1. ' NADEEM AZHAR SIDDIQI, J.---The petitioners have filed this petition for winding up of respondent No,1 under sections 305, 309 and 311 of the Companies Ordinance, 1984.
2. ' The facts as stated in the petition are that the petitioners are the employees and shareholders of the respondent No,1 to the extent of 33 % shares. It was stated that after 1998 the respondent No,1 had not given Annual Reports and started claiming that the respondent No,1 is in loss of Rs,45 Crore and in 2000 the company was closed. It was further stated that the respondent-Company is unable to pay its debts and dues and substratum has gone and it is just and equitable to wind up the company.
3. ' After service of notice Chief Executive of the respondent-Company appeared in Court on 17-8- 2003 and requested for time for engaging an advocate and thereafter, Ch. Rasheed Ahmad, Advocate appeared for respondent-Company on 7-10-2003.
4. ' From the perusal of record it appears that the respondent-Company has not filed any counter- affidavit or reply to the petition.
5. ' Parawise comments have been filed by the Additional Registrar on 7-10-2003.
6. ' On 11-5-2004 the Official Assignee was appointed as Provisional Manager with all powers and authority in terms of section 325 of the Companies Ordinance, 1984 for the purpose of regulating and controlling affairs of the company and to take and prepare list of creditors and shareholders and call for their claims as to their entitlement towards the company.
7. ' On 4-6-2004 the report of the Official Assignee was taken up for hearing. In his report the Official Assignee has submitted that the company is spread over an area of 36 acres plus it has extra land of more than 40 acres and the business of the company is closed since 24-5-2000.
8. ' Vide order dated 4-6-2004 the company was ordered to be wound up in terms of section 305(h) of the Companies Ordinance, 1984.
9. ' On 20-9-2004 the Official Assignee was permitted to sell the assets of the company by inviting sealed tender and was also permitted to invite claim from the creditors of the company under Rule 126 of the Companies (Court) Rules, 1997.
10. ' On 4-4-2005 the Reference No,2 of 2005 of the Official Assignee was taken up for hearing by which the Official Assignee has submitted the offers for the purpose of sale of properties mentioned in the reference. According to the reference of Official Assignee, following properties were put to auction:- -
(1) Plot of land Naclass No, 26, Deh Rehri, Tapo Landhi, District Malir, Karachi, measuring about 68.28 acres with plant, machinery, all movables and building constructed thereon i,e, factory known as Sindh Alkalis;
(2) Plot of land Naclass No, 26, Deh Rehri, Tapo Landhi, measuring about 43.28 acres, District Malir, Karachi;
(3) Plot of land situated at Deh Rehri, Tapo Landhi, District Malir, Karachi, measuring about 150 acres;
(4) Plot of land Naclass No, 26, measuring about 450 acres, situated in Deh Gungiar, Tapo Landhi, District Malir, Karachi;
(5) Plot of land measuring about 497.21 acres near Goth Khamiso Khan, District Thatta, the same was granted to the company by Government of Sindh, Directorate of Mineral Development on lease for 10 years from 20-7-1996 to 19-7-2006; ' The highest offer was made by Ibrahim Shamsi and Abdullah Rafi in the sum of Rs,45 Crore for the entire assets mentioned in the reference.
11. ' The Reference No,2 of 2005 was again taken up for hearing on 18-4-2005 and the following order was passed:-- "It is pointed out by the O.A. That offer earlier received was about 450 Million. He has received information and revised offer of Rs, 460 Million. Let the O.A. Call the two last bidders to make close bidding amongst themselves and so also at the same time EPZ Authority may also participate in such proceedings, if any as he interested in acquiring the property as stated by Mr. Faisal Kamal, Advocate. The reference stands disposed of."
