P L D 1967 Karachi 156 (PLP)

Date of hearing: 15h August 1966. The point for consideration in both these cases is as to whether there is a prima facie case for making an order that the applications be advertised in terms of Rule 781 of the Sind Chief Court Rules (Original Side).

2. The allegation that has been made by the applicants 1lgainst the company is that cheques of the company of the value of four lacs and five lacs of rupees have been dishonoured. Mr, Naimuddin saris that in one case, there is an admission of the liability. of the company also. Mr. Sharaf Faridi denies that the so-called admission really amounts to that. The applicants have alleged in their respective applications that Rs. 13,29,638 and Rs. 9,46,092.40 are due and recoverable from the company. It is also alleged that notices in terms of section 163 of the Companies Act, 1913 have been duly given to the company, but the company has neglected to give any reply to them.

3. The above circumstances alleged on behalf of the applicants appear to be adequate for establishing a prima facie case against the company to wind it up compulsorily. Mr. Sharaf Faridi has replied to this aspect of the case by pointing out that the company is disputing its liability, and that all disputes that may arise between the parties are referable to arbitration. Such arbitration, according to Mr. Faridi, has already commenced because the arbitrators of the parties and an umpire have been appointed and a date far bearing of the parties has also been fixed. In these circumstances, according to Mr. Faridi, the claim of the applicants is in dispute and cannot be considered to be a debt on the basis of which the company may be ordered to be wound up. He has explained that the cheques which have been dishonoured are much less in amounts than the amounts of money that have been claimed by the applicants. This difference, combined with the dispute as to the liability to pay brings this case, according to counsel, within the proposition of law that has been laid down In. re: Brighton Club and Norfolk Hotel Co. (Ltd.) (1) according to which an amount which may ordinarily be adequate for ordering a company to be wound up, if it involves a claim which is far in excess than what appears from the evidence to be correct, cannot be regarded as adequate for ordering the company to be wound up.

4. The above point of view of Mr. Faridi has the weakness that, whereas in the case to which he has referred, there wag only trite basis of accounts which needed detailed considera tion, with the result that the learned Court felt itself unable to order as to what amount was to be paid to the judgment-debtor, in this case it is clear that Rs. 4 lacs and Rs. 5 lace; for which two cheques were issued by the company, are prima facie the amounts which can be taken to be due from the company.

5. At this stage Mr. Faridi has offered to furnish security in both cases separately for the full amounts claimed by the applicants with the request that on this condition-the proceedings in these cases may be stayed until the arbitrators are able to decide the disputes as to the existence of debt against the company. Counsel for the applicants have expressed their approval of this offer,

6. It is accordingly ordered that the company should furnish security in both the cases to the extent of the full amounts of claim. Mr. Faridi requests for a month's time to d this. Mr. Naimuddin suggests eight days time. As the amount for which security is to be furnished is a huge one involving about Rs. 22 lacs, it is, to my mind, fair that a month's time be granted. The company is thus allowed to furnish security to the satisfaction of the Nazir within one month's time. In the event of the security being furnished as ordered, the proceedings will be automatically stayed. In default of the company furnishing the security as ordered the objections raised by it against the publication of an advertisement under Rule 781 of the Sind Chief Court Rules (O. S.) will stand overruled; an advertisement will be mad in terms of the rule and the proceedings will go on unstayed. K. B. A.