ground. Section 230, as presently relevant, provides as follows:-- "230. Agent cannot personally enforce, nor be bound by, contracts on behalf of principal. ---In the absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them.
'Presumption of contract to contrary. ---Such a contract shall be presumed to exist in the following cases:
(1) where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad: ...."
' As correctly submitted by learned counsel for the defendant, the basic rule laid down by the section is that an agent can neither sue nor be sued in respect of any contract entered into by him on behalf of his principal. This is subject to there being a contract to the contrary. Such a contract can actually exist (i,e,, there may, in fact, be such a contract) but is presumed to exist in case any one of the three exceptions listed in the section apply. I am here concerned only with the first exception.
6. There is no doubt that the Tender was for the purchase of goods (Urea) by the defendant and that the principal, Omacon, was a "merchant resident abroad". The only question therefore is whether the contract in question was entered into by the plaintiff on behalf of Omacon. If so, then section 230 and hence the first exception would apply and the plaint could not be rejected. If not, then the reverse position would hold. Now, both learned counsel have focused on the offer made on the Tender, which as noted was signed by both Omacon and the plaintiff. In my view, learned counsel for the defendant was correct in submitting that this was an offer made directly by the principal itself and hence the plaintiff's signature and stamp on the document were irrelevant. The contrary submission by learned counsel for the plaintiff cannot, with respect, be accepted.
However, the key question is whether it was this offer that resulted in the contract? An affirmative answer would mean that section 230 would not apply. However, in my view, the documents annexed with the plaint (which are admitted) indicate that the answer to this question must be in the negative.
7. As noted above, the plaintiff had express authority to negotiate the contract on behalf of Omacon. Also as noted, the offer was to supply the Urea at USD 251 per MT. I my view, the key document is the defendant's letter dated 21-12-2005, issued after the aforesaid offer ,had been made. This was a letter addressed to the plaintiff alone. It referred to the Tender, and then stated in material part as follows:-- "Dear Sir, ' Reference your offer dated 20th December, 2005 on the captioned subject.
2. Your revised verbal offer during the meeting of Purchase and Price Evaluation Committee on 20th December, 2005 for 25,000 (Twenty five thousand) MT (10% MOLSO) Urea Granular @ USD 250 (Two hundred fifty) PMT CFPO Karachi has been accepted."
' As is clear, the initial or original offer made by Omacon was not accepted. Rather, there was subsequent negotiation between the parties, which took place between the relevant committee of the defendant and the plaintiff acting on behalf of the Omacon. The defendant's letter clearly shows that the plaintiff (i,e,, the agent) made a revised offer at the meeting to supply the Urea at a slightly lower price (USD 250 per MT) and it was this offer that was accepted and materialized in the contract. It is important to note that with this letter of acceptance issued by the defendant, a contract came about between the parties. Any subsequent documentation was merely procedural in nature. Thus, it is quite clear from the record that the contract came into existence on 21-12-2005 and this resulted from the acceptance (through the letter) of the revised offer that had been (verbally) made by the agent at the meeting held a day earlier. In my view, this clearly establishes that the contract was entered into not by the principal but the agent acting on his behalf. Thus, section 230 was applicable and hence, since the first exception is attracted in the facts and circumstances of the present case, the suit could have been brought by the agent. The plaint cannot therefore be rejected on this ground.
8. The case-law relied upon by learned counsel for the defendant with regard to this ground may now be considered. I may note that the case-law was provided by means of a statement dated 21- 5-2010 (this application was apparently heard before more than once but no decision could be announced) as well as a supplemental statement dated 8-4-2014 (i,e,, after the conclusion of the present hearing). Learned counsel relied on Angbats Aktiebolaget Bohuslanska Kusten and another v. Central Hardware Stores, .Chittagong PLD 1969 SC 463. The two appellants were sued by the respondent for recovery of sums due for the supply of certain material provided to a ship operated by the first appellant. The first appellant was a shipping company and the second appellant was its agent. The suit was decreed against both the appellants. The second appellant took the defense, in effect, that it had no liability as it was only the agent and the contract had been entered into directly between the respondent and the master of the ship. This was not accepted. The suit was decreed against both appellants and their appeal to the High Court failed. The further appeal to the Supreme Court was only on the point whether the second appellant (i,e, the agent) was liable (see at pg. 465). After reviewing the record, the Supreme Court held that the second appellant was liable to the respondent as a guarantor "and it was thus a case of personal liability by contract" (pg. 468). It was held (ibid) that the liability of the second appellant was "direct, both as a guarantor and as an agent" and hence it "cannot enjoy the negative protection afforded by section 230 of the Contract Act". It was also observed that in the circumstances, the first exception to section 230 did not have to be invoked (ibid). As is obvious, the facts and circumstances of the cited case were quite different from those at hand and hence the decision does not, with respect, advance the defendant's case.
