' The plaintiff's father late Muhammad Ayub Abdul Kareem had established a prosperous business in India and Burma. When it was converted into a private Limited company he associated family members as shareholders and the company was incorporated in Bombay in the year 1933 in the name and Style of Messrs Ahmed Abdul Kareem Brothers Ltd. The plaintiff's father as one of the shareholders had a total of 2/7 shares of the entire share holding made up of the shares in his name and also shares standing benami for him in the names of his sister Rabia Bai Abdul Kareem and his daughter-in-law Mariam Bai Haji Muhammad Jiya. The company established its business at Rangoon and other parts of India. The plaintiff's father soon thereafter died leaving a will dated 12-7-1934 under which he bequeathed his estate to his widow, two sons and 5 daughters. The plaintiff claims to be entitled to 2/21 shares out of the total business of the Company or its assets.
After Partition of India all the members of the family who are shareholders of the company migrated to Pakistan from time to time and in consequence thereto the company was declared as evacuee and was taken over by the Custodian at Bombay. The branch business of the Co. At Rangoon was not subject to the jurisdiction of the Custodian and remained untouched. The plaintiff has averred that on taking over the company by the Custodian in India the company came to an end as from 18th September, 1951, the properties were leased to third parties and later on were sold away. The company thus ceased to exist. The original defendants who were directors of the company continued to be in possession of the company's business at Rangoon till the filing of the suit as if it were still an incorporated body without informing the Registrar of the company at Rangoon about the affairs at Bombay and thereafter, made a declaration in 1951 and subsequent years that the head office of the company was at Karachi. The plaintiff has alleged that the defendants have been in possession of a common property in which others like the plaintiff have different shares and, therefore, on that basis the plaintiff is entitled to an account of his share in property and the accretion thereof since September, 1951. It has further been averred in the plaint that the defendants have admitted that the plaintiff, his mother, his brother and sisters are entitled to share in the business but they have neither written a single letter to the shareholders intimating to them of the exact state of the business and details of the assets nor remitted to them a single rupee as their share in the property. In Civil Suit No, 235-55 which was pending in this Court the defendants in that suit entered into a compromise with the plaintiff and insisted on inclusion in the compromise a term that the plaintiff and his co-heirs were not to challenge the correctness of the accounts kept by the defendants herein for Rangoon business. The plaintiff has alleged that by reasons of the exigencies the plaintiff agreed to it and a consent decree was passed. After the settlement of Suit No, 235-55 the plaintiff personally went to Rangoon to inspect the account of branch business since 1948 and to obtain the amount which was payable to him, his brother, mother and sister. But one of the defendants and their employees refused inspection of the account. The plaintiff was directed to go and see the defendants at Karachi where it was alleged that the head Office of the Rangoon business was situated. The plaintiff served a written notice dated 16-2-1963 on the defendants which was replied on 13-3-1963 whereby the terms of the compromise decree were pleaded. It has been averred that as defendants have been in exclusive possession of the business at Rangoon and as the plaintiff has beneficial interest therein the defendants are accountable to the plaintiff. During the pendency of the suit defendants Nos. 3 and 5 have died and their legal heirs have been brought on record.
