MOHSIN AKHT AR KAYANI, J.--- Through this Civil. Suit, the plaintif f has prayed for compensation of loss of shares to the extent of Rs. 10.9 Million. u/s. 8(5) and Section 11 of Central Deposit ary Act, 1997 against defendant No. 1 and has also prayed that the damages to the tune of Rs. 61 Million be awarded in his favour and against Defedantst No. 1, 3 & 4 alongwith cost.
2. Brief facts referred in the plaint are that the plaintif f Ashiq Hussain is an Overseas Pakistani, who had purchased different shares and kept the same with the Central Depository Company (hereinafter called as "CDC" ) and Investor Account No. 16176 was opened on 23.97.2004. The CDC/defendant No. 1 has transferred the shares of plaintif f to one Muhammad Usman and huge loss was caused to the plaintif f due to negligence and wrongful action of the CDC or any of its employees. The transfer of shares by Muhammad Usman was based upon fake Authority Letter dated 31.08.2006 to use the Transaction Order books, which was never issued by plaintif f as he was not, in Pakistan at the relevant time. A new trans action order book was issued' ssued to Muhammad Usman in violation of law and even CDC has violated the investors Account Services Operating proce dural manual. The plaintif f and lodged a complaint with the Islamabad Stock Exchange/defendant No. 2 on 26.12.2010, when the instant matter came to his knowledge, but no result has been achieved. The plaintif f has claimed loss of Rs. 10,900,270/- on account of shares value of the 5500 Engr o and 59000 Fauji Fertilizer shares including dividend for the year 2006- 07 and 2009 as well as the bonus shares including the miscellaneous expenses. The suit was contested by the CDC/defendant No. 1 on the ground that the same is not maintainable and plaintif f himself applied through a written request dated 31.08.2006 for issuance of transaction order book and blocking of previous transaction order book and the designated Officer of the answering defendant after completing the codal formalities, issued Transaction Order Book to defendant No. 3 being authorized representative of plaintiff, but subsequently , second Transaction Order Book was also issued to the defendant No,. 3 on 24.07.2008, CDC/defendant No. 1 claims that they with due care and caution transferred the shares under written instructions of the plaintif f. It was further referred in the written statement that a criminal 'case was also registered against defendant No. 3, however , defendant No. 3 was acquitted from the charges vide judgment dated 07.12.2013, passed by learned Judicial Magistrate, Section 30, Islamabad. The defendant No. 2 has, also contested the matter , but no active relief has been sought against the said defendant, whereas defendants No. 2 & 3 have been proceeded against ex-parte vide order dated 09.10.2018.
3. Learned counsel for the plaintif f contends that defendant No. 1 has not performed his legal duty and transferred the shares without due verification and even without comparison of the signatures available in their record. He further contends that the plaintif f is entitled for compensation for loss caused by defendant No. 1 for their negligence as fraud was committed by defendant No. 3, which was not checked by CDC at the relevant time. It has further been argued that the criminal case was also registered against the defendant No. 3 at Police Station FIA, whereby FIA authorities have declared the signatures of plaintif f as forged, however , defendant No. 3 was acquitted from the charge by. the. Court and appeal against acquittal is pending before this Court. It has lastly been contended that the relationship of plaintif f and defendant No. 1 is based upon an agreement Exh.PWI/1 and defendant No. 1 is bound by its terms alongwith Investors Account Services Operating Procedural Manual. Learned counsel has relied upon case-law reported as 2012 CLC (Mubashir Hassan and others vs. Ghulam Sarfraz and others); AIR 1965 Supreme Court 1663 (National Bank Lahore vs. Sohan Lal), 2018 CLC Note 55 (Mst.
Parveen Azad vs. The, Administrator/Chairman, National Medical Centre Hospital), 2007 CLD 376 [Lahore] (Mian Nisar Elahi vs. Lahore Stock Exchange (G) Limited and 4 others), 1999 MLD 788 [Lahore] (Muhammad Jahangir , Proprietor Qadeer Brothers vs. Executive Engineer and another).
4. Conversely , learned counsel for defend ant No. 1 contends that instant suit is not maintainable, which is barred by limitation and plaintif f failed to prove his case as negligence of the CDC/defend ant No. 1 has not been proved, even alleged fraud is committed by defendant No. 3, who is the nephew of the plaintif f's wife, who was also in contact with the plaintif f through emails and was also given investment by the plaintif f in CDC account; that the instant suit has been filed against defendant No. 1 with malafide intention, despite the fact that defendant No. 1 has performed his lawful duties after due care and caution. It has lastly been contended that the plaintif f has not impleaded defendants No. 3 & 4 at the time of filing of the initial suit, which was later on impleaded through separate C.M. No. 252/2013 and as such, suit was barred by limitation. Respondents No. 2, 3 & 4 have been served with different notices and finally a substituted mode of service was adopted through publication in newspaper in Daily Nawa-e-W aqt, dated 11.06.2018, but despite the said publica tion no one put appearance on behalf of said respondents, therefore, they have been proceeded ex-parte vide order dated 09.10.2018.
5. Arguments heard and record perused.
6. Perusal of record reveals that the plaintif f Ashiq Hussain has opened the account No. 1 176 with Central Depository Company (CDC)/defendant No. 1 on 23.07.2004 in order to maintain his shares in safe custody , he came to know that his shares were fraudulently transferred, one Waseem Haider of CDC/Defendant No. 1 contacted him on telephone and informed that his shares have been transferred from CDC to Ahmed Nadeem Securities Account, however , on the interv ention of the said Manager of CDC, the shares were reverted to plaintif f's CDC account, whereafter plaintif f filed the complaint that his other shares were also fraudulently transferred on the basis of authority letter issued in the name of defendant No. 3/Muhammad Usman, his wife's nephew , who was not authorized and plaintif f claims that compensation and loss of his hard earned money , due to negligence of defendant No. 1.
