2005 PLP 463 (CLD)

30. The Auditor, appointed pursuant to rule 19 of the rules, carried out scrutiny of the affairs of the respondent‑Company and submitted its report to the petitioner on 30‑6‑2000. In the report, following specific findings were given by the Auditors: (1) That funds of the respondent‑Company were misappropriated and misapplied by fictitious Musharakas to the Chairman and his family (Rs.37.092 million); income booked instead of being suspended (Rs.31.653 million); dubious leasing (Rs.69.16 million); submission of fake leases for reimbursement from Asian Development Bank (Rs.100 million); leasing facilities granted in violation of the rules (Rs.188.26 million), (2) That the affairs of the respondent‑Company are being conducted in unlawful and fraudulent manner as the largest lease given in the name of M/s. Alpine International (Pvt.) Limited and another lease in the name of M/s. Mehran Animal and Poultrv Feeds (Pvt.) seems to be fake lease as the assets in both cases do not exist, that the management has been found to have embezzled funds of a Musharika investment of Rs.37.092 million, the Prudential Commercial Bank Limited has denied, in writing, that they have issued any guarantee for US $ 2.750 million in order to obtain Asian Development Bank as such it appears to be a fictitious guarantee, submission of fake documents to Asian Development Bank, submission of leases which had already been reimbursed by ADB and Kreditanstault Fur Wiederaufbau (KFW) Loan, the investment made during the year could not be proved to be genuine and short term transaction exposing the company to unwarranted risk for obtaining more profit. (3) Fund based facilities were provided to the relatives of the Chairman in the case of Alpine International and Mehran Animal and Poultry Feed. In one case even the address of the company was that of Prudential House, the head office of the Prudential Group. (4) That the respondent‑Company was managed contrary to applicable laws and especially in blatant contravention of the rules as paid‑up capital of the respondent Company as on 30‑6‑2000 was Rs.149.238 million and Rs.242.830 million were required to be made in the accounts of the respondent‑Company for bad/doubtful debts whereas the respondent‑Company made provision of only Rs.$8.50 million, the entire capital of the respondent‑Company has, as such, been totally eroded and there is a shortfall of Rs.5 million in the capital of the respondent‑Company, contrary to rule 71(xi) of the rules, granted financial facilities to fictitious entities; renewed or restructured existing facilities without fresh documentation; contrary to section 196 of the Companies Ordinance, facilities have been obtained without approval of the Board of Directors from relatives of the Chairman at exorbitant rates at times when `no funds were required, in violation of section 208 of the Companies Ordinance, investments were made in associated companies with any special resolution in excess of the prescribed limit of 30% of the paid‑up capital and free reserves, entered into loans at exorbitant rates. (5) That changes in the Board of Directors were made without the approval of the petitioner.

31. All these allegations were not denied as the learned counsel for the respondent‑Company had simply stated that `all allegations stated in paras.7, 8, 9, 10, 11 and 12 pertain to the period before 2‑6‑2001 and the present respondent has no concern whatsoever with any of the allegations raised in these paras'.

32. It is not denied that five Directors of the respondent Company were replaced at the annual general meeting held on 26‑12‑2000 without obtaining approval form the competent authority i.e. the petitioner and, subsequently, more changes in the Board of Directors were made without approval from the petitioner. Mr. Tayebaly submitted that it is the petitioner who had not rejected any proposed director of the respondent Company but at the same time has not even approved such Directors. This creates an impression as though the petitioner was bound to approve the names submitted to it. It is not so, rule 7(2)(xii) of .the Leasing Companies (Establishment and Regulation) Rules, 2000, read as under: "

7. Terms and conditions of operation.‑‑‑A leasing company shall operate in accordance with the following conditions, namely:‑‑ (1) ‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑ (not relevant) ‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑ (2) It shall not (i) to (xi) ‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑(not relevant ‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑ (xii) make change in its Chief Executive and Board of Directors excluding Directors nominated by creditors and sponsoring financial institution without prior approval of the Commission." Thus, it is incumbent upon a leasing company to obtain prior approval of the Commission if it wants to bring any changes in its Board of Directors or change the Chief Executive. It is an illogical contention that the petitioner has "not rejected the approval" for the appointment of new Directors, it was for the respondent‑Company to obtain approval from the petitioner' prior to the appointment and not afterwards. The currently; serving "Chief Executive" of the respondent has not been approved by the Commission and can only be said to be unlawfully occupying his post.

