PLJ 2016 Karachi
versus
MTW PAK ASSEMBLING INDUSTRIES (PRIVATE) LIMITED through Representative, Karachi and others--Defendants
Suit No. 975 of 2015, decided on 18.9.2015.
----S. 21--Civil Procedure Code, (V of 1908), S. 151 & O. XXXIX, Rr. 1 & 2--Joint venture company--Draft of unsigned agreement--Plea of irreparable or irretrievable loss--Failed to place any conveyance deed--Basic ingredient of contract of agency--Contractual obligation--Contract was not specifically enforceable--Validity--Contract which is in its nature revocable cannot be specifically enforced--Specific performance is an equitable relief which is not granted as a matter of course or as a matter of right but it is in discretion of Court to be exercised on basis of established sound and judicial principles and or consideration of circumstances of each particular case--In order to invoke specific performance it is necessary that there should be a contract, enforcement of which is not barred in Act; act to be done is in respect of trust and there is no standard for ascertaining actual damage caused; pecuniary compensation is not adequate relief and Court deems it fit to exercise its discretion in favour of plaintiffs. [P. 19] A
----O. XXXIX, Rr. 1 & 2--Rule of granting injunction--Joint venure partner--Inconvenience--Irreparable loss--Prima facie--Relief of injunction is discretionary and is to be granted by Court according to sound legal principles and ex-debito justice--Existence of prima facie case is to be judged or made out on basis of material/evidence on record at time of hearing of injunction application and such evidence of material should be of nature that by considering same, Court should or ought to be of view that plaintiff applying for injunction was in all probability likely to succeed in suit by having a decision in his favour. [Pp. 19 & 20] B & C
Civil Procedure Code, 1908 (V of 1908)--
----O. XXXIX, Rr. 1 & 2--Rule of granting of injunction--Pleading--Balance of convenience--Existence of right--If an injunction is not granted and suit is ultimately decided in favour of plaintiff, inconvenience caused to plaintiff would be greater than that would be caused to defendant, if injunction is granted. [P. 20] D
----O. XXIX, Rr. 1 & 2--Rule of granting injunction--Inconvenience--Irreparable loss--Validity--Inconvenience caused to him would be greater than that which may be caused to defendant--Irreparable loss would mean and simply such loss, which is incapable of being calculated on yardstick of money”. [P. 20] E & F
----O. XXXIX, Rr. 1 & 2--Rule of granting injunction--Essential to justice or restraining as act--Validity--An injunction as is well known is an equitable remedy and accordingly is to conform to well-known maxim of Law of Equity that “he who seeks equity must do equity”--A plaintiff who ask for an injunction must be able to satisfy Court that his own acts and dealings in matter have been fair, honest and free from any taint or illegality and that if in dealing with person against whom he seeks relief, he has acted in an unfair or un-equitable manner, he cannot have that relief”.
[P. 20] G & H
----Clause-III (24)--Joint venture--Restriction on any shareholder or member--Article of association--Violation of--Neither articles of association are attached with plaint nor any restrictive covenant was referred to from articles of association even during course of arguments--Matter is already pending with SECP which is a regulatory authority and in case any illegal or fraudulent activity is found in incorporation of defendant or any violation of articles of association, law will take its own course which may include penal action and cancellation of registration. [P. 21] I
----S. 19--Contract Act, (IX of 1872), S. 73--Injunctive relief--Specific performance--Company to run--Entitlement of--Joint venure--Compensation--Validity--If in any suit Court decides that specific performance ought not to be granted, but that there is a contract between parties which has been broken by defendant, plaintiff is entitled to compensation--If breach of any contract is proved obviously through evidence, plaintiffs may claim compensation for losses or damages if any sustained by them--Contracts involving collection of monetary benefits having been obtained on specific monetary consideration, could not involve irreparable loss--No injunction can be issued unless all required ingredients namely prima facie case, balance of convenience and irreparable loss to aggrieved party”. [Pp. 21 & 22] J & K
Mr. Yousuf Moulvi, Advocate for Plaintiffs.