12. ' The order dated 4-4-2005 and 18-4-2005 were challenged before the Honourable Supreme Court of Pakistan. The matter was disposed of by the Honourable Supreme Court vide order dated 28-6- 2005, the operative part of which is reproduced as under:-- "Consequently, the petition after conversion into appeal is accepted, the impugned order dated 18- 4-2005 is set aside and the case is remanded to the learned Company Bench of the Sindh High Court with direction to decide Reference No,2 of 2005 and Reference No,3 of 2005 along with all the objections and applications of the parties, after hearing all the parties concerned, keeping in view, the larger interest, in accordance with rule, of the Company under liquidation as well as the creditors. The Court shall decide the matter within 15 days from the receipt of this order."
13. ' After the order of the Honourable Supreme Court the matter was taken up in Court on 11-7-2005 and the Official Assignee was directed to call fresh bids for sale of assets of the company through publication.
14. ' On 22-7-2005 Mr. Ahmed Pirzada, learned Addl. A.G. Appeared in Court and has opposed the sale of the land on the ground that the land allotted to Sindh Alkalies Limited has been resumed and allotted to Export Processing Zone Authority.
15. ' The References Nos.2, 3,4 and 5 of Official Assignee were taken up for hearing on 3-8-2005 and the following order was passed:- "As the auction-purchaser, Memon Abdul Qadir, offered to purchase the property on "as is where is" basis and have a notice of objection taken by Mr. Faisal Kamal on behalf of KEPZ, the offer given by him for the sum of Rs,46.20 crore, being the highest bid, is accepted. The auction-purchaser is directed to deposit the balance amount within 15 days from the date of this order. It made clear that no letter for the renewal of lease in respect of land in question will be issued by the Official Liquidator as properties were sold "as is where is" basis."
16. ' The above order was also challenged before the Honourable Supreme Court by way of filing of C.P.L.A. No, 1071 of 2005 and C.P.L.A. No,1325 of 2005 disposed of vide judgment dated 15-2-2006. The operative part of which is reproduced as under:- "We, having heard the learned counsel for the petitioners and gone through the record with their assistance, have found that learned Judge in chamber in the High Court instead of deciding the dispute arising out of References Nos. 2 and 3 of 2005 in terms of the judgment of this Court, confirmed the auction in favour of Memon Abdul Qadir, who entered in the competition at a later stage and offered matching big with a nominal margin. Be that as it may, we with consent of learned counsel for the parties, send the case to the High Court for decision of the references, along with the objections and miscellaneous applications, afresh in the light of the observations contained in the judgment dated 28-6-2005 of this Court within a period of two months. These appeals are allowed in the above terms with no order as to cost."
17. ' After the remand from the Honourable Supreme Court the matter was again taken up on 17-5- 2006 and in the order it was observed as under:-- "The evidently obvious circumstances, in which both the bidders acted, coupled with their dubious conduct were adequate enough to create an impression that none of them was genuine bidder.
18. Both of them wanted their share of booty. Failing to get what they wanted at a throwaway price, they have thrusted meaningless litigation to the detriment of the company, the creditors, and all other stakeholders. Indeed they need to be ridded off."
19. ' Regarding the claim of Export Processing Zone Authority the Court in the above order has observed as under:-- "This application was filed by Export Promotion Zone Authority (EPZA) under Order I, Rule 10(2), C.P.C.
20. For being impleaded as one of the respondents. According to EPZA the Board of Revenue had leased out certain land situated in Deh Rehri to the company under liquidation viz. Messrs Sindh Alkalis Limited Karachi but subsequently the allotment in respect of 200.00 acres out of the said land was cancelled and the same was leased out to EPZA vide letter dated 17-2-2001 of the B.O.R.
21. From the perusal of the case diary, it reveals that on 3-8-2005 said application was fixed before the Court and after elaborately discussing all the relevant points, the same was disposed of. It will thus not be appropriate to make any further observations."