2. The defendants have filed their written statement in which they have raised legal objection that the suit is misconceived, incompetent and not maintainable. It has been averred that shares of the company which the plaintiff claims to be owner were held in the joint names of the plaintiff and Mst. Rabia Bai and, therefore, it is alleged that suit filed by the plaintiff is incompetent. It has further been pleaded that the Court has no jurisdiction to try the suit. As regards the merits, it has been denied that the plaintiff's father had established a vast business. It has been stated that the plaintiff's father had died in 1940 and the bulk of the mills were started and transferred after the death of Ayub Abdul Karim. It is stated that the company was incorporated with the joint efforts of the brothers or their sons and it has been denied that 2/7 share belonged to the plaintiff's father. It has also been alleged that the plaintiff and Mst. Rabia Bai owned their shares jointly. It has been denied that the plaintiff's father held shares as benami as alleged and it has been pleaded that the company recognised those shareholders who have shares in their own names and deals with such shareholders. It has been denied that any will has been left by Ayub, and it has been pleaded that be had appointed trustees in respect of the property, shares and assets. It has been denied that the plaintiff become entitled 2/21 shares of the total business of the company and its assets. It has been denied that the entire activity of the company came to an end in September, 1951 or that the company had become defunct or ceased to exist in respect of business and property which is in their possession at Rangoon. It has been pleaded that the defendants were in possession and control of the business at Rangoon as being the business of the incorporate company but it has been denied that the Registrar of the companies at Rangoon was kept in the dark of the conditions in India or that improper declaration was made in 1951 or subsequently that the Head Office of the company was at Karachi. It has been pleaded that the company had complied with all requirements of the companies law at Burma and the company continued in Burma as an incorporated company. It has been denied that the business at Burma is a common property in which the plaintiff has any share and is entitled to claim any account. The defendants have pleaded that they allowed the business at Rangoon to be carried but by reasons of Foreign Exchange Rules and Regulations no amount was allowed to be taken out from Burma or remitted to any other country. Therefore, any account or amount cannot be claimed in Pakistan in respect of the property and assets which are situated in Burma. The defendants submitted that the business at Rangoon was being carried on and conducted by the employees of the company and no remittance was ever been received by the defendants or any profits were allowed to be sent out of Burma. The plaintiff was aware of this position and knew that periodical accounts were being received but there was no hope of getting any amount from Burma. It has been pleaded that when all affairs of the family in. Suit No, 235/55 were being settled the plaintiff had agreed to accept the accounts and balance-sheets received from Burma as correct to valid and binding. In 1963 all the banks and companies operating in Burma were nationalised by the Government of Burma. The plaintiff went to Burma and being non-resident remanded large amount of money from Manager Incharge of the business which he rightly refused. It has been pleaded that the business and properties of the company are situated in Barma which have been nationalised and are under the control of the Government of Burma and the defendants have no right or control over the same, the suit is therefore, infructuous and Government of Burma is a necessary party. It has been pleaded that the defendants cannot be directed to give an account of the assets of the business carried in Burma except to allow inspection of the balance-sheet, profit and loss statement which have been received from Burma. On these facts it has been pleaded that the suit should be dismissed. On the basis of the pleadings the following consent issues were framed :-
(1) Whether the suit is incompetent and is not maintainable as framed?
(2) Whether this Court has no jurisdiction to entertain the suit?
(3) Whether the business in India and Burma was established by Ayub Abdul Karim or by his brothers as alleged by the defendants? If so, what is the effect?
(4) Whether Ayub Abdul Karim held a total of 2/7 shares in the total capital of the Company in his name and in the names of his sister Rabia Bai Abdul Karim and his daughter-in-law Mariam Bai Haji Jiya benami for him at the time of his death ?
(5) Whether Ayub Abdul Karim by his will dated 12-7-1934 bequeathed his estate to the plaintiff, his widow, his other two sons and his five daughters ?
(6) Whether plaintiff became entitled to 2-21 shares of the total business of the Company and its assets?
(7) What is the effect of taking over of the Company and its properties by the Custodian of Evacuee Property in Bombay over its business and properties?
(8) What became the position of Burma business of the Company after the Company was taken over by the Custodian, Evacuee Property, Bombay on 18-9-1951.
(9) In what capacity the defendants carried on Burma business of the Company since 18-9-1951 and what is their liability.
(10) Whether the Company had complied with the requirements of the Companies Law in Burma. If so, when and what is the effect?
(11) Whether any amount was taken out from Burma or remitted to any other country prior or after September 1951?
(12) Whether the defendants showed any accounts of business to the plaintiff, from Burma and the same are binding on the plaintiff in view of the terms of compromise in suit No, 235 of 1955?
(13) Whether the plaintiff was fully aware of the accounts and the position of the business and assets in Burma ? If so, what is the effect ?
(14) Whether the defendants are not accountable to the plaintiff at Karachi?
(15) Whether the Government of Burma have nationalised the Company, its properties, each in hand? If so, when and what is its effect?
(16) Whether the Government of Burma is a necessary party?
