' MALIK HAQ NAWAZ, J.---The petitioner by virtue of instant petition filed under sections 305 and 309 of Companies. Ordinance has sought indulgence of this, so that a Phillip may be given to the winding up of respondents Company "the grievances which finally culminated into presentation of instant petition have been eloquently given tongue in the petition, as per the averments of the petitions and the respondents companies entered into a joint venture stretched over a period of 10 years started from the year 2004, which was likely to breath its last in the year 2014. Both the Companies were duly incorporated by respondent No, 4 on 17.8.2004 with the name and style "Messrs Pak China Joint Venture Sust Dry Port Company (Pvt.) Ltd." The petitioner's claim extract the relief mentioned supra, hovers mainly around the facts that basic agreement of joint venture of which all the business and ancillary activities are an off spring has met the expiry limit, neither the agreement has been signed anew nor the same has been given a new lease of life either by extension or by a sort of mutual understanding, beside the failure of respondent Company to submit statutory reports to the Registrar Joint Stock. Companies, its failure to convene annual general meeting despite letters to the Chairman Pak-China Joint Venture Company, exceeding limits of tenure by directions of the respondents company in violation of Article 180 of the Companies Ordinance and finally a resolution unanimously passed by the general body which sounded the final note of joint venture endeavoring to put full stop on all the business activities in between the petitioner and respondent as per averments of the petition further augments the petitioners' contention. In support of his arguments the learned counsel for the petitioner placed before me a copy of C. Misc. 228/13, wherein the petitioner approached this Court by submitting an application under section 290 of Companies Ordinance to the effect that affairs of the Company are not being run in accordance with the provisions of section 180 of the Companies Ordinance and the terms of Directors have expired and the Directors are holding their position unlawfully and, the prayer was sought to restrain the respondents to continue their function any more. The application was disposed of by this Court on 07-05-2014, by holding that: "In the light of above discussion the Registrar Joint Stock Companies Gilgit-Baltistan is directed to convene the board meeting of Joint Company within one month of this Order."
2. The Chairman Board of Directors and Managing Director contested the case but did not file any appeal, revision or writ petition against the orders of Chief Court in the case No, C. Misc. 228/2013 which attained finality. The learned counsel submitted that respondents did not comply the orders of Chief Court in the 8th meeting of Board of Directors held on 16.6.2014, wherein some decisions were made and it was decided that 9th meeting of BODs will be held within 21 days but the respondents instead of holding the meeting resorted to the apex Court Gilgit-Baltistan through C.P.L.A. No, 35/2015, which was disposed of on 16.05.2016 and the Hon'ble apex Court held that the petition is meritless. The said judgment is exhaustive in nature and it covers all the material points involved therein which per learned counsel shows the mala fides of the respondents and the respondents are playing the game of hide and seek, instead of acting in accordance the original agreements. The learned counsel relied on 2001 YLR 838, PLD 1990 SC 763, PLD 1990 SC 768 and 2004 CLD 1723 in support of his contentions and prays that the application of winding up be accepted in the larger interest of justice.
3. Conversely the respondents represented by Mr. Islam-ud-Din, Advocate contradicted the claim of petitioner by means of a written statement on the score that the petitioner lacks both the cause of actions and locus standi, besides the application of Order VII, Rule 11, C.P.C. Is also pleaded, the respondent has brought under attack the maintainability of the instant petition on the strength of contentions that the same has not been drafted in accordance with law, beside it has been stressed that by means of the contract signed by both the parties resolution of disputes can solely be had through arbitration, in addition the respondent Company has emphasized that the winding up procedure has itself been provided in articles of association itself, which as per the respondents acts, places a clog on the exercise of jurisdiction by this Court, in furtherance concern has been raised with respect to the legal character of the petitioner and his entitlement to file this petition.
The learned counsel for respondents stated with vehemence that the arguments advanced at bar by the learned counsel for the petitioner are irrelevant being out of pleading and the petition in present form is not maintainable. He further submitted that the respondents are carrying out the business of the Company in accordance with the spirit of agreement and there is no extra ordinary departure, which may give a cause of action to the petitioner to resort to this Court, when alternative remedy to the petitioner is available under section 314(2) and (3) of Companies Ordinance. The learned counsel relied on 2005 CLD 558, 2006 CLD 347 and 2007 CLD 605 to support his contentions.
4. While adverting to the factual premises, the adverse replies given in response to the petition elucidated that on the investment of every additional installment of 3 million rupees the life of joint venture was supposed to extend for one year, as per reports of PCSPCS share equity of both the parties for 2005 to 2010 the Chinese side invested additional amount of RMB 295088992/- equivalent to (PKR.
