2000CLC4 (PLP)

6. At the very outset,. Mr. Saeed A. Sheikh has raised preliminary objections to the maintainability of this suit on the ground that since both the original. plaintiffs had expired, this suit has abated. He has pointed out to the prayer clauses (b), (d) and (g). It is argued that since the original plaintiffs have expired, they cannot be installed as directors in the said company and that all these reliefs being personal in nature could not be granted in favour of the legal heirs/present plaintiffs. He has referred to the maxim ' actio personalis moriture cum persona' and placed reliance on the case Mercantile Cooperative Bank Ltd. v. Messrs. Habib & Co. and others _PLD 1967 Kar.

755. In that case, it was held by this Court after reference to the aforesaid maxim that the right to render account is a personal right available against a person who is liable to account and that such a right does not survive against his heirs except in cases where a claim for money is made and for which accounting is sought. In that case, the plaintiffs had filed a suit against a proprietorship concern but subsequently the proprietor died and his widow, mother and a minor son and daughter were impleaded as defendants. In such circumstances, it was further held by this Court, "The exception is upon the principle that where the deceased had appropriated money or property the cause of action even though personal to him survives." This maxim that the personal right of action dies with the person properly relates only to extention of liability, although it has sometimes been misused in connection with the rule that death does not give rise to liability in tort, as observed by Herbert Broom LL.D. in his famous books, 'A Selection of Legal Maxims' 10th Edition, Sweet & Maxwell Limited London. While concluding his discussion at page 622, the following general rule was laid down:‑‑ "In conclusion the extent and limits of the common law doctrine, actio personalis moritur cum persona, may be summed up thus: it was a rule of the common law that if an injury were done either to the person or property of another for which damages only could be recovered in satisfaction, the action died with the person to whom or by whom the wrong was done: but this rule was never extended to such personal actions as were founded upon any obligation, contract, debt, covenant, or any other similar duty to b,~ performed: for there the action survived."

7. The above maxim was also considered in several other judgments of the superior Courts of Pakistan. In Muhammad Aslam v. Wazir Muhammad PLD 1985 SC 46 at 53, it was held, inter alia, by the Honourable Supreme Court, personal actions connected with the individuality of a person do not survive him.."The Honourable Supreme Court made an exception to this rule and held that where personal actions have matured into a decree or become part of the estate, the legal representative can execute such orders. (For further reference, see the case of Agricultural Development Bank of Pakistan v. Sanaullah Khan and others PLD 1988 SC 67 at

72. The case of Mercantile Cooperative Bank (supra) was followed by another Judge of this Court, G.H. Malik, J. (as he then was) in A. Majid Sama v. The Asbestos Cement Industries, Ltd. and another 1996 MLD

803. In that case, a suit was filed by the plaintiff for recovery of Rs.51,000 by way of damages on account of defamation. During the proceedings of the suit, the said plaintiff died and defendant raised objection that in the death of the plaintiff the cause of action has not survived to his legal representative and referred to the cases Sardar Muhammad Ali v. Pakistan PLD 1961 Kar.

88. Mercantile Cooperative Bank (supra) and Government of Punjab and another v Mst. Kamina and others 1990 CLC

404. The plaintiff on the other hand, referred .to the cases Muhammad Akram v. Mst. Farman Bi PLD 1990 SC 28 and Syed Ghayyur Hussain Shah v. Aziz Alam PLD 1990 Lah. 432 and raised the plea that the right of reputation is to be placed on equal footing with the right of property as per Islamic law. This Court came to the conclusion that since the suit was filed for damages on account of alleged defamation suffered by the plaintiff, the cause of action has not survived upon the death of the plaintiff and the suit was abated. A Division Bench of this Court has also considered the above maxim in the case of Mst. Kamina (supra). In that case, a suit was filed for recovery of Rs.209,000 on account of damages in view of the death of plaintiff's son and on account of damage and loss of business. The suit was decreed in the sum of Rs.1.00,000 and in the appeal the suit was dismissed and the appeal was allowed with the following observations:‑‑ "From the above discussion, it is clear that the meaning of this maxim is that a personal action dies with the person, the effect is that the death extinguishes the liability in tort. In other words the death of the party wronged or the wrongdoer brings an end to the cause of action and the right to sue or be sued for gets extinguished. But this is subject to a qualification viz, where a tortfeasor estate is benefited by the wrong done, an action would be against the representatives of a wrongdoer. The essence of the maxim applies to an action brought for damages for a personal wrong. In the instant case, undoubtedly the action is brought by the respondents Nos. l and 2 on the foot of a personal wrong of Muhammad Habib Siddique and the present appellants. Unless it is shown that the estate of the deceased wrongdoer was benefited by the tortious act committed by him, the right to sue does not survive because the personal action is said to die with the person. "

8. In Pakistan, the above maxim is to be read keeping in view the provisions of Order XXII, C.P.C. particularly Rule 1 thereof which provides that no abatement to take place in case of death of plaintiff or defendant if the right to sue survives. It is settled that where a party to a suit dies, his legal representative is appointed in order that the suit may proceed and decision be given on the facts of the case. In fact, it is the original party's rights and disabilities which is to be considered and not those of the legal representatives impleaded in place of a deceased party. Order XXII. C.P.C. does not extent any independent right to the legal representative higher than the deceased party. (See Muhammad Iqbal and 2 others v. Ghulam Ali Shah PLD 1975 Lahore 1205 at 1211). Now, reverting to the relief being claimed by the legal representatives of the deceased plaintiffs which includes their status as to the directorship of the said company, I am afraid that the right of directorship to a company is not an heritable right. The legal representatives/heirs may be entitled to right to inherit the shares being owned and possessed by the deceased plaintiffs in the company but cannot inherit right to directorship of the company, and, therefore, such E relief to the extent of seeking directorship on the basis of inheritance could not be granted in the present suit. The present plaintiffs may be entitled to the relief seeking shares in the company upon declaration as illegal and void the agreement impugned and proceedings of the meeting dated 31‑3‑1976 which I propose to discuss hereinafter.