(17) Whether the relief claimed in para. 14(c), if granted, would contravene the Foreign Exchange Regulation, both in Burma and Pakistan?
(18) Relief.
' The parties have led their evidence and have agreed that Issues Nos. 1 and 2 may be tried as preliminary issues. 1 have therefore, heard Mr, Muhammad Ali Saeed, Mr. Iqbal Kazi and Haider Ali Pirzada for the parties.
3. The defendants have challenged that the suit for accounts as framed is not maintainable. In order to appreciate this contention it would necessary to refer to such facts which are proved on record. Ahmed Abdul Karim Brothers Ltd. Was incorporated and registered in 1935 in India with its registered Office at Bombay. It opened branches in various cities of India as well as in Burma. The branch at Burma was not registered as an independent Company but it was carrying on busines as branch Office of Ahmed Abdul Karim Brothers Ltd. After the death of Ayub Abdul Karim the plaintiff alongwith his brothers and sisters inherited the share under a will. It has been established through evidence that the plaintiff was a shareholder alongwith his sister Mst. Rabia. Although the plaintiff has pleaded that the defendants father had purchased the shares as benami but on the basis of the evidence on record it is proved that shares in the name of plaintiff and Mst. Rabia were registered jointly in their name. After the Partition of India the shareholders migrated to Pakistan from time to time and on 1Sth September, 1951 the company was declared evacuee in India and was taken over by the Custodian. The assets and management of the company in India passed into the hands of the Custodian but the branch at Rangoon continued to function under the supervision of the directors. Mr. Muhammad Ali Saeed, the learned counsel for the plaintiffs has contended that as the company had been taken over in India by the Custodian the directors ceased to be directors of the company and if they carried on business at Rangoon after 18-9-1951 which otherwise they could not do legally, the defendants did so at their risk and in fiduciary capacity to the shareholders. He has further contended that after the company ceased to exist a director could not deal with the business assets and properties of the company. A company can cease to exist either by wading up or by operation of law. In the present case the evidence is that the Custodian had taken over the company in India. The plaintiff has stated that the company is not carrying on business and has ceased to exist. The defendants have not made any effort to controvert it. In respect of the assets and business in India the defendants had filed claim and compensation was awarded to them. However in respect of business carried on in Rangoon it seems that defendants had taken steps to save it and wanted it to be registered as an independent company which was not granted. The defendants did not disclose to the authorities at Rangoon that in India the company had been declared as evacuee. The defendants had made certain representations at Rangoon that business was carried on from Karachi. The defendants were making all efforts to save the property and business in Rangoon and in that regard they even made such representation to the Government authorities at Burma. However on 19th October, 1963 the company was nationalised in Burma and taken over by the Government without any compensation.
4. The status of the company's Office at Rangoon was not that of a company incorporated in Rangoon but a branch Office of a foreign company registered at Rangoon for which permission to carry on business was granted by the Government of Burma. It would not be correct to presume that once the company was taken over by the Custodian in Bombay, the company was wound up and therefore business at Rangoon stood completely closed down and did not require any winding up under the Companies Act. In either situations the rights and liabilities of the parties were to be governed in the same manner as between the shareholders and directors. The company's business, assets and properties could not be converted into a common property in which the plaintiff had definite share. Even if the company had ceased to exist in India or that the Rangoon branch has completely severed its relationship from the registered Office, it cannot be denied that it continued to carry on business at Rangoon. This business or operation at Rangoon could be treated as a business of an unregistered company. In cases of unregistered company winding-up proceedings are permissible under law. Such a company may be wound-up if the company is dissolved or has ceased to carry on business or is carrying on business only for the purposes of winding-up its affair or if the company is unable to pay its debt or if the Court is of the opinion that it will be just and equitable that the company be wound-up. Some of the grounds were available for winding-up of the company and such action could be initiated either by shareholders or a creditors or by the company itself. It is true that if a foreign company having its Office registered in another country ceases to exist then such registered Office in a foreign country cannot claim its independent entity as it drives its corporate existence from the parent company. But it does not mean that as the parent company has ceased to exist branch Office should be deemed to have been closed and wound-up. This can be done only by winding-up proceeding. Palmer on Company Law, Volume I, 22nd Edition, para. 84-10, p. 1020 relying on the judgment of Megarry, J, In re: Companla Ma Rabello Sai Nicholas S. A. observes as follows :- "As is evident from Magarry, J's statement.., a foreign company may be wound-up under these provisions even though it did not have an established or, indeed, any place of business in Great Britain ; it is sufficient that it carried on business here. Normally, the existence of assets in this country or the presence here of persons claiming as creditors is sufficient indication of a business having been carried on by the dissolved company in Great Britain."
