This is an election appeal by special leave to the Supreme Court of Pakistan against a High Court judgment that upheld an Election Tribunal's decision voiding the appellant's election to the National Assembly. The core questions were: (1) whether the Supreme Court had jurisdiction to hear an appeal from a High Court decision in an election petition, given the statutory bar in section 64(3) of the Elections Ordinance, 1970; (2) whether the appellant's resignation as Managing Director of a company with a subsisting government contract took effect from the date of communication or the date of acceptance; and (3) whether the appellant remained disqualified as a de facto director holding an office of profit under Article 9(2)(h) of the Legal Framework Order, 1970.
The Court held that the Supreme Court's appellate jurisdiction under Article 186 of the Interim Constitution was not controlled by Article 249 or the statutory bar, as sub-constitutional legislation cannot curtail constitutional jurisdiction. On the merits, the majority held that the resignation took effect immediately upon communication to the company. The majority further held that the plea of de facto directorship was not raised in the election petition and could not be entertained for the first time in appeal; that the key document (Form E) was not duly proved under section 67 of the Evidence Act and could not be used as an admission without confrontation under section 145; and that a de facto director without proof of holding an office of profit was exempt under the proviso to Article 9(2)(h). The appeal was accepted and the election petition dismissed. The Chief Justice dissented in part, holding the appellant remained a de facto Managing Director and thus disqualified.
1. HAMOODUR RAHMAN, C. J.-This appeal, by special leave is directed against the judgment of a Division trench of the Peshawar High Court in an appeal from -the decision of the Election Tribunal, North-West Frontier Province, constituted under sec--petition 54 of the National and Provincial Assemblies (Elections) Ordinance, 1970.
2. The Election Tribunal had declared the election of the appellant herein to Constituency No. NW-I, Peshawar-1 to be void on the ground that he was the Managing Director of K. K. & Co. Ltd., Peshawar, on the date of filing of his nomination paper, as also on the date of the scrutiny thereof.
3. This was held to be a disqualification under sub-clause (h) of C.(2) of Art. J of the Legal Framework Order, 1970. This sub-clause reads as follows:- "9. Qualifications and disqualifications for being a member.-(1)
(2) A person shall be disqualified from being eiected as, and from being, a member if-
(h) he, whether by himself or by any person or body of person in trust from him or for his benefit or on his account or as a member of a Hindu undivided family, has any share or interest in a contract, not being a contract between a Co-opera--tive Society and Government for the supply of goods to, or for the execution of any contract or the performance of any services undertaken by, Government: It is now an admitted fact that K. K. & Co. Ltd. (hereinafter called the Company), a public limited company, had a subsist--ing contract with the Government for the supply of goods and 'the appellant was its Managing Director. The appellant,, however, claims that he tendered resignation on the 10 Decem--ber 1970. The letter of resignation (Exh. D. A.) reads as follows:- "Mohammad Yusuf Khattak,Phone No. 2798th M. A., Oxen, Bar-at-Law2. The Mall, President, Sarhad ProvincialPeshawar Cantt.
4. Muslim League.
5. 10 December 1970.
6. To The Board of Directors, K. K. & Co. Ltd., Peshawar.
7. Sir, It is with feelings of profound regret that I beg to announce my resignation from the Board of Directors of K. K. & Co., Ltd. And from the Managing Directorship of the Company.
8. Yours faithfully, (Sd.) Muhammad Yusuf Khattak."
9. Thereafter, he sought election to the National Assembly at a bye-election held to till a vacancy occasioned by the resignation of the then incumbent of that seat. The last date for the filing of' nomination papers for this election was the 27 of Decem--ber 1970, and the scrutiny of nomination papers was held on the 28th of December 1970, leaving in the field four candidates, the appellant and the three respondents herein.
10. The election was held on the 14th of January 1971, and tit; appellant was declared elected. He polled 31,056 votes as against 25,226 votes secured by the first respondent herein, The other two candidates were defeated by wider margins.
11. The result of the election was notified on the 26th of January 1971, but the first respondent challenged the election by an Election Petition, filed on the 10 of March 1971, on the ground that the appellant was disqualified under sub-clause (h) of Clause (2) of Article 9 of the Legal Framework Order, 1970, and that the election had been vitiated as a result of a large number of other illegalities and corrupt practices committed during the electrons. The appellant alone contested this petition t the other two respondents did not take any part in the proceedings.
12. The appellant denied the charges and maintained that he had duly resigned both from the Managing Directorship as well as the Directorship of the Company on the 10th of December 1970: The allegations about corrupt practices and other illegalities, under the National and Provincial Assemblies (Elections) Ordi--nance, 1970. Were struck out on the ground of being vague and nebulous and the Election petition was contested on the following; three issues:- "(1) Whether respondent No. 1 was Managing Director of K. K. & Company Limited on the day of filing the nomination, papers and on the day of scrutiny thereof ?
(2) Whether there was a subsisting contract between the Government and K. K. & Company Ltd. On both the aforesaid dates. If so, with what effect?
(3) To what relief is the petitioner entitled?"
13. It was conceded that K. K. & Co. Did have a subsisting con--tract with the Government of Pakistan.
14. Hence the only question on which the parties were at issue, was as to whether or not the appellant stood disqualified on the date of his nomination in terms of Article 9(2)(h) of the Legal Framework Order, 1970.
15. The Tribunal accepted the evidence led by the appellant of his tendering resignation on the 10 of December 1970,but came to the conclusion, upon a consideration of the relevant articles of the Articles of Association of the Company that the resignation took effect from the Ist January 1971, the date of its acceptance and not from the date of the communication thereof to the company.
16. The Tribunal also found support for this conclusion from the conduct of the Company itself which, on receipt of the letter of resignation of the 10 of December 1970, issued notices on the 12 December 1970 for a meeting of the Board of Directors to consider, inter alia, "the acceptance of resignation tendered by Khan Muhammad Yusuf Khattak on 10 December 1970" (Exhe. D. B., D. C.
17. And D. D.), the resolution (Exh. D. F) adopted by the Board of Directors on the lot of January 1971, toth th th th th th th accept the resignation of Khan Muhammad Yusuf Khattak from the Board of Directors and from the office of Managing Director "with deep regret" and the Form 'E' (Exh. P. E.) filed by the Company itself under section 32 of the Companies Act with the Registrar of Joint Stock Companies showing Khan Muhammad Yusaf Khattak as one of the Directors of the Company even on the 31st of December 1970. This form also contained a certificate rat its end to the following effect:- "I, Mohmmad Yusuf Khan Kbattak, do hereby certify that --the above list and summary truly and correctly states the facts as they stood on the 31 day of December 1970.
18. (Sd.)
19. Mohammad Yusuf Khattak, Managing Director."
20. On this evidence, the Election Petition was accepted and the election of the appellant declared void.
21. From this decision, the appellant went up in appeal to the --High Court under subsection (3) of section 64 of the National and. Provincial Assemblies (Elections) Ordinance XIII of 1970. This subsection reads as follows:- "64. Decision of the Tribunal.-(1)
(2) ---------------------------..
(3) Any person aggrieved by a decision of the Tribunal may., within thirty days of the announcement of the decision, appeal to the High Court on any of the grounds enumerated in sec--petition 100 of the Code of Civil Procedure. 1908 and the decision of the High Court on such appeal shall be final, and shall not be subject to appeal to the Supreme Court. Every such appeal shall be heard by a Division of two Judges of the High Court.--- The High Court after an elaborate examination of the entire evidence, the provisions of the Articles of Association of the Company and the relevant law, came to the conclusion that the Tribunal had rightly decided that the appellant was disqualified from seeking election on the relevant dates. The appeal was, accordingly, dismissed with costs on the 30 of June 1972.
22. The appellant came up to this Court for special leave on the 13 of July 1972, under clause (3) of Article 186 of the Interim Constitution of 1972 and leave to appeal was granted to him on the 28th of August 1972, in spite of the caveat entered by the respondent No. 1, because, both sides had raised important questions of law which required consideration.
23. It may be mentioned here that Mr. S. M. War, the learned counsel appearing for the caveator (now respondent No. 1), had at that stage too challenged the competency of the appeal and the jurisdiction of this Court to entertain the same by reason of the provisions of subsection (3) of section 64 of the National and Provincial Assemblies (Elections) Ordinance, 1970, read with Article 249 of the Interim Constitution.
24. At the hearing of the appeal, he has again raised this as a pre--liminary objection. It is, therefore, necessary to dispose of this preliminary objection first.
25. Subsection (3) of Article 64 of the National and Provincial Assemblies (Elections) Ordinance, No. XIII of 1970, has already been quoted earlier in this judgment. Article 249 of the Interim Constitution is in these terms:- "No election to the National Assembly or a Provincial Assembly shall be called in question except by an election petition presented to such authority and in such manner as may be provided by Act of the Federal Legislature."
26. By clause (2) of Article 290, an Act of the Federal Legislature Includes "an Ordinance made by the President". Ordinance XL1I of 1970 is also an existing law which has been continued in force by Article 280 of the Interim Constitution. The question, there--fore, that has to be decided is whether the bar created by sub--section (3) of section 64 of Ordinance XI1I of 1970 continues not-- withstanding the provisions of Article 186 of the Interim Constitution giving to this Court jurisdictionst th th to hear and determine appeals from judgments, decrees, orders or sentences of a High Court and, therefore, no appeal lies to this Court from the judg--ment and decision of the High Court In an appeal from the decision of an Election Tribunal.
27. I am unable to agree that Article 249 of the Interim Consti--tution controls Article 186 thereof.
28. Article 186 does not say that the Supreme Court shall have jurisdiction to hear and deter--mine appeals from judgments, decrees, orders or sentences of the High Court subject to the other provisions of the Constitution; but the jurisdiction conferred on the Supreme Court by this) Article is only "subject to this Article". It is clear, therefore, that Article 249 does not control the jurisdiction of this Court nor has it anything to do at all with the jurisdiction of this Court. Under Article 186, this Court does not call the election to an Assembly in question but merely determines an appeal from a judgment of the High Court which it has delivered while hearing an appeal under subsection (3) of section 64 of Ordinance XIII of 1970. The words of exclusion occurring in this subsection of the Ordinance, which is a Sub-constitutional legislation, cannot, therefore, take away the jurisdiction given to this Court sub--sequently by the Interim Constitution itself without any reservation.
29. It is interesting to note that a similar question arose in the case of Muhammad Saeed v. Election Petitions Tribunal, West Pakistan (AIR 1955 SC 233) where also reliance was placed on Article 146 of the Constitution of 1956, which was in precisely the same terms as Article 249 of the Interim Constitution, to claim a finality for the decisions of Election Tribunals but this Court held that the juris--diction given to the Supreme Court by Article 160 of that Con--stitution was in no way controlled by Article 146 thereof. Indeed, the Court went on to point out that, by the incorporation of Article 160 in the Constitution, the Constitution-makers had taken away the finality given by earlier laws to the findings of Election Tribunals and the Governor's order thereon. I see no reason to depart from the principles laid down in Muhammad Screed's case and hold that the finality given by subsection (3) of section 64 to the decision of the High Court in appeal from the decision of an Election Tribunal has now been clearly taken away by Article 18 of the Interim Constitution.
30. Learned counsel has, in this connection, also referred us to certain comments of Mr. A. K. Brohi in his book on the 'Funda--mental Laws of Pakistan' regarding the decision in Muhammad Saeed's case (vide page 516); but with due respect to the learned author I am unable to agree with him that any serious difficulty presents itself in accepting the validity of the reasonings given by this Court in Muhammad Saeed's case and the Supreme Court of India in the case of Rari Vishnu Karnath v.
