2006 PLP 967 (CLD)

ZAHID KURBAN ALVI, J.

Through these petitions the petitioners have sought a relief that the respondents may appoint a receiver, administrator and manager to run the applicant in consultation with the Directors. It has also prayed that the re-scheduling and re-structuring should be done and in the interim period a moratorium should be observed. It is further urged that this Court should declare that the respondent is not entitled to any interest and/or mark-up. This prayer was made in J.M. No.22 of 2000. Against this petition after notice being served the respondents have filed their objections even though a separate application has been moved under section 292 of the Companies Ordinance by the petitioner. In the counter-affidavit against the main petition which is under section 290 for the companies Ordinance the respondent has very vehemently put forward the concept that the prayers 2 to 4 cannot be referred before a Company Judge who has no jurisdiction to entertain such prayers by virtue of the existence of the Banking Companies (Recovery of Loans, Credit and Advances) Act, 1997. Furthermore it is the contention that they cannot be forced to appoint manager and look after the administration of the Sugar Mill. According to them the prayers cannot be answered under the provisions of the provisions of the Companies Ordinance. The other detail factual objects have been taken but the gist of the objections are as stated above. An application under Order I, Rule 10,C.P.C. has been filed by the Intervenors who are apparently 22% shareholders in the applicant's Company. They have claimed that they should be heard before any major decision is taken. In J.M. 47 of 2000 the position is slightly different. Here the 22% shareholders have moved an application under section 290 of the Companies Ordinance where they have made the Company as respondent No.1 and financial institutions as other respondents. In their capacity as 20% shareholder in the respondent No.1's they have prayed once again for appointment of a receiver and re-scheduling and re-structuring of the outstanding financial facilities. In this petition also an application under section 292 of the Companies Ordinance has been filed and detailed counter affidavit has been filed to the main petition by respondents Nos.2 and

5. On behalf of 20% shareholders and in support of application under section 290 this petition has been filed with the objective of saving the sugar mill from liquidation even though the concept of appointment of manager/administrator is not alien but it has to be seen whether such an appointment would be in the ultimate analysis for the benefit of the institution or not. It is quite obvious that tremendous financial problems have crept up which has creating a situation where all the creditors are demanding their money. Having failed to release the outstanding they have now resorted to litigation and suits have been filed before competent Court of jurisdiction. Apparently the liability has gone up tramendously. Certain justifications and excuses are being given on behalf of the Company for the delay in the commencement of the project which has resulted in a squeeze on the liquidating resulting in the present day situation. Primaraly the NDFC is the main financer and, therefore, it is against the NDFC that a request by way of prayer is made. Can the prayer be granted? In response to this question the counsel for the respondent has strongly opposed the grant of such an application. According to him even if the NDFC is lender and even if NDFC had fate in the feasibility of this project considering over all mess in which the institution is now a days the NDFC would be reluctant to appoint a manager as no purpose would be served. Even if a manager was appointed and the NDFC decided to administer the property the claim from the other financial institutions would have to be offset hence the re-scheduling or restructuring would be well wisher improper. The learned counsel in fact has urged that this petition has been moved to frustrate the execution of various decrees as possibly have been passed against the Company. Learned counsel is of the view that NDFC would not be prepared to invest any further knowing fully well the limitation of the organization as it stood now. The NDFC and other Banking Institutions are all going through financial constraint. There is also a restriction imposed on further financing in organization when necessary approval of the competent authorities. I have gone through at length the arguments advanced by the learned counsel for the parties and have also heard the view points of those learned counsel who are creditors of the Company. I am. therefore, not inclined to grant the relief as prayed as I do not find any justification for appointment of an administrator by the NDFC. No substantial justification has been brought to light save and except that o Ice upon a time the N.D.F.C. had given an information to the effect that the Company was a feasible project. In spite of coming to this Court under the provisions of Companies Ordinance perhaps the petitioner should have approached the restructuring and re?-sheduling committee appointed by the Government in concurrence with the State Bank of Pakistan who can investigate the feasibility of the Company and may issue directions for the restructuring or re-scheduling. With the above observations the petitions stand disposed of along with listed applications. M.B.A./M-70/K????????????????????????????????????????????????????????????????????????????????? Order accordingly.