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Petitioner: MUHAMMAD AMIN MUHAMMAD BASHIR LIMITED and anothers VS Respondent: PAKISTAN JUDGMENT
Court Name: Sindh High Court Judge(s): Rasheed A. Rizvi Title:MUHAMMAD AMIN MUHAMMAD BASHIR LIMITED and anothers vs PAKISTAN
JUDGMENT
Reported As: 2000 CLC 1559 Result: Order accordingly Judgment JUDGMENT ' This common judgment will dispose of these two suits, namely, Suit No,185 of 1966 (Messrs Muhammad Amin Muhammad Bashir Ltd., and others v. Pakistan and others) and Suit No,324 of 1966 (Ahmed Dawood and others v. Pakistan and others) as the evidence and the questions of law are common. 2. The plaintiffs of Suit No,185 of 1966 were the shareholders of the Karachi Road Transport Corporation Ltd., (for brevity sake, hereinafter referred to as the Corporation) which was established by the Ordinance XXI of 1959 PLD 1959 CS 174 namely, the Karachi Road Transport Corporation Ordinance, 1959. The plaintiffs as claimed in the plaint had shares in the Corporation of the value of Rs,7,50,000. It is further claimed in the plaint that on 14-6-1963 the defendant No,1, namely, Federation of Pakistan decided to transfer their shares to defendant No,5 who was required to form a company by the name of Karachi Road Transport Corporation Ltd. (For brevity sake, hereinafter referred to as the Company). At the relevant time an impression was given to the plaintiffs that the shareholders of the Corporation shall become the shareholders of defendant No,3, namely, Karachi Road Transport Corporation Ltd. To the same value and extent as shown in the share certificate of the Corporation; that the said impression was confirmed by the defendant No,1 allegedly through different promises. Meanwhile, the Ordinance XXI of 1959 was repealed through the Ordinance XXIV of 1964, namely, Karachi Road Transport Corporation Ltd. (Repealed) Ordinance, 1964. PLD 1965 West Pakistan Statutes 5 /. It was admitted by all the parties that the fate of this Ordinance, 1964 was that the earlier company stood dissolved on 17-12-1964 by virtue of a Notification, dated 14-12-1964.
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3. It is further the case of the plaintiffs of Suit No,185 of 1966 that no provision was made either in the Memorandum or in the Articles of the Association of defendant No,3 to the effect of the rights, assests and liabilities of the shareholders of the Corporation. According to the averments of the pliant, the plaintiffs, within one month after coming into force of the Ordinance, 1964, made offer to the defendants Nos.4 and 5 to purchase their shares at par with the market value, which was denied by the said defendants by their letter, dated 22-2-1965. In a nutshell, the case of the plaintiffs is that the defendants Nos.3 to 6 are liable to pay the plaintiffs the value of their rights, properties and interest in the Corporation which may be equal to the value of their share as held by them in the Corporation. In the alternate and without prejudice the plaintiffs had also challenged vires of the Ordinance XXIV of 1964 through which Messrs Karachi Road Transport Corporation Ltd. Was taken over by the defendants Nos.3 to 6. They are asserting their fundamental rights as granted to them vide Article 14 of the deceased Constitution, 1962. In the aforesaid background they have prayed for the following reliefs:-- (a) For Rs,7,50,000 being the value of plaintiff's right, properties and interests ' in the Corporation' or, (b) Rs,7,50,000 being the value of the shares owned and held by them in 'the Corporation' by way of specific performance of the contract, or, (c) for declaration that Ordinance No,24 of 1964 is ultra vires of the Constitution to the extent it does not provide compensation for the shares held and owned by the plaintiffs and/or their rights, property and interest in the Corporation being consistent with Fundamental Right No,14 and that defendants are liable to pay compensations to the plaintiffs for their shares in the sum of Rs,7,50,000 and/or, (d) for declaration that defendants Nos.1 and/or 2 without lawful authority transferred the properties of the 'Corporation' to defendants Nos.3 to 6 and have deprived the plaintiffs of their rights and interests in 'the Corporation' and/or defendants are liable to account for the same and pay compensation and/or damages to the plaintiffs to the extent of par value of the shares of 'the Corporation' held and owned by the plaintiffs and to render accounts thereof, and (e) for Rs,7,50,000 on account of compensation for the shares and/or damages suffered by the plaintiffs. (f) Costs of the suit. (g) such other and further relief or reliefs as may arise out of the above stated facts or under the circumstances of the case or may seem just and proper to this Honourable Court 4. All the defendants of Suit No,185 of 1966 have filed their separate written statements