22. ' The order dated 17-5-2006 was also challenged before the Honourable Supreme Court. At the first instance the Honourable Supreme Court vide order dated 14-11-2006 allowed Ibrahim Shamsi to deposit Rs, 46,20,00,000 within three days. The matter was taken up by the Honourable Supreme Court on 17-11.-2006 and was disposed of. The operative part of the said order is read as under:-- "6. As we are intending to remand the case to the Company Judge of High Court, therefore, appellant shall make an application before the Company Judge for the refund. Thus, without dilating upon and entering into the merits of the case we consider it appropriate to set aside the impugned judgment and send back this case to the Company Judge, High Court of Sindh at Karachi for disposing of afresh keeping in view only the bona fides of the appellant in making the deposit. The claim of the Export Processing Zone Authority, shall also be examined and decided in accordance with law. The Court shall also be free to take into consideration whether any action can be initiated against Memon Abdul Qadir who dragged proceedings for one or the other reasons, as a result whereof matter is lingering on without any justification.
7. Thus, for the foregoing reason, Civil Appeal No,1336 of 2006 is allowed and Civil Petition No, 403-K of 2006 filed by Memon Abdul Qadir is dismissed. Case is remanded to learned Company Judge, High Court of Sindh, Karachi for the disposal of the matter expeditiously preferably within a period of three months. Parties are left to bear their own costs."
23. ' After the remand the Export Processing Zone was made party to the proceedings on 11-1-2007 and on 8-3-2007 the Government of Sindh was impleaded as party to the proceedings.
24. ' In the above quoted background the arguments of the learned counsel for the parties were heard in respect of the following items referred in order dated 31-1-2008:--
(1) Application of Government of Sindh filed under Order I, rule 10(2) read with section 12(2), C.P.C.
(2) Objections of the Export Processing Zone in respect of sale/auction of the properties.
(3) Application of auction bidder Ibrahim Shamsi bearing C.M.A. No, 1075 of 2006.
(4) Official Assignees's References Nos.6 of 2005 and 14 of 2006.
(5) Apart from above, submissions of Mr. Junaid Farooqui, Advocate for bidder, Memo Abdul Qadir, was heard with regard to the return of earnest bid money.
25. ' ITEM NO.1 ' The claim of the Government of Sindh with regard to the land allotted to the respondent- Company is as under:-
(a) Lease of land of 150 acres from 1962-1963 and 43.28 acres from the year 1964-1965 from Naclass No, 26, Deh Rehri for a period of 30 years.
(b) In 1964 grant of lease of 437.20 acres from Naclass No,
46. Possession not taken and lease was not extended.
(c) In 1995 grant of lease of additional area of 491.27 acres near Village Khamiso Khan District Thatta from 1996 for 10 years for excavating lying stone. Lease was cancelled on 5-6-2006 on account of violation of lease.
(d) An area of 125 acres out of total area of 193.28 acres of Deh Rehri resumed by Deputy Commissioner Karachi vide his order No, Rev/3607/1989, dated 26-11-1989.
(e) Lease of remaining 68.28 acres Deh Rehri was renewed for 30 years from 1992-1993 vide order No,PS/MBR/LU/3653, dated 15-10-1992.
(f) It was further stated that the respondent-Company is in possession of 68.28 acres through illegal order and neither they are lessee nor owner of suit property.
26. ' Vide Reference No, 1 of 2005 the Official Assignee submitted that he has advertised for sale of the following properties:--
(1) Plot of land Naclass No, 26, Deh Rehri, Tapo Landhi, District Malir, Karachi, measuring about 68.28 acres with plant machinery, all movables and building constructed thereon i,e, factory known as Sindh Alkalis.
(2) Plot of land Naclass No,26, Deh Rehri, Tapo. Landhi, measuring about 43.28 acres, District Malir, Karachi.
(3) Plot of land situated at Deh Rehri, Tapo Landhi, District Malir, Karachi, measuring about 150 acres.
(4) Plot of land Naclass No, 26, measuring about 450 acres, situated in Deh Gungiar, Tapo Landhi, District Malir, Karachi.
27. ' In the same reference he has also submitted that the lessees of the above properties were expired and sought permission for obtaining renewal of leases. The said reference was disposed of as the Official Assignee has not pressed the same.