33. In addition to the above, it had come on record that Rasheedullah Yacoob, Chairman of the Prudential Group, had entered into an agreement with one Sabur Rehman, claiming to be Chairman of Damson Hill Plc of England, for sale of 5.3 million shares of the respondent‑Company and the information sought by the Commission in respect of the said Sabur Rehman or Damson Hill Plc of England were never provided to the Commission.

34. Mr. Arshad Tavebaly also argued that for above the above violations, as reported in the Special Audit Report, the proper remedies are available under specific provisions of the Companies Ordinance, 1984 and the remedy is not for appointment of an Administrator under sections 290, 291 to 295 of the Ordinance.

35. There are specific allegations as to the manner in which fictitious leases have been created, money has been advanced to relatives of the Chairman, sham documents were submitted to Asian. Development Bank, a bank guarantee was said to have been issued by Prudential Commercial Bank which fact was denied by the Bank in writing. There is no denying the fact that for these violations there are specific punishments provided in the Companies Ordinance. However, it does not mean that the Authority burdened with the onerous task of ensuring that all the companies perform their duties according to law can only impose such fines as mentioned in the respective provisions of law only and allow the irregularities and illegalities to continue. If this plea of the learned counsel for the respondent‑Company is entertained then it would mean that if a car is parked in a no parking area the only thing which a police man can do is to fine', it for parking in a no parking area and leave the matter as it is. If the wrongly parked car is causing hindrance in the smooth flow of traffic even then the policeman cannot do anything merely because he has fined the driver for the violation committed by him. If such was the intent, the Legislature would not have inserted section 290 of the Ordinance with such vast powers because, as argued by Mr. Arshad Tayebly, punishments for all of the individual breaches are provided for in the Ordinance. The intent of the Legislature seems to be that where an isolated breach of a provision of the Ordinance occurs, the violator would be punished by the penalty provided for such gross violation. However if a series of violations are committed and are not redressed on the pointation of the, relevant authority, then it would mean that the affairs of the; company are deliberately being conducted in an unlawful and fraudulent manner as well as in a manner not provided for in the Memorandum because evidently a Memorandum does not provide that the affairs of a company should be conducted in any other manner.

36. It is not denied that changes were made in the Board of Directors without the approval of the petitioner, that the information sought by the petitioner has not been supplied by the respondent‑Company as yet, though at this belated stage, it was offered during the course of arguments that the respondent‑Company is ready to furnish the information before this Court. However, this Court will restrain from assuming the duties and responsibilities of the petitioner and the right course for the respondent‑Company was to provide the information asked for to the petitioner so that necessary approval may have, been granted.

37. The learned counsel, in respect of the dispute about shareholding of the respondent‑Company, submitted even assuming that there is controversy regarding the shareholding, the change of management by way of appointment of an Administrator is not the correct solution. Even if an Administrator is appointed the shareholding dispute would remain and as such, the remedy under section 290 is clearly inapplicable. He submitted that on the direction of this Hon'ble Court a complete list of the present shareholders of respondent Company has been filed before the Court and copy supplied to the petitioner and in obedience to the orders passed in Suit No.639 of 2002, filed by respondent‑Company against its previous Share Registrar, the previous Share Registrar "Share and Corporate Services Ltd." is in the process of handing over the documents and records to the Nazir of this Hon'ble Court. As such, the dispute regarding the shareholding is concerned, the same is completely taken care of as this Hon'ble Court has been seized of the matter and no transfer of shareholding can be done without the permission of this Hon'ble Court. In view of this development, the appointment of an Administrator is completely uncalled for.

38. So far as Grounds A to K, stated in the petition for appointment of an Administrator, are concerned, it was submitted by the learned counsel for the respondent‑Company that action should be initiated against those persons who have acted in violation of the provisions of the Ordinance and in respect of allegations, remedy is available in other provisions of the Ordinance and section 290 of the Ordinance is not applicable. So far as violation of rule 5 of the Leasing Rules is concerned, the learned counsel submitted that these rules have been repealed by Non‑Banking Finance Companies (Establishment and Regulation) Rules, 2003 and, in any, event rule 5 is not applicable as it relates to the grant of licence which was already granted to the respondent‑Company before promulgation of the said rules. He denied that the respondent‑Company is involved in any kind of money laundering as envisaged under rule 7(xi) of the Leasing Rules.

