P L D 1989 Lahore 24 (PLP)

The Official Liquidators in the matter of Industrial & Commercial Finance Ltd. have prayed vide their Report No.58 filed on 5‑7‑1988 that an order may be passed directing the petitioners in C.O. No.36 of 1979 and C.O. No.10 of 1980 to deposit with them a sum of Rs.100,000 for defraying the day to day expenses on the winding up of the defunct‑Industrial & Commercial Finance Ltd. Reply to this report has been filed by both the petitioners, namely, Haji Safdar Naseer, ex‑Managing Director of the said company (under liquidation) and the State Bank of Pakistan.

2. The learned Joint Official Liquidators have asserted that no funds are available with them for even defraying the expenses like payment of the rent for the office premises, salary of employees etc. They have stated that a minimum of Rs.7,000 is required for monthly expenditure on these counts.

3. The learned counsel for State Bank of Pakistan has asserted that since the ex‑Managing Director had undertaken to repay the dues of the creditors to the extent of 100$ and to bear the entire expenses for implementation of the scheme, it is he who should be burdened with the remuneration of the Official Liquidators as well as for the other expenses of the nature described above.

4. The learned counsel for State Bank of Pakistan has also submitted that the winding up order has been passed in C.O.No.36 of 1979 which has been made by the ex=Managing Director and he being the petitioner is the only person who should be asked to pay the expenses in question.

5. On the other hand, the learned counsel for the ex‑Managing Director has stated that under the scheme there were certain obligations to be fulfilled by the ex‑Managing Director whilst the other part of it was to be fulfilled by the defunct‑company. It has. also been asserted by the learned counsel that the ex‑Managing Director has contributed more than his share towards the repayment of the claims of creditors and, therefore, the amounts required for expenses may be met out of the recoveries to be made from the debtors of the company which are pending adjudication.

6. I have given anxious consideration to the controversy involved. One thing is certain that the Official Liquidators have in any case to be paid the amounts that they have to spend on the day to day work of winding up of the company. They cannot be asked to defray these expenses out of their own pockets. It is also admitted at all ends that no funds are presently available with the defunct‑company to meet the above expenses. Rule 49 of Chapter I of Vol.II of High Court Rules and Orders reads as under: "

49. Funds not available for winding up proceedings.‑ When the official Liquidator takes charge o the Company and finds that there are no funds available to carry on the winding up proceedings, he shall move the Court for directions in the matter. The Court shall direct the issue of notice to the person or persons who applied for the winding up order, and the secured creditors, if any, so as to find out their wishes in the matter and require them to show cause why they should not be made to pay a reasonable amount to carry on the winding up proceedings, and after, hearing them and the Official Liquidator, the Court may direct any of them to pay a reasonable amount to Official Liquidator to meet the necessary expenses. The amount so advanced shall be a first charge on the assets of the Company."

7. It clearly emerges from a bare reading of the above provision that when there are no funds available to carry on the winding up proceedings the Official Liquidator may move the Court for directions on which the Court shall issue notice inter alia to the persons who applied for the winding up order and require them to show cause why they should not be made to pay a reasonable amount to carry on the winding up proceedings.

8. The explanations offered by the two petitioners who had moved the winding up petitions do not show airy sufficient cause why they should not pay a reasonable amount to the Liquidators for incurring expenses for carrying on the winding up proceedings especially when the amounts so advanced shall be the first charge on the assets of the company and there are assets of the company which can be proceeded against for satisfying the charge that may be created on the above score.

9. The learned Joint Official Liquidator during the course of arguments also pointed out that asking the ex‑Managing Director to pay the expenses may not mature into actual payment in that the said ex‑Managing Director despite repeated promises has not paid many of the verified claims and in view of the above position directions have already been issued today for sale of the attached property to satisfy the claims. The Joint Official Liquidator has further submitted that if the State Bank of Pakistan is directed to make payment the assets being available after sale of which the amount that the State Bank of Pakistan may pay can safely be reimbursed there will be no prejudice caused to it.

10. I find that the above submissions of the learned Joint Official Liquidator do have reason and force. I would, therefore, direct that the State Bank of Pakistan shall pay to the Official Liquidator a sum of Rs.30,000 (Rupees thirty thousand only) for defraying the day to day expenses for carrying on the winding up proceedings. This amount shall be the first charge on the assets of the company and would be reimbursed by the Official Liquidators as soon as proceeds of sale of the attached property are received by them. The Official Liquidators shall keep proper accounts of the expenses that they may incur. 11.??? Before parting with the case I may also observe that the learned counsel for State Bank of Pakistan had attempted to argue that the State Bank of Pakistan was not as such an applicant for seeking the winding up of the defunct‑company and, therefore, does not fall within the purview of Rule 49 ibid. I see no force in this contention inasmuch as in the order of winding up State Bank of Pakistan's application is one of the basis for the direction of the Court to wind up the defunct‑company. State Bank of Pakistan is, therefore, an entity which can be called upon to pay the amount as i provided by Rule 49 aforementioned. A.A./I‑94/L????? Order accordingly.