IN THE SUPREME COURT OF PAKISTAN 
(Appellate Jurisdiction) 
 
PRESENT:  
MR. JUSTICE MUSHIR ALAM 
MR. JUSTICE QAZI FAIZ ISA  
MR. JUSTICE SAJJAD ALI SHAH 
 
CIVIL APPEAL NO. 45—L  OF 2018 
(Against the Judgement dated 10.04.2018 
passed by the Lahore High Court in Insurance 
Appeal No. 18/2017  
 
Rana Basit Rice Mills Private Limited…..…………………Appellant 
VERSUS 
Shaheen Insurance Company  
and another ………………………………………..…………………….Respondents 
For the Petitioner(s): 
Mr. Liaqat Ali Butt, ASC 
For the Respondent(s) 
Date of Hearing: 
Ch. Amjad Pervaiz, ASC 
12.12.2019 
                               JUDGEMENT  
  
 
MUSHIR ALAM, J.— The Appellant a limited liability company has 
assailed the judgment of Lahore High Court dated 10.04.2018. 
2. 
 
Facts in brief are that the appellant Rana Basit Rice Mills 
Private Limited, through its Chief Executive, obtained from the 
Respondent Insurance Company a fire general policy to the tune of Rs. 
150,002,000/- covering its stock of rice, paddy Machinery and building 
etc. as provided for in the Insurance Policy and detailed in paragraph 2 
of the Insurance Petition against comprehensive insurable risk for a 
period 09.09.2011 to 09.08.2012 against the premium of Rs. 370,000/-  
3. 
 
On fateful night between 13.06.12 and 14.06.12, a gust 
thunder storm caused losses to the appellants insurable interest covered 
under the insurance policy. Loss and damaged to the insurable interests 
were fully covered by the Insurance Policy. Appellant as required under 
the law and policy lodged the claim to the tune of Rupees 9,851,760/=. 
4. 
 
The Respondent-Insurer to assess and evaluate the loss, 
appointed a surveyor who, after all requisite formalities, assessed and 
verified the loss to the tune of Rs. 49,57,083/-. The assessed claim was 
not paid within 90 days as mandated under section 118 of the Insurance 
CA 45-l/18                              -2- 
 
Ordinance, 2000. Consequently, the Appellant invoked the jurisdiction of 
the Insurance Tribunal Punjab, Lahore on 06.12.12 and claimed loss of 
Rs. 98,51,760/- from the Responder-Insurer.  
5. 
 
 Insurance claim was contested by the Respondent-Insurer. A 
preliminary objection as to maintainability of Insurance Petition was 
raised on the ground inter alia that the petition was not filed by the 
authorized person as no resolution of the Board of Director was available 
on record. Respondent filed an application under Order VII Rule 11 CPC1 
seeking rejection of Insurance Petition.  
6. 
 
The Appellant, to meet the challenge posed by the 
Respondent, filed an application under Order VI Rule 17 read with Order 
VII Rule 18 and section 151 C.P.C, seeking amendment of the Petition 
to incorporate such fact and permission to place on record copy of Board 
Resolution authorizing the deponent of the Insurance Petition to file and 
contest the Insurance Petition for and on behalf of the Appellant.  
7. 
 
Learned Insurance Tribunal adjudged both the applications 
collectively. Application filed by the Respondent Insurance company for 
the Rejection of the Insurance Petition did not found favour and the 
application for the amendment of Insurance petition and to place the 
Board Resolution on record, was allowed subject to cost, vide order 
dated 10.02.2014 in the following terms: 
“The perusal of the record reveals that the applicant is 
one of the owners of the firm which is a private one. He 
has brought on the record the resolution whereby the 
other partners have authorized him to pursue and file 
the case. Thus, it is an admitted fact that the case has 
been filed by one of the owners of the applicant firm 
and the error in question, is an irregularity. The 
applicant is an entity, it can sue and can be sued, 
therefore, the amendment sought for would neither 
change the complexion of the suit nor shall prejudice 
any party. The application for the insurance claim 
cannot be out-rightly dismissed on this ground since 
the applicant has filed this application to make the 
necessary rectification in this regard through the 
amendment sought for, in this application, therefore, in 
the interest of justice, this application for the 
amendment is accordingly accepted subject to payment 
of cost of Rs. 4000/. This order be annexed with the 
main file. 
                                                             