39. The learned counsel also submitted that an Administrator cannot be appointed on the assumption that one Mr. Sabur Rehman is heading the management of the respondent‑Company, more so, when this particular person Mr Sabur Rehman has not been impleaded as respondent. It is further submitted that even assuming but not conceding that Mr. Sabur Rehman is suspect in the eye of law, a harsh order against the respondent‑Company of appointing an Administrator cannot be passed on such ground. This Hon'ble Court in the summary jurisdiction cannot go into these questions as to whether the shares have been purchased by fraud or the person who has allegedly purchased them is a convict or not. Even otherwise, it has been submitted that the respondent‑Company has been informed that Mr. Sabur Rehman has sold his entire shareholding to one Mr. Ashfaq Asghar. He placed reliance on the following cases: (1) Rohtas Industries Ltd. v. S.D. Agarwal and another AIR 1969 Supreme Court 707, (V 56 C 135). (2) Pakistan WAPDA and others v. Kot Addu Power Co. Ltd. PLD 2000 Lahore 461, and (3) Shahbazuddin Chaudhry v. Service Industries Textile Limited PLD 1988 Lahore 1.

40. As regards the relief claimed in the petition, the learned counsel submitted that the relief claimed by the petitioner is against the Board of Directors and the Chief Executive but the petitioner has failed to implead such Directors and Chief Executive as respondents in the subject‑matter. Since the very persons against whom the relief is being claimed have not been impleaded as respondent, no such order can be passed against them. He also submitted that appointment of Receiver is the harshest order that can be passed and can be passed only if the Court has come to the conclusion that the affairs of the company are being conducted, or are likely to be conducted, in an unlawful or fraudulent manner, or in a manner not provided for in its memorandum or in a manner oppressive to an v of the members or creditors or are being conducted in a manner prejudicial to the public interest. Appointment of Administrator would completely destroy the public confidence and the respondent‑Company would suffer irreparable harm and damage. Therefore, the reliefs claimed in the petition cannot be granted and the petition is liable to be dismissed.

41. At the end of his detailed arguments, the learned counsel also proposed that since it appears that the main grievance of the petitioner is that the Board of Directors have not been approved by the petitioner and as such they cannot perform their duties as the Board of Directors, then the Court may direct that elections be held to elect and appoint Directors of the respondent‑Company and the names of the Directors put forward by the shareholders for election would first be approved from the petitioner and only after obtaining the approval of the names of the proposed Directors, a General Meeting can be held to elect such Directors and such General Meeting of the shareholders can be carried out under the supervision of the Court. As such, the new Board of Directors elected by the shareholders can run and manage the affairs of the respondent Company.

42. It was stated that a "consent order" was passed in Suit 1214 of 2001 on 19‑11‑2001 to the effect that the petitioner "shall not create any hindrance or obstacle for the plaintiff to perform his functions as the Chief Executive Officer of the respondent‑Company" and this petition is in violation of the said consent order. Suffice it to say that the said consent order clearly states that "They shall not take any steps for his removal unless through due process of law " which is followed by "and till the disposal of the applications that they have filed before the Lahore High Court". The petitioner is a statutory organization and it cannot be denied the right to perform its statutory duties and if it is so construed then the petitioner would be compelled to become a silent bystander to the wrong doings of the respondent‑Company. Filing of a petition cannot be termed as not falling within the term "due process of law". Admittedly the case before the Lahore High Court is a case in respect of another company, namely, Universal Leasing Corporation Limited and has nothing to do with the present case which is based on steps taken by the petitioner according to law in discharge of its function. By no stretch of imagination it can be said that the petitioner has to become a silent spectator to the misdeeds, if any, of a company simply because such a consent order has been passed in respect of another company. Such an action of the petitioner is in conformity with the aforesaid consent order.

