1994 PLP 2202 (CLC)

Sh. Zia Ullah for Petitioner. Mirza Naseer Ahmed for Respondent. I have heard the learned counsel for the parties on the effect of the petitioner's failure to serve on the respondent‑Company a notice in terms of section 306, subsection (1), clause (a) of the Companies Ordinance, 1984, by delivering it at its registered office. Learned counsel for the respondent Company argued on the assumption that the petitioner's petition (C.O.No.7/90) is a petition under section 306 of the Companies Ordinance. The assumption is wrong because it is a petition for the winding up of the respondent‑Company under section 305 read with section 309 of the Companies Ordinance, 1984. The winding up of the respondent‑Company is sought on two grounds (i) that the respondent‑Company is unable to pay its debts and (ii) that the respondent Company has suspended its business for the last about three years. In other words the petitioner's case falls to be dealt with under section 305, clauses (c) and (e) of the Ordinance. Section 306 of the Ordinance provides that a company shall be deemed to be unable to pay its debts if a creditor has served on the company, by causing the same to be delivered by registered post or otherwise at its registered office a demand under his hand requiring the company to pay the sum due and the company has for thirty days thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor; or fib) if exeoution or other process on a decree or order of any Court is returned unsatisfied; or (c) if it is proved to the satisfaction of the Court that the company is unable to pay its debts. The plain meaning of the plain words of section 306 of the Ordinance is that that section provides for a mode of proving that a company is unable to pay its debts and for that purpose it creates certain presumptions, one of them being that a demand notice in terms of clause (a) of subsection (1) thereof has been delivered at its registered office and that Company has for thirty days thereafter neglected to pay the debt: But as has been seen above, subsection (1) of section 306 provides two other modes of proof and one of them is the mode of proving to the satisfaction of the Court that the compare is unable to pay its debts. Learned counsel for the respondent referred to the address of the respondent‑Company in the original petition to point out that the registered office of the respondent‑Company is at 14‑B, Agro Square, Shadman‑I Lahore; !~e also called my attention to the demand notice at pages 66, 67 and 69 of the 1‑etinon to point out that those notices were sent at the address 3/1, Temple Road, Lahore. He argued that the act of the petitioner to send the notice at an address other than the address of the registered office has the effect of making this petition liable to dismissal. For his contention, learned counsel referred to two cases, Mrs. Sabiha Shahid Raza v. Ahmad Construction Company PLD 1990 Karachi 191) and In re: Janlazar Monna Estate Limited (AIR 1931 Calcutta <9?)) Both these cases it seems to me turned on, their own facts. In the Karachi case, referred to above, what was found was that the notice under section 306, subsection (1), clause (a) suffered from uncertainty and ambiguity. 1n the case it was found as a fact that the omission to serve the statutory notice at the address of the registered office was deliberate and, therefore, the petitioner were not entitled to rely on the presumption afforded by section 63(1) of the Companies Act (which is the predecessor section of sectior 306 of the Companies Ordinance). It was added:‑‑ "This, however, is not the conclusion of the matter since the petitioners are entitled to show aliunde that the company is unable to pay its debts and I suppose that failure to pay an undisputed debt would be as a rule conclusive evidence of this," This applies equally to the facts of this case. As the stage for adducing proof has not yet reached, it will be undesirabe to say whether the petitioner is or is not entitled to the presumption afforded by clause (a) of subsection (1) of section 306 of the Ordinance and I would leave that question at large to be decided at the appropriate stage. It suffices to say that even if the petitioner is not so entitled he will be entitled to invoke clause (c) of subsection (1) of section 306 to his aid and to prove to the satisfaction of the Court that the company unable to pay its debts. 4 There is, therefore, no merit in the objection. Disposed of accordingly 5 It shall now come up on 22nd instant A.A./O‑5/L Order accordingly