7. On the other hand, the CDC/Defendant No. 1 has contested the suit by raising different factual and legal aspects including question of limitation and raised the plea that they have performed their lawful duty in accordance with law and there Waseem Haider/Manager informed the plaintif f regarding transfer of his 70,000 shares of Fauji Fertilizer to Ahmed Nadeem Securities, whereafter the plaintif f denied the said transaction, as a result whereof the shares were reverted back to the plaintif f's account with CDC. The defendant No. 1 also took the stance that on 31.08.2006, a written request for new Transaction Order (TO) Book and blocking of previously issued TO Book was received by them alongwith authority letter having signature of plaintif f in favour of Defendant No. 3. The designated officer of CDC after comple ting the formalities issued a TO Book to Defendant No. 3 being an authorized representative of plaintif f. Subsequently , a second TO Book was also issued by designated officer of CDC on 24.07.2008. The defendant No. 1 had received transaction orders on different dates between 04.09.2006 and 05.09.2008 with the signature of plaintif f for transfer of shares to the account maintained with M/s. Ahmad Nadeem Securities (SMC) (Pvt.) Ltd. A due care and caution was observed during the transfer of share under the written instructions of the plaintif f. It is lastly contended that criminal case was also lodged on the complaint of plaintif f in the FIA, however no incriminating evidence regarding involvement of CDC Officials was found by the FIA, which is evident from their report dated 12.10.2010. Out of divergent 'pleadings of the parties, this Court has framed the following issues:---
1. Whether the plaintiff authorized defendant No. 3 or granted him power of attorney to act on his behalf in operating Account No. 16176 before defendant No. 1? OPP
2. Whether The transaction books to plaintiff's account issued in favour of defendant No. 3 by defendant No. I was done without any = lawful authority and/or prior permission of the plaintiff? OPP
3. Whether defendant No. 1 transferred the shares of the plaintiff in favour of defendant No. 3 without any lawful authority and/or illegally? OPP
4. Whether defendant No. 1 acted in violation of its own operation rules and procedure while handing over the transaction books to defendant No. 3 and later transferring the plaint ff's shares in his faovur? OPP
5. Whether defendants No. 1 & 3 are liable jointly and/or severally to payment of Rs. 10,900,279/- to the plaintiff?
OPP 6 Whether defendants No. 1 & 3 are liable jointly and/or severally to pay damages in the amount of Rs. 61 million to the plaintiff? OPP
7. Whether the plaintiff is entitled of recov ery of Rs. 10.9 million from defendant No. 1 under sections 8(5) and 11 of Central Depository Act, 1997? OPP
8. Whether the plaintiff is entitled for recovery of Rs. 61 million on account of damages and compensation from defendants No. 1, 3 & 4? OPP
9. Whether the suit is barred by time? OPD
10. Whether the plaintiff has no cause of action against defendant No. 1? OPD
11. Whether the suit is not maintainable? OPD
12. Whether the plaintiff has approached the Court with unclean hands and with mala fide intentions? OPD.
13. Relief
8. The plaintif f in order to prove his case appeared as PW-1 and has produced his wife Robina Shaheen as PW-2.
Plaintif f has also brought on record documentary evidence as Exh.PW -1/1 and Exh.PW -1/2. The CDC/defendant No. 1 has produced Mirza Zafar Hussain, Branch Incharge, Central Depositor y Company as DW-1 and has produced documents as Exh.D1 to Exh.D21, whereas Defendants No. 2 and 3 have been proceeded against ex- parte.
9. While considering the above background, Issues No. 1 to 4 are interlinked, therefore, the same have been decided jointly .
ISSUES NO. 1 T O 4.
The plaintif f Ashiq Hussain appeared as PW-1 in order to substantiate his case and contends that he is an overseas Pakistani and Canadian citizen, who has migrated to Canada in 2007, however , he had opened his account No. 16176 with CDC on 23.07.2004 and transferred his Engro and Fauji Fertilizer Company shares from RAFI Securities to Central Depository Company in order to get them safe and secure. He stated that he did not give any authority to anybody regarding the operation of the said Account with CDC. He received a telephone call from Waseem Haider , Manager CDC Islam abad Branch on 14.04.2009, who asked him as to why he is transferring his remaining 70000 shares of Fauji Fertilizer to Ahmed Nadeem Securities, whereupon PW-1 plaintif f requested him to stop the transaction, thereafter his 70000 shares were reverted to his CDC account on the same day. He further states that Waseem Hadier told him that his 5500 Engro and 59000 Fauji Fertilizer shares have been transferred from CDC account to Ahmeed Nadeem Securities since 2006, whereupon he told Waseem Haider that his Transaction Order Book is with him, then how did the shares have been transferred from his account to another? He was informed that new Transaction Order Book has been issued on the basis of authority letter submitted to CDC by Muhammad Usman/Defendant No. 3. The plaintif f claims that he never issued any authority letter to anybody and any such Authority Letter was based upon forged and fake signatures, which was used by Muhammad Usman/Defendant No. 3, when plaintif f was in Saudi Arabia. The shares were transferred in his absence. The plaintif f also contends that his all Engro and Fauji Fertilizer shares were transferred to Accounts No. 514 and 515, maintained by Muhammad Usman/Defendant No. 3 with Ahmed Nadeem Securities/defendant No. 4 and this was done in connivance and wrongful act or omission of CDC/Defendant No. 1. He also states that second Transaction Order Book was issued to Muhammad Usman in June, 2008 on the basis of requisition slip without any supporting Authority Letter , which shows gross negligence on the part of CDC. The plaintif f has taken a categorical stance in his evidence that Muhammad Usman/Defendant No. 3 was confronted regarding his illegal transfer , whereupon he admits his wrongful act that he had transferred these shares and promised that he will return all these shares and later on 4200 Engro shares were returned to plaintif fs CDC account. The plaintif f filed a complaint to. HA in November , 2009 against. Muhammad Usman, but no action was taken against him. He also approached the Securities and Exchange Commission of Pakistan/Defendant No. 2, but even then no action was taken. The plaintif f claims that he suffered heavy financial loss to the tune of Rs. 72.3 million in addition to mental torture and agony . He claims that loss of Engro and Fauji Fertilizer alongwith their bonus shares, dividend valuing Rs. 10.2 million, travelling expenses of Rs. 600,000/-. He also claims the damages of Rs. 42 million alongwith counsel fee for litigation of Rs. 100,000/-.