23180789.93/- resultantly the commercial enterprise gained 7.72 years beyond the agreed period, the report got approved unanimously in the 7th board meeting held on 03-08-2011, the contentions with respect to the non- submission of statutory report met a flat rather an evasive denial and the same remained the fate of the question pertaining to the terms of office of Director and the alleged violation of Article 180 of Companies Ordinance, 1984.
5. The written statement further disclosed that annual general meeting was properly called and decisions were acted upon, in furtherance the legal strength of resolution after whose acceptance the instant petition has been filed which was called in question on the score 2017] Zafar Iqbal v. Pak China Sust Port Joint Stock Co. (Pvt.) 1043 (Malik Haq Nawaz, J) that the same has been passed by un-concerned persons and finally the jurisdiction of this Court was challenged on the strength of the contention that both the parties had decided to go by the alternate remedy for resolving the disputes through arbitration.
' After appraising the thesis and anti-thesis, root and branches following questions crept up to be taken into account by this Court:-
(a) Whether the apprehension concerning the maintainability o instant petition is well founded?
(b) Whether the arbitration clause is sufficient to oust the jurisdiction of this Court?
(c) Whether the winding up proceedings can be initiated on the strength of the contentions raised by the petitioner?
' As well as the maintainability of the instant petition, it is cardinal to be penned here that the same has been triggered by a jumble of technical and factual objections, the first among them as per the respondent is the lack of cause of action and locus standi at the point of the petitioner and on the strength of this objection the respondents have pleaded the rejection of plaint under Order VII, Rule 11, C.P.C. The recipe of Order VII, Rule 11, C.P.C. Is a quaternary of four ingredients enlisted here under:- ' Firstly, where the plaint does not disclose a cause of action.
' Secondly, where the relief claimed is under value, and the plaintiff on being required on being required to correct the valuation within time to be fixed by the Court fails to do so.
' Thirdly, where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped and the plaintiff on being required by the Court to supply the requisite stamp paper within a time to be fixed by the Court fails to do so.
' Fourthly, where the suit appears from the statements in plaint to be barred by law although the statue caters for the satisfaction of the first three requisite mentioned above for rejection of plaint, the last one has been added as a fruit of judicial labour and legal toil of this particular coinage owes its wisdom to a judgment of Hon'ble Supreme Court reported in 2014 SCMR 13, wherein it has been captioned that: "The object of powers conferred upon the trial Court under Order VII, Rule 11, C.P.C. That the Court must put an end to the litigation at very initial stage when on account of some legal impediments full-fledged trial will be a futile exercise, in view of the above the suit of the plaintiff challenging the gift mutation was on the face of record barred by the time and there was no need of recording of evidence."
' The legal acumen coin therein further augments the strength of this particular order so that stillborn, handicapped, enfeeble, or those sort of litigations carrying inherent disqualification should be buried in the very inception so as to safeguard the parties unlocked in litigation from a misconceived expense, loss of both time and energy on one hand and to lighten burden of the Courts on the other. The ingredients mentioned as Nos. 2, 3 and 4 are missing in the recipe of objections and that very objections which endeavors to attract the application of Order VII, Rule 11, C.P.C. Hovers around the existence or non-existence of cause of action. In this regard it is necessary to be jotted down that although cause of action is a term capable of yielding a number of eventualities which may engineer the enforcement of a legally recognized right of a person/party in favour of whose it accrues. It is multifaceted, multicolored and multidimensional phenomenon which cannot be restricted to a particular mode since, its nature, intensity and gravity varies from case to case, but when it comes to the winding up a company, there exists a judicial consensus on the score that while deciding the application of Order VII, Rule 11, C.P.C. Nothing can be considered, but the plaint and its averments, which are to be taken into B account as a truth in whole while doing so, the instant petition vividly discloses a cause of action so as to satisfy the requirements of section 305 on one hand and to reject this objection on the other. The petition discloses that the contract between the petitioner and the respondents has come to an end owing to the exhaustion of numbers of years for which the same was chalked, Chapter XII, Article 33 of the Contract itself provides in the very opening line that the joint venture may be dissolved where term of cooperation is expired. Section 33 is reproduced here under although this particular assertion has been refuted by the respondents on the score that it was settled in between the adversaries that the life of the Company will earn a complete year on every investment of 3 million rupees as an additional sum, the respondents as per written statement invested an additional amount of RMB 2950898.42 (Rs, 23180789.63) and the expiry period resultantly exceeded to a quota of 7.72 years but there exists nothing in black and white to substantiate the claim of respondent. Moreover, the