P L D 2003 Supreme Court 149 (PLP)

Please refer to your Letter No.LD/LFT/275/A‑408 dated July 21, 1991 regarding payment of dues to ICP Limited consortium by our company. This is to inform you that ICP led consortium had sanctioned to the company the following loans:‑‑ (1) Rs.9.588,000 (PTC financing) under the agreement dated 15th May, 1985. (2) Rs.10,00,000 under the LMM financing agreement dated 27th May, 1986. (3) Rs.30,00,000 under the LMM financing agreement dated 12th April, 1987 (4) An amount of Rs.66,68,000 (Rupees six million six hundred sixty‑eight thousand only) had been disbursed by ICP‑led consortium out of total loan (PTC financing) amounting to Rs.9,588,000 the balance un-disbursed amount had been withdrawn by ICP vide its Letter No. 1D/90/4861 dated August 5, 1990. Further an amount of Rs.3,99,233 had been disbursed by ICP out of the total loan of 8,.10,00,000 (LMM financing) under the LMM financing agreement dated 27th May, 1986, Furthermore no disbursement from the loan of Rs.30,00,000 had been made by ICP under the agreement dated 12th April, 1987. But the Mortgage/charge had been treated by ICP over the properties anti assets of the company for the amount of Rs.34,82,976 areas, you have demanded vide your letter under reference to the amount of Rs.93,88,000 under the Investment agreement, dated 15th May. 1985, an amount of Rs.4,32,576 (which is sale/purchase price of LMM financing amount to Rs.10,00,000 and Rs.34,82,976 (the resale/purchase price of Rs.30,00,000 of LMM financing under the LMM financing agreement dated 27th May; 1986 and 12th April, 1987 respectively. We understand that the amount quoted and demanded by you it your letter under reference are not correct and not acceptable to us."

5. The respondents syndicate exhausting the patience eventually filed the winding up Petition No. JM 315 of 1994 under section 305 read with 309 on 22‑11‑1994 before the Sindh High Court at Karachi, pressing into service clauses (c) and (e) thereof in particular, text whereof is reproduced below:‑‑ (a)

(b)

(c) if the company does not commence its business within a year from its incorporation, or suspends its business for a whole year. (d)

(e) if the company is unable to pay its debts:

6. To which the appellant objecting joined issue as to maintainability contending that neither the respondents are creditors nor the appellant a debtor within the contemplation of the statutory provisions being invoked for he respondents as investors had invested the complained of sum on profit and loss basis.

7. The learned Company Judge disagreeing with the submissions made by the appellant opining the financial assistance arrangement as a loan on the basis of documents adduced granted the winding‑up petition vide the impugned judgment dated 3‑10‑1995.

8. Reiterating the submissions present appeal has been recoursed which we are afraid is utterly misconceived since conjunctive reading of the agreements, the demand promissory note, the trust deed and the registered mortgages, charges, hypothecations, and the correspondence exchange between the parties referred to supra, patently demonstrate the intendment of he parties and the nature of the arrangements made as to its juridical classification being a loan facility explicitly described as a loan in the Agreement dated 15‑5‑1985 comprising Long Term PTCs and LFM refinancing by the syndicate secured through mortgage of all present and future movable and immovable assets, uncalled capital, continuing floating charges, to rank pari passu with the existing mortgages/charges with other reditors at fixed rate of profit, repayable bi‑annually to be credited as expenses in the profit and loss account of the company restraining the Appellant from alienating any of its assets, during subsistence of the encumbrances or charges of mortgages in favour of respondents syndicate in lie event of default rendering the entire sum due and payable upon expiry of he notice period. Factum whereof even has been admitted in reply to the notice rendering unambiguously clear beyond the realm of doubt that the availed facility by the appellant from the respondents syndicate for all interests and purposes was a loan fully secured through proper documentation and not investment simpliciter. 8‑A. Further admittedly the appellant since its nearly a decade ago has not even commenced its business.

9. Likewise the submission as to failure of the respondents syndicate to disburse the entire loan facility on time, is equally ill‑founded since in terms of (3.01) it preconceives performance of the undertaking by the appellant, which is lacking.

10. Resultantly, no exception could be taken to the impugned order the appeal being devoid of any substance, fails and is hereby dismissed. M.B.A./A‑357/S Appeal dismissed.