2003 PLP 815 (CLD)

(c) any other matter, including a change in management, for which in the opinion of the Court it is just and equitable that provision should be made. The perusal of the section 290 reproduced above shows that the power /jurisdiction of the Company Court can be invoked by-- (1) any member or members holding not less than twenty per cent. of the issued share capital; or (2) a creditor or creditors having interest equivalent in amount to not less than twenty per cent. of the paid-up capital; or (3) The Registrar when he is of the opinion, that the ground mentioned the section exists for seeking interference of the Court. The causes which are to form basis of a petition under section 290 are:-- (a) That the affairs of the company are or are likely to be conducted in an unlawful or fraudulent manner; (b) that the affairs of the company are being conducted in a manner not provided for in its memorandum; (c) that the affairs of the company are being conducted in a manner oppressive to the member or any of the members or the creditors or creditors; (d) that the affairs of the company are being conducted in a manner prejudicial to the public interest. It may also be noticed that in addition to general power of the Court under section 290, an order under that section may invoke for-- (a) the termination, setting aside or modification of any agreement, howsoever arrived at between the company and any director including the Chief Executive, Managing agent or other officer, upon such terms and conditions as may, in the opinion of the Court, be just and equitable in all the circumstances; (b) setting aside of any transfer, delivery of goods payment, execution or other transaction not relating to property made or done by or against the company within three months before the date of application which would, if made or done by or against an individual, be deemed in his insolvency to be a fraudulent preference; and (c) any other matter including a change in the management for which in the opinion of the Court it is Just and equitable that provision should be made.

8. The remedy provided by section 290 is of a preventive nature so as to bring to an end to oppression and mismanagement on the part of controlling shareholders and not to allow its continuance to the detriment of the aggrieved shareholders or the company. The remedy is not intended to enable the aggrieved shareholders to set at naught what has already been done by the controlling shareholders in the management of the company. The section does not confer any power on the Court to set aside or interfere with past or concludes transactions between a company and third parties which are no longer continuing wrongs. The provisions are essentially intended to control and prevent oppression of the rights of the minority shareholders and mismanagement by the majority, actually alternative to winding-up proceedings. In order to invoke the jurisdiction of the company Judge under section 290 it must be made out that the company's affairs are being conducted in a manner prejudicial to public interest or oppressive to any member or members of the company and the facts justify the making of a winding-up order, but at the same time, making such winding-up order would unfairly prejudice such member or members. The provisions are essentially intended against the tyranny of the majority against the minority shareholders. The power of the Court under these provisions cannot be read as subject to the provisions contained in other chapters which deal with normal corporate management of the company. An analysis of the sections contained in Chapter X of the Ordinance would also indicate that the powers of the Court under section 290 or 291 cannot be read as being subject to the other provisions contained in sections dealing with corporate management of the company in normal circumstances with exception to application of the provisions of the sections 410 to 417 of the Ordinance. The topic or subjects dealt by Chapter X are such that it .becomes impossible to read any such restriction or limitation on the powers of the Court: Without prejudice to the generality of the powers conferred on the Court under section 290, section 291 proceeds to indicate what types of orders the Court could pass. Under clause (c) of the section 291, the Court's order may provide for any other matter for which, in the opinion of the Court it is just and equitable that provision should be made. The only limitation can be impliedly read on 'the exercise of the power would be that nexus must exist between the order that may be passed thereunder and the object sought to be achieved by those sections and beyond this limitation, which arises by necessary implication, it is difficult to read any other restriction or limitation on the exercise of Court's power. Further section intended to avoid winding up of the company, if possible, and keep it going while at the same time relieving the minority shareholders from the acts of oppression and mismanagement or preventing its affairs from being conducted in a manner prejudicial to public interest and, with such objective the Court has power to interfere with the normal corporate management h of the company.