cardinal authority with regard to commercial venture rests in the respective governments of both the petitioner and respondents extension of contract cannot be had without prior sanction and final approval of both the governments, admittedly, there exists no consensus on further extension of the contract, nor the parties have arrived at any sort of settlement besides there exist a resolution dated 07.09.2014 unanimously passed to effect the winding up proceedings. In furtherance as alleged in the petition that respondent did not submit statutory report to the Registrar of Joint Stock Companies despite repeated letters/notice served upon the Company in question by the registration office of Joint Stock Companies entails credibility in this particular assertion. It establishes that beside violating Section 180 of Companies Ordinance 1984, the joint venture has not submitted the statutory report since 2009 and audit report since 2010, besides non holding of annual general meeting is also a consequence which has a telling affect upon the continuation of business by the Company in question the statutory report follows as a consequence of statutory meeting, the purpose of holding the statutory meeting, is the approval of allotment of shares, receipt and payments of money expenditure and contracts particularly about under writing agreements and commission paid, the Company appraises the further plan of the Company, failure to file statutory report consequently can be visited by penal action as enumerated in section 157(11) of Companies Ordinance, 1984 beside directions can be given by Registrar for holding over AGM under section 170, in case of non holding of statutory meeting or non delivery of statutory report, proceedings of winding up can be initiated under section 305(B), Article 14 of the contract of cooperative business duly signed by both the parties lays explicit that General Manager of the Board of Directors Shall be held at least once in a year, but the letter No, R/JSC/NA-6/2004 dated 20-11-2013, lays explicit that the same has not held since last many years. In the wake of all this happening it can be safely concluded that a cause of action worthy of yielding results has been accrued in favour of the petitioner and justifies indulgence of this Court in dispensing the demanded relief.
6. The grievance pertaining to the drafting of instant petition, which according to the respondents have not been properly drafted in accordance with law is neither exhaustive enough to yield a positive result nor the respondents have bothered to substantiate, as to what particular provision of Company laws has been violated by the petitioner such a bald objection cannot be entertained in vacuum if for the sake of arguments the said objection is taken into account ever then the petitioner will be within their rights to move this Court amending the some to remove the deformity so as to bring the same within the bounds of law on the subject, with these observation the said objection also dashes down to ground.
7. Another offshoot of the objection raised by the respondents relates to the legal character of the petitioner to file instant petition in this regard a reference could be made to the contract cooperative business operation, wherein it is provided in chapter VII under the head "Board of Director" that "the Chairman of. Board of Director will be the legal person of joint-venture". This particular statement confirms legal character of the petitioner and certifies his competency to file the instant petition gets a mention in the opening paras of the petition and the same has been admitted as correct by the respondent at this juncture, such a plea which seems counter to rather is a paradox to what has been candidly admitted cannot be allowed, having discussed the maintainability of this petition and the strength of the cause of action, now it comes to unravel knot of contention in which pertains to exercise of jurisdiction by this Court the respondents asserted that jurisdiction cannot be exercised by this Court since the alternate remedy of arbitration as stipulated in the contract has not been exhausted by the petitioner. In order to assess and appraise the above mentioned objection the concept of its requisite, and the obligations of the parties desirous of pressing the same in service needs an elaborate discussion which comes here under: The Black's law dictionary defines arbitration as "a method of dispute resolution involving one or more neutral third parties, who are usually agreed to, by disputed parties and whose decision is binding". The following ingredients can be sifted from the above definitions. a. It is method of dispute resolutions. b. The method of an amicable mode of settling the disputes. c. The resolution of dispute can be reached by invoking neutral third party. d. The neutral third party can be one or more in number. e. The neutral party entrusted with the task of solving the dispute is an agreed one by both the disputing parties. f. The decision of third party would be binding.
' Arbitration is one of the modes employed while the parties make a resort to alternate dispute resolution, since it can save the adversaries from the cumbersome process of initiating legal proceedings and from the expenses so incurred, therefore, an arbitration clause exists almost in every contract, but the sine qua non of invoking this particular clause is the agreement of both the parties on getting their dispute settled through arbitration, besides it requires a specific sort of negligence at the part of the party, which is up to invoke the same, as a ready reference 34 and section 35 of the Arbitration Act, 1940 are reproduced hereunder:- S.
