MIANGUL HASSAN AURANGZEB, J:---Through the instant writ petition, the petitioners, who claim to be shareholders in Messrs Reliance Cold Storage (Pvt.) Ltd. ("R.C.S ."), impugn the order dated 22.10.2019 passed by respondent No.2 (Registrar of Companies) whereby the petitioners' review petition against the order dated 24.10.2018 passed by respondent No.2 rejecting the petitioners' application for the restoration of R.C.S., which had been struck of f from the register of companies in 2012.
2. The record shows that R.C.S. was incorporated on 29.04.1998. Its primary object was to carry out the business of cold storage. It had authorized and paid-up share capital of Rs.1,000,000/- and Rs.30,000/- respectively , divided into 10,000 and 300 shares of Rs.100/- each. In Order to establish a cold storage facility , R.C.S. had purchased 16 kanals and 14 marlas of land in Mouza Mangokhasa, Tehsil Daska, District Sialkot through sale deed dated 03.11.2000. The copy of the record of rights for the year 2014-15 shows R.C.S. as the owner of the said land.
3. Since R.C.S. had failed to file its statutory returns for the years 2000 onwards, respondent No.2, on 26.12.2012, published a notice under section 439(5) of the erstwhile Companies Ordinance , 1984 ("the 1984 Ordinance"), whereby its name was struck of f from the register of companies.
4. The returns for the years 2000 to 2012 were filed by the new management of R.C.S. on 14.03.2013, and the returns for the years 2013 to 2016 were filed on 10.10.2017. It was not until 13.07.2016 that petitioner No.1 filed an application before. respondent No.2 for the reactivation of the company and submitted a challan of Rs.10,000/- as reactivation fee. Vide letter dated 27.07.2 016, respondent No.2 asked petitioner No.1 to provide certain information and documents. Petitioner No.1 was also asked to provide a detailed statement of R.C.S.'s assets and properties along with copies of the registrations/mutations, etc. In response to the said letter, petitioner No.1 provided a copy of the fard/record of rights pertaining to the said land.
5.. R.C.S.'s shareholding position had undergone a major change since 2002, and the shareholders who had held 75% of the shares had left the said company . The change in the shareholding position had been reported to respondent No.2 vide returns filed in 2013, by which time R.C.S. had been struck off from the register of companies. Respondent No.2 had sought the personal appearance of outgoing shareholders/ directors to confirm the contents of the affidavit furnished on their behalf. Vide order dated 24.10.2018, respondent No.2 dismissed petitioner No.l's application for the reactivation of R.C.S. primarily on the ground that the old management of said company had not been produced in support of the application for reactivation and to establish a change in R.C.S.'s shareholding/management.
6. Against the said order dated 24.10.2018, a review application was filed by the management of R.C.S. under section 425(9) of the Companies Act, 2017 ("the 2017 Act") before respondent No.2. The said review application was filed on 18.02.2019. Since a decision has not been taken on the said review application, the petitioners filed Writ Petition No.2044/2019 before this Court impugning respondent No.2's order dated 24.10.2018. Vide order dated 27.05.2019, the said writ petition was disposed of with the direction to respondent No.2 to decide the review application within a period of two months.
7. Vide order dated 22.10.2019, respondent No.2 dismissed the review application on the ground that the outgoing - directors/ shareholders of R.C.S. had not been produced in support of the application for the reactivation of the said company . Perusal of the said order shows that one director / shareholder , namely Mrs. Mahfooz Shoukat, who had held 25% shares in R.C.S., had been produced on 12.07.2019 and she had confirmed the transfer of shares in the said company . The said orders dated 24.10.2018 and 22.10.2019 passed by respondent No.2 have been assailed by the petitioners in the instant writ petition.
8. Learned counsel for the petitioners, after narrating the facts leading to the filing of the instant petition, submitted that the statutory returns for R.C.S. had been filed albeit with a delay of a few years; that the petitioners had satisfied respondent No.2 that R.C.S. owned an immovable asset in the form of a piece of land; that in the order dated 24.10.2018, it was recorded that on account of such ownership, R.C.S. merits restoration; and that respondent No.2 was being unreasonable in requiring all the members of the previous management of R.C.S . to appear before him before he could allow the application for the reactivation of the said company .
9. Learned counsel for the petitioners further submitted that respondent No.2 erred by not appreciating that section 439(8) of the 1984 Ordinance clearly provided that the provisions of section 439 do not apply to a company which has any known assets and liabilities, and that such a company shall be proceede d against for winding up; that if respondent No.2 was of the view that the substratum of R.C.S. had disappeared, he could have initiated the process for its winding up under section 309 of the 1984 Ordinance; that respondent No.2 also erred by not appreciating that under section 439(9) of the 1984 Ordinance, he could have, after such inquiries as he deemed fit, moved the Securities and Exchange Commission of Pakistan ("S.E.C.P .") to have the name of R.C.S. restored to the register of companies; that since admittedly R.C.S. had assets in the shape of immovable property , proceedings to have its name struck off from the register of companies could not have been initiated under section 439 of the 1984 Ordinance; and that the process adopted by respondent No.2 to strike off R.C.S.'s name from the register of companies was without lawful authority and of no legal effect. Learned counsel for the petitioners prayed for the writ petition to be allowed in terms of the relief sought therein.
