1. By this application the petitioners, a public limited company incorporated under provisions of Companies Ordinance, 1984, carrying on its operation in Pakistan, seeks winding up of respondent, a private limited company.
2. The respondent-Company was carrying on business of insurance in Pakistan in pursuance of the licence granted by the Controller of Insurance on 27-7-1948. The petitioner is a company incorporated in U.K. and as a result of their merger abroad petitioner seeks winding up of the respondents subsidy in Pakistan. Business of insurance was carried out by the respondent up to 19- 9-1975 thereafter the operations ceased. All employees of the respondents were retrenched as far back as in 1975. As affairs pertaining to tax and other incidental matters were pending the respondent-Company continued to exist till finalization of the same.
3. It appears that on finalization of the above, the respondents approached the Controller of Insurance for withdrawal of the deposit as required under the provision of Insurance Act. Pursuant to terms of the agreement between the Commercial Union Insurance Company PLC and Eagle Star Insurance Company Limited, copy whereof is produced as Annexure B to the petitioner, the petitioners who are already holder of a valid Insurance licence undertookto meet all the liabilities of the respondent as specified under clause 3 of the said agreement. After issuance of no objection from the Assistant Controller Insurance, Government of Pakistan, dated 11-3-1999, the respondent- Company moved the Court of VII-Senior Civil Judge, Karachi South vide Application No.1 of 2001 and the deposit was ordered to be refunded by order dated 30-4-2001, copy whereof is filed as Annexure D to the petition followed by no objection from the Security and Exchange Commission of Pakistan dated 22-10-2001. Copy of power of attorney giving authority to Muhammad Waqar-ud- Din to act on behalf of the respondent-Company has also been placed on record as Annexure F to the petition.
4. Notices were issued to the Registrar, Joint Stock Companies,' who have filed their written statement under section 305 of the Companies Ordinance. While raising a preliminary objection to the maintainability of this application, Registrar has prayed for exemption from attendance. With regard to the function of the company Mr. Abdul Wahid Wyne has produced a photocopy of power of attorney duly endorsed by Richard Graham Rosser, Notary Public, City of London bearing the endorsement of the State Bank of Pakistan registered at K-24/19 of the Public Debt Office at Karachi dated 17-11-1975 to show that the respondent-Company was functioning as a subsidy in 1975. With regard to objection pertaining to jurisdiction, contention of Mr. Abdul Wajid Wyne Advocate is that the company is a registered company within the meaning of section 443 of the Companies Ordinance as such the provisions of section 444 are not attracted in this case and any claim or liability if arising out of any claim in any part of the country, is payable by Commercial Union General Insurance Company PLC in view of their undertaking already on record. The objection is therefore, waived. With regard to the objection as to the maintainability of the application under section 305 of the Companies Ordinance 1984, the matter has already been considered in detail in earlier judgment of this Court in case of Messrs James Finley P.L.C. v. Messrs Hellenic Lines Limited and another 1986 CLC 2933 wherein it has been held as under:-- "The grounds, for which an unregistered company including a foreign company can be wound up by the Court, are contained in section 444 of the Companies Ordinance, 1984 (previously section 271 of the Companies Act, 1913). Under subsection (1)(iii) of section 444 it is provided that the circumstances, under which an unregistered company may be wound up, are:---
(a) If the company is dissolved or has ceased to carry on the business or is carrying on business only for the purposes of winding up its affairs;
(b) if the company is unable to pay its debts; and
(c) if the Court is of the opinion that it is just and equitable that company should be wound up.
5. Apart from these three grounds, a foreign company can also be wound up on the ground contained in subsection (iii) of section 444 which reads as follows:--- 'Where a company incorporated outside Pakistan, which has been carrying on business in Pakistan, ceases to carry on business in Pakistan, it may be wound up as an unregistered company under this Part, notwithstanding that it has been dissolved or otherwise ceased to exist as a company under or by virtue of the laws of the country, under which it was incorporated.'
6. In my view , for maintaining a petition for winding up of an unregistered company (including a foreign company), for anyone or more of the grounds mentioned in subsection (1)(iii) of section 444, it is not required that the concerned company should have been carrying on business in Pakistan or has an office or a place of business in Pakistan. However, for maintaining a winding up petition of a foreign company under subsection (3) of section 444 of the Companies Ordinance, 1984, it is required that the concerned foreign company had been carrying on business in Pakistan.
7. This is apparent from the wordings of subsection (3) of section 444 itself. There is no such requirement if the petition for winding up is made on any of the grounds mentioned in subsection (1)(iii). Such requirement is not spelt out from the wordings of subsection (1)(iii) of section 444.
8. There are other requirements for maintaining a winding up petition of an unregistered company including a foreign company under section 444 of the Companies Ordinance, 1984 (previously section 271 of the Companies Act, 1913), and these are that the concerned company has assets in Pakistan and that the petitioner is a creditor of the concerned company."
9. In view of the above the objections hardly carry any weight. The fact that the companies are stated to have merged, the respondent has ceased to carry business since 1975, licence has been cancelled after return of amount of deposit as required under the provisions of Insurance Act and after refund of the deposit by the Controller of Insurance after the cancellation of its licence, the respondent-Company does not stand any chance of carrying on the business of insurance in Pakistan together the petitioners undertake to make all claims, liabilities and demands as may be set against the respondent, this petition is allowed and the respondent No.1 is ordered to be wound up under the Companies Ordinance, 1984 but no liability of respondent shall be extinguished. The same, if any, shall be satisfied by the petitioners in view of the fact that the respondent-Company has merged with the petitioner. In addition an undertaking to this effect has been made before this Court. Mr. Wajid Wyne further states that in view of the fact that there ceased to be asset of the company and the business is being carried on by the petitioner since 1975, the question of appointment of Liquidator in the peculiar circumstances of the present case does not arise.
10. However, the petitioner undertakes to file a certificate to the effect of no liability and the statement of affairs and accounts of the respondent before this Court within one month.