10. During the course of cross-examination, the plaintif f acknowledged the following facts:--- o.
(i) Waseem Hader , Manager , CDC informed him regarding transfer of 70000 shares of Fauji Fertilizer to Ahmed Nadeem Securities, and 5500 & 59000 shares Fauji Fertilizer and Engro have already been transferred to Ahmed Nadeem Securities.
(ii) Waseem Haider , Manager , CDC informed him that shares were transferred on the 'request of Muhammad Usman, who is nephew of plaintiffs wife.
(iii) Plaintiff had given Rs. I9,50,000/- on 14.04.2009 to Muhammad Usman for investment in shares for his another Account No. 555 with Ahmed Nadeem Securities.
(iv) Plaintiff acknowledges that Exh.D1 to Exh.D3, emails correspondence between him and Muhammad Usman.
(v) Plaintiff claims that he had given application, from Canada against Muhammad Usman Exh.D4 to Exh.D6 to D.G. FIA, Islamabad
(vi) Plaintiff acknowledges that Exh.D7 is his statement recorded before the Court. (vii) Plaintiff has also admitted that Usman do purchase and sell the shares on his behalf, volunteered that it was relating to 555 Account only .
(viii) Muhammad Usman was acquitted by the Court on 07.12.2013 through judgment Exh.D8.
(ix) Instant suit was filed on 25.05.201 1 through Special Attorney W ajid Mehmood
(x) Plaintiff has also acknowledges that he had not impleaded Muhammad Usman and Muhammad Ahmed Nadeem Securities in my original plaint and Muhammad Usman returned 4200 shares of Engro after two months of the occurrence, which was recorded in the activity report.
(xi) Plaintiff confirms that Exh. D9 being activity report of his CDC account No. 16176, whereby 4000 Engro shares were transferred to CDC Account by Muhammad Usman on 02.09.2009 and 28000 shares of Kohat Cement Company Limited were transferred to my CDC account on the request of Muhammad Usman on 20.1 1.2009.
(xii) Plaintiff acknowledges that Exh-D10 is the account opening form of Muhammad Ahmed Nadeem Securities and his signatures as Exh-D1 1/1 to Exh-D1 1/08.
(xiii) Plaintiff did not issue any legal notice to the CDC asking for my compensation before filing of this suit.
(xiv) Plaintiff visited Pakistan on 19.05.20 08 and 10.06.2010, but did not file any suit in 2010 nor even mentioned that Muhammad Usman is the nephew of his wife.
(xv) Plaintiff had given one year time to Muhammad Usman on the request of his father to return his FFC shares and Engro shares.
(xvi) Plaintiff had not produced any written proof of his medical treatment in Canada after the occurrence nor even produced any proof of his travelling cost to Pakistan and confirms the F.I.A. report dated 12.10.2010 Exh. D12 written by Zia-ul-Hassan, Inspector FIA.
(xvii) Plaintiff had produced his wife as PW-2, who is not privy to any of the transaction and recorded her stance on the basis of hearesy evidence, which is reflected from her statement and same was admitted by her, therefore, there is no need to discuss the evidence of PW -2/Robina Shaheen wife of the plaintiff (xviii) Zafar Hussain, Branch Incharge, Central Depository Company , who acknowledges the opening of Investors Account by Ashiq Hussain/plaintiff on 23.07.2004 vide account No. 16176. He contends that written request of Ashiq Hussain alongwith Authority Letter Exh-D13 and Exh.D-14 were submitted to CDC office, whereby plaintiff has reported that he has lost his transac tion order book. He further states that in July, 2008 another request for issuance of new transaction order book was submitted on the requisition slip signed by the plaintiff and the new transaction order book was sent at the address of the plaintiff through courier . The original receipt Exh-D15, certified copy of requisition slip was produced as Exh-D16.
11. Defendant No. 1/CDC produced their witness Mirza Zafar Hussain, Incharge CDC, who appeared as DW-1 and stated that plaintif f opened an investor account with CDC on 23.07.2004 which is 16176. On 31.08.2006, a written application signed by Ashiq Hussain was received alongwith authority letter , whereby it was reported that Ashiq Hussain has lost his TO Book. DW-1 has produced the certified copy of plaintif f's request and authority letter Exh.D13 and Exh.D14. He completed all the procedural requirement and issued a new TO Book to Muhammad Usman after getting his signature and copy of ID Card on the authority letter DW-1 further state that total eight (08) transactions relating to transfer of shares were made till 14.04.2009 to the broker namely Muhammad Ahmed Nadeem Securities and two other transactions- were carried out in the name of Rafi Securities Private Limited.
