2003 PLP 1494 (CLD)

Date of hearing: 25th March, 2003. The respondent/ company was incorporated on 5-5-1967 under the Company Laws. The authorized and paid-up capital of the Company is 27 lacs divided into 27 thousand shares of Rs.100 each. The petitioner and his three sons hold 15% share in the respondent/ company. The petitioner seeks winding up of the company on the following grounds:-- (i) That the Company suspended its business of manufacturing straw board and allied products in 1994; (ii) no Annual General Meeting was actually ever held since 1972; (iii) that no balance sheet or profit and loss account was ever prepared nor the budget of the company was ever approved in any of the Annual General Meetings, nor dividends were ever declared; (iv) that the substratum of the company has gone. The above mentioned facts have not been denied by the learned counsel for the respondent/ company. However, it is stated by the learned counsel for the respondents that the company passed a special resolution on 20-11-1999 for the sale of the assets of the company. The same has been sold for Rs.2,95,000 out of which rupees 50 lacs was received at the time of agreement of sale. The purchaser deposited Rs.35 lacs in the joint account of respondents 2 and 3 and the respondent No.3 has taken Rs.2,50,

000. Respondent No.2 has taken rupees 25 lacs from the purchaser. The remaining amount has been paid to the petitioner and other share holders, thus the total amount paid by the purchaser of the assets is Rs.1,10,00,

000. Learned counsel further submitted that amount of Rs.31,89,766 has been incurred as expenses as per Arbitration Award. A sum of Rs.1,85,000 is still recoverable from the purchaser of the assets of the company.

2. Learned counsel for the petitioner in rebuttal submitted that the alleged resolution is totally a forgery. The petitioner resides in America and his signature has been forged on the special resolution: He has not received any amount from the account of the company.

3. The above stated facts clearly show that the company has suspended its business and there is no reasonable hope that in future the object of trading with profit will be revived. The parties have misappropriated the funds/property of the company. The assets of the company have been sold. The-balance sheet attached with the reply shows that they do not pertain to the respondent/ company but it is a joint account of Hussain Paper and Board Mills and Lasani Straw Board Mills. The ledger, also shows irregularities in the maintenance of the same. The entries in the ledger have been made at the whims of the respondents. No balance sheet has been prepared nor it was ever audited by any Auditors. It is clear that the substratum of the company has disappeared. In the circumstances, it is just and equitable that the company be wound up.

4. Mr. Afzaal Ahmed Hashmi, Advocate. 4-Mozang Road, Lahore, is appointed as Official Liquidator who shall take over all the books and assets of the company in his custody and retrieve the funds/property misappropriated by the contributories and, directors of the company and shall also recover amount of Rs.1,85,000 from the purchaser of the assets of the company. He will further proceed with the winding-up of the company in accordance with the provisions of the Companies Ordinance. His fee is fixed at Rs.25,000 per month which he can charge on the liquidation account which he shall open with a bank.

5. In order to meet the initial expenses of the winding up, the petitioner is directed to deposit a sum of rupees two lacs in the liquidation account to be opened by the Liquidator. S.M.B./M-1869/L Order accordingly.