JAWAD HASSAN, J.--- "Rectification should be ordered based on several decisive factors. The first was the contextual background to the deeds and the communications preceding their execution: here the parties were not negotiating a new deal - the negotiations had taken place in 2012 and the agreement here was designed to complete "one missing brick in the edifice" of the intercreditor agreement. Correspondence between the parties began with simply checking whether the assignment existed. Once it transpired that it did not, the correspondence discussed the accession deeds. The "obvious inference" according to the court was that the deeds must have been intended to replace the missing security and not fulfil any other or additional purpose. The commercial absurdity of the deeds and the absence of a discussion about such a fundamental change to the deal were further factors that weighed decisively in favour of rectification."
FSHC Group Holdings Ltd v . GLAS T rust Corp Ltd.
[2019] EWCA Civ 1361; [2020] Ch 365; [2020] 1 All ER 505; [20201 All ER (Comm) 719; [2020] 3 CL 47.
This judgment will decide twenty-one (21) years old controversy between the parties and their alleged dispute of rectification of register of Lamrey Cerami cs (Private) Limited arose in year 1995 and brought before this Court in year 1996 and then in 2006 through this petition.
Succinctly , the Petitioner seeks the origin al jurisdiction of this Court being a Company Judge under Section 152 of the Companies Ordinance, 1984 (the "Ordinance") for the rectification of register of debenture-holders of the Company , the transfer of 20,000 shares in her name as recorded vide order dated 04.12.1996 in C.O. No.11/1996, enter the name of the Petitioner as director and allow her to participate in all the proceedings of the Company and its affairs and to declare all proceedings conducted by the new management of the company as illegal, without lawful authority and void ab-initio.
A. FACTUAL BACKGROUND
2. Brief facts of the case, as per petition, are that the Petitioner earlier filed a petition bearing C.O. No.11 of 1996 (the "first petition ") under Section 152 of the Ordinance for rectification of the register of members/shareholders of Lamrey Ceramics (Pvt.) Limited (the "Company "). During the pendency of "first petition " through Court's orders dated 16.09.1996 and 04.12.1996; 12,000 shares were transferred in her name. However , the "first petition " was dismissed in default on 27.11.2002. The Petitioner filed application bearing C.M.No.706 of 2005 for restoration of "first petition " on 28.11.2005 (the "restoration application ") which was duly contested by the Respondents and ultimately the "restoration application" was withdrawn by the Petitioner vide order dated 28.06.2006. As per version of the Petitioner , she approached old management of the Company for implementation of orders dated 16.09.1996 and 04.12.1996 but they refused to extend any sort of help. Hence this petition.
B. ARGUMENTS OF THE PETITIONER
3. Mr. Muhammad Imran Sarwar , ASC inter-alia contended that the Petitioner is still shareholder of the Company in terms of orders dated 16.09.1996 and 04.12.1996 and her status having 32,000 shares has already been proved during proceedings of "first petition"; that the new management committed illegalit ies by refusing to implement the orders passed in "first petition" and to re-transfer 20,000 shares; that new management of the Company sold out the factory constructed on 8-kanals along with the installed machinery owned by Haji Naseer Ahmad/the Respondent No.11 without holding any statutory meeting and also conducted the proceedings without giving any information to her; that the Petitioner has substantial right to participate in the affairs of the Company but said right has been denied by the Respondents.
C. ARGUMENTS OF THE RESPONDENTS
(i) Arguments of Respondents Nos. 1, 6, 7, 8, 9 and 10
4. The counsel for the Respondents submitted report and parawise comments stating that the claim of the Petitioner is false and frivolous because she herself had transferred the shares in favour of the Respondent No.6 on 20.09.2003. It was further stated the "first petition" was dismissed in default and "restoration application" filed by the Petitioner was time barred hence was not maintainable. It is next stated that 12,000 shares were transferred in the name of the Petitioner in terms of order dated 16.09.1996 passed in "first petition" whereas there exists no order pursuant to which 20,000 shares were allowed to be transferred in her favour . The Respondents have taken specific stance that the plea taken by the Petitioner regarding ignorance of change of management and knowledge about the case for a period of 6 years does not stand to reason because the matter pertaining to ownership of the shares and management of the Compa ny were resolved through arbitration in which the Petitioner actively participated and also pursued the Court proceedings from 1999 to 2003 in suits pending between the parties; hence she is estopped to approbate and reprobate in the same breath.
