1. ' Mrs. Salma Noorani has filed this application under Section 314 of the Companies Ordinance, 1984 read with Order 39, rules, 1,2 and 7 and Section 151, C.P.C. Praying that pending the hearing and disposal of the petition for winding up of Mandiviwala Estate (Pvt.) Limited the Court will be pleased to: "(a) Restrain the holding of Extraordinary General Meeting of the Company fixed to be held on March 11, 1991 at 4-00 p.m. At the registered office of the Company;
(b) order and direct the meeting for election of directors to take place after directors have fixed as required by Section 178 of the Ordinance the number of directors to be elected; and--
(c) After directors have resolved and authorised the convening of an extraordinary general meeting; and--
(d) given notice of 21 days required under law to be given in accordance with Section 50 of the Ordinance; and--
(e) afforded the members/share holders opportunity to give notice of their intention to offer themselves for election as director under subsection (3) of section 178 of the Ordinance;
(f) give and grant interim and ad interim relief in terms of prayer as above."
2. ' The applicant claims to be a Director and a shareholder of 105 paid-up shares of the value of Rs,1,000 each. She moved her said application in this J.M.No,8 of 1985 filed by her sister, Mrs. Anis Mirza, another Director and shareholder of the Company in which winding up of the Compay has been prayed for. The grievance of the applicant is that she received notice and agenda dated 24- 1-1991 of the Board meeting held on 2-2-1991 but there was nothing on agenda as to fixation of number of Directors nor was it taken up and decided by the Board. Similarly no resolution was passed by the Board to convene an extraordinary general meeting of the company for election of Directors on 11-3-1991.
3. ' Her further grievance is that notice of Annual General Meeting to be held on 26-2-1991 was sent to her per Courior alongwith annual account report of directors and of auditors etc. Consisting of about 20 pages. Alongwith these papers was also a notice of extraordinary general meeting of the company fixed for 11-3-1991, in such a way, as not was noticeable or could draw her attention. She saw this notice on 26th February, 1991, and wrote a letter of protest to the Chief Executive of the company the same day. It was further contended by Mr. J.H. Rahimtoola, learned counsel for the applicant that the meeting dated 11-3-1991 was illegal and ultra vires as there was no fixation of the number of elected Directors of the Company. The number of Directors was to be fixed 35 days before the convening of the General Meeting and the number so fixed could not be changed except with the prior approval of the General Meeting.
4. ' The Company through its Secretary has resisted the application controverting that on 2-2-1991, the applicant was present at the Board's meeting when it was resolved to elect seven directors and to hold extraordinary general meeting of the Company. In support he has filed a certified copy of attendance sheet of the Board meeting. According to him the notice of the annual general meeting alongwith attachments etc., was stappled in one bunch and the notice of extraordinary general meeting of 11-3-1991 alongwith its requirement was stappled in another bunch and these two separate notices were forwarded by Courier Service to the applicant, receipt of which was duly acknowledged by her.
5. ' The applicant did not raise any of her objections at the annual general meeting held on 26-2-1991.
6. Those who filed their nominations within time, got elected as Directors but the applicant did not due to her own default. It would be useful to examine the adequacy or otherwise of the notice of extraordinary meeting dated 11-3-1991 in the light of subsections (1), (2) and (3) of section 50 and section 160 and subsections (1) to (4) of Section 178 of the Companies Ordinance, 1984 which read as follows:-- "Section 50 of the Companies Ordinance, 1984: Service of notice on members etc.---(1) A notice may be given by a company to any member either personally or by sending it by post to him to his registered address or, if he has no registered address in Pakistan, to the address, if any, within Pakistan supplied by him to the company for the giving of notices to him.
(2) Where a notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, prepaying and posting a letter containing the notice and, unless the contrary is proved, to have been effected at the time in which the letter would be delivered in the ordinary course of post.
(3) If a member has no registered address in Pakistan, and has not supplied to the company an address within Pakistan for the giving of notices to him, a notice addressed to him or to the share holders generally and advertised in a newspaper circulating in the Province or the part of Pakistan not forming part of a Province in which the registered office of the Company is situate shall be deemed to be duly given to him on the day on which the advertisement appears.
7. ' Section 178 of the Companies Ordinance, 1984: Procedure for election of directors.- --(1) The directors of a company shall, subject to Section 174, fix the number of elected directors of the company not later than thirty-five days before the convening of the general meeting at which directors are to be elected, and the number so fixed shall not be changed except with the prior approval of a general meeting of the Company.
(2) The notices of the meeting at which directors are proposed to be elected shall among other matters expressly state---
(a) the number of elected directors fixed under subsection (1); and
(b) the names of the retiring directors.
(3) Any person who seeks to contest an election to the office of director shall, whether he is a retiring director or otherwise, file with the Company, not later than fourteen days before the date of the meeting at which elections are to be held, a notice of his intention to offer himself for election as a director: ' Provided that any such person, may at any time before the holding of election, withdraw such notice.