9. In this suit, some 16 persons were produced by the parties as witnesses and more than 200 documents were exhibited on behalf of plaintiffs and defendants in order to prove and disprove their respective claims. Following are the details of witnesses produced by the parties:‑‑ P.W.1 Haji Sharif Khan, plaintiff No. l (Exh.5) documents exhibited from Exh.5/1 to Exh.5/103. P.W.2 Haji Abdul Rashid plaintiff No.2 (Exh.6) documents exhibited Exb.6/1 to Exh.6/23. P.W.3 Muhammad Islam from P.A.F. (Exh.7) documents exhibited from Exh.7/1 to Exh.7/2. P.W.4 Ghulam Rasool Senior Clerk, Aziz Bhatti Shaheed, Gujrat (Exh.8) Documents exhibited Exh.8/1 to Exh.8/6. P. W .5 Muhammad $iddique Khan, Inspector, Central Excise, Kotri (Exh.9) Documents exhibited (Exh.9/1). P.W.6 Moinuddin Khan, Central Excise (Exh.10). Witnesses on behalf of defendants D.W.1 Viola, Director Piaggio Co. (Exh.11) Documents exhibited Exh.l l/1 to Exh.l1/14. D.W.2 Muhammad Shoaib Qureshi, Deputy Controller, M.C.B. (Exh.12) Documents exhibited Exh.12/1 to Exh.12/84. D.W.3 Mushtaq Ahmed Vorah (Exh.13) Documents exhibited Exh.13/1 to Exh.13/6. D.W.4 A.K. Shamim, Advocate (Exh.14) Documents exhibited Exh.14/1 to Exh.14/5. D.W.5 Afzal Rasheed (Exh.15) Documents exhibited Exh.15/1 to Exh.15/8. D.W.6 Muhammad Saleem (Exh.16) Documents exhibited Exh.16/1. D.W.7 Anwar Saleem (Exh.17). D.W.8 Muhammad Iftikhar Hussain (Exh.18) Employee of M.C.B. Ltd. D.W.9 Mr. Tariq Sayeed (Exh.19) . DWAO Raja Abdul Rehtnan (defendant No.l) (Exh.20) Documents exhibited Exh.20/1 to Exh.20/13. '

10. First I will deal with the legal issues namely issues Nos.9 to

12. Issues Nos.9 and 12.

11. It was argued by Mr. Saeed A. Sheikh that the plaintiffs are not entitled for the declaration as prayed as these reliefs are not in respect of any legal character or status of the deceased plaintiffs pertaining to their right to property. It was further argued that the reliefs (a) to (f) fall outside the scope of section 42 the Specific Relief Act, 1877. He has placed reliance on the cases M.A. Naser v. Chairman, Pakistan Eastern Railways and others PLD 1965 SC

83. Abdur Rahman Mobashir and 3 others v. Syed Amir Ali Shah Bokhari and 4 others PLD 1978 Lah. 113 and Anwar Hussain v. The Agricultural Development Bank of Pakistan and others 1992 SCMR 1112. In the case of M.A. Naser (supra), the question involved before the Honourable Supreme Court of Pakistan was a catering contract between the appellant and the railway administration. It was held that under the provisions of section 42 of the Specific Relief Act, a person entitled to any legal character or right to property can institute a suit for a declaratory relief in respect of his title to such legal character or right to property and that the said suit does not fall within the scope of section

42. In Anwar Hussain (supra), one of the questions before the Honourable Supreme Court was the acceptance of an employee's resignation. It was held that the suit filed by the appellant was not competent and was rightly dismissed by the High Court. In the case of Abdur Rahman Mobashir (supra), a learned Division Bench of Lahore High Court has dealt in detail with various aspects of a declaratory suit. While referring to section 9, C.P.C., it was held that the suit involving right to property or to an office is a suit of civil nature, and thus, competent.

12. The phrase ' legal character' and 'legal status' was elaborately discussed by a Judge of this Court Noorul Arfin, J. (as he then was) in the case Alavi Sons Ltd. v. The Government of East Pakistan PLD 1968 Kar.

222. After making reference to the 15 definitions given by Professor Holland and after reference to the case K.P. RamakrishnaTatter v. K.P. Narayana Patter and others ILR 39 Mad. 80, it was held that these expressions include "personal rights and pertain to the exclusion of the proprietary relations, contractual capacities and incapacities, or legal conditions imposed upon a person by law without his own consent as opposed to the condition which he has acquired himself by agreement such as position of a slave." It was further held that a suit seeking declaration that the plaintiff has not committed breach of the terms of a contract is a suit neither with regard to an legal character nor any right to or in the property. Recently, this Court in the case of Muhammad Yasin Fecto and another v. Muhammad Raza Fecto and 3 others 1998 CLC 237 has considered interference of a Civil Court in the affairs of a company registered under the Companies Ordinance, 1984 with reference to section 42 of the Specific Relief Act and section 9, C.P.C. Reference was made to the several reported cases including Abdur Rehman Mubashir (supra), Messrs Chalna Fiber Company Ltd. Khulna and others v. Abdul Jabbar and others PLD 1968 SC 381, Fareed Sons Ltd. v. Karachi Cotton Association PLD 1956 Kar. 315 and Parvaiz Aslam Mian Aslam v. Synthetic Chemical Company Ltd., Karachi and another PLD 1980 Kar.