9. After dilating on the scope of sections 290 and 291 with reference to the pre-conditions for the exercise of jurisdiction and limitation on exercise of such jurisdiction, I now venture to address the contentions raised:

10. Mr. Zahid F. Ebrahim, learned counsel for the petitioner contention was that the respondents 2 to 7. controller of the affairs of the EBM, have taken a decision in board meeting dated 22-12-1999 to purchase CFL share at 100% premium by issuing further shares smacks of undue personal enrichment and oppression of minority shareholders. The valuation of CFL shares have been manoeuvred to the undue personal advantage of the respondents 2 to 7 which have been artificially inflated to a ridiculous 100% premium value through a non-transparent process where the sellers have manoeuvred the price at which EBM is being compelled to purchase CFL shares which has been done for no reason other than to personally benefit the respondents 2 to

7. He also pointed out that valuation repot of Messrs Ferguson dated 6-12-1999 clearly specifies that the valuation report is based on the forecast and actual result could differ from the forecast since anticipated events frequently do not occur as expected and variations. may be material. Therefore, his contention was that such report have no credible value based on information manoeuvred by respondents 2 to 7, who are directly interested in the purchase of CFL shares by compelling the EBM to purchase CFL shares at an inflated value of Rs.20, thus loss to EBM and to cause personal benefit to the respondents 2. to 7 and. prejudicial interest of the petitioners. His contention was that efforts of the respondents 2 to 7 to improperly acquire the shares of CFL at ridiculously inflated value are mala fide, oppressive. His further contention was that the respondents 2 to '7 have duel position, i.e. purchaser and seller and the petitioner is being made to pay for the. benefit being made by the respondents 2 to 7 as the purchase is being financed by further issue of shares of EBM, which is oppressive if the petitioner, does not subscribe to further issue of shares to finance profit being illegally made by respondents 2 to 7, the petitioner's shareholding would be diluted from 40% to 13%. His further contention was that it is the latest act in the series of mala fide manoeuvre and acts of oppression of respondents 2 to 7 aimed at either ousting the petitioner. from the EBM or diluting its shareholding. He referred the J.M. No-11 of 1999 filed by the petitioner against, the respondents 2 to 7, with regard to forcible acquisition of petitioner's shares and referred, particularly, sub-para. V of para. 3, containing the resolution dated 26-12-1998 of 33rd Annual General Meeting whereby Board was authorized (a) to direct ABIL/DANONE to end the grave, wrongful and unlawful 'Conflict of Interest' situation by disinvesting its shareholding in and sever its relations with CBL and (b) stop providing support, technical assistance and know how, and (2) should DANONE (40% shareholders in EBM through ABIL) decline or fail to comply with resolutions (a) and (b) above within sixty days hereof, it shall be deemed that oppression, misconduct and breach of-fiduciary obligations and ABIL is liable to forfeit its right to continue as member in' EBM and the Board is authorized in such event of non-compliance of. Resolutions (a) and (b) to transfer 40% shares held by ABIL to other shareholders on prorata basis at fair value in Pound Sterling to be determined and certified by the Auditors. His further contention was that the Court has taken notice of J.M. No.11 of 1999 in order dated 15-3-2000 in the following terms:-- 'The petitioners filed affidavit-in-rejoinder wherein they have reiterated the contentions and grounds raised in the petition and the affidavit. In addition they have also placed a copy of J.M. No. 11 of 1999 pending between the same parties under section 290 of the Companies Ordinance. In the said petition the resolution dated 26-12-1998 passed by the company whereby the shares owned by the petitioners have been decided to be transferred to other shareholders had been challenged; the Court granted interim injunction on 15-3-1999 against the respondents: the petition and the application are pending for final adjudication. He pointed out that the above petition on the basis of statement made on behalf of the respondents was disposed of as they have withdrawn the resolution for the forcibly acquisition of the petitioner's shares.

