1. ' NADEEM AZHAR SIDDIQI, J.---The petitioner has filed this petition under section 305 of the Companies Ordinance, 1984 for winding up of the respondent No,1 on the ground that the respondent No,1 has suspended the business for several years and is unable to pay its debits and it is just and equitable that the respondent No,1 may be ordered to be wounded up.
2. ' The respondent No,1 has filed reply on 17-11-2006. In para 1 of part-B of reply under the heading "preliminary objections" the respondent No,1 has stated that the institution of the proceedings have not been properly authorized in the manner required by the Rules of Business 1973 or otherwise howsoever. As a consequence, the above listed proceedings are illegal, nullity in the eyes of law and void ab initio. The respondent No,1 has also disputed the assertion made in the petition.
3. ' The respondent No,2 has also filed parawise comments in which it has been stated that the company has obtained certificate of commencement of business, which was issued on February 2, 1996 well within a year of its incorporation. However, it appears to be correct that the company had not actually commenced the business. In the comments it has been further stated that the company has filed 25 statutory reports with the respondent No,2 on July 7, 1996 reporting for holding of statutory meeting on July 28, 1996. However, the position of compliance with the statutory requirements of the Companies Ordinance, 1984 is very poor. In the comments it was further stated that the office of the respondent No,1 is not situated in the premises notified as registered office of the company and instead office of Messrs Kabraji and Talibuddin & Co., Advocates is situated in that premises.
4. ' The petitioner filed rejoinder to the reply filed by the respondent No,1 and in para 1 of part-B of the rejoinder it was submitted that the petitioner has met all requirements of law including the Rules of Business, 1973 for filing these subject proceedings. In para 16 of Part-C it was further stated that the Managing Director is authorized by the President of the Islamic Republic of Pakistan to institute suits and proceedings.
5. ' The petition earlier came up for hearing and was allowed vide judgment dated 13-8-2008.
6. ' The said judgment was challenged before the Honourable Supreme Court who vide its order dated 13-9-2007 remanded the case for disposal of petition in accordance with law.
7. ' After remand the case came up for hearing on 25-1-2008 and it was decided to first hear the legal objection with regard to the authority of the person who has signed and filed this petition.
8. ' Learned counsel for the respondent No,1 states that the petition has been signed and filed by Zafar Ali Khan, Managing Director PPIB, .Who has no authority to sign the said petition as the agreement between the parties was signed under the specific authority of President of Pakistan and the power of attorney on the basis of which this petition was filed does not contain any power to institute proceedings on behalf of President of Pakistan. He refers to Annexure-D to CMA No,4 of 2007 which is a letter from the learned counsel for respondent No,1 to Mr. Anwar Mansoor Khan, Advocate asking information with regard to the authority of Zafar Ali Khan to institute proceedings. He then refers to Article 99 of the Constitution and submits that only the President or his authorized person can institute the proceedings. He then submits that power of attorney is to be strictly construed and power not contained in the power of attorney cannot be inferred. He then submits that Rules of Business have not been followed by the petitioner and the petition has been filed without consulting the Ministry of Law, Justice and Human Rights Division. He has relied upon the following reported cases:--
(1) Imam Din v. Bashir Ahmed PLD 2005 SC 418;
(2) Abdul Rahim v. Messrs United Bank Ltd. Of Pakistan PLD 1997 Kar.62.
9. ' Learned counsel for the petitioner submits that the petition has been properly filed by the person duly authorized in this behalf and refers to the power of attorney dated 18th April, 1996 executed by the then President of Pakistan. He also refers to the last few lines of the power of attorney which gives authority to do all acts and things that in the judgment of the Managing Director PPIB and in the absence of the Managing Director. PPIB, the Director Legal, PPIB are necessary or appropriate in connection herewith or incidental thereto. He then submits that the words "in connection therewith" have wide scope and include legal proceedings also. He then submits that pursuing the matter by the Government is itself amounts to ratifying the act of filing of petition by Managing Director, PPIB and has referred to the affidavit filed by M. Ismail Qureshi, Secretary, Ministry of Water and Power.