denying the claim of the plaintiffs as well as their liabilities. The case of the defendant No,1 is that by virtue of resolution of the shareholders, dated 31-10-1963, the shares of the Corporation stood transferred, ipso facto the newly formed Company, namely, defendant No,3 and that the plaintiffs are not entitled for the valuation equal to their shares. It is also denied that any understanding, promise or agreement was made by the defendant No,1 to purchase the shares of the plaintiffs. It is asserted by the defendant No,1 that the assets of the Corporation were handed over to the newly formed company by the abovementioned resolution and that the said action was justified, legal and valid. It is denied that the plaintiffs are entitled for any amount or for compensation. The defendant No,2, newly, Province of West Pakistan has also filed its written statement denying averments of the plaint. They have also stated that there was no violation of the fundamental rights of the plaintiffs and have prayed for dismissal of this suit. According to defendant No,3, namely the Company, the shareholders of the Corporation became the shareholders of the Company and that the said defendant never agreed for the purchase of the shares of the plaintiffs at market value. It was stated that Ordinance XXIV of 1964 was intra vires and that its vires cannot be questioned by the plaintiff through the instant suit. They have also relied upon the resolution of the extraordinary general meeting, dated 31-10-1963. The written statements of defendant No,4, namely, Messrs
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Mansoor & Brothers, defendant No,5 Mian Muhammad Akhtar and defendant No,6, namely, Mian Mansoor Hussain are similar in contents and on the same line as of the earlier referred written statements. All of them have prayed for dismissal of the suit with special cost against the plaintiffs. 5. In the plaint of Suit No,324 of 1966 it is claimed that the plaintiffs were shareholders of the Corporation. It has further been alleged that in accordance with the provisions of the Ordinance XXI of 1959 the said Corporation had authorized capital of Rs,7 crores and subscribed capital of Rs,3,50,00,000 that the subscription of the Central Government was Rs,1,35,42,130. It has further been stated in the plaint that on or about 14-6-1963 the Central Government (Now Federal Government) decided to transfer its shares to defendant No,3, namely, Mian Muhammad Akhtar; that the transfer had to take effect from 1-7-1963. The letters of the Central Government have been produced as Exhs.11/15 and 16 respectively. It is further the case of the plaintiffs in Suit No,324 of 1966 that by virtue of promulgation of an Ordinance No,XXIV of 1964, it repealed the earlier Ordinance No,XXI of 1959. It was contemplated in the said Ordinance that upon dissolution of the Corporation, all properties belonging to the Corporation would stand transferred and devolved upon the new company i,e, Karachi Road Transport Corporation Ltd. (defendant No,5 in Suit No,324 of 1966). It is further alleged in the plaint that after the promulgation of the repealing Ordinance, the plaintiffs wrote a letter, dated 1-1-1965 and another letter, dated 20-2-1965 calling upon the defendants Nos.1 and 3 to take over their respective shares at par. But the said defendants refused to accept the plaintiff's offer. Thereafter, it is alleged that on several occasions the plaintiffs offered their shares but no reply was given by defendants. It is further stated in the plaint that the latter law i,e, Ordinance No,XXIV of 1964 being a Provincial Statute could not have repealed the earlier law i,e, Ordinance XXI of 1959, the same being Central Statute. It is further averred in the plaint that due to the refusal on the part of the defendant No,3 to accept share of the plaintiff, they have suffered loss of Rs,7,13,000. It is further claimed that the dissolution of the Corporation of which the plaintiffs were the shareholders was illegal. Plaintiffs have prayed for the following reliefs in Suit No,324 of 1966:-- (a) a sum of Rs,7,13,000 as value of shares mentioned in the para. (1) above and/or damages and/or compensation from the defendants or such of them as this Hounouable Court may hold liable with further interest 9% from the date of suit till realization. (b) In the alternative-- (i) a declaration that the dissolution of the Corporation is illegal, and ultra vires and the Corporation despite the Repealing Ordinance still exists in terms of The Ordinance of 1959. (ii) A mandatory injunction restraining the defendants Nos.3 to 6 from managing, appropriating or otherwise using emplying the assets, (iii) A mandatory injunction directing defendants Nos.1 and 2 or any of them, to revive and operate the Karachi Road Transport Corporation in terms of the Ordinance, XXI of 1959 and to reinstate and/or appoint the Directors