Certified copies of Delivery Transaction Request are produced as Exh-D17 (10 pages). He also claims that Waseem Haider , Branch Manager contacted on the available telephone numbers and talked to Muhammad Aslam i.e. father-in-law of the plaintif f, who informed him that plaintif f shifted to Canada and provided his latest Canadian telephone number , whereupon the said Waseem Haider contacted the plaintif f in Canada and informed him regarding transfer of 70000 shares of FFC, however , on the request of Plaintif f Exh-D18, the transaction was blocked and 70000 FFC shares were reverted to CDC account of Ashiq Hussain/plaintif f. The defendant No. 1 had produced account opening form Exh-D19 and Exh-D20, Authority Letter for issuance of Transaction Order Book Exh-D21 and contends that CDC has complied with all its procedure and requirements for issuance of transaction order books and transferred the shares.
12. During the course of cross-examinatio n, DW-1 acknowledged that he verified the account holder and confirms the signatures of plaintif f from Exh-D20. 'The defendant DW-1 confirms that the transactions executed through Exh- D17 was made after its comparison with signature card Exh-D20. He also confirms the CNIC of Muhammad Usman before issuance of the Transaction Book Exh-D13 and copy of CNIC of Muhammad Usman was also obtained by CDC. However , he acknowle dges that there was no letter of authority given for issuance of second Transaction Order Book in 2008.
13. While considering the above backgro und, it is abundantly clear that plaintif f has opened the account with CDC bearing account No. 16176 on 23.07.2004 and he was informed through Waseem Haider , Branch Manager , CDC regarding bulk transfer of shares of FFC by Muhammad Usman/defendant No. 3. The said request was pre-empted by the employee of CDC Waseem Haider and the shares were reverted to CDC, whereby it is the CDC/defendant No. 1, who informed the plaintif f regarding transfer of previous 5500 shares of Engro and 59000 shares of Fauji Fertilizer Company by Muhammad Usman/defendant No. 3 between the period of 2006 to 2008, who is admittedly the nephew of the plaintif f's wife.
14. Although the claim of the plaintif f is mainly against the CDC that they were negligent in performance of its lawful duties, who have not compared the signatures of the plaintif f with the account opening form and specimen card signatures, however , onus to prove issue No. 1 regarding operation of plaintif f's account through an unauthorized attorney Muhammad Usman/defendant No. 1, handing over of transaction order book to defendant No. 3 by CDC, which resulted into subsequent transfer of shares through Exh-D17 is to be considered in the light of Article 117 of Qanun-e-Shahadat Order , 1984, whereby it says that, "Whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist." In this regard the initial burden of proof is upon the plaintif f in such type of cases.
15. It is trite law that when a person alleges a fraud in any transaction based upon his forged signatures by someone else, like in this case, defendant No. 3/Muhammad Usrnan, it is obligatory upon the plaintif f to substantiate his plea through cogent evidence in the following manner:--- a. His signatures were forged and based upon some verification report by handwriting expert. b. That he never authorized defendant No. 3 Muhammad Usman through Authority Letter Exh-D8 to obtain transaction order book from CDC.
16. The plaintif f acknowledges his relationship with Muhammad Usman, whereby the correspondence to that effect i.e. Exh-D1 to Exh-D3 were acknowledged, even he admits that he has given Rs. 1,950,000/- for investment purpose to Muhammad Usman/defenda nt No. 3 for Joint Account No. 555, which is reflected from Exh.D10, whereupon Muhammad Usman/defendant No. 3 purchased the shares, but it has nothing to do with Account No. 16716 of the CDC/Defendant No. 1. Such relationship confirms that the plaintif f was in regular contact with Muhammad Usman/defendant No. 3.
17. The plaintif f has also lodged a crimina l case F.I.R. No 11/10 dated 30.08.2010, u/ss. 420, 468, 471, PPC, P.S. FIA, CCC, Islamabad Zone referred' in Exh-D12, which is a final report u/s. 173, Cr.P.C. submitted by Zia-ul- Hassan, Inspector , FIA/I.O., who has declared Muhammad Usman as accused on the basis of available evidence and incriminating material collected during the course of investigation. The repor t further reveals that fraud was committed by accused Muhammad Usman/defendant No. 3 with the plaintif f and his shares were transferred on the basis of Transaction Order Book obtained through fake Authority Letter , whereby FIA Authorities have also confirmed that signatures of the plaintif f' were fake on letter Exh-D13, Authority Letter Exh-D14 including Exh-D16 and Exh-D17 (10 pages). However quest ion remains the same, whether it is the negligence of CDC or not? In this regard plaintif f has been confronted as to whether any procedural lapse was made by defendant No. 1/CDC, but no such defect or procedural lapse has been highlighted by the plaintif f in his eviden ce nor any concrete proof was brought on record against the CDC/defendant No. 1 to discharge the onus that CDC is negligent in performance of their duties while considering the request Exh-D13 and Exh-14 as well as in execution of Exh-D17 in any manner .
The plaintif f had given C.M. Nos. 616 and 617 of 2019 on the request to obtain the expert opinion for comparison of signatures and the said C.M. was decided on 14.01.2020 while considering Article 84 of Qanun-e-Shahadat Order , 1984 on the strength of case-law reported as 1995 SCMR 256 (Hafeezan Bibi v. Muhammad Tufail), 2003 MLD 1095 Karachi (Lt. Muhammad Sohail Anjum Khan v. Abdul Rasheed Khan), PLD 1956 Dakha 14 (Benoy Bhusan Sara v. Muhammad Abdul Samad alias Ladai Miah), 2005 CLC 870 Lahore (Muhammad Yaqoob v.
Hameeda Begum), PLD 1992 Lahore 366 (Arif Beg v. Mubarak Ali) and 1999 SCMR 85 (Waqas Enterprises v.
