1997 PLP 1921 (CLC)

Badar Alam for Respondent. This Judicial Miscellaneous was filed 'under the provisions of section 152 read with section 290 of the Companies Ordinance, 1984 (hereinafter called the Ordinance) with a prayer for rectification in the Register of Members in relation to the names of respondents/Directors from serial Nos. 1 to 5 mentioned in the prayer clause on the averments that the petitioner had acquired share holding of these respondents for valuable consideration with the result that they are no longer members/ Directors of the company. Besides decisions taken in alleged meetings held on 2‑3‑1984 and 27‑4‑1984 were sought to be adjudged fraudulent and illegal.

2. Petition was resisted on behalf of the respondents who denied the sale of share holding inasmuch as amongst the so‑called transferors, seven of them were minors whose share could not have been lawfully transferred. The case of the petitioner is that he had offered to purchase the entire shareholdings of the company which has duly considered by its Board of Directors at its meeting held on 27‑I 1‑1981 and was unanimously accepted by the Board. At the next meeting of the company held on 29‑1‑1982, it was finally resolved to transfer the company with all its assests and liabilities including 4208 shares held by its 17 members to the petitioner pursuant to which an agreement dated 21‑3‑1982 was executed between the parties. The petitioner was then nominated as Managing Director w.e.f. 28‑3‑1982 in place of Muhammad Qaiser S. Faruqui who ceased to be the Managing Director from the said date. By another resolution, petitioner was inter alia given all the powers. It is further the case of petitioner that on 25‑2‑1984 one Muhammad Shakeel Faruqi, Chairman/President of the Company had died and in his place Alhaj Saeed was elected as Chairman of the company but despite definite commitments, record of the company was not handed over to him and the newly elected Chairman of the Company but Qaiser S. Faruqi started a campaign of non‑cooperation and harassment against the petitioner and his position as Managing Director of the company was also disputed. It was alleged that latter had formed a parallel Board of Directors consisting of members who had already sold their shares to the petitioner. While holding himself out as Managing Director he started convening meetings of the company at the back of the petitioner. Subsequently, however, on receipt of a notice from the Deputy Registrar, Joint Stock Companies an extraordinary general meeting was convened on 25‑7‑1984 in which the said Qaiser S.. Faruqi was removed from Directorship with immediate effect.

3. Petition was resisted by the respondents who denied various allegations in the counter‑affidavit. It was denied that on 9‑5‑1980 deceased mother of respondent Muhammad Qaiser Shakil Faruqi and his brother Muhammad Sohail Faruqi were present at the meeting of the Board of Directors or that any one of the respondents had signed any minutes or resolution as alleged. It was pointed out that on 21‑3‑1983 when. the alleged agreement of transfer of shares was made, seven share‑holders of the company were minors and their shares could not have been lawfully transferred through the alleged agreement. With regard to the power of attorney upon which deceased Muhammad Shaikh Faruqi had purportedly acted, the same had been cancelled by him, his deceased mother, his brothers and sisters vide letter dated 20‑7‑1982 jointly written by them. Alleged transfer of shares was termed as unlawful, void and of no legal effect and no payment whatsoever had been ever received by any of the share‑holders. Consequently according to the respondents they were legally entitled to file returns and resolution of the company with the Deputy Registrar, Joint Stock Companies and the petitioner was without any locus standi.

4. In the first round of litigation after taking into consideration the documents on record and contentions raised by the parties, a learned Single Judge of the Court by judgment dated 16‑3‑1992 allowed the petition in relation to the relief under section 152 of the Ordinance but he held that section 290 of the Ordinance was not attracted to the circumstances of the case. This judgment was assailed in High Court Appeal No.44 of 1992 which was heard on 12‑4‑1994 and allowed. The petition was accordingly remanded for a fresh decision on merits.

5. After the remand, the petition came up for hearing from tithe to time and after hearing final arguments judgment was reserved to be announced on 25‑5-1995 when on 23‑5‑1995 learned counsel for the petitioner moved Civil Miscellaneous Application No,1349 of 1996 under order XX'III, rule 1, C.P.C seeking to withdraw the petition on the averments of technical defect in the petition and the fact that a civil suit on the same cause of action had been filed by the petitioner. However, without notice to respondents, learned Single Judge allowed this application and dismissed the petition as withdrawn. Respondents, therefore, challenged this order in High Court Appeal No. 114 of 1995 which was heard by a Division Bench on 10‑1‑1996 whereupon this order was set aside and by consent of the parties matter remanded to the Single Judge for examining the present Civil Miscellaneous Application and a decision after hearing both sides.

