P L D 1957 (W (PLP)

WAHIDUDDIN, J.

This petition is directed against the order of the learned Chief Judge, Small Causes Court, Karachi, dated 14th October 1953, resulting in an ex-parse decree. Briefly the facts leading to the present application are that on 17th December 1952 the opponent entered into an agreement with the petitioners' company for the purchase of 1450 yards of Fuji Silk at 44 per yard. The goods were to be shipped in December 1953, and an irrevocable letter of credit was to be opened in favour of the applicant-company at Osaka, Japan. According to the opponent the goods supplied by the applicant-company were of inferior quality, and they suffered a loss of Rs. 2,000, being the difference in the value of the goods supplied with the price paid by them. The suit was filed at Karachi and the applicant company was served through their Manager, Mr I. H. Nomura, on 13th October 1953. Mr. Nomura made an application on 14th October 1953 on the allegations that the defendants were a foreign company, they have neither any office at Karachi nor they are carrying on any business there, that he is not the Principal Officer and service of the sommonses on him cannot be treated as service on the defendant company. It was therefore prayed that the service of the summonses be effected on the applicant com pany at their official place of business, namely at Osaka, Japan. The learned Chief Judge, Small Causes Court, after hearing the parties, passed the following order on 14th October 1953 :- "Heard parties. This application is not supported by an affidavit. A letter dated 20th May 1953 from the defen dants addressed to the plaintiffs shows that they have an office at Karachi. Rejected." On the same date, the learned Chief Judge, Small Causes Court passed another order which reads as under :- "Plaintiff by Mr. Costellino. Defendants served called absent. Mr. Suleman states he has no instructions. Decree ex-parse as prayed." Against these orders, the applicant company has filed the present revision application and it is alleged that the service of summons in the above-mentioned matter is bad inter alia on the grounds that Mr. I. II. Nomura has no authority to receive summons on behalf of the defendant company, that he is neither a Director nor a Secretary not holding any power of attorney on behalf of the company, and he is also not the other principal officer within the meaning of Order XXIX, rule 2, Civil P. C. It is further urged that the learned judge below did not apply his mind to the facts of this case and his order "decree. ex-parte as prayed" did not comply with the provisions of Order IX, rule 6 and the decree, therefore, should be set aside. During the course of the arguments, it was also contended by the learned counsel for the applicant, that in this case the summons was served on Mr. Nomura on 13th October 1953 and the hearing was fixed for 14th October 1953. There was very little time for Mr. Nomura to get instructions from the Head Office, and therefore, he could not properly conduct the case even if the service on him is held good. It was, therefore, urged that the ex-parte decree passed by -he learned Chief Judge, Small Causes Court, has resulted in grave injustice and should be set aside. The first question for consideration in this case is whether the service on Mr. Nomura is good or bad. Accord ing to Order XXIX, rule 2, Civil P. C., where the suit is against a corporation, the summons may be served on the Secretary or any Director or other principal officer of the Corporation. Mr. Aziz, the learned counsel for the applicant, has contended that Order XXIX, rule 2 is not applicable to foreign corporations. He has further contended that Mr. H. Nomura was neither the Secretary nor the Director nor other principal officer of the applicant corporation. In support of these contentions he has relied on the affidavit of Mr. Nomura filed in this Court. The following statement appears from this affidavit :- "(1) I am the Chief Canvasser of the applicant-defendant company at Karachi. (2) The registered office of the applicant-defendant company is at No. 1-25, 5 Chome, Mina mi-Kyutaro-Ma chi Higashi-Ku Osaka, Japan. (3) The applicant defendant company does not carry on its business at Karachi, but does maintain an office here. Neither any Director nor principal officer of the company resides at Karachi. I am in charge of and manage the Karachi Office. This office at Karachi has no authority to conclude any transaction on behalf of defendant company nor any power to bind the Company to any commitment whatever. This office at Karachi has been established with twofold objects one to keep the company at home well posted with the commercial information of the Karachi market, the market demand and day to day market position, and the other to introduce the defendant company in Karachi market, and to familiarise the products it offers for sale. This office acts simply as a post office ; it passes on to the home office any enquiry received and conveys the reply when it comes from Japan to the local merchants. If any offer for purchase is made, it is simply transmitted to the home office of the company in Japan ; it is officers of the home office who are competent to offer or accept terms and it is they who conclude business - and bind the company to commitments. All moneys are received and disbursed by the home office of the company. The applicant `com pany has not so far opened any bank account at Karachi nor maintains any. (4) . . . (sic) (5) I hold no general nor any special power of attorney on behalf of the defendant company and I have no authority to receive summons issued against the defendant company. I am neither a director, nor secretary nor an officer of the defendant company. Neither any director, nor the secretary nor any officer of the defendant company resides here at Karachi . . . . . ." These allegations in the affidavit have not been con troverted by the other side and, therefore, the facts must be taken as correct. During the course of the hearing, I inquired from Mr. Costellino and he also did not controvert the statement made by the applicant-company in the above mentioned affidavit. Order XXIX, rule 2, Civil P. C. reads as under :- "Subject to any statutory provision regulating service of process, where the suit is against a corporation, the summons may be served. (a) On the secretary, or on any director, or other principal officer of the corporation, or (b) by leaving it or sending it by post addressed to the corporation at the registered office, or if there is no registered office, then at the place where the corporation carries on business." It is too late in the day- to contend that Order XXIX rule