Allied Bank. of Pakistan), therefore, the only option left for this Court is to compare the signatures by itself with the admitted signatures of plaintif f as he has not called the Investigation Officer of the criminal case as a witness in this matter , but fact remains the same that there is not element of negligence on the part of CDC, who were rather vigilant and informed the plaintif f regarding transaction in question i.e. transfer of 7000 shares, which were reverted back to plaintif f's account, although the relationship of the parties reflected from Exh-PW -1/1 (The Investor Account Services Document of CDC) is silent qua any such responsibility even at serial No. 19 of Exh-PW -1/1, a question was formulated in this regard:--- Can I operate may account without visiting IAS counter? Yes you can operate your account in 2 ways Either mail the T O to CDC. Or send the T O through another person to CDC to carry out the transaction on your behalf
18. The above-referred procedure provided by the CDC has left nothing in favour of plaintif f, who has heavily relied upon serial No. 17 of the Investor Account booklet Exh.PW -1/1, which is as under:-- Can another person execute transactions on my behalf?
Yes, a person authorized by you as your agent can operate your account on your behalf However , you have to submit a power of attorney authorizing the relevant person to operate the account on your behalf alongwith his/her specimen signatures.
19. This is not the case of the plaintif f that who was operating his account, rather he only disputes his request for issuance of transfer order book, which was issued through Exh-D13, and handed over to Muhammad Usman through Authority Letter Exh-D14; whereafter all the transaction orders were alleged ly signed by plaintif f referred as Exh-D17 (10 pages in numbers) whereby shares of Engro Private Limited and Fauji Fertilizer Company were transferred, therefore, key question which comes before this Court is as to whether all these documents contain the forged signatures of plaintif f referred in Exh-D17, hence, this Court has to take a judicial notice of the judgment dated 07.12.2013 (Exh-D8), passed by learned Judicial Magistrate, Section 30, Islamabad in case F.I.R. No. 11/10, dated 30.08.2010, u/ss. 420, 468, 471, registered at Police Station, FIA Crime Circle Islamabad, whereby the learned trial Court has relied upon the opinion given by the FIA handwriting expert in para 2 of the judgment in the following manner:-- "The handwriting expert gave his technical opinion as "the examination of the documents in the the above- mentioned enquiry has revealed that the questioned signatures marked as 01 and Q2 on the application for new T.O. book and authority letter do not tally in characteristics with the corresponding specimen and routine in nature of the complainant Ashi Hussain"
20. However , Defendant No. 3 was acquitted of the charge by extending benefit doubt by the learned trial Court, therefore, this Court will not indulge into the merits of the criminal case as it was highlighted by the plaintif f that appeal against acquittal is pending with this Court, but fact remains the same that the signatures of the plaintif f do not tally in characteristics with the corresponding specimen and routine signatures, however , while exercising the authority in terms of Article 84 of Qanun-e-Shahadat, 1984 at this stage, I have considered the admitted signatures of the plaintif f referr ed as Exh-D10 highlighted as Exh-D1 1/1, Exh-D1 1/2, Exh-D1 1/3, Exh- D11/4, Exh-D1 1/5, Exh-D1 1/6, Exh-D1 1/7, Exh-D 11/8 with the disputed signature at Exh-D13 to Exh-D17, whereby this Court could not differentiate or able to measure the discrepancy amongst the signatures, which requires the expert opinion, which was already given in a criminal case, same was referred as Exh.D12, whereby the handwriting expert has given the following opinion: "Findings:-- The examination of the documents in the above-mentioned enquiry , has revealed that the questioned signatures marked as Q/1 & Q/2 on the application for new T.O. book & authority letter , do not tally in characteristics with the corresponding specimen & routine signatures of the complainant Ashiq Hussain, marked as S/1 to S/3 & R/1 to R/6. The opinion about the questioned signatures Q/3 to Q/20 will be given on receipt of 15/20 previous routine signatures of the complainant on the same kind of documents i.e. transaction orders.
All the factors such as formations, connections, alignments, initial & final impulses, proportional sizes, abbreviations, speed, slants, curvatures and angles, line quality were taken into consideration while forming the above-mentioned opinion.
21. The above-referred view rendered in the FIA handwriting report as well as in the judgment of the criminal court Exh.D8 has to be seen in terms of Article 91 of the Qanun-e-Shahadat Order , 1984, whereby evidence of criminal court in a judicial proceedings, which is signed and verified by the Court, shall be presumed to be a genuine document and it was taken to be true as presumption of truth is attached to the official record in absence of anything contrary . Reliance is placed upon 2017 MLD 338 (Khalid Mehmood v. Mst. Naseem Akhtar and 9 others). Even otherwise, the record of the FIA handwriting expert report which is part of challan under Section 173, Cr.P.C. in a criminal case referred as Exh.D12 is also considered to be a public record which was produced by the Investigating. Officer in the criminal court and as such, legitimate presumption has arisen on record, the judicial proceedings have strong presumption of correctness and sanctity is attached to them. Reliance is placed upon 2002 SCMR 1336 (Muhammad Ramzan v . Lahore Development Authority ).