11. Conversely, Mr. Shaiq Usmani, representing the respondents' contention was that in the Annual General Meeting held on 18-10-1999 the petitioner's representative agreed for the resolution of the conflict of interest through purchasing 49% shares of CFL. The method of financing the purchase of shares was clearly mentioned in the Director's report presented at the annual general meeting by raising capital by issuing fresh shares which was adopted in the annual general meeting. The objection as to the valuation report based on forecasts provided by the respondents, his plea was that the same was provided to the petitioner on 18-1-2000 and subsequently Board through its resolution dated 22-12-1999 approved the issuance of fresh shares under section 86 of the Ordinance at the premium of Rs.10 per share. His further contention was that issuance of fresh shares was in terms of section 86 of the Ordinance. Mr Shaiq Usmani, learned counsel for the respondents referred Single Bench judgment of Lahore High Court in Shahbazud Din Chaudhry and 27 others v. Messrs Service Industries Textiles Limited (PLD 1988 Lahore 1), (a case pertaining to a public limited company), on Court's power to interfere in the working of internal management, wherein three principles of company law, approved by Indian Supreme Court in Shanti Prasad Jain v. Kalinga Tubes Ltd. (AIR 1965 SC 1535) were adopted. These principles are:-- (a) Unless misconduct complained has produced insolvency, an order for winding-up under just and equitable' clause would not be made; (b) that the Courts will not intervene at the instance of shareholders in matters of internal management of the company by directors so long as they are acting within the powers conferred on them by the articles of the company. (c) that if there is lack of confidence that would be the ground for an order for winding-up but that lack of confidence must arise not because the aggrieved party is in minority but must arise from the lack of probity in the conduct of the affairs of the company. Mr. Shaiq Usmani also referred the restrictive interpretation to section 210 of English Company Act by the Court of appeals in re; Jermyn Street Turkish Baths Ltd. ((1971) 3 All. 184), reproduced by the learned Single Judge in para. 27 at page 29 of the report as follows:-- 'The affairs of a company could only be said to have been conducted in a manner oppressive to some part of the members of the company where shareholders having a dominant power in the company, either exercised that power to procure that something was or was not done in the conduct of the company's affairs or procured by an express on implied threats of an exercise of that power that something was not done in the conduct of the company's affairs to amount to oppression such conduct must be unfair or burdensome, harsh and wrongful to the other members of the company or some of them and lack that degree of probity which they were entitled to expect in the conduct of the company's affairs; oppression which was unfair to them as the result of some overbearing act or attitude on the part of the oppressor.' Mr. Shaiq Usmani also referred para.29 of the report which is based on the view expressed by Supreme Court of India in N.I.I. Ltd. v. N.I.H. Ltd. (AIR 1981 SC 1298), which reads as follows:-- "

29. Some of the important principles which clearly emerge from the precedents analysed above are that unwise, inefficient or careless conduct of a director in pursuance of his duties cannot give rise to a claim for relief under section 290, Companies Ordinance, 1984. The person complaining of 'oppression' must show that he has been constrained to submit-to a conduct which lacks in probity or to a conduct which is unfair to him and which causes prejudice to him in the exercise of his legal and proprietary rights as shareholder and not as a director or employee of the company. It is also clear that where the just and equitable' jurisdiction has been applied, the circumstances have always been such as to warrant the interference that there has been at least unfair conduct, abuse of powers and an impairment of confidence in the probity with which the affairs of the company were being conduced as distinguished from mere resentment on the part of minority at being out-voted on some issue of domestic policy." On the above premises, Mr. Shaiq Usmani contended that from the facts brought, there is no oppression insofar as respondents are concerned, all the decisions have been taken by the Board of EBM in the interest of the company. The decision to issue fresh shares was also known to the petitioner through the Directors' report and provisions of section 86 of the Companies Ordinance was fully complied with. His contention was that it is necessary for the Court to first arrive at a conclusion that the circumstances brought out by the petitioners are such that the company ought to be wound-up and it is only then that the Court can pass an order under section 290 and to support contention he has referred the case of Rajahumundry Electric Supply Corporation Ltd. v. A. Nageshwara ,Rao and others (AIR 1956 SC 213), in the above case, inter alia was pleaded that allegations in the application were sufficient to support a winding-up order under 162, and that, therefore, no action could be taken under section 153-C. The Bench consisting of Bose and Venkatarama Ayyar. Judges agree with the contention that before taking action under section 153-C, the Court must, .be satisfied that circumstances exist on which an order for winding-up could be made under section