1 Page 59 of the Paper Book 
CA 45-l/18                              -3- 
 
 
8. 
No exception to the order passed by Insurance Tribunal as 
reproduced above, was taken by the Respondent Insurance company. 
The Petition progressed on its merits and the issues were framed on 
11.09.14. Rana Abdul Basit, the Chief Executive of the Appellant 
Company appeared as AW-1, he produced the Board Resolution Ex-
A1, beside claim documents, surveyor report assessing loss as exhibits 
No. Ex A-2 to Ex A-4. Examined Rana Muhammad Saleem as AW-2 and 
Malik Muhammad Saleem as AW-3.  
9. 
Respondent Insurer only examined Ahsan ul Haq, Assistant General 
Manager Claims as RW-1.   Repeated opportunities were availed to 
produce further evidence, ultimately side was closed on 26.6.2016 but, 
no other witness in rebuttal was examined. Instead of making final 
arguments after availing more than five opportunities for final 
arguments, the Respondents then filed another application under Order 
XIV, Rule 5 CPC seeking to frame additional issue as to maintainability 
of Insurance Petition. The learned Tribunal dismissed the application 
vide order dated 2.11.2016 and fixed the case for final arguments.  
10. 
Learned Insurance Tribunal, on examination of evidence produced 
allowed the petition filed by the current Applicant vide order dated 
22.11.2016 and as against the claim of Rupees 9,851,760/= granted 
the insurance claim only to the extent of Rs. 49,57,083/- as assessed 
by the Insurance surveyor along with liquidated damages under s.118 
of the Insurance Ordinance. The liquidated damages were to be paid for 
the during the period for which the failure to make payment continues, 
from the date of occurrence till the realization of the claim, and was to 
be calculated at monthly rests at the rate of 5% higher than the 
prevailing base rate. The Respondents were directed to bear the cost of 
the case and to make the payment of the insurance claim and 
liquidated damages within a period of 30 days. 
11. 
Respondent-Insurer filed an appeal before the Lahore High Court, 
Lahore under S.124(2) of the Insurance Ordinance, 2000 essentially 
on the grounds inter-alia that the current Appellant could not have 
filed the insurance petition since a board resolution authorizing the 
attorney was admittedly not present on the date of filing of the 
CA 45-l/18                              -4- 
 
Insurance Petition. Learned Bench of the High Court swayed by the 
fact that no board resolution was filed when the Insurance Petition 
was filed by Rana Basit, the Chief Executive of the appellant  Rice 
Mills, accepted the appeal vide order dated 10.04.18. Therefore, the 
current Appellants are before us under Article 185(2)(d) of the 
Constitution of Pakistan, 1973. 
12. 
 Arguments heard. Record perused with the assistance of learned 
counsels.  
 
13. 
The pivotal issue before us that requires careful consideration is 
legal repercussions of where no Board Resolution is presented 
authorizing the deponent Rana Abdul Basit, the Chief Executive of the 
Appellant Company to file and contest the Insurance Petition. First 
case from our jurisdiction that considered identical issue, as is 
Muhammad 
Siddiq 
Muhammad 
Umar 
and 
another 
v. 
Australasia Bank Ltd.2 The issue before this Court was ‘whether the 
principal special officer/general attorney of the bank was competent to 
file the suit on behalf of the Plaintiff bank?’. This Court after taking 
stock of the facts on record held that:  
“It was apparent from the pleadings that the suit 
was being instituted by a constituted attorney of 
a public limited company. He could only do so if 
he was duly authorized in that behalf and 
occupied one or other of the offices mentioned in 
Rule 1 of Order XXIX of the Civil Procedure Code. 
A copy of the power of attorney had been 
produced which showed that Muhammad Khan 
had been empowered in that behalf but the 
question still remained to be ascertained as to 
whether those who gave him that power were 
competent to do so, as the authority was on 
behalf of a public limited company. For this 
purpose, a reference to the Articles of Association 
of the company was certainly necessary, see 
whether 
the 
Directors 
were 
competent 
to 
delegate such power. It was not necessary to see 
whether the Directors had in fact approved of the 
giving of such power-of-attorney to the person 
who presented the plaint. This was, however, 
proved by the production of the resolution of the 
Board of Directors as a matter of abundant 
caution. The additional evidence was to that 
extent, 
therefore, 
in 
our 
opinion, 
rightly 
                                                             
2 PLD 1966 SC 685 
CA 45-l/18                              -5- 
 
admitted. This was all that was required. It was 
not necessary to call the Managing Director as 
the Court calling for the additional evidence itself 
realized subsequently. Even the production of the 
resolution could have been dispensed with, as it 
was not strictly necessary”  
“Two points, of fundamental importance, require 
attention. Firstly, the Supreme Court held that an 
examination of the Articles of Association was 
necessary in order to ascertain whether the 
directors were empowered to delegate the power 
of instituting legal proceedings to someone else. 
Secondly, and perhaps even more importantly, 
the Supreme Court observed that it was not 
necessary to see whether, in fact, the board had 
actually done so. The production of the resolution 
passed in this regard was considered to have 
been only ‘a matter of abundant caution’, and it 
was expressly noted that it could have been 
dispensed with ‘as it was not strictly necessary’.”3
 
 
 
 
 
 
 
 
 
 
 
 
       (underlined 
for 
emphasis) 
14. The issue of a power of attorney not validly constituted due to the 
lack of board resolution was also considered by this Court in Central 
Bank of India Ltd. v. Taj ud Din Abdur Rauf4 wherein it was ruled 
that there is no specific requirement of law to prove a resolution 
passed by the Board of Directors.  
 
