' GULZAR AHMED, J.---This is a petition, under sections 305 and 306 of the Companies Ordinance, 1984 for winding up of the respondent. G. M. Printo Pack (Pvt.) Ltd. Petitioner claims himself to be the Managing Director and Shareholder of respondent, holding 1,112,346 shares out of the total number of 2,107,000 of the respondent. The respondent is stated to have been incorporated as a private limited liability company on 2-1-1991 having its registered office at Plot No,192. Sector 24, Korangi Industrial Area Karachi. The petitioner was incorporated with the object as mentioned in the Memorandum of Association i,e, to engage in the business of packaging, printing of cartons, labels, POS and stationery etc. It is alleged that the authorized paid up capital of respondent is Rs,30,000,000 divided into 3,000,000 shares of Rs,10 each of which paid up share capital is Rs,21,070,000. It is alleged that for the purpose of its operations, the respondent obtained various finance facilities. Demand Finance, working Capital Finance, Leasing Finance, and that respondent business was running smoothly and was producing good results and paying its liabilities to the financial institutions but due to economic slump the respondent faced liquidity crunch and was not able to meet its financial liability to a great extent. Some accommodation was provided by majority of financial institutions to repay the debt by respondent but some of the Financial Institutions who had given lease fiance facility, went on to harass the respondent with threat of repossession of leased assets and one Crescent Standard Investment Bank Limited repossessed its leased assets i,e, machinery from the factory premises of the respondent. The removal of the machinery made the respondent unable to fulfil its commitment and could not generate revenue.
The customers of respondent cancelled their orders causing loss to the respondent. Respondent is alleged to have filed a suit for damages against the Crescent Standard Investment Bank Limited. It is alleged that in view of the scenario, the creditors including financial institutions started to call the respondent for return of their dues for which the respondent had no liquidity. In para. 13 of the petition, petitioner has enumerated eight cases pending against the respondent and others details of which are as follows:--- Sr. No Suit No. Court No. Parties Names Recovery Amount
1. S.372/05 BC-V Karachi Crescent Standard Investment Bank (Pvt.) Ltd. v. Messrs G.M.
Printo Pack (Pvt.) Ltd and others.5,104,246
2. S.469/04 BC-1 Karachi Pak gulf Leasing Co. Ltd. v. Messrs G.M.
Printo Pack (Pvt.) Ltd. and others.1,430,820.00
3. S.160/04 BC-3 Karachi Security Leasing Corporation Ltd. v. Messrs G.M. Printo Pack (Pvt.) Ltd.
And others.6,845,550
4. S.161/04 BC-3 Karachi Crescent Leasing Corporation Ltd. v. Messrs G.M. Printo Pack (Pvt.) Ltd.
And others.7,695,590
5. S.120/07 Bank Al-Flah v.
Messrs. G.M.
Printo Pack (Pvt.) Ltd. And others.32,546,017
6. S.45/07 Saudi Pak Leasing Co. v.
Messrs G.M.
Printo Pack (Pvt.) Ltd. and others.30,320,095
7. S.193/04 NIB Bank v.
Messrs G.M.
Printo Pack (Pvt.) Ltd. and others.5,472,181
8. S.372/05 Capital Assets Leasing v.
Messrs G.M.
Printo Pack (Pvt.) Ltd. And others.4,796,543 ' Besides the above, it is alleged that a decree in the sum of Rs,54,635,000 has been passed in Suit No,32 of 2004 against respondent and it is alleged that the decretal amount has been settled by adjusting Director's personal property having value of Rs,44,000,000 and for payment of balance sum of Rs,10,635,000 a further long term finance has been obtained. Another suit for recovery of Rs,32,549,017 has been filed by another leasing company against the respondent. It is alleged that respondent has calculated to have incurred gross losses amounting to Rs,2,073,000 at the end of the year June, 2005, Rs,32,793,5550 at the end of the year of June, 2006 and Rs,71,159,081 at the end of the year June, 2007 as per Auditor's Reports. Total liability of respondent as one June, 2007 is Rs,51,568,627 on account of loans, lease and finance facility obtained by respondent and the respondent has shown its inability to pay its debts. Accordingly prayer is made for winding up of the respondent.
The respondent was served and Mr. Kumail Ahmed Shirazi, Advocate has filed his Vakalatnama on its behalf on 6-2-2008. The respondent has not filed any objection and/or counter affidavit. It appears from the record that after the filing of Vakalatnama, the counsel for respondent even did not put up appearance in Court. Parawise comments have been filed by the Additional Registrar of Companies, Karachi. The objections have been filed by respondent's creditors namely Innovative Investment Bank Ltd. Security Leasing Corporation, Saudi Pak Leasing Company Ltd. And Al-zamin Leasing Corporation Ltd. On the date of hearing, the counsel for the objectors was not in attendance. Petitioner counsel has filed a note of written arguments.
' I have gone through the record of this J.M. And have also considered the submissions made by the petitioner counsel in the note of his written arguments.
So far the respondent is concerned there is no opposition to the petition that it is unable to pay its debts. The comments of Additional Registrar of Companies, Karachi, shows that following charges have been registered against the assets of respondent:-- Date Amount In favour of
1. 1st September, 1999Rs.6,250,000 B.R.R. International Modarba
2. 24th November, 2003Rs.60,500,000 Bank Al Falah, Korangi
3. 24th November, 2003Rs.20,000,000 Bank Al Falah, Korangi
4. 28th July, 2005 Rs.25,000,000 Bank Al Falah, Korangi ' The objectors in their objections have made serious allegations against the petitioner of being involved in financial embezzlement of the respondent and is stated to be a convicted person. It is further alleged that the petitioner and his wife were the only Members and Directors of respondent, who have siphoned off the finance of respondent for their personal gain to the extent of crippling the company and bringing its operation to a closure. They have stated that petition for winding up may not be allowed but instead the petitioner and his wife be made to return the entire finance embezzled by them and the liabilities of the respondent be paid off.
Section 305 of the Companies Ordinance, 1984 (the Ordinance) lays down the circumstances in which the company may be wound up by the Court. Clause (e) lays down one of the circumstance that is if the company is unable to pay its debts. So far the question of inability of the respondent to pay its debts is concerned, same does not appear to be in contest even by the objectors rather they complain that their dues are outstanding against the respondent which it is not in a position to liquidate. In this view of the matter there appears to be consensus that the respondent is unable to pay its debts and there is no escape from it being ordered to be wound up.
So for the allegations made by the objectors in their objections against the petitioner and his wife, it may be noted that the objectors may initiate legal proceedings against the petitioner and his wife, be that of civil or criminal if same is permissible to them by the law. On respondent being ordered to be wound up in terms of section 328 of the Ordinance, a statement as to the affairs of the respondent verified by an affidavit will be required to be submitted by its Directors to the Official Liquidator, who, in turn under section 329 of the Ordinance submit his preliminary report to the Court bring to the notice of the Court inter alia all factors which has resulted in the failure of the respondent and further report containing his opinion of any fraud that may have been committed by any person in the promotion and formation of the respondent or by any Director of other officer of respondent in relation to it since its formation. On considering of such preliminary report or reports of the Official Liquidator, the Court can pass an appropriate order.
Consequently, this petition is allowed. The respondent company is ordered to be wound up. Official Assignee is appointed as Official Liquidator. He shall immediately prepare inventory of all the assets of respondent and proceed further in accordance with law. Listed application is also disposed of.