and other statutory office-bearers in terms thereof, after taking over all its assets of every description from defendants Nos.3 to 6 (both inclusive) and a further mandatory injunction against defendants Nos.3 to 6 (both inclusive)- to surrender all the assets, properties and effects of the Karachi Road Transport Corporation to the defendants Nos.1 and 2 for the purpose of being handed over to the Karachi Road Transport Corporation as and when it is to commence business. (iv) The plaintiffs also claim:-- That a Receiver be appointed to take over and manage the assets of the Corporation till such time the claims of the plaintiffs are not satisfied in terms prayed in clause (a) above. (v) Any other relief to which the plaintiffs in the circumstances of the case be deemed entitled. (vi) Costs of the suit...." 6. The defendant No,1 in Suit No,324 of 1966 is Pakistan through Secretary, Ministry of Commerce, Islamabad, who have filed their written statementS and have denied claim made in the plaint. They
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have stated that shortly after transfer of the shares of Central Government in July, 1963 a meeting was held on 31st October, 1963 in which the shareholders of the Corporation unanimously decided to transfer all their shares ipso facto to the Company i,e, defendant No,5 in this suit. It has further been stated that after the transfer of shares to .The then management, nothing could be done by them except to make attempt to persuade the defendant No,5 to accept the request of the plaintiffs. It is further stated in the written statement that the Legislatures were competent to repeal the Ordinance XXI of 1959 and to dissolve the Corporation by Ordinance No,XXIV of 1964. The other defendants have also filed their separate written statements and have stated the same facts. It is their case that on 31-10-1963, the extraordinary general meeting of the Karachi Road Transport Corporation was called and notices were issued to all the shareholders, including the plaintiffs, and that in the said meeting, it was unanimously resolved that the proposed public limited company (defendant No,5) should take over the business and undertaking of the Karachi Road Transport Corporation. That on the repeal of the Karachi Road Transport Ordinance XXI of 1959 the shareholders became ipso facto the shareholders of the defendant No,5. It is further alleged that after incorporation of the defendant No,5 as public limited company all the shareholders of the said Corporation, including the plaintiffs, have become the shareholders of the defendant No,5 on the same terms, conditions, rights and obligations, as were enjoyed by them in that corporation. 7. As a result of above pleadings of the parties, several legal and factual issues were framed separately in both suits. On 24-9-1987, by consent of the parties in Suit No,185 of 1966, following order was passed by this Court:- "24-9-1987. Mr. Abdul Rauf, Advocate Mr. Sharaf Faridi, Advocate Mr. Kazi Mehfooz Ahmed, Advocate Mr. Haider Raza Naqvi, Advocate ' By consent it is ordered that the entire evidence recorded in Suit No,324 of 1966 be read and treated as evidence of the parties in this suit. By consent six documents produced by Mr. A. Rauf, Advocate are admitted and accepted as Exhs.A-1 to A-6. ' The matter is adjourned for arguments to 12-10-1987. (Sd.) Judge." 8. It was jointly stated by the parties that the questions of facts and law are common in both these suits but despite that no efforts were made to get these suits consolidated. In the above circumstances, on 19-5-1999 consolidated issues were framed by this Court with the following observations: - "10-5-1999. Mr. Abdul Rauf, Advocate for plaintiff. Mr. Abrar Hassan, Advocate for defendant. Mr. Bashir Memon, Official Liquidator for K.R.T.C. ' This matter was heard in past on several occasions. In view of the order,. Dated 24-9-1987 whereby it was ordered that the evidence recorded in Suit No,324 of 1966 be read as evidence in Suit No,185 of 1966, therefore, a need arose as to hearing both the suits together and to pass a consolidated judgment. Parties were directed to file consolidated issues, in view of the aforesaid circumstances, as well as in view of the fact that after recording of evidence, several of the issues have become redundant. Mr. Abdul Rauf and Mr. Abrar Hassan have filed their respective drafts issues and have made their submissions on this point. Following issues are framed by the Court:- (1) What is the effect of non-recording of evidence in Suit No,185 of 1966? (2) Whether the plaintiffs in both the suits i,e, Suit No,185 of 1966 and Suit No,324 of 1966 became shareholders of the newly established Corporation which was established in pursuance of Ordinance 24 of 1964? (3) Whether any meeting of the shareholders of K.R.T.C. Was held on 31-10-1963? If so, what were the decisions/resolutions?