31. Ahmad Ishaq (PLD 1957 SC (Pak.) 91).
32. The jurisdiction conferred on this Court by clear terms of the Constitution itself cannot be whittled down on considerations of c policy or convenience. In the case of Muhammad Saeed, the question was as to whether this Court could grant leave to appeal directly from the decision of a Tribunal.
33. The position here is different. The relevant law itself provides for an appeal to the High Court and the question before us now is merely this as to whether the decision of the High Court is to have the finali--ty given to it by that law notwithstanding the provisions of Article 186 which make the decisions of a High Court subject to appeal to this Court. If the Constitution-makers wanted to con- -tinue the exclusion of the jurisdiction of this Court, they would have said so in Article 186 itself; but since that has not been done, I cannot accept the contention that the jurisdiction given to this Court by the Constitution itself can be cut down or curtailed by a sub-constitutional legislation.
34. Having disposed of this preliminary objection, I have next to consider as to what is the true nature and scope of the juris--diction of this Court in such matters. Learned counsel for the respondent No. 1 has contended that the jurisdiction is, at best, of a limited nature. Furthermore that on general principles it should be limited to interference only to cases where the Tribunal or the High Court has acted in excess of jurisdiction or exercised its jurisdiction capriciously or in violation of the principles of natural justice or in disregard of the norms of judicial procedure. Mere misinterpretation or misconception of law or miss-apprecia--petition of evidence, it is contended, is not enough to call for such interference.
35. "Coming to the question whether we should interfere with the Tribunal's Report, I may state at the very outset that the supervisory jurisdiction of the Supreme Court under Article 160 is a restricted jurisdiction and an appeal to invoke it will not succeed where a special tribunal, like the Election Petitions Tribunal, has functioned within the spirit and the intention of the statute that created it and while so functioning has made a real and honest endeavour to judge facts on the merits of the evidence and to apply the law to them. A finding of fact thus arrived at, however, erroneous, will not be scrutiniz--ed or reviewed by this Court, and even if an error of law be committed by the Tribunal that will not be considered to be a sufficient ground for interference unless the law so misunder-- stood or miss-applied raises some general question of funda--mental importance to the proper functioning of the tribunal or the decision of the case. But if the Tribunal has made no honest effort to arrive at a correct conclusion or has come to a decision which no reasonable body could ever have come to or has, on no evidence, recorded findings which have deprived persons of important constitutional rights, the exercise of which is the very basis on which the whole constitutional fabric rests, this Court will be acting in betrayal of the Constitution if on any such case being made out it did not interfere with the verdict of the Tribunal."
36. There are similar observations in the case of Smt. Mulibai v. Custodian of Evacuee Property (PLD 1964 SC 648), which read as follows:- "The limits which this Court has set upon itself when enter--taining appeals from Tribunals of this nature have been laid down in the case of Muhammad Saeed and others v. Election Petitions Tribunal, West Pakistan and others PLD 1957 SC (Pak.) 91, and we are clear in our minds that the present is not a case which comes within those limits, as we are not prepared to hold that the decision of the Custodian Authorities was based on no evidence at all, or upon any manifest misreading or misconcep--petition of the evidence or such that it could not honestly have been arrived at after giving due consideration to the facts and circumstances of this case."
37. Reference is also made in this connection to the decision of this Court in the case of Jamal Shah v.
38. Election Commission (PLD 1966 SC 1) and to an unreported decision of this Court in the case of Rahim Shah v. The Chief Election Commissioner of Pakistan C. A. No. 122 of 1972, decided on 22-11- 1272 to show that, at any rate, this Court has always placed upon itself a restraint in dealing with orders of Tribunals of exclusive jurisdiction.
39. It is no doubt true that this Court does, in matters coming be--fore it for special leave to appeal directly from orders of Tribunals of such exclusive jurisdiction, act with considerable restraint and even otherwise does not regard itself as an ordinary Court of appeal. It does not even in ordinary civil matters grant leave merely to correct errors of fact or errors of law, unless some question of general or public importance is involved or some fundamental principle relating to the appreciation of evidence has been disregarded or such a grave error of law or procedure com-- mitted that for the guidance of Courts below, it becomes necessary to correct the same. But once leave has been granted and the appeal is before this Court, this Court has vested in it, by clause (1) of Article 189 of the Interim Constitution itself, all the powers necessary for doing complete justice in any cause or matter pending before it. In the exercise of this power, it certainly has the jurisdiction to do all that the Court, from whose decision the appeal is brought, could do. Thus, in an appeal from a judgment of a High Court in a proceeding brought before it under Article 201 of the Interim Constitution, this Court, while consider--ing whether the High Court has proceeded upon correct principles keeps in view the nature and scope of the jurisdiction given by that Article to the High Court, and where it becomes necessary to correct the High Court, this Court proceeds on the basis that it too has the same jurisdiction as the High Court. Similarly, in appeals from judgments delivered by the High Court in a second or a first appeal, this Court proceeds on the basis that it too is vested with the same powers of doing complete justice, which the High Court had.
40. Following this principle this Court in the case of the United Bank of India Ltd. v. Azirannessa Bewa (PLD 1965 SC 274), reversed findings of fraud and collusion arrived at by the High Court after a re, appraisal of the evidence. In the case of M. O. Ghani v. A. N. M. Mahmood (PLD 1966 SC 802), special leave to appeal was granted as "several questions of law and fact were raised" in the petition for special leave. In the case of The Federation of Pakistan v. A.I Ihsan (PLD 1967 SC 249), this Court after examining the evidence actually reversed a concurrent finding of fact on the ground that it was "on the very face of it opposed to all laws of dynamics". The principle upon which this was done was elucidated as follows:- "It is no doubt true that in a civil appeal; this Court, following the practice of the Privy Council, does not normally go behind a concurrent finding of fact if that finding is not vitiated by any error in point of law but this rule, as pointed out by the Privy Council itself in the case of Bibhabati v.
41. Ramendra Narayn AIR 1947 P C 19 is not a cast iron one and there may occur cases of such an unusual nature as will constrain' the Court to depart from the practice' in order to prevent a 'miscarriage of justice'. Upon this principle the Privy Council itself recognised that it would not hesitate to review the evidence in spite of a concurrent finding of the Courts below if it be shown with absolute clearness that some blunder or error is apparent in the way in which the learned Judges below have dealt with the facts vide Allen v. Quebec Warehouse Company (1887) 12 A C 101, or `if there had been any principle of evidence not properly applied'. But this at best is a rule of practice only which has gradually developed as a result of the decisions of the Board which are merely Illustrative and by no means exhaustive. Applying this principle we would say that the rule may also be legitimately departed from where the finding is on the face of it against the evidence or so patently improbable or perverse that to accept it would amount to perpetuating a grave miscarriage of justice. There would, in our opinion, be still greater justification for interfering with a concurrent finding of fact if the finding could be demonstrated to be physically impos--sible."
42. The position here then would be that, since under sub--section (3) of section 64 the High Court had the jurisdiction of a Court of Appeal under section 100 of the Code of Civil Procedure, the correctness of the impugned judgment of the High Court will have to be considered on the basis as to whether the High Court had followed the provisions of this section of they Civil Procedure Code in the appeal before it, and if it has not done so, then this Court will have the right to correct it on the basis that it too has the same powers as the High Court.
43. Now under section 100, Civil Procedure Code, an appeal lies to the High Court on any of the following grounds, namely
(a) the decision being contrary to law or to some usage having the force of law;
(b) the decision having failed to determine some material Issue of law or usage having the force of law
(c) a substantial error or defect in the procedure provided by this Code or by any other law for the time being in force, which may possibly have produced error or defect in the decision of the case upon the merits.
44. Having disposed of the preliminary objection and determined the true nature and scope of our jurisdiction in this appeal, I now propose to deal with tie appeal on merits.
45. Mr. M. Anwar, the learned counsel for the appellant, has contended that the Tribunal and the High Court were clearly wrong in taking the view that the resignation had to be accepted before it could become effective. Learned counsel contends that the resignation becomes operative from the moment it reaches the company, and after that, the Director ceases to be a Director. He has relied on subsection (2) of section 86-I of the Companies Act to point out that the office of a Director shall be vacated upon the happening of anyone of the events mentioned in sub section (1), as also upon additional grounds, if any specified in the Articles of Association of the Company. In the present case, Article 83 of tie said Articles provides that the office of a Director shall be vacated if, inter alia, "by a notice in writing he resigns his office". The provisions for vacation of office In the event of resignation having been added to the eight circumstances mentioned in subsection (1) of section 86-I of the Companies Act stands, it is argued, on the same footing as any one of the other conditions mentioned in subsection (1) of section 86-I.
46. It is evident from a perusal of the conditions specified in subsection (1) of the said section that the office is automatically vacated on the happening of any one of the events specified therein. Thus, if a Director fails to obtain within the time specified by section 85 the share qualification necessary for appointment as a Director, or if he is found to be of unsound mind by a Court of competent jurisdiction, or is adjudged as an insolvent, the office must manifestly be automically vacated. If resignation by notice In writing is one of the conditions which is added to those specified in subsection (1), then it too must stand on the same footing and have the same effect.
47. A Managing Director has, under Article 91 of the Articles of Association, to be appointed from amongst the Directors, and under Article 92 he is "subject to the provisions of any contract between him and the company" subject to the same provisions as to resignation and removal as the other Directors of the Com--pany. There is no evidence here that there was any contract to the contrary between the appellant and the Company. In any event, since a Managing Director has first to possess the qualification of being a Director, he cannot function as a Managing Director after he ceases to be a Director. Thus, if he resigns from the Directorship and that resignation operates from the moment of its communication to the Company, then he also ceases to be a Managing Director from that point of time. In any event, I am not In a position to say that he could continue as a Managing Director, even after ceasing to be a Director in the face of the provision in Article 92 of the Articles of Association that "if he ceases to hold the office of Director from any cause, he shall, ipso facto and immediately, cease to be a Managing Director."
48. Learned counsel has in support of his contentions placed reliance on paragraph 634 of Halsbury's Laws of England, Third Edition, Volume 6 (page 231) wherein it is stated that "whereby the articles a director has power to resign at any time, his resignation takes effect independently of acceptance by the other directors of the company". The authority cited for this view is the case of Glossop v.
49. Glossop ((1907) 2 Ch. D 370). In that case, the Articles of the Company, as in the present case, provided that the office of a Director should be vacated, inter alia, if by notice fn writing to the Company he resigned his office, provided that the vacation of office should not take effect unless the Directors pass a resolution to the effect that he has vacated his office. Such a resolution had to be passed within six months, and the office of the Managing Director was to be vacated upon the happening of any one the contingencies whereby the office of a Director was to be vacated. A Managing Director of the Company wrote to the Company resigning his office but before the next meeting of the Board he wrote again withdrawing his resignation. Notwithstanding this, the Board passed a resolution to the effect that he had vacated his office.
50. The question was as to whether, in the circumstances, the resolution of the Board was valid and effective. Neville, J. Of the Chancery Division held that the Managing Director could not withdraw his resignation without the consent of the Company and that his resignation had become operative from the date of communication of his letter. The resolution of the Board, therefore, was effective and valid.
51. It will be observed that, notwithstanding the provision in the Articles that the resignation was not to take effect unless the Directors passed a resolution to that effect, the Chancery Division held that the Managing Director having once tendered his resignation, could not withdraw it. It was only for the Company to permit such withdrawal, in view of the provisions in its Articles. In the present case, there is no such provision in the Articles. Therefore, the resignation becomes operative from the moment of its communication.
52. To the same effect are the decisions in the case of Reg v. Wigan Corporation ((1885) 14 Q B D 908) and Finch v. Oake, ((1896) 1 Ch. 409) cited by the learned counsel.