(ii) Arguments of Respondents Nos.2 to 5
5. Mr. Mushtaq Mehdi Akhtar , learned counsel for the Respondents Nos. 2 to 5 submitted report and parawise comments objecting to maintainability of petition on the ground that this petition is barred by time therefore it is liable to be dismissed. He argued that remedies were provided under section 152 of the Ordinance for a party who called in question the title of shares and omitting his/her name fraudulently from the register of the Company but such remedies ought to have been invoked within the period of limitation provided and if no period is specifically provided then within reasonable period of time; that due to change in management, the grievance of the Petitioner , if any, could only be resolved by the Board of Directors consisting of Respondents Nos. 6 to 10 and because the matter has already been resolved through arbitration and the Respondents Nos. 2 to 5 have no connection with the affairs of the company; that the Petitioner had full knowledge about the relinquishment of charge of the present Respondents and change in ownership of the management of the company because, after dismissal for non- prosecution of C.O. No.11 of 1996 and C.O. No. 159 of 1996, the Respondents Nos. 2 to 5 quit the company and its management was jointly taken over by the Petitioner through her brother in law Nisar Ahmad Virk, Nayyar Arifa, and her husband Tariq Mehmood Butt; that the Petitioner and the Respondents Nos.6 to 10 have been appearing and defending litigation with regard to change of management of the Company before the Banking Court No.2, Gujranwala therefore, the version of the Petitioner regarding lack of knowledge of new management during the proceedings of "restoration application" is not true.
(iii) Arguments of Respondent No.1 1
6. Mr. Sheraz Zaka, Advocate objected to maintainability of the petition and argued that the Respondent No.11 is bona fide purchaser of 8 kanals of land through a registered sale deed dated 28.06 .2005. He further stated that the Petitioner has filed this petition on the basis of order dated 04.12.1996 passed in "first petition" without mentioning the instrument through which 20,000 shares were transferred in her favour . He relied on case law reported in Nazar Hussain and others v . Nasir Ali and another ( 2020 CLD 578 Lahore).
(iv) Arguments of Respondent No.12
7. Hafiz Talha, Advocate for the Respondent-SECP submitted report and parawise comments according to which as per Form-A submitted by the Respondent No.1, the Petitioner had transferred 20,000 shares to Mst. Nayyar Arifa and 12,000 shares to Nasir Ahmed Virk on 28.02.1995 and resignation of the Petitioner was also notified by the Company w.e.f. 28.02.1995 through Form-29 dated 01.03.1995. It is stated in the report that the Company reported the transfer of 12,000 shares in favour of the Petitioner as per Court's order dated 16.09.1996 but subsequently the Company reported the SECP about the change of shareholding position of the Petitioner . It is also stated by the Respondent-SECP that the Company had filed Form-29 dated 11.08.1998 by notifying change in directorship according to which Ilyas Ayub Dar, Tahir Ayub Dar, Almas Ayub Dar and Tariq Ayub Dar resigned from directorship of the Company and Tariq Mehmood Butt, Umer Butt, Haroon Butt and Amir Butt were elected as new directors. Furthermore, the Company vide Form-29 dated 20.09.2003 reported resignation of Nasir Ahmed V irk.
8. I have respectively taken into consideration arguments advanced by learned counsel for the parties and perused the record.
D. DETERMINA TION OF THE COURT
9. Before resorting to real controversy , the question that boils down for determination before this Court is whether the Petitioner should have approached the Civil Court under section 152 of the Ordinance or she has rightly resorted to the jurisdiction of the High Court under the Ordinance which is a special law. It has provided special remedy and procedure to resolve dispu tes erupting between the Company and the members under the said Ordinance. The High Court being the Court of "original jurisdiction" under the Ordinance is empowered under section 152 of the Ordinance to entertain the application for correction/rectification of the register of members.
Section 9 of the Ordinance has provided procedure to dispose of all matter coming before the High Court. So far as taking the cognizance of the matter is concerned, it is provided in the Ordinance that an application shall be preferred before the High Court by the aggrieved person or any member of the Company for "rectification" of the register . Though Section 152 of the Ordinance gives wide power to the High Court to rectify the register of members, yet, the jurisdiction of the High Court is summary in nature, as emerges in section 9(3) of the Ordinance which reads as under "In the exercise of its jurisdiction as aforesaid, the Court shall, in all matters before it, follow the summary procedure."
