C.M. No,488-L of 2008 ' SYED HAMID ALI SHAH, J.---The applicants are major share-holders and ex-Directors of the company (in liquidation). They have jointly moved this application for staying the operation of order dated 9-9-2008, till the reference under section 29-A National Accountability Ordinance, 1999, is decided.
2. Learned counsel for the applicants has contended that the applicants have approached through letter dated 4-8-2008, the Governor State Bank of Pakistan for reconciliation of liability through the conciliation committee: State Bank of Pakistan has responded and has addressed communication through letter dated 15-8-2008, whereby the applicants have been asked to furnish requisite information. The applicants have provided necessary detail through letter dated 28-8-2008. The applicants being hopeful of a positive outcome of conciliation though the committee seek that operation of order dated 9-9-2008 be kept in abeyance. Learned counsel for the petitioner and also the official liquidator has submitted that order dated 9-9-2008, is very clear. The applicants have failed to pay a price of Rs,105 millions as per their undertaking within 30 days and as such the auction in favour of the petitioner has already been confirmed. It was contended that instant application has been moved to further delay the matter.
3. Heard learned counsel for the parties and perused the record.
4. This case has a chequered history. A decree for an amount of Rs,292,433,714.40 was passed in favour of the petitioner and against the applicants and the company (in liquidation) on 16-1-2001.
The company was ordered to be wound up vide order dated 3-7-1997 and Joint Official Liquidators were appointed to carry the winding-up proceedings. The assets of the company (in liquidation) were put to auction and the auction was held on 29-5-2004. The petitioner being decree-holder sought permission to participate in the bid and the same was accorded through order dated 17-11- 2003. The petitioner was declared highest bidder. The applicant (ex-management) moved application (C.M. No,519-L of 2004) for setting aside the sale. Fresh sale of the asset, with a reserve price on the basis of fresh valuation by independent evaluator, was directed vide order dated 1-2- 2006. Reserve price was fixed by consensus at Rs,100 millions. The petitioner (Al-Mashriq Bank) was declared as successful bidder, in the auction held on 12-10-2006. The applicants, once again filed objection and during pendency of their objection petition, they came with an offer to purchase the assets against the consideration of Rs,105 millions. Their offer was accepted by creditors/petitioners and 30 days period was granted for the payment. The auction in favour of the petitioner (Al-Mashriq Bank) was ordered to be confirmed, in the event of nonpayment of agreed amount within the stipulated period. No payment was made and failure thereof has resulted into confirmation of the sale in favour of auction-purchaser. The applicants have now filed this application and pray that proceedings herein, be held in abeyance, to provide a chance to the petitioners to settle their matters with NAB authorities.
5. "Winding up" is a term used for proceeding by which a company is dissolved. This process is also called as "liquidation proceedings". The assets of the company in these proceedings are disposed of, debt is realized and the liability of the company towards it's creditors is paid off, out of realized assets. The surplus if any is distributed to the members and contributory proportionately. In short winding up is legal process, by which an incorporated company is brought to an end. The consequences of winding up order are that all the assets of the company come under the control of the Court and the management of the company vests with liquidator instead of Directors and the Chief Executive. The transfer and disposition IA of property of the company by anyone, except by the liquidator, is prohibited and the law renders any such transaction as void. When the winding up order has been passed, no suit or proceedings against the company can commence against the company, except with the leave of Court: The Court (company Judge) where the winding up proceedings are pending, has the jurisdiction, within the contemplation of section 316 of the Companies Ordinance, 1984, to entertain and dispose of any suit or proceedings, by or against the company. Even pending proceedings by or against the company stand transferred to the company Court. The object of section 316 of Ordinance, 1984, is to accelerate disposal of winding up proceedings, cheep and summary remedy in respect of claims for and against the company, and to save unnecessary litigation. The provisions of Companies Ordinance, 1984 are special and will prevail over other laws. The company Court exercises a wide jurisdiction, over all matters relating to the company in the process of winding up. The matter relating to a company in winding up are to be adjudicated before one Court and the wisdom behind this provision is that company should be dissolved finally, without complication.
6. The applicant seeks stay of instant proceedings, till final decision of reference under section 25-A of the National Accountability Ordinance, 1999. This course is not legally permissible and the same offends the provisions of Company Law, especially section 316 of Ordinance, 1984. The winding up proceedings are pending since 1995. Any delay will unfairly prejudice the rights of creditor. Section 320 of Ordinance, 1984, requires that regards has to be given to wishes of creditors.
' The application in hand is devoid of merit and is accordingly dismissed. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.