' NADEEM AZHAR SIDDIQI, J.---This is a petition under section 305 read with section 306 of the Companies Ordinance, 1984, filed by the petitioners for the winding up of respondent No, 1.
2. Brief facts of the case are that respondent No,1 company was incorporated in the year, 1981 under the Companies Ordinance, 1984 ("the Ordinance") with four directors, being petitioners Nos. 1 and 2, respondent No,
1. And Muhammad Al Adawi, all real brothers inter se. On 15-5-1996, respondent No,2 allegedly filed sham resignation letters of the petitioners and their latter brother Muhammad Al Adawi and transferred the shares in the name of his wife, respondent No,3. A resolution, dated 16-5- 1996 was allegedly passed without holding any Annual General Meeting whereby the number of directors of the respondent No,1 was reduced from four to two. It is alleged that whenever the petitioners inquired from respondents Nos. 2 and 3 about the position of respondent No,1., they were informed that everything was in order and that were carrying on business in bona fide and honest manner. In the month of May, 2004, the petitioners smelled some foul play and approached the office of respondent No,4 for certified copies of Form-A and Form-E and some other documents and on receipt thereof the petitioners came to know that the respondents Nos. 2 and 3 have fraudulently taken over the control of respondent No,1 in order to deprive the petitioners and the legal heirs of their deceased brother Muhammad Al Adawi. Respondents Nos. 2 and 3 totally ousted the petitioners from the management of the respondent No,1 company, Attempts were made by family members and well wishers to settle the issue amicably but failed as respondents Nos. 2 and 3 were not prepared to patch up the matter. Petitioners sent legal notice for winding up of the respondent No,1 company under sections 305 and 306 of the Ordinance and also took up the matter with respondent No,4 for rectification. As the acts of the petitioners did not bear any fruit, the petitioners filed the present petition, inter alia, for winding up of the respondent No,1 company.
3. Notices were issued to the respondents in response to which defendant No,4 filed comments and defendants Nos. 1 to 3 filed counter affidavit to the application under Order XXXIX, rules 1 and 2, C.P.C.
4. I have heard the learned counsel for the parties and have gone through the record.
5. Mr. Khawaja Shamsul Islam, learned counsel for the petitioners, submitted that the respondent No,1 is a family concern and at the time of its incorporation all the four brothers were its directors.
At that time the shareholding of the company was as under:-- ' Hassan Al-Adawi 6000 shares.
' Muhammad Al Adawi 3000 shares.
' Hussain Al Adawi 8000 shares.
' Yasin Al Adawi 3000 shares.
' However, the respondents No,2 by submitting fake resignation letters and fake transfer deeds removed the petitioners from the Board of the respondent No,1, reduced the number of directors from four to two and transferred the shares in his and his wife's names. He submits that all this was done without calling any extra ordinary general meeting or without passing any special resolution to that effect. He denies that petitioners had ever signed any resignation letters or transfer deeds.
He submits that the transfer of shares as well as reduction of number of directors from four to two is illegal and contrary to law. He further submitted that respondents--Nos. 2 and 3, out of the funds generated from respondent No,1, purchased a number of properties in their own names which are liable to be sold and the sale proceeds be distributed amongst the petitioners, respondents Nos.2 and 3 and legal heirs of late Muhammad Al Adawi. He further submitted that no annual general meeting of the respondent No,1 was ever held and this fact was brought to the notice of respondent No,4. He finally submitted that respondents Nos. 2 and 3 have, in effect, totally excluded the petitioners from the management of the respondent No,1 company and a total deadlock has taken place with regard to the management of the business and affairs of the company and that the business of the company cannot be carried out in accordance with the Articles and Memorandum of the Association of the Company as well as the provisions of the Ordinance and, therefore, he submitted that it would be just to wind up respondent No,1 company, sell the properties purchased by the Respondents Nos. 2 and 3 through the funds generated by respondent No,1 and to distribute the same as per the respective share of the parties/LRs of deceased Muhammad Al Adawi therein. Learned counsel for the petitioners relied on the case of Aeroflot Russian International Airlines v. Gerry's International Ltd. 2003 CLD 1075.