401. In the case of Muhammad Yasin Fecto (supra) the Chief Executive filed a suit seeking declaration that he my be declared to be the Chief Executive and his removal through a resolution passed by the defendants be declared contrary to law, invalid and with no legal effect. After considering the case law, it was held by this Court as follows:=‑ "From the case‑law as discussed hereinabove, it can be safely held that the Courts are not competent to interfere in the day to day working of a company on the well‑established doctrine of indoor management. But this is not a absolute bar and there are situations where a Director or a shareholder can bring a case before the Court against a company and its Directors. The Court will be justified to interfere if the following conditions are fulfilled:‑‑ (1) Where the majority has acted in depriving the minority of their lawful and legitimate rights. (2) Where the acts, complained of, are ultra vires of the Memorandum and Articles of Association of the Company. (3) Where the Directors have acted malafidely and against the interest of the Company. (4) Where there is violation of a principle of natural justice (5) Where the act, complained of, amounts to fraud and misrepresentation In the instant case, allegations of the plaintiffs are that plaintiff No. 1, for all legal and pecuniary purposes, was 'removed' (as discussed infra) from the assignment of Chief Executive without adopting due course of law. It is further argued by the learned counsel for the plaintiff that the meeting of 7‑8‑1995 was mala fide and that the said resolution is ultra vires of the company, therefore, in view of such averments of the plaint, I am of the considered view that this suit is very much maintainable as the plaintiffs have no other remedy available under the other provisions of Companies Ordinance, 1984 through which they are entitled to seek declaration as to their legal status in the Board of Directors after passing of the impugned resolution." 13 In view of the aforesaid discussion; I am of the considered view that the present plaintiffs are entitled to declaration to the extent of their rights and entitlement in the shares left by their predecessors as these are their properties but subject to the condition of proving the fact that the agreement, dated 31st March, 1976 was executed under duress and that no consideration was paid to the deceased plaintiffs against purchase of their shares. Issue No. 11.

14. Initially, this suit was filed and was valued at Rs.60,000 for the purpose of declaration and Rs.200 for permanent injunction. Accordingly, court fee amounting to Rs.2,275 was tendered. Subsequently an application was filed seeking amendments in the valuation of the suit. The said application was numbered as C.M.A. 1601 of 1997. On 26‑5‑1997, the said application was granted and the suit was revalued at Rs.6,66,665.74 and further amount of court‑fee was paid which is now maximum ad valorem court‑fee amounting to Rs.15,

000. In the circumstances, the defendants have half‑heartedly argued this point and, therefore, the same is answered in negative. Issue No. 12.

15. It is contended by the learned counsel for the defendants that M/s. Khawaja Autocars (Pvt.) Ltd. was a necessary party as the directorship and shares for which the instant suit has been' filed pertains to the said company. Since it is a necessary party, it is pleaded that its non‑impleadment should result in dismissal of the instant suit. Mr. Saeed A. Sheikh has not cited any law on this point. However, Order I, Rule 9, C.P.C. provides that no suit shall bel defeated by reason of misjoinder or non joinder of the parties and that every suit will deal with the matter in controversy so far as regards the rights and interest of the parties before the said Court. In the instant case, it has not been denied that the present defendants are the directors of M/s. Khawaja Autocars Ltd. and, therefore, for intent and purposes, it could be presumed that the said company is before the Court. This issue is accordingly answered. Issues Nos. 1 and 6.

16. Plaintiffs are under heavy burden to prove these two issues. According to the averments in the plaint, the agreement dated 31‑3‑1976 was executed under duress but no specific instances have been mentioned in the body of plaint. Mr. Saeed A. Sheikh has referred to Order VI, Rule 4, C.P.C. where it is provided that a party pleading any misrepresentation, fraud, breach of trust, willful default or undue influence shall state the same with dates and items in his pleadings. In para. 7 of the plaint, it is alleged that after some displeasure crept up between the parties, the defendant No. l started threatening the plaintiffs to either kill them or to put them behind the bars. In para. 11 of the plaint, it is simply alleged that the resignations of the plaintiffs were obtained under coercion, threat and duress on 31‑3‑1976. In so far as the question of misrepresentation is concerned, it is alleged that the defendants Nos.2 to 7 were all minors at the relevant time and it was not disclosed to the plaintiffs which led them to signing the agreement, dated 30th March, 1976.

17. The agreement, dated 30th March, 1976 has been produced by P. W.1 Sharif Khan as Exh.5/65 while agreement dated 31‑3‑1976 is produced and exhibited as Exh.5/69. In support of this issue, both the plaintiffs namely Sharif Khan and Abdul Rasheed have appeared in witness‑box. Sharif Khan was examined as P.W.1 (Exh.5). It will be seen from the evidence of both the plaintiffs as well as that of defendant No. l that it is clearly reflected that there was misunderstanding between the parties upto a great extent commencing from the end of year 1975. This fact was admitted by P.W.1 in his cross‑examination who admitted lodging complaints with the police authorities. Certified copies of his statement to the police were produced and exhibited as Exh.6/2 to Exh.6/4, respectively. Before the alleged execution of agreement, dated 30th March, 1976 and transfer documents on 31‑3‑1976, there was an earlier agreement between the plaintiffs and defendant No. l which the plaintiffs were not able to deny. Although this fact was not disclosed either in the pleadings or , in the examination‑in‑chief of P. W.1, Sharif Khan was confronted with this fact in his cross‑examination. A carbon copy of agreement, dated 28th August, 1976 was shown to P.W.1 Sharif Khan and through him it was produced and marked as Exh.5/19. It was admitted by both the plaintiffs that Exh.5/19 contains their .signatures. It was further admitted that the factory was closed after execution of Exh.5/I1 and all the staff was sent on leave. It was also admitted by P.W.1 and P.W.2 that as a result of execution of Exh.5/19, no work was done in the factory for about next two months. This fact was noted by their principal in Italy, namely, Piaggio. According to this agreement (Exh.5/19), it was agreed between the parties that the matter is to be resolved amicably; that the factory head office and workshop shall remain closed till settlement and that no new employee was to be engaged in the services; that all the three directors shall prepare their accounts and they will make their respective offers within one month for purchasing the factory. That before commencement of bidding, every director shall disclose their financial capability; that the retiring director shall not interfere in the affairs of company thereafter and shall not initiate any legal proceedings; that the retiring director shall execute all necessary documents for his retirement; that in case the highest bidder is not able to pay the balance sale consideration within the period agreed, the other party would be entitled to purchase the company.