15. The rationale provided in Central Bank of India5 and Australasia 
Bank Ltd6. was aptly summarized in the Sindh High Court decision 
of Pak Turk v. Turkish Airlines Inc.7, which received the nod of 
approval by this Court in the case of Rahat and Company, 
through Syed Naveed Hussain Shah v. Trading Corporation of 
Pakistan Statutory Corporation,8 as: 
“Where articles of the Company confer power on a 
particular person or director to institute legal action 
and that person or director institutes the suit there can 
be no additional requirement of a resolution of the 
Board of directors for the simple reason that such 
                                                             
3 Ibid at 695 
4 1992 SCMR 846 
5 1992 SCMR 846 
6 PLD1966 SC 685 
7 2015 CLC 1 
8 2020 CLD 872= PLD 2020 SC 366 
CA 45-l/18                              -6- 
 
power is to be exercisable by a real person. However, 
where the power to institute the suit is conferred upon 
an artificial person or body e.g. the Board of Directors 
or a Committee ... the requirement to produce and 
prove the resolution passed by that artificial person or 
body cannot be dispensed with since such a person can 
only take a decision as a body through a resolution 
passed in a duly convened meeting and not otherwise. 
The above principles would also become applicable in 
the case of delegation or sub-delegation of powers i.e. 
in case the delegator is a real person (when articles 
confer the powers to institute legal action on a real 
person) all that would be required would be to 
scrutinize the articles and then the power of attorney to 
see whether it has been properly executed and confers 
the power so claimed. There would be no requirement 
to produce or prove the resolution from the Board of 
Directors in this regard.” 
 
16. Furthermore, such defect is not fatal to the institution to the suit by 
the attorney as it can be cured with ease under the principle provided 
by the English Court of Appeal decision in Presentaciones 
Musicales SA v. Secunda and another9, and accepted by this 
Court in Rahat and Company10 which stated that as: 
“It is well recognized law that where a solicitor starts 
proceedings in the name of a plaintiff - be it a company 
or an individual - without authority, the plaintiff may 
ratify the act of the solicitor and adopt the proceedings. 
In that event, in accordance with the ordinary law of 
principal and agent and the ordinary doctrine of 
ratification the defect in the proceedings as originally 
constituted is cured: see Danish Mercantile co Ltd. v 
Beaumont,11 since approved by the House of Lords. 
The reason is that by English law ratification relates 
back to the unauthorised act of the agent which is 
ratified: if the proceedings are English proceedings, the 
ratification which cures the original defect, which was a 
defect under English law, must be a ratification which is 
valid under English law." 
 
17. Another recent decision by this court in a Al-Noor Sugar Mills Ltd. 
v. Federation of Pakistan and others12 has also upheld this rule 
where the Respondent raised the objection that a board resolution 
                                                             
9 [1994] 2 All ER 737 
10 PLD 2020 SC 366 
11 [1951] 1All ER 925,  [1951] Ch 680 
12 2018 SCMR 1792 
CA 45-l/18                              -7- 
 
was not as filed when the appeal was filed but presented at a 
subsequent date. This Court dismissed the objection by reproducing 
the decisions stated above.  
 
18. In light of the aforementioned debate, the lack of a board resolution 
authorizing the attorney does not invalidate the institution of the suit 
so long as the Articles of Association confer upon the person/persons 
to institute the suit in the company’s behalf. Even otherwise such a 
defect can always be cured by placing on record a Board Resolution 
issued even at a subsequent date, which would put the matter to 
rest. Respondent did not challenge the finding of the Insurance 
Tribunal before the High Court on merit of the Insurance claim as 
determined by the learned Tribunal, nor before us. Respondent-
insurer throughout laid emphasis on maintainability of the Insurance 
Petition filed without Board Resolution, which as noted above, was 
allowed to be placed on record. Respondent was not able to show any 
prejudice was caused to the Respondent. The claim allowed by the 
Insurance Tribunal was based on the loss determined by the surveyor 
of the Respondents.  Under the given facts and circumstances of the 
case, the appeal is allowed. Impugned judgement dated 11.04.2018  
passed by the Lahore High Court is set aside and that of the learned 
Insurance Tribunal dated 22.11.2016 is restored.  
  
 
 
 
 
Judge 
 
Judge 
 
Judge 
 
ANNOUNCED IN Chambers 
At ISLAMABAD on_24.06.2021_______   Judge 
 
“Approved for reporting” 
 
 
