IN THE HIGH COURT OF SINDH, KARACHI

IInd Appeal No. 115 of 2010

M/s. Trading Corporation of Pakistan (Pvt.) Ltd..……………….….Appellant

Versus

S.S.J. Brothers………………………………………..…………....Respondent

Date of Hearing:- 27.02.2017

Mr. Mazhar Jafri, advocate for the appellant

Mr. Muhammad Umar Lakhani, advocate for the respondent

J U D G M E N T

FAHIM AHMED SIDDIQUI, J: The appellant has assailed the common judgment dated 12-08-2010 of the learned Additional District Judge-V, Karachi South through which he dismissed Civil Appeal No. 99/2008 filed by the appellant and allowed Civil Appeal No 103/2008 filed by the respondent. Both the appeals were directed against judgment and decree passed by learned Senior Civil Judge-V, Karachi South in Suit No 1552/2002.

2. The facts of the case are that the appellant is a government owned company and they appointed respondent as agent for an unspecified period as custodian of goods and stocks of sugar. The respondent was under obligation to take care of goods given under their custody. The appellant imported sugar through different vessels and handed over the same to the respondent. As per the terms and conditions specified, the respondent is bound to take care of goods in his custody for consideration of payment made to respondent by the appellant. It is also the duty of respondent to submit proper accounts duly certified by the appellant's surveyor. On 01-01-1997, the respondent sent bills to the appellant in respect of 13 consignments given to his custody, which was paid off with transportation charges. However, the respondent submitted incomplete account on 05-05-1997 and 14-11-1998 as the same were not certified by the appellant's surveyor. Subsequently, through a letter dated 05-10-1999 requested to release his bank guarantee on the ground they had given explanation/clarification to show cause notice of appellant dated 28-10-1998. The Finance and Accounting Division of appellant ventured accounts of 21 vessels, they found shortage of 258.806 MTS of sugar amounting to Rs.21,46,321/-(as per rate at that time). After the encashment of bank guarantee, the amount payable came to the tune of Rs.17,46,321/-. The appellant filed Civil Suit No. 1412/2001 before this Court, which was transferred to lower forum on account of enhancement of pecuniary limit of district courts. The suit was proceeded before Senior Civil Judge-VII, Karachi South where it was decreed for principal amount but mark-up/interest was not awarded. Appellant and respondent both challenged the decree of lower forum before the First Appellate Court being Civil Appeal No. 99/2008 and Civil Appeal No. 103/2008 respectively. The appellate court dismissed the appeal of appellant and allowed the appeal of respondent.

3. The learned counsel for the appellant placed the foundation of his arguments by describing the whole background of the case. According to him, the appellant successfully discharged his onus before the trial court and it is his right to be compensated through mark-up as per bank rate. According to him, the trial court has dismissed the appeal filed by the appellant on the technical ground that an unauthorised person filed the appeal. He submitted that the First Appellate Court should not consider this ground as the same is not taken by the respondent in WS before the trial court. He drew the attention of this Court to issues framed by the trial court and pointed out that this aspect was not under consideration before the Court. Regarding authority, his contention is that the person who filed the suit was duly authorised, but such authority was not annexed with the suit because the respondent had not taken this point in his WS. He submitted that management executed a GPA authorising Mr Asif Khan and others to file suit, which is available in the office of the appellant. According to him, the said Asif Khan is a Senior Manager and head of legal department of the appellant, as such he is the principal officer and competent to file suit and sign plaint as per the provision of Order XXIX Rule 1. He took reliance from 1988 CLC 1381, 2016 CLD 739 and 2007 CLC 1811.

4. In contrast to above arguments, the learned counsel for the respondent emphasised upon the capacity of the person who has signed plenty before the trial court. According to him, it is very much clear from the provision of Order XXIX Rule 1 that only the secretary, a director or principal officer is competent to file suit on behalf of a company. He submitted that it has not been mentioned anywhere in the plaint that the signatory is the principal officer. Regarding authority, his contention is that the management has not authorised Mr Asif Khan to file suit as per provision under Order III Rule 2 CPC, which specifically deals with such authority as such he is not the principal officer as well as authorised officer. He pointed out that neither an authority later or GPA was annexed or minutes of the board meeting was attached with the plaint. Regarding WS, his contention is that the thing not pleaded is not required to put in WS. He also pointed out that the instant appeal is filed without a decree of the First Appellate Court. He took reliance from 2006 CLC 829, 2006 CLD 85, 2005 CLD 1208, 2010 CLC 420 and 2014 CLD 415.

5. After hearing the arguments, I have examined the entire available material in the light of arguments advanced at a bar. Presently, the actual controversy between the parties is regarding the findings of First Appellate Court in respect of incapacity of the person who had signed the plaint of the suit before trial court. It is the contention of the learned counsel for the respondent that neither the said person enjoyed the privilege of a proper signatory as provided under Order XXIX Rule 1 of CPC nor he has any authority as per the provision of Order III Rule 2.

6. According to Order XXIX Rule 1 of CPC, the pleadings of a Corporation may be signed and verified on behalf of a corporation by the secretary or a director or principal officer of the corporation. In the instant matter, Mr Asif Khan is the signatory of the plaint filed before the Court bellow. He is neither the Secretary nor the Director of the appellant. He is purported to be the Manager and head of a department of the appellant corporation. As per statutory provision of Order XXIX Rule 1, a principle officer may also sign the pleading. In CPC, the term 'principal officer' is not defined. However, the term 'Principal Officer’ is defined in Section 44-A of Income Tax Ordinance 2001, according to which a director, a manager, secretary, agent, accountant or any similar officer and any person connected to the management of a company is 'principal officer'. If we borrow this definition, then it means that a 'principal officer' of a corporation may include the chiefs or heads of finance, operation and legal departments of a company. The reason is obvious as these key persons play a pivotal role in the planning, operation and risk management of the company and they are well connected with the administration of a company. Meaning thereby that the status of Mr Asif Khan, being the head of the Legal Department of the company, falls under the definition of principal officer.

