2005 PLP 151 (CLD)

Limited. National Bank of Pakistan 4.5 11,070,000 .. 398,260,000 386,590,000 Director's Loan (Unsecured) Mr. Shahid Iqbal 4.6 54,000,000 452,260,000 386,590,000"

8. According to the learned counsel, in the years 2002 and 2003 the Company has been securing bridge finance loans from Allied Bank Ltd. and a comparison D shows that the loan has been increased in the year 2003. An excerpt from paragraph 5 of the balance-sheet is given below:-- "Bridge Finance Secured Allied Bank Limited (ABL) 5.1 15,000,000 15,000,000 Long Term Venture 5.2 29,284,840 29,284,840 Capital Musharika 44,284,840 44,284,840 Less Current portion (8,525,381) shown under current liabilities 44,284,840 35,759,459"

9. Further reference is also made to paragraph 6 of the statement in the balance-sheet to show that further loans were obtained both in the years 2002 and 2003 reflecting the following position which is an excerpt from these:-- "Liability against Finance Lease Long Term Venture 6.1 4,068,404 4,068,404 Capital Modaraba Inter Asia Leasing 6.2 5,695,554 6,382,354 Company Limited MCB Kia Sportage 6.3 1,127,440 Citibank-Suzuki Cultus 6.3 427,614 MCB-Suzuki Cultus 6.3 443,545 MCB-Suzuki Baleno 6.3 560,313 MCB-Toyota Corolla 2 OD 6.3 912,063 13,234,933 10,450,758 Less Current portion shown under current (1,170,686) liabilities (4,592,877) Less Amount due but not (823,170) paid (5,416.047) (1,170,686 7,818,886 9,280,072"

10. Learned counsel while referring to these loans has stated categorically that there is nothing on record to suggest any repayment done against these loans by this Company.

11. Regarding the miscellaneous expenses which have been incurred over the previous years, Dr. Parvez Hassan, Advocate points towards paragraph 15 of the balance sheet at page 135 of the file which shows miscellaneous expenses at Rs.522,412,166 for the year 2003 against Rs.383,786,280 for the previous year. Learned counsel states that this is an acknowledged liability as reflected in the balance-sheet and the statement given by the respondent in the written statement that it was a solvent company and what is alleged by the petitioners was incorrect, is belied by this figuration.

12. Learned counsel has referred to the additional rejoinder wherein he has mentioned about the long term liabilities and liabilities against the assets in the following terms:-- "Long term Liabilities (Amount in Million) 2001 2002 2003 36.955 388.486 416.544 Liabilities against Assets subject to lease finance:-- 2001 2002 2003 1.136 9.280 7.817"

13. Learned counsel further went on to say that a statutory notice having been given, there is presumption of truth attached regarding the inability to pay.

14. Learned counsel emphasized saying that on the basis of the figuration which he has referred to above, this was no longer viable project; that its substratum has gone; that it is unable to pay its debts; that after the issuance of the statutory notice, it was bound to establish by discharging the onus on it that it was commercially solvent and was in a position to meet its liabilities. That its inability to fulfil the requirements of the contract alongwith the addendum to the agreement vis-a-vis the petitioners, has further established its weak liquidity position. Learned counsel states that in view of these circumstances, this was a fit case where winding up has to be ordered and placed reliance on the following case-law: (1) Mazhar Ali v. Lasni Straw Board Mills 2003 CLD 1494; (2) Rauf B. Kadri. v. State Bank of Pakistan 2002 CLD 1794; (3) Ali Woollen Mills v. IDBP PLD 1990 SC 763; (4) PICIC v. Waseem Beverages Limited. 2000 MLD 660 and (5) Messrs Bankers Equity. Limited (BEL) v. Balochistan Coasters Limited PLD 1997 Karachi 416.

15. On the question of the pendency of the civil suit, referred to above, in the Sindh High Court, it is said, that it was no bar and placed reliance on the cases of: (1) Platinum Insurance Company Limited v. Daewoo Corporation PLD 1999 SC 1; (2) BCCI v. Hamaliya Textile Mills 1999 MLD 3195; (3) Habib Bank Ltd. v. Hamza Board Mills PLD 1996 Lahore 633; (4) UBL v. Pak Wheat Products Limited PLD 1970 Lahore 235; (5) IDBP v. Modern Poultry Farm 1990 CLC Karachi 1030 and (6) BCCI through Habib Bank Ltd. v. Hamaliya Textile Mills (Pvt.) Ltd. 1999 MLD 3195. In paragraph 8 of the judgment of the latter case i.e. BCCI v. Hamaliya Textile Mills 1999 MLD 3195, it was observed as follows:-- "It was next argued by the respondent's counsel that the petition was not maintainable as a suit has been filed for recovery of the same loan on the basis of which this petition has been instituted by the petitioner, before the Banking Court. However, learned counsel for the respondent is unable to show any law which bars the petitioner from seeking winding up of the company on the ground of its inability to pay the debts on account of pendency of suit for recovery of money. On the other hand, the Companies Ordinance, 1984 visualizes the situation where the suits have already been filed by or against the company and provides. in section 316 that on order of winding up being passed the proceedings in the suit would be stayed. Reference may be made-to Messrs Industrial Development Bank of Pakistan v. Messrs Trade and Industries Publications Limited 1989 MLD

374. Be that as it may, this discussion has now been academic inasmuch as the suit filed by the petitioner has since been decreed as mentioned above by this Court as Banking. Court on 8-7-1998. "

16. In view of the arguments addressed and the record which is available having been seen and as there was no one on behalf of the respondent side to controvert the verbal arguments of the learned counsel for the petitioner, although the written statement and the other documents produced by the respondent side were gone through and as the respondent was also proceeded ex parte vide orders of this Court dated 19-10-2004 and as no one having appeared even today or yesterday on behalf of the respondent and while keeping in view the orders of this Court dated 27-9-2004, whereby it was directed that the final arguments shall take place on 19-10-2004, this Court allows the petition under section 305 of the Companies Ordinance, 1984.

17. Therefore, consequently, Mr. Sittar Pingar, Advocate, C/o Liaqat Merchant & Co. Advocates, Karachi, is appointed as the Official Liquidator, who is directed to take over all the assets of the company as well as all its record into his possession and proceeded with the sale of the assets in accordance with law while submitting a fortnightly report on the action taken by him pursuant to this entrustment. The Official Liquidator shall be submitting a personal bond in the sum of rupees one hundred thousand immediately in the office.

18. The Official Liquidator shall not incur the expenses beyond Rs.10,000 without the permission of this Court and for enabling him to carry on with the day-to-day expenditure, the creditors are directed to deposit a sum of Rs.1,00,000 (Rupees one lac) in a National Bank of Pakistan Branch at Karachi so that the Official Liquidator may draw the amount from the account in accordance with what has been ordered above. The Official Liquidator may appoint guards for protecting the property and assets of the company and whose remuneration he will draw from the said amount with the permission of this Court. The Official Liquidator in the meanwhile will receive Rs.10,000 as his subsistence fee which will be adjustable from the overall commission due to him subsequently.

18. A copy of this order shall also be attached with the application for opening of the account with a branch of the National Bank of Pakistan at Karachi for compliance with respect to the directions laid in paragraph 17 of this judgment with respect to the withdrawal of the amount by the Liquidator. M.B.A./S-252/L Order accordingly.