43. Part X of the Companies Ordinance, 1984, consisting of sections 290 to 296, deals with the prevention of oppression of the members/ creditors and mismanagement of the affairs of a company. Section 290 thereof reads as under: `

290. Application to Court.‑‑‑-"(1) If any member or members holding not less than twenty percent. of the issued share 'capital of a company, or a creditor or creditors having interest equivalent in amount to not less than twenty per cent of the paid‑up capital of the company, complains or complain, or the registrar is of the opinion, that the affairs of the company are being conducted, or are likely to be conducted, in an unlawful or fraudulent manner, or in a manner, not provided for in its memorandum, or in a manner oppressive to the members or any of members or the creditors or any of the creditors or are being conducted in a manner prejudicial to the public interest, such member or members or, the creditor or creditors, as the case may be, the registrar may make an application to the Court by petition for an order under this section. (2) If, on any such petition the Court is of opinion:‑‑ (a) that the company's affairs are being inducted, or are likely to be conducted, as aforesaid; and (b) that to wind‑up the company would unfairly prejudice the members or creditors the Court may, with a view to bringing to an end the matters complained of; make such order as it thinks fit, whether for regulating the conduct of the company's affairs in future, or for the purchase of the shares of any members of the company by other members of the company or by the company, and, in the case of purchase by the company, for the reduction accordingly of the company's capital or otherwise. (3) ‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑ not relevant ‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑ (4) ‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑ not relevant ‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑ (5) ‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑ not relevant ‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑

44. This petition has, been moved under section 290 of the Ordinance and the object behind provisions of section 290 appears to be that the affairs of the company must be conducted in lawful manner and strictly in accordance with the Memorandum and Articles of Association of the company. As argued by Mr. Arshad Tayebaly, counsel for the respondent Company, the section is intended to avoid winding‑up, if possible, and keep the company going while, at the same time, taking remedial measures to cure mismanagement of the company.

45. So far as the contention of Mr. Arshad Tayebly, learned counsel for the respondent‑Company, that an order under section 290 of the Ordinance can only be made when the petition does not raise any disputed question of fact and highly complex matters and cases of a highly technical nature are not for the High Court to determine and adjudicate under section 290, is concerned, suffice it to say that the irregularities and mismanagement committed are contained in paragraphs 7‑12 of the petition and all that is said about these paragraphs is that all allegations stated in paras.7, 8, 9, 10, 11 and 12 pertain to the period before 2‑6‑2001 and the present respondent has no concern whatsoever with any of the allegations raised in these paras.', therefore, in a sense, it is admitted that these irregularities did occur and the only defence put up by the learned counsel is that the previous management is responsible for it. All the allegations are clearly depicted in the report submitted by the appointed firm of the Chartered Accountants and it has not been denied that the report is incorrect.

46. As regards the locus standi of the petitioner to file the petition is concerned, a perusal of the provisions of section 290 of the Ordinance reveals that it confers right on three persons, namely, (i) Member or members, holding not less than twenty per cent of the issued share capital of a company, (ii) creditor or creditors, having interest equivalent in amount to not less than twenty per cent of the paid‑up capital of the company, and (iii) the registrar, to make an application to the Court under this section. And if the Court finds it that the allegations contained in the application are correct, then the Court, with a view to bring to an end the matter complained of, can take following steps: (i) make such order as its thinks fit for regulating the conduct of the company's affairs in future, or (ii) for the purchase of the shares of any members of the company by other members of the company, or (iii) such purchase of shares by, the company.

47. The learned counsel for the respondent‑Company also contended that the petition is liable to be dismissed on the ground that it was filed on 30‑11‑2001 on the basis of the information contained in the Audit Report dated 30‑6‑2000. Thus, there is a huge delay in filing of the petition. He placed reliance on the cases of Muhammad Fikree v. Fikree Development Corporation Ltd. 1992 MLD 668.

48. Admittedly, this petition was filed on 30‑11‑2001 on the basis of the Audit Report dated 30‑6‑2000. However, after receipt of the report, five Directors of the respondent‑Company were replaced on 26‑12‑2000, and vide letter dated 17‑1‑2001 this change was brought to the notice of the petitioner. The documents furnished by the respondent‑Company for approval of the petitioner were found to be incomplete. The respondent Company was called upon, vide letter dated 25‑1‑2001, to rectify the same. Again, vide letter dated 23‑4‑2001, the respondent‑Company was called upon to provide the requisite information. Thereafter, three show‑cause notices were issued to the respondent‑Company, two dated 14‑6‑2001 and one dated 12‑7‑2001. However, no satisfactory reply was provided by the respondent‑Company thereto. In response to the show -cause notice dated 12‑7‑2001, representatives of the respondent‑Company appeared before the petitioner on 10‑8‑2001 and agreed to provide the necessary information, however, till the filing of the petition the same was not provided. Thereafter, the petitioner made inquiries from the Shares and Corporate Services (Private) Limited regarding the present status of the ownership of the respondent‑Company and it was informed that the shares had not been transferred to the name of the new management of the respondent‑Company on a complaint to the National Accountability Bureau. It was in this back drop that the present petition was filed on 30‑11‑2001. Thus the time spent in taking the requisite action has been duly explained.