18. In compliance of the agreement (Exh.5/19), several other documents were executed namely Exh.5/20 and Exh.5/24 which establish the fact that the workshop, factory and other outlet of the company were closed and the process of accounting commenced. The plaintiffs have also challenged the fact that there was no bidding which I will discuss in the subsequent paragraphs but for the time being they are required to show that the transfer agreement dated 31‑3‑1976 was obtained under. threat, coercion and duress. In fact, there are two agreements in field. The first is dated 30th and the other 31st March, 1976 a copy of which has been filed as Annexure ' C' to the plaint Exh.5/69. These two agreements and several other documents executed on 30th and 31st March, 1976 have been claimed by plaintiffs to have been obtained under duress and coercion. In evidence, the only instance of threat is attributed towards bodyguard of defendant No. 1 who was holding pistol in his hand.

19. The case of the plaintiff No. l/P.W.1 is that on 30th March, 1976, he was called by one Mushtaq who was chartered accountant of the company who informed him that the matter has been settled. He took plaintiff No. 1 to the Muslim Commercial Bank Branch at Akbar Road, Karachi where 8 to 10 servants of defendant No. l were also present. Plaintiff No.2 was also called in the bank and defendant No. l produced some papers alongwith two pay orders of Rs.3,33,333 each and obtained their signatures on all these documents; that on 31‑3‑1976 plaintiff No. l/P.W.1 went to one of his friends who after hearing all this story suggested him to take the matter to civil Court as it was a civil dispute. In such circumstances, the instant suit was filed. In cross‑examination, it was admitted that no complaint of criminal case was lodged with the police station despite the fact that the distance of police station was hardly one furlong from the place of alleged incident. It is also alleged by both the plaintiffs that no complaint was lodged against the Bank Manager, M.C.B., and that the other accounts have been maintained by the plaintiffs in the same branch even thereafter. Now, the question arises whether the acts complained of by the plaintiffs constitute undue influence, coercion or misrepresentation. These acts have been defined in sections 15 and 16 of the Contract Act, 1872. Section 14 thereof has defined 'free consent' to be an act when it is not caused by coercion (section 15) or, undue influence (section 16), or fraud (section 17) or, misrepresentation (section I S) or mistake (sections 20 to 22). Coercion has been defined in section 15 as "committing or threatening to commit any act forbidden by Pakistan Penal Code or the unlawful detaining or threatening to detain any property to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement." Section 18 defines misrepresentation which includes a representation, statement or assertian made by one party at the time of execution of any agreement ‑or contract with the other party in respect of some matter which is the subject of such agreement or contract.

20. The allegations of coercion, undue influence and/or misrepresentation is to be pleaded and to be proved in the same manner as that of the allegations of E fraud. It is to be proved through strong and independent evidence as held by the Honourable Supreme Court in the case of Shamir v. Faiz Elahi 1993 SCMR

145. The question of coercion was earlier considered by a Division Bench of this Court in Kazi Noor Muhammad v. Pir Abdul Sattar Jan PLD 1959 (W.P.) Kar. 348 at 357 where it was held that "in order to prove coercion it must be shown that the coordinator applied pressure upon the debtor to procure his consent. The mere fact that agreement was entered into in fear of criminal proceedings is not sufficient to avoid the agreement on the ground of coercion. " This rule was followed by another Bench of this Court in the case of Sheikh Muhammad Obaid v. Muhammad Rafi Qureshi PLD 1962 (W.P.) Kar. 409 where reference was made to the cases Sayed Muhammad v. Fatteh Muhammad and others ILR 22 Cal. 325 and Boyse v. Rossborough (1857) 6 HLC 1 (49). It was held that undue influence can also be pleaded on a party by means of coercion. It was further held as follows:‑‑ "No doubt undue influence usually arises in contracts made between relatives or persons in a fiduciary position but it appears to us that it can also arise even in cases between strangers if certain form of coercion, oppression or compulsion is exercised to dominate the will of the aggrieved party. Thus, if a person is persuaded to do something under coercion or by threatening him in such a way that it gives him mental distress, it will be nothing but exercise of undue influence. In our opinion it is not necessary that such coercion or threat may in itself be illegal, but if it has given mental distress to the aggrieved party resulting in the domination of his will, it will clearly amount to undue influence. "

21. I have minutely scrutinised the pleadings of the parties and their respective evidence in order to find out elements of coercion, undue influence and misrepresentation in line with the rule laid down by a Full Bench of Honourable Supreme Court in the case of Mst. Hamida Begum v. Mst. Murad Begum and others PLD 1975 SC

624. In that case, it was held, "where undue influence is alleged it is necessary to examine very closely all the circumstance of the case". It is not one document which was executed on 31st March. 1976. According to plaintiff's evidence, they remained at the branch office of M.C.B. for more than 4/5 hours and executed scores of documents in support of the transfer deed. Defendants have examined D.W.3, Mushtaq Ahmed Vohra (Exh.13) who was the chartered accountant of the company, D.W.4, Mr. A.K. Shamim, Advocate (Exh.14) who was Advocate of the company and the concerned Bank Manager. All of them have denied use of any coercion, misrepresentation or undue influence b), the defendant No.l. In cross examination of Muhammad Shari, it was admitted that the transfer deeds of shares were also executed in the said branch. There were certain shares belonging to the wives of the plaintiffs Nos. l and 2 and were to possession of their wives which were also brought . to the bank and their transfer documents were also signed. No, explanation was offered by the plaintiffs as to how these shares and. the transfer letters which were in possession of their wives were brought to the branch at the relevant time and date and were delivered to defendant No. 1 duly signed. If it was a case of getting execution of only one contract why were all these documents signed and no objection raised by the plaintiffs during all this period? Again, no explanation was offered as to how the two pay orders of Rs.3,33,333 each were credited in the accounts of the plaintiffs and were subsequently, withdrawn. All these facts led me to conclude that there was neither any element of coercion or duress nor undue influence when the agreement dated 31‑3‑1976 was executed. Accordingly, issue No. 1 is answered in negative. Issues Nos.2 and 3.