22. Keeping in view the above position, the defendant No. 3 has been proceeded against ex-parte, as such no evidence in rebuttal has been brought on record to prove that any valid authorization was given by the plaintif f in favour of defendant No. 3, however , transaction order books were issued on the basis of Exh-D13 and Exh-D14 to defendant No. 3/Muhammad Usman, whereby no fault of CDC was reflected. Defendant No. 3 was not authorized to transfer the shares, who is accused in the criminal case' lodged by the plaintif f and is also the nephew of plaintif f wife having contact with plaintif f with regard to investment in Ahmed Nadeem Securities through transfer of shares, this aspect has not been denied by the plaintif f in his evidence, hence it is reflected from the record that Muhammad Usman/Defendant No. 3 has some authority to deal with the accounts of plaintif f to the extent of Account No. 555, although plaintif f has denied the authorization to the extent of Account No. 16176, which is under CDC/Defendant No. 1. The report of FIA, dated 01.07.2010, is part of Final Challan prepared by FIA (Exh/D12), and at this stage, there is no evidence in rebuttal that the signatures of the plaintif f are genuine on all the disputed documents and transactions. Hence, on the basis of preponderance of the evidenc e, the plea raised by the plaintif f that he never authorized Muhammad Usman/Defendant No. 3 or granted him power of attorney to operate Account No. 16176 with the CDC is correct, whereas, the claim of compensation referred in the plaint against CDC/defendant No. 1 requires direct proof that CDC has not performed the duties as per law but no such proof was brought on record, as such the acts and working of CDC is considered in the light of Section 8 of Central Depositories Act, 1997, which has certain parameters, which are reproduced as under:---
8. Central depository discharged from liability if acting on instructions.--- (1) A central depository , if acting in good faith and without negligence, shall not be liable for any loss, damages, compensation, costs and expenses in tort or under any law or contract for any breach of trust or duty and in the cases where the central depository has, in the accounts or sub-accounts maintained by it, made or allowed to be made entries or handled or allowed handing of any book-entry securities, according to the instructions of an account-holder or a participant, notwithstanding that the account-holder or the participant, as the case may be, had no right to dispose of or take any other action in respect of such book-entry securities.
(2) A central depository , if acting in good faith and without negligence, shall be fully discharged of its obligations to an account-holder and participant, upon the transfer or delivery of book-entry securities under the instructions of the account holder or participant, as the case may be.
(3) A central depository shall not be required to enquire whether or not---
(a) an account-holder or a participant, has a right to handle any book-entry securi ties entered in his account or in any sub-account under his account, as the case may be, or to take an action in that regard, or
(b) the document of title in respect of a security deposited with an issuer for the purpose of registration of the transfer of the security in the name of the central depository is genuine.
(4) Except as provided in this Act, a central depository shall not owe any fiduciary or any other obligations whatsoever , including, without limitation to the generality of the foregoing, any obligations in law, contract, tort, warranty or strict liability , to the sub-account holders in whose name sub-accounts are maintained in the central depository system.
(5) Without prejudice to the provisions of any other law for the time being in force, if any loss is caused to an account-holder or a sub-account holder due to any negligent or wrongful act or omission of a central depository or any of its employees, the central depository shall compensate such account-holder or sub-account holder for such loss.
23. While considering the above provisio n, it has been proved on record that respondent CDC has acted in good faith, which is evident from the conduct of their employee namely waseem Haider , who informed the plaintif f regarding illegal transfer of his shares and as such, the CDC has fully discharged its obligations towards the account holder in accordance with law and their acts are fully protected, therefore, the entitlement for any loss, damages or compensation claimed by the plaintif f against CDC has not been justified through any cogent or direct proof by the plaintif f. Therefore, issue No. 1 is answered in affirmative, however the Defendant No. 1 CDC has acted with due diligence and been informed the plaintif f for alleged transfer of 70000 shares of Fauji Fertilizer , which were reverted to plaintif f's account with the timely efforts of CDC Manager Waseem Haider , hence, no blame could be attributed to CDC. Issues No. 2, 3 are answered in affirmative to the extent of Defendant No. 3 without any fault of CDC and Issue No. 4 is answered in negative.
ISSUES NO. 5, 6, 7 AND 8.
24. Keeping in view the above discussion on Issues No. 1 to 4, CDC is not guilty of an illegality or negligence on its part in any manner as no proof was brought on record by the plaintif f to suggest that any mala fide or negligence is committed by the CDC or there is some connivance between the CDC/defendant and Muhammad Usman/ Defendant No. 3, hence, the defendant No. 1/CDC is not jointly or severally liable for any compensation, loss or damages caused to the plaintif f as the fraud was solely committed by Defendant No. 3 without authorization through fake signature of plaintif f while executing Exh.D13 to Exh.D17, which has been confirmed by FIA technical expert report.
25. The plaintif f has suffered a huge loss of Rs. 10,900,270/- which has been claimed by him in body of plaint as well as in evidence, which includes 5500 Engro shares with its dividend for three years, 59000 shares of Fauji Fertilizer with its bonus shares and dividend along-with claim of travelling and loss of income, which is exclusive liability of Defendant No. 3.
26. In order to prove the concept of damages, it is necessary to justify the case of damages with reference to its kinds i.e. nominal, general and special damages, whereas in this case the plaintif f has demonstrated that fraud has been committed by Muhammad Usman/defendant No. 3, who has forged his signature through TO Book and transferred the shares of plaintif f unautho rized from CDC account to Ahmed Nadeem Securities, therefore, there is no cavil to the proposition that a fraud has been committed which resulted into a financial loss to the plaintif f through exclusive act of Defendant No. 3 without any fault of Defendant No. 1. The damages are not uncertain in this case, which appear to be mathematically calculable and referred in the plaint as well as highlighted by the plaintif f in his evidence as PW1. The plaintif f is claiming total loss of Rs. 72.3 Million inclusive of mental torture and negligence. He claims the losses of Engro shares including dividend from 2006 and 2009 together with the shares amounting to Rs. 400,000/-, 59000 shares of Fauji Fertilizer including share value, bonus share and dividend value for the period of 2006-2009 equal to Rs. 10.2 Million. Besides these actual figures the plaintif f has not brought any travelling details to justify his expenses and even not produced the cost of litigation as to what has been paid by him to his counsel through any banking channel. In absence of authentic, oral and documentary supporting evidence, mere statement of a party is not sufficient to establish amount of damages allegedly suffered by him. A person claiming special damages must prove each item of his loss on the basis of evidence. Where a person claims special damages then it is incumbent upon him to show as under which head of account and how such damages have been sustained, in absence of such proof, special damages cannot be allowed. Reliance is placed upon 1992 CLC 1561 Karachi (Abdullah v. Muhammad Saddique) and 2008 CLD 576 Karachi (KLB-E-Hyder and Company (Pvt.) Ltd. through CEO v. NBP), therefore, at this stage, this Court could only consider the plaintif f's claim to the extent of Rs. 10.6 Million, which was calculated by the plaintif f at the time of his evidence, although the future calculation of bonuses has not been brought on record through any independent source.