Mr. Behzad Haider, Advocate for Defendants Nos.1 to 4 and 6.
Date of hearing: 15.9.2015
Order
This order will dispose of CMA No. 9104/2015 filed by the plaintiffs under Order XXXIX Rules 1 and 2, CPC read with Section 151, CPC. The brief facts of this suit for declaration and permanent injunction are that the Plaintiff No. 1 is a proprietorship concern and its proprietor is Shahzad Riaz who is also co-founder of Plaintiff No. 2 with the Defendant No. 2. The Defendant No. 6 is manufacturer of Belarus Tractors in the Republic of Belarus and Plaintiff No. 1 used to import tractors in Pakistan . On 12.1.2015 the Plaintiff No. 1 through its proprietor and Defendant No. 4 entered into a memorandum of understanding (MOU) and Joint venture agreement in Karachi through which they agreed to form a company. Consequently a joint venture company i.e the Plaintiff No. 2 was formed and the Defendant No. 5 was authorized by the Plaintiff No. 2 to sign all documents and transaction etc. with the Defendant No. 6. In the month of May, 2015, the plaintiffs came to know that the Defendant No. 2 who is also a shareholder of the Plaintiff No. 2 in connivance with Defendant No. 3 fraudulently incorporated a company i.e. Defendant No. 1 for the same object and purposes without informing the plaintiffs and without taking their consent.
2. In the injunction application, the plaintiffs prayed for the following relief:--
“For the facts and reason disclosed in the accompanying affidavit, it is most respectfully prayed on behalf of the plaintiff above named that this Hon’ble Court may be pleased to restrain the Defendants No. 2 and 3, its agent, servant and all persons claiming through or under him from entering into any agreement/license with the Defendant No. 6 for import of Belarus Tractor and establishing of assembly Plant for assembling of Belarus Tractors and further restrain the Defendant No. 6, its agent servant and all person claiming through or under them from executing any contract and or license agreement with the Defendant No. 2 its company and or agent servant and all person claiming through or under for exporting Belarus tractor in Pakistan and granting license for establishment of Assembly Plant for assembling of Belarus Tractors of the Defendant No. 6, in Pakistan except through plaintiffs.
And also further restrain the Defendants No. 1 and 2 from committing breach of terms of MOU dated 12.01.2015, Joint Venture Agreement.
Furthermore, restrain the Defendant No. 1, its Directors i.e., Defendants No. 2 and 3 and 4 and or any other person acting on their behalf including the Defendant No. 6 from carrying on any trade and business relating to Belarus Tractors-510 or taking any steps and or entering into any agreements in relation to sale, and or towards establishment of Assembly Line for manufacture of Belarus Tractors-510 in Pakistan, till the final disposal of the suit.
Ad-interim order is solicited.
The above prayers are made in the interest of justice”.
3. The matter was fixed for orders on injunction application on 9.6.2015, when the learned Single Judge was pleased to issue notice to the defendants through all modes except publication, however till the next date of hearing, ad-interim order was granted as prayed. Against the interim order dated 9.6.2015, the Defendant No. 1 filed HCA No. 195/2015 which was disposed by the learned division bench in presence of counsel for the appellants and Respondents No. 1 and 2 in the following terms:--
“This appeal arises from the order passed by the learned Single Judge on application under order XXXIX Rule 1 & 2 CPC, filed by the plaintiffs (respondent herein) and on the very first day when the same was fixed for orders all the prayers made therein were granted. There is no discussion on the factual aspect while granting such ad-interim order. In any case as the order was ad-interim, the opportunity to seek its recall is still available with the appellants. It is pointed out that the impugned restraint order is adversely affecting the day to day business affairs of the appellants as 300 Tractors, which were imported are stuck up at the Port. In case the respondents/plaintiffs succeeded in the suit, the monetary compensation can be claimed with regard to any benefit derived on these 300 Tractors that have already been imported. We, therefore, while disposing of this High Court Appeal hold that the appellant shall be free to seek release of 300 Tractors so that their commercial interest is not jeopardized. With these directions this appeal stands disposed of.”