162. It was further observed that the true scope of section 153-C is that whereas prior to its enactment the Court had no option but to pass an order for winding-up when the conditions mentioned in section 162 were satisfied, it could now in exercise of the powers conferred by that section make an order for its management-by the Court with a view to its being ultimately salvaged. Where, therefore, the facts proved do not make out a case for winding-up under section 162, no order could be passed under section 153-C. The sums and substance of the contention of Mr. Shaiq Usmani, learned counsel for the respondents was that neither the petitioner was able to establish a case of oppressiveness nor the facts brought could be the grounds for winding-up of the respondent 1, therefore, the petition has no merits.

12. The facts which emerge from the pleadings are that petitioner ABIL shareholding in respondent 1 is 40%, whereas, 60% shares belong to groups of respondents 2 and 3, they can be categorized as 'ABIL Group', 'K.B. Group' & 'E.Q Group' i.e. three Croups. The respondent 1 is private limited company.

13. Dealing with the true character of the company in Scottish Cooperative Wholesale Society Ltd. v. Meyer ((1958) 3 All ER 66) Lord Keith said that the company was in substance, though not in law, a partnership, consisting of the society, Dr. Meyer and Mr. Lucas and whatever may be the other different legal consequences following on one or other of these forms of combination, one result followed from the method adopted, 'which is common to partnership, that there should be the utmost good faith between the constituent members'. Finally, it was held that the Court, ought not to allow technical pleas to defeat the beneficent provisions of section

210. The rule as regards the duty of utmost good faith, on which stress was laid by Lord Keith in Meyer, received further and closer consideration in Ebrahimi v. Westbourne Galleries Ltd., (1973) AC 360 (HL) wherein Lord Wilberforce considered the scope, nature and extent of the just and equitable' principle as a ground for winding-up a company and it was held by the House. of Lords that the words just and equitable' which occur in section 222 (f) of the English Act (corresponding to our section 305(h)), was not to be construed ejusdem generis with clauses (a) to (e) of section 222 (corresponding to our clauses (a) to (g) of section 305). Lord Wilberforce observed that the words just and equitable' are recognition of the fact that a limited company is more than a mere legal entity, with a personality in law of its own; and that there is room in company law for recognition of the fact that behind it, or amongst it, there are individuals, with rights, exceptions and obligations inter se which are not necessarily submerged in the company structure; In re; Yenidji Tobacco Company Limited, ((1961) 2 Ch. 426), Master of Rolls Lord Cozens-Hardy observed that in affirming the order he had treated it as a partnership, although it was strictly not a partnership, for, according to him, precisely the same principles ought to reply to a case like this where in substance it is a partnership in the form or guise of a private company. It was a case of winding-up of private limited company and the winding-up order of company made by a learned Single Judge was upheld on appeal, as it was proved that the two directors of the company were not on speaking terms, that the so-called meetings of the Board of Directors have been almost a farce or comedy and no business which deserves the name of business in the affairs of the company could be carried on. The leading authority on the point in our country is of Ladli Prasad Jaiswal v. The Karnal Distillery Co. Ltd. (PLD 1965 SC 221), the apex Court by adopting the principle enunciated in re: Yenidje Tobacco Company Limited, said that 'now in case of private limited company the tendency of the Courts has uniformally been to treat it more or less as a partnership and to apply the same principles in the winding-up of a private limited company as would entitle a partner to have a partnership firm dissolved, commonly the exclusion of the partner from the management of a firm, the existence of a state of deadlock between the partners or the justifiable lack of confidence in the management have been regarded as just and, proper, grounds for dissolving a private limited company: The above principle was followed by this Court in re: Kruddson Limited (PLD 1972 Karachi 376) by late Justice Tufail Ali A. Rehman by observing: "That .the true position was that a private limited company, in the matter of a winding-up petition, could be treated as a partnership firm in the sense only that such circumstances as would justify the dissolution of a firm under section 44 of the Partnership Act, 1932, on the ground that it was just and equitable to order a firm to be dissolved, would also justify the winding-up of a private company but it was neither possible nor desirable, to attempt an exhaustive enumeration of, the circumstances in which a Court would order a winding-up under the just and equitable' clause. It was further held that the right to participate in the management of the company does not mean the right exclusively to manage any part of the company's business and that the right of a shareholder is to participate by the exercise of his voting rights in the management of the company." In Messrs Nagina Films Ltd. v. Usman Hussain and others (1987 CLC 2263), a Division Bench of this Court comprising of Ajmal Mian anti Muhammad Mazhar Ali, JJ., after examination of a number of cases on the subject including Ladli Prasad Jaswal case, enunciated inter alia, the following- principles: (a) That principles of dissolution of partnership may be applied if the apparent structure of the company is not the real structure and on piercing the veil it is found that is reality it is a partnership. (b) Generally the exclusion of a partner from the management of the firm: existing of a state of dead lock between the partners or justifiable lack of confidence in the management have been regarded as just and proper grounds for dissolving a private limited company. The same principles were followed by Mr. Justice Mamoon Kazi in Iqbal Alam and another v. Messrs Plasticrafters (Pvt.) Limited and 4 others (1991 CLC 589). The proper interpretation of the principle laid down by the apex Court in Ladli Prasad Jaiswal (supra) and followed in subsequent cases is that in case of winding-up, a private limited company may be treated as a partnership firm to the extent as would justify the dissolution of a partnership firm under section 44 of the Partnership Act and the following grounds, which are available to a partner for having a partnership firm dissolved, are also available to a shareholder for the winding-up a private limited company under the just and equitable' clause:-- (1) exclusion of a partner from the management of a firm; (2) the existence of a state of deadlock between the partners; and (3) justifiable lack of confidence in the management. In the instant case, the respondent-company is a private limited company of three groups, petitioner's ABIL Group, respondent's K.B. Group and 'E.Q Group', therefore, any attempt on the part of respondents to oust petitioner from the company and/or dilute their shareholding is bound to result into bitterness and justifiable lack of confidence in the management. As a consequence thereof, the above principles would apply as are applicable for the dissolution of a partnership firm.

