National Investment Trust Limited (N.I.T.) holds 10% shares of the respondent's Company. By a letter, dated the 11th March, 1998, N.I.T. Forwarded the nomination of its consultant, namely Mr. Wusooq Khaleeli, through the National Bank of Pakistan, Karachi, the Trust Department of petitioner, alongwith Form-28 and a letter of intention showing his consent for the election of Mr. Wusooq Khaleeli as Director of the respondent's Company in accordance with section 178 of the Companies Ordinance, 1984. The respondent by its letter, dated 20-3-1998, acknowledged the receipt of the nomination letter and other documents but pointed out that since the nomination papers were received on 13-3-1998, the nomination of Mr. Wusooq Khaleeli, was not in order within the meaning of subsection (3) of section 178 (ibid) as the election of the Directors was scheduled for 27-3-1998 i.e., within less than fourteen days.
2. The petitioner is aggrieved that nomination of Mr. Wusooq Khaleeli was sent by it within the time prescribed under subsection (3) of section 178 of the aforesaid Ordinance and that on 27-3-1998 no elections were held. In fact, the respondent had, vide notice published in daily "Business Recorder" and "Dawn" of the 20th March, 1998, already announced the names of eight persons having been elected as its Directors. According to the petitioner, the said notice did not include the name of its nominee, i.e. Mr. Wusooq Khaleeli. The petitioner has, therefore, brought this petition under section 161(8) of the Companies Ordinance, 1984, seeking declaration that the notice, dated 20-3-1998 published in the daily Business Recorder and other newspapers intimating the date for Annual General Meeting was legally defective and consequently the proceedings of the meeting held on the 27th March, 1998, were of no effect being contrary to law.
3. The petition was opposed on behalf of the respondent claiming that under section 161(8) of the Companies Ordinance, 1984, the petition was not maintainable, in particular, the petitioner did not hold 20% shares in the Company which could have entitled it to challenge the vires of the election of the Board of Directors in accordance with section 179 of the Ordinance.
4. From the copies of the correspondence filed by the parties it appears that nomination form of Mr. Wusooq Khaleeli was sent by the N.I.T. On the 11th March, 1998. This was admittedly received by the respondent's Company on the 13th March, 1998, as acknowledged by it by letter, dated the 20th March, 1998. Subsection (3) of section 178 of the Companies Ordinance, 1984, provides that a person who seeks to contest election to the office of Director shall file with the company not later than fourteen days before the date of the meeting at which elections are to be held, a notice of his intention to offer A himself for election as a Director. As stated above, according to the petitioner, the notice of intent for election as a Director of the respondent's Company was sent by Mr. Wusooq Khaleeli to the Company's Secretary at its Head Office at Chakwal on the 11th March, 1998, alongwith Form-28. This nomination, therefore, was well within time as specified in section 178(3)
(ibid). Even otherwise, if it is considered that the Company had actually received it on the 13th March, 1998, through Courier Service it was well within the period of limitation of fourteen days provided in section 178(3) of the Ordinance as the meeting was to be held on the 27th March, 1998.
If we count the period from the date of receipt of the nomination form on the 13th March, 1998, the said nomination had certainly received by the respondent's Company within fourteen days prior to the date of the meeting scheduled for election of the Board of Directors.
5. In subsection (3) of section 178 (ibid), the expression "not later than fourteen days before the date of the meeting at which elections were to be held" has been used. Hence, in that case only the date i.e. 27-3-1998 shall be excluded, while the day of the 13th March, 1998, i.e. The date of receipt of nomination, shall be included. In this respect, support is drawn from M. Saleem v. Shaikh Abdul Latif PLD 1963 Dacca 477, wherein it was held that in case of monthly tenancy, the date of commencement thereof shall not be excluded. In a reference regarding Court Fees Interpretation of Statutes "From a certain date" AIR 1924 Mad. 257, it was held by the High Court of Madras that "where the statute fixes only the terminus a quo of a state of things which is envisaged as to last indefinitely -the common law rule obtains that you ought to neglect fractions of a day and the statute or the regulation or order takes effect from the first moment of the day on which it was enacted or passed, that is to say, from midnight of the day preceding the day on which it is promulgated; where on the other; hand a statute delimits a period marked both by a terminus a quo and a terminus ad quem, the former is to be excluded and the latter is to be included in the reckoning.