10. On the other hand, learned counsel for the respondents/S.E.C.P . submitted that R.C.S. has not been carrying on business since several years; that admittedly R.C.S. had failed to file its statutory returns within the time period provided by law; that respondent No.2 had sent notices under sections 439(1), (2) and (3) of the 1984 Ordinance to the registered address of R.C.S.; that no reply to the said notices was received; that on 07.03.2012, a notice under Section 439(3) of the 1984 Ordinance was published in the official Gazette followed by the publication of a notice under section 439.(5) on 26.12.2012 whereby the name of R.C.S. was struck off from the register of companies; that respondent No.2 was justified in requiring the attendance of the old management of R.C.S. to satisfy himself as to the correctness of the affidavit and other documents placed before him; that the application for the reactivation of R.C.S. had been filed by its new management; that since the shareholding position of the R.C.S. had undergone a major change since 2002, and the shareholders who had held 75% of the shares had left the said company , respondent No.2 was justified in asking for the personal appearance of the outgoing directors/shareholders to confirm the contents of the affidavit submitted on their behalf; and that since the outgoing shareholders other than Mrs. Mahfooz Shoukat did not attend the proceedings before respondent No.2, the latter was correct in dismissing the application for the reactivation of R.C.S. Learned counsel for the respondents prayed for the writ petition to be dismissed.
11. I have heard the contentions of the learned counsel for the contesting parties and have perused the record with their able assistance.
12. The facts leading to the filing of the instant petition have been set out in sufficient detail in paragraphs 2 to 7 above, and need not be recapitulated.
13. Section 425 of the 2017 Act is in pari materia to section 439 of the 1984 Ordinance. Section 439(1) of the said Ordinance provides that where the Registrar has reasonable cause to believe that a company is not carrying on business or is not in operation, he may send to the company by post a letter inquiring whether the company is carrying on business or is in operation. Section 439(2) provides that if the Registr ar does not within one month of sending the letter receive any answer thereto, he may within thirty days after the expiration of the month send to the company by post a letter referring to the first letter , and stating that no answer thereto has been received and that, if an answer is not received to the second letter within one month from the date thereof, a notice will be published in the official Gazette with a view to striking the name of the company off the register . Section 439(3) of the said Ordinance provides that if the Registrar either receives an answer from the company to the effect that it is not carrying on business or is not in operation, or does not within one month after sending the second letter receive any answer , he may publish in the official Gazette and send to the company by post a notice that, at the expiration of three months from the date of that notice, the name of the company mention ed therein will, unless cause is shown to the contrary , be struck of f the register and the company will be dissolved.
14. In the case at hand, a notice under section 439(3) of the 1984 Ordinance was published in the official Gazette on 07.03.2012. The name of R.C.S. is mentioned at serial No.319 in the said notice. A copy of this notice is annexed at page 63 of the petition.
15. Section 439(5) of the 1984 Ordinance provides that at the expiration of the time mentioned in the notice the Registrar may, unless cause to the contrary is previously shown by the company , strike its name off the register , and shall publish notice thereof in the official Gazette, and, on the publication in the official Gazette of such notice, the company shall be dissolved.
16. In the case at hand, a notice under Section 439(5) is said to have been published in the official Gazette on 26.12.2012. This had caused R.C.S. to be dissolved. R.C.S.'s name stood struck off from the register of companies at the expiration of three months from the publication of the notice under section 439(3) of the 1984 Ordinance.
17. The management of R.C.S. had undergone a change inasmuch as 75% of its shareholders had exited the company . For the present purposes, it is not necessary to give details of the chan ge in the shareholding of R.C.S. in 2002 and thereafter . Suffice it to say that presently the two petitioners claim to be the only shareholders in R.C.S. each having 150 shares. As per Form-29 dated 01.10.2012 filed on 14.03.2013, petitioner No.1 is said to be the Chief Executive of R.C.S.
18. Respondent No.2 had required the personal appearance of the previous shareholders of R.C.S. in order to confirm and verify the correctness of the contents of the affidavit furnished on their behalf in support of the application for the reactivation of the said company . Mrs. Mahfooz Shoukat, who had previously held 75 shares in R.C.S., had appeared before the Registrar during the hearing of the review application and had confirmed the transfer of her shares in the defunct company . But respondent No.2 insisted on the personal appearance of the remaining shareholders as well. I am of the view that it is not necessary to give a 'finding on whether respondent No.2 had ventured beyond his jurisdiction by requiring the personal attendance of all the former shareholders of R.C.S. For the present purposes, the vital question that needs to be determined is whether in view of the fact that R.C.S. did own immovable property , the process to strike its off name from the register of companies could have been initiated under Section 439 of the 1984 Ordinance.