7. Another aspect of the instant case requires consideration. The appellant has instituted the suit before this Court in the year 2001 and the suit was transferred to District Court in 2002 on account of enhancement in the pecuniary jurisdiction of district courts in Karachi. The suit remained pending for a considerable period of time and it was decided by the court of first instance on 02-07-2008. I have gone through the WS, which is silent about any objection in respect of the signatory of the plaint. Even during the long years of pendency, the respondent did not raise an objection in this regard. This objection was first-time raised and addressed by the First Appellate Court. There are certain provisions in CPC, which can only be considerable by the court if pleaded before it. I am of the view that Order XXIX Rule 1 is one of the same. If in his mentation, the respondent considered that the person who had signed the pleadings was not duly authorised then such objections should be raised at the very initial stage. In the case reported as China Annang Construction Corporation v. K.A. Construction Company (2001 SCMR 1887), the Hon’ble Supreme Court after a thorough discussion inter alia held that the plea of maintainability, especially the suit is filed by an unauthorized person, should be taken at the first instance i.e. before the trial court. In a case reported as Kathiawar Cooperative Housing Society Ltd v. Macca Masjid Trust and others (2009 SCMR 574), the Hon’ble Apex Court held as:

"Coming now to the second issue vis-a-vis the competency of the person, who has signed and verified the plaint, it would be seen that no such plea was taken in the written statement by the respondents and only a general objection was raised as to the maintainability of the suit, to cover which issue, the learned Civil Court framed Issue No.1 viz. whether the suit is not maintainable according to law and Issue No.8 whether the suit is barred by section 92, C.P.C. Indeed, under cross-examination, the plaintiff's witness Amin Ghazi has not been asked any question at all regarding the authorization of Mr. Muhammad Amin Chottani to sign and verify the plaint. Similarly, in the affidavit-in evidence filed by Iqbal Shakoor defendant No.4, this issue has not been adverted to at all and only an objection has been taken as to the permission of the learned Advocate-General under section 92, C.P.C. In this view of the matter and in the light of the provisions of Order XXIX, rule 1 of the C.P.C., where no specific objection has been taken by the respondent regarding the competency of the person, who signed and verified the plaint to do so either in the written statement or in the evidence produced before the learned Civil Court, this can hardly be done at the appellate stage. Indeed, where such an objection had been taken, it could very well have been rectified by the appellant by producing the requisite authority for Mr. Chottani to sign and verify the plaint, since per settled law, this is a mere irregularity which can be set right and cannot be the basis of non-suiting a litigant."

8. Another objection raised by the respondent is in respect of authorisation of the recognised agent. According to learned counsel for the respondent, the person who had signed the pleadings before the trial court is not a recognised agent as per the provision of Order III Rule 2 CPC. In this respect, I am of the view that such authorization is needed when a corporation files the suit through a person who is neither secretary/director nor a principal officer. As in the instant matter, the suit was filed by signing and verification of plaint as per the provision of Order XXIX Rule 1 of CPC, therefore, there is no need to proceed with appointment of a recognised agent under Order III Rule 2 of CPC. However, in the instant matter, an authorization is also available, but the same could not be produced or placed before the trial court. The learned counsel for the appellant filed before this Court a GPA executed in favour of some officers of the appellant Corporation. The said GPA was executed before the institution of the suit. It is also practice in the corporate sector that particular officers are authorised under a power of attorney, as such the execution of GPA by the management of the appellant Corporation is entirely rational. A power of attorney though not produced or exhibited but the same is available can also be relied upon. In this respect, I would like to take a lie from the case of this court reported as National Bank of Pakistan v. Anwarzaib White Cement Ltd (2007 CLC 657) wherein it is held as:

"In our opinion, in such circumstances, even if formally copy of such power of attorney was not produced in evidence still the same could have been looked into, to verify the legal status and authority of the person under whose signatures/verification on oath suit was instituted, so as to avoid failure of the suit on mere technical lapse, not otherwise affecting the merits of the case."

Now it can be safely said that the suit before the trial court was properly instituted and there are no fatal lapses by the appellant at the time of filing of the suit. I have examined the findings of the trial court and came to the conclusion that the same rest on the proper appreciation of evidence and there is no illegality or irregularity. The appellant succeeded in establishing before the trial court that 258.806 MTS of sugar was given under the charge of the respondent but the same was not delivered to utility stores and other outlets. The appellant proved their case with the help of convincing documentary and oral evidence while the respondent could not account for the above-referred shortfall of the quantity of sugar entrusted to them. The respondent produced no convincing evidence in respect of rate of sugar; therefore, the trial court is justified in holding that the principal amount is due. However, the view taken by the court of the first instance in respect of mark-up is not proper. The trial court cannot restrain the mark-up by holding that the same is non-Islamic. Being a court of law, the learned judge has no other option but to act according to law and as long as 'mark-up' is there in the book of the statute, it may be allowed in the appropriate cases as the case in hand, which will be as per rate prescribed by the State Bank of Pakistan for the relevant period. With these observations, the appeal filed by the appellant is allowed with no order as to cost.

9. With these observations, the appeal filed by the appellant is allowed with no order as to cost.

J U D G E