P L D 1983 Lahore 326 (PLP)

GHULAM MUJADDID MIRZA, J.-Pak Chrome Leather Company Limited, Karachi, filed a suit for declaration, permanent injunction and for the recovery of Rs. 9,19,576/45, against Pakistan through the Ministry of Defence, Rawalpindi, in the Court of Senior Civil Judge, Rawalpindi. The plaintiff' is a limited company. It was awarded contract No. 34777/ A/DDP/P. 16, dated 27-I1-1974 by the defendant, for the supply of Boots. The contract was amended on 21-7-1975. Under the amended contract, 35,000 pairs of Boots D. M. S. were to be supplied. The plaintiff furnished bank guarantees amounting to Rs. 4,56,003 and Rs. 2,73,000 to secure advance payments and for satisfactory performance of the contract. On 19-11-1976, the contract was duly fulfilled. The company as such became entitled to the entire price of the Boots supplied and for release of the bank guarantees. The factum of performance of the contract is admitted by the Directorate of Procurement in its entirety. Nevertheless, the aforesaid Directorate withheld the payment of nine lac rupees on the pretext that another firm registered under the name and style of Messrs Sind Tanneries Limited owed some money to the Directorate. The plaintiff company objected to that ; denied the liability for that amount and filed the suit. The defendant contested the suit. The plaintiff joined issue. The trial Court framed the following issues : (1) Whether this Court lacks territorial jurisdiction to entertain the suit ? O. P. D. (2) Whether the defendant can withhold the amount due to the plaintiff for adjustment of its claim against the Messrs Sind Tanneries ? O. P. D. (3) Whether the plaint is insufficiently stamped ? O. P. D. (4) Whether the suit has not been instituted by an authorised person ? O. P. D. (5) Whether Messrs Sind Tanneries is a necessary or proper party in this suit ? O. P. D. (6) Whether the suit is barred under section 56-D of the Special Relief Act? O. P. D. (7) Whether the suit for declaration and injunction had become infructuous ? O. P. D. (8) Relief. The suit was decreed vide judgment and decree dated 2-4-1978. The first pointed raised by the learned counsel for the appellant pertainedi to the jurisdiction of the trial Court. It was contended that the contract was made and executed at Karachi ; goods were supplied at Karachi. I Therefore, the Court at Rawalpindi had no jurisdiction to entertain the suit. In support of this reliance was placed on section 20 of the Code of Civil Procedure and Mian Fazal Muhammad Nizam-ud-Din Baig & Co. v. The Province of West Pakistan and others (PLD 1969 LAH 453). The next objection taken was that the suit had not been properly filed: The person who had signed the plaint was not duly authorised by the company to do so. In support of this learned counsel relied on the following observation in the case of Khan Iftikhar Hussain Khan of Mamdot v. Messrs Ghulam Nabi Corporation Ltd., Lahore "In the case of H. M. Ebrahim Sait v. South India Industrials Ltd. (1) it was held that in law a meeting of directors is not duly convened unless due notice has been given to all the directors. On the facts of the present case, I am satisfied that due notice of the meeting was not given to the deceased appellant and, therefore, the resolution passed in the meeting of 28th September, 1951, cannot be said to be a valid one. In my opinion, no valid authority was conferred on Mr. Khurshid Mahmood and, therefore, he was not competent to institute the suit. I would. therefore. hold that the learned trial Judge was perfectly justified in dismissing the suit on this ground." It was further submitted that the respondent company and Messrs Sind Tanneries Limited were the sister concern. The Directors of the two companies were the same. One family was running the two companies. The respondent owes More than one crore to the appellant. Therefore, the appellant was justified in withholding the payment. Learned counsel while dealing with issue No. 4 submitted that the onus to prove this issue was on the plaintiff. In support of this he drew our attention to the case of Mst. Mulkhan Bibi v. Muhammad Wazir Khan (P L D 1959 (W. P.) Lah. 710) wherein it has been observed thus :- ". . .It is the party who asserts a positive fact who should be called upon to prove his assertions and not the party who denies that fact. . ." While justifying the stance taken by the appellant for withholding the payment on the ground of the two companies being sister concern, he argued that for the purpose of liability both the companies have to be treated as one and the same. The mere fact that they have two different names would not exonerate the one from the liability of the other. Learned counsel appearing on behalf of the respondent submitted that the objection pertaining to the territorial jurisdiction was without any substance. He contended that the order for the supply of Bootc was placed at Chaklala ; contract was finalised and accepted at Rawalpindi. This is the place where the Director-General's office is situated. Relying on section 20, C. P. C., learned counsel argued that the respondent was well within its right to institute the suit at Rawalpindi. He also pressed into service section 21 of the Cod and submitted "no objection as to the place of suing shall be allowed by any appellate or revisional Court unless such objection was taken in the Court of first instance at the earliest possible opportunity and in all cases where issues are settled at or before such settlement and unless there has been a consequent failure