1. This judgment will govern the disposal of F.R.As: Nos. 142 of 1986 to 150 of 1986. These nine appeals were filed by nine different tenants namely (1) Malik Muhammad Nawaz, (ii) Muhammad Yousuf,
(iii) Ghulam Hussain, (iv) Muhammad Nawaz, (v) Muhammad Hamir, (vi) Ali Dad, (vii) Muhammad Ahmed, (viii) Muhammad Ilyas and (ix) Hamid against their landlord namely Haji Muhammad Hayat who is the owner of a building occupied by the tenants. The said building is known as "Hayat Compound" bearing C.S.Nos.2/2052-2052/1, Allahabad Chand Village, Hyderabad. This property had been purchased by the present landlord in 1965 from one Abdul Qadir. It appears that present tenants were living in that compound before the said property was purchased by Haji Muhammad Hayat hereinafter referred to as "the landlord".
2. Main grounds mentioned in all the applications filed under section 15 of Sindh Rented Premises Ordinance, 1979 (hereinafter referred to as the Ordinance) are:
(i) default in payment of monthly rent, and
(ii) reconstruction or creation of new building at the site The learned Rent Controller framed the following issues under section 19(5) of the Ordinance:---
(i) Whether the opponent has committed default as alleged by the applicant?
(ii) Whether the case premises is required by the applicant in good faith and subsection 2(vi) of section 15 of S.R.P. Ordinance, 1979?
2. (iii)What should the order be?
3. As issues numbers (i) and (ii) were answered in affirmative in all the Rent Applications, hence, in view of the findings, the learned Rent Controller allowed these applications and all the appellants/opponents were directed to hand over the vacant physical possession of the case premises to the respondent/applicant within two months.
4. The appellant in each F.R.A. And the respondent had examined themselves only before the learned Rent Controller instead of producing any other witness in support of their case although they had taken several points in their respective stand and for which it was necessary for both of the parties to prove those points.
4. It is also necessary to point out that the appellant had filed applications before the learned Rent Controller under section 151, C.P.C. With a prayer that the Hon'ble Court (means the Rent Controller) be pleased to direct the applicant to withdraw the arrears of rent from the Court deposited by them. Order passed by the learned Rent Controller on these applications reads as follows: "Application stands disposed of as Rent Order has already been passed."
5. I could not understand the purpose of moving such applications. Similarly the order passed by the learned Rent Controller neither radiates this purpose of those applications nor it reflects any logic behind this order. Although no directions were issued, to withdraw or not to withdraw the rent, but the record of the case reflects that rent was not withdrawn because there is no application on the record to show withdrawal of rent. In this connection, it is necessary lo point out that most of the landlords move applications under section 16 of the Ordinance. By claiming much more higher rent than the actual A rent and the learned Rent Controllers also usually pass routine order by directing the said tenant to deposit arrears of the rent due within specific period without holding any inquiry which is the requirement of section 16 of the Ordinance, Any such order which does not reflect this aspect of inquiry, in my view, is the most defective order. As the consequences of non-compliance of such orders are always very harming i.e. Striking off the defence, therefore I am of the view that holding summary inquiry is obligatory when there is dispute between the parties on the rate of rent.
6. In all such cases if the learned Rent Controller passes an order, as has been usually observed, that the tenant should deposit the rent at the B rate demanded by the landlord but the landlord shall withdraw only that rent which is admitted by the tenant, then such an order may not be proper if judged on the anvil of equity because firstly it puts the tenant under the burden of that heavy rent which he was not bound to pay and secondly the said tenant is put under a metal torture that if he failed to comply with the said order, his defence, would be struck off.
