Order under Section 73 (4) read with Section 476 of the Companies Ordinance, 1984 This order shall dispose of show cause proceedings initiated against Farmers Market (Private)
Limited (hereinafter referred to as the "Company") for violation of the mandatory provisions of Section 73 of the Companies Ordinance, 1984 (hereinafter referred to as the "Ordinance").
2. Brief facts of the matter are that the Company in terms of Clause (a) of Sub Section (1) of Section 73 of the Ordinance was required to file with the registrar concerned within thirty days of making any allotment of its shares, a return of the allotment, stating the number and nominal amount of shares comprised in the allotment, the name, father`s name, address and occupation of each allottee, and the amount paid on each share.
3. As per Form -3 filed by the Company with the registrar concerned on 07.10.2005, the Company allotted 199.990.000 shares of Rs. 10 each on 29.06.2005 to its Chief Executive, Mr. Safdar Kamal Akhtar and M/s Farmers Market Limited respectively. The Company, however, instead of filing the above material information with the registrar concerned within 30 days of the allotment, filed the same on 07.10.2005 i,e with a delay of 02 months and 08 days.
4. Accordingly, a show cause notice dated 29.11.2005 was issued to the Chief Executive of the Company with the directions to circulate the notice to all other directors and officers of the Company and to show cause as to why the penalty provided by the Ordinance for the aforesaid default might not be imposed. In response to the notice, the Company and its directors replied through Mr. Asad Fouad, Chartered Accountant vide his letter dated 24.12.2005 and informed that the Company is regular in filing of all of its statements and other returns and the instant delay in filing in time a return of allotment of shares was only due to inadvertent oversight of the manager.
5. Having not satisfied with the aforesaid reply, hearing in the matter was fixed on 17.01.2006 where Mr. Asad Fouad, authorized representative of the Company and its directors appeared and argued the case. During the hearing, Mr. Fouad repeated the same arguments earlier submitted through his letter dated 24.12.2005. He also informed that the Company is regular in filing its statutory returns however, the default occurred due to lack of professional in the Company to handle the corporate matters.
6. I have gone through the relevant provisions of law and the documents submitted before me for perusal. It is the duty of every company and its officers to file and furnish to the registrar within 30 days all returns of allotment of shares on the prescribed form. The Company, however, filed the same with a considerable delay of 02 months and 08 days. The reasons stated for such default is also not convincing. It is the duty of the Company and its officers/directors to ensure timely filing of all returns with the registrar so as to protect the interest of investors. However, as the Company and directors attributed the delay caused due to inadvertence and lack of legal knowledge on the part of its manager, I take a lenient view of the matter and impose a fine of Rs. 5000/ on the Company and its director in the following manner: {{TABLE}} S. No. Name Penalty (Rupees)
1. Farmers Market (Pvt) Ltd 3,000
2. Ms. Bushra Khan Akhtar 1,000
3. Mr. Azam Soofi 1,000 Total 5,000 {{TABLE}}
7. The Company and its directors are, hereby, directed to deposit, within 30 days of the date of receipt of this order, the aforesaid fines totaling to Rs. 5,000 (Rupees five thousand only) in the Commission`s designated bank accounts maintained with Habib Bank Ltd or pay by a demand draft / pay order issued in the name of the Commission and send a copy of the receipt to the Commission for information and record, failing which proceedings under the Land Revenue Act, 1967 will be initiated which may result in the attachment and sale of moveable and immoveable property.
8. The Company and its directors are advised to be careful in future and ensure strict compliance to the requirements of the Ordinance in this regard.