' It was further observed in paragraph 84-11, "A foreign company which has been carrying on business in Great Britain, but has ceased to do so, may be wound up as unregistered company even if it has been dissolved according to its own law of incorporation."
5. In Pakistan section 271(3) of Companies Act provides that where a company incorporated outside Pakistan which has been carrying on business in Pakistan ceases to carry on such business it may be wound up as an unregistered company, notwithstanding the fact that it has been dissolved or otherwise ceased to exist as a company under the law under which it was incorporated. The Law in India and Burma does not seem to be different. In the case of V. S. R. M.
Chettyar Firm v..1. Hormasji and others it was held that under section 270, Companies Act the Court has jurisdiction in a proper case to order the winding-up of a partnership association or company under section 271, if and only if, at the time when the petition for winding up is presented it consists of more than seven members. A somewhat wider view was taken. In re Strauss & Co. where it was held that High Court has jurisdiction to wind-up an unregistered foreign company irrespective of the number of its members under sections 270 and 271. In Pakistan by virtue of section 271(3) any foreign company which has been carrying on business here ceases to carry on business can be wound-up irrespective of the number of its members. This winding up order can be passed even if it has bee dissolved or ceased to exist under the Laws under which it was incorporated. It is, therefore, clear that the company at Rangoon could have been wound-up.
6. Gower in his book Principle of Modern Company Law, 4th Edition at page 748 has elucidated as follows i--- "the fact that the foreign company had already ceased to exist under its personal law is no bar to an English winding-up order. Indeed, the fact that it has been dissolved is one of the grounds on which an order may be made, the other being in ability to pay its debts and that winding-up is just and equitable."
' It has further been observed that "A winding-up order may be made even though the company never had a place of business in this country provided that there are assets to administer and persons subject, or at least submitting to the jurisdiction who are concerned or interested in the proper distribution of the assets.1 2 3 ' Furthermore, for the purpose of invoking the winding-up jurisdiction it is irrelevant whether the foreign company is incorporated or not. As we have seen, it is recognised, even in the case of English associations, that winding-up under the Act may be the most convenient method of liquidation whenever any considerable body of persons is involved, irrespective of whether their association was registered under the Act."
7. Gower has concluded with these words "winding-up is, therefore, the ultimate remedy of both creditor and member. This, as we have seen, is true also of English companies but with foreign company its role is even more important, for it may after all be the only available remedy".
8. Having determined the status of business at Burma and the remedy available in law I will examine the contentions of the learned counsel for the plaintiff. Mr. Muhammad Ali Sayeed the learned counsel for the plaintiff has contended that the voluntary act of the defendants to carry on the business at Rangoon has created a fiduciary relationship between the plaintiff and the defendant and they are, therefore, liable to account for the profits. In this regard the learned counsel for the plaintiff has heavily relied on the observations made by Finn in his book Fiduciary Obligations. In para. 23 following observation has been made :- "Where a person has his interest served by another, but has not himself agreed with that other the powers and duties to be exercised and discharged for his benefit, one finds reasons emerging for Equity's intervention. If, in addition, he has not the general right to say how they are to be exercised and discharged for his benefit then the need for equity's supervision becomes compelling. Here is a functionary who, within the limits of his powers and duties, is independent of and not controlled by the person for whose benefit he acts. In this independence this freedom from immediate control, lies the final and decisive characteristic of the fiduciary office."
9. It is, therefore, to be seen whether any fiduciary relationship existed between plaintiff and defendants. The defendants have been described as directors whereas the plaintiff claims to be the member of the company holding shares jointly with other persons.