53. The High Court has taken the view that the provisions of the Articles of Association should be read together and, therefore, reading Article 83 with Articles 88, 92 and 98 the resignation is not operative, unless accepted by the Company, even though there is no provision in the Articles of Association for the acceptance of resignation. Article 88 deals with the case of Directors retiring by rotation and not with the case of Directors whose offices are vacated by the operation of Article 83.
54. It would be absurd to suggest that, even if a Director has been adjudged an insolvent or has been found to be of unsound mind by a Court of competent jurisdiction still the Board of Directors must meet and pass a resolution to the effect that his office is vacated. This as not the intention of the Companies Act, nor could a Company, under section 86-I, add any condition which would have the effect of defeating the intention of the status. The only power given by subsection (2) of section 86- 1 is to add a condition which would stand on the same footing as the other conditions specified in subsection (1), for the automatic vacation of the office of a Director.
55. As I have already indicated. Article 92 clearly provides that if the Managing Director ceases to hold the office of Director for any cause whatsoever, he should, ipso facto and immediately, cease to be a Managing Director. The provisions of Article 98 of the Articles of Association as to quorum for a meeting of the Directors has no application whatsoever in this case. Actually, Article 80, which has not been noticed by the High Court provides for such an eventuality. This reads as follows:- "The continuing Directors may act notwithstanding any vacancy in their body; (but so that if the number falls below the minimum above fixed the Directors shall not, except for the purpose of filling vacancies act so long as the number is below the minimum)."
56. This clearly shows that for the purpose of filling a vacancy the existence of a quorum is not necessary. The High Court was, therefore, clearly wrong in taking the view that the resignation did not become operative from the moment it reached the Company. Both the Courts have found that the letter of resignation did reach the Company on the 10 of December 1970, It should have operated from that date.
57. Learned counsel for the respondent has, however, contended that the words of sub-clause (h) of clause (2) of Article 9 of the Legal Framework Order (quoted earlier), are wide enough to bring within its mischief even a de facto Director and, as such, a de facto Director too would be disqualified on that count. In the present case, whatever might be the legal position, the concurrent finding of the Courts below, it is urged, is that the evidence does establish that the appellant did continue to act as a Director even on the Company's own showing up to the 31st of December 1970, which was after the nomination date and this should not be Interfered with. Even if he was not a de jure Director he was at least a de facto Director and Managing Director.
58. It is true that the word "Director" has been defined in section 2(5) of the Companies Act as including "any person occupying the position of a director by whatever name called" and the language of sub-clause (h) of clause (2) of Article 9 of the Legal Framework Order 9s wide enough to Include even a shares-holder and a de facto Director. They escape disqualifica--petition because of the exemption granted by proviso (ii) of the said sub-clause but a de facto Managing Director is not exempt. The question, therefore, that needs examination is as to whether the appellant was notwithstanding his resignation, still acting as such de facto Managing Director till the 31 of December 1970, as has been held by the High Court and the Tribunal. The acts of such de facto Directors do not become Invalid even under the Companies Act, for the Company can always ratify them subsequently. The term "Director", as we have already indicated, includes a de facto Director.
59. Palmer in his Company Law at page 534 also observes that "a de facto Director is as much in ath st fiduciary position as a de jure Director, and liable accordingly." According to Palmer, it would seem that even a Director, who acts after ceasing to be qualified as a Director, is entitled to claim remuneration on a quantum meruit basis for his services of which the Company has had the benefit. It was so held in Craven-Ellis v. Cannons Ltd. ((1936) 2 K B 403).
60. I am, therefore, In agreement with the learned counsel for the respondent that if, notwithstanding his resignation it has been correctly held as a fact that the appellant continued to act as a Director even afterwards, then he would be disqualified on the g ground that he acted during this period as a de facto Director and Managing Director. The latter is without any doubt an "office of profit".
61. To support the contention that he did so act, strong reliance is placed on the letter dated 16th of January 1971, sent by the Company to the Registrar of Joint Stock Companies, Peshawar (Exh. D. H.).
62. It states that on the 1st of January 1971, the Board of Directors resolved to accept with great regret the resignation of Mr. Muhammad Yusuf Khattak from the Board of Directors and from the office of the Managing Director of the Company on the 1 of January 1971, as also on Exh. P. E., which is the Form 'E' said to have been filed under section 32 of the Companies Act with the Registrar of Joint Stock Companies. The latter shows not only the share capital of the Company made up to the 31 of December 1970, but also gives the names and addresses of its Directors on the 31 of December 1970. This Form, as already stated, was filed along with a certificate said to have been appended by the appellant himself certifying that the summary "truly and correctly states the facts as they stood on the 31st day of December 1970."
63. Learned counsel for the appellant has taken three objections to this latter document, namely:---
(i) that it is not proved;
(ii) that even if proved, .It cannot be used as the appellant was not confronted with it when he was in the witness-box; and
(iii) that it is a fabricated document which has been surreptitiously smuggled into the record.
64. The first objection is based on section 67 of the Evidence Act which requires that in the case of a document alleged to be signed or written by any person, the signature or the hand writing as is alleged to be in that person's handwriting must be proved to be in his handwriting, and such proof, according to section 47 of the Evidence Act, can only be furnished by the testimony of a person acquainted with the signature or the handwriting of the person by whom the document is alleged to be written or signed. This, it is said, was not done In the present case as the document was only produced by the Registra--petition Assistant (P. W. 2) of the Office of the Registrar, Joint Stock Companies, Peshawar. His evidence is to the following effect:- ---I have brought the original Form E and Exh. P. E. Is the true copy of its."
65. No question was put to him in cross-examination to suggest that the document was a fabrication, nor was any objection taken at that time to the marking of the copy as an exhibit.
66. It appears that; in the list of witnesses and documents filed on the 30 October 1971, by the respondent No. 1, before the Tribunal, this document was mentioned as a document, the original of which should be called for from the Registrar of Joint Stock Companies. To this list was also attached a photostat copy of the last page of the Form 'E' where the certificate under the signature of the appellant was appended. The original was produced on the 10 of December 1971, by the Registration Assistant (P. W. 2) bat no question was put to him to elicit as to whether he was or was not acquainted with the signature of the appellant or to suggest that the document was not a genuine document. Again, the appellant gave evidence on his own behalf on the 26 of January 1972, but he was neither shown this document nor did he dispute the genuineness of this document (Exh. P.E.). But after the close of arguments on the 19 of February 1972, an application was moved on his behalf on the 28 of February 1972; before the Tribunal for the removal of Exh. P. E. From the record. Even in this application, no categorical denial was made of the genuineness of the appellant's signature on Exh. P. E. Although objections ware taken as to its admissibility in evidencest st st th th th th th on the ground of want of proof and non-compliance with the provisions of rule 4 of Order XIII of the Code of Civil Procedure and section 145 of the Evidence Act. The Tribunal actually records that in the course of arguments it enquired from the learned counsel appearing for the appellant as to why the latter had signed Exh. P. E. And his only answer was that it was signed by him erroneously or illegally.
67. Learned counsel appearing on his behalf has reiterated these arguments before us and maintained that the document not being a commercial document specified in the Schedule to the Commercial Documents evidence Act, 1939, had to be formally proved and admitted in the manner prescribed by rule 4 of Order XIII of the Civil Procedure Code. In support of this contention, reliance is also placed on the warning recorded by the Judicial Committee in the case of Sadiq Hussain Khan v. Hashim All Khan (AIR 1916 PC 27) with regard to the non-observance of the provisions of Order XI1I, rule 4 of the Code of Civil Procedure. Lord Atkinson, in delivering the opinion of the Privy Council, pointed out that the Civil Procedure Code imposed a duty upon the Courts to observe the wholesome provisions of the above mentioned rule and that its disregard would in future not be excused; but it is significant that, although this warning was given for the future, in the cage under consideration before it the Privy Council did not refuse to read or permit to be used any document not endorsed in the manner required by the said rule.
68. Reliance is also placed on a decision of this Court in the case of Bengal Friends & Co. v. Gour Benode Saha & Co. (PLD 1969 SC 477) in which it was held that documents which are not copies of judicial records "could not be received in evidence without proof of signature and handwriting of persons alleged to have signed or written them as required by section 67 of the Evidence Act".
69. There is no dispute as to the principles enunciated in these cases; but the learned counsel for the respondent contends that, where nobody disputes the signature or the writing in the document nor raises any objection to the admissibility of the document into evidence, no question of proof arises.
70. One is called upon to prove only those facts on which issue is joined. In the present case, the appellant knew or should have known after receiving his client's list of witnesses and documents that the respondent proposed to rely on this particular document, namely, Form 'E' said to have been filed on behalf of the Company with the Registrar of Joint Stock Companies. He could not have filed this document along with his petition, because, it was not a document in his possession.
71. He, however, did file a photostat copy of the last and relevant page wherein the certificate under the signature of the appellant appeared along with the list filed on the 30th of October 1971. On the basis of this notice, the document was produced in original by the Registration Assistant on the 10th of December 1971, but even then, neither the appellant nor his Council raised any objection to the admissibility of this document, and the document, as pointed out in the order of the Tribunal, "was admitted without objection". In the circumstances, mere non---compliance with the technicalities of Order XIII, rule 4 of the Civil Procedure Code will not make the document inadmissible. It has been repeatedly held by the Privy Council as also by this Court, that where the objection is only to the mode of proof of a document, it is essential that the objection should be taken at the trial before the document is marked as an exhibit and admitted to the record.
72. The Privy Council, in the case of Gopal Das v. Sri Thakurji (AI R 1943 P C 83) pointed out that "Where the objection to be taken is not that the document is in itself inadmissible but that the mode of proof put forward is irregular or insufficient, it is essential that the objection should be taken at the trial before the document is marked as an exhibit and admitted to the record. A party cannot lie by until the case comes before a Court of appeal ad then complain for the first time of the mode of proof. A strictly formal proof might or might not have been forthcoming had it been insisted on at the trial.
73. To the same effect are the observations of this Court in the cases of Abdullah v. Abdul Karim (PLD 1968 SC 140) and Malik Din v. Mohammad Aslam (PLD 1969 SC 136). st December 1970.
74. The next contention of the learned counsel for the appellant is that even if the document was properly admitted into evidence, it could not be relied upon as an admission of the appellant without confrontation as required by section 145 of the Evidence Act. This argument too it, in my opinion, misconceived, for, such confrontation is necessary only for the purposes of contra-- diction, and if the appellant never denied his signature on this document or challenged its correctness, there was no need at all to confront him with this document. In the present case, not only did the appellant not deny his signature on this particular document, but his learned counsel actually admitted it in the course of his arguments before the Tribunal; and I am entitled to assume that this admission must have been made upon proper instructions.
75. Learned counsel for the respondent has gone further and claimed that the impugned document was actually a public document under subsection (2) of section 74 of the Evidence Act, and, therefore, it was proved by the mere production of the original from the public records of the Registrar of Joint Stock Companies.
76. Having disposed of the first two objections, I now come to the last objection, namely, that the document was a fabricated document which had been smuggled into the record surreptitiously.
77. This objection, it has to be pointed out, was not raised before the Tribunal. The fabrication was not suggested even in the application filed on the 28 of February 1972 on behalf of the appellant for the exclusion of Exh. P. E. From the record. It was not raised even in the High Court. It cannot therefore, be allowed to be raised for the first time in this Court. If it Weis a fabricated document, it would have been the easiest thing for the appellant to produce the genuine Form 'F' filed by the Company with the Registrar of Joint Stock Companies. The fact that no attempt has been made to do this even up to this stage leads one to the conclusion that the Form 'E' which had been produced from the records of the Registrar of Joint Stock Companies was actually filed by the Company.