2. Civil P. C. does not apply to foreign corporations. Ordinarily a foreign corporation is expected to comply with the provisions of section 277, Indian Companies Act. This was not done and therefore this case shall have to be considered under the provisions of the Civil P. C. Section 20 Explanation 2, Civil P. C. reads as under :- "A corporation shall be deemed to carry on business at its sole or principal office in British India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place." It is admitted by the applicant that they have their branch office at Karachi and, therefore under this Explanation the applicant-corporation shall be deemed to carry on business at the place where it has also a subordinate office. Mr. Costellino has invited my attention to a case in The Peoples Insurance Co. Ltd. v. Benoy Bhusan Bhowmik and others (47 C W N 292). The learned judges of the Calcutta High Court in that case held that the cause of action arose within the jurisdiction of the Dacca Courts where the company had a branch office also. The suit could be instituted under Explanation 2 to section 20, Civil P. C. the learned Judges further observed :- "But the language of the explanation is perfectly clear and once it is established that a corporation has got a branch office at any place it shall be deemed in the eye of law to carry on its business at that place irrespective of the nature of the work that is actually carried on there." They also relied on the observations of their Lordships of the Privy Council in the case of Commissioner of Income Tax Bombay Residency v. Bombay Trust Corporation Ltd. (57 I A 49 at p. 55): "When a person is `deemed to be, something, the only meaning possible is that whereas he is not in reality that something the Act of Parliament requires him to be treated as if he were." These observations are also applicable to the facts of the present case and in my opinion the applicant-corporation will be deemed to be carrying on business at Karachi as they have a branch office in this city. This, however, does not solve the question. Under Order XXIX, rule 2 (a) service on a corporation unless otherwise provided by statutory provision can be effected only on the secretary or any director, or other principal officer of the corporation. The question, therefore, is whether Mr. Nomura, on the allegation made in the affidavit, can be considered to be other principal officer of the corporation, for purposes of effecting service on the applicant -corporation. It is admitted by the counsel for the parties that Order XXIX, rule 2, Civil P. C. is based on Order IX rule 8 of the English practice and the decision of the English Courts will be of much assistance, for the decision of this case. Mr. Aziz, the learned counsel for the applicant, has relied on Mackereth v. The Glasgow and South Western Railway Company (28 L T R 167). He has also relied on the case of Golding v. The Order of La Sainte Union Des Sacrees Coeurs (67 L T 605). But the facts of these cases are distinguishable. In the first case the railway company had a booking office in England and one of their clerks used to issue tickets for their railway. The learned judges in that case came to the conclusion that he was not the principal officer or head officer or secretary of the railway company and, therefore, the service on him cannot be taken as proper. In the other case, the Mother Superior was served on behalf of the Order of La Sainte Union Des Sacrees Coeurs and the learned judges came to the conclusion that service on Mother Superior cannot be taken as service on the Sacred Order. The principal enunciated in these authorities is that the person who is served should not be a clerk or a ministerial officer and must have some share or authority in the conduct of the business or office of the company. Mr. Castellino in support of his contention has relied on Newby v. Von Oppen (7 Q B 293) and Haggin v. Comptoir D'Escompte De Paris (23 Q B 519). The leading case on the subject, however, is Newby's case reported in 7 Q B

293. This authority has been followed in English Courts and the principle of law laid down therein is that service of a writ of summons on the head officer of an English branch of a foreign corporation carrying on business in England is good service, and it is not necessary to serve the process on the officer at the head office abroad. Blackburn, J. observed at page 295-6 :- " The other and more difficult question is, whether the corporation has been properly served, supposing them to be suable. It was argued that the American corporation was resident in America, and must be served, if at all, as a foreigner resident out of the jurisdiction, subject to the difficulties which are pointed out in Ingate v. Austrian " Lloyd's Co. (4CB (NS)704 :27LJ(CP)323) This would be so, if the foreign company had merely employed an agent here, who made a contract for them ; but we think it is different where the foreign corporation actually has a place of business and trades in this country. This is a point of very considerable practical importance. There are already several Scotch banking corporations that have established branches in London. We see, from this case, that there is at least one