10. It is well established that the directors by virtue of their position are only in a fiduciary relationship with the company and not with his share-IC holders. Finn in para. 20 has expressed his view on this well-accepted rupee!! In the following words : - "By their statutory contract the company and its shareholders agree as a general rule that designatee powers are to be entrusted to the board alone. By virtue of this arrangements a legal relationship is created between the board and the company, but it would seem no corresponding legal relationship let alone a fiduciary one is created between the board and the shareholders. This is somewhat mystifying. As will be seen the Courts have imposed some equitable duties on the directors when taking decisions which affect the right of shareholders inter se. There is now a need and felt one for the Courts to recognise that there is both a legal and a fiduciary relationship between the board and the shareholders, at least when certain powers are exercised."
' Mr. Kazi the learned counsel for the defendant No, 1 has referred to the case of Macaura v.
Northern Assurance Co. Ltd. And other where it was held that :- "Now shareholder has any right to any item of property owned by the company, for he has no legal or equitable interest therein. He is entitled to a share in the profits while the company continues to carry on business and a share in the distribution of the surplus assets when the company is wound-up."
11. A company has its independent legal and separate entity from th shareholders. The company and the members are bound to observe all the provisions of memorandum and article which confer right and duties upon them. A shareholder by virtue of the articles is bound by the resolution of the majority and legally obliged to accept it provided it has been passed in accordance with the law and the articles. These rights are known as corporate membership rights. In contract distinction to these corporate rights there are individual rights as well which are enjoyed by every4 member. These rights are the rights conferred upon member by virtue of the contract with the company as contained in articles and the same cannot be withdrawn or taken away except by law or with the consent of the shareholders. If such individual member's right is infringed the shareholder has a right to agitate for its protection in the Court of law. A member can sue to enforce his individual right to which he is entitled under the Articles or the statute. To name a few, he may sue the company to enter his name in the register of members, restrain the company from excluding his name from membership to restore his name if wrongfully removed, to allow him right of vote. To pay the dividend only declared and return his capital on winding-up.
12. Mr. Pirzada has referred to the leading case of Ross v. Harbottle for the proposition that the shareholders cannot sue the directors. The refusal of the Court to interfere in the management of the company as laid down in this case is based on the principle that the majority has the right to decide how the affairs of the Company shall be conducted. The rule laid down by this case has been followed for more than one reason which has given practical advantages. Any action by the company itself prevents multiplicity of action. If shareholders were permitted to sue it may entail in succession of actions by innumerable plaintiffs. This case illustrates the principle to respect the will of the majority. The rule has been more aptly explained in Macdougall v. Gardiner by Mollish .1 in the following words :- "In my opinion, if the thing complained of in a thing which in substance the majority of the company are entitled to do, or if some thing has been done irregularly which the majority of the company are entitled to do regularly, or if some thing has been done illegally which the majority of the Company are entitled to do legally, there can be no use in having litigation about it the ultimate and of which is only that a meeting has to be called, and then ultimately the majority gets its wishes."
13. This rule will not apply where the majority. Cannot cause such illegality or irregularity sanctioned by an ordinary resolution Burland v. Erarl and Edwared v. Halliwell.
14. The adverse result of the rule laid down in Ross v. Harbottle would have been to completely throw the minority into the hands of majority and even the protection given to the minority may have been frustrated. Therefore, certain exceptions have been recognised and the shareholders can institute proceedings as plaintiffs. Gower has summarised these situations in the following manner :- "(i) When it is complained that the company is acting or proposing to act ultra vires.
(ii) When the act complained of, though not ultra vires the company, could be effective only if resolved upon by more than a simple majority vote i. e. Where special or extraordinary resolution is required and (it is alleged) has not been validly passed.
(iii) Where it is alleged that personal rights of the plaintiff shareholder have been infringed or are about to be infringed at any rate if the wrong to the plaintiff could not be rectified by an ordinary resolution of company.
(v) Any other case where the interests of justice require that the general rule requiring by the company, should be disregarded."