9. Learned counsel also relied on Pakistan Insurance Corporation v. Pakistan National Shipping Corporation and others 1994 M LD 667 (SHC; DB). In this case, certain suits had been filed in this Court on the original side on claims arising on certain insurance policies. However, it was established that the said policies had not been entered into by the appellant, which had filed the suits. The suits were dismissed as being hit by section 230 and the appeals were dismissed by the cited decision. With respect, this case does not assist the defendant. There was nothing in the record to indicate that the insurance contracts had been entered into by the appellant. Indeed, the entire record established the contrary, the appellant being only. The Secretary to the National Co- Insurance Scheme. As is clear, the facts of the cited decision were different from those at hand.
Reliance was also placed on Bombay Co. Ltd. v. Haji Adam Haji Peer Muhammad Issak PLD 1959 WP (Kar.) 411 (DB). The respondent had filed suit seeking to recover damages for short delivery of cargo delivered by ship from Bombay. The suit was decreed. The learned Division Bench observed that "this case is remarkable for the lack of preparation on both sides" (pg. 414). The question was whether there was, in fact, a "contract to contrary effect" within the meaning of section 230, it being accepted that none of the exceptions applied. It was found, as a matter of fact, that no such contract had been made out. The issue involved was clearly different from the one at hand.
10. Learned counsel also relied on Pakistan Insurance Corporation v. Pan Islamic Steamship Co. Ltd.
1988 CLC 1373 (SHC; SB). The factual position in this decision (whereby two suits were decided) was essentially the same as that in the aforementioned Division Bench decision reported in 1994.
Indeed, the learned Division Bench specifically referred to this judgment. It does not therefore, with respect, require separate consideration in any detail. Learned counsel also relied on Bombay Brass Works Co. v. Pakistan and another PLD 1966 W.P. (Kar.) 340 (SB). The plaintiff purchased certain scrap copper wire from the first defendant (the Central Telegraph Stores) through the defendant No,2, a contractor and auctioneer. It was claimed that although the contractual price had been paid, the goods were not delivered resulting in the suit. It was observed (see at p. 346) that the defendant No, 2 had only acted as an "introducer" and not as an auctioneer, nor had the goods been obtained through an auction. Thus, this defendant had no liability in terms of section 230.
Again, the facts of this case were quite different from those at hand.
11. Reliance was also placed on Capt. Dr. Abdul Wahab etc. v. Province of Punjab, etc. 1986 M LD 2049. A suit brought by the predecessor in interest of the petitioners in the civil courts at Sheikhupura was dismissed and an appeal against such decision also failed. The matter came to the Lahore High Court by way of a revision. The facts of this case were totally different from those at hand and the decision does not, with respect, advance the defendant's case in the present proceedings. Learned counsel also relied on Ghulam Mustafa v. Rashid Akbar Ansari reported in SBLR (sic). In the written statement filed by learned counsel, however, the year of the cited decision is missing. The brief summary of the case given in the statement merely sets out the basic principle. The basic principle is not in doubt but for the reasons as noted above, in my view the facts and circumstances of the present case come within the first exception. Finally, learned counsel also relied on Raj Bahadur Lal v. Silta Prasad and others AIR 1951 All.
596. The facts were rather complicated but as presently relevant it is to be noted that the defendants had filed a counter claim, which was admittedly being pursued as agents and not on their own behalf. A question arose whether the second exception of section 230 was applicable, but this was not accepted. Again, the position in the cited decision was different.
12. Having considered the cases cited in some detail, I am of the view that while these cases may have reaffirmed the position under section 230 (which is in any case obvious from a reading of the provision) the underlying facts were quite different from those at hand. At the risk of repetition, I would emphasize that in the present case the original offer was indeed made by the principal, but it never materialized in a contract. Rather, a revised (i,e,, fresh) offer was verbally made by the agent (who had full authority to negotiate the contract) at a meeting held with the representatives of the defendant, which offer was accepted in writing the next day. This revised offer, upon acceptance, materialized in the contract between the parties, which stood concluded with the issuance of the defendant's letter of 21-12-2005. Thus, the contract was entered into between the parties by the agent acting on behalf of the principal and not directly by the principal itself. Section 230 was applicable as was the first exception stated therein. The first ground taken for the rejection of the plaint cannot therefore be accepted.