4. Though in the HCA order, the learned division bench while disposing of appeal allowed the appellants to seek release of 300 tractors so their commercial interest may not be jeopardized but Defendant No. 1 also filed Civil Petition No. 2286/2015 in the Supreme Court and vide order dated 7.9.2015, this civil petition was disposed of by the Hon’ble Supreme Court in the following terms:
“2. In view of the above, this petition is disposed of with the observation that in pending Suit No. 975/2015, the learned Judge seized of the matter in the High Court of Sindh shall hear and decide C.M.A. No. 9104/2015 finally within two weeks from today. In case of failure, the ad-interim order passed on the said application on 09.06.2015 shall stand vacated. A copy of this order be sent to the Registrar, High Court of Sindh for information and record.”
5. Since the learned judge seized of the matter, vide order dated 18.6.2015, directed the office not to fix this matter before him in future with connected suit, therefore, the office had fixed the matter before me. The Learned counsel for the plaintiffs referred to page 51 of the Court file which is a MOU singed on 12.1.2015 between the Plaintiff No. 1 and Defendant No. 4 through which an understanding was developed for the improvement of procedure for the organization of sales of tractors manufactured by Defendant No. 6 and parties agreed to establish a company “Pak Belarus Industries Inc.” in Pakistan, thereafter, learned counsel also referred to page 61 which is an agreement of joint venture between the Plaintiff No. 1 and Defendant No. 4. This joint venture agreement was made for creation of assembly line for tractors, establishment of a service centre for the provision of warranty, post-warranty services for tractors produced by JSC “MTW”. They further agreed that Private Limited Company will be incorporated in Pakistan under the name and style of “MTW Pak Industries (Private) Limited.” (i.e. Plaintiff No. 2). In Clause 10 it was agreed that the first party Plaintiff No. 1 shall advance and finance for the delivery of 732 units of MTW tractors, which will entitle the proposed company to get right of sole and exclusive agency for Pakistan. Learned counsel also pointed out Clause 15, in which it was agreed that agreement shall continue with full force and effect until commencement of the winding up proceedings, the parties unanimously agreed in writing to replace this agreement or winding up, receivership, insolvency or administration of any of the parties. This agreement was executed between the Plaintiff No. 1 and Defendant No. 4. Thereafter, the learned counsel referred to page 85, which is memorandum and articles of association of MTW Pak Industries (Pvt.) Limited, in which the proprietor of Plaintiffs No. 1 Shahzad Riaz and Defendant No. 2 are the shareholders. In order to show the nexus of Defendant No. 6 with the joint venture agreement of the company incorporated in Pakistan, the learned counsel further referred to Page 57 which is a letter dated 10.2.2015, sent to the Council of Ministers, Republic of Belarus in which it was communicated that the registration of “MTZ Pak Industries Ltd.” company founded by Belarussian Investors and “Shahzad Trade Link” company has been finalized. Shahzad Trade Link Company has been chosen as a co-founder of the newly established Company on the ground of its actual financial potential and cooperation experience with MTW over 2007 to 2014 period 26493 tractors were delivered to this partner. It is further stated in the same letter that Shahzad Trade Link has established letter of credit for supply of 732 tractors. It was further contended by the learned counsel that the Defendant No. 4 bypassed MoU and joint venture agreement and created Defendant No. 1 through Defendants No. 2 and 3 while Defendant No. 2 is also Director of the Plaintiff No. 2 but they have fraudulently and due to some misrepresentation and concealment formed Defendant No. 1 with slight change of name. The Defendant No. 2 and Defendant No. 4.1 are the same person who has 42% shareholding in the Plaintiff No. 2 but he possesses 99% shareholding in the Defendant No. 1 while the Defendant No. 3 has only 1% share in Defendant No. 1. Learned counsel also shown the grievance that the Defendant No. 2 did not invest any amount in Plaintiff No. 2 despite having 42% share but all the formalities required for incorporation were completed by the Plaintiff No. 1. Learned counsel for the plaintiff has also attached draft of unsigned agreement exchanged between the Defendant No. 6 and Plaintiff No. 2 for the SKD Belarus tractors in which it was stated that the delivery and assembling of goods would be effected on the basis of license agreement dated 31.3.2015. He then drawn my attention to license agreement for trademark dated 31.3.2015 which is also unsigned. These documents are available in Court file from Page 201 to 237. Learned counsel further referred to a sale agreement dated 30.4.2015 which was signed between Adam Motors Company Ltd. and the proprietor of Plaintiff No. 1 and argued that in order to assemble the tractors in Pakistan the proprietor of the Plaintiff No. 1 purchased Adam Motors Company equipped with plant and machinery and other assets. The Court asked a question how the plaintiff can rely upon an unsigned agreement to show the relationship of an agent. The learned counsel then referred to Pages-293 to 339 and argued that earlier he referred to the unsigned copies, but subsequent agreements were signed by the Director of the Plaintiff No. 2 on 30.4.2015 and forwarded the same to Defendant No. 6 for their signatures but he admitted that the Defendant No. 6 never signed any such agreement.