6. As stated above the main thrust on behalf of the respondent Company is that since the petitioner does not hold 20% or more shares in the Company, the elections of the Board of Directors cannot be challenged by it because of the restraint contained in section 179 of the Companies Ordinance, 1984. For that purpose, it has to be seen if actually the elections of the Board of Directors were held in the Annual General Meeting on 27-3-1998. In this respect, the notice to the share- holders issued through daily Business Recorder and other newspapers dated 20-3-1998 is a most important piece of evidence. For facility of reference, the contents of the said notice are reproduced below:-- "Al-Qaim Textile Mills Ltd NOTICE Notice is hereby given that in pursuance of section 178(3) of the Companies Ordinance, 1984, the following persons have filed with the company notices of their intention to offer themselves for election of Directors at the 11th Annual General Meeting scheduled to be held on 27th March, 1998 at 11-00 a.m. At Awan House, Faisal Colony Talagang Road, Chakwal.
(1) Haji Ashiq Hussain(2) Haji Ghulam Hussain
(3) Muhammad Ali(4) Mst. Naseem Begum
(5) Muhammad Asghar Khan(6) Ch. Muhammad Ali
(7) Hameed Akhtar Khan(8) Muhammad Aamir Ali Since the number of persons to be elected, as Directors is the same as fixed by the Board under section 178(1) of the Companies Ordinance, 1984, therefore, the abovenamed eight candidates shall be deemed to be elected at the above referred Annual General Meeting.
Chakwal 20th March, 1998By Order of the Board Syed Sarfraz Habib Company Secretary.
7. In the second paragraph of the above-mentioned notice it had been made clear that, since the number of the nominations and the number of Directors of the Board to be elected was the same, hence the eight persons whose names were published therein shall be deemed to have been elected at the Annual General Meeting. Meaning thereby that no elections were to be held on the 27th March, 1998. This view finds support from the minutes of the Annual General Meeting of the Company held on the 27th March, 1998 at Awan House, Faisal Colony, Talagang Road, Chakwal. In this context item 3 of the Agenda is reproduced below:--
3. Election of Directors.
The Secretary read out the notice circulated through the daily papers about the following eight individuals who were found eligible to contest elections for a term of three years commencing from 27-3-1998 and terminated on 26-3-2001
(1) Haji Ashiq Hussain (2) Haji Ghulam Hussain
(3) Muhammad Ali (4) Mst. Naseem Begum
(5) Muhammad Asghar Khan(6) Hameed Akbar Khan
(7) Ch. Muhammad Ali (8) Muhammad Amir Ali The N.I.T. Put its candidate Mr. Wusooq Khaleeli. Mr. Wusooq Khaleeli being not a member was found by the management not eligible to represent the members of the Board of Directors. Even otherwise a natural person can be a candidate with the qualification of membership. The Company had not entered into any agreement with N.I.T. To take any of its' representative as one of the constituents of elected Board of Directors. The members approved the action of the management and carried the following resolutions:-- "Resolved that the following eight Directors be and are elected to constitute the Board of Directors for the future term of 3 years commencing from 27-3-1998 to 26-3-2001.
(1) Haji Ashiq Hussain (2) Haji Ghulam Hussain
(3) Muhammad Ali (4) Mst. Naseem Begum
(5) Muhammad Asghar Khan(6) Hameed Akbar Khan
(7) Ch. Muhammad Ali (8) Muhammad Amir Ali
8. It is clear from the above that the name of Mr. Wusooq Khaleeli was not excluded from his taking part in the election because of late receipt of the notice but on the grounds that he was not a member of the Company and that there was no agreement between the N. I. T. And the respondent for electing any representative of the N.I.T. On the Board of Directors of the respondents' Company.
In this respect, the contentions of the respondent that the nomination of Wusooq Khaleeli was received late appear to be fallacious. The exclusion of the nominee from the candidature of Directors also appears to had been made so that no election may not be held in forthcoming Annual General Meeting. This fact becomes clear from the above minutes that no elections were held on the 27th March, 1998, and in the meeting only the eight persons already notified in the notice, dated the 20th March, 1998, were declared to had been elected.
9. In view of the above, since no elections were held, restriction of holding of 20% of shares as envisaged in section 179 of the Companies Ordinance, 1984, for challenging any elections would not apply in the instant (case. Consequently, the petitioner need not have assailed the elections under the provisions of section 179 (ibid). In this manner, the very meeting held on the 27th March, 1998 was irregular and not in accordance with law as the members were prevented from using, their right to vote affectively. In consequence thereof, the proceedings of Agenda Item 3 relating to elections of Directors are declared to be invalid and the respondent is directed to hold afresh a General Meeting for holding of elections of members of the Board of Directors of respondent's Company in accordance with law. The present petition is allowed accordingly without any orders as to costs.