' MUNIR A. SHEIKH, J.---By this consolidated judgment, we propose to decide Civil Appeals Nos.1462 and 1463 of 1999, as questions of law and facts are common in both of them.
2. These appeals by leave of the Court are directed against the consolidated judgment dated 5-11- 1999 of the High Court of Balochistan, Quetta whereby R.F.As. Nos.2 and 3 of 1999 filed by the appellant-Corporation against the judgments and decrees passed by the trial Court in two suits one filed by it and the other by the respondent-company have been dismissed on the ground that on account of having not complied with the provisions of sections 451 and 452 of the Companies Ordinance, 1984, the appellant-corporation was debarred from initiating any legal proceedings to enforce rights arising from the contract and that the appeals had been filed by a, person not authorized to do so.
3. The facts of the case are that the appellant which is a foreign-corporation was given contract of Project No,6-B consisting construction of (1) Jhat Pat main drain, (2) Mohbatpur Main Drain, (3)
Mohbatpur Waste Way, (4) Road Main Drain and (5) Temple Main Drain. The appellant-corporation through sub-contract employed the services of respondent-company. A dispute arose between the appellant-corporation and respondent-company as regards contract in respect of the said project, therefore, the appellant-corporation filed a suit against the respondent-company for the recovery of Rs,2,56,93,492.24 wheieas the respondent-company filed a suit for the recovery of Rs,1,38,52,053 against the appellant-corporation. Issues in each suit were separately framed by the trial Court. As is evident from the judgment of the trial Court, the appellant-corporation made an application that the suit filed by it should be consolidated with the suitfiled by the respondent- company which was not objected to, therefore, the said application was accepted through order dated 15-8-1998 and both the suits were consolidated and ultimately decided through consolidated judgment dated 5-11-1998. The suit filed by the respondent-company was decreed whereas the other filed by the appellant-corporation dismissed. Feeling aggrieved, the appellant- corporation filed two R.F.As. Nos.2 and 3 of 1999 which have been dismissed through the impugned judgment dated 5-11-1999 by a Division Bench of the High Court of Balochistan, Quetta against which these appeals by leave have been directed.
4. Since both the appeals have been dismissed by the High Court on the abovementioned technical grounds, therefore, we need not dilate upon the merits of the case. An objection was raised by the respondent-company to the competency and maintainability of both the appeals at the time of final hearing on the following grounds:-
(a) The appellant-foreign corporation having not complied with the provisions of sections 451 and 452 of the Companies Ordinance, 1984 though it had a place of business at Dera Allahyar having established a site office therein, in that:it did not deliver the required documents to the Joint Registrar of Companies, as such, by operation of section 456 of the said Ordinance, though validity of contract entered into by the said corporation had not been adversely affected but it was debarred from filing any suit or raising any counter-claim or initiating any other legal proceedings in respect of the said contract:
(b) that the appeals had not been filed by a duly authorized person, therefore, were liable to be dismissed.
5. In order to appreciate the first-mentioned objection, it would be appropriate to reproduce in extenso sections 451, 452 and 456 of the Companies Ordinance, 1984 for ready reference:-- "451. Documents to be delivered to Registrar by foreign companies.--(1) Every foreign company which, after the commencement of this Ordinance, establishes a place of business in Pakistan shall, within thirty days of the establishment of the place of business, deliver to the Registrar--
(a) a certified copy of the charter, statute or memorandum and articles of the company or other instrument constituting or defining the constitution of the company, and if the instrument is not written in the English or Urdu language, a certified translation thereof in the English or Urdu language;
(b) the full address of the registered or principal office of the company:
(c) a list of the directors, chief executive and secretaries (if any) of the company;
(d) a return showing the full present and former names and surnames, father's name or, in the case of a married woman or widow, the name of her husband or deceased husband, present and former nationality, designation and full address in Pakistan of the principal office or the company in Pakistan by whatever name called;
(e) the full present and former names and surnames, father's name or, in case of married woman or widow, the name of their husband or deceased husband, present and former nationality, occupation and full addresses of some one or more persons resident in Pakistan authorized to accept on behalf of the company service of process and any notice or other document required to be served on the company together with his consent to do so; and
(f) the full address of that office of the company in Pakistan which is to be deemed its principal place of business in Pakistan of the company.