19. Section 439(8) of the 1984 Ordinance provides that the provisions of section 439 shall not apply to a company which has any known assets and liabilities, and such company shall be proceeded against for winding up. The petitioners had provided to respondent No.2 documents showing that R.C.S. owned 16 kanals and 14 marlas of land in Mouza Mangokhasa, Tehsil Daska, District Sialkot. Respondent No.2 appears to have been satisfied as to the factum of R.C.S. owning the said land. In this regard, the relevant portion of paragraph 7 of respondent No.2's order dated 24.10.2018 is reproduced IA herein below:- "7. After ascertaining the above facts of the case, the registrar concerned is of the opinion that the Company has an immovable asset in the form of piece of land, by virtue, of which prima facie it merits restoration."
20. After making the said observation, respondent No.2 proceeded to reject the application for the reactivation of R.C.S. Since section 439(8) of the 1984 Ordinance had insulated a company which owned assets from the applicability of section 439 of the said Ordinance (which gives the power to the Registrar to strike a defunct company off the register of companies), it is my view that it was essential for respondent No.2 to have first determined whether R.C.S., which admittedly owned an asset, could have been dissolved or struck off the register of companies by invoking the provisions of section 439 of the said Ordinance. In the case of Combined Ginners (Pvt.) Limited v. Registrar , Securities and Exchange Commission of Pakistan, Lahore (2007 CLD 1234 ), the Hon'ble Lahore High Court, in its company jurisdiction, ordered the name of a company , which had been struck off from the register of companies under section 439 of the 1984 Ordinance, to be restored on the ground that it had owned immovable property . 'The operative part of the said judgment is reproduced herein below:- "4. Heard the learned counsel for the petitioner . Leaving aside the factual submissions as regards lack of service of statutory notices I will readily agree with him that the bar contained in subse ction (8) of section 439 of the Ordinance was attracted in the case in hand. Subsection (8) provides that "The provisions of this section shall not apply to a company which has any known assets and liabilities, and such company shall be proceeded against for winding up". The copy of the aforesaid sale deed dated 9-3-1991 unequivocally supports the claim of the petitioner company that since the date of its incorporation it held the aforesaid piece of land as a known asset. Therefore, in view of the provisions of subsection (8) of section 439 the Registrar could not Old the company as a defunct company and struck off its name from the "Register of Companies". Instead, only a winding up petition could be filed against the company if any one or more circumstances including the failure of the company to file statutory reports as contemplated in section 305 of the Ordinance were answered.
5. As observed earlier , the company being in possession of known assets in the form of said immovable property the said provisions of section 439 enabling the Registrar to struck off the name of the company from the Register were not applicable. In the presence and availability of substantial immovable assets it is otherwise just and proper that the name of the company be restored to the Register .
6. Therefore, this application is allowed. The name of the petitioner company shall immediately stand restored to the Company Register with all incidental and consequential implications and results."
21. Section 439(9) of the said Ordinance provides inter alia that if due to inadvertence or otherwise the name of any company which has any assets and liabilities has been struck off the register , the Registrar may, after such inquiries as he may deem fit, move the Commission to have the name of the company restored to the register and thereupon the Commission may, if satisfied that it would be just and proper to do so, order the name of the company to be restored in the manner provided in Section 439(6) of the 1984 Ordinance.
22. At no material stage were any proce edings initiated for the winding up of R.C.S. True, Section 439(9) of the 1984 Ordinance gives the power to the Registrar / respondent No.2 to make "such inquiries as he may deem fit" before moving the Commission to have the name of a company restored in the register of companies; such inquiries would be for the Registrar to satisfy himself that the company does indeed own assets or has any liabilities. In the order dated 24.10.2018 , respondent No.2 appears to have been satisfied that R.C.S. owns immovable property . Section 439(9) does not make it obligatory for the Commiss ion to restore a company to the register merely because the Registrar has moved the Commission for such restoration. The Commission has to satisfy itself that "it would be just and proper" to restore the company to the register . It is at this stage that the lapse on the part of R.C.S. in inordinately delaying the filing of its statutory returns including the belated filing of Form-29 showing the change in the shareholding of R.C.S. would become relevant for the Commission whether or not to restore the said company to the register of companies.
23. In view of the above, the instant writ petition is allowed; the impugned orders dated 24.10.2018 and 22.10.2019 passed by respondent No.2 are set aside; and the matter is remanded to respondent No.2 to decide petitioner No.l's application for the reactivation of R.C.S. afresh bearing in mind the import of Section 439(8) of the 1984 Ordinance as well as the law laid down in the case of Combined Ginners (Pvt.) Limited v. Registrar , Securities and Exchange Commission of Pakistan, Lahore (supra) . There shall be no order as to costs.