10. A careful examination of section 9 of the Ordinance would show that the intention of the legislature is to introduce new provision in the Ordinance to provide a very expeditious and summary procedure. In case, allegation of fraud and fabrication or intricate question of law is involved requiring recording of evidence, the High Court can advise the party to approach the Civil Court of competent jurisdiction to get the issue determined and in case of favourable judgment, the litigant can always approach the High Court again under Section 152 of the Ordinance. A Division Bench of the High Court of Sindh at Karachi, in the case of "Manzoor Ahmad Bhatti v. Haji Noval Khan"
(1986 CLC 2560) directed the parties to approach the Civil Court for resolution of disputed question of fact raised in the petition. Similarly , in the cases of "Syed Shafqat Hussain v. Registrar , Joint Stock Companies Lahore"
(PLD 2001 Lahore 523) and "Zakir Latif Ansari v. Pakistan Industrial Promoters Ltd." (1988 CLC 154) the aggrieved person was advised by the High Court to approach the Civil Court of competent jurisdiction to get the issues determined and in case of a favourable judgment, he could always approach the High Court again under section 152 of the Ordinance with a similar prayer of rectification of the Register of the Company . Reference may be made to "Lahore Race Club v . Raja Khushbakht-ur-Rehman" (PLD 2008 Supreme Court 707).
11. The question of jurisdiction of rectification of name in the Register of Member s has also been dealt with by a Full Bench of Delhi High Court in the case of "Messrs Ammonia Supplies Corporatio n Private Ltd. v. Messrs Modern Plastic Containers (Pvt.) Ltd. (AIR 1994 Delhi 51) wherein it was observed that the jurisdiction of the Court is discretionary and summary in nature. The Delhi High Court in that case took into consideration different views rendered by the Indian High Courts. The judgment of the Delhi High Court was challenged before the Supreme Court of India in the case of "Messrs Ammonia Supplies Corporation Ltd. v. Messrs Modern Plastic Containers Ltd." (AIR 1998 SC 3153) and the Court keeping in view its powers to rectify Register of Member of the Company under Section 38 of the Indian Companies Act, 1913, observed that "rectification of Register of Member , jurisdiction of the Company Court is summary in nature and Civil Court's jurisdiction is impliedly barred."
Analysis
12. In view of above, it is unequivocal that Section 38 of the Indian Companies Act, 1913 dealing with powers of the Court to rectify the Register corresponds with section 152 of the Ordinance. To elaborate further , this Section empowers the Court to decide any question relating to "rectification" of the Register including the law. There can be no doubt that any question raised within the peripheral field of rectification, it is the High Court under section 152 alone which has the exclusive jurisdiction. However , the question raised does not rest here. In case any claim is based on some seriously disputed civil rights or title, denial of any transaction or any other basic facts which may be the foundation to claim a right to be a member and if the Court feels such claim does not constitute to be rectification but instead seeking adjudication of basic pillar some such facts falling outside the rectification, its discretion to send a. party to seek his relief before Civil Court first for the adjudic ation of such facts, it cannot be taken away merely on account of that no such language is provided in the section. For instance, if under the garb of rectification one may lay claim of many such contentious issues for adjudication not falling under it, in other words, the Court under it has discretion to find whether the dispute raised are really for rectification or is of such a nature, unless decided first it would not come within the purview of rectification. A plain reading of the word "rectification" itself connotes some error, which has crept in requiring correction. Error would only mean everything as required under the law has been done yet by some mistake the name is either omitted or wrongly recorded in register of the Company . Reference may be made to "Lahore Race Club v. Raja Khushbakht-ur-Rehman" (PLD 2008 Supreme Court 707).
13. Out of divergent contentions of the parties following points of determination are framed by this Court which reads as under: I. Whether provisions of Limitation Act 1908 and Civil Procedure Code are applicable on proceedings under Companies Ordinance, 1984?
II. Whether plea of pardanasheen lady amounts to sufficient cause under section 5 of Limitation Act, 1908; if so, whether petitioner is a pardanasheen lady?
