1997 PLP 1577 (CLC)

S.M.A. Mahmood for Petitioners.. Aminuddin Ansari for Respondents. Date of hearing: 15th May, 1997. In this petition under sections 305, 306 and 309 of the Companies Ordinance, 1984 (hereinafter referred to as Ordinance) prayer for winding‑up a private limited company established for manufacture of polythene bags is founded on a number of grounds reflecting gross violation of the provisions of the Ordinance. 2. Respondent No.2 who is Chief Executive of the company since 1984 (without being re‑elected as such) and his father floated the company for the purpose indicated in the Memorandum and Articles of Association. Although Mrs. Shamim Ara mother of respondent No.2 is not a shareholder in the company, she is shown to be a Director of the company apart from the two petitioners who are the son and father respectively. It is stated that the petitioners owned shares worth Rs.3,50,000 which amount was paid to the company between the period from 27‑4‑1988 to 16‑7‑1988 and such share certificates were duly issued but these are not reflected in the records of the Registrar Joint Stock Companies as required by law, whereas respondent No.2 continues to pose .and style himself as Chief Executive of the company without holding annual statutory meetings of the shareholders and issuing balance‑sheets for the last over a decade. It is the case of the petitioners that virtually and essentially private limited company is a partnership business in which respondent No.2 has assumed to himself the role of majority shareholders by increasing the share capital without the consent and approval of the shareholders and the petitioner Directors. He has also removed the account books from the registered office of the company and not filed statutory returns with the Registrar of the companies. It is urged that the said respondent has been keeping the shareholders on false hopes and in complete dark with the assurance that the company is doing well and that the Dividend shall be distributed but it .has .recently come to the notice of the petitioners 'that the company is closed‑while not a single penny has been distributed by way of Dividend amongst the shareholders though the company made patently huge.profits which have been siphoned off by the Chief Executive to the exclusion of the petitioner‑shareholders and others. 3. Besides the said respondent has allotted to himself, to his wife and to his mother a total of 1,64,200 shares in order to show majority shareholding in the company .and to mismanage the affairs at his whims in complete disregard and utter violation of the statutory provisions of law. His conduct and attitude is oppressive and adverse to the interest of other shareholders which cannot be justified by any stretch of reasoning and any norms of decency in a limited company. 4. Apart from the statutory notice containing all such allegations sent by registered‑post A/D as well as .courier service dated 8‑1‑1996 respondent was warned by way of earlier notice dated 3‑10‑1995 to desist from such illegal acts and to accountfor the shares of the petitioners but without any response hence this petition. 5. A notice of the petition was issued to the respondents as well as Registrar, Joint Stock Companies. While Mr. Aminudin Ansari appeared for the respondents, no written statement or counter‑affidavit was filed to the petition which in law tantamounts to silent admission of the facts stated in the petition as well as statutory notice served on the respondents. In his parawise comments Registrar, Joint Stock Companies admitted the position that Mrs. Shamim Ara wife of Naim Baig has not been shown as shareholder in Form A made up to 31st December, 1985 whereas her name appears as Director in Form A reportedly appointed with effect from 28‑1‑1985. Besides Form A filed in the office for the period ending 31‑12‑1986 contains a large number of erasures and overwriting. On the one hand list of shareholders attached with the said Form A is not properly legible position of the shareholders and their shareholding do not to tally with that shown in the subsequent list of members in Form A filed at the close of the year 1987. It is admitted that share capital of the company was increased by allotment of 3,22,750 shares of Rs.10 each made on 3‑8‑1989 vide Form 3 dated 17‑8‑1989, intimations in respect of holding Annual General Meeting have however been filed in the Office of the Registrar regularly up to 1995 but in respect of A.G.M. for 1994 two different Forms A signed by some partners were filed in the office which contained different/incorrect position with regard to shareholding and directorship of the company and relevant columns in both the Forms A which have not been properly filled in. It is not disputed that respondent No.2 has been shown as Chief Executive throughout and that statutory returns were filed under his signatures.but such returns contain material omissions contrary to law inasmuch as there appears to be no proper transfer of shares, intimation on prescribed format for change in directorship in terms of section 205 of the Ordinance. It is conceded that this respondent and his wife hold 74500 and 44000 shares of Rs.10 each according to the information conveyed through Form A filed at the close of the year 1994. There is mortgage charge in the sum of Rs.2,02,57,000 in favour of I.D.B.P. registered on 21‑3‑1995 against the assets and properties of the company, Registrar concluded. 6. Upon hearing learned counsel for the parties, I am fully convinced that the statements of fact and law made in the petition for winding up are fully made out as there is not a single word in rebuttal. Respondents have obviously not bothered to file any written statement controverting the allegations levelled by the petitioners which in law are deemed to be admitted and require no further A elucidation. However such facts are adequately corroborated by various, documents filed by the petitioners and from the comments filed by the Registrar, Joint Stock Companies. In the absence of any circumstance to the contrary a fit case for winding up for the company is made out. The company is ordered to be wound up accordingly and Official Assignee of Karachi is appointed as Official Liquidator to take over assets and properties of the company with all powers available in the Ordinance. A.A./M‑181/K Order accordingly.