7. At the same time if the learned Rent Controller passed an order in accordance to the statement of the tenant, it may deprive the landlord from actual rent due to that order. On account of these reasons, I have no hesitation to hold that striking off defence on the bases of all such defective orders passed under section 16(1) of the Ordinance, which do not reflect the existence of any C inquiry, would be unlawful particularly when this rent is increasing that the landlord, after getting such an order passed, do not proceed with the case to gel it decided on merits but wait and see till the tenant falls in the clutches of section 16(2) of the Ordinance. It is, therefore, necessary, that the learned Rent Controller should not adjourn the matter by now and then after passing an order under section 16(1) of the Ordinance at the request of the landlord on account of the worst consequences to be faced by the tenant. Perhaps this must be the apprehension in the minds of the tenants due to which they moved applications under section 151, C.P.C. Which they would file under section 16(3) of the Ordinance. I am also of the view that if an application under section 16(3) of the Ordinance is moved by any of the party and particularly by the tenant then the learned Rent Controller must pass some speaking order, and not an order as was passed in the cases in hand, on those applications in accordance to the spirit of that section. Although no penalty has been mentioned against the landlord if he violates an order passed under section 16(3) of the Ordinance yet his conduct would be fully exposed at least to the extent whether he was interested to receive rent at proper time or he was interested only to knock out the tenant technically who had, otherwise, the best case on merits.
8. In the light of this discussion, the order passed on the applications by the other cases supporting the same view are: Col. Kuldip Singh Dhillon and others v. Paragon Utility Financers (Private) Limited and others (1988)
9. 64 Company Cases 19 and Calcutta Chemical Company Limited v. Dhiresh Chandra Roy (1985) 58 Company Cases 275.
10. As against the above judgments Mr. Monib relied on the case of Abdul Jabbar v. Haryana Asbestos Cement Industries 1987 CLC 726 wherein it was observed that "Legislature appears to have consciously specified the terminus qua of notice from date of its sending and not from date of its delivery or receipt.
11. While the wording of section 171(1) of the Indian Companies Act, 1956 are: "A general meeting of a company may be called by giving not less than twenty-one days' notice in writing".
12. The wording of section 158(3) of the Companies Ordinance, 1984 is as under:--- "158(3).---The notice of an annual general meeting shall be sent to the shareholders at least twenty-one days before the date fixed for the meeting and, in the case of a listed company, such notice, in addition to its being despatched in the normal course, shall also be published at least in one issue each of a daily newspaper in English language and a daily newspaper in Urdu language having circulation in the Province in which the stock exchange on which the company is listed is situate."
13. Thus, it is clear that the words in the subsection are "shall be sent to the shareholders at least twenty-one days before the date fixed for the meeting.
14. But Article 65 of the Articles of Association respondent No. 1 is "not less than twenty-one days' notice (exclusive of the day on which the notice is served or deemed to be served) but inclusive of the day for which notice is given specifying the place, day and hour of the meeting..."
15. The wordings of these sections explain the difference of opinion in the different judgments given by the Courts in India and Pakistan.
16. In the present case though no evidence has been produced by the respondents in support of their contention but it can be presumed that the notice published in newspaper must have been sent a day earlier for publication. As such in my opinion the requirement of section 158(3) were partly complied with as far as the publication is concerned. But as I have already said hereinabove that no supporting material is on record to show that the individual notices were sent to all the directors shareholders as required under section 158(3) of the Companies Ordnance. The law has provided penalty for non-compliance of any of the provisions of section t 78 and as such the compliance is mandatory.
17. The next contention of Mr. Sayeed was that the notice did not contain the election of Chairman to preside over the proposed meeting. Since the meeting was presided over by a non-elected Chairman the business conducted during the meeting was invalid.
18. He relied on the case of Satesh Chandra Bank and others v. Dacca Jute Mills Limited PLD 1968 Dacca 610 where a similar situation arose and it was held that:--- "The affidavit by respondent No.2 clearly avoids the specific denial of the statement of the petitioners that petitioner No.2 proposed that the Chairman be elected for the purpose of conduct of the Annual General Meeting and, therefore, I am convinced that the statement made by the petitioners is true and in these circumstances respondent No.2 could not have taken the chair by virtue of the provisions of Article 78.