13. The petitioner's case is that the decision of the Board of Directors held on 22-12-1999, whereby the Board has taken a decision to purchase the shares of CFL on 100% premium through right issue is oppressive and against the interest of not only the petitioner but also against the respondent 1 as well as the respondents are purchasing their own shares at 100% premium and is getting two shares in petitioner 1 against one share of CFL by manipulated value based on forecast provided by none other than the respondents 2 and

3. It is true that an isolated act, may not necessarily and by itself support the inference that the commission/ omission was mala fide or burdensome, harsh and wrongful. But a series of acts/omissions following upon one another can, in the context, lead justifiable to the conclusion that they are a part of the same transaction, of which the object is to cause or commit the oppression of persons against whom those acts are directed. This may usefully be illustrated by reference to a familiar jurisdiction in which a litigant asks for the transfer of his case from one Judge to another. An isolated order passed by a Judge which is contrary to law will not normally support the inference that he is biased but a series of wrong or illegal orders to the prejudice of a party are generally accepted as supporting the inference of a reasonable apprehension that the Judge is biased and that the party complaining of the orders will not get justice at his hands. The question sometimes arises as to whether an action in consonance with law is per se oppressive, as was done by W.H. Bhagwati, J. in S.M. Ganpatram v. Sayaji Jubilee Cotton and Jute Mills Co. (AIR 1965 Gujarat 96) that 'a resolution passed by the directors may be perfectly legal and yet oppressive, and conversely a resolution which is in contravention of the law may be in the interests of the shareholders and the company'. On this question, Lord. President Cooper observed in Elder v. Elder (1952) SC 49: The decisions indicate that conduct which is technically legal and correct may nevertheless be such as to justify the application of the just and equitable' jurisdiction, and, conversely, that conduct involving illegality and contravention of the Act may not suffice to warrant the remedy of winding-up, especially where alternative remedies are available. Where the just and equitable' jurisdiction has been applied in cases of this type, the circumstances have always, I think, been such as to warrant the inference that there has been, at least, an unfair abuse of powers and an impairment of confidence in the probity with which the company's affairs are being conducted, as distinguished from mere resentment on the part of a minority at being outvoted on some issue of domestic policy. In Needle Industries (India) Ltd. and others v. Needle Industries Newey (India) Holdings Ltd., and others (AIR 198 (sic) SC 1298), Y.V. Chandrachud, C.J., on behalf of the Bench after reviewing the various decisions said that where the party complaining oppression has failed to make out a case of oppression, the Court is not powerless to do substantial justice between the parties and placed them, as nearly as it may in the same position in which they would have been if the crucial meeting were not held in accordance with the law. In the instant case, as noted above, the decision to purchase the shares of CFL at 100% premium is not an isolated act, earlier to this, through 33rd Annual General Meeting, the respondents tried to forcibly acquire the petitioners shares on the plea of conflict of interest without recourse to the provisions of section