(2) The list referred to in clause (c) of subsection (1) shall contain the following particulars, that is to say---
(a) with respect to each director,--
(i) in the case of an individual, his present and former name and surname in full, his usual residential address, his nationality, and if that nationality is not the nationality of origin, his nationality of origin, and his business occupation, if any, and any other directorship which he holds:
(ii) in the case of a body corporate, its corporate name and registered or principal office; and the full name, address, nationality and nationality of origin, if different from that nationality, or each of its directors;
(b) with respect to the secretary, or where there is joint secretaries, with respect to each of them--
(i) in the case of an individual, his present and former name and surname, and his usual residential address;
(ii) in the case of a body corporate, its corporate name and registered or principal office; Provided that, where all the partners in a firm are joint secretaries of the company, the name and principal office of the firm may be stated instead of the particulars mentioned in clause (b)
(3) Every foreign company, other than a company mentioned in subsection (1) shall, if it has not delivered to the Registrar before the commencement of its Ordinance the documents and particulars specified in section 277 of the Companies Act, 1913 (VII of 1913), shall continue to be subject to the obligation to deliver those documents and particulars and be liable to penalties in accordance with the provisions of that Act.
452, Return to be delivered to Registrar by foreign companies whose documents etc., altered.---If any alteration is made or occurs in---
(a) the charter, statute or memorandum and articles of a foreign company or any such instrument as is referred to in section 451; ' the address of the registered or principal office of the company; ' the directors, chief executive or secretaries or in the particulars contained in the list referred to in section 451;
(d) the principal office referred to in section 451;
(e) the names or addresses or other particulars of the persons authorized to accept service of process; notices and other documents on behalf of the company as referred to in the preceding section 451, or
(f) the principal place of business of the company in Pakistan; ' the company, shall, within .Thirty days of the alteration, deliver to the Registrar for registration a return containing the prescribed particulars of the alteration and in the case of change in persons authorized to accept service of process, notices and other documents on behalf of the company, also his consent to do so.
456. Company's failure to comply with this part not to affect its liability under contracts, etc.---Any failure by a foreign company to comply with any other requirements of section 451 or section 452 shall not affect the validity of any contract, dealing or transaction entered into by the company or its liability to be sued in respect thereof; but the company shall not be entitled to bring any suit, claim any set off, make any counter-claim or institute any legal proceeding in respect of any such contract, dealing or transaction, until it has complied with the provisions of section 451 and section 452."
6. Since the legal consequences of non-compliance of the provisions of sections 451 and 452 of the Companies Ordinance, 1984 by operation of section 456 thereof are far-reaching i.e,, the company responsible for this non-compliance is debarred from seeking any legal remedy either by way of defence as counter-claim or by filing suit in respect of any contract entered into between the said company and the others without adversely affecting the legality of the contract itself which means the adversary party would be fully competent in such a case to enforce its rights and the defaulting company rendered defenceless, therefore, it is necessary according to well-settled principles of interpretation of such a provision that the same be construed very strictly and unless the Court finds that the case of defaulting company strictly falls within the scope of such a provision, the same would not be applied in a given case.
7. Keeping in view this principle of interpretation, we proceed to examine minutely the provisions of sections 451 and 452 of the Companies Ordinance. It is clear from these provisions that the same are applicable only where a Foreign Company chooses to establish place of business in Pakistan and not otherwise. The expression "establish" has not been defined in the Companies Ordinance whereas the expression "place of business" has been defined in section 460 thereof. Learned Judges of the High Court as is clear from the impugned judgment laid emphasis mainly on the expression "place of business" and after considering the meaning of the said expression as given in section 460(a) of the Companies Ordinance, it was held that merely by maintaining a premises at the spot which was called as site office by the appellant-corporation, the corporation shall be deemed to have established place of business in Pakistan, therefore, its case fell within the mischief of sections 451., 452 and 456 of the Ordinance. The expression "place of business" is preceded by the use of the word "established" in the relevant provisions, therefore, the Court is required to give meaning to this expression before provisions of sections 451, 452 and 456 of the Ordinance were held to be attracted. The use of the expression "established" by law is very significant and has to be construed strictly before debarring Foreign Company from enforcing its legal right under the contract.