10. He also refers to sub-rule (2) of Rule 7 of Rules of Business, 1973 and submits that the officers listed in schedule IV may authenticate by signature all orders and other instruction made and executed in the name of President. He then refers to clause G of Policy Frame Work and package of incentive for private sector power generation projects in Pakistan and submits that PPIB was established to facilitate private sector power projects and for that reason power of attorney was executed by the President of Pakistan in favour of Managing Director PPIB. He then submits that it is not necessary for the President to sign every document and instrument and the offices authorized under the Rules of Business are competent to sign on behalf of the President. He then submits that the respondent No,1 is indebted to the petitioner and this petition has been rightly filed by a creditor. He has relied upon the following reported cases:--
(1) Muhammad Khaliq v. Abdullah Khan 1987 CLC 1366;
(2) Khyam Films v. Bank of Bahawalpur Ltd. 1982 CLC 1275;
(3) Fazal Rehman v. Khursheed Ali 2004 CLC 359;
(4) Messrs Bismillah Textile Ltd. v. Habib Bank Limited 2008 CLC 504;
(5) Gap Inc. A Daware Corporation USA v. Gap Departmental Store, Karachi 2006 CLD 1477; and
(6) Lahore Stock Exchange Limited v. Fredrick J. Whyte Group Pakistan Ltd. PLD 1990 SC 48.
11. ' In rebuttal the learned counsel for respondent states that filing of the legal proceedings are not the routine business of the President and for initiating legal proceedings specific authorization is required, which is lacking in this case.
12. ' I have heard the learned counsel for parties and perused the record made available before me.
13. ' This petition for winding up has been filed by the petitioner under section 305 of Companies Ordinance, 1984 hereinafter referred to as "the said Ordinance". Section 305 of the said Ordinance provides circumstances in which company may be wound up by Court and sub-clause (e) of the above section provides that if the company is unable to pay its debts the company may be wound up by Court. Section 306 provides that a company shall be deemed unable to pay its debts if on demand requiring the company to pay the sum so due and the company has for thirty days thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor. Section 309 of the said Ordinance provides that an application to the Court for the winding up of a company shall be by petition presented, subject to the provisions of this section, either by the company, or by any creditor or creditors including any contingent or prospective creditor or creditors, or by any contributory or contributories, or by all or any of the aforesaid parties, together or sparately, or by the registrar, or by the Commission or by a person authorized by the (Commission) in that behalf.
14. ' Section 310 of the said Ordinance provides that (1) where a company is being wound up voluntarily or subject to the supervision of the Court, a petition for its winding up by the Court may be presented by any person authorized to do so under section 309 and subject to the provisions of that section; and (2) The Court shall not make winding up order on a petition presented to it under subsection (1) unless it is satisfied that the voluntary winding up or winding up subject to the supervision of the Court cannot be continued with due regard to the interests of the creditors or contributories or both.
15. The claim of the petitioner is that the respondent have been adjudged by the ICC International Court of Arbitration and to pay to the petitioner US$ 592,030.00, which the respondent has not paid inspite of service of notice of demand dated 9th February, 2005. The petitioner has filed this petition as a creditor. The award is in favour of Islamic Republic of Pakistan, Ministry of Water and Power and in the capacity of a creditor the petition can be filed without referring the matter to the President of Islamic Republic of Pakistan.
16. For filing the petition by the Islamic Republic of Pakistan in the capacity of creditor no reference or permission from President is necessary. Article 173(3) of the Constitution of Islamic Republic of Pakistan provides that all contracts and all assurance of property made in the exercise of that authority shall be executed on behalf of the President or Governor by such persons and in such manner as he may direct or authorize. Article 174 of the Constitution provides that the Federation may sue or be sued by the name of Pakistan and a Province may sue or be sued by the name of the Province.
17. ' There is no condition in the above-referred Articles that the proceedings should be signed by the President himself or his authorized agent. The private power and Infrastructure Board PPIB appears to be a attached department of Ministry of Water and Power and the said Ministry has an award in its favour, which was not fulfilled by the respondent and the petition has been rightly filed on behalf of Islamic Republic of Pakistan by Managing Director PPIB being the creditor of the respondent No, 1.
18. This petition has not been filed to enforce the terms and conditions of the guarantee dated 5th May, 1996 entered into between the President of Pakistan signed by Managing Director PPIB and the respondent No,1 and, therefore, the specific authorization from the President of Pakistan is not required. Article 99 of the Constitution provides that all the executive actions, including contracts made on behalf of the Federal Government, to be expressed in the name of President. Sub-Article
(2) of Article 99 also provides that if an order is issued in the name of President and is duly authenticated in the manner prescribed in the said Article there is a rebuttable presumption that the order is made by the President.
19. ' In view of the above, the objection raised by learned counsel for the respondent No,1 regarding maintainability of petition is rejected.
20. ' This matter may be fixed for further hearing according to roster.