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(4) Was Provincial Government empowered to repeal the Karachi Road Transport Corporation Ordinance, 1959 and to deliver the assets of the said Corporation to the Karachi Road Transport Corporation Ltd.? (5) What is the effect of winding up/liquidation of the Karachi Road Transport Corporation Ltd. On its shareholders/plaintiffs in both the Suits. (6) Whether the reliefs claimed in the suit can be granted under the changed circumstances when the Company which is the sole beneficiary has gone into liquidation? (7) Whether the plaintiffs are entitled to any relief? (8) What should the decree be? 9. The plaintiffs examined P.Ws. Muhammad Aslam, Wali Dad, Shaukat Hussain, Section Officer, Ministry of Communication, and Siddiq Dawood. The defendants did not examine any witness. Now, I will proceed to examine the case, issue wise. First, I will deal with the legal issues. Issue No,1 10. This issue was framed at the insistence of Mr. Abrar Hassan, learned counsel for the company/K.R.T.C. Under liquidation. According to him, since the plaintiff, in Suit No,185 of 1966, has failed to produce any evidence in support of his case and since he himself has failed to appear in the witness-box such act being fatal, Suit No,185 of 1966 is liable to be dismissed for no evidence. Mr. Abrar Hassan has also referred to the provision of Order VI, Rule 15, C.P.C. And contended that since the plaint was filed in the year 1966, it was not verified on oath or solemn affirmation (as subsequently provided after introduction of Ordinance XI 1972) the same has no evidentiary value. He has placed reliance on the following cases:-- (i) Mst. Khair-ul-Nisa and 6 others v. Malik Muhammad Ishaque and 2 others PLD 1972 SC 25, (ii) Nazir Ahmad Khan and 2 others v. Muhammad Ashraf Khan and 2 others PLD 1975 Karachi 598, (iii) Muhammad Noor Alam v. Zair Hussain and 3 others 1988 M LD 1122, and (iv) Riaz Muhammad and another v. Sarwar Shahid and 2 others 1991 CLC 2462. 11. In the case of Mst. Khair-ul-Nisa (cited at serial No,I, above) it was contended on behalf of the appellants that the factum of the service of the notice since denied in the written statement should be considered as evidence as provided under section 32 of the Evidence Act (now repealed). It was held by a Full Bench of Honourable Supreme Court that "Written Statements cannot be the exhibits in the case without the person who filed the same being examined in the Court." It was further observed that the statements made in the written statements were simply verified and were not on oath and therefore, cannot be treated as evidence in that case. Reference was made to the cases J.B. Ross & Co. V.C.R. Seriven and others AIR 1917 Cal. 269 and Muhammad Siddique v. Bhupendra Narayan Roy PLD.1962 Dacca 643. The rule laid down by the Honourable Supreme Court in the case of Khair-ulNisa (ibid) was followed by this Court in K.A.H. Ghori v. Khan Zafar Masood and another PLD 1988 Kar. 460 at 463. In the case of Nazir (cited at serial No,II above) it was held by a Division Bench of this Court that "As a rule pleadings are not evidence by themselves; the statements made by defendant in the written statements, could be used as evidence in cases where they amount to admission of the plaintiff's pleas. These admissions could be direct or even by implication, and in both cases are proof in themselves." This rule could be equally applied in the matter of plaintiffs. In the cases where the defendant has failed to specifically deny any allegations of the plaint or where it was admitted even by implication, such fact being an admitted fact could be considered as part of admitted facts. In the case of Muhammad Noor Alam (cited at serial No,III above), following rule was laid down by a Division Bench of this Court. "A written statement contains averments of a party which are to be proved through cogent evidence. If a party does not produce any evidence in support of the contents of its written statement, in the absence of any admission on the part of a plaintiff the averments contained in the written statement cannot be treated as evidence."