6. Mr. Ch. Abdul Rasheed, learned counsel for respondents Nos. 1 and 2 and 3, on the other hand, submitted that at the time of filing of the present petition the petitioners were neither contributories nor creditors and, therefore, they are not entitled to file the present petition under the law. He submitted that first the petitioners should have got the Register corrected under section 252 of the Ordinance and, thereafter, they should have approached this Court under section 290 or section 305 of the Ordinance. He also states that disputed questions of facts are involved in this petition, which cannot be decided without recording evidence.
7. The claim of the petitioners is two-fold: (1) that respondents Nos. 2 and 3 fraudulently transferred the shares of petitioners in their names and (2) the respondents Nos. 2 and 3 are conducting the business of respondent No 1. In a manner oppressive to the minority shareholders, i,e, petitioners Nos. 1 and 2.
8. The main thrust of the arguments of learned counsel for the petitioners was on the fact that the respondent No,1 company was a family concern wherein all the brothers, as mentioned above, were directors/share-holders and the respondents Nos. 2 and 3 transferred the shares of petitioners Nos. 1 and 2 in their names as well as removed the petitioners from the Board of the respondent No,1 company through forged resignation letters.
9. In the circumstances mentioned above the remedy available to such an aggrieved person is contained in section 152 of the Ordinance, which reads as under:-- "152. Power of Court to rectify register.--(1) If:--
(a) the name of any person is fraudulently or without sufficient cause entered in or omitted from the register of member or register of debenture-holders of a company; or
(b) .................. Not relevant...................... ' the person aggrieved, or any member or debenture-holder of the company, or the company, may apply to the Court for rectification of the register.
(2) to (4).................... Not relevant....................
10. Thus, from the above quoted clause (a) of section 152 of A the Ordinance, it is crystal clear that if name of the any person is fraudulently entered in or omitted from the register, the remedy available to an aggrieved person in such circumstances is by way of applying to the Court for rectification of the register. It is stated in para. 22 of the petitioner that the petitioner approached respondent No,4 for rectification but respondent No,4., vide its letter, dated 4-1-2005, informed the petitioners that the matter of "transfer of shares through alleged forgery and fabrication of documents, by other member(s) of the company falls under the purview of section 152 of the Companies Ordinance for which the jurisdiction rests with the Court of law and not with this office."
However, the petitioners, instead of heeding the advice given by respondent No,4 or abiding by the provisions of section 152 of the Ordinance, preferred to approached this Court under sections 305/306 of the Ordinance.
11. The second submission of the learned counsel for the petitioners was to the effect that the respondents Nos. 2 and 3 were conducting the affairs and business of the respondent No,1 company in a manner oppressive to the minority shareholders. Part X of the Companies Ordinance deals with prevention of oppression and mismanagement. Section 290, Part X, of the Ordinance, reads as under:-- "290. Application to Court.--(1) If any member or members holding not less than twenty per cent of the issued share capital of a company, or a creditor or creditors having interests equivalent in amount to not less than twenty per cent of the paid-up capital of the ' company, complains or complain, or the registrar is of opinion, that the affairs of the company are being conducted, or likely to be conducted, in an unlawful manner, or in a manner not provided for in its memorandum, or in a manner oppressive to the member or any of the members or the creditors or any of the creditors or are being in a manner prejudicial to the public interest, such member or members or the creditors or creditors, as the case may be, the registrar may make an application to the Court by petition for an order under this section.
(2) to (5)...................... Not relevant..................
12. Thus it would be seen that the law envisages that only members or creditors having interests equivalent to at least twenty per cent of the paid-up capital of the company are entitled to file an application in the above quoted eventualities one of which is that the affairs of the company are conducted in an oppressive manner to the members or the creditors, as the case may be. Unless a person is (sic) a member or creditor of a company, he cannot approach the Court under this section. Admittedly, on the date of filing of this petition, the petitioners were not, according to the official record maintained by the respondent No,4, members of the company.
13. The reported case of Aeroflot Russian International Air Lines (supra), which was filed by a creditor after serving notice under section 306 of the Ordinance, in view of the above, is not relevant to the present case.
14. In view of the above discussion, I am of the considered opinion that the petitioners, on the date of filing of the petition were not members of the respondent No,1 company and, therefore, not competent to file this petition. According, this petition is dismissed. The petitioners would be at liberty to seek appropriate remedy as per law.