6. It was further averred that the plaintiffs came to know in the month of May, 2015 that the Defendant No. 2 in collusion with the Defendant No. 3 and Defendant No. 4.2 incorporated the Defendant No. 1 for the same object and purpose without informing the plaintiff and without taking his consent, but on the basis of forged and fabricated documents they applied for incorporation. A news was published on 5.6.2015 that the first Deputy Director Minsk Tractor (MTW) and Defendant No. 2 have created a new assembly plant in Hub under the joint venture of Defendant No. 1 and Omni Group. He further argued that proprietor of Plaintiff No. 1 has also filed a Constitution Petition No. D-2898/2015 which is pending in this Court. He further argued that though the Defendant No. 2 is shareholder of Plaintiff No. 2 but he failed to contribute a single rupee in equity of the company despite making request by the Plaintiff No. 1 on several occasions. He further argued that the plaintiffs incurred heavy amount for establishing assembly plant at Karachi , therefore, the Defendant No. 6 cannot enter into any agreement with Defendant No. 2. The plaintiffs have a prima faciecase, balance of convenience lies in their favour and in case the injunction application is dismissed they will suffer irreparable loss. However, he admitted that there is no concluded contract with the Defendant No. 6 but some draft of agreements were exchanged between the plaintiffs and the Defendant No. 6. He claims that in view of the oral agreements the plaintiffs are entitled for injunctive relief. The Learned counsel for the plaintiffs relied on 1999 CLC 1989 (Nizam Hashwani v. Hashwani Hotels Limited & others.), in which it was held that “prima facie, function of Court was to ensure smooth and effective running of a company and at the same time not to permit any member, Director or even a shareholder to violate any provisions of Memorandum and Articles of Association or provisions of Companies Ordinance, 1984. Plaintiff/petition had successfully established a good prima facie case for grant of interim injunction. Other two ingredients namely suffering of irreparable loss and injury and balance of convenience were
also present in plaintiff/petitioner’s favour. Interim injunction was granted to plaintiff/petitioner, in circumstances, till final decision of the case”.
also present in plaintiff/petitioner’s favour. Interim injunction was granted to plaintiff/petitioner, in circumstances, till final decision of the case”.
