1998CLC731 (PLP)

Anwar Muhammad for Petitioners. Ferozuddin Asif Khan claiming to be Resident Director of the Respondent‑Company. The petitioners, a consortium of Development Financial Institutions, have filed this petition for winding up of the respondents company under sections 305 and 309 of the Companies Ordinance, 1984 (hereinafter referred as the Ordinance).

2. It is the case of the petitioners that they are Banking Organizations whereas the respondent is a public limited company duly registered under the Ordinance on or about 31‑8‑1989. In terms of the conditions as contained in Short Term Investment Agreement, dated 28‑12‑1989, and Supplementary Short Term Investment Agreement, dated 5‑11‑1992 executed by the respondents, an advance of Rs.30.080 Million was made to the respondents and released by the petitioners, which they have failed to pay. In para. 4 of the petition break‑up of Term Finance Certificates issued by each of the petitioners in favour of the respondents company has been incorporated.

3. For due performance of the terms and conditions of the agreement, respondents company executed Trust‑Deed, dated 26‑3‑1990 for securing the syndicate investment duly registered with the Sub‑Registrar Hub, District Lasbela. Under Schedule‑2 of the aforesaid Trust‑Deed, respondent created mortgage, charge and floating charge mentioned therein on all the present and future movable and immovable properties and assets of the company to secure the loan which was duly registered. Besides they executed Form III which was duly registered with Assistant Registrar, Joint Stock Companies, Karachi on 29‑3‑1990. In addition respondents executed Certificate Registration of Mortgage, dated 26‑3‑1990 and 16‑11‑1989. Resolution passed by their Board of Directors, dated 20‑11‑1989 and three guarantees in terms of agreement and letters of undertaking, dated 14‑4‑1990, 27‑11_1990 and 6‑11‑1991. While the investments were repayable in fixed instalments on specified dates, respondents have not repaid a single penny to the petitioners who after service of a legal notice on the company under section 306 of the Ordinance have prayed for winding up of the company for the reasons firstly, that the company is under heavy financial liabilities and the substratum of the respondents seems to have disappeared, that the respondents have violated the terms and conditions of the loan agreement and Trust‑Deed and deliberately suppressed the material facts with ulterior motives in order to defraud its creditors; that there is no likelihood of the assets and properties of the respondents being saved except by winding up of company which is otherwise just and equitable in the circumstances.

4. A public notice in respect of institution of this petition was published and a notice was issued to the respondents as well as Joint Registrar, Joint Stock Companies. While no creditor has come forward to explain his point of view, respondent‑company's Resident Director appeared before the Court on 26‑3‑1996. On his request three adjournments were granted in order to engage a counsel and to submit a parawise reply but none has been filed. On his part, Joint Registrar of Companies, Karachi has filed his comments stating that their organization has nothing to urge except that the interests of the shareholders and creditors be protected. According to the Joint Registrar, mortgages/charges on account of Industrial Development Bank of Pakistan, Karachi and Investment Corporation of Pakistan, Karachi have been registered in favour of the creditors to the tune of Rs.56,200,000 and Rs.53,250,662 respectively.

5. In the absence of any contest and the reply by the representative appearing on behalf of the respondents that he is unaware whether the respondents company has even issued six monthly and annual report to his shareholders and the facts as pleaded and verified in the petition on oath, I am convinced that it will be just, fair and equitable to direct the winding up of the company in terms of section 305 of the Ordinance. Official Assignee is le appointed as Official Liquidator to take over the affairs of the company. A.A./I‑26/K Winding up ordered