Insolvency petitions
Insolvency petitions legal meaning, translation and judicial precedents.
Meaning & Judicial Interpretation: (اردو مفہوم اور قانونی تشریح)
Petitioners had not submitted documents which were required to be produced under S.15(3) of the Insolvency (Karachi Division) Act, 1909
Contention of the petitioners was that the required information/documents could be produced by the petitioners in a meeting of the petitioners' creditors to be called under S.26 of the Insolvency (Karachi Division) Act, 1909
Validity
Said contention was without any force as meeting of creditors under S.26 of the Insolvency (Karachi Division) Act, 1909 could only be called after an order of adjudication against an insolvent was passed and on application of a creditor before the Official Assignee under the Sindh High Court Rules (Original Side)
If no such order of adjudication as insolvent had been passed against the petitioners, no meeting under S.26 of the Act could be called.
Contention of the petitioners was that having incurred huge losses and after selling all their movable and immovable properties they were unable to settle their liabilities to the investors and accordingly they should be adjudged as insolvent and discharge certificate be issued in respect of their liabilities
Validity
Petitioners admitted before the court that there was no record of import of vehicles, manner of sales proceeds appropriation and claimed that they did not maintain any bank account or books of accounts and did not produce bank statements or income tax assessments
Petitioners had therefore, not complied with the provisions of the Insolvency (Karachi Division) Act, 1909
Specific grounds must have been stated in an application for declaring insolvency and under S.15(3) of the Insolvency (Karachi Division) Act, 1909; when a debtor's application was admitted, he shall unless the court otherwise directed, produce all his books of accounts
Petitioners had admittedly not given any specific grounds/details and had admittedly not complied with mandatory requirements of S.15(3) of the Act
Petitioners could not be adjudged as insolvent unless they obtained a certificate from the Official Assignee under Rule 586(2) of the Sindh High Court Rules (Original Side) which could not be granted under the said Rule 586(2), unless mandatory requirements of Rule 586(1) were fulfilled by the petitioners
Statements of the petitioners before the Official Assignee as well as the reports submitted by the Official Assignee established that the mandatory requirements of Rule 586(1) of the Sindh High Court Rules (Original Side) had not been complied with by the petitioners
Reports of the Official Assignee or contents thereof had not been denied by the petitioners and it appeared that they had not come to the court with clean hands as genuine debtors
Petitioners had filed the petitions in a mala fide manner to save themselves from legal actions which their creditors may initiate against them
Petitioners had, therefore, failed to justify their inability to pay their debts, their insolvency petitions were dismissed in circumstances.
Contention of the petitioners was that having incurred huge losses and after selling all their movable and immovable properties they were unable to settle their liabilities to the investors and accordingly they should be adjudged as insolvent and discharge certificate be issued in respect of their liabilities
Validity
Petitioners admitted before the court that there was no record of import of vehicles, manner of sales proceeds appropriation and claimed that they did not maintain any bank account or books of accounts and did not produce bank statements or income tax assessments
Petitioners had therefore, not complied with the provisions of the Insolvency (Karachi Division) Act, 1909
Specific grounds must have been stated in an application for declaring insolvency and under S.15(3) of the Insolvency (Karachi Division) Act, 1909; when a debtor's application was admitted, he shall unless the court otherwise directed, produce all his books of accounts
Petitioners had admittedly not given any specific grounds/details and had admittedly not complied with mandatory requirements of S.15(3) of the Act
Petitioners could not be adjudged as insolvent unless they obtained a certificate from the Official Assignee under Rule 586(2) of the Sindh High Court Rules (Original Side) which could not be granted under the said Rule 586(2), unless mandatory requirements of Rule 586(1) were fulfilled by the petitioners
Statements of the petitioners before the Official Assignee as well as the reports submitted by the Official Assignee established that the mandatory requirements of Rule 586(1) of the Sindh High Court Rules (Original Side) had not been complied with by the petitioners
Reports of the Official Assignee or contents thereof had not been denied by the petitioners and it appeared that they had not come to the court with clean hands as genuine debtors
Petitioners had filed the petitions in a mala fide manner to save themselves from legal actions which their creditors may initiate against them
Petitioners had, therefore, failed to justify their inability to pay their debts, their insolvency petitions were dismissed in circumstances.
"Insolvency petitions", Pakistan Law Portal, available at: https://paklawportal.com/words-terms-maxims/124938892
Precedents & Case Laws citing "Insolvency petitions"
2021 C L D 1217
Mrs. SAMINA MEHR-UN-NISA MAZARI — Appellant Versus PUBLIC AT LARGE and others — Respondents
Court: Supreme Court of PakistanP L D 2021 Supreme Court 913
Mrs. SAMINA MEHR-UN-NISA MAZARI — Appellant Versus PUBLIC AT LARGE and others — Respondents
Court: High Court1988 C L C 913
KAZIM ALI SHAH‑‑Petitioner Versus UNITED BANK LIMITED‑‑Respondent
Court: Lahore2014 C L C 1705
MUHAMMAD DAWOOD — Petitioner Versus UNITED INSURANCE CO. PAKISTAN LTD. and 8 others — Respondents
Court: SindhP L D 1966 (W
M. IMAMUDDIN‑Appellant Versus MUHAMMAD YUSUF AND ANOTHER‑Respondents
Court: It is imperative under the provisions of section 13 of the Insolvency (the Karachi Division and Dacca) Act old Presidency Towns Insolvency Act, 1909 that the debt alleged by the petition ing creditor shall be proved and that the alleged act or acts of insolvency on the part of the debtor or at least one of them should also be established. If the Court is not satisfied on both the above requisites it shall dismiss the petition; alternatively, if the Court is satisfied on the above two points and the debtor does not appear despite the notice issued to him, the Court may make an order of adjudication as prayed for. But the provision of subsection (6) of section 13 of the Act makes it perfectly clear that where the debtor appears in answer to the petition and denies his indebtedness the Court on taking security from him in respect of the amount of the debt as may ultimately be found and of the costs in' establishing it may either dismiss the petition or otherwise stay all proceedings thereon after taking the requisite security to try the question relating to the debt. In a fit case where the question involved in the matter requires elaborate inquiry likely to take a long time the In solvency Judge should after taking sufficient security from the debtor stay all proceedings on the petition for such length of time as may be necessary for the creditor to prove his debt against debtor in due course of law before the ordinary Civil Courts.P L D 1969 Lahore 552
GUL MUHAMMAD AND ANOTHER‑Petitioners Versus Haji GHULAM RASUL AND OTHERS‑Respondents
Court:1999 C L C 323
ABDUL ALEEM‑‑‑Petitioner Versus GENERAL PUBLIC and 5 others‑‑‑Respondents
Court: LahoreP L D 1972 Karachi 209
AND $ OTHERS‑Petitioners Versus MESSRS H. A. SATTAR A. SHAKOOR & Co. AND 8 OTHERS‑Respondents
Court: High Court2021 C L C 297
ABDUL AHAD ANSARI — Petitioner Versus Mst. LUBNA QAISER — Respondent
Court: SindhP L D 2016 Sindh 332
Insolvency Petition No. Nil of 2014
Court: High Court