2009 PLP 741 (CLD)

MIAN HAMID FAROOQ, J.

Petitioners, nine in number, claiming to be the ex-employees of defunct Company namely Messrs Sampak Paper and Board Mills etc. (Company), seek leave to appeal against the order, dated 5-12-2003, whereby the learned Company Judge of the Lahore High Court at Lahore ordered for dissolution of the Company and the file of the case was consigned to record.

2. Initially, the Company filed an application before the learned Company Judge, Lahore High Court, Lahore for its voluntary liquidation and subsequently PICIC, the first charge holder and secured creditor of the Company, was transposed as the petitioner with the leave of the Court, vide order, dated 21-12-1999. The learned Company Judge passed a winding up order of the Company and appointed an Official Liquidator, vide order, dated 7-5-2002. According to the petitioner, they after attaining knowledge about the pendency of winding up proceedings before the learned Company Judge, filed separate applications (C.Ms. Nos.109-L of 2000 to 115-L of 2000) with the similar prayer that they may be included in the list of creditors and their claims be satisfied. The learned Company Judge, on 15-2-2000, disposed of the said applications with the observations that they may file their claims before the Official Liquidator, which they ultimately did. According to the report of Official Liquidator mortgaged properties and other assets of the Company were sold to Messrs Arsan Pulp and Paper Board Industries for a total sum of Rs.57.500 million. The Official Liquidator submitted his final report and also scheme for distribution of the sale proceeds and recommended payment of a sum of Rs.2,86,000 to the petitioners and other employees of the Company as preferential claimants, which amount was reportedly paid to them. The learned Company Judge after finding that the affairs of the Company have been settled, project has been disposed of and final scheme for distribution has been filed, proceeded to order for dissolution of the Company with a further direction to the Official Liquidator to distribute the amount as per the scheme to the two secured creditors, vide impugned order, dated 5-12-2003, hence the present petition.

3. Learned counsel for the petitioners, while admitting that the ex-employees of the Company, including the petitioners, were distributed a sum of Rs.2,86,000 from the sale proceeds of the assets of the Company, contended that the paltry amount of Rs.2,86,000 was given to the ex-employees as against their admitted claim of Rs.2,53,49,340 and rest of the sale proceeds was illegally distributed amongst the other creditors. He, while relying upon section 405(1)(b) of the Companies Ordinance, 1984 further submitted that at the first instance, after paying the revenue tax etc. to the Federal or Provincial Government, the total claim of the ext-employees of the Company should have been satisfied. Lastly he contended that the impugned order is devoid of reasons and not sustainable in law.

4. We have heard the learned counsel for the petitioners and examined the available record. The learned Company Judge after the receipt of report and final scheme for distribution from the Official Liquidator ordered for dissolution of the Company and passed the following operative order:-- "The Company is dissolved under section 350 of the Companies Ordinance, 1984. All amounts available in the liquidation account shall within seven days from today be distributed as per scheme to the two secured creditors C/s PICIC and Pak Libya. No other unsecured creditor either ex-employee or any other institution representing the Provincial Government will be entitled to receive any payment."

5. Admittedly, the ex-employees of the Company, including the petitioners, were disbursed a sum of Rs.2,86,000 while the Punjab Employees Social Security Institution was distributed a sum of Rs.15,69,

703. It is true, as is evident from the Official Liquidator's Report No.7 (available at page 54 of the paper book), that the ex-employees of the Company submitted their claim of Rs.25,349,340, which was also an admitted claim, but it is equally true that in view of section 405(2) of Companies Ordinance, 1984, they could only get a sum of Rs.2,000 each, as in the circumstance the claim of one claimant could not exceed from Rs.2,

000. Section 405(2) reads as under:-- "(2) The sum to which priority is to be given under clause (b) of subsection (1) shall not, in the case of anyone claimant, exceed two thousand rupees:-- Provided that, where a claimant is a labourer in husbandry who has entered into contract for the payment of a portion of his wages in a lump sum at the end of the year of hiring, he shall have priority in respect of the whole of such sum, or a part thereof as the Court may decide to be due under the contract, proportionate to the time of service up to the relevant date." The learned Official Liquidator, on the basis of section 405(2) of the Companies Ordinance, 1984, recommended for the total payment of Rs.2,86,000 to the ex-employees of the Company at the rate of Rs.2,000 for each claimant, which amount was admittedly received by them. The final scheme for distribution submitted by the Official Liquidator was approved by the learned Company Judge. The rest of the amount was distributed amongst secured creditors i.e. PICIC and Pak Libya Holding Company, who were the first charge holders as well as the first secured creditors. It may be noted that PICIC was disbursed an amount of Rs.47,927,706 as against the admitted claim of Rs. 162,615,262 and similarly Pak Libya Holding Company was disbursed a sum of Rs.7,014,591 against its admitted claim of Rs.23,800,

000. It flows therefrom that even the admitted claim of the secured creditors and first charge holders could not be satisfied from the sale proceeds of the assets of the Company. The ex-employees of the Company were treated as preferential claimants and were rightly disbursed the said amount of Rs.2,86,000 in accordance with the law, therefore, their claims were rightly satisfied.

6. As regards the next contention of the learned counsel, suffice it to say that no detail order was required, under the circumstances, as the Company was ordered to be wound up through a detailed order, dated 7-5-2002. Thereafter it was the function of the Official Liquidator to receive the claims from creditors, scrutinize the claims and furnish his recom mendations before the Company Judge seeking an order for implementation of the final scheme for distribution. It is evident from the impugned order that none, including the petitioner, raised any objection to the proposed scheme of distribution, therefore, it was rightly and validly approved by the learned Company Judge and the Company was finally dissolved and Official Liquidator was directed to distribute the amounts to the secured creditors. It was specifically held in the impugned order, most probably, due to receipt of payment by the ex-employees of the Company that, "No other unsecured creditor either ex-employee or any other institution representing the Provincial Government will be entitled to receive any payment". The impugned order is completely justified and we have no reasons to interfere in it. No case for grant of leave to appeal is made out.

7. In view of the above, the present petition, being devoid of merits, stands dismissed and leave to appeal refused. M.H./M-15/SC Petition dismissed.