American Corporation that has set up a branch business here, and there will probably soon be more such a corporation does, for many purposes, reside both in England and in its own country. In the case of Carron Iron Co. v. Maclaren, (5 H LC at p.459) Lord St. Leonards, taking a different view of the facts from that taken by Lords Brougham and Cranworth, thought the Scotch Corporation was resident in England. We think that there is great good sense in what Lord St. Leonards states to be the law on his view of the facts. He says: ' If the service on the agent is right, it is because, in respect of their house of business in England, they have a domicile in England ; and, in respect of their manufactory in Scotland, they have a domicile there. There may be two domiciles and two jurisdictions ; and in this case there are, as I conceive, two domiciles and a double sort of jurisdiction, one in Scotland and one in England ; and for the purpose of carrying on their business one is just as much the domicile of the corporation as the other'. The majority of the Lords took a different view of the facts, and thought that, though the corporation possessed property in England, and had agents there, they did not carry on business there ; but we do not find that they differed from Lord St. Leonard's view of the law if they had agreed as to his facts ; and in the present case the fact is clear that the American company are carrying on trade themselves in London, and therefore, we think, must be treated as resident there. One more point has to be noticed. At common law the service of a writ on a corporation aggregate, which from the nature of the body could not be personal' was by serving it on a proper officer, so as to secure that it came to the knowledge of the corporation, and then proceeding by distress ; see 1 Tidd's Practice, p. 121, Ed. of 1828. The 2 Win. 4, c. 39, ss. 13 and 15 and 16 Vict. c. 76, s. 16, in fact only re-enact the old law as to what should be service on a corporation. The clerk or officer must be in the nature of a head officer, whose knowledge would be that of the corporation. We think that, when once it is established that the corporation is to be treated as resident in England, the proper officer is the officer of the English branch, and that it is not necessary to serve the process on the officer at the head office abroad ". In 23 Q. B. D. 519, it was held :- " A foreign corporation carrying on business in this country is liable to be sued in an English Court, and may be served in the same manner as an English corpo ration aggregate. Therefore service of a writ of summons on the head officer at the place of business in England of such a foreign corporation is good service under Order IX, rule 8". The writ in this case was served on the Manager of the defendant's branch officer at London. The corporation was established by French law having its chief place of business for carrying on its banking and other operations in Paris. It had established a. branch office on which their name had appeared and in London the same name was printed. The persons who represented the corporation in London certainly carried on the principal part of the business as banking. 1n this case, however, the foreign company was carrying on banking business in London and, therefore, this is not of much assistance on the facts of the present case. Mr. Castellino has also relied on a case in Bundi Portland Cement Ltd. v. Abdul Hussain Essali (1936 Bom. 418). In that case the plaintiff, a foreign company filed a suit and it was verified by a person who was not actually the principal officer of the company. On behalf of the defendant it was contended that under Order XXIX, rule 1 Civil P. C. the plaint must be verified by the principal officer. The learned judge dealing with that case, however, decided that any person acting in place of the Secretary in the foreign company should be treated as a de facto principal officer and the verification made by him must be treated as the one on behalf of the principal officer of the foreign company. I have also considered several other authorities on this point, namely :- (1) Dunlop Pneumatric Tyres Co. Ltd., v. Actien Gesellschaft Fur Motor Und Motorfahrzeughau Vorm Cedell & Co. ((1902) 1 K B p. 342) (2) Saccharin Corporation Ltd. v. Chemische Fabric Von Heyden Aktiengesellshaft, ((1911) 2 K B p. 516) and (3) Actiesselskabet Dampskib " Hercules " v. Grand Trunk Pacific Railway Company, ((1912) 1 K B 222) and in almost all these cases it was held that the defendants were carrying on their business at the agent's office so as to be resident at a place within the jurisdiction, and that the agent could, therefore, be properly served with a writ there, as the ' head officer ' of the defendants within Order 1X, rule 8 in an action brought by the plaintiffs against the defendants for breach of an agreement. In (1902) 1 K B 342, the defendants, a foreign corpo ration, who were manufacturers of motor-cars abroad, hired a ' stand ' at the Crystal Palace for the exhibition of articles of their manufacture at a cycle show, and exhibited at the show which lasted for nine days, among other articles, a motor-car fitted with tyres, which were alleged by the plaintiffs to be an infringement of their patent. The defendant's "stand " was incharge of a person employed by them as their representative, whose duty it was to explain the working of the articles exhibited, and to take orders for and press the sale of the defendants goods. On these facts the learned judges of the Appellate Court held that, during the continuance of the show, the defendants were carrying on business so as to be resident at a place within the jurisdiction, and therefore, could be served there with a writ in an action by the plaintiffs for infringement of their patent under Order IX, rule