78. As for the surreptitious smuggling in of the document, there is absolutely no foundation. Due notice was given that this document would be relied upon by the respondent in his list of witnesses and documents filed on the 30th of October 1971, The original was produced in Court on the 10 of December 1971; but even then, no question was put in cross-examination to the Registration Assistant, who produced the same. The appellant himself gave evidence on the 26 of January 1972 and arguments were heard on the 19 of February 1972. Even at this stage, the learned counsel appearing for the appellant admitted that tire signature had been affixed either illegally or erroneously under some misconception; but he never challenged that the document did not bear the signature of the appellant. In the circumstances, there was no question of the appellant being taken by surprise by this document. If he failed to object to its admissibility without strict proof, it is his own fault, and he cannot be allowed to complain of it now.
79. SAJJAD AHMAD, J.--With all respect, I regret that my conclusion as to the fate of this appeal is different from that of my Lord the Chief Justice for whose ability and vast judicial experience, I have the highest admiration. The reason which is the sole basis of my dissent is that I am unable to share my learned brother's view that the appellant was disqualified under sub-clause (h) of clause
(2) of Article 9 of the Legal Framework Order, 1970, to seek election as a member of the National Assembly, on the ground that he had, "at any rate, up to the 31 of December 1970 (including the date on which he had filed his nomination papers for this election, viz, 27 of December 70) acted as a de facto director of the public limited company (K. K. 8t Company Limited, Peshawar), which was having a subsisting contract with the Government for supply of goods".
80. My Lord hats also held, and I respectfully agree with hum, contrary to the opinions of the Election Tribunal and the learns Judges of the Division Bench in the Peshawar High Court, that the appellant had tendered his resignation from his office as a Director/Managing Director of the Company onth th th th st th the 10 of December 1970, and that under the relevant clauses of the Articles of Association of the Company, his resignation became operative forthwith. His relations with the company as its de jure director thus came to an end. Legally, therefore, the appellant ceased to be the Managing Director of the company on the submission of his resignation on the 10 of December 1970, and on that account he suffered from no disqualification.
81. The correctness of the proposition that nonetheless the appellant remained a de facto director even after tendering his resignation on the 10 of December 1970, up to the 1st of January 1971, when his resignation was accepted, has to be examined on the pleadings and the evidence produced in the case is the light of certain well-recognised principles which bear on the resolution of election disputes brought for adjudication before the judicial forums. The first is that the allegation of a corrupt practice or an Illegal act allegedly committed by a candidate in relation to his election has to be specifically made in the election petition, giving full particulars of such a corrupt practice or an illegal act. The concealment of his disqualification by a candidate from the relevant authorities as well as from the electorate is undoubtedly a corrupt practice which would vitiate the election inasmuch as a candidate, who holds himself out to be qualified to seek the election while in fact he is not so is guilty of fraud and misrepresentation, of which full particulars must be supplied in the election petition. Section 52 of the National and Provincial Assemblies (Elections) Ordinance, 1970, under which the present election petition was filed, reads as follows: "52. Contents of petition.-Every election petition shall contain: -
(a) a precise statement of the material facts on which the petitioner relies;
(b) full particulars of any corrupt or illegal practice or other illegal act alleged to have been committed . . . . ."
82. It is also useful to reproduce rules 4 and 5, Order VI of the Code of Civil Procedure, the provisions of which have been made applicable to the trial of the election petitions as far as possible by section 59 of the above-mentioned Ordinance. The relevant portions of these rules are as follows: "Rule 4.-In all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, wilful default, or undue influence . . . . . . . . Particulars (with dates and items, if necessary) shall be stated !n the pleading.
83. Rule 5.-A further and better statement of the nature of the claim or defence, or further and better particulars of any matter stated in any pleading, may in all cases, be ordered, upon such terms, as to costs and otherwise, as may be just."
84. The legal position in this behalf is succinctly stated in the following observations of ex-Chief Justice Muhammad Munir in the case of Muhammad Screed v. Election Petitions Tribunal, West Pakistan etc.;- "The law relating to the trial of election petitions though volumes have been written on it, in so far as it is relevant to the present case, is so simple that it can be summed up in one sentence, namely, that where an election is sought to be set aside on the ground of commission of corrupt practices, the party challenging its validity must specify in the petition the corrupt practices committed, giving In the list attached to the petition, or in his statement before the settlement of issues full particulars of those corrupt practices; that no fresh charge or instance of a corrupt practice can be added at the trial, that the burden of proof of corrupt practices Is on the petitioner, that the evidence in proof of such practice must be restricted to the charges or Instances mentioned in the petition and the particulars; that each ingredient of a corrupt practice so charged must be affirmatively proved by evidence, direct or circumstantial and that where the evidence is wholly circumstantial, the commissioners before finding a corrupt practice proved must exclude all reasonable hypotheses which are consistent with that corrupt practice having not been committed."th th th The other basic factor to be kept In mind In this connection is that the charge of a corrupt practice or a disqualification attaching to a candidate before the election or incurred by him after the election, is a quasi-criminal charge, and must be proved affirmatively by positive evidence. On this point, in the same case of Muhammad Saeed v. Election Petitions Tribunal, West Pakistan etc., Mr. Justice Cornelius expressed himself as follows:- "A charge of a corrupt practice is a quasi-criminal charge, and, as the Tribunal has stated in its report, the great volume of authority in the corpus of election law is to the effort that such an allegation must be treated, for the purposes of evidence, on the principles applicable to the trial of criminal charges. One such principle is that to a case of doubt raised upon the evidence, the benefit of such doubt must go to the accused person."
85. Keeping these basic considerations in mind, I would examine the respondents case against the appellant regarding his alleged disqualification, as sot out in paras. L, M, N, O and P of the election petition, which read:- "(l) That the petitioner learned that the respondent No. 1 (the appellant before us) had deliberately suppressed his disqualification within the meaning of Article 9(2)(h) of the Legal Framework Order of 1970, and had, therefore, succeeded in securing illegal acceptance of his nomination papers on the 28 of December 1970.
(m) That the disqualification within the Legal Framework is to the effect that the respondent is the Managing Director of a limited company registered under the Companies Act, 1913. Certificate from the Registrar of Joint Stock Companies, N: W. F. P., Peshawar, to this effect is appended as Annexure
(n) That the name of the limited company is K. K. Company Ltd. This company, of which the respondent No. 1 is the Managing Director, had subsisting contract with the Government for the supply of tinned foodstuff.
(o) That the contract between the Government and K. K & Company Ltd. Was subsisting on the date of filing the nomination papers i.e., 27-12-70, and on the date of the scrutiny of the nomination papers, i.e., 28-12-70, and is still holding the contracts.
(p) That the respondent No. 1, however, has resigned frog the said Managing Directorship of the K. K. & Company Ltd on 1-1-71; i.e., after the nomination papers were scrutinised an accepted i.e., 28-12- 70.
86. "That the election of the respondent No. 1 be declared void and that the petitioner be declared as a returned candidate, < 4n the alternative, the election to the said constituency (No. N. W. 1 Peshawar 1) be declared void as a whole for the following grounds amongst others:-
(l) That the respondent No. 1 at the time of filing of the nomination papers and scrutiny of the nomination papers was Managing Director of K. K. & Company Ltd., which company was having a subsisting contract for supply of tinned foodstuff to the Government of Pakistan, and was and is, therefore, disqualified within the meaning of Article 9(2)(h) of the Legal Framework Order, 1970."
87. The appellant, in his written statement, replied to these allegations as follows:- "(l) That the contents of sub-paragraph I are incorrect, and are, therefore, denied. The replying respondent No. 1 was not suffering from any disqualification within the meaning of Article 9(2)(h) of the president---s Order No. 11 of 1970 (the Legal Framework Order, 1970). Under the circumstances, the question .Of deliberate suppression on the part of the respondent No. 1 does not arise at ail'. The allegation of ills petitioner in this behalf is wrong and without any substance. The nomination papers of replying respondent No. 1 were accepted in accordance with the law. It may, however, be respectfully added that the petitioner did not raise any objection against she acceptance of nomination papers at the stage of scrutiny. This is clearly an afterthought which is the result of vendetta due to the crushing defeat suffered by the petitioner at the hands of the replying respondent.th
(m) That the contents of this sub-paragraph are incorrect and denied. The petitioner has deliberately made false arid wild allegations against the reply respondent No. I and has tried to mislead this Honourable Tribunal. He has intentionally omitted to state the correct and trite factual position. Moreover, he has acted with a design in his failure to append with his petition the copies of the relevant documents which totally falsify and contradict his allegations. The replying respondent tendered his resignation on the 10 of December 1970, from the Board of Directors of K.
88. K. & Company Ltd., Peshawar, which is a public company as defined In the Companies Act, 1913 (VII of 1913). As a consequence of his resignation, the replying respondent ceased to be a Director of the Company with effect from the 10 of December 1970. The novice of registration by respondent No. 1 tendered on the 10 of December 1970, was despatched to the other Directors on the 12 of December 1970, as it is evident from the certified copy issued by the; Registrar of Joint Stock Companies, Peshawar, which is annexed hereto marked R-1. The petitioner has also deliberately suppressed this document of overall Importance and has append to his petition; a copy of form XII only with the intention of a misleading the Tribunal.
(n) That the allegations made In paragraph N to O are altogether irrelevant regarding the alleged disqualification of the replying respondent No. 1 within the meaning of Article 9(2)(h) of the Legal Framework Order, 1970. As stated earlier, the replying respondent No. 1 resigned sin the 10th of December 1970, and ceased to be a Director and Managing Director of the Company with effect from that date. Thus, be is not hit by Article 9(2)(h) of tile aforesaid legal Framework Order, 1970, nor did the replying respondent No. 1 suffer from any disqualification.
(p) That the contents of this paragraph are also incorrect and are, therefore, denied. The petitioner has made a false statement that, the replying respondent No. 1 resigned from the Managing Directorship of K. K. & Company Ltd. On the 1st of January 1971. As submitted in the preceding paragraphs and established from unimpeachable documents, the replying respondent No. 1 resigned from the Board of Directors on the 10th of December 1970, and hence ceased to be either a Director or a Managing Director with effect from that date."
89. I have set out in detail the allegations made in the election petition on the point of the appellant's alleged disqualification and latter's reply to the same in order to highlight the fact that it was conceded by the contesting respondent that the appellant had resigned from the directorship, of the company. The controversy between the parties was thus limited to the issue whether the appellant had resigned on the 10th of December 1970, as alleged by him, or on the 1 of January 1971, as alleged by the respondent. It was not the respondent's case, as set out in the petition, that the appellant had functioned as a de facto director at any relevant time, nor did he file any replication in answer to the appellant's written statement, to say that even if the appellant was found to have resigned from the directorship on the 10th of December 1970, he had acted as a de facto director thereafter for a period of time. Including the day when he filed his nomination papers and thus suffered from the disqualification envisaged in sub-clause (h), clause (2) of Article 9 of the Legal Framework Order. The issue, which was framed by the Election Tribunal, reflects the same position which was to the following effect:- "Whether respondent No. 1 was Managing Director of K. K. & Company Ltd. On the day of filing of the nomination papers and on the date of scrutiny thereof."
90. The parties went on trial on this issue, and it is clear from the evidence produced at the trial by the petitioner (respondent) that not a hint was thrown or a suggestion made by any one that the appellant had functioned as a de facto director even though he had ceased to be the de jute director after tendering his resignation on the 10 of December 1970.
91. I think, if the learned Judges in the High Court had not been swayed by their view of the appellant's resignation taking effect from the date of its acceptance, they would have come to a differentth th th th st th conclusion on the question of de facto directorship. This is clear from the observations of the learned Judges in para. 8 of their judgment (page 109 of the paper book) to the following effect:- "We will like to elaborate the point further. As already observed, the appellant resigned from the post of directorship Vide his letter dated 10 December 1970 (Exh. D. A.) If Article 83 ibid was to be the solitary article in the field, there can be no two opinions, that the office stood vacated ever since the resignation, i.e., 10-12-70, and it could have been urged without fear of contradiction, that thereafter, the appellant became functus officio."