28. ' In Reference No,2 of 2005 the Official Assignee has submitted the bids for consideration for the sale of above four properties. In the same reference the Official Assignee has also mentioned about the following property:--
(5) Plot of land measuring about 497.21 acres near Goth Khamiso Khan, District Thatta, granted by the Directorate of Mineral Development for 10 years from 20-7-1996.
29. ' The Official Assignee in the above reference has further submitted that the four bidders have agreed that offer should be given for entire assets and all dues of utilities be paid by the auction- purchaser except property tax which will be paid by the Official-Assignee. The Official Assignee has further submitted that the highest offer is of Rs,45 crore made by Ibrahim Shamsi and Abdullah Rafi for the purchase of - entire assets as mentioned at Sr. Nos. (i) to (iv) of Para. 2 and in Para. 3 of the reference with the condition that all the utility liabilities except-property tax will be payable by the auction-purchaser and the Court will give letter for renewal of lease of land to the Government in respect of expired lease.
30. ' From the above it is clear that the leases of above land except the lease of land of.
31. 68.28 acres of land situated in Naclass No,26, Deh Rehri, Tappo Landhi, District Malir, Karachi, were expired and the properties cannot be legally auctioned unless the leases are renewed.
32. Furthermore, from the notification submitted by the learned A.A.-G it appears that third party interest is already created in the land measuring 497.21 acres situated at Goth Khamiso Khan. As far as 68.28 acres of land, plant and machinery with all movables and building thereon the lease of which was renewed for further 30 years can be auctioned for the remaining period of lease. The auction of the properties the leases of which were expired or cancelled will not serve the purpose as the Official Assignee will not be in a position to pass on better title than possessed by the respondent-Company. This Court in the summary jurisdiction under the Companies Ordinance cannot resolve the dispute of title and cannot compel the Sindh Government to renew the leases.
33. ITEM NO.2 ' The EPZA has objected for sale of properties mentioned at Serial No, (ii) and (iii) of Para. 2 of the Reference No,2 of 2005. The claim of the EPZA is that the said land was allotted to it by the Government of Sindh. Along with application under Order I, Rule 10, C.P.C. The EPZA has filed allotment letter of 1998 which shows that additional land of 200 acres was allotted to it but in the said letter the location and particulars of the property allotted or its survey number was not mentioned. The EPZA has also filed certain documents to show that 150 acres of land allotted to the respondent-Company was cancelled and the said company has lost its case upto the level of Member Board of Revenue. The EPZA has also produced a copy of letter dated 17-2-2001 addressed by the Member (L.0) to Deputy Commissioner West by which 200.00 acres of land in Deh Rehri was allotted to the EPZA. Again in this letter the description and location of the property allotted has not been mentioned. It is not known on what basis the EPZA is claiming a particular land. There is no further document available on record to connect the land allotted to the EPZA to the land allotted to the respondent-Company. As per their own showing the EPZA has received the possession of 125 acres of land and in the possession letter also there is no mention of location and description of property. Even the survey number is not mentioned in the Possession Letter. It appears that the claim of EPZA is based on their own imagination. The objections filed by EPZA are rejected.
34. ITEM No,3 ' By filing this application, Ibrahim Shamsi bidder has prayed that Official Assignee may be directed to take all necessary steps for renewal of leases.
35. ' Keeping in view the fact that all leases except one were expired it will be in the interest of the shareholders, creditors and the prospective purchasers that before taking any further action in the matter the Official Assignee should approach the Government of Sindh for renewal of leases.
36. ' The application is allowed as prayed. The Official Assignee may proceed further in the matter. The creditor banks may provide due assistance and finances to the Official Assignee in this regard. Any amount incurred by the creditor banks have first charge on the sale-proceed.
37. ITEM NO.4 ' By filing Reference No,6 of 2005, the Official Assignee has submitted that National Bank of Pakistan secured creditors has produced the documents in respect of the assets of the company.
