1997 PLP 1347 (CLC)

Muhammad Musharaf, Dy. Registrar of Companies for Respondent. Date of hearing: loth November, 1995. This petition has been filed under section 488 (2) of the Companies Ordinance, 1984 read with Rules 778 and 779 of the Sindh Chief Court Rules (O.S.) praying therein for discharge from any claim of liability that will or may be made/arises against them in respect of any alleged negligence, breach of duty, breach of trust in the holding of the Annual General Meeting for the financial year 1993‑94 and for non‑presentation of the audited annual accounts for the financial year commencing first day of July, 1993 and ending June 30,1994, and also for' condonation for the delay in the holding of the said Annual General Meeting and preparing of the audited annual accounts due to reasons beyond the control of the petitioner and his colleagues. Further directions for the holding of the Annual General Meeting upon the preparation of the audited annual accounts for the aforesaid year, within three months from the date of receipt of the pricing formula from the Federal Government.

2. I have heard Mr. Agha Fakheer Muhammad, who has contended that the petitioner is a private limited company registered under the Companies Ordinance, 1984 and Pakistan National Shipping Corporation and State Petroleum Refining and Petrochemical Corporation, Karachi are the only share holders with a shareholding of 50 per cent. each as such the petitioner company falls under the control and supervision of the Federal Government, that the petitioner is engaged in the marine transport of crude oil from Gulf Ports and its income is determined by the Ministry of Petroleum, Government of Pakistan, after fixing the composite affreightment rate on the basis of operating cost as per the current year actual initiated accounts and the mark‑up for the company; that it is necessary that the Government announces its pricing formula for the year on the basis of which only the profit and loss account and balance‑sheet could be prepared and presented for the above period; that the Government could not supply the pricing formula for the, financial year 1993‑94 and the old pricing formula (which was announced in 1992‑93) lapsed on June 30, 1993 was no longer applicable 4o the petitioner; that after satisfying itself that the petitioner was not, responsible for any delay in presenting to audited annual accounts for the year 1993‑94 or for holding the Annual General Meeting by December 31,1994, the Registrar/respondent was pleased to grant the petitioner extension of time up to March 31, 1995 for both the above purposes; that as the Government has still not supplied the pricing formula for N.T.C. as such it was not possible for N.T.C. to finalise and present the audited annual accounts and hold the Annual General Meeting by March 31, 1995; that this may entail the fines/penalty to be levied against the petitioner as per sections 158(4(a) and 233(6) read with section 230(7) of the Companies Ordinance, 1984 for such default; that the petitioner will require 3 months from the date of such announcement to prepare and present the audited accounts and to hold the Annual General Meeting; that the petitioner will hold Annual General Meeting after the Government has announced new pricing formula and the petitioner has prepared its audited balance‑sheet and accounts on that basis and for that purpose a formal application will be made under section 170 of the Companies Ordinance, 1984 at the appropriate time; that there has been no willful negligence or default by the petitioner; that it is not possible for the petitioner to prepare a balance‑sheet as sales revenue, cannot be determined without a new pricing formula to be announced by the Federal Government; that section 4$8(2) of the Companies Ordinance, 1984 provides that where any person to whom this section applies has reason to apprehend .that any claim will or might be made against him in respect of any negligence, default, breach of duty or breach of trust, he may apply to the Court for relief;; that the petitioner, being Chief Executive of the company, is entitled to seek relief in terms of section 488(2) for and on behalf of himself.

3. Mr. Agha Fakheer Muhammad has produced the orders of this Court in Judicial Miscellaneous No. 18/93 dated 22‑3‑1994 pertaining to, National Refinery Limited and Judicial Miscellaneous No.66 of 1994, dated 21‑12‑1994 filed by the present petitioner.

4. Notice was issued to the Registrar, who has submitted comments.

5. I have also heard Mr. Muhammad Musharaf, Deputy Registrar, who has contended that the petitioner was granted 90 days extension up to 31‑3‑1995 under subsection (1) of sections 158 and 233 of the Companies Ordinance, 1984 for holding Annual General Meeting and lying Annual Audited Accounts of the company for the period 30‑6‑1994; that in case of default under sections 158 and 233 of the Companies Ordinance, 1984 the company and its Directors are liable to the penalties prescribed under sections 158‑ and' 230 of the Companies Ordinance, 1984. 6. 1 have heard Mr. Agha Fakheer Muhammad, learned counsel for the petitioner and Mr. Muhammad Musharaf, Deputy Registrar of the respondent and I have also perused the orders of this Court passed in 2 Judicial Miscellaneous referred to above.

7. It would appear that there has been no negligence on the part of the E Chief Executive, Director and officers of the petitioner and that they acted honestly and reasonably and having regard, therefore, to all the circumstances of A the case the petitioner ought fairly to be excused for the default and non‑ compliance of the provisions of the Companies Ordinance.

8. For the foregoing reasons I allow this petition arid exempt/discharge the petitioner from claim or liability that may be made or arises against them in respect of any alleged negligence, breach of duty, breach of trust in the holding of the Annual General Meeting for financial year 1993‑94 and for non presentation of the annual audited accounts for the financial year which commenced on 1‑7‑1993 and ended on 30‑6‑1994 and condonation for delay in holding the said Annual General Meeting and preparing Annunal Autited Accounts, due to the reasons beyond the control of the petitioner and his colleagues with directions for the holding of the Annual General Meeting upon the preparation for the audited annual account for the aforesaid year, within 3 months from the date of receipt of the pricing formula from the Government. H.B.T./C‑4/K Petition allowed