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S. 152 - Petition for rectification of Register of Members of Company-Agreement to sell shares to petitioners was yet to be completed by making payment of balance price of shares-Petitioners having admitted on record about non-completion of sale agreement of shares to them, held, could not claim to be the owner of said shares and as such possessed of the rights of members of company-Admission of petitioners about non-completion of sale agreement of shares would be an estoppel for seeking rectification of register of members of company by them.

(b) Companies Ordinance (XLVII of 1984)-

-- S. 152--Petition for rectification of Register of Members of Company-Powers of Court-Where sale of shares to petitioners was not complete, petitioners, held, were not entitled to invoke jurisdiction of High Court under S. 152.

The power vesting in Court under section 152, Companies Ordinance, 1984, is to be exercised in cases where legal title in the applicant is clear, as in a complicated or doubtful case, summary jurisdiction ought not to be exercised.

It is true that this section gives the Judge wide discretion in deciding matters relating to the rectification of Register of Members but that would mean that each and every controversy raised respecting the shares or rights claimed with regard thereto can be considered and determined by the Court. In a case where sale of shares is not complete, remedy under general law is to be availed of by instituting proper proceedings in the Civil Courts of plenary jurisdiction. The summary proceedings under section 152, Companies Ordinance, 1984, cannot be resorted to when the suit for seeking same relief has become barred by time under the Limitation Act. Again the discretion vesting in the Court will not be exercised in favour of a party guilty of laches. The delay in a given case may give rise to equitable considerations and disentitie a party from seeking a particular relief. Where the sale of shares to petitioner was not yet complete, petitioner was not entitled to invoke jurisdiction vesting in High Court under section 152, Companies Ordinance, 1984.

Malik Sarfraz Hussain for Petitioners.

Iqbal Haider Zaldi for Respondents.

Date of hearing: 23rd September, 1986.

Khurshid Ahmad and Muhammad Ijaz petitioners through this petition under section 152 of the Companies Ordinance 1984, seek rectification of the Register of Members of the respondent-Company with the averments that Abdur Rahim and others mentioned in para. 2 of the petition agreed to sell vide sale agreement dated 12-5-1976, 1/3rd of 2670 shares to each of the petitioners and that the petitioners have been asking the said vendors to hand over the share scripts and the record of the company after receiving from each of them the 1/3rd share of Rs. 44,255 i. e. the entire balance of the sale price, but the vendors have been postponing the matter with the assertion that it could be done only if the entire balance price is paid by all the purchasers. It was further averred that Nazir Ahmad respondent No. 2-got these shares secretly transferred in his name and this transfer of the shares came to their notice on the filing of the written statement by respondent No. 2 in C. O. No. 47 of 1984 instituted in this Court by the aforesaid vendors. It was also pleaded that out of these shares, 250 shares were then transferred by respondent No. 2 to each of the respondents Nos. 3 to 5. According to the petitioners, cause of action in respect of the rectification of the Register of Members accrued on 24-6-1985 when C. O. No. 47 of 1984 was disposed of by this Court. The petitioner No. 1 and petitioner No. 2 further claimed that they are respectively owners of 100 and 250 shares on account of transfer of shares by Z. A. Ghani and the legal heirs of Haji Abdul Majid, the outgoing shareholders.

2. Learned counsel for the respondents vehemently opposed the petition by taking objections, inter alia, that the present petition was barred by the principle of res judicata as the earlier petition filed by the aforesaid vendors in collusion with the present petitioners was dismissed; that the petition suffers from laches as the shares held by the vendors (petitioners in C. O. No. 47 of 1984) stood transferred to the present respondents since 1976 and this was well within the knowledge of the petitioners who attorned to the respondent company as tenants vide agreement dated 17-1-1977; that the petitioners have not come to the Court with clean hands and that the petitioners had never approached the management for the inclusion of their names in the Register of Members on the basis of any alleged purchase.

3. Learned counsel for the petitioners in reply relied on the observation recorded by the learned Company Judge in the order dated 16-6-1985 passed in C. O. No. 47 of 1984. This observation is to the effect that "the transfer of their shares to all intent and purposes was complete and they cannot now seek re-entry into the company by devious means",

It was argued that as the transfer of shares subject-matter of sale agreement dated 12-5-1976 was held complete and effective, the petitioners are entitled to be recognized as owners of the shares in question and registered as members of the respondent-Company.