22. Burden was upon the plaintiffs to prove that the defendants Nos.2 to 7 were all minors at the time when the shares were purchased in their names. The only evidence on this point led by the plaintiffs is that on 31‑3‑1976 when they were executing transfer deeds and other documents; it was stated by D.W.a. Mr. A.K. Shamim, Advocate that the defendants Nos.2 to 7 are minors and that defendant No. l asked him to keep quiet as it was none of the business of that Advocate. It is to be seen that during cross‑examination it was admitted that earlier a company was formed by the wives of the plaintiffs alongwith defendant No.2, Tariq Rehman. In this background, it was suggested that if the defendant No.2 was minor how was a private limited company formed by the wives of the plaintiffs? It is admitted position that defendant No.4, Miss. Ghazala Rehman is elder sister of defendant No.2. Therefore, presumption arises that when defendant No.2 was major, she was also major being elder to defendant No.2. It was argued by Mr. Saeed A. Shaikh that there is no bar in law for entering into a contract by a father on behalf of his minor children for purchase of the property. It was argued that since shares of a private limited company is also property, a father would be competent to enter into contract on behalf of his minor children. Mr. Saeed A. Sheikh has referred to the following cases:‑‑ (i) Ashraf Ali v. Etim Ali and others PLD 1959 Dacca 625; (ii) . Mst. Amanat v Mahboob Hussain PLD 1959 (W.P.) Kar. 362; (iii) Muhammad Mursaleen v. Syed Noor Muhammad Hussain PLD 1968 Kar. 163.

23. In the case of Ashraf Ali (cited at serial No. l above), it was held by a learned Single Judge of erstwhile Dacca High Court while interpreting sections 10 and 11 of the Contract Act that it is enacted for the benefit and protection of the minors and cannot be made to operate against them. In the case of Mst. Amanat (cited at serial No. ii above), it was held by this Court that a minor is not incapable of being a transferee in a sale‑deed of an immovable property. This case was followed by another Judge of this Court in the case of Haji Noor Muhammad Jamote and another v. Osman and 3 others PLD 1993 Kar. 26 = NLR 1996 CLJ

148. Again, section 11 of the Contract Act was interpreted by this Court in Muhammad Mursaleen (cited at serial No.iii above) where it was held that a distinction is to be drawn between contracts made by minors and those made by their guardians oa their behalf for their benefit. It was further held that the purchase of property made for the benefit of a minor is not hit by section 11 and, therefore, a suit filed for injunction was maintainable. At the I same time a further distinction is to be drawn between an agreement executed by a minor himself and an agreement entered into on his behalf by his guardian/II partent for his benefit. If an agreement is executed by a minor himself, it will be a nullity in law and will not confer any right or title on the purchaser. (If reference is needed, see Abdur Rahman v. Abdul Haq and others PLD 1960 Kar. 625). This proposition of law was also considered by the other High Court. It was held by Peshawar High Court that an agreement entered into by the father on behalf of minors as their guardian for the benefit of such minors was fully enforceable in the Courts of law Muhammad Hussain v. Saleem Jan and others NLD 1995 Pesh,

982. A learned single Judge of Lahore High Court, Malik Muhammad Qayyum, J. in the case of Safdar Ali and 3 others v. Muhammad Malik and 4 others 1995 CLC 1751 considered several case law including the case of Mst. Amanat v. Mehboob Hussain (supra) and Ashraf Ali v. Etim Ali (supra) whereafter it was held that an agreement by a minor is void as provided II by section 11 of the Contract Act and that an agreement in favour of a minor is valid and binding. A distinction was drawn between an executed contract and executory contract. Following view was adopted by a Division Bench of Balochistan High Court in the case of Dr. Khalida Malik and 2 others v. Mst. Fareeda Malik and 7 others 1994 MLD 2348 at 2358:‑‑ "In the circumstances it is to be seen whether such agreement is void in view of section 11 of the Contract Act. As stated hereinabove the main object of this provisions appears to be to protect interest of the minors. Parties are the legal heirs of late Malik Karam Ellahi Khan, Advocate and every member of the family wanted to settle the dispute of property in an amicable manner, thus, they thought it proper to refer the matter to arbitrators appointed by each of the parties. We have found no element of fraud and forgery in the said agreement and the counsel failed to point out any mala fides on the part of the mothers of the minors to enter into agreement as against the interest of the minors. Learned counsel has also failed to point out that the minors' mothers have ever acted against their interest. Thus, our conscience is satisfied that the legal guardian entered into agreement on behalf of the minors bona fide so as to settle the dispute through arbitration by appointing arbitrators of their confidence. It is also not the case of the parties that the mothers of the minors as legal guardians have ever sold an inch of the property to anyone else or that they acted against the interest of the minors in any way. The object of section 11 of the Contract Act has, thus, been fully achieved..." In the instant case, the transfer agreement dated 31‑3‑1976 (Exh.5/69) was executed by all the defendants. In order to resolve these two issues, namely 2 and.3, first it is to be seen whether defendants Nos.2 to 7 were minors on the date of execution of Exh.5/69; secondly, whether that agreement was for the benefit and advantage of the minors containing any reciprocal promise; thirdly, whether defendants Nos.2 and 3 could have been appointed directors; and lastly, what will be the consequences of the lapse of time. In this connection, several documents were produced by the parties to prove and disprove minority of the defendants Nos.2 to