7. Mr.Behzad Haider, Advocate for the Defendants Nos.1 to 4 and 6 argued that the contract dated 9.12.2014 is between the Plaintiff No. 1 and the Defendant No. 6 but it has nothing to do with joint venture agreement or the incorporation of Plaintiff No. 2. So far as the license agreement dated 31.3.2015 is concerned it was merely a draft, but it was never signed by the Defendant No. 6, so this cannot be considered a contract. He also referred to Clause 14.1 of the same agreement, in which it is clearly mentioned that the agreement is valid for a period till 31.12.2016 and will become effective from the date of signing by both the parties. Learned counsel argued that the said license agreement never acquired a status of concluded contract simply for the reasons that it was not signed by the Defendant No. 6. Learned counsel also referred to an email dated 8.5.2015 (page 357 of the Court file) communicated by the Defendant No. 6 to the proprietor of Plaintiff No. 1. Through this email various concerns had been shown by the Defendant No. 6 including that the draft of commercial contract and license agreement signed by the plaintiff will not be taken into consideration for the reasons that the draft of contract was provided for consideration and comments as a draft only, but not a final document to be signed. Besides, other reasons which are self-explanatory it was further stated in the email that it is not acceptable to have contracts be signed by the person other than indicated in preamble of the document and finally it was stated that MTW has no legal basis to consider L.C. draft as they do not have any official ground in favour of valid contract signed by both the parties. He also referred to Page-775 of the Court file, which is a license agreement executed between the Defendant No. 1 and Defendant No. 6 through which exclusive rights for Belarus trademark were conferred to Defendant No. 1. Learned counsel also invited my attention to page-661 which is a termination letter dated 17.6.2015 and argued that through this termination letter even the agreement dated 9.12.2014 entered into between the Defendant No. 6 and the Plaintiff No. 1 was also terminated, which is available at Page-849. He further argued that there is some typing error in the termination letter and instead of 9.12.2014 the date 9.12.2015 is typed which is merely a typing error but the contract number mentioned in the termination letter and the agreement dated 9.12.2014 is one and the same. He further referred to L.C. documents available Page-373 to onwards to show that the tractors were imported by the Plaintiff No. 1 on the strength of agreement dated 9.12.2015 which were being imported in the individual capacity of Plaintiff No. 1 and not by the Plaintiff No. 2. So far as the relationship of the Defendant No. 1 with Omni Group is concerned, the learned counsel argued that the Omni Group have been given 50% share in the Defendant No. 1 for using and allowing their plant and machinery for assembling purposes. He further argued the proprietor of Plaintiff No. 1 has already filed a constitution petition in this Court which is pending and similar relief has been sought in the petition but since no interim orders were granted therefore, the plaintiffs have filed the suit. He further argued that the plaintiffs have failed to make out any prima facie case and there is also no question of balance of convenience or irreparable injury rather on account of ad-interim order granted by this Court as prayed which in fact amounts to grant of final relief in shape of interim relief, the defendants are suffering from problems and monetary losses. In support of his arguments he relied upon 2007 MLD 2019 (M/s.Maxim Advertising Company (Pvt.) Ltd. v. Province of Sindh
8. Heard the arguments. It is an admitted fact that before filing the suit the proprietor of the Plaintiff No. 1 who is also shareholder/director of the Plaintiff No. 2 filed a Constitution Petition No. 2898/2015. (Copy of memo. of petition is available at page-953) and the Respondent Nos.3, 4 and 5 in the petition are the same as Defendants No. 2, 3 and 4.2 of this suit. In the petition the plaintiffs have sought the direction against the official respondents including SECP to take action against the Respondents Nos.3 to 5 and restraining order was also sought against the Respondent Nos.3 and 4 from operating the company which is Defendant No. 1 in the suit. In the injunction application filed in the constitution petition prayer has been made to stay all business doing by the Defendant Nos.3 and 4 under the name and style of (MTW Pak Assembling Industries (Pvt.) Ltd). However, learned counsel for the plaintiffs admitted that no restraining orders were passed in the constitutional jurisdiction but during pendency of the petition he has filed the suit on 9.6.2015. No doubt by dint of joint venture the Plaintiff No. 2 came into existence and the Defendant No. 2 is also shareholder but the fact remains that this company was never conferred any agency or franchise by the Defendant No. 6 to claim any exclusive right or agency in Pakistan. In the JV Agreement, it was the responsibility of Plaintiff No. 1 to run assembly plant and service centre of necessary attributes such as allocation of land, buildings and structures, technological equipment’s, human resources and obtaining necessary licenses and permits from Government of Pakistan . In order to show the fulfillment and conformity of its role, only a copy of sale agreement dated 30.4.2015 with Adam Motor Company limited has been bring forth which shows advance payment of 29,00,000/- with balance payment of Rs. 261,000,000/- and completion date of transaction was not later than 19th may 2015. Though a plea of irreparable or irretrievable loss was taken but the plaintiffs failed to place on record any conveyance deed if registered before the concerned registrar for materializing and finalizing the deal with Adam Motors and without having required infrastructure or assembling plant or transfer of technology, they are claiming exclusive rights and wish for restraining order against the defendants particularly the Defendant No. 6 not to engage in any business activity with Defendant No. 1 which has already activated its assembling plant before filing of this suit with the collaboration of another group under a valid license of Defendant No. 6. Nothing in support of interim relief argued that the plaintiffs have done substantial acts or suffered losses in consequence of contract capable of specific performance as provided under Section 22 of Specific Relief Act.
