2023 PLP 111 (CLD)

JAWAD HASSAN, J.

The Petitioner, Securities and Exchange Commission of Pakistan (the "SECP"), has filed this petition for winding up of the Respondent No.1, Messrs B4USOFT (Private) Limited (the "Company") under section 301 read with section 304 of the Companies Act, 2017 (the "Act") on the ground that the Respondents have violated various provisions of the Act.

2. It is contended by Mr. Ruman Bilal, Advocate that subsection (2) of section 26 of the Act explains the business and objects of a company while the provision of prohibition on acceptance of deposits from public, is given in section 84 of the Act. He next contends that the Respondents are running a ponzy scheme through illegal deposit taking from the general public, which is against the Memorandum of Association (the "Memorandum") of the Company and are also prohibited under the law/Act. He strenuously states that the Company is indulged in accepting unauthorized deposits from the general public as well as illegal business of multi-level marketing by alluring them with highly lucrative monetary rewards. With regard to the functioning of the SECP, he has placed reliance on a landmark judgment reported as Additional Registrar Company v. Al-Qaim Textile Mills Limited (2021 CLD 931) in which this Court has elaborated in detail the purpose of the Act and powers of the SECP to regulate affairs of a company in Pakistan, as a Regulator. He states that the SECP, being a Regulator, pursuant to a number of complaints received through various online channels, including the Prime Minister's Performance Delivery Unit (the "PMDU"), Pakistan Citizen's Portal (the "PCP"), issued Show Cause Notice dated 22.01.2021 to the Respondents to submit a reply as to why sanction under section 304(b) of the Act should not be granted to the Registrar to present winding up petition of the Respondent-Company before the Company Bench of this Court. He adds that besides issuing the aforesaid show cause notice, separate show cause notices under sections 172 and 500 of the Act were also issued to the sponsors and directors of the Company. He argues that pursuant to the aforesaid show cause notices, different authorized representatives of Respondent No.1 appeared before the SECP and sought time to file written reply/response which was subsequently also filed but thereafter, on direction of the competent authority, they have not submitted any additional document in support of their written reply/response till to date. He submits that the Respondents have violated various provisions of the Act, specifically sections 84 and 26(2), and a number of opportunities were also granted to them through their various authorized representatives and since the Respondents are found indulged in running affairs of the Company beyond the scope/purpose for which it was initially registered with the SECP, this is a fit case for winding up in terms of relevant provisions of subsection (g) of section 301 read with section 304 of the Act.

3. Mr. Ruman Bilal, Advocate goes on to argue that on the powers and functions of granting sanction to winding up, this Court has recently passed a judgment in the case of Messrs Crescent Jute Products Limited v. Federation of Pakistan and others (2022 CLD 338) (LHC Citation). Reliance is also placed on the landmark judgment of the Hon'ble Supreme Court of Pakistan, reported as Messrs Platinum Insurance Company Limited, Karachi through Managing Director v. Daewoo Corporation, Sheikhupura, through Director, Administration and Finance (PLD 1999 SC 1).

4. Heard. Record perused.

5. Notices were issued to the Respondents through ordinary modes followed by publication in newspaper but none has marked appearance on their behalf today despite of repeated calls, therefore, they are proceeded against ex-parte.

6. Indeed, this winding up petition has been preferred by the Additional Registrar of Companies on the grounds that the Respondent No.1, in violation of sections 84 and 301(i)(g) of the Act, was raising unauthorized deposits from the public at large in the garb of a ponzy scheme. The record reflects that Respondent No.1 was incorporated with the SECP on 31.07.2018 under the Act. The SECP received certain complaints through the PMDU/PCP that Respondent No.1 is involved in securing deposits/advances from the public at large under a ponzy scheme, which act was beyond the objects of Respondent No.1. The consistent absence of the Respondents from scenario brings forth strong belief that they are available with nothing to defend allegations against them. Non availability of defense on behalf of Respondents and their above elaborated disinterest leaves behind no other option except to believe the Petitioner's stance agitated in instant petition. Hence, in attending circumstances, it is a fit case for an order of winding up under section 301(h)(i), which clearly states that:

301. Circumstances in which a company may be wound up by Court.

A company may be wound up by the Court-- (a) . . . . (b) . . . . (c) . . . . (d) . . . . (e) . . . . (f) . . . . (g) . . . . (h) if the company is- (i) conceived or brought forth for, or is or has been carrying on, unlawful or fraudulent activities; or

7. In view of the above, this Petition is allowed and Respondent No.1, Messrs B4USOFT (Private) Limited, is ordered to be wound up Mrs. Lubna Shuja, Advocate, Office No.6, IAF Centre (+92-333-4587887) is hereby appointed as Official Liquidator (the "OL"), who shall forthwith start the performance of her duties and functions in relation to the Respondent-Company and shall continue to perform such duties and functions till the conclusion of the winding up proceedings. All the consequences enumerated in the Act, which follow the order of the winding up of a company shall be applicable to the instant case as well. The intimation of the winding up orders shall be sent to the OL and the Petitioner. She shall be paid Rs.50,000/- as remuneration initially and then according to the work done. The OL shall, in terms of section 321 of the Act read with the Companies (Court) Rules, 1997, submit a preliminary report to the Court. SA/A-130/L Petition allowed.