7. Exh.6/45 is the certificate issued by the Head Mistress, Government Girls Secondary School, Jacob Lines, Karachi which reflects the date of birth of Ghazala Rehman as 27‑10‑1958. Exh.6/46 which is a Certificate from the Principal of Public School Karachi Cantt. shows the dates of birth of Tariq Rehman as 2‑6‑1962, Habibur Rehman as 2‑4‑1967, Nighat Rehman as 2‑7‑1966 and Shgufta Rehman as 15‑4‑1969. Another Certificate which is a school leaving certificate of Ghazala Rehman (Exh.6/47) shows he; date of birth as 27‑10‑1958. According to Forms‑B, Exh.6/48 and Exh.6/49, Ghazala Rehman was born in 1958, Tariq Rehman in 1961, Gulnaz Rehman in 1963, Nighat Rehman in 1966, Habibur Rehman in 1967 and Shagufta Rehman in 1969. On the point of age factor, the plaintiffs have relied upon the evidence of P.W.3, namely, Sq. Leader Muhammad Islam (Exh.7) who brought the original services record of defendant No. 1 who had also served in Pakistan Air Force. He produced two documents as _Exh.7/1 and Exh.7/2. It was admitted by defendant No‑] during his cross‑examination that the defendants Nos.2 to 7 were born from his second marriage with Mst. Imtiaz Rehman and that the said marriage took place in the year 1955. According to the documents pertaining to the P.A.F. the date of birth of Ghazala Rehman is 21‑f‑1958 which in respect of Fxh.6/5 and Exh.6/47 relates to the same year. However, month is different. If the date of birth of Ghazala Rehman in reckoned from the P.A.F. record, it suggests that on 31‑3‑.1976 she was 17 years, 9 months and 10 days old. By that time she was a married woman. This being the situation, it appears that the defendants Nos.2. to 7 were below the age of 18 years on the day when the transfer deed was executed. According to the Age of Majority Act, 1875 read with Guardian and Wards Act, 1890, these defendants appear to be minors at the relevant time. Now, the consequence of entering into the agreement by the minors is to be seen in the surrounding circumstances of the case which I intend to discuss in the latter part of this judgment.

25. Plaintiffs have filed this suit against defendants Nos.2 to 7 through defendant No. l as guardian who is father of all the said defendants. C.M.A. 2519 of 1976 was filed by the plaintiffs under Order XXXII, Rule 3, C.P.C. which was granted on 24‑5‑1976 to the extent that the defendant No.l was appointed guardian ad litem of defendants Nos.3 and 5 to

7. Since the defendants disputed the age of defendant No.2 namely Tariq Rehman and defendant No.4 Miss. Ghazala Rehman, on that date no guardian was appointed and this matter was left for consideration on the next date of hearing. I have gone through the subsequent orders. Question of suing defendants Nos.2 and 4 through guardian ad litem was perhaps never re‑agitated before the Court. However, on 23‑5‑1977 while hearing the plaintiffs' application under Order XXXIX, Rules 1 and 2, C.P.C. following observations were made by a learned single Judge of this Court, Zafar Hussain Mirza, J. (as his lordship then was):‑‑ "So far as the first contention on behalf of the plaintiffs is concerned, Mr. Sharifuddin Pirzada submitted that a transaction of transfer of shares in favour of minors is not governed by ordinary rules regarding the capacity of minors to contract and referred to certain decision where such transfer has been held to be valid in law. Even otherwise, counsel contended, a transfer of property in favour of minor through his guardian has been held to be valid. In this connection he placed reliance on Subrahmanyam v. Subba Rao AIR 1948 PC 95 where in a case in which the mother of the Hindu minor entered into a contract for sale of immovable property belonging to the minor, on his behalf and was held to be one which it was within her competence as guardian to enter into and that the contract was for the benefit of the minor. In Dewansingh v Minerva Films AIR 1959 Punjab 106 it was held that there is no bar to a minor acquiring or holding shares in a joint stock company and where the shares of the minor are fully paid‑up and they are subject to no obligation the allotment of shares to the minor cannot be held to the void merely because of their minority. The Dacca High Court in Ashraf Ali v. Etim Ali PLD 1959 Dacca 625 observed that in an executed contract where the minor's part has been performed, such a contract is enforceable by a minor as it is the contract for the benefit of the minor and a dictum was laid down that such a contract in which the minor is a party cannot be enforced against the minor but that does not mean that the major party who had the knowledge of the minority of the minor contracting party, can be allowed to repudiate it. It was accordingly urged that no exception can be taken to the validity of the agreement of transfer on the ground that the beneficiary of the contract was minor. But the submission of Mr. Khalid Anwar was that defendants Nos.2 and 4 who are also minors cannot be appointed as directors. On behalf of the defendants, on the other hand, it was submitted that there is nothing in the Companies Act disqualifying a minor from being a director, as the disqualifications of the directors are expressly provided for in the Act. A great deal of controversy was raised, on facts over the question whether defendants Nos.2 and 4 are minor or not. The defendants contended that the parties had a sister‑concern known as Khawaja Autos Limited in which the wives of the plaintiffs were the subscribing member alongwith defendant No.2 and it was further asserted that defendant No.4 is the elder sister of defendant No.2 Conflicting documentary evidence was produced by the parties However, in my view the question whether defendants Nos.?. and 4 are minor or not, is not very material for the present purposes. It has been shown prima facie that there is no bar in law for minors to acquire shares in a company. The only relevance of the question of minority therefore, relates to the functioning of the aforesaid two defendants as directors. Apart from the submission that there is no bar in the Companies Act to appointment of minors as directors which question also requires fuller consideration so far as the plaintiffs are concerned if they fail to establish their case that they were deprived of their share holding through duress and coercion, they will obviously have no locus standi to question the appointment of these two directors. This is so because once their interest in the company is lawfully terminated they cannot question the functioning of the company as they would be strangers having no right to interfere in the management thereof." (Reported in PLD 1977 Kar. 814 at 817.)