8. We have already observed that the word or the expression "established" has not been defined in the Companies Ordinance, therefore, the meaning assigned to the said expression in the Law Dictionaries are to be looked into and considered. Learned counsel for the appellant-corporation has referred to the meaning of the expression "established" as given in Black's Law Dictionary, Sixth Edition which defines the expression "established" as under:-- "(1) To settle firmly, to fix unalterably; to settle, make or fix firmly; place on a permanent footing."
' He also referred to the meaning of the said expression assigned in Legal Thesaurus by William C.
Burton which defines the expression "established" as under:-- ' "Cause to endure, confirmare, fix deeply, fix permanently, implant firmly, ingrain, make durable, make firm, make lasting, make permanent, make stable, make steadfast, perpetuate, plant, put on a firm basis."
' In Ballentine's Law Dictionary, the said expression has been assigned the following meaning:- ' "To originate, to create, to found and set up; to put in a settled or efficient state or condition" and the expression 'established business' has been given the meaning as a business which has an element of fixity and permanence."
9. Learned counsel for the appellant relying upon the definition of the expression "established" referred to above maintained that unless it was proved that Foreign Company had established a place of business of permanent nature in Pakistan, the case of such company would not fall within the mischief of the provisions of sections 451 and 452 of the Companies "ordinance. It was argued that merely because a foreign company had set up premises at the site of the project for the purposes of supervising and looking after the execution of the work at the said project and for establishing contact with it at that place which is temporary in nature, the company could not in any manner be held to have established a place of business in Pakistan as contemplated by the said provisions of law.
10. The argument when examined in relation to the provisions of sections 451, 452 and 45.6 of the Companies Ordinance is found to be of considerable force. It may be mentioned here that a Foreign Company has not been bound down by any provisions of the Companies Ordinance to establish in Pakistan a place of business. It is only when such a company decides to establish place of business in Pakistan that it is required to comply with the provisions of sections 451 and 452 of the Companies Ordinance, 1984 and submit documents mentioned therein to the Registrar failing which it would incur the disability to file any legal proceedings by way of suit or take a defence by way of counter-claim in respect of any contract executed by it. There is nothing on the record that the appellant-corporation within the contemplation of the meaning of the expression "established" as discussed above had established place of business in Pakistan, therefore, its case did not fall within the mischief of these provisions as such it was not debarred from seeking legal remedies by filing suit and taking plea in defence of counter-claim, as such, the findings of the High Court are not sustainable.
11. Independent from the meaning assigned to the word "established" as discussed above in the Law Dictionaries, the view expressed hereinbefore that the word "establish" means establishment of a business of permanent nature gets support from the provisions of sections 451 and 452 of the Ordinance themselves, for the nature of information which is required to be provided to the Joint Registrar of the Companies is indicative by itself that those provisions were applicable to such a foreign company which had established place of business in Pakistan on permanent basis. Clause
(f) of section 451 of the Ordinance which is reproduced below has placed the matter beyond any shadow of doubt that these provisions were intended to be applicable only in the case of those foreign companies who had established place of business in Pakistan on permanent basis, for if it was not so, there was no necessity to have required such a company to indicate such an information: "(f) the full address of that office of the company in Pakistan which is to be deemed its principal place of business in Pakistan of the company."
The expression "Principal place of business" used in this case as distinguished from other places of business is indicative of the fact that the company had established place of business on permanent basis and not otherwise.
12. In the suit filed by the appellant-company which was consolidated as observed above with the suit of the respondent, the respondent did not raise any objection before the trial Court in the written statement that the appellant-company was debarred from filing the said suit. It was only in appeal filed by the appellant-company before the High Court that such an objection was raised.