290. Such act on the part of the respondents lack that degree of probity, which the petitioners were entitled to expect in the conduct of the company's affairs. I am conscious of the limitation that the person complaining of oppression is to show that he has been constrained to submit to a conduct which lacks in probity, conduct which is unfair to him and which causes to him in the exercise of his legal and proprietary rights as shareholder. In my view, an attempt on the part of respondents to purchase petitioners' shares without recourse to the provisions of section 290 by resolution dated 26-12-1998, followed by the purchase of CFL shares at 100% premium on valuation based on the forecast provided by the respondents are sufficient to demonstrate that the conduct of the respondents as directors is with purpose to oust the petitioners or dilute their share, lack that degree of probity, which the petitioner is entitled to expect in the conduct of the affairs of the company, more particularly, when the respondents have duel position, seller and purchaser, to achieve transparency, the process of valuation ought to have been done under the supervision of an independent body/source. Once it is demonstrated that the affairs of the company are being conducted in manner oppressive to members (petitioner), a justification for a winding-up order on the ground of lack of confidence in the management, such winding-up order would unnecessarily prejudice the members.

14. This takes me to the C.M.A. No.3518 of 2001, the contempt application. The main plea, against the contempt application taken by the respondents was that order dated 26-1-2000, was to remain effective till the compliance of the directions contained in order dated 15-3-2000. The respondents complied with the directions on 20-9-2000 and on that day, the order dated 26-1-2000 come to an end. Mr. Shaiq Usmani further contended that directions in terms of paras. (a) and (b) were complied with by the respondents whereunder they again supplied the entire material including the surveyor Iqbal Nanji & Co. to the petitioners within the stipulated time and also instructed the Chartered Accountants to evaluate CFL shares as per Court orders. The petitioners themselves failed to settle the matter of fees and remain engaged in the correspondence with the auditors. The petitioners, have to blame themselves. After compliance, the position as of 16-1-2000 was restored. The respondents were within their right to purchase the shares of the petitioners as they failed to exercise their option to purchase the shares.

