1988 PLP 67 (MLD)

This petition has been filed by the State Bank of Pakistan under section 43, F(4) of the Banking Companies Ordinance, 1962. The petitioner has made the following prayer:- "To pass an order of adjudication against Syed Hassan Masroor Zaidi, proprietor of National Investment Corporation, adjudging him an insolvent without further proof, and direct the Official Assignee to act in pursuance of the adjudication order according to the provisions of the relevant Insolvency Act for the administration and distribution of the property of the insolvent."

2. This petition was filed in the High Court on 29-10-1987 and, by order dated 22-11-1987 this Court ordered issuance of notice to Syed Hassan Masroor Zaidi, proprietor of National Investment Corporation (hereinafter referred to as the respondent") for 6-12-1987. Notice of the petition was served upon the respondent on 3-12-1987 and when this matter was taken up in Court on 6-12 1987, Mr. Syed Fareed Alam Rizvi, Advocate, appeared on behalf of the respondent and filed his Vakalatnama. He also sought time to file objections within two weeks. At the request of Mr. Syed Fareed Alam Rizvi, Advocate, the matter was adjourned to a date in Office. The petition was then fixed in Court on 21-12-1987 when the respondent and his Advocate were reputedly called absent, but the matter was adjourned as Mr. Muhammad Shibili, counsel for the petitioner, State Bank of Pakistan, was not free and was busy before another Bench. The petition was then taken up on 7-2-1988. On 7-2-1988 also, the case was adjourned to 21-2-1988 as the learned counsel for the State Bank of Pakistan was busy before another Bench. On 21-2-1988, neither Fareed Alam nor the respondent were present. Notice was directed to be issued to Mr. Fareed Alarn for 1-3-1988. On 1-3-1988 no one appeared on behalf of the respondent. I heard the arguments of Mr. Mohammad Shibili, learned Counsel for the State Bank of Pakistan. 2-A. The memo of petition filed by the State Bank of Pakistan and the documents filed alongwith memo of petition show that respondent Syed Hassan Masroor Zaidi was carrying on the business of Banking, as defined in section 5 (b) of the Banking Companies Ordinance, 1962, under the name and style of "National Investment Corporation" and this banking business was being carried on by the respondent in contravention of section 27(1) of the Banking Companies Ordinance, 1962. An enquiry was started in the matter as contemplated by the provisions of the Banking Companies Ordinance, 1962 contained in part II-A thereof. The enquiry revealed that deposits were accepted from various persons from the public by the respondent under the name of National Investment Corporation after advertisement in the Press and then the deposits received from various persons were utilised in meeting the capital requirements of three other companies, namely, Messrs Zaidi Brothers (Pvt.) Ltd. Fibre (Pvt.) Ltd. and Intech International (Pvt.) Ltd. which companies are registered as private limited companies. In the circumstances a show-cause notice dated 15-8-1987 under section 43-B of the Ordinance was addressed to National Investment Corporation. A reply-dated 17-9-1987 was received from the respondent. The reply was not found satisfactory and the State Bank of Ralistan then made a declaration on 15-10 1987 under section 43-B(1) of the Banking Companies Ordinance, 1962 to the affect that the State Bank of Pakistan was of the opinion that the National Investment Corporation under the proprietorship of Syed Hassan Masroor Zaidi was transacting the business" of banking in contravention of section 27(1) of the Banking Companies Ordinance, 1462 and this declaration was published in the daily `Dawn` dated 23-10-1987 ,, as required by section 43-B(2) of the said Ordinance. Thereafter, the present petition was filed under section 43-F(4) of the said Ordinance in this Court on 29-10-1987.

3. As observed earlier, in spite of the opportunities given to the respondent, no objections or counter-affidavit has been filed by him. The case of State Bank of Pakistan that Syed Hassan Masroor Zaidi had been carrying on the business of banking under the name of National Investment Corporation in violation of section 27(1) of the Ordinance stands established by the documents filed alongwith the petition. The averments made by the State Bank of Pakistan in the memo of petition have not been controverted m spite of adequate opportunities granted to Syed Hassan Masroor Zaidi. It may again be observed that Mr. Syed A Fareed Alam Advocate had filed Vakalatnama on behalf of Syed Hussain Masroor Zaidi, but no counter--affidavit or objections were then filed and Mr. Fareed Alam has also not appeared after 6-12-1987. In the circumstances, and in view of the provisions of section 43-F(4) of the Banking Companies Ordinance, 1962, the petitioner, State Bank of Pakistan has made out a case for passing an adjudication order against Seyd Hassan Masroor Zaidi adjudging him as insolvent.

4. This petition under section 43-F (4) of the Banking Companies Ordinance, 1962 is accordingly allowed with costs and Syed Masroor Zaidi, Propritor, National Investment Corporation, is adjudged and insolvent. The Official Assignee is directed to act in pursuance of this adjudication order according to the provisions of the Involvency (Karachi Division) Act, 1909 for the administration and distribution of the property of the insolvent. AA./S-238/K Petition accepted.