This petition under section 493 of the Companies Ordinance, 1984, has been filed by Messrs Hina Export Company (Pvt.) Limited through Mst. Sarwari Begum its Managing Director, on the plea that respondent No. l being Director of the company holding 1635 shares of the value of Rs.400 each in the said company, in connivance with respondent No.2 alienated a portion of company's property i.e. Property No.SW-92-R-6 situate Mela Ram Road, Lahore constructed on the land measuring 21 Marlas through sale-deed, dated 28-9-1988, registered on the even date. In amplification of the averment aforementioned, it was urged that the said property came into ownership of the company by virtue of an agreement, dated 19-7-1973 and since then the company continued to own the same as absolute owner, therefore, the transfer in favour of respondent No.2 was termed as illegal regarding which a complaint was also lodged with the local police on 11-1-1988. It was maintained that respondent No. l was neither owner of the said property nor had any authority to transfer the same to the third person, therefore, the Managing Director and the other Directors namely Shahid anu Najid Ali filed a suit in the Civil Court as well but withdrew the same with permission to file fresh suit on the ground that there are some formal defects in the said suit which need to be rectified. It was further alleged that similarly respondent No.2 also filed a suit against one of the Director of the company and another, in the Court of Chaudhry Muhammad Jamil, learned Civil Judge, Lahore, which is statedly pending in the said Court. Finally, it was urged that respondent No.2 having obtained unlawful possession of the property has also changed its structure, thus, causing damage to the property and since respondent No.2 wrongfully obtained the possession of property of the company and transferred the same to respondent No.2 thereby maliciously and wilfully misapplied the said property to the purposes other than those directed in the Articles and the Companies Ordinance, 1984, therefore, the respondents be ordered to deliver up the possession of the company improperly obtained and wrongfully withheld by the said respondents.
Respondent No. l conceded the petition with the rider that the sale agreement between the parties was result of coercion exercised by respondent No.2 on respondent No. l (the preliminary objection raised in that regard is not correctly worded inasmuch as it gives impression that the petitioner i.e. Company had exercised some kind of coercion over respondent No. l). Although the plea of coercion allegedly exercised by respondent No.2 over respondent No. l can be gathered from the over all reading of the written statement filed by respondent No. l Respondent No.2, however. Contested the petition on the grounds that the same is neither competent nor maintainable against the said respondent; that he is neither a Director, Chief Executivc, Officer, employee nor agent of any alleged company. It was further maintained that the respondent No.2 is a bona fide purchaser for valuable consideration without notice of and alleged claim of the petitioner, therefore, fully protected in law. The mala fide was also attributed inasmuch as the petition itself was stated to be the result of collusion between the mother, the alleged Chief Executive and sons for causing harassment to respondent No.2. Above all the alleged ownership of the company in regard to the property in dispute was denied for it was submitted that the same was gifted by Mst. Sarwari Begum in favour of her four sons vide gift deed dated 9-7-1971, duly registered with the Registrar of documents on the same date and respondent No.1 having become owner of 1/4th share of the said property offered the same for sale to respondent No.2 who agreed to purchase the same for valuable consideration and in pursuance of the abovesaid offer and acceptance a formal sale-deed was also drawn on 28-9-1988 and was registered with the Registrar of documents on the same date. The formation of company as also alleged vendor's agreement was termed to be a paper transaction having no effect in law. It was also added that due inquiries made from the record of Sub-Registrar, Registrar, it was found that respondent No.1 was competent to transfer the property to favour of the answering respondents. The plea of the petitioner that the abovesaid property had been transferred in favour of the company by way of vendor's agreement, dated 19-7-1973 was specifically denied with the rider that Mst. Sarwari Begum having gifted the property by way of registered gift deed dated 9-7-1971 had not remained the owner thereof, therefore, the validity of vendor's agreement itself was disputed with the assertion that it did not convey any title to the property in dispute in favour of the company. It was also urged that the owners of the property never sold or alienated the property to the company. The plea as to respondent No.2 not being a Director, Chief Executive Officer, employee or agent of the company was reiterated and the factum as to respondents' alongwith two others filing the suit and withdrawing the same with the permission to file fresh suit was admitted with the submission that no fresh suit was ever filed against the petitioner. The respondent did also admit that he has filed a suit and that it is pending in the Court of Chaudhary Muhammad Jamil, learned Civil Judge, Lahore.
It was then submitted that the validity of are gistered instrument executed by respondent No. l in favour of respondent No. 2 cannot be questioned in summary proceedings under the Companies Ordinance.
2. The simple question which falls for determination is to the effect as to whether in the summary proceedings under Companies Ordinance registered sale-deed can be cancelled on the plea that the same had been procured through coercion and the subsidiary question as, to whether the word "to deliver up" are meant to imply that the registered sale-deed is to be delivered up or they are to be read in conjunction with the words "any such property improperly obtained or wrongfully withheld or wrongfully misapplied and any kind or benefit derived therefrom". A bare reading of section 493 leaves no manner of doubt that this section is applicable to a class of persons connected with the company itself for the opening part of the section itself reads as follows:-- "Any Director, Chief Executive, or other officer or employee or agent of a company, who wrongfully obtains possession of any property of the company or having any such property in his possession wrongfully withholds it or wilfully applies it to the purposes other than those expressed or directed in the articles and authorised by this Ordinance shall..."
