P L D 1984 Lahore 411 (PLP)

Maid Ali Khan for Kh. Muhammad Farooq for Respondents Nos. 1 and

2. Nemo for Respondents Nos. 3 and

4. Muhammad Hussain Naqashbandi for Respondent No.

5. Date of hearing : 18th March, 1984. Mst. Sadiqa Begum, and her minor son, namely, Muhammad Younus, brought a suit against respondents Nos. 3 and 4 for recovery of damages. It was decreed for Rs. 41,

760. Out of the decretal amount a sum of Rs. 20,000 was to be paid to the decree‑holder by the Pakistan General Insurance Company Ltd., arrayed herein as respondent No.

5. For the recovery of balance amount on the decree holder's move, the learned executing Court proceeded to attach some personal assets of the petitioner. However, before the actual attachment, he filed an application to the effect that his personal property could not be proceeded against for execution of the decree against Messrs Nusrat Transport Company Ltd. i.e. respondent No.

4. This application was dismissed in default on 1‑4‑1976.

2. The petitioner then instituted another similar application contending that he was not a party to the suit or possessed of any property of the Company and that, therefore, the decree passed against the latter could not be executed by attachment and sale of his personal assets. The learned execu ting Court by its order dated 10‑12‑1976, disallowed the application primarily on two grounds; firstly, that due to the dismissal of the first application the second one was not maintainable and secondly, the Company was sued through the petitioner. In the opinion of the Court; the petitioner's assertion that he did not hold any assets of the Company, was immaterial, because the decree having been passed against him he was bound by it. The fact that the petitioner gave out that he held some fully paid up shares of the Company, was, considered as another factor, for saddling him with the liability. The order dated 10‑12‑1976 is under challenge in this petition.

3. I have heard the learned counsel for the parties and examined the available record. It is argued on behalf of the petitioner that as the property had not been put under attachment by then, both the applications were made under section 151, and not under Order XXI, rule 58, C. P. C. In the sub mission of his learned counsel, the latter provision would be attracted only if the property was actually attached but that stage bad not reached; there being no express provision in the Code, to meet the requirement of the case, the inherent power of the Court under section 151, C. P. C., was rightly invoked. It was added, that the application under section 151, C. P. C. being not akin to a suit, its dismissal in default did not fall within the mischief of Order IX, rule 9, C. P. C., to bar the institution of a fresh application, on the same cause of action.

4. There is some substance in this contention. Since there was no attachment, the proceedings under Order XXI, rule 58, C. P. C. could not be initiated. Obviously, Order IX, rule 9, C. P. C. apples to the suits and not to the applications. If this provision is held to be not applicable then the principle of constructive resjudicata, is the other possible ground to render the second application as incompetent. In this respect, it is noteworthy that on the first application admittedly there was no adjudication on merits. Thus, the bar to reopen the matter, anchored on the doctrine of con structive res judicata, also would not be attracted. The dismissal in default of the first application, therefore, did not preclude the petitioner to bring a fresh one. The decision of the learned executing Court in this behalf is erroneous and cannot be upheld.

5. It remains to be seen as to whether or not an application in the nature of an objection petition in anticipation of the attachment order, is maintainable? The learned executing Court has not adverted to this aspect of the case and also this point has not been debated before me. The issue is, therefore, left open for consideration by the learned executing Court. Next comes the question of immunity of the petitioner's personal property from being proceeded against for execution of the decree and whether he himself is the judgment‑debtor. Dealing first, with the last limb of this question, I find that in the plaint defendant No. 2 has been described as "The Nusrat Transport Company, Ltd., Lyallpur, through its Director Incharge Malik Muhammad Anwar Tiwana". It is manifest from its name, that Nusrat Transport Company is a corporate body and thus, a legal personality. In view of the provisions of Order XXIX, rule 1, C. P. C. it had to be sued in its corporate name. In the plaint, while describing defendant No. 2, the addition of words "through its Director Incharge Malik Muhammad Anwar Tiwana" is merely an act of supererogation and on account of such description alone, the petitioner who himself was not the party to the suis, cannot be clothed with the status of a judgment, debtor. 6‑A. Sardar Sami Hayat, is not wrong in contending that the respondent. Company and its office‑bearers or for that matter the share holders of the Company, are altogether separate entities. It can hardly be denied that the shareholders are constituents of a Company who manage its affairs through the Directors, in accordance with its Articles of Association, but the assets of the Company are owned by it and not by the Directors. I had the occasion to examine this point in Tariq Saeed Sehgal v. District Excise and Taxation Officer, Rawalpindi (1982 C L C 2387), and maintained that the Directors of a Company, are not liable for its debts, except to the extent and in the manner, provided under the Statute. There is, thus, no doubt that petitioner's personal assets cannot be appropriated for the recovery of the debt due from the Company.

7. It is to be noticed that eversince Lord Machnaugton's classic observation in the well‑known case of Solmon v. Solmon (1897 A C 22), to the effect, "that the company is at law a different person altogether from the subscribers to the memorandum." much has been said on the corporate character and the Courts have chosen to draw a distinction between the corporate status of a public limited Company and that of a private limited Company. In a number of judicial pronouncements, the latter, not unoften has been described as a family concern having the attributes of a partnership, but bearing the mark of a corporate character. Authorities are not lacking that if the facts of a case so demand, the Court can pierce the veil and determine the real character of incorporation. A reference in this connection may be made to the President of Pakistan v. Mr. Justice Shaakat Ali (P L D 1971 S C 585) and Lilawati v. Anwarul Islam (P L D 1971 Kar. 25).) It is not known as to what is the real nature of the respondent‑Company. The decision of this question would necessitate recording of some evidence. The conclusion emanating from the foregoing discussion, however, is that only that property would be liable to be attached in execution of the decree which is shown to be belonging to the Company, and lying in the hands of the petitioner, or that the Company is found to be merely carrying a label of corporate personality to hood wink its creditors. 7‑A. This revision petition is, therefore, accepted and the impugned order set aside. The petitioner's application under section 151, C. P. C. shall be treated as pending and disposed of afresh by the executing Court in the light of the forgoing observations. The parties are left to bear their own costs. M. Z. M. Revision accepted.