9. The exclusive right is conditional to the accomplishment of agency contract or license. According to Section 182 of the Contract Act an agent is a person employed to do any act for another or to represent another in dealings with third person. The person for whom such act is done or who is so represented is called the principal. The basic ingredient of contract of agency includes that the agent has a power on behalf of principal to deal with third person as to bind the principal the subject matter of the agency has to be dealt with as proprietor of principal and not of the agent. The agent acts as intermediary for consideration. In ordinary legal parlance and phraseology the agency is a relation between two parties created by agreement express or implied by which one of the parties confides to the other management of same business to be transact in his name or his account and by which the other assume to do the business and for render an account of it.
10. I have mentioned the various documents in the chronological order referred to by the learned counsel appearing for the parties. In order to reach just and apt conclusion, it is imperative to first look into whether there is or there was any concluded contract between the plaintiffs and the Defendant No. 6 or not? Though the learned counsel for the plaintiffs pointed out correspondence anterior to exchange of draft of license agreement for negotiation purpose but when the draft of license agreement by which rights were to be given to the plaintiffs for assembling the tractors reached to the plaintiffs, the agreements were signed and forwarded to the Defendant No. 6 for their signature but the Defendant No. 6 never signed any such agreement rather they communicated their disagreement for various reasons through their email that the draft of contract was provided for consideration and comments as a draft only but not a final document to be signed. So far as the import of tractors directly by the Plaintiff No. 1 is concerned, the L.C(s) were opened vide contract No. 112/00236091/140135-1 dated 9.2.2014 which is not the subject matter of the suit. It is an admitted fact that even no relief has been claimed by the plaintiffs in the suit in relation to aforesaid contract which is an independent entity with Plaintiff No. 1. So far as the Plaintiff No. 2 is concerned, no L.C. was opened by this joint venture company for the import of tractors from Defendant No. 6 rather the Plaintiff No. 1 shown the grievance that the Defendant No. 2 failed to invest any amount in the joint venture company despite having 42% shares.
11. Though this is a suit for declaration and permanent injunction but in the prayer clause (a) the plaintiffs have also sought direction against the Defendants No. 2 to 5 to specifically perform their contractual obligations under the MOU, joint venture agreement and license agreement, which was signed by the plaintiff on 30.4.2015 and transmitted to the Defendant No. 6 for their signature but it was refused for the reasons mentioned in the email of Defendant No. 6. Even in the case of authentically and validly executed contract between the parties, the Court has to visit Section 21 of the Specific Relief Act germane to the contract not specifically enforceable. The learned counsel adopted a line of argument that though the contract was not finally executed with the Defendant No. 6 but surrounding circumstances profusely demonstrate that the plaintiffs and the Defendant No. 6 were engaged in the correspondence, so the plaintiffs are entitled for the specific performance. Section 21 of the Specific Relief Act pertains to the contract not specifically enforceable which includes a contract for the non-performance of which compensation in money is an adequate relief. A contract which is in its nature revocable cannot be specifically enforced. The specific performance is an equitable relief which is not granted as a matter of course or as a matter of right but it is in the discretion of the Court to be exercised on the basis of established sound and judicial principles and or consideration of circumstances of each particular case. In order to invoke the specific performance it is necessary that there should be a contract, enforcement of which is not barred in the Act; the act to be done is in respect of trust and there is no standard for ascertaining the actual damage caused; pecuniary compensation is not adequate relief and the Court deems it fit to exercise its discretion in favour of the plaintiffs.