III. Whether pre-requisites of section 152 of the Companies Ordinance, 1984 are fulfilled by the Petitioner?
14. Now , I will discuss points of determination respectively as under: POINT NO.1 (Limitation Act under the Company Law)
15. That Section 152 of the Ordinance did not prescribe any time limit for filing of an application for rectification of register of members or register of debenture-holders of a Company . So, said provision remained under consistent judicial scrutiny and interpretation as it could not have been left open to infinity without a definite yardstick of timeframe as it would have been a negation of the very concept of summary mechanism ordained under this provision. A discrete survey of judicial pronouncements of the Supreme Court on aforementioned query is summarized as under:- i. Article 181 of Limitation Act applies to all applications filed under any statute and is not confined in any manner to merely the applications filed under the C.P.C. Under section 152 of the Ordinance an application is to be filed before the Company Bench of this Court and there appears to be no reason to deal with such an application differently than the application filed under Section 20 of the Arbitration Act. Reference can be made to "M. Imam- Ud-Din Janjua v. The Thal Development Authority" (PLD 1972 SC 123). The reasoning given by the Honorable Supreme Court of Pakistan was latter on followed by this court in the case reported as "Messrs United Foam Industries v . Messrs Joy Foam Ltd." (2016 CLD 2325 ) and Nazar Hussain v . Nasir Ali" (2020 CLD 578 ). ii. The limitation period for seeking same relief in a civil suit would also be deemed limitation period for the purposes of application under Section 152 of the Ordinance. The summary proceedings under the said section cannot be resorted to when the suit for seeking same relief has become barred by time under the Limitation Act, 1908. Reference can be made to "Khurshid Ahmad Khan v. Pak Cycle Manufacturing Company Ltd." (PLD 1987 Lahore 1 ). iii. Once a remedy of Civil Suit has become barred by time then only in exceptional circumstances a party can be allowed to avail other remedy if available in law. Reference is made to "Akbar Ali v. Mamun AU Bumasuk Ltd."
(2006 CLD 960), wherein the Petitioner failed to give any cogent reason for not questioning the transfer of shares for 11 long years the Petitioner was held disentitled to the discretionary relief under section 152 of the Ordinance. iv. A civil suit for a relief under section 152 of the Ordinance would entail the limitation period prescribed in Article 120 of Limitation Act, 1908. Therefore, said Article shall also be applicable to a petition filed under section 152 of the Ordinance and period mentioned in the said Article should be taken as a reasonable standard by which delay is to be measured. Reference can be made to "Mian Waheed-ud-Din v. Messrs Royal Rice Millers " (2015 CLD 1978 ) and "Mrs. Saeeda Mahmood v . Anas Munir " (2007 CLD 637 ).
Analysis
16. A sequel of above referred case law candidly establishes that law of limitation is fully applicable to the petition filed under section 152 of F the Ordinance. It is discernable from the record that the "first petition" was filed on 15.02.1996 which was dismissed due to non-prosecution vide order dated 27.11.2002. The Rule 7 of The Companies (Court) Rules, 1997 specifically states that the provisions of the Code of Civil Procedure, 1908, so far as applicable shall apply to all proceedings under the Ordinance. It is thus clear that if an application is dismissed due to default as provided under Order IX Rule 3 or Rule 8, it can be restored in accordance with Order IX, Rules 4 and 9 of C.P.C. provided that such restoration is sought within the limitation period of thirty days as specifically provided under Article 163 of Limitation Act, 1908. The Petitioner , however , brought "restoration application" on 28.11.2005; after a lapse of approximately three years, whereas the time limitation for filing such application was thirty days from the date of its dismissa l. Although Section 5 of Limitation Act, 1908 is made applicable to an application for restoration, however , the Petitioner was bound to establish sufficient cause, which prevented her to approach the Court within the period of limitation. To counter the argument of delay, a plea has been advanced on behalf of the Petitioner that she is a `pardanasheen' lady and therefore she was not aware of the dismissal of her "first petition" that is why the plea of time barred "restoration application" cannot be taken against her. It is deemed imperative that this plea must be examined in its legal perspective.
