FAHIM AHMED SIDDIQUI, J.---The appellant has assailed the common judgment dated 12-08-2010 passed by the learned Additional District Judge-V, Karachi South whereby he dismissed Civil Appeal No. 99/2008 filed by the appellant and allowed Civil Appeal No. 103/2008 filed by the respondent. Both the appeals were directed against judgment and decree passed by learned Senior Civil Judge-V, Karachi South in Suit No 1552/2002.
2. The facts of the case are that the appellant is a government owned company and they appointed respondent as agent for an unspecified period as custodian of goods and stocks of sugar. The respondent was under obligation to take care of goods given under their custody. The appellant imported sugar through different vessels and handed over the same to the respondent.
As per the terms and conditions specified, the respondent is bound to take care of goods in his custody for consideration of payment made to respondent by the appellant. It is also the duty of respondent to submit proper accounts duly certified by the appellant's surveyor. On 01-01-1997, the respondent sent bills to the appellant in respect of 13 consignments given to his custody, which was paid off with transportation charges. However, the respondent submitted incomplete account on 05-05-1997 and 14-11-1998 since the same were not certified by the appellant's surveyor.
Subsequently, through a letter dated 05-10-1999 requested to release his bank guarantee on the ground they had given explanation/clarification to show-cause notice of appellant dated 28-10- 1998. The Finance and Accounting Division of appellant ventured accounts of 21 vessels, they found shortage of 258.806 MTS of sugar amounting to Rs.21,46,321/- (as per rate at that time). After the encashment of bank guarantee, the amount payable came to the tune of Rs.17,46,321/-. The appellant filed Civil Suit No. 1412/2001 before this Court, which was transferred to lower forum on account of enhancement of pecuniary limit of district courts of Karachi. The suit was proceeded before Senior Civil Judge-VII, Karachi South where it was decreed for principal amount but mark- up/interest was not awarded. Appellant and respondent both challenged the decree of lower forum before the First Appellate Court being Civil Appeal No. 99/2008 and Civil Appeal No. 103/2008 respectively. The appellate court dismissed the appeal of appellant and allowed the appeal of respondent.
3. The learned counsel for the appellant placed the foundation of his arguments by describing the whole background of the case. According to him, the appellant successfully discharged his onus before the trial court and it is his right to be compensated through mark-up as per bank rate.
According to him, the trial court has dismissed the appeal filed by the appellant on the technical ground that an unauthorised person filed the appeal. He submitted that the First Appellate Court should not consider this ground as the same is not taken by the respondent in written statement before the trial court. He drew the attention of this Court to issues framed by the trial court and pointed out that this aspect was not under consideration before the Court. Regarding authority, his contention is that the person who filed the suit was duly authorised, but such authority was not annexed with the suit because the respondent had not taken this point in his written statement. He submitted that management executed a General Power of Attorney (hereinafter referred as GPA) authorising Mr. Asif Khan and others to file suit, which is available in the office of the appellant and subsequently traced out. According to him, the said Asif Khan is a Senior Manager and head of legal department of the appellant, as such he is the principal officer and competent to file suit and sign plaint as per the provision of Order XXIX Rule 1. He took reliance from 1988 CLC 1381, 2016 CLD 739 and 2007 CLC 1811.
4, In contrast to above arguments, the learned counsel for the respondent emphasised upon the capacity of the person who has signed plaint before the trial court. According to him, it is very much clear from the provision of Order XXIX Rule 1 that only the Secretary, a Director or Principal Officer is competent to file suit on behalf of a company. He submitted that it has not been mentioned anywhere in the plaint that the signatory is the principal officer. Regarding authority, his contention is that the management has not authorised Mr Asif Khan to file suit as per provision under Order III Rule 2, C.P.C., which specifically deals with such authority as such he is not the principal officer as well as authorised officer. He pointed out that neither an authority letter or GPA was annexed or minutes of the board meeting was attached with the plaint. Regarding written statement, his contention is that the thing not pleaded is not required to put in written statement.
He also pointed out that the instant appeal is filed without a decree of the First Appellate Court. He took reliance from 2006 CLC 829, 2006 CLD 85, 2005 CLD 1208, 2010 CLC 420 and 2014 CLD 415.
5. After hearing the arguments, I have examined the entire available material in the light of arguments advanced at a bar. Presently, the actual controversy between the parties is regarding the findings of First Appellate Court in respect of incapacity of the person who had signed the plaint of the suit before trial court. It is the contention of the learned counsel for the respondent that neither the said person enjoyed the privilege of a proper signatory as provided under Order XXIX, Rule 1 of C.P.C. nor he has any authority as per the provision of Order III, Rule 2 of C.P.C.
6. According to Order XXIX Rule 1 of C.P.C., the pleadings of a Corporation may be signed and verified on behalf of a corporation by the secretary or a director or principal officer of the corporation, who is able to depose to the facts of the case. A corporation being a juristic entity can take decision or act only through its Board of Directors, and an authority or authorization by or on behalf of a corporation is deemed to be valid and legal only when it has the sanction or approval by its Board of Directors. In the instant matter, Mr. Asif Khan is the Manager and may be the head of a department of the appellant corporation but nowhere it is mentioned that he is the 'principal officer' of the corporation and he has signed and verified the plaint in that capacity. In such a situation, the provision of Order HI Rule 2 is attractable and he A may sign and verify the plaint under an authorisation given to him by the Board of Directors. It is well settled that pleadings by or on behalf of a corporation/company are not proper and competent if the signatory of the pleadings and verification is not so authorised by the Board of Directors of the said corporation/company. On this point, the reference may be made to the leading case of the honourable Supreme Court reported as Khan Iftikhar Hussain Khan of Mamdot (Represented by 6 heirs) v. Messers Ghulam Nabi Corporation Ltd., Lahore (PLD 1971 SC 550).
7. During the course of arguments, the learned counsel for the appellant took a stance that the signatory of plaint was duly authorised under a GPA but the same could not be produced before the trial court.
He submitted that such GPA was available in the office and the same was later on found and a copy of the same was produced before this Court under the statement of the counsel for the appellant. I have gone through the contents of the said GPA in which Mr. Asif Khan and two other officers of the appellant Corporation are given certain authorities including filing and appearing in litigation on behalf of the corporation and the date appearing on the said GPA is a little earlier of filing of civil suit. It may be that a GPA was executed in favour of the said officer of Corporation by the directors but it is an admitted position that the same was neither produced before the trial Court during pendency of suit nor before the first appellate Court as additional evidence. It is interesting to note that only filing of a GPA even before trial Court under a statement is not sufficient. For proper authorisation, it is necessary that the authorisation should be properly done under a meeting of the Board of Directors. Nothing on the record is available to say that a meeting of the Board of Directors was held to authorise Mr. Asif Khan for the purpose of signing and verifying the pleadings and appearing in a suit filed by the Corporation. Without a proper meeting of the Board of Directors, it cannot be said that there was a valid authority under a GPA is given by the Board of Directors. This issue is also discussed in detail by the honourable Supreme Court in the case of Khan Iftikhar Hussain Khan of Mamdot (supra) in which it is held that any such business of a corporation must be done under a proper meeting after giving notice to all the directors of the company.
8. In view of the above discussion, I reached to the conclusion that Mr. Asif Khan was not competent to initiate the suit on behalf of the appellant as such the instant appeal is bound to fail. I would, therefore, dismiss the instant appeal with no order as to cost.