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12. Case of Riaz Muhammad (cited at serial No,IV above) is of no help to the legal proposition as canvassed by Mr. Abrar Hassan. While considering his objections one cannot ignore the order of this Court, dated 24th September, 1987 as reproduced in para. 7 of this judgment. No objection was raised at that time by the present defendant. I am conscious of a decision of learned Single Judge of this Court Abdul Razaq A. Thahim, J. (as he then was) in the case of Shabbir and 2 others v. Mst. Ghulam Fatima 1987 CLC 1407 where the mode of recording of evidence of one party in one rent case and the same copied out in other cases was not upheld. In that case 5 rent cases were filed before the Rent Controller who disposed of the same with single order and copied the evidence of one case in the other. No separate evidence was recorded. But in the instant case it was agreed by consent of all parties that the evidence recorded in Suit No,185 of 1966 be treated as evidence in other suit as well and at the same time some 6 documents produced by Mr. A. Rauf, Advocate for the plaintiff in Suit No,185 of 1966 were admitted and accepted as exhibited A-1 to A-6 respectively. Since no objection was raised by any of the defendants in Suit No,185 of 1966 at the relevant time it cannot be considered at this belated stage. Plaintiff's failure to appear in witness box in support of his case is fatal when the burden to prove any particular issue lies upon him and where the facts are within his knowledge but in case where a witness other than plaintiff is fully aware of the facts and has brought all relevant facts successfully before the Court, the defendant cannot compel the plaintiff to appear in the witnesss box and to depose. In such circumstances, a Court may be justified to draw presumption adverse to the plaintiff for not appearing in witness box but it cannot be said that there was no evidence in the plaintiff's case. Be that as it may, both the above suits should have been consolidated in view of this Court order, dated 24th September, 1987 which was not done. However, on 10th May, 1999 it was ordered by this Court that both the suits should be consolidated and that consolidated issue be framed as facts and questions of law were common in both these suits. The grounds of the plaintiff on which they have based their prayer as well as the evidence of the defendants are also common in both the suits. Once two suits are consolidated there remains no need for recording separate evidence. 13. The practice of consolidating two suits fqr the purpose of avoiding conflicting judgments has become an established practice of the Courts. I am fortified in my view by a decision of K.A. Ghani, J. (as he then was) in the case of Shahzada Sultan Humayun v. Nasiruddin 1984 CLC Kar. 3090 where reference was made to Masood Bari v. Abdul Aziz PLD 1967 Kar. 55 and Terath Ram v. Harbhog Singh AIR 1933 Lah. 1033. For further reference see Muhammad Siddique and another v. Mst. Zahida Begum and another 1986 CLC 2963 (Azad J&K) Mst. Hafizan v. Muhammad Yasin and 2 others 1985 CLC 1448 Pakistan v. Messrs Agro Marketing Corporation Ltd. And 2 others 1981 CLC Lah. 443. Rule laid down in the last cited case was upheld by the Supreme Court of Azad Jammu and Kashmir in the case of Sain Muhammad and 4 others v. Muhammad Younis 1993 CLC 723. 14. As a result of the above discussion, I am inclined to hold that nonappearance of plaintiff in the witness-box and not producing any evidence in Suit No,185 of 1966 was not fatal and that the evidence recorded in suit No,324 of 1966 is the evidence recorded in Suit No,185 of 1966. issue No,4. 15. This issue comprises of two parts. First portion deals with the competence of the Provincial Legislature to repeal the Karachi Road Transport Corporation Ordinance (Ordinance No,21) of 1959 (hereinafter referred to as the Ordinance, 1959) and the second whether the Provincial Government was competent to deliver the assets of the said corporation to the then newly incorporated company. It was argued by Mr. A. Rauf that the Ordinance, 1959 could not be repealed by the West Pakistan Governor through Ordinance (XXIV of 1964) namely Karachi Road Transport Corporation (Repeal) Ordinance, 1964 (hereinafter referred to as the Ordinance, 1964). He has placed reliance on Article 132 of the Constitution, 1962. Mr. Hyder Raza Naqvi has disputed this legal position and
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has referred to a decision of a Division Bench of this Court in the case of Syed Azizuddin v. Abdul Ghafoor Arain and three others PLD 1964 (W.P.) Kar. 88 where following observations were made:-- "(2) In the next place, it was contended that the Basic Democracies Order, 1959 has been amended by the Governor of West Pakistan. It is urged in this connection that the Basic Democracies Order was passed by the President and, therefore, it was a Central law. On this basis it is urged that the Governor could not amend the same. There is not much force in this contention . Under Article 225 of the Constitution the existing laws were to continue subject to any amendment that may be made by the appropriate Legislature. Basic Democracies is now admittedly a Provincial subject. In that view of the matter the Governor was competent to legislate under Article 79 of the Constitution." 16. The Ordinance, 1959 was enacted by the President pursuant to the proclamation of the seventh day of October, 1958 for the purpose of, establishing a corporation for operating road transport services in the Federal capital which at that relevant time was the city of Karachi. By virtue of section 3, the Corporation established was a body corporate having perpetual succession and common seal with power to hold and dispose of properties subject to the provisions of the said Ordinance. The Chairman of the Board of Directors and some other directors were to be appointed by the them Central Government and other directors not exceeding four were to be elected by the shareholders. Duties of Chairman and Board were also provided in the said Ordinance. By virtue of section 31, all acts and proceedings of the Corporation were subject to the control of the Central Government and by virtue of section 32, it was the Central Government which was competent to revoke the power of the Board. The…
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