POINT NO.2 (Limitation Act for Pardanasheen lady)
17. It is settled principle developed by the Supreme Court of Pakistan which is binding op this Court under Article 189 of the Constitution that "Pardanashee n lady" is not a term of art. It has legal purport, impact and significance, which encapsulate certain defences in favour of a woman taking and establishing such plea, which are not available to other persons under the law. It is a bulwark, which offers legal immun ity from certain ordinary binding legal principles especially a valid legal justification to substantiate the plea for condonation of delay on the touchstone of being unaware or uninform ed. It offers a legitimate defence to agitate a cause of action which is otherwise barred by flux of time under the applicable limitation criteria. The valid excuse of being a pardanasheen lady therefore offers a strong ground and a reasonable consideration for exercising discretion in favour of a time barred application, as it is, if established, be taken as a sufficient cause within the contemplation of section 5 of the Limitation Act, 1908 to condone the delay . It is therefore necessary that the true and correct interpretation of the term 'pardanasheen lady' must be understood before extending benefit to a petitioner on this sole ground. A candid survey of judicial pronouncements on the term 'pardanasheen lady' is summarized as under:- i. Pardanasheen lady is one who remains behind the curtain and has no communication except from behind the Pardah with any male person save a few privileged relations or dependent. Reference may be made to "Mst.
Mahmooda Begum v . Major Malik Muhammad Ishaq" (1984 SCMR 890) ii. Pardah observing lady is not necessarily a Pardanasheen lady. A Pardanasheen lady is a lady who does not appear in public according to her religious belief or according to the rule of custom followed by her. Reference may be made to "Mst. Hamida Begum v . Muhammad Saleem" (1988 CLC 2456 ).
18. The argument of the Petitioner that she being a Pardanasheen lady was unaware of the dismissal of the "first petition", therefore, she could not file "restoration application" within the period of limitation. when examined on the touchstone of yardstick laid by Honorable Supreme Court as stated above, this contention holds no weight as per available record. Careful scanning of available record reveals that Petitioner had been appearing personally before the Banking Court No.II, Lahore as well as Banking Court Gujranwala in suits filed by the Respondents which were decided in year 2003 while the "first petition" was dismissed on 27.12.2002. Surprisingly , the Petitioner on the one hand had been appearing before the Courts personally and also by engaging counsels independently and on the other hand, she is taking the plea of being a Pardanasheen lady, which is contrary to her conduct. When the Petitioner was performing such-like professional activities personally , the principle of pardanasheen lady and presumption and immunities attached with it under the law , did not apply in her favour .
19. The Honorable Chief Justice of Supreme Court candidly observed in Muhammad Shujaat Khan v. Nawab Mashkoor Ahmed Khan (2000 SCMR 953) that "Mere assertion that appellant is Pardana sheen did not make out a ground for condonation of delay in filing of the appeals. The application for condo nation of delay fails to make out any reason which prevented the appellants from pursuing the matter diligently . The ground A number 2 in the application is; that the delay in filing the appeals is neither intentional nor deliberate but on account of circumstances which are mentioned in paragraph 1 of the application. We have already referred to the assertions made in paragraph 1 of the application which are vague and no sufficient ground for condonation of delay is made out." Additionally , no application for condonation of delay was filed along with "restoration application" of the Petitioner to substantiate her claim and to bring her application within the purview of Section 5 of the Limitation Act, 1908. Courts would show indulgence only if error on the part of the Petitioner is of a kind, which can be committed by a reasonable and prudent man exercising due diligence and caution and regarding, which he/she has a legal justification to offer but in the case in hand situation is otherwise and the Petitioner has miserably failed to bring the same within the ambit of Section 5 of the Limitation Act, 1908. Moreover , it is celebrated maxim of law Vigilantibus, non-dormientibusjura sub veniunt' (the law aid those who keep watch not those who sleep). Even otherwise, if instant petition be treated as a fresh application against the very cause of action, even then it is way beyond, the limitation period provided under Article 181 of Limitation Act, 1908 i.e., three years as conclusively determined in judgments referred and discussed supra.
POINT NO.3 (Requirement of Section 152 of the Ordinance)
20. Before deciding this appoint of determination it is expedient here to reproduce section 152 of the Ordinance for ready reference:- "152. Power of Court to rectify register .--
(1) If -
(a) the name of any person is fraudulently or without sufficient cause entered in or omitted from the register of members or register of debenture-holders of a company; or
(b) default is made or unnecessary delay takes place in entering on the register of members or register of debenture-holders the fact of the person having become or ceased to be a member or debenture holder; the person aggrieved, or any member of debenture-holder of the company , or the company , may apply to the Court for rectification of the register .