15. Mr. Pirzada, the learned counsel for the defendant No, 2 has referred to Dr. Satya Charan v.
Rameshwar Prosad where it was held that directors are the only persons who can file proceedings but if the directors are wrongdoers majority of the shareholders can take action and sue in the name of the company. Similar observation has been made in AIR 1955 SC 74. This establishes that merely because there are some irregularities or illegalities in the conduct and management of the company by the' directors, which can be rectified by the majority, the shareholders do not ipso facto have a right to sue. It entirely depends upon the nature of action and the right the shareholder seeks to assert as all actions by shareholder are not barred. Palmer in Company Law, 22nd Edition, has observed that "if a director has been negligent or has committed some breach of5 6 7 8 9 his duty towards the company be is prima facie liable in an action by the Company. It was further observed that "under the rule, of Ross v. Herbottle only the company, but not minority shareholders are entitled to sue the directors in negligence, breach of trust unless the case falls within one of the established exceptions to that rule".
16. The directors owe duty to the company. They do not owe any contractual or fiduciary duty to the shareholders, in the management of the company, Penningtion in Company Law, third Edn. At page 527 observes :- "Directors owe no contractual or fiduciary duty to members of their company and it is extremely doubtful whether they owe them any duty at common Law to take case in the management or the company's affairs."
17. The shareholders by virtue of the statutory contract have certain rights as provided under Law or by articles. This individual right does not travel to the extent of claiming accounts from the directors which they are p even otherwise bound to present in terms of the articles. In the present case the defendants have filed balance-sheet for the relevant years and, therefore the plaintiffs are not entitled to take any action unless they establish that a fraud has been committed upon the minority. Mr. Muhammad Ali Sayeed, the learned counsel has referred to the case Niaz Muhammad v. Government of West Pakistan and others, where following observation was made : - "It is only when the relationship of the plaintiff and the defendant is of such a nature that there may be a liability to render account that a suit for rendition of account can be maintained. Such a liability exists when there is a fiduciary relationship or a contractual or statutory responsibility to render account exists. The plaintiff has to establish that the defendant is liable to account to him for no decree for accounts can be passed if the liability to render accounts is not established."
' It is, therefore, clear that before a plaintiff seeks an action he must establish that the defendant is liable to render account to the plaintiff. This liability can arise under the law or contract or fiduciary relationship which may develop between the parties. Considering the facts and nature of the present case the rule laid down by the Supreme Court does not apply because the defendants are not under any statutory or contractual liability to render accounts to the plaintiffs. A reference has been made to In re: Coomber; where Moalton, J. Observed as follows :- "Fiduciary relations are of many different types they extend from the relation of myself to an errand boy who is bound to bring me back my change up to the most intimate and confidential relations which can possibly exists between one party and another where the one is wholly in the hands of the other because of his infinite trust in him. All these are the cases of fiduciary relations and the Courts have again in cases where there has been fiduciary relation, interfered and set aside acts which between persons in a wholly independent position, would been perfectly valid. Thereupon in some minds there arise the idea if there is any fiduciary relation whatever any of these types of intereference is warranted by it. They concluded that every kind of fiduciary relation justifies every kind of interference. Of course that is abused. The nature of the fiduciary relation must be such that it justifies the interference.
' Even if for argument sake it may be admitted that there existed some fiduciary relationship, between the plaintiff and defendants being the shareholders and the directors of the company then in view of the articles and the statute the relationship was not of such a nature which may render the defendants liable to give accounts to the plaintiff.
18. Mr. Pirzada's next contention is that as the entire claim of the plaintiff is based on a will under which executors have been appointed the plaintiff has no locus standi to file a suit and it should have been file by the executors. In this regard reference has been made to Order XXXI, rule 1, C. P. C.
Which provides that where property is vested in trustee executor or administrator and the contention is between the beneficiaries and third persons the executors shall represent the beneficiaries in all suits concerning properties G vested in the executors. In cases where executors10 11 have been appointed under the will the beneficiaries cannot represent the estate till such time the executors or the administrators have exhausted the power and distributed the properties in terms of the will. There is no evidence to show that the administrator have so far not exhausted their power under the will therefore no finding in favour of the defendants can be given.