6. While Mr. I.H.. Zaidi, learned counsel for the petitioner is of the view that it is absolute right of the petitioner to seek withdrawal of the petition at any stage before the final judgment in view of the observation of the learned Single Judge in the order dated 24‑4‑1995 that as the names of the respondents did not appear in Register of Members of the company, the question of rectification of their names would hardly arise, Mr. Badar Alam learned advocate for the respondents is of the considered opinion that intended withdrawal of the petition after passage of more than eight years is patently mala fide as it has prejudiced the rights of the respondents who were advised by the Registrar, Joint Stock Companies that since matter was sub-judice before the High Court of Sindh he was not in a position to ascertain the exact position of the share‑holders and the other matters as claimed by both the parties.

7. Learned counsel for respondents referred to letter, dated 21st October, 1984 froth the Registrar, Joint Stock Companies informing Qaiser Shakeel Faruqi that the documents filed by both the opposite parties had been kept on record unregistered till the decision by the Court. Grievance of the learned counsel essentially is that as the petitioner brought this petition before this Court here was no occasion for the respondents to raise this dispute before this Court for final‑ determination of shareholders/Directors of the company. He urged that by abrupt and uncalled for withdrawal of the petition controversy would remain unsettled despite a lapse of more then ten years. On factual aspects learned counsel submitted that since the relief under section 152 of the Ordinance was held to be maintainable in this petition and the respondents have denied the transfer of shares in favour of the petitioner, rights and obligations of the parties must be allowed to be adjudicated by this Court. Additionally it is claimed that the names of the respondents as shareholders/members of the company do appear in the Register of Members and it is completely wrong to say that their names do not appear in the said Register or that the question of rectification does not arise in the circumstances.

8. On a careful analysis of the circumstances of the case and the proceedings before the Court during last eight years prior to the application for withdrawal of the petition, I am of the considered view that a right to pursue their remedy had accrued to the respondents after the filing of the petition which cannot be lightly taken away under the garb of a right to seek withdrawal of the petition at the option of the petitioner. Had this petition not been filed, the respondents would have approached the Court for determination of their rights by impugning the claim of alleged transfer of shareholding in the company as asserted by the petitioner. It was necessary for the reason that both the rival groups had furnished annual returns and statements to the Registrar of the companies who did not register either of the returns for the reason that a dispute as to the shareholding was pending before this Court. The act of filing suit No.367/95 on the original side of the Court even before a withdrawal of the petitions is another factor which is sufficient to raise an inference that withdrawal of petition at this belated stage is either genuine nor in good faith. At the moment it is not possible to support the view that the petition is likely to fall on account of technical defect which right to have been noticed earlier.

9. As to the proposition in law whether withdrawal of a petition without seeking permission to file a fresh petition can be disallowed by this Court, learned counsel for the respondents has referred to a judgment of Division Bench of this Court in Riaz Malik v. Mrs. Amina Parekh etc. (PLD 1988 Kar. 560). No doubt permission to withdraw the suit unconditionally was declined in the said case, the facts of the case are entirely distinguishable. I am, however fortified in my view by a recent judgment of the Hon'ble Supreme Court of Pakistan in Javed Iqbal Abbasi‑ & Co. v. Province of Punjab (1996 SCMR 1433), in which the view taken was that normally the Court will not disallow an application for unconditional withdrawal of a writ petition filed under Article 199 of the Constitution after its institution but if the Court comes to the conclusion that the application for withdrawal of the proceedings has been made in order to defeat the right of respondent of any other person to whom the right to pursue the petition has accrued after filing of the petition or withdrawal of the proceedings, would result in perpetuating a fraud or injustice, the Court may decline to allow the petitioner to withdraw the case. The Court may also in appropriate cases, where it comes to the conclusion that the purpose of withdrawal of proceedings is only to prevent the Court from passing an order undoing a wrong or an injustice done to a party or the withdrawal would deprive the Government or a public functionary to receive or recover the public dues, or the withdrawal would otherwise defeat the ends of justice, decline the prayer for withdrawal of petition filed under Article 199 of the Constitution seeking equitable relief from the Court.

10. For the aforesaid facts and reasons, I am of the definite view that the withdrawal of petition at this stage is without any lawful ground and not in the public interest, which is accordingly refused and Civil Miscellaneous Application 1349 of 1996 dismissed. C.M.S./F‑20/K??????????????????????????????????????????????????????????? ??????????? Application dismissed