(2) The Court may either refuse the application or may order rectification of the register on payment by the company of any damages sustained by any party aggrieved, and may make such order as to costs as it in its discretion thinks fit.
(3) On any application under subsection (1) the Court may decide any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register , whether the question arises between members or debenture- holders or alleged members or debenture-h olders, or between members or alleged members, or debenture-holders or alleged debenture-holders, on the one hand and the company on the other hand; and generally may decide any question which it is necessary or expedient to decide for rectification of the register ."
21. Literal study of section 152 of the Ordinance, (now section 12 of Companies Act, 2017) provides a right to make an application before the Court for the purposes of rectification of register of members or register of debenture holders of a company in a case where name of a person fraudulently or without sufficient cause was entered in or omitted from said registers. A summary procedure is chalked out for resolution of such disputes where legal title of the applicant was clear and undisputed whereas complicated or doubtful case s, which could not have been decided in a summary manner , were to be raised before Civil Court of competent Jurisdiction.
Pre-Requisites for Rectification of Resister of Shareholders
22. By virtue of section 152 of the Ordinance, the Court may decide any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register , whether the question arises between members or debenture-holders or alleged members or debenture-holders, or between members or alleged members, or debenture-holders or alleged debenture-holders, on the one hand and the company on the other hand; and generally may decide any question which it is necessary or expedient to decide for rectification of the register . The Honorable Supreme Court in "M. Imam-ud-Din JanIlia v. The Thal Development Authority"
(PLD 1972 Supreme Court 123) candidly observed that "it can be seen that an aggrieved person may apply to the Court for the rectification of the Register of Members if the conditions mentioned in section 152 are fulfilled."
Therefore, the Petitioner must satisfy the Court with following two pre-requisites before claiming relief under the said provision:- i. The name of any person is fraudulently or without sufficient cause entered in or omitted from the register of members or register of debenture-holders of a Company . ii. The default is made or unnecessary delay takes place in entering on the register of members or registers of debenture-holders the fact of the person having become or ceased to be a member or debenture-holder .
23. In "Muhammad Hussain v. Dawood Flour Mill" (2003 CLD 1429 ) a Division Bench of the High Court of Sindh observed that if the name of any person is fraudulently or without "sufficient cause" entered in or omitted from the Register of Members, the aggrieved person can apply to the Court for rectification of Register and the Court after enquiring into the matter may order rectification of Register if it is satisfied that the aggrieved person is entitled to such relief.
24. The whole case of the Petitioner is that she is still shareholder of the Company and is entitled to 20,000 shares in terms of order dated 04.12.1996 which was transferred by the Respondents Nos.2 to 6 without her consent. It transpired from the record that the Company was incorporated on 22.06.1994 as a private company . The authorized capital of the Company at the time of its incorporation was Rs.10,000,000/- divided into 100,000 ordinary shares of Rs.100/- each. The paid-up capital was Rs.60,000/- divided into 600 ordinary shares of Rs.100/-.
The object of the Company as set forth in the Memorandum of Association is to set up an industrial undertaking for the manufacturing of Ceramics products of all kinds and to market the same. It was notified by the Company to SECP through Form-3 Dated 01.11.1994 regarding further issuance of 79700 shares and shareholding position reads as follows:- Sr.#Name of Subscriber Number of Shares
1. Ilyas Ayub Dar 10,000
2. Tahir Ayub Dar 10,000
3. Almas Ayub Dar 10,000
4. Tariq Ayub Dar 8,000
5. Nisar Ahmad V irk 32,000
6. Miss Zahida Parveen 80,000 Total 80,000
25. As per From-M XXIX, the Petitioner resigned from the directorship of the Company and this fact was reported to SECP on 01.03.1995 and on the said date the Respondent No.6 was appointed. Form-A filed by the Company up to 16.08.1995 reflected transfer of Petitioner's 32,000 shares out of which 20,000 shares were transferred to the Respondent No.6/Mst. Nayyar Arifa and 12,000 shares were transferred to one Nisar Ahmad Virk on 28.02.1995.