19. The next contention of the learned counsel for the defendant is that the plaintiff is relying upon the will dated 12th July, 1934 which recites that the testator was a Memon and according to the custom Hindu Law will apply to him. The learned counsel has referred to AIR 1930 Born. 191 ; AIR 1935 Born. 417 and AIR 1934 Mad. 504 ; to support his contention that the plaintiff in respect of the will is to be governed by the Hindu Law. He, therefore, contended that as Hindu Law was applicable the plaintiff was required to obtain a probate of the will and as probate has not been obtained his suit is not maintainable. In this regard a reference has been made to AIR 1960 SC 1471. The learned counsel for the plaintiff in reply has contended that firstly the suit is not based on a will and secondly the plaintiff is suing as a shareholder and as there is a fiduciary relationship existing between the plaintiff and the defendants he is entitled to file a suit. The learned counsel further contended that in view of the West Pakistan Muslim Personal Law (Shariat) Application Act, 1962 Muslim Personal Law shall apply to all Muslims. He has, therefore, contended that it was not necessary for the plaintiff to obtain a probate of the will. After promulgation of the said Act in spite of custom and usage, where parties are Muslims all questions regarding will shall be governed by Muslim Personal Law (Shariat). The Muslim Personal Law in its application to Muslims overrides custom and usage in respect of matters specified in section 2 of the said Act. The Muslim Personal Law shall govern the Muslim and as Muslims are not required to obtain a probate of the will the bar imposed by section 213 of the Successions Act is not applicable to Muslim wills. This contention has, therefore, no force.
19. The next contention of Mr. Pirzada is that the defendants Nos: 3 and 5 have died during the pendency of the suit and, therefore, the cause of does not survive against the legal heirs and they cannot be called upon to render accounts. In this regard reference has been made to the case of Mercantile Co-operative Bank Ltd., v. Messrs Habib & Co. And others . In this case the plaintiff had filed suit for recovery of specific amount on the ground that the defendant who was auditor of the plaintiff bank during the relevant period acted negligently in the discharge of his duty as auditor which enabled the Manager of the Bank to misappropriate the assets of the Bank. In the plaint there was no allegation of fraud misappropriation or dishonesty by the auditor. Nor was it alleged that as a result of his negligence any benefit accrued to the estate. The claim was thus for unliquidated damages based on the negligence of the defendant in performance of his duty. The defendant died and it was held that cause of action did not survive.
20. The next case relied upon is Pushottam Vasudeo v. Ramkrishna Govind where it was held that when an agent dies without rendering 'account the legal heirs cannot be called upon to render account in the 'technical sense in which an agent will be liable to render. In a suit for accounts the plaintiff has to first establish that the defendant is an accounting party. After it is established the defendant is required to prove what amounts he has received and what expenses he has incurred on behalf of the plaintiff. If the defendant dies then it seems unjust and inequitable to burden his legal heir to render accounts to the plaintiff. This would be practically if not impossible, very difficult. In such circumstances the burden is cast on the plaintiff to prove all items of amounts which he claims. In such cases the plaintiff has to prove his entire claim and the legal representative cannot be asked to render accounts. Reference can be made to I L R 44 Mad. 214= 1921 Mad.
407. A more appropriate case of Maharaja Bahadur Singh v. Basunte Kumar Roy (.) and Sasi Sekhareswa r v. Hajirannisa (2). In the later case a suit for accounts was originally filed against the agent and after his death during its pendency it was allowed to he continued against the legal12 13 representative. It was held that after the death of the agent the burden of proof which originally lay on the agent shifted to the plaintiff. It is thus settled that a suit for accounts can be continued or filed against the legal representatives of the deceased but they cannot be called to render accounts. This is for the plaintiff to prove the amounts received and spent by the deceased. Where the legal heirs of a defendant liable to render accounts are brought on record the burden shifts on the plaintiff who must prove that each item was actually realised by the deceased and it was not paid to the plaintiff. The legal representatives will be entitled to lead evidence to rebut the allegations of the plaintiff. The amount so proved can be realised from the estate of the deceased.
This liability of the legal representatives shall, however, be limited to the extent of the estate of the deceased in their hands. This suit, therefore, on this contention can be fail.
