This order will dispose of the proceedings initiated against M/S Adil Polypropylene Products Limited (the "Company") for failure to hold Annual General Meeting for the calendar year 2001 and to lay therein a balance sheet and profit and loss account for the year ended June 30, 2001.
2. The relevant facts for the disposal of this case are very simple. The Company was required to hold its Annual General Meeting (the "AGM") for the calendar year 2001 and to lay therein its balance sheet and profit and loss account for the year ended June 30, 2001 on or before December 31, 2001 as required under Sub-section (1) of Section 158 of the Companies Ordinance, 1984 (the "Ordinance'). The failure of the Company to comply with the aforesaid mandatory requirements necessitated action as provided under the Ordinance. A show cause notice No.19 (1000)/CF/ISS/2001 dated January 18, 2002, therefore, was issued to the Company, its Chief Executive and directors calling upon them to show cause in writing within fourteen days as to why penalties as provided under Clause (a) of Sub-section (4) of Section 158 read with Section 476 of the Ordinance may not be imposed.
3. The reply to the show cause notice was received on February 11, 2002 through the Company's letter dated February 08, 2002. In order to give personal hearing, the case was fixed on March 06, 2002, which at the request of the Company was adjourned and re-fixed on March 11, 2002. Mr. Saleem Iqbal Khawaja and Mr. Ale Imran of Corp Link (Pvt) Limited represented the Company, its Chief Executive and directors in these proceedings.
4. During the course of hearing and also in the reply to the show cause notice, it was stated that the company is dormant since eighteen months and neither there has been any transaction nor any staff was employed. The representatives also informed that an application U/S 170 of the Ordinance has already been forwarded to the Registrar for a direction to hold AGM by April 30, 2002. It was also stated that the audited accounts would be ready in two months time.
5. I have given careful consideration to the arguments advanced by the Company for not being able to hold AGM and lay therein balance sheet and profit and loss account. I am of the view that none of the reasons advanced by the Company justify the delay in holding of AGM and presentation of balance sheet and profit and loss account therein.
6. In view of the foregoing, the default under Sub-section (1) of Section 158 of the Ordinance is established and the Chief Executive has made himself liable under Clause (a) of Sub-section (4) of Section 158 of the Ordinance. As the Company has not been able to give any justifiable excuse for the default, therefore, I consider it a deliberate act on the part of the Company, its Chief Executive and directors. Punishment has been prescribed with the intention that law should be observed.
Keeping this in view and also because the Company has held its overdue AGM on April 29, 2002, I am inclined to take a lenient view of the default and impose a fine of Rs 10,000 (Rupees ten thousand) only on Chief Executive of the Company for default in complying with the provisions of Sub-section (1) of Section 158 of the Ordinance. The Company, its Chief Executive and directors are, however, advised to ensure timely holding of AGM in future.
7. The Chief Executive namely, Mr. Faisal Mehmood is hereby directed to deposit the fine amounting to Rs 10,000/- in the bank account of the Commission within 30 days of the receipt of this order and submit a copy of the receipted challan to the Commission.