A plain reading of the abovesaid section leads to one irresistible conclusion that the property should first be owned by the company and then any of the officers abovementioned wrongfully withholds it (it is not the case here) or wilfully p applies it to purposes other than those expressed or directed in the articles and authorised by this Ordinance. This could have been the case here but the primary question that the company must own the property and in order to ascertain that. One must look to the vendor's agreement itself, whereby the said property is said to have been conveyed to the company. The vendor's agreement, in order to create any right, title or interest in regard to the property conveyed 'to the company must be a registered document for otherwise it will not purport to create, declare, assign, limit or extinguish any right, title or interest in the property in dispute in favour of the company.. If any authority is needed, reference may be made to Mi..L;.
Munawar Ahmad and others v. Official Liquidators and 3 others PLD 1980 Lah.
86. The other question as to whether the vendor's agreement in this particular case had at all conveyed the property to the company can well be answered in negative for the particular reason that the document itself is silent about the description of the property inasmuch as it does not recite the number of property nor the location thereof and other allied particulars by which property can be identified and the simple recital that whatsoever property, the signatory held, shall be deemed to have been transferred to the company is too vague and expression to be given any credence in a Court of law. It is well-established that the documents conveying certain property must in the first instance recites its particulars and unless. That is so done, no conveyance of any property is presumed. It is, thus, difficult to holdthat the Property bearing No.SW-92-R-6, situate Mela Ram Road, Lahore was at all conveyed to the company. r ;-r' ;;Coming to the plea of respondent No-1 that he had executed the sale deed in favour of respondent No.2 under compulsion and coercion, the plea itself requires that ingredients of coercion must be disclosed for it is a question of fact which needs determination. (coercion as defined in Black's Law Dictionary means and includes: Compulsion; restraint; compelling by force or arms or threat. It may be actual, direct or positive, as where physical force is used to compel act against one's will, or implied legal or constructive as whereone party is constrained by subjugation to others to do what his free-will would refuse). It is, thus, obvious that one can be said to be victim of coercion only when he is either under the direct positive or actual force i.e. Under any arm or a threat, no such case is made out in the written statement of defendant No. l and the implied legal or constructive coercion are also not to be found to have been exercised in the instant case because here also the respondent No. l has not disclosed any ingredients. By simply asserting that respondent No.2 was determined to get prized portion of property transferred in his name would not even prima facie establish that coercion was exercised. This brings me to the last question as to whether such a complicated question of fact and law should be tried in the domain of company jurisdiction which is eminently meant to be summary in nature. Learned counsel for the petitioner tried in vain to rely on the judgments reported as B.R. Herman and Mohatta Inida v. Ashok Rai and another AIR 1984 D.1. 61, Govind T. Jogtiani v. Sirajuddin S. Kasi, Senior Administrative Officer Indian Oil Corporation (1983) Comp LJ 8 (Bob), Beguram v. Jaipur Udhyog Limited AIR 1987 Jaipur 744, British India Corporation, Ltd. And others v. Robert Menzies AIR 1936 All. 568, Nava Samaj Ltd. Nagpur and others v. Civil Judge, Class-1, Rajnandgaon and others AIR 1966 M.P. 286 (/v 53 C 72), The Premier Automobiles Ltd. v. Kamlakar Shantaram Wadke and others AIR 1975 SC 2238. In all most all the cases, it was either an employee or some officer of the company who having obtained the property of the company had withheld it even after his having ceased to remain an employee or an officer of the company and has turned around with impunity to maintain that section 630 of the Indian Companies Act, 1956 which corresponds with section 493 of the Companies Ordinance, 1984 would not be applicable to an ex-employee or ex-officer of the company. In all these cases it was held that such an officer of an employee could not retain the property of the company without any justification but the one case cited by the learned counsel for the petitioner reported as Damodar Das Jain v. Krishna Charan Chakraborti and another AIR 1985 Company Cases 115 stands out of the many cases dealt under section 630 of the Companies Ordinance, 1956 wherein it is laid down that if a bona fide dispute as regards title to the property wag to exist between the parties, the said dispute would be purely of a civil nature and the Magistrate before exercising jurisdiction under section 630, will be required to allow the Civil Court which is the proper forum for the purposes to determine the dispute as to title to the property involved. In the case abovenoted, the employee who was inducted into property by the company by entering into a paying guest agreement with its owner, was subsequently, required to be ousted by the company claiming itself to be a tenant of premises while the employee occupied the same as term of his employment. The question was treated to be one of fact and raising bona fide dispute as regards title to the property, therefore, was left to be determined by the Civil Court. The case abovenoted is a complete answer to the line of arguments adopted by learned counsel for the petitioner and for that matter various authorities relied by him. It would, thus, be seen that the question being one of fact could at best be resolved by the Court of plenary jurisdiction, as the summary proceedings in the exercise of corporate jurisdiction are not meant to decide such a question. Similarly, it is highly doubtful that respondent No.2 nor being an employee, a Director, Chief Executive or agent of a company could be amenable to the jurisdiction of a Company Judge, therefore, the transaction of sale in his favour cannot be declared to be void or voidable at the option of the petitioner or respondent No-2 under section .493 of the Companies Ordinance, 1994.
4.For the reasons aforestated, this petition is dismissed with costs.