27. While arguing to issues No. 1 to 7, there is no denial that fraud was not committed by Defendant No. 3, therefore, plaintif f is also entitled for general damages for mental torture and agony amounting to Rs. 1 Million as question of general damages relating to mental torture, anguish and distress has to be assessed by following the rule of thumb and said exercise falls in discretionary jurisdiction of the Court and has to be decided on the basis of facts and circumstances of each case. Reliance is placed upon 2012 CLD 06 (Abdul Majeed Khan v. Tawseen Abdul Haleem), 2013 SCMR 507 (Malik Gul Muhammad Awan v. Federation of Pakistan), 2019 YLR 1985 Karachi (Nazeer Ahmed v. Karachi Port Trust through its Chairman) and 2013 CLD 733 (Malik Gul Muhammad Awan v. Federation of Pakistan). Hence, Issues No. 5, 6 are answered in affirmative to the extent of Defendant No. 3 for the purpose of dama ges and actual liability by excluding Defendant No. 1 CDC as the latter is not jointly or severally liable for any neglig ence or fault. Issue No. 7 is answered in negative and findings of Issues No. 5 and 6 are to be read in connection with issue No. 8, therefore, no separate compensation could be awarded to the plaintif f regarding this issue.
ISSUE NO. 9
28. Defendant No. 1/CDC has raised the plea that suit is time-barred, whereas record reveals that the plaintif f has filed the instant suit on 25.05.201 1 before this Court without impleading defendants No. 3&4 and later on both the defendants have been impleaded through C.M. No. 252/2013 on the conceding statement of defendant No. 1 vide order dated 11.03.2015, however , the issue of fake transfer of shares came into limelight on 14.04.2009, when plaintif f was informed by Waseem Haider; Branch Manager , CDC/Defendant No. 1 regarding transfer of shares of Engro and Fauji Fertilizer Company by Defendant No. 3 in his account maintained with Ahmed Nadeem Securities/Defendant No. 4 and plaintif f has filed a complaint with FIA on 20.11.2009 against Muhammad Usman regarding fraudulent transfer of shares as per Para-15 of the plaint. The cause of action claimed by the plaintif f is on the basis of letter dated 28.04.201 1 from Securities and Exchange Commission of Pakistan/defendant No. 2, but the factum of fraud came into his knowledge on 14.04.2009, therefore, the cause of action starts from the said date for the purpose of limitation.
29. Learned counsel for Defendant No. 1 contends that Section 3 of Limitation Act, 1908, states that every suit instituted after the period of limitation prescribed in the First Schedule shall be dismissed, therefore, I have considered the argument of limitation in terms of Articles 2, 36 and 115 of the First Schedule, whereby different limitations are prescribed for filing of suit for compensation, which are as under:--- Description of Suit Period of LimitationTime from which period begins to run
2. For compensation or doing or for omitting to do an act alleged to be in pursuance of any enactment in force for the time being in Pakistan).Ninety Days. When the act or omission takes place
36. For compensation for any malfeasance, misfeasance or non-feasance independent of contract and not herein specially provided for .Two Years When the malfeasance, misfeasance or non-feasance takes place
115. For compensation for the breach of any contract, express or implied, not in writing registered and not herein specially provided for .Three Years When the contract is broken, or (where there are successive breathers) when the breach in respect of which the suit is instituted occurs, or (where the breach is continuing) when it ceases.
30. The above-referred position, if seen in the light of evidence narrated by the plaintif f as PW-1, who is simultaneously claiming his principal amount as well as compensation for breach and negligence on the part of the CDC/defendant No. 1. However , at this stage while referring Issues No. 1 to 4, it has already been settled that it was neither the CDC's negligence in performance of their duty nor there is any act or omission on their part, however , the alleged fact regarding fraud ulent transfer of shares came into knowledge on 14.04.2009 (actual date of knowledge of plaintif f), whereas Article 2 of Limitation Act, deals with the compensation for doing or for omitting to do an act alleged to be in pursuance of any enactment in force, which is not the case in hand. On the other hand, Article 36 of the Limitation Act deals with compensation for any malfeasance, misfeasance or non-feasance, independent of contract and the limitation for filing of the plaint/suit is two years, when the said malfeasance and non-feasance took place, if this Article has been considered, the malfeasance and misfeasance came into the knowledge on 14.04.2009 and the suit was filed on 25.05.201 1, however , the plaintif f approached the Security & Exchange Commission of Pakistan/defendant No. 2 and waited for their decision and filed his suit on the. basis of letter dated 28.04.201 1. The third Article refers as Article 115 of the Limitation Act, which provides period of three years, when the contract is broken or where there are successive breaches, when the breach in respect of which the suit is instituted occurs, all these comparisons clearly spell out that CDC/Defendant No. 1 which is established under the Central Depositories Act, 1997 has a contractual relationship as referred in Exh.PW -1/1 with plaintif f, but there was no negligence or mala fide or connivance of CDC/Defendant No. 1 in the alleged fraud committed by Muhammad Usman/Defendant No. 3, nor there is any relationship of both the defendants, neither there is breach of terms of contract through which plaintif f can charge them for their misconduct, therefore, limitation against CDC/Defendant No. 1 has to be considered with two different limitation periods i.e. firstly under Article 36 of the Limitation Act and secondly under Article 115 of the Limitation Act, which provides three years period. On the other hand, plaintif f has taken a categorical stance that when no specific period of limitation is provided for the purpose of filing of suit specifically in terms of Central Depositories Act, 1997, Article 120 of the First Schedule will apply , which provides the period of six (06) years, starting from the date, when the right to sue accrues. He has relied upon AIR 1965 Supreme Court 1663 (National Bank Lahore vs. Sohan Lal), 2007 CLD 376 [Lahore], (Mian Nisar Elahi vs. Lahore Stock Exchange (G) Limit ed and 4 others), 2018 CLC Note 55; (Mst. Parveen Azad vs. The Administrator/Chairman, National Medical Centre Hospital).
