1988 PLP 1955 (CLC)

Mansoorul Arfin for Petitioners. Nemo for Respondent. This petition for winding‑up of a private limited company incorporated under the name and style of M/s. Welcome Agencies (Private) Limited, has been filed by two of its shareholders. It is an admitted position that there are only three shareholders in the company namely the two petitioners and the respondent Muhammad Anwar. The total shareholders of these parties are as follows:‑ Muhammad Shabbir Khan 2,000 shares of Rs.10 each Nazir Sultan 1,000 shares of Rs.10 each Muhammad Anwar 2,000 shares of Rs.10 each It is alleged in the petition that there is complete mistrust between the two petitioners and the respondent in conducting the affairs of the Company .and' that it is not possible to carry on the business of the Company except at loss. On 'being served in the case the respondent Muhammad Anwar made application under sections 9, 312, 313, 314, 383, 382, 412 to 420 of the companies Ordinance read with section 151, C . P . C . in which he made very serious allegations against the petitioners about misappropriation of the funds of the company and falsification of the accounts. After considering the allegations made in the above application filed by Muhammad Anwar in the above case there is no doubt that there is complete mistrust between the three Directors of the company of which the petitioners in the case are on one side while Muhammad Anwar is on the other side. It is also quite clear that in view of the allegations and the counter allegations made in the petition and in the application filed on behalf of respondent Muhammad Anwar in the case it is impossible to run the business of the company except at losses. In the case of Ladli Prasad Jaiswol v. Karnal Distillery Co. Ltd. P L D 1965 SC 221 it has been held that in the case of a private limited company where there is complete mistrust between the co‑directors and or there is a deadlock in the company on account of such mistrust then the principles contained for dissolution of partnership could be applied for dissolving a private limited company. Learned counsel for the petitioners has also drawn my attention to a passage from the book entitled Winding Up on the Just and Equitable Grounds, by F.H. Callaway at page 87 of the book which is to the following effect:‑ "Where the petitioner relies on quasi‑partnership there is relaxation of the usual rules. For example, differences not amounting to deadlock may be sufficient ground to winding up order if they mean that the business of the company cannot be carried on a basis of co‑operation and, where participation is not excluded by the Articles or by common understanding, participation by all the quasi‑partners. Again, in a quasi- partnership the circumstances that may justify a loss of confidence in the controllers of other quasi‑partners need be so serious. It is unnecessary to point to breach of a statutory, contractual or fiduciary duty and it is not a condition precedent to the making of an order that the conduct of those who oppose its making should have been unjust or inequitable." Keeping in view the principle laid down in the case of Ladli Prasad Jaiswol v. Karnal Distillery Co. Ltd. (P L D 1965 SC 221) I am the view that the petitioners have succeeded in making out a case under the just and equitable clause of section 305 of the Companies Ordinance for winding up of the company. I accordingly pass an order of winding up of the company known as M/s. Wellcome Agencies (Pvt.) Limited. The Official Assignee who was appointed as the Provisional Liquidator in the case on 12‑10‑1986 is appointed as Official Liquidator in the case. He shall take further proceedings in the case in accordance with the provisions of the Companies Ordinance. H.B.T./M‑378/K Order accordingly.