Commercial insolvency

In the event of failure to pay debt in accordance with statutory notice of demand under S.306 of Companies Ordinance, 1984, insolvency was to be presumed through it could also be proved in other ways.

Company had become "commercially insolvent" and was unable to pay its debts and its paid up capital had been completely wiped out

Even the remotest possibility of revival of the company did not exist and its further existence or continuance would only multiply its liabilities to detriment of its creditors and shareholders

Effect

Winding-up of the company had become inevitable and no objection was received from any quarter and statutory presumption as to commercial insolvency of the company was created

High Court appointed official assignee as Official Liquidator, who would take over complete charge and control of the affairs and assets of the company

High Court directed that official liquidator would perform all such duties and functions and exercise all such powers as were required under the law

Mills of the company were located in different districts in other province, therefore, official liquidator was authorized to seek assistance of such persons at those places as he might deem fit and proper in the best interest of creditors and shareholders and for expeditious winding-up of the company

Petition was allowed in circumstances.