The shareholding position made upto 16.08.1995 is as follows:- Sr.#Name of Subscriber Number of Shares
1. Ilyas Ayub Dar 10,000
2. Tahir Ayub Dar 10,000
3. Almas Ayub Dar 10,000
4. Tariq Ayub Dar 10,000
5. Nisar Ahmad V irk 20,000
6. Mrs. Nayyar Arifa 20,000 Total 80,000
26. It is observed that the Petitioner filed "first petition" on 15.02.1996 by claiming 32,000 shares out of which 12,000 shares were ordered to be handed over to her by one Nisar Ahmad Virk who was the Respondent No.6 in the "first petition" (stated to be brother in law of the Petitioner) but has not been made party to this petition. Record reveals that original share scripts regarding above stated 12,000 shares were also handed over to the Petitioner vide order dated 04.12.1996. After pass ing the aforesaid order , the Company reported the transfer of 12,000 shares in favour of the Petitioner in Form-A upto 31.12.1996 with the following shareholding position:- Sr.#Name of Subscriber Number of Shares
1. Ilyas Ayub Dar 10,000
2. Tahir Ayub Dar 10,000
3. Almas Ayub Dar 10,000
4. Tariq Ayub Dar 10,000
5. Nisar Ahmad V irk 20,000
6. Mrs. Nayyar Arifa 20,000
7. Mrs. Zahida Perveen 12,000 Total 80,000
27. The Company reported transfer of shares made up to 31.12.1998 in the following manner-: Sr.#Name of Subscriber Number of SharesTransfee
1. Ilyas Ayub Dar 6000 4000Haji Tariq Mehmood Amir Butt
2. Tahir Ayub Dar 4000 6000Amir Butt Umer Butt
3. Almas Ayub Dar 10,000 Haji Tariq Mehmood
4. Tariq Ayub Dar 2000 8000Umer Butt Haroon Butt
28. After transfer of shares mentioned above, the Company reported following shareholding position which is as under: Sr.#Name of Subscriber Number of Shares
1. Nisar Ahmad V irk 8,000
2. Mrs. Nayyar Arifa 20,000
3. Mrs. Zahida Perveen 12,000
4. Haji Tariq Mehmood Butt16,000
5. Amir Butt 8,000
6. Umer Butt 8,000
7. Haroon Butt 8,000 Total 80,000
29. The Company reported the SECP regarding change of shareholding of Nisar Ahmad Virk and Mst. Zahida Parveen. As per Form-A, made up to 20.09.2003, the Petitioner transferred her 4000 shares to Tariq Mehmood Butt (Respondent No.7), 4000 shares to Haroon Butt (Respondent No.9) and 4000 shares to Bilal Butt (Respondent No.10). While Nisar Ahmad Virk transferred his 8000 shares to Umar Butt (Respondent No.8). The SECP vide letter dated 04.08.2004 required the Company to file documents of shareholders/members which was provided by the Company vide its letter dated 30.08.2004. Transfer deeds along with affidavits of the transferors held by the Petitioner and Nisar Ahmad Virk are also attached with the report of SECP at Page 80 to 89. As per report of SECP , latest Form A made up to 31.10.2006, the last Shareholding position of the Company is as under:- Sr.#Name of Subscriber Number of Shares
1. Mrs. Nayyar Arifa 20,000
2. Haji Tariq Mehmood Butt20,000
3. Bilal Butt 12,000
4. Umer Butt 16,000
5. Haroon Butt 12,000
30. The Petitioner is asserting her entitlement of having 20,000 shares by relying on order dated 04.12.1996. It is imperative to reproduce the relevant part of said order which reads as under: "Learned counsel for the Respondents Nos.1 to 5 submits that in pursuance of the order dated 16.09.1996, the company register has been corrected/rectified and the necessary amendments have been made. He has also handed over original share scripts of Rs.12,000/- shares to the learned counsel for the Petitioner . As far the application filed on behalf of Respondent No.7, suffice it to say that the said Respondent No.7 has submitted that no transaction as such took place between the Petitioner and the said Respondent, therefore, he has nothing to do with shares scripts of Rs.20,000/- and that the same may be re-transferred in the name of the Petitioner . Learned counsel appearing on behalf of the Respondents Nos. 1 to 5 concedes that necessary amendments/rectification shall be made in the register within 7 days from today and the original shares scripts shall be handed over to the Petitioner on Court. T o come up on 12.12.1996".
