SHER ASFANDYAR KHAN vs NEELOFAR SHAH Ss — 2025 SCMR 1307 SUPREME-COURT

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SHER ASFANDYAR KHAN VS NEELOFAR SHAH Ss. 7, 9, 148, 290 & 291---Qanun-e-Shahadat (10 of 1984), Art. 76---Corporate affairs---Oppression and mismanagement---Proof---Summary proceedings---Secondary evidence---Non-seeking of permission---Effect---Proceedings under sections 290 and 291 of Companies Ordinance, 1984 were initiated against respondents for inquiry into mismanagement and oppression in corporate affairs---Company Judge allowed the petition and Division Bench of High Court dismissed the appeal---Objection was raised by appellant on admissibility of secondary evidence---Validity---Company Judge erred in proceeding summarily in a dispute that required a full evidentiary examination---Nature of the controversy, involving serious allegations of forgery and fabrication, necessitated framing of issues and recording of evidence; procedural safeguards that were improperly bypassed---Statutory prohibition under section 148 of Companies Ordinance, 1984 (section 121 of Companies Act, 2017) precluded recognition of a trust over shares in the company's register, reinforcing the principle that the company was not bound to take notice of any alleged trust arrangement---Claim of trust, as asserted by respondents, was legally untenable---Improper admission of secondary evidence in violation of Article 76 of Qanun-e-Shahadat, 1984 undermined validity of proceedings---Failure to establish preconditions for admissibility of secondary evidence rendered reliance on disputed documents unsustainable---Discretion of Company Judge in treating the Shareholders' Agreements as genuine was exercised in disregard of established legal principles, given the absence of a proper evidentiary inquiry---Division Bench, in upholding such finding, failed to recognize procedural and substantive irregularities in the adjudication of the case---Parties could pursue their respective claims in pending civil suits, wherein all matters in controversy, including validity of Shareholders' Agreements and legitimacy of meeting in question of Board of Directors were to be adjudicated---Supreme Court set aside judgments passed by Company Judge as well as by Division Bench of High Court---Appeal was allowed. [Majority view]

SHER ASFANDYAR KHAN vs NEELOFAR SHAH Ss — 2025 SCMR 1307 SUPREME-COURT

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