' SHAHID KARIM, J. --- This is a petition under Section 391 of the Companies Ordinance, 1984 (Ordinance, 1984), filed by the Official Liquidator of the company under liquidation 'Mechanized Construction of Pakistan (Pvt.) Ltd.' (MCPL). It seeks the implementation of the findings of the Official Liquidator with regard to certain dues which are allegedly payable by the Government of Balochistan to MCP(L).
2. No one had appeared on behalf of the Government of Balochistan despite notice and it was proceeded against ex parte on 21.10.2015.
3. The purported findings of the Official Liquidator have been annexed with this petition. On the threshold, the question which begs an answer is whether there is power in the Official Liquidator to make a determination of the nature which has been undertaken by the Official Liquidator and which is sought to be implemented by this Court in the present application. Upon a holistic reading of the Ordinance, 1984 and its various provisions, no power seems to have been conferred on the Official Liquidator appointed with regard to the company which is wound up which gives the authority and jurisdiction to the Official Liquidator to determine the claims of the company under liquidation against third persons or legal entities. At best, in case the Official Liquidator considers that there is a claim against a third party and which is due to the company under liquidation, proceedings under the relevant laws may be instituted for seeking a determination of those claims and debts and to have them realized. In terms of Section 317 of the Ordinance, 1984, the liquidator may apply to the Court for expeditious disposal of the suits filed by the company under liquidation.
By Section 316, jurisdiction has been conferred on the Court to entertain and dispose of suits or proceedings by or against the company under liquidation. Section 333 of the Ordinance, 1984 delineates the powers of the Official Liquidator which does not include the power of adjudication vis-a-vis third parties and this is clearly outside the scope of the Official Liquidator. The reason for not conferring a power on the Official Liquidator to adjudicate claims against third parties is grounded in good sense and propriety. The Official Liquidator is not empowered to exercise judicial powers and thus cannot determine disputes or render a decision thereupon. The only powers which have been conferred on the Official Liquidator by the provisions of the Ordinance, 1984 are the powers to decide claims and debts of third persons and creditors in respect of the company under liquidation which power too, is subject to the supervision of this Court. But this has to be contrasted from the power of the Official Liquidator to determine claims between the company under liquidation and third parties. In such matters the rights of third parties are involved and they have a right to due process of law and a regular trial and cannot be left to the discretion of the Official Liquidator to pass a judgment on the disputes involving third parties. Not only that this will run counter to the provisions of the Ordinance, 1984, it is tantamount to conferring judicial power in the Official Liquidator which can only be done in terms of Article 175 of the Constitution.
4. Rules 127 of the Companies (Court) Rules, 1997 confers the powers on the Official Liquidator to determine the debts and claims made by creditors against the company under liquidation upon furnishing of proof of those debts and claims. The Official Liquidator may thereupon accept or reject the claims in terms of rule 141 of the Rules, 1997. From such determination, an appeal has been provided under rule 142 of the Rules, 1997. These are the only powers conferred on the Official Liquidator and clearly the powers of the Official Liquidator are circumscribed by these Rules. The Official Liquidator cannot transgress the power so conferred upon him by law.
5. The Official Liquidator of MCP(L) has applied under Section 391 of the Ordinance, 1984 to this Court for the implementation of the determination made by the Official Liquidator on 07.10.2009. Section 391 reads as under:- "391. Power to apply to Court to. Have questions determined or powers exercised. --- (1) The liquidator or any contributory or creditor may apply to the Court---
(a) to determine any question arising in the winding up of a company; or
(b) to exercise as respects the enforcing of calls, the staying of proceedings or any other matter, all or any of the powers which the Court might exercise if the company were being wound up by the Court.
(2) The liquidator or any contributory may apply to the Court specified in sub-section (3) for an order setting aside any attachment, distress or execution put into force against the estate or effects of the company after the commencement of the winding up.
(3) An application under sub-section (2) shall be made--
(a) if the attachment, distress or execution is levied or put into force by a High Court, to such High Court, and
(b) if the attachment, distress or execution is levied or put into force by any other court, to the Court having jurisdiction to wind up the company.
(4) The Court, if it is satisfied that the determination of the question or the required exercise of power or the order applied for will be just and beneficial, may accede wholly or partially to the application on such terms and conditions as it thinks fit, or may make such other orders on the application as it thinks just.
(5) A copy of an order staying the proceedings in the winding up, made by virtue of this section, shall forthwith be forwarded by the company, or otherwise as may be prescribed, to the registrar, who shall make a minute of the order in his books relating to the company."
6. Clearly, the basic principle that applies here that what cannot be done directly cannot also be achieved indirectly. If the liquidator does not have the power to determine disputes involving the company under liquidation and third parties, any such determination will be ultra vires and without lawful authority. Therefore, such a determination cannot be sought to be implemented by this Court in its jurisdiction under Section 391 of the Ordinance, 1984. By so applying under Section 391, the liquidator has clearly misconstrued the powers of this Court under the said provision of law.
This provision does not confer any jurisdiction on the Court exercising powers under the Ordinance, 1984 to determine disputes arising between the company under liquidation and third parties or legal entities. Where a dispute arises of the nature which requires evidence to be taken down and proof to be adduced, this can only be done through a proper trial. There is no stopping the liquidator from filing a claim by way of proper proceedings and then perhaps applying to this Court for its expeditious disposal or for it to be entertained by this Court for its disposal. This Court, under the provisions of Ordinance, 1984, is adequately equipped to order that the matters brought by the official liquidator be decided with all deliberate speed or may be brought before it for expeditious disposal. The intention of the legislature is clear. On the one hand, third parties have been held entitled to due process and proper trial through Courts set up by law and on the other, keeping the policy of the law relating to winding up in view, all means have been provided in law for the speedy and expeditious disposal of suits and claims which the company under liquidation has against third parties, and which are denied. But the route adopted by the Official Liquidator is not countenanced under the law. Neither can this Court be conferred jurisdiction thereby to determine this question. The term "determine any question arising in the winding up of a company" does not include the questions relating to disputed claims which the company has against third parties. That question is not within the scope of the term "to determine any question arising in the winding up of a company". Any such interpretation will have the effect of making redundant the other provisions of the Ordinance, 1984 relating to expeditious and summary disposal of suits and claim's, and the intention of the legislature not to stultify the normal procedures for determination of claims by proper trial.
7. In view of the above, this application is without merit and is, therefore, dismissed. The Official Liquidator may proceed to establish his claim and to proceed for its recovery through the procedure provided by law.