31. From the above said order , it is quite obvious that the Petitioner was at one point of time shareholder in the Company holding 12,000 shares as per Court's order dated 16.09.1996 which was transferred to her by handing over original share scripts by the Respondents Nos.2 to 5 in the Court on 04.12.19 96. However , said shares were subsequently transferred by the Petitioner in favour of the Respondents Nos. 7, 9 and 10 as evident from the report of SECP and her claim regarding 20,000 shares could not get substantiated within the ambit of law as provided under Section 76 of the Ordinance and she does not hold any further shareholding in the Company , so she is no more entitled to claim all the above referred rights, which are only available to a member/shareholder of a Company . In the case in hand, the Petiti oner's title with regard to 20,000 shares is not clear and to the extent of remaining shares, which were transferred to her as per Order of the Court pas: ed in "first petition", she herself had subsequently transferred all the shares in the year 2003 which is a fact well established from the report of SECP .
32. It is agitated by the Petitioner that the Respondents Nos.6 to 10 has transferre d her 20,000 shares without her consent and knowledge which was given to her by the Court's order dated 04.12.1996. The said ground has strongly been agitated by learned counse l for the Respondent No.11 by stating that the order dated 04.12.1996 is silent about the mode of transfer or instrument through which 20,000 were transferred to the Petitioner . It is observed that such shares could only have been transferred in accordance with the Section 76 of the Ordinance requiring a duly stamped transfer deed executed by the Petitioner along with the original share stamps be lodged with the copy. No such transfer deed or any original script of copies thereof have been filed with this petition at any later stage. It is clear and obvious that requirement of section 76 of the Ordinan ce has not been complied with which are mandatory in nature and in the absence of such compliance no transfer of shares in law stand effected.
Similarly , it is also evident that 20,000 shares vested in the name of the Responden t No.6 which was transferred by the Petitioner in favour of aforesaid Respondent as evident from Form-A filed by the Company up to 16.08.1995.
33. Moreover , the Petitioner has alleged that the new management has refused to implement the orders passed in "first petition" for re-transferring 20,000 shares. Record reveals that the Petitioner resigned from the directorship of the Company on 01.03.1995 but she remained the shareholder till 20.09.2003 while the management of the Company was changed on 11.08.1998 as per Form 29 submitted before the SECP regarding change in directorship and Respondents Nos.7, 8, 9 were elected as new directors and the Petitioner herself has been pursuing the cases with regard to change of management of the Company before the Banking Court from the year 1999 to 2003. So, it cannot be said that the Petitioner was unaware about the change of new management of the Company till the year 2005 when the "restoration application" was filed. Although the Petitioner has taken stance in this petition that she approached the management of the Company but they have refused to extend any sort of help. Suffice it to say that the Company was incorporated on 22.06.1994 and Article of Association of the Company contains a specific clause which provides for arbitration in case of any dispute and therefore it is a form of contract between the members of the Company and they are bound by its terms. It is important to reproduce Clause 44 of the Article of Association of the Company which reads as:-- "Whenever , any difference arises between the Company on the one hand and the members, their executors, administrators or assignee on the other hand, touching the true intent or construction or the incident or consequence of these present or of the statutes or touching anything thereafter done, executed, omitted or suffered in pursuance of these presents-or otherwise relating to these presents or to any statute affecting the Company , every such difference shall be referred for the decision of the arbitrator or umpire under the Arbitration Act, 1940 as amended from time to time."
34. A literal reading of above clause clearly depicts that the Petitioner should have first invoked the arbitration clause instead of approaching this Court for redressal of her grievances. The Clause 44 of the Article of Association of the Company specifically contains the arbitration clause for settlement of dispute/dif ference. The dispute arising requires determination through arbitration, which course has not been adopted by the Petitioner . Reference may be made to "Aurangzeb Khan v . Dabagh (Pvt.) Ltd." (2008 CLD 697 ).
35. The accumulative conclusion of the discussion made hereinabove, this petitio n is not maintainable and being devoid of merit is accordingly dismissed.