34. Power to stay legal proceedings where there is an arbitration agreement.---Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time" when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings.
' S.35. Effect of legal proceedings on arbitration.---(1) No reference nor awe, 'd shall be rendered invalid by reason only of the commencement of legal proceedings upon the subject matter of the reference, but when legal proceedings upon the whole of the subject matter of the reference have been commenced between all the parties to the reference and a notice thereof has been given to the arbitrators or umpire, all further proceedings in a pending reference shall, unless a stay of proceedings is granted under section 34, be invalid.
7. The above quoted provision of law threadbare that the arbitration can only be bared before filing written statement that too would be rendered invalid, where the Court takes cognizance of the whole subject matter. From the valuable citations on the arbitration law the following conditions can be adduced for invoking the arbitration clause of an agreement:-
(i) That the matter is mutually agreed between the parties.
(ii) That the factum of alleged arbitration is a not denied.
(iii) That the agreement must be valid and enforceable.
(iv) That the application is filed before filing the written statement or taking any step in proceedings.
It has recently been held in PLD 2016 Pesh. 164 that "Arbitration clause will be no importance and significance unless specific application at initial stage of case is moved requesting the Court to refer the case for arbitration."
8. This Court enjoys original civil jurisdiction over the subject matter of the litigation by virtue of section 7 of the Companies Ordinance, 1984 and the jurisdiction once established by a statute can neither be denied nor can be taken away by any express or implied contract, moreover, the Courts always remains jealously alert and at guard to exercise the jurisdiction, conferred upon them, with these observations the respondents claim as to invoke the arbitration clause also ends in fiasco.
Taking in account the violation of section 180 of the Companies Ordinance, 1984, it is penned here that the said provisions clearly mention:- S.
180. Term of office of directors. (1), A director elected under section 178 shall hold office for a period of three years unless he earlier resigns, becomes disqualified from being a director or otherwise ceases to hold office.
(2). Any casual vacancy occurring among the directors may be filled up by the directors and person so appointed shall hold office for the remainder of the term of the director in whose place he is appointed.
9. The alleged violation has been enumerated in para 6 of the petition which has met with an evasive denial, the respondents have failed to produce any cogent and convincing evidence to refute this assertion, it can be deduced that fresh election have not taken place, had it been so the respondent would securely have placed on record the election result sheet beside the evasive treatment meted out to the said contention is sufficient to discard the respondents' assertion. In order to beef up my finding I, can aptly point to the following citations. It has been held in 2016 CLD 618 that "Evasive denial was not a denial rather such denial would amount to admission."
' Reverting to point in that whether there exist sufficient grounds to initiate the winding up proceedings, the answer comes in affirmative, the expiry of the time limit of contract, non-filing of statuary report, failure to convene annual general meeting, violation of terms of office by the directions of respondent company and a unanimously approved resolution signed by the petitioners which loudly says "no" to engage itself in any further commercial transactions with the respondents are the circumstances which have titled the balance in favour of the petitioner, resultantly the instant petition is allowed.
10. The respondent company namely Messrs Pak. China Joint Venture Sust Dry Port Company (Pvt.)
Ltd. Is ordered to be windup. Messrs Haji Mirza Ali, Senior Advocate SAC and Mr. Muhammad Hussain Shehzad, Advocate SAC are hereby appointed as official liquidators. They will take into their possession all assets movable and immovable, as also the books of accounts and other registers/record of the company and will proceed with the liquidation, thereof according to law.
11. The liquidators shall be paid Rs, 1,50,000.00/- each and out of above amount Rs, 50,00.00/- each will be paid as an advance and remaining amount of Rs, 2,00000.00/- will be deposited with Registrar of this Court, which will be paid to the liquidators after completion of the liquidation proceedings. The petitioner will arrange necessary transportation and lodging/boarding of the liquidators at a reasonable hotel and the expenses so incurred shall be adjustable against the assets of the company.
12. Notices stating that the respondents-company has been ordered to be windup, be published in the Daily Urdu K-2, Daily Ausaf and English newspaper Daily (The Dawn). The intimation of this order shall be given to the Registrar, Joint stock companies Gilgit. The petitioner shall deposit the publication charges within 10 days.
13. Before parting with judgments, the assistance rendered by the learned counsel of both the parties is appreciated, especially Mr. Islamud-Din, Advocate, who though is a junior lawyer, the way he prepared and argued the case impressed me a lot and if he will continue to work hard, he will be among the dapper lawyers of this Court. A copy of this judgment be also supplied to the Liquidators immediately for further proceedings.