38. ' By filing Reference No,14 of 2006 the Official Assignee has requested for confirmation of offer of Rs,46.20 crore made by Ibrahim Shamsi and others for the purchase of entire assets of the respondent-Company and to hand over the possession to the same and to approach the Land Utilization Department for renewal of expired lease.
39. ' Mr. Ghulam Mohiuddin, learned counsel for auction-purchaser Ibrahim Shamsi states that the land allotted to the respondent-Company belongs to the Federal Government and the Sindh Government has nothing to do with the same and neither Sindh Government can resume the land nor can allot the same. He submits that in view of the last order of the Hon'able Supreme Court the sale of the properties may be confirmed in favour of Ibrahim Shamsi.
40. ' There appears to be some dispute with regard to the ownership of the property. The Sindh Government claims the land as their land whereas the auction-purchaser states that the land belongs to Federal Government. This controversy cannot be decided in these proceedings. In any case it is an admitted position that the leases of land allotted to the respondent-Company were expired except one land of Deh Rehri measuring 68.28 acres which was renewed on 15-10-1992 and cannot be sold unless the leases are renewed. The other question is that the tender for sale of properties were called in October, 2004 and thereafter, the prices of the properties of Karachi increased manifold and it will not be equitable and just to confirm the sale in 2008 at the prices of 2004. Till to-date the bid has not been confirmed in favour of highest bidder and he has not acquired any right and title in the property. The properties were advertised for sale with the condition that the Official Assignee may cancel the tenders without assigning any reason and all tenders are subject to confirmation of High Court of Sindh, Karachi. In the reported case of Munshi Muhammad and another v. Faizanul Haq and another 1971 SCM R 533 the Honourable Court has held as under:-- "The view formed by the High Court is unexceptionable. Since the auctions in favour of the petitioners were not finally approved, they did not acquire any right in the properties, and had, therefore, no locus standi to ask for their transfer. According to the terms and conditions of the auction itself, the highest bids offered in the auctions were subject to the approval of the Additional Settlement Commissioner concerned, who may or may not accept the bids, without assigning any reasons for his action."
41. ' In view of above, Reference No,6 of 2005 is taken on record and Reference No,14 of 2006 is rejected.
42. ITEM NO.5 As far as the request of Mr. Junaid Farooqui, Advocate for bidder Memon Abdul Qadir, for refund of bid amount on the ground that bidder is not aware about the title dispute, is concerned, I found no force in his contention as the bidder is aware about the title dispute and has agreed to purchase the properties "as is where is" basis against consideration of Rs,46.20 crore. The bidder has also filed a statement dated 3-8-2005 in which he had stated that he is ready and willing to purchase the property in question despite existence of dispute regarding validity of lease/title. In this regard, I want to refer order dated 3-8-2005, the relevant portion of which is reproduced herewith:- "As the auction-purchaser, Memon Abdul Qadir, offered to purchase the property on "as is where is basis and have a notice of objection taken by Mr. Faisal Kamal on behalf of KEPZ, the offer given by him for the sum of Rs,46.20 crore, being the highest bid, is accepted. The auction-purchaser is directed to deposit the balance amount within 15 days from the date of this order. It made clear that no letter for the renewal of lease in respect of land in question will be issued by the Official Liquidator as properties were sold "as is where is" basis."
43. ' No doubt the above order was set aside by the Honourable Supreme Court but the same was only quoted to show that the request of the bidder is not bona fide and since he fails to deposit the balance sale consideration within the time allowed he is not entitled to refund of the bid amount.
44. The bid amount is, therefore, forfeited.
45. ' In view of the above discussion, the Official Assignee is directed to re-advertise for the sale of 68.28 acres of land situated at Naclass No,26, Deh Rehri, Tapo Landhi, District Malir, Karachi for the remaining period of lease with plant and machinery along with building and other movables on "as is where is" basis with the condition that all the taxes and dues will be payable by the auction- purchaser. The Official Assignee is further directed to approach the Government of Sindh for renewal of the expired leases.