26. I am in respectful agreement with the above observations of Justice Zafar Hussain Mirza that once the plaintiff fails to establish that the agreement in question was obtained under duress and coercion, they cannot challenge the appointment of defendants as directors or as shareholders as they have become strangers to the company. Even otherwise, Exh.5/69 was jointly signed by all the defendants. It could be treated that the defendant No.l who is father of the remaining defendants entered into the said agreement on behalf of the minors. It is not the case of the plaintiffs that the said agreement was contrary to the rights and interest of the minors. In fact the said minors acquired rights and benefits in the share‑holding of the company which was in the interest of said minors. These issues are answered accordingly. Issue No.4. ‑ .. 27. 1 have partly discussed this matter in paras. 6, 7 and 8 above to the extent of rights of the legal heirs of the plaintiffs to inherit directorship of the company. Therefore, so far as the directorship of the deceased plaintiffs is concerned, that cannot be inherited by their legal heirs‑ However. the plaintiffs are entitled to the inheritance upto the extent of the shares of the plaintiffs in the company provided they succeed in proving that the transfer of the shares took place under duress, coercion and through misrepresentation which I have already discussed hereinabove. The right of transfer of shares and other interest of a I deceased member of a company to his legal representative was protected by virtue of section 35 of Companies Act, 1913. In so far as merits of this case are concerned, it will be seen that all the transfer deeds were executed by the plaintiffs in the premises of the bank. They went upto the extent of bringing shares of their wives and other family members which were never in possession of the defendants and also delivered the same to the defendant No. l which were subsequently transferred in the name of defendants. I have already discussed the question of duress and coercion in the above paras. and I am of the view that it was plaintiffs' voluntary acts through which they have executed two agreements and also executed transfer deed. In such backdrop, this issue must be answered in negative. Issue No.5.

28. Answer to this issue is based on the findings on Issues Nos. l to 4 above. Since the execution of transfer deed was not found to be illegal and void, it cannot be said that all the transactions carried out by the defendants after 31‑3 1976 in their capacity as shareholder/directors are void. Plaintiffs have failed to discharge their burden in order to prove this issue. Accordingly, this issue is answered in negative. Issue No. 7

29. In their evidence, plaintiffs have categorically denied that they were paid anything as a result of execution of transfer deed (Exh.5/69). At the conclusion of his examination‑in‑chief, plaintiff No. 1, Sharif Khan, admitted, ""Apart from the amount of pay orders mentioned by me neither I nor the plaintiff No.2 was paid any other amount." Earlier, he admitted in his examination‑in‑chief that a pay order of Rs.3,33,333 was paid. to him and another of Rs.3,33,334 was paid to plaintiff No.2, Haji Abdul Rasheed. In cross‑examination, it was admitted by P. W.1, Sharif Khan, that the said pay order was deposited in his account by the Manager of the bank. He has admitted that chartered accountant, Mushtaq Ahmed Vohra and their company's Advocate Mr. A.K. Shamim were also present during the entire proceedings on the evening of 30‑3‑1976 at the M.C..B. Branch. The mode of payment of further amount as shown by the defendants was through three short notice deposit receipts (SNDRs) of the value of Rs.30,67,

667. As alleged by the defendants, these three SNDRs were converted into 6 SNDRs on the same night on the instructions of the plaintiff No.l in the name of Messrs Dost Muhammad, Qalandar Shah, Umer Khattab, Muhammad Hayat, Shah Wazir and Mir Nawab. This witness was shown a cheque, dated 30th March, 1976 for Rs.400,000 which was produced as Exh.5/85. He admitted that the same bears his signatures on the reverse in token of receiving the cash. It was stated by P.W.1 that the endorsement on the reverse was obtained by misrepresentation.

30. P. W.2, Haji Abdul Rasheed (Exh.6).also denied to have received his share of Rs.34 lacs from the defendants against the execution of the transfer deed. He has admitted to be present during the process of examination‑in‑chief and cross‑examination of P. W .1, Sharif Khan. This witness has admitted the fact of maintaining several accounts in his name and in the name of his children at the Muslim Commercial Bank, Rizvi Chambers Branch, Karachi. Earlier, this witness denied to have opened an account in the name of "A Rasheed" and the cheques confronted during his cross‑examination. Subsequently, he tendered his apology for making a false statement and admitted execution, of the document Exh.6/86 and Exh.6/87. He denied having opened three fictitious accounts with the Muslim Commercial Bank, Frere Road Branch. This witness was confronted with the four SNDRs which were made in favour of Najeeb, Tariq and Suleman. He has denied these SNDRs were converted into eight SNDRs at his instructions. He was confronted with a certified account of S.Q. Traders which he has earlier admitted to be his company which shows entries of Rs.10 lacs and 12 lacs on 3‑4‑1976. After confrontation, no explanation was offered by this witness as to how this huge amount was credited in the accounts of S.Q. Traders which was admittedly owned by his wife. This witness further admitted to have deposited a sum of Rs.8,50,000 in his account in United Bank. He was confronted with the cheques and pay orders Exh.6/1'75 and Exh.6/176. Again, no satisfactory reply was offered as to from where he obtained such huge amount and deposited in his personal account No.865 (Exh.6/177). He admitted to have withdrawn a sum of Rs.2,93,000 and Rs.300,340 on 8‑11‑1976. On the same day, he further withdrew an amount or Rs.2,64,446.81 from the accounts of S.Q. Traders but was not in a position to show as to from where this amount was deposited and how he earned all this amount. He admitted that his wife was illiterate and that he used to sign her cheques on her behalf and to conduct her business but still he denied to offer any explanation for such huge withdrawals on the ground that it is for the S.Q. Traders to explain.