92. It is thus quite plain from the records of the case that the question of the appellant continuing to function as a de facto director of the company after ceasing to be so de jure, was not at all raised at any stage of the proceedings before the Election Tribunal, not even in the arguments before it. It was for the first time in the High Court that this point of de facto directorship was pressed as an alternative argument, which was accepted by the High Court in disregard of the patent fact that since it was never the respondent's case in the election petition or during the trial of the election petition, the appellant was under no obligation to meet it. The question whether the appellant had functioned as a de facto director or not was one of fact which should have been put in issue and Investigated. In my humble view, it was entirely wrong to take the appellant by surprise on this point and to permit the respondent to build up a new case in the appeal before the High Court by way of an alternative argument independently of the pleadings and the issues in the case. The law does not allow any departure from the pleading, as is clear from rule 7, Order VI of the Civil Procedure Code, which reads: "No pleading shall, except by way of amendment, raise any new ground of claim or contain any allegation of fact inconsistent with the previous pleadings of the party pleading the same."
93. The learned Judges in the High Court should have, therefore, discarded this new plea set up before them in the course of arguments in the appeal, just as they did in the case of another new plea that was similarly set up, namely, that in all probability the appellant had tendered his resignation after the 14 of January 1971, when the unofficial result of the election was known, and that the evidence was manipulated to witness that the resignation had been tendered by the appellant on the 10th of December 1970. Dealing with this point, the learned Judges of the High Court have observed: We have given our anxious thought to the matter and taking into account the allegations in paragraph No. 1/P of the petition as reproduced above, reply of respondent No. 1, as respects Exh. P.
94. E., evidence brought on the record, and more particularly the omission to put any cross-question or, suggestion in this behalf to the appellant, it becomes crystal clear, that it has never been the case of respondent No. 1 that the appellant tendered his resignation after 14-1-71, when the result was declared and that the documents upon which the latter relies were ante-dated to suit his purpose. While there is considerable force in the argument that it was quite easy for the appellant to have ante-dated tie documents on which he relies and which he has produced in support of his contention because of a very close affinity of the Directors of the Company with each other, we are not prepared to allow respondent No. 1 to set up a new case in this appeal, which is restricted in Its scope and is permissible only on such grounds on which a this rid appeal under section 100, C. P. C., could be brought to Court."
95. PLD 1973 SC 24, an allegation was made in the election petition preferred by one Sher Muhammad (the defeated rival candidate of Rahim Shah that the latter had incurred a disqualification after his successful election because he had entered into a contract with the Government for supply of goods. The Election Commission held that he was disqualified because Rahim Shah's son, who had entered into the contract was his (Rahim Shah's) agent or Benamidar. This finding, which was In departure of the allegation as made in the election petition, was held by this Court to be "the principal defect in the proceedings that the appellant was not put on notice that in entering uponth th the contract, his son Anwar A.I Shah had acted as Benarnidar (page 36 of the Report)". At page 38 of the Report, this matter was further commented upon as follows "The appellant had no notice of the ground on which the order adverse to him was passed. Prima facie he did not enter into the contract with the Provincial Government, but it was held that his son who entered into the contract, had acted as his agent or Benamidar. It was a mixed question of fact and law whether Anwar A.I Shah had acted as an agent of the appellant. In that case, it was necessary to prove that the benefit under the contract was received by the appellant. Such a question could not be diposed of on a mere perusal of pleadings and the documents produced on record. It was, therefore, of utmost importance that issues were settled and the parties given an opportunity to adduce evidence."
96. Apart from what I have said above, I am not at all satisfied that on the material available on the record it can safely be held that the appellant bad acted as the de facto director of the company after the tender of his resignation on the 10 of December 1970. The finding of the High Court in this behalf is based primarily on Exh. P. E., which will need an elaborate discussion, but as Exh. P. B. And D. H. Also find mention in the judgment, they must first be disposed of. Exh. P. B. Is a certified copy of form XII prepared under section 87 of the Companies Act, which shows that the Managing Director of the company whose name is not given in the copy Exh. P. B. And it was not disclosed in evidence who he was, had signed this form on the 16th of January 1971, stating under the heading "Changes" that Khan Muhammad Yusuf Khan Khattak had resigned on the 1st of January 1971, and that Khan Muhammad Ayub Khan was appointed as Managing Director on the 1 of January 1971. It Is hardly necessary to state that this document does not prove that the appellant had worked as the de facto director till the 1 of January 1971, as it only indicates a change in the Managing Directorship, proceeding on the basis of the assumption by the author of this document that the appellant had resigned on the 1st of January 1971, because this was the date of the acceptance of the resignation.
97. The author of the document was not at all examined to show on what basis he had come to the conclusion as stated in this document. His opinion would not bind the appellant. Exh. D. H. Was produced on the record by the appellant himself as Exh. R. 1 later exhibited as D. H. In the cross- examination of P. W. 2 Aziz Bakhsh, the Registration Assistant in the office of the Registrar, Joint Stock Companies, Peshawar by the appellant's counsel. The appellant had referred to this document in his written statement in pare 'M'. Stating as follows:- The notice resignation of respondent No. 1 (appellant) tendered on 10-12-70 was despatched to the other directors on 12-12-70 as it is evident from the certified copy issued by the Registrar of Joint Stock Companies, Peshawar which is annexed hereto marked R-1. The petitioner (respondent has deliberately suppressed this document of overall Importance and has appended to his petition a copy of form XII with the intention of misleading the Tribunal."
98. This document (Exh. D. H.) is a copy of form VIII by which it was conveyed to the Registrar, Joint Stock Companies, that a resolution had been adopted by the company, whereby the resignation of Khan Muhammad Yusuf Khan Khattak from the Board of Directors and from the office of the Managing Director was accepted with regret and that Khan Muhammad Ayub Khan was elected to the office of the Managing Director of the company. This form VIII was prepared under section 82(1) of the Companies Act, which inter alia contains the date of despatch of notice of the proposed resolution to the other Directors of the company. The date of despatch of notice, as stated in this document, is 12-12-70. The appellant produced this document and laid emphasis on it as is evident from his written statement, to prove that the notice of his resignation to the other directors had been despatched on the 12 of December 1970, showing without any doubt that he bad resigned earlier on the 10 of December 1970. This document proves the appellant's case that he had resigned on the 10 of December 1970, and cannot furnish any proof of the fact that he functioned as the de facto Managing Director thereafter.th st st th th th Coming to Exh. P. E. It may be stated that it was the main subject of controversy between the parties during the arguments before the Election Tribunal, the High Court ant before us. The appellant's contention with regard to this document is that it was a fabricated document, surreptitiously smuggled into the records of tine office of the Registrar of Joint Stock Companies, that it was an unproved document, and that, in any case, it could not be used against the appellant as an admission, as at no stage of the proceedings was he confronted with it. The contention of the respondent, on the other hand, is that this document was duly exhibited during the evidence before the Election Tribunal without any objection by the appellant or his counsel, thus dispensing with the necessity of its formal proof. The other contention of the respondent in this behalf is that since the appellant had not, in the course of his deposition before the Election Tribunal, said anything in contradiction to this document, and, in particular, as he did not specifically deny his signatures on it, there was no need to confront him with it, as required by section 145 of the Evidence Act. To examine the rival contentions, it becomes necessary to refer to certain facts, as disclosed from the records. The respondent filed his election petition on the 10th of March 1971, and the only document, which he annexed with the petition as Annexure 'A', was true copy of an attested copy of form XII issued by the Registrar, Joint Stock Companies, N. W. F. P., Peshawar. As already stated above, a certified copy of this form XII was exhibited (as Exh. P. B.) by the Tribunal on the statement of P.W. 2 Asia Bakhsh, Registra--petition Assistant from the office of the Registrar. Joint Stock Companies, Peshawar. The filing of this annexure by the respondent shows that he had had access to the records of K. K. & Company Limited in the office of the Registrar, Joint Stock Companies, which he must have examined before he filed his election petition. The question very pertinently arises how is it that form 'E' which was the sheet anchor of his case missed his notice and why did he not obtain a certified copy of the same for filing it with the petition? He could have easily obtained a copy of it from the Registrar's office to file it with his petition, as required by Order "III, rule 14 of the Civil Procedure Code, just as he had obtained a copy of form XII. The original of Exh. P. E. Was not in his possession like the original of form XII, but a certified copy of the same was within his reach and control. When the respondent filed his list of reliance on the 30th of October 1971, he mentioned the following at item No. 2 of the list:- "Original of form B' as required by part 2 of the Companies Act, 1913 (section 32) dated 31-12-70 of K.
99. K. & Company Ltd., Peshawar, to be produced by the Registrar of Joint Stock Companies, Peshawar."
100. This recital does not mention that the appellant had signed that document to put him on notice of that fact. There is also on record at page 77 of the Tribunal's records a photostat copy of the last sheet of a certified copy of form 'E', including a photostat copy of the certificate to the following effect:- "I Muhammad Yusuf Khan Khattak do hereby certify that the above list and summary truly and correctly state the facts as they stood on 31-12-70.
101. (Sd.) Muhammad Yusuf Khan Khattak."
102. It is important to note that while the list of documents at page 74 of the Tribunal's records and also the list of witnesses and documents filed on behalf of tire respondent at page 78 of the Tribunal's records bear the initials of the Tribunal with the date 30-10-71, by reference to its order No. 9, dated 30-10-71, neither the metro of production accompanying the photostat, nor the photostat copy itself bear such initials. This puts one in complete doubt as to when and how the photostat copy and the memo mentioned above were brought into the Tribunal's records. It is also very intriguing why the petitioner did not file the certified copy of form 'E', which he had obtained from the office of the Registrar, Joint Stock Companies, and instead filed a photostat copy of only Via last sheet of the certified copy. He could have obtained a photostat copy of the original of Exh. P. E., which would have been a good piece of secondary evidence under section 63 of the Evidence Act. A photostat copy of the certified copy is not admissible as secondary evidence. It is also noteworthy that while filing his list of documents on the 30th of October 1971, the respondent filed an application on the same date under Order XI, rules 1 and C. P. C., for admission of certain facts by the appellant to ensure speedier disposal of the petition. Interrogatories for the examination of the appellant were filed in the manner as prescribed by form 2 in Appendix 'C' of the Civil Procedure Code. It the respondent was really sure of form 'E' to serve as sheet anchor of his case, I fail to understand why be did not include Exh. P. E. In hose interrogatories to put the appellant on admission or denial of his having signed that form and the certificate appended thereto as the Managing Director of K. K. & Company Ltd., on the 31 of December 1970. The further circumstance that the respondent did not refer to this form in his statement before the Tribunal, and no question was put to Qasim Jan, the Manager of K. K. & Company Ltd., who appeared as the respondent's witness, as to whether or not the form was sent on behalf of the company to the office of the Registrar, Joint Stock Companies and if it was sent, by whom, throws a cloud on the genuineness and authorship of this document.
103. Added to this is the fact that we had sent for the original of the form during the hearing of this appeal and we found that it showed manifest indications of tampering and overwriting on the signatures appended to this form purporting to be those of Khan Mohammad Yusuf Khan Khattak.
104. Who did this over-writing and at what stage and why, becomes a matter of conjecture. From the entire set of circum-- stances, I cannot escape the feeling that if the original of Exh. P. E. Was a genuine document bearing the signature of the appellant, the attitude of the respondent in regard to it would have been different. Exh. P. E. Being the respondent's trump card, it should have received, the fullest limelight from his side to be played at every turn and not kept in the background like it was done.
105. The original of Exh. P. E. Was not kept on record of the case by the Tribunal, and there Is no indication that the Tribunal had examined it before allowing its copy (Exh. P. E.) to go on the record.
