P L D 1999 Karachi 246 (PLP)

NAZIM HUSSAIN SIDDIQUI, J.--This judgment will dispose of IntraCourt Appeals Nos. 117 and 182 of 1997 and No.73 of 1998. In all these appeals, common questions of law are involved.

2. The Appeal No. 117 of 1997 is directed against the Order dated 30-5-1997 of learned Single Judge of this Court in J. M. No. 1 of 1989 passed on the Official Assignee's Reference No.53 of 1997. 11.is in respect of two plots. The High Court Appeal No. 182 of 1997 is against the Order dated 12-11-1996 passed by learned Single Judge of this Court. The property involved in this matter is a plot, measuring 243 square yards in Korangi Township. In the Appeal No.73 of 1998, the impugned Order is dated 17-3-1998 of learned Single Judge of this Court. The appellant has prayed for re-sale/fresh auction of the assets of respondent No.2.

3. In these cases, it is an admitted position that, all these companies have already been wound-up. The only point for consideration in these matters is that whether these appeals are covered by subsection (1) or (2) of section 10 of the Companies Ordinance, 1984, which is as follows:- "Section

10. Appeals against Court Orders.--(1) Notwithstanding anything contained in any other law, an appeal against any order, decision or judgment of the Court under this Ordinance shall lie to the Supreme Court where the company ordered to . be wound up has a paid-up share capital of not less than one million rupees; and, where the company ordered to be wound up has a paid-up capital of less than one million rupees, or has no share capital, such appeal shall lie only if the Supreme Court grants leave to appeal. (2) Save as provided in subsection (1), an appeal from any order made or decision given by the Court shall lie in the same ,manner in which and subject to the same conditions under which appeals lie from any order or decision of the Court. "

4. Mr. Farogh Neseem, Advocate contends that provisions of subsection (1) of section 10 can only be attracted where winding up order is under challenge. He also argued that all other orders would fall within the ambit of subsection (2) of section

10. In support of this contention, he cited Messrs Mehbbob Industries Ltd. v. Pakistan Industrial Credit and Investment Corporation Limited 1988 CLC

866. The observation relied upon by him is as follows: ' "It is, therefor, evident that the intention of the law-makers is that an appeal against an order, decision or judgment of winding up of a company notwithstanding anything contained in any other law shall lie to the Supreme Court and not to High Court but an appeal in. respect of any other order, decision or judgment other than relating to the winding up shall lie to the High Court. "

5. Mr.Usman Ghani Rashid, Advocate, who substantially adopted the arguments of Mr. Farogh Naseem in support of above contention, cited (1) Messrs Central Cotton Mills Limited and another v. Gulzar Ahmed and 8 others PLD 1992 Kar. 29, (2) Brother Steel Mills Ltd. and others v. Mian Ilyas Miraj and 14 others PLD 1996 SC 543 and (3) M/s. Sarbaz Cement Ltd. v. Bankers Equity Ltd. and 8 others 1996 SCMR

88. In the case of Messrs Central Cotton Mills Ltd., the appeal before this Court was preferred under subsection (2) of section

10. It has no discussion on subsection (1) of section 10.

6. In the case of Brother Steel Mills Ltd. at page 556 following has been observed: "In the facts of the present case, section 10(1) of the Ordinance cannot be pressed in service because one of the preconditions for its applicability is that the company should have been ordered to be wound up. If no order for winding up of the company has been passed, section 10(1) of the Ordinance will not be attracted." This citation, on the contrary, supports the view we have taken in this matter.

7. In M/s. Sarbaz Cement Ltd.'s case, the question under consideration was power of Official Liquidators during. winding up proceedings. In said case the company was not wound-up: The scope of subsection (1) of section 10 was not under consideration in said case.

8. It is pertinent to point out here that a Division Bench of this Court in which one of us (Justice Nazim Hussain Siddiqui) was a Member in High Court Appeal No.61 of 1998, relying upon the ratio decidendi of the cases reported as (1) Chaudhry Jamil Ahmed v. Nippon Bobbin Company (Pakistan) Ltd. PLD 1991 Lahore 467, (2) M/s. Industrial Development Bank of Pakistan and 3 others v. Kamal Enterprises Limited PLD 1995 Quetta 41 and (3) M. Suleman & Co. v. Joint Official Liquidators and another 1997 CLC 260, held that subsection (1) of section 10 is in two parts, and the first one applies when a company has paid up capital of not less than one million rupees and the second is attracted when paid-up capital is of less than one million rupees. In case of former the appeal shall lie to the Supreme Court and in case of latter too the appeal would .lie to Supreme Court, subject to grant of leave by said Court. It was also held that if the company has been ordered to be wound-up, the appeal would like to Supreme Court. Thus, the legal position with regard to subsection (1) of section 10 is that when the company has already been wound up, the appeal or petition for leave to appeal would only lie to the Supreme Court.

9. It appears that scope of subsections (1) and (2) of section 10 is materially and substantially different. Subsection (1) covers tile cases in which the company has been wound-up. the other orders or decisions are covered by subsection (2). The scope of subsection (1) of section 10 cannot be restricted only to the extent of challenging the validity of winding up order. It also includes the orders passed thereafter. This is for the reason that on the one hand it may help in achieving finality comparatively at earlier stage and on the other in protecting the rights of investors and creditors. On 3-9-1998, after hearing learned counsel for the parties, we had dismissed these appeals in limine and these are the reasons for the same. Q.M.H./M.A.K./M-415/K Appeals dismissed.