8. In my opinion, on the facts of the present case it is abundantly clear that Mr. I. H. Nomura admittedly was in charge and managed the. Karachi office of the applicantD company. It may be that according to the terms of his appointment he was not entitled to enter into agreements of sale or purchase on behalf of the parent company, but certainly lie was entitled to take on hire the premises, on which the applicant company was having its office and was entitled to do other business for example, to introduce the applicant-company in the Karachi markets and to familiarise the products and offer them for sale. In determining whether a foreign corporation can be served in Pakistan under Order XXIX, rule 2, the only requirements are that there is a branch office and some sore of business, irrespective of its nature, is carried on in such office. If these two requirements are fulfilled then the service on the person in charge of such office will be a service on the other principal officer of such company. There is not a shadow of doubt that the applicant-company was carrying on business at Karachi and Mr. I. H. Nomura was in charge of this office. The contention that he had no authority to accept summons or the scope of the authority was very C limited, is not at all material tot- purpose of service under the provisions of law The Learned Chief Judge, Small Causes Court was, therefore; perfectly right in treating the service on aim as good and in proceeding ex-parte against the applicant-company. The other contention of, the learned counsel for the applicant that the learned Chief Judge, Small Causes Court, should have given the applicant time to defend the suit is also without foundation, because no such prayer was made p by the counsel appearing for the defendant and the learned Judge could not himself adjourn the case to provide an opportunity to the applicant-company to contest the case. There is great force in the contention raised by the learned counsel for the applicant-company that the order of the learned Chief Judge. Small Causes Court, reproduced above, is in utter disregard of the provisions of Order IX, rule 6 and Order XX, rule 4, Civil C. P. The learned Chief Judge should have applied his mind to the facts of the case, considered the evidence produced before him and held that the case against the applicant has been prima facie proved. There is no indication on the record that` the case under consideration was approached in this manner. It is the duty of a Court when ex parte proceedings are: taken to consider the interest of the absent defendant and therefore, there should have been some indication on then record to satisfy this Court that the matter was property con sidered and the learned judge who dealt with the case applied his mind to the facts of the case. It was contended that the learned Judge below was dealing with a matter on the Small Causes Court side and, therefore, it was not at all necessary for him to write a judgment or to indicate that he has considered the facts of the case and the case against the applicant-company was sufficiently proved. This argument on the face of it is falacious because Order IX, rule 6 and Order XX, rule 4, Civil P. C. are also applicable to Small Causes suits and to proceedings decided ex parte. There was no justification for the learned Chief judge in ignoring the above-mentioned provisions of law. In my opinion in this case the question involved was whether the opponent has suffered any, damages on account of breach of the contract committed by the applicant. The learned Chief Judge should have at least some evidence before him to show that the defendant-applicant suffered damages on account of the breach. The mere statement of the plaintiff that his claim is correct cannot prove the fact that damages were suffered by him. In my opinion the evidence adduced in this case was wholly insufficient to justify the decree passed in his favour. The learned Chief Judge, Small Causes Court, obviously thought that in ex pane proceedings that much of caution is not necessary as in contested suits. This is not a correct view and if there is any such im pression in the mind of the Subordinate Courts then it should no longer remain. I may add that in ex parte pro ceedings an elaborate judgment is not necessary, but it must indicate that the points for determination were considered and thereafter the decree was passed. In Amrit Nath v. Roy Dhumput (15 W R 503) it was observed :- " Irrespective however of this consideration every Judge in dealing with an ex parte case should take good care to see that the plaintiff's case is at least prima facie good ". In Deo Nandan v. Janki Singh (44 573 (P C)) their Lordships of the Privy Council observed :- " But their Lordships wish it to be distinctly under stood that where an appeal is heard ex parte it is the duty of the counsel to bring to the notice of the Board adverse as well as favourable authorities ". There is no doubt in my mind that the order of the learned Chief Judge, Small Causes Court '' Ex parte decree as prayed " is in utter disregard of the provisions of law. It was passed in haste. It is an incomplete and erroneous judgment. Under section 32 of the Karachi Small Cause Court Act the power of revision vested in this Court is very, wide and if this Court is satisfied that substantial justice has not been done in a particular case, then the judgment of the Chief Judge, Small Causes Court can be set aside. On the facts of the present case I am clearly of the opinion that the learned Chief Judge did not act in accordance with law and this has resulted in miscarriage of justice. The decree of the learned Chief Judge, Small Causes Court, is therefore set aside and the case is remanded for re-trial on merits. The money deposited by the applicant in pursuance of the order of this Court in the Court of Small Causes, Karachi, will remain deposited and will be subject to the decision arrived at by the lower Court. In the circumstances of this case, I will order the applicant to bear the cost of this application. A. H. Application accepted