Assets and income of company

2013 CLD 114 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss. 290, 291 & 292Case of oppressionAssets and income of companyEntitlement

Applicants claimed to be entitled to revenues and income received from the project of the company and alleged that respondents had been usurping and grabbing the same

Validity

Property, assets and income of company belonged to it alone and shareholders did not have any interest, right or title in or to the same

Property in question belonged to company in question and was its assets and it was that company which was entitled to any income derived from it; such assets regardless of whether the construction of property in question was financed entirely by applicants

Shareholders of the company, even by unanimous decision could not themselves deal directly with company's assets and income as though they were the owners thereof, even though the shareholders could ultimately be entitled to the benefit of income by way of a payout of dividend

Two things (i.e. the company's income and a dividend declared in favour of shareholders) were in law separate and distinct

Rights and obligations purportedly created in terms of agreement between the parties with regard to property in question and income to be derived from it were unenforceable in law

Even those clauses of the agreement which could have such an effect were also unenforceable

Neither of the parties could have any legal grievance against the other with regard to any alleged "breach" of agreement in question

Alleged non-implementation of agreement in question by respondents could not form the basis of or support and action by applicants under S.290 of Companies Ordinance, 1984

Applicants had made out a case of oppression within the meaning of S.290 of Companies Ordinance, 1984 and were entitled to have brought the situation to an end

High Court declined to make an order for buyout of the shares of one group by the other, as the company was a going concern and it appeared to be a profitable one

High Court in exercise of powers under Ss.290 and 291 of Companies Ordinance, 1984, issued directions that would be to the ultimate advantage and benefit of both sides

Application was disposed of accordingly.