13. I turn to consider the second ground. Learned counsel for the defendant relied on a number of cases. I start with Trading Corporation of Pakistan (Pvt.) Ltd. v. Messrs Syed Corporation PLD 2006 Kar. 258 (SB). In this case, the defendant was sued in the name of the trading concern. The learned Single Judge noted that he was initially of the view that the suit (filed by the present defendant ("TCP")) was not maintainable as the defendant ought to have been sued in his personal name.
However, learned counsel for TCP (who in fact also appeared for TCP before me) submitted that such a form of suing was permissible by reason of Order XXX, Rule 10, C.P.C. This was accepted by the learned Single Judge. The actual issue was whether the legal heirs of the defendant (who had expired after the filing of the suit) could be brought on record. This case has, with respect, no bearing on the point presently under consideration. Learned counsel relied on Messrs M.A. Majeed Khan v. Karachi Water and Sewerage Board and others PLD 2002 Kar. 315 (SB) ("M.A. Majeed Khan").
The plaintiff was the proprietary concern of one Mr. M. A. Aziz Khan. It was held that the suit as filed was not maintainable and an oral prayer for amendment of the plaint was refused. The plaint was rejected. The next case referred to was Collector of Customs v. Imran Enterprises 2000 CLC 419 (SHC; SB) ("Imran Enterprises"). A number of revision applications were decided by a common judgment. All the suits had been brought (in the civil courts) -by the same party, which was the respondent before this Court. It was submitted that the plaintiff was a proprietary concern, and the suits ought therefore to have been filed in the personal name of the proprietor. This submission was accepted by the learned Single Judge. The next case cited was Aran Saz Contracts v. Pak Chromical Ltd. 1999 M LD 1781 (SHC; SB) ("Aran 'Saz"). The suit was filed in the name of the proprietary concern. The learned Single Judge held that this was not a mere irregularity, or a technicality that could be rectified. The suit was dismissed. The next case cited was Habib Bank Ltd. v. Iqbal I. Chundrigar and another 1983 CLC 1464 (SHC; SB) ("Habib Bank"). Several issues were framed, of which one was whether the defendant No,2 had stood surety for Iqbal Chundrigar (the defendant No, 1) or "Iqbal and Co.". The defendant No, 2 contended that he had been surety for the former and therefore had no liability to the plaintiff bank. This plea was rejected by the learned Single Judge and the issue decided against the defendant No,
2. As is obvious, the facts of this case were materially different from those at hand.
14. Learned counsel also relied on Ismail Haji Sulaiman v. Hansa Line and another PLD 1961 Dacca 693 (DB). In this case the suit was brought by "Ismail Haji Sulaiman, a proprietary concern" instead of (as it ought to have been, as held by the learned (Division Bench) "Ismail Haji Sulaiman, a proprietor of the firm". It was held that while a proprietary firm could not sue in the name of the proprietorship, this was only an improper or imperfect designation in the plaint, which was not fatal. Certain Indian decisions were considered by the learned Division Bench. It was observed if it was found that there was a mere misdescription or error, then the same could be corrected and the situation would not be hit by section 22(1) of the Limitation Act, 1908. After considering the matter, the learned Division Bench concluded that the case before it was a situation of misdescription or error and hence an irregularity that was curable. In addition to the foregoing authorities, learned counsel relied on a number of Indian decisions. However, for reasons that will presently become apparent, it is not necessary to consider these decisions in any detail.
15. Learned counsel for the plaintiff also relied on certain case-law. Reference was made to Angbats Aktiebolaget Bohuslanska Kusten and another v. Central Hardware Stores, Chittagong PLD 1969 SC 463, Bombay Co. Ltd. v. Hall Adam Haji Peer Muhammad Issak PLD 1959 W.P. (Kar.) 411, Capt.
Dr. Abdul Wahab and others v. Province of Punjab and others 1986 M LD 2049, Ismail Haji Sulaiman v.
Hansa Line and another PLD 1961 Dacca 693. This was in connection with the first ground. These judgments have already been considered above and in any case, I have not accepted the first ground for the reasons stated above. As regards the second ground, learned counsel relied on Habib Bank Ltd. v. Lqbal I. Chundrigar and another 1983 CLC 1464, which has also been considered.
In addition, certain other decisions were also relied upon, of which only one (mentioned below) needs to be considered in detail.
16. The second ground raises a point of some importance and one that I have anxiously considered. In two of the Single Bench decisions of this Court (Trading Corporation of Pakistan (Pvt.) Ltd. v. Messrs Syed Corporation PLD 2006 Kar. 258 and Habib Bank Ltd. v. Lqbal I. Chundrigar and another 1983 CLC 1464), the proprietary concern was in fact the defendant. These decisions are therefore clearly distinguishable on the facts. What I must consider in particular are the three Single Bench decisions of this Court in which the proprietary concern was the plaintiff, and the plaint was rejected or suit dismissed. These are M.A. Majeed Khan, Imran Enterprise and Aran Saz.