49. The case of Muhammad Fikree and others (supra), relied upon by Mr. Arshad Tayebaly, is not applicable as in that case irregularities which had occurred in the period between 1967 and 1978 were made the basis for a petition under section 290 of the Ordinance filed in, the year 1989. It is not so in the present case wherein, the petitioner was constantly in touch with the respondent‑Company for remedying the matter. It was after failure of the respondent‑Company to remedy the situation that the petition was filed. The delay, if any, is fully accounted for and is not attributable to any omission or inaction on the part of the petitioner.

50. During the course of argument, the learned counsel for the respondent‑Company was directed to provide further information in addition to the above, which was also provided as under: (i) Details of paid‑up capital. Provided per the Annual Audit Report filed. (ii) Whether any dividend was paid during the last two years the answer is Nil. (iii) The break‑up value of shares is as follows: June‑01 June‑02 Dec‑02 June‑03 Audited Un‑audited Net Equity 143,317,241 17,164,137 (8,688,068) (23,747,636) Number of Shares 16,416,222 16,416,222 16,416,222 16,416,222 Break‑up Value 8,73 1.05 (0.53) (1.45)

51. It has been stated that separate legal proceedings have already been initialed against Rashidullah Yaqoob and other individuals on the basis of the findings of the Special Audit Report.

52. The issue is not merely the sale transaction of the respondent's shares. This transaction is viewed by the petitioner in the broader context of the oppressive and, unlawful management of the respondent‑Company by Mr. Rashidullah Yacoob, the sale of his shareholding in the respondent without intimation to the petitioner and the fact that such sale transaction has not been completed, making the present management's status unlawful. This together with the fact that this unlawful management of the respondent is violating the applicable laws makes it a matter of extreme urgency that the interests of minority shareholders are protected and that a legitimate management is placed at the helm of the respondent's affairs. Mr. Sabur Rahman has failed to establish his ownership of the respondent. The financial status of Damson Hill Plc, of which Mr. Sabur Rahman is Chairman is shrouded in mystery; it is even doubtful that such an entity actually exists. No documentation regarding the financial status of Damson Hill Plc has been provided to the petitioner. The uncertainty surrounding the sale transaction is accentuated by the seizure of the respondent's accounts held with Prudential Bank Limited and the share transfer register office of the respondent by NAB. These facts confirm that the petitioner's concern about the affairs of the respondent is absolutely justified.

53. Mr. Arshad Tayebaly repeatedly referred to "previous" and "present" managements. However, it may be pointed out that it is the affairs of the company which are relevant and not the management. If a set of persons is replaced by another set of persons, the same would not validate all the invalid acts committed by such outgoing persons. Even otherwise, the allegations are against both, the present and the previous management.

54. So far as the‑ dispute between Rashidullah Yacoob and Sabur Rahman is concerned, it is a matter between these two persons to decide the fate of the disputed shares. But, at the same time, the very legality of the present management depends on the issue of the said transfer. The management itself admitted that Mr. Sabur Rahman was in physical possession of only 5.3 million shares out of a total of 14.9 million shares. This is further supported by the information from Shares and Corporate Services (Pvt.) Limited, the respondent's share transfer office which informed the petitioner that the shares of the Prudential Group had not been transferred to the new management due to the seizure of the records of the respondent by NAB. It has also come on record that Sabur Rahman is an absconder, who has been convicted of drug smuggling by Special Military Court and whose appeal against the conviction was dismissed by the Hon'ble Supreme Court of Pakistan, which has ordered Mr. Sabur Rahman's arrest. The present management desires to use the assets of the respondent to make payment to Rashidullah Yacoob of the balance of the sale consideration of the shares it, therefore, becomes imperative that the petitioner steps in to protect the interests of the minority shareholders.