31. It is trite law that when two different sets of limitation provided, the period, which extends certain benefit or the longer one, has to be considered. Reliance is placed upon 1999 MLD 788 Lahore (Muhammad Jahangir vs. Executive Manager).
32. While considering the above position , this Court is fortified with the view given in 2007. CLD 376 [Lahore], Mian Nisar Elahi vs. Lahore Stock Exchange (G) Limited and 4 others), whereby it has been held as under:--- Learned counsel for LSE did not elaborate as to how this suit was time-barred nor did he refer to any Article of the Schedule to the limitation. As noted above, the suit has been filed under section 11 of the CD Act. No period of limitation has been specified in the Limitation Act for the filing of suits under the CD Act. In the circumstances, in my opinion, Article No. 120 of the Schedule to the Limitation Act will apply . It provides for a six years' period of limitation starting from the date on which the right to sue accrues. According to the plaintiff, the cause of action accrued to him on 9th and 10th April, 2001 when the CDC wrongly allowed transfer of the pledged shares from his sub-account No. 577 and the LSE illegally sold the said shares. The suit was filed on 8-4-2004, which is within three years from the aforesaid acts of LSE and CDC. The suit was thus, well within time. Issue No. 3 is decided accordingly .
33. In view of above, the suit has been filed within time as the period of limitation recognized in the above- mentioned judgment of Lahore High Court is 06 years of the Limitation Act, 1908, therefore, Issue No. 9 is answered in negative ISSUES NO. 10, 1 1 AND 12
34. While considering the discussion referred in Issues No. 1 to 8, the plaintif f has prima facie established a cause of action but failed to prove the same to the extent of CDC/Defendant No. 1, however the suit is maintainable to the extent of Defendant No. 3, hence, the findings given in preceding paragraphs demonstrate the Issues No. 10 & 11 to the extent of CDC/Defendant No. I' are affirmative as the suit against CDC/Defe ndant No. 1 is not maintainable in present circumstances as the plaintif f has failed to prove his claim against the CDC/Defendant No. 1. In the light of above position, there is no need to further dilate upon Issue No. 12.
RELIEF:
35. While considering the entire backgrou nd discussed above, the plaintif f was in contact with the defendant No. 3 Muhammad Usman as reflected from his emails dated 26.02.2009 and 12.02.2009, 09.03.2009 Exh-D1 to Exh-D3, whereby Muhammad Usman has informed the plaintif f regarding investment made by him in FFC and Engro shares, the said emails were admitted by plaintif f, but the authorization was given to defendant No. 3 is to the extent of Joint Account No. 555 and as such, no valid authorization is available in favour of defendant No. 3 for transfer of shares in Account No. 16176 with the CDC, the signatures of plaintif f have already declared defective by the FIA and acknowledged by the learned trial Court in case F.I.R. No. 11/10, dated 30.08.2010, u/ss. 420, 468, 471, PPC, P.S. FIA, CCC, Islamabad Zone vide judgment dated 07.12.2013 Exh-D8, passed by learned Judicial Magistrate, Section 30, Islamabad, creates a parallel position that CDC has performed their lawful duty without negligence as no illegality has been proved by the plaintif f against the CDC/Defendant No. 1 in terms of Sections 8 & 11 of Central Depositories Act, 1997. The plaintif f has raised the plea that his fake signatures were used in Exh.D17 Transaction Request (10 pages) as compared to his Investor Account Holder . Signature Card Exh-D20, said factum was not denied in rebuttal by the defendant No. 3, nor any valid proof was brought on record that valid authorization was given to Defendant No. 3, who has been proceeded ex-parte, hence the losses claimed by the plaintif f, which are apparent on record, are proved at this stage and even the CDC/Defendant No. 1 supports the case of plaintif f regarding transaction of shares and its reversion. The financial loss caused to the plaintif f is the exclusive liability of Muhammad Usman/Defendant No. 3.
36. Defendant No. 3 has already been proceeded against ex- Parte ne and there is no evidence in rebuttal to disbelieve the contention of plaintif f against the defendant No. 3. Hence, the instant civil suit is hereby PARTLY DECREED to the extent of Defendant No. 3/ Muhammad Usman, the nephew of the plaintif f's wife, who unauthorizedly obtained the new Transaction Order Book of Account No 16176 and transferred the shares Exh-D17 (10 transactions) and caused huge loss to the plaintif f therefore, the suit is hereby . DECREED to the tune of Rs.
10.6 Million for the loss of share alongwith Rs: Million in addition as compensation. However , no evidence regarding the claim of travel expenses or the litigation charges has been brought on record, hence, the said claim is not proved. Of fice is directed to draw the decree sheet.