The Punjab National Silk Mills Ltd. (hereinafter referred to as the `Company') was incorporated as a private limited company with its registered office at 326 Andhi Khohi Road, Multan.
2. The company received advance loan of Rs.6 lacs from the National Bank of Pakistan by pledge and hypothctication of its stocks. On 30-11-1966 the Company owed Rs.6,99,899.73, to the National Bank of Pakistan. The Company did not pay the amount of loan and consequently on 23-12-1966, the National Bank of Pakistan filed application (Civil Original No. 1 of 1967) under sections 162 and 163 of the Companies Act, 1913 for winding up of the Company. It was pleaded in the application that the Company had stopped its business and closed the Mills for about three years. The Company was thus unable to pay its debts.
Similarly Commerce Bank Ltd. Also filed petition (Civil Original No. 22 of 1967) for winding up of the company. The proceedings in both the petitions were consolidated. This Court on 10-4-1972 passed order of winding up of the Company and observed:- "For the foregoing reasons I accept this petition with costs and order that the company should be wound up in accordance with law. I, therefore appoint Sh. Maqbool Ahmad, Advocate as the Official Liquidator for the Company in these two cases. He is already working as the Provincial Liquidator for the Company and his appointment now as the Official Liquidator shall be on the same terms and, conditions. He shall have ail the necessary powers under section 179, subsections (a), (b), (c), (d), (1) and (i) of the Companies Act. He shall duly submit his periodical reports to this Court concerning the affairs of the Company."
3. Aggrieved by the aforementioned order of this Court the respondents in the petitions filed Appeals Nos. 177 and 178 of 1972 before the Supreme Court. The appeals were, however, dismissed on 17-3-1986 holding as follows:- "Taking an overall view of the case in particular the prolonged non --functioning of the Company, its mounting liabilities both secured and unsecured, disputed and undisputed and the conduct of the Managing Director, all justified the conclusion of the High Court that Company is in a morbid state with little or no chance of its recovery or rehabilitation and winding up order was eminently just and proper order. The two appeals are found to be without merit and are dismissed with costs."
4. Before the expiry of three years from the final order of winding up passed by the Supreme Court the Company through Muhammad Hussain its Managing Director on 22-4-1986, applied under section 319 of the Companies Ordinance, 1984, for withdrawal/revocation of the final winding up order on the ground that the Directors of the Company had arranged the requisite funds for discharging the liabilities of the Company (under liquidation). The Commerce Bank Ltd. Which was later on merged into the United Bank Ltd. Was paid Rs.312,212.56 in full and final settlement of the claim. Similarly the Directors of the Company made offer to the National Bank of Pakistan for payment of Rs.6 lacs, the principal amount, plus Rs.2,50,000 towards consolidated interest in addition to all other liquidation expenses, including counsel's fee incurred by the National Bank of Pakistan. In this way the total amount including liquidator's remuneration, counsel's fee and other miscellaneous expenditure was calculated to be Rs.13,93,550. This amount was offered to be paid through Bank Drafts/cheques. It is significant to mention that during the pendency of the application, Muhammad Hussain died. His legal representatives have been brought on the record.
Before passing any order the Official Liquidators were directed to submit report with respect to the affairs of the Company. The reports filed by them are on the record.
5. I have heard learned counsel for the applicant National Bank of Pakistan and the Joint Official Liquidators. I have also perused the report submitted by latter. Learned counsel fur National Bank of Pakistan did not agree for payment of Rs.1,50,000 as consolidated interest on the principal amount but he could not controvert the factum that the National Bank of Pakistan advanced loan of Rs.6 lacs and when the application for winding up of the company was moved approximately Rs.1 lac was due as interest on the principal amount. In this way the consolidated interest payable by the Company approximately would be Rs.2,50,000. It is further established on the record that the loan was advanced against the pledged stocks; the value whereof was assessed on 3-9-1986 by the Official Liquidators to be Rs.3 lacs only. The landed property on which the Mills are established belongs to the Government, almost all the quarters of the Company are in possession of tile trespassers. In these circumstances it appears just and proper to accept the offer made by the heirs of Muhammad Hussain particularly when the Company through pledged stocks was unable to pay even the principal amount of the National Bank of Pakistan. The National Bank of Pakistan shall realize the principal amount, the consolidated amount of Rs.2,50,000 as interest, plus all other expenses of liquidation incurred by it. The Directors of the Company shall have to pay Rs.13,93,550.
There is no other creditor of the Company because the liability of the United Bank stands already discharged. A settlement has been made with the Excise and Taxation Officer, Multan for payment of outstanding amount. The order for winding up of the Company was passed only because the Company was unable to pay its debts. In these circumstances, I accept the offer and direct the payment of Rs.13,93,550 to the National Bank of Pakistan. In my view the claim of the National Bank of Pakistan Ltd. For tile accumulated interest beyond Rs.2,50,000 does not justify the dissolution of the company.
6. In the result, the order for winding up of the company passed by this Court, is withdrawn the proceedings pending in pursuance thereto, are dropped, subject to the encashment of Bank drafts/cheques of various amounts issued in favour of the National Bank of Pakistan. This application (Civil Miscellaneous No. 864-L/ of 1986) is accepted in terms indicated above. This order also disposes of Civil Original Nos. 1 and 22 of 1967
7. Copy of this order shall be forwarded to the Registrar of Companies for necessary action in the matter.
M.Z.S.//N-232/L