31. Then there is evidence of D.W.2, namely, Muhammad Shoaib Qureshi who at the relevant time was the Manager of the M.C.B. Rizvi Chambers Branch, Karachi on the point of ‑the above issue pertaining to the payments. According to this witness, defendant No. l directed him to prepare two pay orders in the name of Haji Abdul Rasheed and Haji Sharif Khan. He further stated that defendant No. l gave him six short notice S.N.D.Rs. in the name of different persons with the direction to prepare four S.N.D.Rs. for Rs.10 lacs, one for Rs.10,66,666 and another for Rs.10,66,

667. According to this witness these S.N.D.Rs: were handed over to Mushtaq Ahmed Vohra and A.K. Shamim, Advocate for Haji Sharif Khan and Haji Abdul Rasheed. He further stated that the plaintiffs opened new accounts and deposited the pay orders and with further application forwarded him S.N.D.Rs. for conversion of the same in the names of their nominees. He admitted that the entire process of preparation of S.N.D.Rs., their encashment and other documentation took place in the bank branch during the night between 30th and 31st March, 1976. He admitted presence of plaintiffs, defendant No.l, Mr. A.K. Shamim, Advocate, Mushtaq Ahmed Vohra, chartered accountant and 4 other persons belonging to the said company. He further admitted that the entire staff of his branch numbering 17 to 20 was also present during the entire process. During his lengthy cross examination, he admitted to have filled in several bank documents on the relevant day. This witness was supported by D.W.8, Muhammad Iftikhar Hussain (Exh.18) who at the relevant time was posted in the said branch and had witnessed the entire transactions as claimed by the defendant No.

1. He supported the bank Manager in respect of preparation of S.N.D.Rs. He has deposed that the .said S.N.D.Rs. were encashed on the directions of the two plaintiffs whereafter fresh S.N.D.Rs. were made in different names which were handed over to the plaintiffs. This witness was not able to recall the names of those persons in whose name the said S.N.D.Rs. were prepared. The practice of late banking transactions which are done after banking hours is to be recorded as the transactions of the next date was also supported by this witness.

32. Mr. A.K. Shamim, Advocate was examined as D.W.4 (Exh.14). He claims to know both the plaintiffs for more than 13/14 years and that he was the legal advisor of the company. He supported the fact that on 30‑3‑1976 bidding took place and defendant No. l quoted the highest offer whereafter he was required to pay an amount of Rs.6S lacs to the plaintiffs. He also narrated in detail the transactions conducted in the evening of 30th March, 1976 within the premises of M.C.B, Rizvi Chambers, Karachi. He has also supported the fact of preparation of pay orders and S.N.D.Rs. at the branch and its delivery to the two plaintiffs. From the entire evidence, it is established that Mr. A.K. Shamim, Advocate and Mr. Mushtaq Ahmed Vohra, chartered accountant were present during the entire transactions of bidding and execution of agreements as well as payment of Rs.68 lacs to the plaintiffs. It is pertinent to note that both the plaintiffs . in their detailed examination‑in‑chief did not allege anything against these two persons in regard to coercion, misrepresentation and/or duress. Nothing was brought out from the cross‑examination in regard to their integrity and bias towards to plaintiffs. They remained associated with the plaintiffs and defendant No. l throughout the process of crisis in the company beginning from January, 1976 and ending on 31‑3‑1976. From their evidence, the transactions of bidding, execution of transfer deed and other documents as well as payments of Rs.68 lacs through different S.N.D.Rs. stands successfully proved. This fact, coupled with the fact that the defendants have subsequently encashed the said two pay orders and withdrew a huge amount from their private accounts for which no satisfactory explanation was offered, further strengthens the view that the agreed amount was paid at the M.C.B., Rizvi Chambers Branch, Karachi on the night in between 30‑3‑1976 and 31‑3‑1976. Therefore, this issue is answered in affirmative. Issue No. 8

33. If it would have been a case of coercion, duress or misrepresentation on the part of defendant No. l then equally the Bank Manager, other staff members of M.C.B., Rizvi Chambers Branch, Karachi; Mushtaq Vohra and A.K. Shamim, Advocate were also to be held responsible for such acts as without them the alleged acts of coercion, duress and misrepresentation were not possible. Why no action was taken against the bank staff by the plaintiffs? No attempt was made by the plaintiffs to answer this question. Allegations of obtaining signatures of the plaintiffs on the reverse of the pay orders and encashment of S.N.D.Rs. without involvement of cash payment were offences fully covered by the provisions of Pakistan Penal Code. (In the year 1984, a special law titled 'Offences in Respect of Banks (Special Courts) Ordinance, 1984 was enacted). Even no complaint was made to the high officials of the M.C.B. for the alleged role of the bank staff. Why no complaint was lodged with the Sindh Bar Council on the conduct of the Company's Advocate, Mr. A.K. Shamim? Why no complaint was made to the professional body of the Chartered Accountants for the alleged conduct of Mr. Mushtaq Vohra. There was no satisfactory explanation on all these questions from the plaintiffs' side. From the conduct of the plaintiffs. it proves that filing of this suit was a result of an afterthought. This observation is fully supported by the admission of P.W.1 Haji Muhammad Sharif who stated that after 2/3 days of the alleged date of incident (30th March, 1976) he conveyed all the acts of defendant No. 1 to one of his friend who advised him to file this suit as it was a civil matter. Only on such advice, the plaintiff No. 1, approached one Advocate who filed the instant suit. Till meeting with his friend the plaintiff was not sure of the coercion, duress or misrepresentation allegedly committed by the defendant No. 1.

34. In view of the above discussion and for the reason that the transaction of sale and transfer of shares was proved to be genuine and bona fide, I am of . the considered view that now the plaintiffs are estopped from questioning the same. Issue No. 13.

35. This issue deals with the reliefs as prayed by the plaintiffs. After going through the deposition of witnesses which comprises of more than 400 pages and the documents brought on record which again comprise more than 200 in number, I am of the considered view that the plaintiffs were not able to prove the case of duress, coercion and misrepresentation in execution of the agreement (Exh.5/69) as well as non‑payment of consideration. The fact that defendants Nos.2 to 7 were minors on the relevant day would not entitle them for grant of relief prayed for. Accordingly, the plaintiffs are not entitled for relief prayed in the suit which is dismissed with no order as to costs. Q.M.H./M.A.K./S‑246/K Suit dismissed.