4. I have considered the respective pleas of the parties. The petitioners cannot avail of the afore-noted observation made by the learned Judge as their own case before me is that the agreement to se11IA was yet to be completed by making payment of the balance price. The; precise averments made in para. 3 of the petition read:-

"That the petitioner had always been asking the vendors (Abdur Rahim etc.) Managing Director of the company, to hand over the records of the company along with the shares scripts, after receiving the petitioner's shares in respect of the balance amount of Rs. 44,255 (2/3rd of Rs. 44,255) due to the vendors from the petitioners (purchasers) as per the sale agreement dated 12-5-1976. But Haji Abdur Rahim etc. (vendors) postponed the matter every time with the assertion that this could be done only if the entire balance amount of Rs. 44,255 is to be paid by all the purchasers. The assertion of the vendors could not be fulfilled on account of the first postponement then flat refusal made by respondent No. 2 in regard to his 1/3rd share in the balance amount payable (due) to the vendors."

This being the case of the petitioners themselves, they cannot claim t be the owners of the said shares and as such possessed of the rights o members of the respondent-Company. In addition, there is an admission B of the petitioners on record which estops them from seeking the relief prayed for in this petition. This admission is contained to the reply filed by the petitioners in the petition (C. O. No. 47 of 1984) filed by Abdur Rahim and others against the respondents including Sh. Nazir Ahmad respondent No. 2 as well as the present petitioners. In this petition the stand taken by these vendors was that Sh. Nazir Ahmad owned only 500 shares but the other respondents (including the present petitioners) did not own any share in the company. On the basis of these averments, it was prayed in the said petition that the Register of Members of the Company be rectified so as to delete the shares of Sh. Nazir Ahmad to the extent of 1,920 shares and to delete the shares of the remaining respondents and instead their names be entered indicating the position of share holding mentioned in the petition.

5. The aforenoted averments were contained in para. 13 of the petition. The petitioners in corresponding para. of the reply filed by them in the said proceedings not only admitted these averments as correct but also stated in the prayer clause of the reply that the Register of Members of the Company be corrected accordingly. It will, therefore, be seen that the claim made in this petition is quite contrary to the admission made in the aforesaid proceedings.

6. Moreover the fact cannot also be lost sight of that since the execution of agreement in 1976, no step was taken by the petitioners to have the bargain of sale specifically enforced through a Court of law. In 1983, the petitioners did file a suit but that was for grant of mandatory injunction. This suit was not pursued and was got dismissed in default after filing the present petition in this Court. Learned counsel for the petitioners stated that the suit was not pursued as the petitioners were advised that their remedy lay in instituting proceedings under section 152 of the Companies Ordinance 1984.

7. This plea is misconceived. The power vesting in Court under section 152, is to be exercised in cases where legal title in the applicant is clear, as in a complicated or doubtful case, summary jurisdiction ought not to be exercised. This was so held as early as the year 1877 in. the matter of the Diamond Rock Boring Company Ltd. (1877) 2 Q. B. D. 463. It is true that this section gives the Judge wide discretion in deciding matters relating to the rectification of Register of Members but that would mean that each and every controversy raised respecting the shares or rights claimed with regard thereto can be considered and determined by the Court. In a case where sale of shares is not complete, remedy under general law i to be availed of by instituting proper proceedings in the Civil Courts o plenary jurisdiction. The summary proceedings under section 152, Companies Ordinance, 1984, cannot be resorted to when the suit for seeking same relief has become barred by time under the Limitation Act. Again the discretion vesting in the Court will not be exercised in favour of a party guilty of laches. The delay in a given case may give rise to equitable considerations and disentitle a party from seeking a particular relief. In the instant case sale of shares was admittedly not complete. Learned counsel for the petitioners was not in a position to urge that suit for specific performance if now filed, will not be liable to be dismissed a barred by time. The petitioners in the circumstances noted above are no entitled to invoke jurisdiction vesting in this Court under section 152, Companies Ordinance. For the reasons given above, there is no alternative but to dismiss this petition. .

8. Before parting with this judgment, notice may be taken of another plea of the learned counsel for the petitioners. He argued that the peti tioners held 350 shares in addition to the rights being claimed under the sale agreement dated 12‑5‑1976 as mentioned in para. 2 of the petition. Learned counsel for the respondents, however, stated that though a mention of these shares has been made but no relief has been claimed in respect of these 350 shares in this petition. He added that if the petitioner have genuine documents to support the purchase of these shares, the petitioners may approach the Board of Directors for transfer of these shares to them and if the Bard of Directors is satisfied, these shares will be transferred to them and their names will be entered in the Register of Members of the Company. The petitioners may approach the respondent Company if so advised. With these observations, this petition is dismissed with costs. M. H. A.

Petition dismissed.

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