19. Therefore, he could not automatically take the chair under the provision of the Article 78 of the Articles of Association. I therefore, hold that the impugned General Meeting having been presided over by person not entitled to do so was not valid Annual General Meeting. "
20. Section 177 of the Companies Ordinance provides for the retirement of directors who are subject to election and thereafter follow the procedure as laid down under section 180 of the Companies Ordinance. The provisos to this section are:--- "Provided that the directors so retiring shall continue to perform their functions until successors are elected: Provided further that the directors so continuing to perform their functions shall take immediate steps to hold the election of directors and in case of any impediment report the circumstances of the case to the Registrar within fifteen days of the expiry of the term laid down in section 180. "
21. Thus, it is clear that the proviso to section 177 direct to take steps immediately to hold the elections of the directors or if there are any impediments the same should be communicated to the Registrar within fifteen days. No such plea is taken nor the Registrar was informed.
22. It is well-established principle of law that a proviso has to be read cautiously as it cannot be extended to defeat the parent provision itself. As held in the case of Mst. Surayya Begun v. M.C.B.
23. Limited PLD 1990 Lahore page 4:--- "A proviso to any parent provisions has to be read very cautiously and the intended whittling effect thereof cannot be so extended as to defeat the provision itself inasmuch as it is not to be presumed that the Legislature intended to take away by one hand through a proviso what it has basically conferred through the other hand by the parent provision. "
24. In the case of Mrs. Anathalakhni Animal v. Teffeis Barytes Asbestos and Paints Limited (1951) 21 Company Cases 294, it was observed that "there is, besides this, enough on the record to convince us that there are factions among the shareholder of the company and it was directed that meeting be conducted by the person to be appointed by the Court who will preside as its Chairman and shall scrutnise the proxy which were duly deposited in time".
25. In the present case also there are two groups involved in the tussle to get the controlling power and oust the other one and unfortunately they are closely related family members. In such a situation it is further obligatory that all legal requirements are complied with.
26. Article 74 of the Memorandum and Articles of Association provides that in case a meeting is adjourned for more than fourteen days a notice be sent as in the case of original meeting. No such notice was given. A notice of an adjourned meeting is also provided under Rules of Stock Exchange.
27. It can be argued again that the petitioners were party to the proceedings when the meeting was adjourned deferred by the Court. But there are other shareholders also who should have been served with such an adjourned date of the meeting.
28. In the case of Re: West Canadian Collurias Ltd. (1962) 1 All England Law Report 26.
29. Notice of the meeting had been given for the purposes of section 141(2)(5) of the Companies Act, 1948 to all the shareholders except, by inadvertence, to nine shareholders. It was held that "there could be no meeting because it is well-settled as regards a general meeting that failure to give notice to a single person entitled to receive notice, renders the meeting a nullity".
30. The meeting on 30-8-1995 was admittedly, presided over by Mr. Tanvir Ahmed who himself was a candidate.
31. In view of the contention raised by the petitioner and keeping in view of Official Assignee's Report the characteristic of the meetings which was scheduled for 29-6-1993 and was adjourned to 30-8- 1993 are as follows: There is not enough proof that the notices were despatched individually to all the directors/shareholders as provided under section 233(4) of the Companies Ordinance, 1984.
32. The agenda prepared for the meeting did not include the election of the Chairman for the proposed meeting.
33. The director's term though had expired on 31-3-1993 but no steps were taken for the election as required under sections 177 and 178(3).
34. The meeting was held under the Chairmanship of an un-elected Chairman.
35. Notice of the adjourned meeting was not issued as provided under Article 74 of the Articles of Association of the respondent-Company and Rules of the Karachi and Lahore Stock Exchanges.
36. In my opinion, since the requirements of the provisions under the Companies Ordinance are mandatory, the non-compliance of the same render the meetings held on 29-6-1993 and 30-8- 1993 invalid.
37. On my query the learned counsel for the respondent has stated that although elections were held on the date as directed but the results were withheld as per the order of the Court, and since then no orders have been passed, the same directors whose term had expired on 31-3-1993 are continuing to hold the office.
38. In view of the circumstances the proceedings of meeting held on 29-6-1993 and of adjourned meeting held on 30-8-1993 are declared to be invalid and the respondents are directed to immediately take steps in accordance with the Companies Ordinance and Memorandum and Articles of Association to call for the Annual General Meeting immediately. The Official Assignee is appointed to conduct the said meeting under his supervision. The two J. Miscellaneous Nos.51 of 1993 and 67 of 1993 stand disposed of in terms of the above order.