1989 PLP 3493 (MLD)

Syed Zahid Hussain for Respondent. Date of hearing: 21st May, 1989.' This civil revision arises from an order dated the 3rd of December, 1988 of the learned Civil Judge, Lahore, whereby he refused to accept prayer of the petitioner‑defendant, Messrs Duke Sports (Pvt.) Limited, in regard to shifting of onus of issue No. 6.

2. The respondents‑plaintiffs brought the suit for recovery of Rs.21,03,31,322.00 as damages arising out of a contract for supply of goods. They stated in para. 1 of the plaint that the Chairman/Commercial Director of the Company (Jahangir Iqbal) was duly authorised in terms of its Articles of Association to represent it, sign the pleadings and appear as a witness on its behalf.

3. This averment was controverted in the written statement where it was maintained that Mr. Jahangir Iqbal was not competent or authorised on behalf of the plaintiff‑Company to sign, verify or institute the suit, and prayed for summary dismissal of the suit for this legal defect. There were other controversial points as well giving rise to various issues. The present revision petition is restricted to the onus of issue No. 6 which was as under:‑‑ "Whether the suit has not been filed by duly authorised person? O.P.D."

4. The petitioner‑defendant made an application for recasting the issue and shifting onus to the respondents on the basis of usual principle contained in Article 117 of Qanun‑e‑Shahadat Order that it lies on the party who alleges a fact. It appears that the application was resisted and the trial Court declined to shift the onus.

5. Mian Dilawar Mahmoood, Advocate for petitioner relied upon Khan Iftikhar Hussain Khan of Mamdot v. M/s Ghulam Nabi Corporation Ltd., Lahore P L D 1971 S C 550 in support of the contention that a Director must be authorised to bring a suit through a resolution carried in a meeting duly convened after serving all, the members of the Board of Directors with a prior notice in regard to its time and place. He sought help from Abubakar Saley Mayet v. Abbot Laboratories and another 1987 C L C 367 wherein it was observed that onus would always lie on a party which makes an affirmative assertion. He drew attention to the contents of para. 1 of the plaint as also the written statement .therein the assertion that the Chairman/Commercial Director was competent to file the suit was categorically traversed. He, therefore, emphasized that the onus has obligatorily to be placed upon the respondents‑plaintiffs who made the affirmative assertion in that behalf.

6. In reply, however, Syed Zahid Hussain, Advocate for the respondents placed reliance upon Articles of Association referred to in para. 1 of the plaint to the effect that in case of such a Company, there was an initial presumption of a Director being competent to sue on behalf of the Company. He cited commentary at page 190 of Ghosh on Company Law, 1913 (1977 Edition) and Mst. Sardar Bibt v. Muhammad Bakhsh and others P L D 1954 Lah. 480 and Muni Akhayyamma v. Maistry Papaiah A I R 1956 Mysore 36 (V. 43 C. 14 May) to substantiate the plea that due to such presumption, the onus lay on the petitioner‑defendant to show otherwise.

7. The basic principle governing placement of onus is found in Article 117 of the Oanun‑e‑Shahadat Order, 1984, and according to it, ordinarily it has to be I placed upon the party which asserts the proposition. The assertion made in para. 1 of the plaint in regard to the competency of the Chairman to institute the suit on behalf of the Company was categorically controverted in the corresponding para. 1 of the written statement. According to the plenary rule, referred to above, the onus should have been on the respondents‑plaintiffs. It may be true that Mr. Jahangir Iqbal may have been mentioned as a Director or even Chairman of the Board to the Articles of Association of the respondent‑Company but that was not enough to authorise him to file the suit. The rule laid down in the above. Khan Iftikhar Hussain Khan of Mamdot's case envisaged that such authorisation needed a meeting of the Board of Directors after notice to each one of them and then passing a resolution conferring power on him to institute the suit on behalf of the plaintiff‑concern. The respondents did not aver in their plaint if any such meeting was convened, or its notice was given to the members, or a formal resolution to that behalf was carried. These were the essential pre‑requisites to bind a Company through an authorised agent. Articles of Association of the respondent‑Company have not been annexed and evidently by themselves were of no assistance. The onus, therefore, had to be placed upon the respondents- plaintiffs. The impugned order of the lower Court on the point was erroneous and cannot be sustained. Consequently, the revision petition is allowed and the onus of issue No. 6 shall be shifted to the respondents/plaintiffs after recasting it suitably. M.Y.H./D‑42/L Revision accepted.