1988 PLP 1069 (MLD)

AJMAL MIAN, J.‑‑This appeal is directed against the judgment/decree dated 3‑5‑1982 passed by a learned Single Judge of this Court in Suit No.423 of' 1977, decreeing the suit in the sum of Rs.12,29,340.95 with 15% interest per annum from the date of filing of the suit till realization against the present appellants.

2. The brief facts leading to the filing of the above appeal are that the respondent filed aforesaid suit against the present appellants for the recovery of the above amount on the basis of two agreements executed by appellants Nos.2 to 3 i.e. first agreement was entered into between the above appellants and the Eastern Federal Union Insurance Company on 10‑4‑1971 at Karachi, hereinafter referred to as the first agreement, and 'the second agreement was executed between appellants Nos.1 to 3 and M/s. Muslim Insurance Company Limited at Lahore, hereinafter referred to as the second agreement, whereby under the first agreement Eastern Federal Union Insurance Company under written 50,(X10 shares of Rs.10 each in appellant No.4 Company, which was floated as Public Limited Company and whereas under the second agreement Muslim Insurance Company Limited under written 35,000 shares of Rs.10 each. It may be observed that under the above two agreements appellants Nos.1 to 3 undertook to ensure the payment of the guaranteed amount of annual dividends failing which they undertook to pay the subscribed amount plus interest. It appears that under the Presidents Order No.10 of 1972, hereinafter referred to as the President's Order the Life Insurance business in Pakistan was nationalised and all the assets, liabilities, obligations and contracts etc. of various Insurance Companies pertaining to life insurance business stood vested eventually in the respondent. 1t is an admitted position that the appellant No.4 did not pay annual dividends in terms of the above two agreements. Consequently the respondent filed the aforesaid suit for the above relief. The above suit was resisted by the appellants in s which a number of pleas were raised including legal pleas. 1t appears from the Court diary of the suit that on 28‑2‑1979 by consent the following three issues were framed: "(1) Whether the plaintiffs have no locus standi to file the suit? (2) Whether this Court has jurisdiction to entertain the suit. (3) Relief? It further appears that on 1‑9‑1979 it was ordered that issue No.2 shall be heard as a preliminary issue. However, the above order was modified by an order dated ' 2‑4‑1980 and it was ordered that the entire case was to be heard and disposed of including issue No.2. It may also be stated that on 22‑4‑1982 the learned counsel for the parties made a statement at the bar that they did not want to lead evidence and after recording the above statement the case was posted for arguments for Rs.26,41,

982. After bearing the arguments the learned Single judge passed the judgment/decree under appeal. The appellants being aggrieved by the above judgment/decree have filed the present High Court Appeal.

3. In support of the above appeal, Mr. Sohail Muzaffar, learned counsel for the appellants has urged as follows:‑ (i) That there was nothing on record to indicate that the above two agreements were assigned or transferred by the aforesaid two Insurance Companies to the respondent and, therefore, the above issue has been improperly decided. (ii) That admittedly the second agreement was executed at Lahore, where registered office of appellant No.4 is situated and, therefore, this Court had no jurisdiction at least in respect of the said agreement. (iii) That even if the learned Single Judge had decided the above first and second issues against the appellants, they should have been given the opportunity to produce evidence on merits. On the other hand Mr.Zaidi, learned counsel for the respondent has submitted as follows:‑ (i) That the appellants have acknowledged and admitted their liability to the respondent to their letter dated 24‑9‑1977. (ii) That since the payment in respect of the second agreement by operation of law was to be paid to the respondent at Karachi, the Sind High Court had jurisdiction to entertain the suit. (iii) That the appellants had voluntarily not produced the evidence on merits as there was no defence available to them.

4. Adverting to the first contention, it may be observed that in the aforesaid letter dated 24‑9‑1977 which was admitted by the learned counsel for the appellants before the learned Single Judge, which fact is reflected in the Court diary dated 26‑4‑1982, the appellants admitted the factum of the transfer of the above two agreements to the respondent and also acknowledged their liability and requested for withdrawing of the legal proceedings by assuring that their shares would yield reasonable return. The above letter was preceded by a number of other letters which are on record. In our view, the learned Single Judge inter ales, on the basis of the above letter could leave recorded finding on issue No.1 against the appellants. As regards the second submission of the learned counsel for the parties, it will suffice to reproduce the conclusion arrived at by the learned Single Judge on the above issue: "It has, however, been contended that in respect to the relief based on the agreement dated 12‑3‑1971 made at Lahore, this Court has no jurisdiction. According to Mr.Sohail Muzaffar, the Second agreement was made at Lahore between Muslim Insurance Company Limited, whose address of Lahore and Dacca was given and that the three defendants also reside and carry on business at Lahore, Mr.Tahir Hussain, on the other hand, argued that pursuance to section 11 of the Life Insurance (Nationalisation) Order, 1972, the plaintiff Corporation was created with its principal office at Karachi as is evident from the notification establishing the plaintiff Corporation. It was further contended that by virtue of section 17 of the said Order of 1972, in place of Muslim Insurance Company Limited. In the agreement dated 12‑5‑1971, the plaintiff Corporation with its principal office at Karachi stood substituted and that as payment had to be made by the defendants to the Muslim Insurance Company Limited now plaintiff Corporation with its Principal Office at Karachi, this Court has jurisdiction in the matter. The contention of Mr.Tahir Hussain is correct. In view of my finding on issue No.(1), State Life Insurance Corporation of Pakistan with its Principal Office at Karachi has taken over the life funds of Muslim Insurance Company Limited including the share holdings in question. The liability of the defendant under the agreement dated 12‑5‑1971, since the taking over, is to the plaintiff Corporation with its Principal Office at Karachi. Payment under the said agreement has accordingly also to be made at Karachi. In the circumstances issue No.(2) is decided in the affirmative and it is held that this Court has jurisdiction to entertain the plaintiffs suit." Mr. Sohail Mu7affar learned counsel for the appellants was unable to demonstrate that the above conclusion suffers from any infirmity warranting interference with the judgment under appeal. We are inclined to concur with the above finding of the learned Single Judge. This leads to the last submission. In this behalf it may again be pointed' out that though the case was fixed for bearing of issue No.2 as preliminary issue by the aforesaid order dated 1‑9‑1979, but the said order was modified by the abovementioned order dated 2‑4‑1980 and the case was adjourned for hearing of the entire case on legal issues as well as on merits. After that the parties voluntarily chose not to produce any evidence except the documents which were filed. The case had come up for hearing on the legal issues as well as on merits of the case which was covered by Issue No.3. The appellants did not get any issue framed as to the breach of the two agreements on the part of the aforesaid two insurance Companies or on the part of the respondent, nor they brought any material on record to prove the above factum. In the absence of any such issue and the material on record, the learned Single Judge was to decree the suit. The above third contention of Mr.Sohail Muzaffar seems to be devoid of any force.

5. The appeal has no merits, and, therefore, it is dismissed but there will be no order as to costs. These are the reasons in pursuance of a short order of even date. H.B.T./T‑29/K Appeal dismissed