21. The other objection taken by the learned counsel for the defendants is that as the plaintiff hold share in joint name with his sister Rabia he cannot sue without joining her as a party to the suit. The plaintiff has admitted to bold shares jointly with the legal heir of his father. Mr. Pirzada has referred Maghanmal Mantonmal v. Pahlojrai and otherswhere it was held that a suit by one of the joint promisor is not maintainable.
22. Section 2(13) of Companies Act while defining private company provides that where two or more persons hold one or more shares in a private company jointly they shall be treated as a single members. In this regard reference has been made to section 45 of the Contract Act which provides that a promise to two or more persons unless there is something to show that the intention of the parties was otherwise is only a joint promise made to them and can be enforced by the promises jointly. In this regard reference can be made to AIR 1960 Cal.
187. The joint shareholders are jointly treated as a single member and therefore if any action is taken it should be by them jointly or the others may be impleaded as defendants.
23. The learned counsel for the defendants finally contended that in view of the settlement in Suit No, 235/55 the plaintiff has no right to claim accounts. In Suit No, 235/55 the plaintiff, defendants Nos. 2, 3, 4 and 5 were parties to it. By this compromise the parties had intended to settle their family dispute. Although it is provided that this compromise has nothing to do with the assets of Ahmed Abdul Karim Bros. Ltd. It has been agreed that balance-sheet of the company from 1951 shall be accepted as between the parties as correct on the assurance that not more than Rs, 2,000 were transferred from Burma to Pakistan. It was further provided that the settlement had nothing to do with the claims of the parties in the Claims Deptt. In respect of assets of the Company. By this compromise every attempt was made to exclude the company from its operation. The conditional statement regarding acceptance of accounts can only be a bar against the plaintiff if the condition has been satisfied. Nothing has been urged to show that the defendant have satisfied this condition and, therefore, this objection is not tenable.
24. Issue No, 2.-The admitted position is that the Company was registered in Bombay and had its branch at Rangoon. It owned four immovable properties and business at Rangoon. All the directors are residing within the jurisdiction of the Court. The learned counsel for the plaintiff relying on Bilasrai Joharmal and another v. Shivndrayan Sarupchand and another (I) has contended that as the defendants are residing within the jurisdiction, the Court has jurisdiction to pass a decree. In this case the trust property, a hospital, was situated outside the jurisdiction of the Court but the trustees were residing within the jurisdiction. It was held that in equity Court may pass order relating to property outside jurisdiction but it cannot administer such property.
25. It is not every action where mere presence of the defendants within the jurisdiction of the Court vests the Court with jurisdiction to pass a decr in respect of properties situate outside the jurisdiction. The account relate to a company which has its branch office at Rangoon. All the records of business were at the material time at Rangoon except the copies of the blan sheets which are available at Karachi and have been filed in Court. In 1963 the Government of Burma took14 over the company and the entire record and properties are in its possession. In the circumstances even by obedience of the defendants no effective order can be passed. In the present suit no fiduciary relationship between the parties has been established nor the defendants are liable to render accounts. In these circumstances the Court will have no jurisdiction to interpose its authority on the defendants in respect of matters and properties which are situated outside the jurisdiction of the Court which are not in the control and possession of the defendants and are in possession of a person which is not a party to the suit.
' In the absence of any fiduciary relationship between plaintiff and defendants and there being no equity between the Parties arising from contract, fraud or trust the Court cannot exercise its jurisdiction in personam in the matter particularly when partly the claim relates to claim in which foreign immovable properties are also involved.
' In view of my finding on both the issues the suit is dismissed. (1973) 75 Ch. 91 I L R 8 Rang. 65$ AIR 1937 Bom. 15 1925 A C 619 67 E R I 89 (1876) 1 Ch. D 1 (1902) A C 83 (1950) 2 A E R 1064 AIR 1950 FC 133 1969 SCM R 219 (1911) 1 Ch. D 723 L D 1967 Kar. 755 AIR 1945 Bom. 21 18 I C 376 AIR 1918 Cal. 276 AIR 1928 Sind 16 AIR 1944 P C 39