12. The Defendant No. 6 has executed the agreement with the Defendant No. 1 on 27.4.2015 and the plaintiffs have themselves mentioned in paragraph 31 of the plaint that a news item was published in the daily Jang on 5.6.2015 relating to inauguration of assembly plant in Hub by the Defendant No. 1 and it is joint venture partner Omni group while the suit was filed on 9.6.2015. So in my view, if at this stage, the interim orders are continued further it will cause irreparable loss and injury to the defendants rather than the plaintiffs and balance of inconvenience lies in their favour.
In the case of Sayyid Yousaf Husain Shirazi v. Pakistan
13. So far as the allegation against the Defendant No. 2 is concerned, matter is not only pending before the SECP but the constitution petition is also pending and plaintiffs are religiously pursuing both the remedies but simultaneously as a third resort or remedy, this suit has been filed. Learned counsel for the plaintiffs pointed out a document attached with CMA No. 13186/2015 and argued that the CEO of Plaintiff No. 2 has lodged complaint to SECP that NOC provided by Defendant No. 1 for its incorporation was forged. He further argued that the article of association of Plaintiff No. 2 do not permit any director to incorporate new company with similar object/name. The SECP has already called upon the chief executive of Defendant No. 1 to submit the reply and the matter is pending. The learned counsel for the plaintiffs also referred to sub-clause 24 of Clause III of Memorandum of Association relating to the objects for which the company is established, which is as under:
“To establish, promote or assist in establishing or promoting and subscribe to or become a member of any other company, association or club whose objects are similar or in part similar to the object of this company or the establishment or promotion of which may be beneficial to the company as permissible under the law”.
14. The reading of above clause does not show any partial or impartial restriction on any shareholder or member/director of the company but it was over all one of the objects for which the company was established which cannot be considered a restrictive clause or covenant against the shareholders/directors of the company not to become a part of any other company or undertaking. The plaintiffs have attached only Memorandum of Association with the plaint (page No. 87-91) but neither articles of association are attached with the plaint except one page at page 93 nor any restrictive covenant was referred to from the articles of association even during course of arguments. Even otherwise, the matter is already pending with SECP which is a regulatory authority and in case any illegal or fraudulent activity is found in the incorporation of the Defendant No. 1 or any violation of articles of association, the law will take its own course which may include penal action and cancellation of registration. In the petition also, various similar relief(s) including the directions against the FI.A and SECP to take action against the incorporation of M/s. MTW Pak Assembling Industries (Pvt) Ltd. have been claimed with an injunctive relief not to allow the company to run.
15. Under Section 19 of the Specific Relief Act, it is unambiguously allude to that if in any suit the Court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant, the plaintiff is entitled to compensation. If breach of any contract is proved obviously through evidence, the plaintiffs may claim compensation for the losses or damages if any sustained by them. The word compensation used under Section 19 is understood in the sense of damages contemplated in Section 73 of the Contract Act. In fact the learned division bench also held the same in the order dated 12.8.2015 while disposing of HCA No. 195/2015 that in case the plaintiffs succeeded in the suit, monetary compensation can be claimed with regard to any benefit derived on Tractors. In the case of “Maxim Advertising” supra cited by the counsel for the defendants also, the Court held that “irreparable losses would mean and imply such loss
which is incapable of being calculated on yardstick of money. Contracts involving collection of monetary benefits having been obtained on specific monetary consideration, could not involve irreparable loss. No injunction can be issued unless all required ingredients namely prima facie case, balance of convenience and irreparable loss to aggrieved party”, while the case of “Nizam Hashwani” cited by the learned counsel for the plaintiffs is distinguishable to the facts and circumstances of this case.
16. The pros and cons lead me to finale that the plaintiffs have failed to make out any case to keep on the injunctive relief. The injunction application was dismissed by me vide short order dated 15.9.2015 and these are the reasons.
(R.A.)
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