106. The perfunctory manner in which this copy was exhibited, not being in strict conformity with the provisions of Order XIII, role 4 of the Civil Procedure Code, assumes significance and calls to mind the warning administered by Lord Atkinsonin the case of Sadiq Hussain Khan v. Hashim A.I Khan and others to the effect that "a ditty is cast upon the Courts to observe the wholesome provisions of rule 4 of Order XIII while exhibiting the documents and that their disregard in future will not be excused--". Sub-rule (2) of rule 4 of Order XIII provides that "where a copy of the document has been substituted for the original and admitted into the evidence, the endorsement by the Court shall inter alia include a statement of its having been so admitted to -be signed by the Judge". This was not done by the learned Election Tribunal in the present case, which confirms the impression that he' had not inspected the original for its comparison with the copy. However, the strongest objection to Exh. P. E. Is that it is not at all a proved document. The mere fact that it was exhibited by the Tribunal without any objection by the appellant's counsel does not prove that the original was written or signed by the appellant. It may be noted that according to the order of the learned Tribunal dated the 10th of December 1971, when the statement of P. W. Aziz Bakhsh was recorded, and the document Exh. P. E. Was exhibited, the appellant himself was not present before the Election Tribunal, although he was represented by his counsel, Mr. Abdul Latif Khan.
107. When I say that the document Exh. P. E. Is unproved, I have in mind the mandatory provisions of section 67 of the Evidence Act, which lay down that "if a document is alleged to be signed -or written wholly or in part by any person, the signature or the handwriting of so much of the document as is alleged to be In that person's handwriting most be proved to be in his hand-- writing". If the case of the respondent was that the appellant had signed the original of Exh. P. E. Or the certificate appended to it, it must have been proved that it was in the appellant's handwriting, for which no effort whatsoever was made. In the case of Bengal Friends & Co. v. Gour Benode Saha & Co, this Coin t had expressed itself on this point as follows:-st "Documents which are not copies of judicial record, should not be received in evidence without proof of signatures and handwriting of persons alleged to have signed or written them."
108. "I am of the view that even if such documents are brought on record and exhibited without objection, they remain on the record as "exhibits" and faithful copies of the contents of the original but they cannot be treated as evidence of the original have been signed and written by the persons who purport to have written or signed them, unless the writing or the signature of that person is proved in terms of the mandatory provisions of section 67 of the Evidence Act. If instead of the copy Exh. P. E., the original form "E" which formed the primary evidence, had been exhibited on the record without proving as to who was its author can it be argued that by merely exhibiting it, the document should be taken for granted as bearing the signature of the appellant without proof that in fact it was written and signed by him. The onus obviously lay on the respondent to prove this fact and his failure to prove it did not cast any responsibility on the appellant to negatively disprove it.
109. On the view that I have taken regarding the suspicious ,authorship of form 'E' (Exh. P. E.) and that it was not proved to >be in the handwriting of the appellant, as required by law, it is not necessary to examine the contention that it contains an admission on the part of the appellant that he had functioned -as the Managing Director of the K. K. & Co. Ltd., up to the 31 of January 1971, as Indicated in this document. However, even if I were to assume, without holding, that the document is genuine, and that it bore the signature of the appellant, I am of the firm opinion that it could not be used against him as his admission, as he was not confronted with it and was not afforded an opportunity to explain it, as required by section 145 of the Evidence Act. The argument that since he had not denied his signature on that document in the course of his statement before the Election Tribunal, which was made long after the document was exhibited on the record and, therefore, it was not necessary to confront him with it, is of no substance. Needless to mention that the real controversy was not in regard to the signature of the appellant but it was in regard to the alleged admission of the appellant allegedly signed by him as contained in the document Exh. P. E. The appellant's case from the very star was that he had resigned from the directorship on the 10 of December 1970, and that he ceased to be a director thereafter. This is certainly inconsistent with the respondent's case that he continued to function as the director on the date of filing of the nomination papers. It is also inconsistent with the fact, as stated in Exh. P. E., that he was the Managing Director of the company according to the state of affairs as on the 31 of December 1970.
110. The mode of proof of admissions is provided in section 58 of the Evidence Act and also in several scattered provisions of the Civil Procedure Code, such as contained in Order VI 11, rule 5, Order X, rule 1, Order XI, rule 1, Order XII, rules 1, 4, 5 and 7, but none of these was Invoked by the respondent in proof of Exh. P. E. As an admission. Long before the judgment was pronounced by the Tribunal on the 13 of May 1972, the appellant had moved an application before It on 28th of February 1972, supported by an affidavit in which he asked for the removal of Exh. P. E. From the evidence on the grounds, inter alia, that. "although he had been cross-examined at length by the petitioner's, counsel, neither the original Form 'E' nor its exhibited copy P. E. Was ever shown to him, nor was he confronted with the same'". It was stated that these documents were rather withheld from him when he entered the witness-box. In para. 3 (e) of the aforesaid application, It was alleged that after tendering his, resignation on the 10th of December 1970, the replying respon--dent was not re-elected as a Director or for that matter as a, Managing Director by the Board of Director, nor did he act or function or correspond with anyone on behalf of the company as its. Director/Managing Director (the underlining" is mine to emphasise the effect of these words). Without his re-election as such, it was stated by him in the application that by no stretch of imagina--petition be could best th st th considered in law to have remained as a Managing Director of the company. In para. 3(d) of the affidavit, accompanying the petition, it was stated as follows "It is successfully established on the record from very reliable evidence, both oral and documentary that the--re respondent No. 1 tendered his resignation from the Board of Directors and the office of the Managing Director on the 10 of December 1970, and from that date he ceased to be a.
111. Member of the Board of Directors, and, therefore, he was no longer the Managing Director of the company nor he could legally function as such." th of March 1972, unaccompanied by an affidavit, and all that was said in reply to ground (d) mentioned above was that it required no comments as it was a reproduction of the part of the argument made by the appellant's counsel at the time of the hearing and had nothing to do with Exh. P. E. It appears from the order dated the 11 of March 1972, on the order sheet of the Tribunal that this application was fixed for hearing for the 21 of March 1972, but no order whatsoever was passed on it. It is quite clear to me that the question of the genuineness of this document was brought to the forefront by this application even though at a belated stage, and if the Election Tribunal was going to rely on it as the sheet-anchor of the respondent's case, as stated in its judgment, he should have summoned the original document and confronted the appellant with the same. The requirement of justice clearly demanded this course. The Tribunal should have at that stage insisted on primary proof of Form 'E' having been signed by the appellant before basing its decision on its copy Exh. P. E. To disqualify and unseat the appellant and thus deprive him of his valuable rights as the member of the National Assembly. In my option, as the appellant's case, both in his written statement and in the deposi--petition before the Tribunal was clearly inconsistent with the alleged admission as contained In Form 'E' (copy Exh. P. E.), this could not be used against him without his having been confronted with it. The statement of law on this point as laid down by the Lahore High Court in the case of Des Raj Faqir Chand v. Piarey Lai (AIR 1946 Lab.
112. 65) was recently affirmed by this Court in the case of Sikander Hayat v. Fazal Karim (PLD 1971 SC 730) in the following terms: "Where a party has gone into the witness-box on the point in issue and in the witness-box has made a statement inconsistent with the admission or the statement made in the witness-box involves the denial of the previous admission, or runs counter to that admission, then the previous admission cannot be used as legal evidence in the case against that party unless the attention of the witness during cross-examination was drawn to that statement and he was confronted with the specific portions of that statement which were sought to be used as admission. Without complying with the procedure laid down in section 145, the admission contained in the previous statement cannot be used as legal evidence against that party."
113. The learned counsel for the respondent tried to get over this difficulty by taking the stand before the Election Tribunal that Exh. P. E. Was not being relied upon by him as an admission of the respondent. On that basis, the Election Tribunal has observed as follows:- "Since Exh. P. E. Is not relied by the petitioner as an admission of respondent No. 1, the latter need not have been. Confronted with it in cross-examination."
114. If Exh. P. E. Was not being relied upon as an admission, admission one fails to understand what was the other purpose for bringing ft on record. However, in the arguments before the High Court, Exh. P.
115. E. Was pressed into service with full force as an admission by the appellant and it was accepted by the High Court as such. The Election Tribunal has used Exh. P. E. Against the appellant it as an admitted document by a very curious approach. He drew upon his memory and I am quoting his words, "for a vivid recollection that during the course of arguments he had asked the learned counsel for the respondent as to why the latter had sent Exh. P. E. And his reply was that he had sent it erroneously or illegally". No record of this admission by the appellant's counsel was made by the Election Tribunal at the time when it was stated to have been made, and it would be a dangerousth th st thing to accord legal recognition to a practice like this where the valuable rights of the litigants should be made to depend on the recollections of the Presiding Judges from their memories of the oral statements by the parties or their counsel made before them without making any contem-- poraneous records of the same. This mode of proof of ad mission allegedly made by tae counsel for the appellant from the Election Tribunal's memory recollection of that admission is, in my view, wholly unwarranted in law, and I regret to note that the learned Judges in the High Court have also approvingly referred to it.
116. Mr. Abdul Latif Khan, the learned counsel for the appellant, filed an affidavit in the High Court denying that he had made any such admission as attributed to him. The situation thus assumed an awkward complexion-the word of the Election Tribunal is pitted against the sworn word of a counsel. If the alleged admission of the counsel had been duly recorded, this situation would not have arisen. But, assuming that any such admission was made by the appellant's counsel as remembered by the Election Tribunal, it was to the effect that Exh. P. E. Had been signed by the appellant "erroneously or illegally". If that was the admission, the question arises: could the Election Tribunal act on an erroneous and illegal admission? If it was erroneous or illegal, it had to be ruled out of consideration unless the Election Tribunal after recording evidence found as a matter of fact that the admission was true and legal and binding against the appellant. Under section 31 of the Evidence Act, admissions are not conclusive proof of the matters admitted but they may operate as estoppels. Admissions can, therefore, be shown to be wrong, and an admission which is wrong in point of fact and is innocently made in ignorance of legal rights, has no binding effect on the person making it-See Daulatsinghji v. Khachar Mansur (AIR 1936 P C15).
117. As I have stated at the very outset of this judgment, the law of election requires strict proof of the disqualification of a candidate as a corrupt practice and a finding with regard to disqualification must be based on positive evidence and not inferen--tially on mere surmises. Apart from Exh. P. E: which has been made the basis of the finding that the appellant was functioning.
118. As the Managing Director up to the 1st of January 1971, which should have been ruled out of consideration and totally discarded on the reasoning which I have already stated above, nothing at all was alleged or proved to show that the appellant had acted as the Managing Director of company up to the 1 of January 1971, as found by the Tribunal or as a de facto Managing Director, as held by the High Court by accepting an alternative argument to that effect. If, as stated by the learned Judges of the High Court, the vacancy of the Managing Director, who is a kingpin in any Organisation, could not remain vacant, and, therefore, the appellant must have acted as such till his replacement by the new Managing Director, the appellant must have transacted lot of other business during that period which could have been easily proved and esta--blished by oral and documentary evidence. The appellant's activi--ties even as a de facto Director cold not remain confined only to Exh. P. E., which, under section 32 of the Companies Act, could have been signed and despatched by other functionaries of the company also like the Manager, or the Secretary and not necessarily by the Managing Director alone. The appellant must have, during the period of these 20 days, in the course of his routine business, Issued cheques and entered into other miscellaneous correspon--dence and business which could have been easily established if the respondent had set up that case and pursued it.
119. Apart altogether from the above aspect of the case, I am of the opinion that assuming, without holding, that the appellant had acted as a de facto director during the intervening period of his resignation and its acceptance. I do not think that he is bit by the disqualification as envisaged under clause 2(h) of Article 9 of the Legal Framework Order, 1970, which contains a proviso to the following effect: - "Provided that the disqualification under the sub-clause shall not apply to a person where the contract has been entered into by or on behalf of a public company, as defined in the Companiesst Act (VII of 1913), of which he is a shareholder but is neither a director holding an office of profit under the company nor a Managing Director."