(In fact, the first two decisions were of the same learned Single Judge.) I have very carefully considered these decisions. In Aran Saz (1999 M LD 1781), reliance was placed on Habib Bank and Ismail Haji Sualiman. In Imran Enterprises (2001 CLC 419), reliance was placed on these two cases and Aran Saz. In M.A, Majeed Khan (PLD 2002 Kar. 315) reliance was placed on these two cases, and Imran Enterprises and Aran Saz. Thus, the three Single Bench decisions are essentially based on Habib Bank and Ismail Haji Sulaiman. These two decisions have already been seen (paras 13 and 14 herein above, respectively).
17. Having carefully considered the matter, I find myself, with the utmost respect, unable to agree with the three Single Bench decisions in which the plaints were rejected or the suit dismissed. In my respectful view, these decisions cannot be regarded as having correctly laid down the law insofar as is presently relevant. No doubt it is correct that a sole proprietorship has no existence in the eyes of law. 'It has no legal status distinct from its proprietor. "It is the proprietor who is the legal person entitled to all the benefits and liable for the liabilities... In fact, it is the proprietor who is carrying on the business in the name and style of a 'firm taking upon himself the burdens and benefits" (see the observations in Habib Bank, pp. 1466-7). Now, if a suit is brought in the name of such a proprietary concern and is dismissed as not maintainable, then it necessarily follows that what is being held is that there is no plaintiff at all before the Court. It cannot be a case of the suit having been brought in the name of the wrong person as plaintiff, requiring substitution of the "real" party as plaintiff. That would mean that the proprietary concern does have some existence separately from the proprietor, but this would be contrary to the well established principle just noted. In my respectful view, the question is whether the aforesaid conclusion, that a suit in the name of a proprietary concern is a suit without a plaintiff; is warranted in all cases and under all circumstances? To this, I would unhesitatingly (though with the utmost respect) give an answer in the negative. In my view, the description of the plaintiff given in the title must be carefully examined. If such examination reveals, or can reasonably be regarded as revealing, the true identity of the party (i,e,, of the proprietor), then the suit must be held to have been brought in the name of the latter. If however, despite such examination, the true identity cannot be determined, then it could be said that that suit has been brought by an entity that has no existence in the eyes of law (i,e,, the proprietary concern) and it may be that the suit is to be dismissed or plaint rejected.
18. It will be pertinent here to note one decision relied upon by learned counsel for the plaintiff. This is an unreported decision of a learned Division Bench of this Court, in HCA 35/2002 dated 3-4-2002 (titled M.A. Aziz Khan v. Karachi Water and Sewerage Board and another). By means of this appeal, the order of the learned Single Judge in M.A. Majeed Khan (PLD 2002 Kar. 315) rejecting the plaint was challenged. The learned Division Bench was pleased to allow the appeal and set aside the order of the learned Single Judge. The learned Division Bench held as follows:-- "The real question for determination would be that when the appellant had substantially disclosed his identity and status as the sole proprietor of a particular business, was it merely a matter of mis- description or whether some vested rights had accrued in favour of the respondent."
' After considering the matter and the cited case-law, the learned Division Bench concluded as follows:-- "... We are clearly of the opinion that since Messrs M.A. Majeed Khan was not a juristic person and it was evident from the title of the plaint itself that the person filing the suit was the appellant, the matter was nothing more than a bona fide mis description which could always be corrected under section 153 C.P.C. To which no limitation applies. For the foregoing reasons, we would allow this appeal set aside the impugned order and remand the case to the learned Single Judge on original side on merits after allowing the appellant to correct the mis-description in the cause title of the plaint."
19. In my view, the present case comes squarely within the observations of the learned Division Bench. It is evident from the title of the plaint that the person filing the suit is the sole proprietor whose identity is substantially disclosed. No vested right can be said to have accrued to the defendant. Therefore, the present case is also one of a mere bona fide mis-description to which no limitation can apply and the error can be corrected in the manner directed by the learned Division Bench. Since the decision of the learned Single Judge in M.A. Majeed Khan has been set aside it cannot, with respect, be regarded as good law. Furthermore, in my respectful view in-light of the decision of the Division Bench, the remaining two Single Bench decisions considered above, i,e,, lmran Enterprises and Aran Saz also cannot be regarded as good law to the extent that these decisions are inconsistent with what has been held by the learned Division Bench. In my respectful view, in such circumstances, it would not be possible for me to follow these decisions and reject the plaint.
20. Accordingly, I am satisfied that neither of the two grounds taken establishes a case for rejection of the plaint. This application therefore fails and is hereby dismissed.