13. Mr. Basharatullah, learned counsel for the respondent-company when asked as to how the respondent could maintain the said objection at that stage stated that in the suit filed by the said respondent against the appellant-company, such an objection could not be raised, for the same had been decided in favour of the respondent and an objection raised in the appeal filed by the appellant-company against the said judgment and decree shall be deemed to have been raised at proper time and stage, for the institution of the appeal could be objected to on the basis of these provisions of the Companies Ordinance. As to why such an objection was not raised in the suit filed by the appellant-company against the respondent, there is no answer. Both the suits were consolidated and decided by a consolidated judgment. The plea of attack made by the appellant- company in its suit was a plea of defence or counter-claim in the suit filed by the respondent against the appellant-company, therefore, the objection as to maintainability of the suit filed by the appellant-company and counter-claim should have been raised at the first opportunity before the trial Court which was not done, therefore, the respondent shall be deemed to have impliedly accepted the legal position that these provisions of the Companies Ordinance were not attracted because of appellant-company having not established a place of business in Pakistan within the contemplation of the said expression in law as noted above. It may be mentioned here that such an objection is required to be raised at the earliest so that the plea, of fact so raised could be met with by the adversary by producing evidence that no place of business had been established within the meaning of the said expression in Pakistan by the appellant-company.
14. The next question which falls for consideration is whether the appeals before the High Court were filed by duly authorized person on behalf of the appellant-company. The memo. Of appeals before the High Court were signed by Mr. He Yi and the question arose whether he was duly authorized by the appellant-company to institute the said appeals. The learned Judges of the High Court decided this question mostly on the basis of para. 4.20 of the Memorandum of the appellant-company whereas in our view the decision of the question whether Mr. He Yi held the authority to file the appeals, should have been made taking into consideration all the materials and documents available on the record and not in isolation of any of them to the exclusion of the other. The power of attorney dated 20-2-1993 given to Mr. He Yi reads as under:-- ' "Power of Attorney The undersigned: ' Mr. He Yi, The President of China Anneng Construction Corporation, People's Republic of China, authorize Mr. Duan Songlin to be true and lawful attorney and hereby authorize the said attorney to conduct all matters relating the tender of projects, operating the business and signing the contract in Pakistan.
' China Anneng Construction Corporation. President (Sd.)
February 20, 1993."
' The Resolution passed by the Execution Committee of the appellant-corporation (which is equivalent of the Board of Directors according to Pakistani Laws), dated February 10, 1993 in pursuance of which the President of the appellant-company had executed the said power of attorney reads as under:-- ' "The President of the Corporation is hereby authorized to appoint Mr. Duan Songlin as attorney for the Corporation's Business in Pakistan. Such attorney shall be given authority to conduct all matters relating to the business such as signing of the tenders, receiving and signing documents, conducting the affairs on the projects awarded to the Corporation and representing and acting for the Corporation before the Employer and Consultants and dealing in all legal matters involving the Corporation."
15. The case of the respondent-company before the High Court was that according to law, it was the resolution of the Board of Directors which was necessary to constitute a duly authorized agent or attorney of the company for the institution of legal proceedings in support of which judgment in the case of Friendship Textile Mills (Pvt.) Ltd. And others, v. Government of Balochistan through Secretary: Local Government and Rural Development, Quetta and others (1998 CLC 1767) was relied. In this view of the matter, it was primarily the resolution passed by the Executive Committee of CACC in pursuance of which the President of the appellant-company executed power of attorney which was relevant to ascertain whether the attorney was duly authorized to institute legal proceedings on behalf of the company and not the power of attorney itself in isolation in which if any of the matters mentioned in the resolution was missing, reference to resolution itself was necessary. In our view, if the resolution and the power of attorney executed in favour of Mr. He Yi are read together, it is plainly clear that he was authorized by the company to deal with all the legal matters involving the corporation which certainly included the institution of the legal proceedings, for the expression legal matters in the resolution would become redundant. An intention had been unimbiguously expressed by the resolution of the appellant-company that the attorney shall have the power to institute legal proceedings, therefore, the appeals were validly filed by Mr. He Yi, attorney who was fully empowered to do so and the findings of the High Court are not sustainable.
17. For the foregoing reasons, both these appeals are accepted, judgment dated 5-11-1999 of the Balochistan High Court is set aside and the cases are remanded to the said Court for decision of the appeals on merits in accordance with law.
18. There will be, however, no order as to costs.