120. It will be seen that this proviso does not only save a shareholder from the mischief of sub-clause (2)(h) of Article 9 of the Legal Framework Order, 1970, but it also saves a director simpliciter who is not the holder of an office of profit under the company nor a Managing Director. The Articles of Association of the company in question do not at all contemplate any office of a de facto director or the de facto appointment of a director to which re--muneration is attached. It is quite clear that there can be no entitlement of anyone to remuneration for any office apart from that created and sanctioned by the Articles of Association. In the present case, there is no allegation, much less any proof, that the appellant claimed or has received any remuneration for services rendered to the company by him as a de facto director after the 10 of December 1970. He would be entitled to none in view of his own contention that he had wholly severed his relations with the company after tendering his resignation on the 10 of December 1970 and ceased to function as the director thereafter. A de facto director in the contemplation of the Company Law is one who is not a qualified de jure director lout forcibly or dishonestly performs any function in the company or is working with the acquiescence of tile directors. In either case he is not the holder of any office in the company but is merely an inter-meddler or an interloper who would be responsible for any losses caused to the company or it connection with the coat --pany's business, since, by his own conduct, he places himself in a fiduciary position qua the shareholders. He may, if at all, lay claim to remuneration on the basis of quantum meriut which will have to be determined on the basis of the services actually ren--dered by him and riot by virtue of his bring an incumbent of any office.
121. The dictum of the Kings' Bench Division in the case of Craven-Ellis v. Cannons, Limited supports the same view.
122. It is well-settled that the provisions of a penal statute, such as contained in clause 2(h) of the Legal Framework Order, 1970, entitling forfeiture and deprivation of valuable rights of property and franchise have to be very strictly constructed anti in the case of doubt 'he benefit trust go to the person against, whom they are sought to be invoked. The rule is founded on the tenderness of, the law for the rights of the individuals. As observed by Lord Usher M. R. In Tuck v. Priester (19 QBD 629) with reference to section 6 of the Copyright Act of 1962 "We must be very careful in construing that section because it imposes a penalty. If there is a reasonable interpretation which will avoid the penalty in any particular case, we must adopt that construction."
123. Unless penalties are imposed in clear terms, they are not enforce--able. Also, where various interpretations of a section are ad--missible, it is a strong reason against adopting particular interpretation if it shall appear that the result would be unreasonable or oppressive. The question squarely arises in the circumstances of this case: Will not the appellant be covered by the exemption aforementioned if he was merely a shareholder or even a de facto director without any proof that he was a director holding an office of profit? - As I have already said, there is no evidence in this case that the appellant as a director de facto was holding an office of profit and did receive any profit. The benefit of this lacuna in the case must go to him.
124. I regret to say that the learned Judges in the High Court, hale entirely misconceived the legal position by indulging in conjectures and possibilities on the point of the appellant's resigna-- petition. In para. 9 of the judgment, they have stated, "It was quite possible that the general meting fixed for the 1st of January 1971, may not at all have been held and in any case nobody could be sure that the remaining directors would agree on the appointment of the successor of the appellant, and what would have happened if the two directors had differed. There would have been one against one. It was precisely for this reason that the option to continue as director remained vested in the appellant till his successor was elected on the 1st of January 1971" This wasth th a, wholly erroneous approach to the case not only because the re--signation of the appellant became operative immediately on the date it was tendered but also because even if the appellant continued to serve as a de facto director, he cannot be said to have had any vested option in this behalf. He was on sufferance if at all he was there.
125. ANWARUL HAQ, J.-I have had the benefit of reading the elaborate judgments proposed to tee delivered in this case by my Lord the Chief Justice and my learned brother Sajjad Ahmad Jan. J. As the facts are fully set out in the judgment of my Lord the Chief Justice, it is not necessary for me to repeat them. Suffice it to say that the following three main questions arise for deter--mination in this case-
(a) whether the present appeal is competent in view of the bar contained in subsection (3) of section 64 of the National and Provincial Assemblies (Elections) Ordinance, 1970, read with Article:149 of the interim Constitution; and if, so, what is the scope of this appeal;
(b) whether the resignation tendered by Vie appellant from the offices of Director and Managing Director of K. K. & Co. Ltd., Peshawar, took effect on the date it was tendered, namely, the 10 of December 1970, or on the date it was formally accepted by the Board of Directors, namely, the 1 of January 1971: and
(c) if the resignation became effective on the date ft was tendered, did the appellant still remain disqualified under clause (2)(h) of Article 9 of the Legal Framework Order, 1970, for the reason that even after tendering his resignation he con--tinued to hold an office of profit in or under the Company by functioning as a de facto Director and Managing Director until the 1st of January 1971.
126. On the first question, my Lord the Chief Justice had held that this appeal is competent as Article 186 of the Interim Con--stitution, conferring appellate jurisdiction on the Supreme Court, is not controlled by Article 249 of the same Constitution, nor by the words of exclusion occurring in the relevant Ordinance which is a sub-constitutional legislation. His Lordship has further observed that since under subsection (3) of section 64 of the Ordinance the High Court had the jurisdiction of a Court of appeal under section 100 of the C. P. C., the correctness of the impugned judgment of the High Court will have to be considered on the basis as to whether the High Court had followed the pro--visions of this section of the diode of Civil Procedure in the appeal before it and if it has not done so, then this Court shall have the right to correct it on the basis that it too has the same powers as the High Court. My learned brother, Sajjad Ahmad Jan, J., hag concurred with this view and I am also in respectful agreement with the same.
127. On the second question, again, both my learned brothers area agreed that in view of the relevant provisions contained in the Articles of Association of the Company and section 86-I of the Companies Act, the resignation tendered by the appellant became operative from the moment it reached the Company, that is, on the 10 of December 1970. I fully endorse this view and agree that the Election Tribunal as well as the High Court were in error in holding that the resignation did not become effective until its formal acceptance by the Board of Directors of the Company on the 1st of January 1971.
128. On the third question, the learned Chief Justice has been pleased to accept the contention raised on behalf of respondent No. I that the appellant continued to function as a de facto Direc--tor of the Company up to the 31 of December, and that for this reason be stood disqualified for election to the National Assembly on the date of nomination as well as the date of scrutiny of the nomination papers. Sajjad Ahmad Jars, J., has however, taken a contrary view in this behalf. st of January 1971, i.e., after the nomination papers were scrutinised arid accepted on the 28 of December 1970. These allegations were refuted by the appellant in his written statement, and it was asserted that he had resigned from tie Board of Directors of the Company on the 10 of December 1970, and he had ceased to be a director with elect from that date It was contended, therefore, that the appellant was not hit by Article 9(2)(h) of the Legal Frame-work Order.th st th st th th No replication was filed by the respondent to assert that even if the resignation of the appellant had taken effect from the 10 of December 1970, be had continued to act as a de facto director until the 1st of January 1971, and accordingly the controversy between the parties remained confined to 'the issue of the effective date of the resignation. Apart from Interpreting the provisions of the relevant Articles of Association, the Election Tribunal derived support for its view of the law from, the documents placed on the record by the respondent solely for the purpose of showing that the resignation of the appellant was accepted on the 1st of January 1971, and that until that date he had continued to function as the Managing Director. The allegations made by the respondent as well as the treatment of the subject by the Election Tribunal leave one in no doubt that the documents, to which a reference will be made later, were being pressed into service only for the purpose of assisting in the interpretation of the law and not for the purpose of establishing an alternative plea of disqualification on the ground of de facto directorship.
129. However, when the matter was brought to the High Court in appeal, the learned Judges permitted the respondent to put forward a new case regarding the de facto directorship of the appellant. In doing so, they overlooked the provisions of section 52 of the Ordinance which enjoins that every election petition shall contain a precise statement of the material facts on which the petitioner relies, and full particulars of any corrupt or illegal practice or other illegal act alleged to have been committed. Now, in the instant case, the allegation of the' respondent was precisely to the effect that the appellant had, resigned from the office of the Managing Director with effect-- from the 1st of January 1971. Such being tie case, the respondent could not have been permitted, in the light of the principles governing the disposal of election petitions, as enunciated by this Court in Muhammad Saeed v. Election Petitions Tribunal, West Pakistan, etc. And Rahim Shah v. The Chief Election Commissioner of Pakistan, to raise a new ground for the first time before the High Court.
130. The facts in the last mentioned case appear to me to be peculiarly similar to those obtaining in the present appeal. Rahim Shah's election was challenged before the Chief Election Commissioner ors the ground that lie was disqualified by reason of having entered into a contract with the Provincial Government for supply of goods. However, he was disqualified on the ground that the contract had in fact been entered into by his son who had acted as his agent or benamidar. The Court has ruled that this was principal defect in the procedure followed by the Chief Election Commissioner. As the appellant was not put on notice regarding this allegation, and that it was a mixed question of fact and law whether the appellant's son had acted as an agent for him, and it was necessary to prove that the benefit under the contract was received by the appellant.
131. It will be noticed that the allegation accepted by the learned Chief Election Commissioner for disqualifying Rahim Shah was skin to the allegation originally made against him, but this Court has disapproved of this approach to the question, for the reason that valuable constitutional and political rights cannot be permitted to be taken away in this manner. If the alternative plea of de facto directorship is allowed to prevail, the appellant would be deprived of the fruits of his election to the National Assembly on a ground which was not urged against him in the election petition.
132. I also find that the High Court was in error in thinking that a finding simpliciter as to de facto directorship would suffice for bringing the case of the appellant within the mischief of the relevant clause of the Legal Frame work Order: The second proviso to sub-clause (h) of clause (2) of Article 9 of the Order, clearly exempts from disqualification a person who is a shareholder of public company, having a contract with the Government, but Is neither a director holding an office of profit under the company a Managing agent. Once the finding is reached that the resignation tendered by the appellant had taken effect from the 10 of December 1970, he could be disqualified only if it were shown that as a de facto director he was holding an office of profit under the company.th th The phrase office of profit" has not been defined in the Legal Framework Order, but according to its ordinary and usual connotation, an office or employment of profit, as held in Tilley v. Wales (1943 A C 386) necessarily involves service over a period of time during which the office is held or employment continues, and. The ordinary way of remunerating the holder or the person employed is to make payments to him periodically. It is true, as stated by Palmer on page 534 of his book on Company Law, that a de facto director is as much in a fiduciary position as a de jure director and liable accordingly, but this fiduciary liability does not of itself make a de facto director the holder of an office of profit under the company. Similarly, it seems to me, that the random payments, which may be made to such a de facto director for services rendered, or meetings attended, by him on the basis of quantum meruit, as contemplated in Craven-Ellis v. Cannons Limited would not amount to regular and periodic remuneration so as to bring his case within the mischief of the phrase "holder of an office of profit".
133. As Managing Director, the appellant was receiving remuner--ation under Article 93 of the Articles of Association, while as a director he could be granted remuneration under Article 69 for services rendered or for meetings attended, or under Article 70 for extra services rendered. It will be seen that the relevant clause of the Legal Framework Order itself makes a distinction between a director and director holding an office of profit under the company, thus clearly showing that the receipt of payments for services rendered as director simpliciter would not amount to a disqualification.
134. I am in respectful agreement with the view expressed by my learned brother, Sajjad Ahmad Jan, J., relying upon the obser--vations of Lord Usher M. R. In Tuck v. Priester that we must be careful in construing a clause which imposes a penalty, and that if there is a reasonable interpretation which will avoid the penalty in any particular case, we must adopt that construction. t consider therefore, that the meaning of the phrase "holder of an office of profit", as used in clause (2)(h) of Article 9 of the Legal Framework Order must be restricted to its ordinary and usual connotation, and cannot be extended so as to include within its ambit a de facto director who might receive casual payments on the basis of quantum meruit for services rendered or meetings attended. In any case, it is significant that no evidence was led at the trial to show that the appellant had received any remuneration whatsoever for functioning as a de facto director of the company.