15. It is contended by the petitioners' counsel that despite clear direction of the Court by order dated 15-3-2000 to the respondents to supply to the petitioner entire material record and then carry out revaluation, the respondents 2 to 7 connived with the auditors and suppressed the material/ documents and failed to carryout revaluation as directed by order dated 15-3-2000. The respondents went ahead and purchased the shares of CFL of face value of Rs.10 at Rs.20 and financed the sale by issuing further shares to which no offer was made to the petitioner after the co-called revaluation. It was also contended that the suppression of material documents with connivance of auditors is proved by a cursory examination of letters dated 21-6-2000 (Annexure E-5, page 671 and Annexure E-14, Draft of the letter dated 21-6-2000 page 809). Annexure E-5 is letter dated 21-6-2000 addressed to the petitioners' counsel by A.F. Ferguson & Co., copy to the respondent 1, in response to letter dated 30-5-2000, whereby the documents/ information were provided to the petitioners in connection with the valuation of shares of CFL. It contains three documents:-- (1) Audited financial statements for the years ended June 30, 1996 to June, 1999. (2) Projected balance sheet, profit and loss account and cash flow statement for the years ending June 30, 2000 to June 30, 2009. (3) Valuation report of Iqbal Nanjee & Co. The letter dated 20-6-2000 has been produced by the petitioner through, affidavit in support of the contempt application. The draft letter dated 20-6-2000 has been filed by the respondents through counter-affidavit (Annexure E-14) whereby the auditors had proposed to point out the basis of valuation on following information:-- (1) Audited financial statements for the years ended June 30, 1996 to June 30, 1999. (2) Projected balance sheet, profit and loss account and cash flow statement for the years ending June 30, 2000 to June 30, 2009 as prepared by the management of CFL. The reasonableness of these projections were ensured through review of the books and accounts of CFL for prior years. (3) Following agreements between Coronet Foods (Pvt.) Limited and English Biscuit Manufacturers (Pvt.) Limited (EBM): (a) Marketing and management agreement. (b) Licensing of 'Brands' agreement. (c) Agreement for use of 'Peid Piper' trade mark on CFL products. (4) Valuation report of Iqbal A. Nanjee & Co. The agreements detailed at S. No.3 above; between the Coronet Foods (Pvt.) Limited and English Biscuit Manufacturers (Pvt.) Limited (EBM) pertaining to (a) marketing and management, (b) licensing of Brands and (c) agreements for use of 'Peid Piper' trade mark on CFL products were withheld from the petitioner. The hand written note is available on Annexure E 14 its contents are 'this should not be mentioned and deleted has also suggested by SIDAT HYDER' with initial of Iqbal Ali Muhammad to whom the draft appears to have been sent for approval before sending it to the petitioner. This is sufficient to establish that all information /materials were not conveyed to the petitioners in terms of order dated 15-3-2000. Secondly, the notice dated 14-1-2000 issued to the petitioner pursuant to the Article 7 of the Company for conveying their acceptance had already expired and no fresh offer was given to the petitioners for purchase of the right share. Therefore, I have no hasitation to, conclude that the respondents purchased the shares of CFL without compliance of the directions contained in order dated 15-3-2000 and also purchased the right shares without notice to the petitioner with intention to dilute the petitioners holding in the company. Therefore, the respondents. 2 to 7 have disobeyed the order, thus liable for the contempt. Therefore, the application (C.M.A. No.3518 of 2001) and the petition are disposed of in the following terms:-- 1. (a) The respondents are directed to restore ante 15-3-2000 position by reversing the process of acquisition of CFL shares and issuance of rights shares of EBM forthwith. (b) The respondents 2 to 7 have rendered themselves liable for attachment of their properties, however, the end of justice would be met if they are fined in the sum of Rs.10,000 each, same is imposed. The amount of fine be deposited within a week with Nazir of this Court, failing which their property (shareholdings in EBM) stand attached. 2. (a) The decision of Board of Directors dated 22-1-1999 with regard to further issue of shares to finance the acquisition CFL shares and all actions in pursuance thereof are declared illegal and of no legal effect. (b) The valuation of CLF shares be done a fresh through independent valuator/ auditor to be engaged at the expenses of EBM. (c) On the basis of valuation fixed by auditor, the shares of CFL be purchased from the finance by issuance of right shares. (d) The petitioner be offered to purchase right share in terms of section 86, if declined or not subscribed, I then be sold to other shareholders.

3. The Official Assignee is appointed Commissioner for implementation of above order with power to appoint independent auditor and to ensure that all the materials, records, reports and assistance required by auditor, in the said process, are provided to auditors by the respondents. The petition with listed application is disposed of in above terms, the parties are left to bear their own costs. M.B.A./A-424/K Order accordingly.