55. It may be pertinent to point out here that though members having more than 20% of the issued share capital and creditors having interest equal to 20% of the paid‑up capital are entitled to approach a Court for redress their grievance, if any, against a company. However, the right to protect the interest of those having less than the above stipulated interest/ share and the operation of the company in accordance with law is the responsibility of the petitioner.

56. Although the controversy surrounding the sale of shares by Rashidullah Yacoob was still simmering when another step was taken as it is stated that Sabur Rahman has sold his entire shareholding in the respondent to Mr. Ashfaq Asghar Kidwai. However, no shares have been "effectively transferred" in his name. Therefore, the true ownership of the shareholding in the respondent has still not been ascertained.

57. The petitioner has already initiated proceedings against Mr. Rashidullah Yacoob and other concerned individuals under section 230(7)(a) of the Ordinance.

58. Before parting with case, I would like to observe that the learned counsel, on the point of locus standi of the petitioner to file the present petition, advanced arguments which themselves establish the locus standi of the petitioner to file the present suit. In the written arguments the learned counsel states as under: `A glance at section 290 makes it clear that an application under this section can only be made by a shareholder or shareholders holding 20% or more of the shares of a company.' Then in the next sentence the learned counsel submits that: `Such an application can also be made by a creditor or creditors whose interest is equal to 20% or more of the paid‑up capital of the company.'

59. Thereafter, the learned counsel, after starting off by saying that an application under this section can only be filed by a shareholder' clearly admits that the petitioner can also file an application under section 290 in the following words: This however, is not the only requirement of law. The third scenario is that if the Registrar is of the opinion that the affairs of the company are being conducted, or are likely to be conducted: (i) in an unlawful, or (ii) fraudulent manner, or (iii) in a manner not provided for in its memorandum, or (iv) in a manner oppressive to the shareholder(s) or the creditor(s), or (v) are being conducted in a manner prejudicial to the public interest.'

60. Thus, section 290 of the Ordinance, envisages that three persons, namely (i) a shareholder, (ii) a creditor, or the Registrar, can file an application under this section. Therefore, after this admission on the part of the learned counsel for the respondent‑Company, any further discussion on this issue would be otiose.

61. Petition filed under section 290 of the Companies Ordinance is not affected by the manner of shareholders or creditors but it is filed by the Registrar on account of the violations of rules as such the provision as to 20% of creditors has no bearing on the merits of the present application.

62. There is sufficient material available on record to show the continuous and flagrant violations of the said rules, mere fact that the penalties as provided for breach and non compliance of such rules may be a valid objection in case of a solitary or few isolated violations rectified in time but cannot be set up as a defence to a petition filed by the Registrar in exercise of his powers in a case of continuing violations of the said rules and compounded by successive changes in the management, one after the other, each one of which is without prior approval of the competent authority while the rules provide for each and every such appointment to be made only after prior approval of the competent authority. Such a case calls for an effective action and the Registrar would be failing in his duties in not approaching the Court for necessary remedial action as provided by the law in appropriate cases.

63. In view of the above facts and discussion, the matters pertaining to the title of the shares, which is already in dispute in another suit before this Court and admittedly the disputed shares have already been placed in the custody of the Nazir of this Court, it is not necessary to examine that controversy in the present petition.

64. The time consumed in the proceedings before approaching this Court has been satisfactorily explained and there is no unexplained delay in approaching the Court that may be detrimental to the proceedings as observed above.

65. In the light of the above discussion and facts, I would hold that this petition is maintainable and the action provided for the violation of the conditions regarding the imposition of various fines and penalties for specific violations does not bar the institution of proceedings in the nature of the present petition in cases involving repeated violations. However, as the present case involves increase in the paid‑up capital of the respondent‑Company which may not be possible for the appointed Manager to accomplish under the normal circumstances and the steps and procedure involves the issue of the relevant notice, holding of meetings with the shareholders, if necessary, and obtaining the requisite permission, I would allow time for compliance of all the formalities complained of in the present petition and to bring the affairs of the respondent‑Company strictly in accordance with the provisions of the Companies Ordinance and the said rules within a period of 12 months from the date of this judgment. At the same time, the petitioner may take appropriate steps to move this Court after expiry of the aforesaid period of 12 months without indulging afresh in the exercise of issue of show‑cause notice if no satisfactory progress is made during the period.

66. The petition stands disposed of in the above terms. M.B.A./R‑32/K Order accordingly.