135. For these reasons I am of the view that even if the alternative plea of de facto directorship could be permitted to be raised for the first time in appeal before the High Court, and even if there was evidence to support this plea, a question to which I shall advert presently, the finding recorded by the High Court could not operate to disqualify the appellant, as the High Court has not held that the appellant was a de facto director holding an office of profit under the company. In any event, it could not record such .a finding as no evidence wag adduced in this behalf by the respondent.
136. On the view that I have taken regarding the legal aspects of the matter, it is hardly necessary for me to examine the evidence relied upon by the High Court and the Election Tribunal for recording a finding that the appellant had continued to function as a de facto Director/Managing Director until the 1 off January 1971. As, however, lengthy arguments were addressed ire this behalf at the Bar, and both my learned brothers have dealt with this part of the case and have arrived at differing conclusions, it 9s only appropriate that I should record my own views on this part of the case as well.
137. There are three documents on the record, which have a bearing on the question in issue, namely, Exh. P. B., Exh. D, H, and Exh. P. E. The first mentioned document is a certified copy of Form XII prepared under section 87(2) of the Companies Act. It was sent by the company on the 16?h of January 1971, and shows that the appellant had resigned from the office of Managing Director on the: 1st of January 1971, and in his place Khan Mohammad Ayub Khan was appointed with effect from that date It is clear that this document by itself does not show that the appellant had continued to function as a de facto director until the 1 of January 1971; on the contrary, thest st information contained in this document simply reflects the legal position as understood by the B3ard of Directors of tae company, namely, that they had to formally accept the resignation of the appellant, which they did at their meeting held on the 1 of January 1971.
138. The second document Exh. D. H. Is also dated the 16 of January 1971. It is a certified copy of Form VIII submitted by the company under section 82(1) of the Companies Act.It again shows change in the office of the Managing Director with effect from the 1 of January 1971, and contains a recital that a resolution had been adopted by the company on the 1st of January 1971, accepting the resignation of the, appellant. Another piece of information contained in this document is that the notice of the appellant'' resignation was circulated to the Directors on the 12 of December 1970. It will be seen that this document again is in the nature of formal action on the appellant's resignation, and it i5 intimation to the Registrar, Joint Stock Companies, It does not establish that the appellant was, in fact, functioning as a de facto director from the both of December 1970, to the 1 of January 1971.
139. Coming now to the last document Exh. P. E., which has been described as the sheet anchor of the respondent's case, I find that this is a certified copy of Form E, also dated he 16 of January 1971, purporting to have been signed by the appellant as Managing Director an 31-12-1970 and showing his own name as a Managing Director on that date on the body of the form as well. This form was submitted to the Registrar, Joint Stock Companies under section 32 of the Companies Act. The Election Tribunal as well as the High Court have placed full reliance on this document.
140. It was contended before us that Exh. P. E. Was a forged document which had been surreptitiously smuggled into the record, that it had not been proved in evidence according to law, and that in any case it could not be used against the appellant as he was not confronted with it as required by section 145 of the Evidence Act. The learned Chief Justice has repelled ail these contentions, whereas Sajjad Ahmad Jan, J., has accepted them, with the result that he has held that Exh. P. E.
141. Could not at all be used in evidence against the appellant.
142. It is correct that no mention was made of Exh. P. E., nor was a copy thereof attached with the election petition when the same was filed on the 10 of March 1971 and it was only, in the list of reliance filed on the 30 of October 1971, that this document was mentioned and a Photostat copy there of way attached. If indeed this document was the sheet anchor of the respondent's case, as observed by the Election Tribunal, there does not appear to be any satisfactory explanation for the respondent's omission to annex a copy thereof with his election petition. It is also significant that this document does not find mention in the interrogatories drawn up for the appellant under Order XI, rules 1 and 2 of the Code of Civil Procedure for admission of certain facts by the appellant to ensure speedier disposal of the petition. It is also correct, as pointed cut by, Sajjad Ahmad Jan, J., that the endorsement appearing on this document is not in strict conformity with the provisions of rule 4 of Order III of the Code of Civil Procedure. From, these acts of omission, my learned brother has drawn the conclusion that the genuineness of Exh. P. E. Was not free from, doubt. I do not, however, find myself in a position to go so far, for the reason that I find that in the list of reliance filed by the respondent on the 30 of October 1971, the document was mentioned and a Photostat copy of its last page was also added.
143. As regards the contention that the document was not proved in accordance with law, I find that there is merit in the submission that the provisions of sections 67 and 47 of the Evidence Act were not complied with, as there is no evidence on the record regarding the identity of the handwriting and the signatures of the appellant as appearing on the certificate appended at the end of Exh. P.
144. E. It is true that the document; was produced before the Tribunal by an official of the Registrar, Joint Stock Companies. Peshawar, and it was exhibited thereafter, without any question having been put to the witness in cross-examination about the genuineness and the authorship of the document, but the fact remains that this official did not say a word about his familiarity with the handwritingst th st th st th th th th and signatures of the appellant. On the date of the production of this, document, the appellant himself was not present In Court, Although his counsel was present. However, after the close of arguments on the 19th of February 1972, an application was --moved on the appellant's behalf on the 28th of February 1972, requesting the Election Tribunal to remove Exh. P. E. From the record on the ground that it had not been duly proved, and there was no compliance with the provisions of rule 4 of Order XIII of the C. P. C. And section 145 of tire Evidence Act. The application was refused by the Tribunal, observing that to the best of his recollection the learned counsel for the appellant had, during the course of arguments, admitted the document staying that the appellant crust have signed it erroneously or illegally. The Tribunal also added that the document was not being used as a previous admission of the appellant and, therefore, the provisions of section 145 of the Evidence Act were not attracted.
145. While it is true, as observed by the Privy Council in Gopal Das v. Sri Thakurji and by this Court in Abdullah v. Abdul Karim and Malik Din v. Muhammad Aslam, that an objection as to tire mode of proof: should be taken at the trial before the document is marked as an exhibit and admitted to the record and a party cannot lie by until the case comes before a Court of appeal and then complain for the first time of the mode of proof, it will be seen that in this case an objection as to the admissibility and the proof of this document was taken before the Election Tribunal itself. A cursory glance at the original of this document, which was summoned by this Court, shows that there is 4n overwriting on the signatures of the appellant. It is recorded by the Election Tribunal that the original, as produced by the Registration Assistant, was seen and returned. I cannot help feeling that the Tribunal clearly failed to perform its duty if it did not see the overwriting on the original of Exh. P. E. Even in the attested copy obtained by the respondent there appears a note to the following effect: - "Attested to be true copy. However, the signatures of 4uhammad Yusuf Khattak appear to be over- written."
146. It was contended by the learned counsel for the respondent that the document Exh. P. E. Was actually a public document under subsection (2) of section 74 of the Evidence Act, and therefore, in accordance with the view taken In Katikineni Venkata Gopala Narasimha Rama Rao v. Chiduri Venkataramayya, It stood proved by the mere production of the original from the public records of the Registrar, Joint Stock Companies. The learned counsel appears to me to be right, as form E is in the nature of a return compulsorily required to be filed by a public company under section 32 of the Companies Act, and it is, therefore, a public record of a private document under subsection (2) of section 74 of the Evidence Act. But, as held in Bengal Friends & Co. v. Gour Benode Saha & Co., documents which are not copies of judicial records could not be received in evidence without proof of signature and handwriting of a person alleged to have signed or written them as required by section 67 of the Evidence Act. It seems to me therefore that to the circumstances of the case, namely, the application made by the appellant to the Election Tribunal and the overwriting appearing on the original and reflected in the attested copy, the Exh. P. E. Could not be said to have been duly proved without compliance with the mandatory provisions of section 67 of the Evidence Act.
147. The last objection raised against the admissibility of this document on account of non-compliance with the provisions of section 145 of the Evidence Act also appears to me to be well-- founded.
148. Assuming that the document Exh. P. E. Had been duly admitted in evidence, the fact remains that it could be used as a previous admission against the appellant only if the latter ire d been confronted with this document under section 145 of the Evidence Act, when he appeared in the witness-box. But no such confrontation was made. The Election Tribunal got over this difficulty by saying that the document was not being used as an admission, but this is not so in the case of the High Court which appears to have taken the view that the appellant had not made any statement inconsistent with Exh. P. E.
149. It will be seen that the real controversy in this case was not in regard to the signatures of the appellant on Exh. P. E., but with regard to its contents, namely, that the appellant was shown as the Managing Director of the company on 31-12-70. Even if the appellant failed to contradict his signatures on this document, he have vehemently contradicted its contents by asserting that he had resigned from the office of Managing Director on the 10 of December 1970, and had ceased to function as such from that date. The contents of Exh. P. E. Were Inconsistent with this assertion made by the appellant in his written statement as well as during the course of his evidence in the witness-box. It was, therefore, clearly necessary to confront the appellant with the consents of Exh.
150. P. E., as required by section 145 of the Evidence Act, if it was intended to place reliance on his previous admission in this behalf.
151. I find myself in agreement with the view taken by a Full Bench of the Lahore High Court in Des Raj Faqir Chand v. Plarey Lai, that:- "Where a party has gone into the witness-box on the point in issue and in the witness-box has made a statement inconsistent with the admission, or the statement made in the witness-box involves the denial of the previous admission, or runs counter to that admission, then the previous admission cannot be used as legal evidence in the case against that party unless the attention of the witness during cross-examination was drawn to that statement and he was confronted with the specific portions of that statement which were sought to be used as admission. Without complying with the procedure laid down in section 145, the admission contained in the previous state--ment cannot be used as legal evidence against that party."
152. A similar view was reiterated by this Court in Sikandar Hayat v. Fazal Karim. In the present case the appellant having taken a particular stand in the witness-box, it was necessary to confront him with Exh. P.E. So as to give him an opportunity to explain how he came to describe himself as a Managing Director of the company in this document purported to have been signed by him on 31- 12-70. It will be recalled that even the alleged oral concession made by the appellant's counsel was that the appellant must have signed this document erroneously or illegally. In this context, the failure to comply with the provisions of section 145 of the Evidence Act becomes fatal to the admissibility of Exh. P. E. In evidence.
153. For the foregoing reasons my conclusions on this part of the cases are-
(a) that the precise ground urged in the election petition being related only to the effective date of the appellant's resignation from the office of Managing Director of the company, the alternative plea that the appellant stood disqualified, nonetheless, on account of his having continued as a de facto director could not be allowed to beentertainedin view of the principle; applicable to the resole ion of election disputes;
(b) that the finding recorded by the Election Tribunal and endorsed by the High Court that the appellant continued to function as a de facto Managing Director up to the 31 of December 1970, is based on inadmissible evidence and can not, therefore, be sustained in law; and
(c) that in any case the mere fact that the appellant might have acted as a de facto director after his resignation became effective, would not amount to a disqualification under clause (2)(h) of Article 9 of the Legal Framework Order, as It has not been shown that as such director he held an office of profit under the company. He was, therefore, protected by the exemption contained in the second proviso to the relevant clause.
154. As a result it has to be held that the appellant was not disqualified for contesting the election to the National Assembly of Pakistan on the relevant dates of his nomination and scrutiny of the nomination papers. The Election Tribunal and the High Court have erred in law in holding to theth st contrary. I would, therefore, accept this appeal, set aside the orders made by the Election Tribunal and the High Court and dismiss the respondent's election petition.
ORDER OF THE COURT
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