of justice". In support of his contention he cited the case of Pokhar Mal Ram Nath through Lala Sant Ram v. Khanewal Oil Mills ( AIR 1945 LAH 260 ). Reliance was also placed on Muhammad Esuff Rowther v. M. Hateem & Co. (AIR 1934 Mad. 581) wherein it has been observed : "It follows from the above considerations that in the present case the contract was completed at the place of his business which is within the jurisdiction of the Tiruvarur Court and the parties- intended that the performance was to be there." In this very decision the learned Judge was of the view that the contract was intended to be performed at the place where the goods were to be supplied and that Court had the jurisdiction to try the suit. 1n this sequence learned counsel also relied on the case of Pakistan & Divisional Superintendent, Pakistan Railways, Rawalpindi v. M. Faiz Ahmad (NLR 1978 Civil 1186). While dealing with Issue No. 2, learned counsel for the respondent drew our attention to Order VIII, rule 6 as wall as Order XXI, rule 20 and contended that legally as well as factually the respondent company was an independent concern. It had nothing common with the other company and, therefore, there was no legal justification to withhold what was due from the appellant. In support of this contention he cited the case of E. B. M. Company Ltd. v. Dominion Bank (4) which reads thus : ?. .They believe it to be of supreme importance that the distinction should be clearly marked, observed and maintained between an incorporated company's legal entity and its actions, assets, rights and liabilities on the one hand, and the individual shareholders and their actions, assets, rights and liabilities on the other hand. . : ' Learned counsel also referred the case of J. H. Pattinson and others v. Bindhya Debi (A I R 1933 Patna 196). With regard to the question as to on whom lips the onus, learned counsel relied on section 101 of the Evidence Act which deals with the burden of proof and is to the effect :- "Whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that facts exist. When a person is bound to prove the existence of any fact, it is said that. the burden of proof lies on that person." Learned counsel submitted that this objection cannot be successfully E raised by the appellant before this Court in appeal. He referred to the case of Bishambar Das and others v. Telu Ram and others AIR 1934 LAH 1019 (2). Similarly, in the case of Jadu Nath v. Ramun Mal (A I R 1921 Lah. 284), therein it has been laid down as follows : " . .The defendant undertook to discharge this onus but failed to do so. It is too late now to complain that he had not been fairly treated in the matter of the burden of proof: . ." The respondent company fulfilled the contract in its entirety. This position is not denied by the other side. The appellant wanted the suit to be dismissed on technical legal grounds. The payment due from them was also withheld on a legal issue. We think the first and the foremost point for .determination in this appeal is the objection relating to the territorial jurisdiction of the trial Court. In this connection we have considered the arguments advanced by learned counsel for the parties and have also taken note of the case law relied by both sides. In our view the answer to this issue is the observation made in the case of Lachha Ram v. Virji and others (A I R 1921 All. 66) wherein the learned L Judge observed as under : ". . .It is a question which involves a consideration of the whole of the merits in the suit and without going into the merits and forming some opinion upon the justice or otherwise of the decision of the first Court, it is impossible for the appellate Court to conform to the provision of this section. There is, in other words, a clear provisions of the law with reservations that if the first Court, even although it had no territorial jurisdiction, has tried out the case upon the merits in such a way, (1) that all the available evidence which either party wanted to call has been called, (2) that the hearing and trial was satisfactory as a matter of procedure, and (3) that the decision appears to be right in fact, the question of the territorial jurisdiction is relegated to obscurity. . ." We respectfully follow the said dictum and, therefore, hold that there is no substance in the objection pertaining to the territorial jurisdiction. Similarly, the objection that the plaint had not been properly signed b a duly authorised person is to be rejected, the reason being that its onus was on the appellant before the trial Court. One Major Javaid Mohammad Khan appeared on behalf of the appellant before the trial Court. There is nothing in his evidence so as to suggest that an objection was taken with regard to the maintainability of the plaint on this issue. The plaint was signed by one of the Directors. We are, therefore, of the view that the trial Court rightly decided this issue against the appellant. We don't agree with the contentions raised by the learned counsel for the appellant the Messrs Sind Tanneries is to be treated as a sister concern so as to share the liability of the respondent. As has been observed in the case cited by the learned counsel for the respondent, in order to succeed the onus was on the appellant to prove that Sind Tanneries was a sister concern of the respondent. This onus they failed to discharge. For the foregoing reasons we are of the view that this appeal must be dismissed. We order accordingly. There shall be no order as to costs. M. Y. M.????????????????????? Appeal dismissed.