(4) All notices received by the Company in pursuance of subsection (3) shall be transmitted to the members not later than seven days before the date of the meeting, in a manner provided for sending of a notice of general meeting in the normal manner or in the case of a listed company by publication at least in one issue each of a daily newspaper in English language and a daily newspaper in Urdu language having circulation in the province in which the stock exchange on which its securities are listed is situate."
8. ' Under Section 160 of the Ordinance, notice of the meeting, specifying the place and the day and hour of the meeting, alongwith a statement of the business to be transacted at the meeting, shall be given among others, to every member of the company and such notice is to be served in a manner in which notices are required to be served under Section 50 but the accidental omission to give notice to or the non-service of notice by, any member shall not invalidate the proceedings at the meeting.
9. ' To lend support to the applicant's contention Mr. J.H. Rahimatoola, learned counsel for the applicant made reference to Palmers Company Law from Twenty-fourth Edition at para. 5908, appearing at page 871, in which it was stated: ' It is difficult to deduce from the decided cases the circumstances in which an infringement of the procedures contained in the articles will be regarded as a corporate matter only and those in which the infringement is seen as giving rise to a personal cause of action. And the statements in which infringement of personal rights have been found 'are' to have proper notice of meeting."
10. Kayee v. Tati.
11. The question, was whether the applicant was served with a proper notice of the extraordinary general meeting of 11-3-1991 or not. Admittedly, she received this notice alongwith another notice of the General Meeting for 26-2-1991 but according to her it escaped her attention as both were tagged together. The Comapanies Ordinance 1984, states nowhere that notice of every general meeting should be sent under a separate cover, failure of which will render it invalid or bad in law.
12. What is contemplated under Section 160 of the Ordinance is that a notice must specify the place, the day and the hour of the meeting alongwith a statement of the business to be transacted at the meeting and what section 50 of the Ordinance requires is that a notice must be served in a manner provided therein although omission to give notice to or the non-service of notice on any member shall not invalidate the proceedings at the meeting. The notice in question in all material respects fulfilled the requirements of law and is also in consonance with articles of the Company. I agree with Mr. Nasim Farooqui, learned counsel for the company that it is not a case of fraud or non- service of notice but of oversight on the part of the applicant for which she cannot blame any one but her ownself.
13. Next question was, whether the Directors acted illegally in fixing the number of Directors, Section 178 of the Ordinance envisages that subject to Section 174, the Directors of a company shall fix the number of elected directors of the company not later than thirty-five days before the commencing of the general meeting at which directors are to be elected and the number so fixed should not be changed except with the prior approval of a general meeting of the company. It is an admitted position that the number of directors which was previously fixed at seven was not changed by the Board and therefore there was no question of prior approval of a general meeting of the Company which was rightly not called by the Directors.
14. ' As to the applicant's allegation that no resolution was passed at the board's meeting to convene an extraordinary meeting on 11-3-1991, reference may be made to the provision of Section 173 of the Ordinance. Under subsection (2) of Section 173, the minutes of general meeting and meeting of its Directors and Committee of Directors, shall, if signed, by the Chairman of the meeting and by the Chairman of the succeeding meeting shall be evidence of the proceedings. The books containing the minutes of proceedings shall be open to inspection, subject to reasonable restrictions, under subsection (6) and any member is entitled to a certified copy thereof under the provisions of subsection (7). In case inspection is refused or certified copy of minutes is not supplied, the company and every officer of the Company who knowingly and wilfully is in default, is liable to fine as prescribed under subsection (8) of Section 173 thereof. The case of the applicant is not that she was refused inspection of minutes or was not supplied a certified copy thereof by the Company.
15. Her allegation is that no resolution was passed at the Board's meeting. Though minutes duly recorded and maintained by the Company shall be evidence of its existence and contents, under subsection (3)of Section 173 of the Ordinance, such evidence is not conclusive and irrebuttable. A mere allegation not supported by any reliable evidence cannot be accepted in the face of minutes duly maintianed by the Company under the provisions of Section 173 (1) and (2) of the Ordinance.
16. Moreso, when the applicant has not controverted in her rejoinder, the contents of the disputed minutes of Director's meeting dated 2-2-1991 referred to therein.
17. ' Mr. Naseem Farooqui, learned counsel for the respondent, argued that the applicant has no locus standi to move an application of this kind in the proceedings for winding up, under Section 305 of the Companies Ordinance, 1984. The petition has nothing to do with the so-called grievance of the applicant who may take any other course open to her. It was further contended by him that the applicant is neither a party to the petition nor has taken any step for being impleaded as a party.
18. Apart from this, her application is barred by Section 179 of the Companies Ordinance which envisages filing of such an application by shareholders having at least 20% of share holding in the Company as against 7% held by the applicant.
19. In the main petition, no order either of winding up of the company or of appointment of provisional liquidator has been passed. The company is a private limited company and its management has remained in the hands of its Directors. With this background, the objection raised by Mr. Nasim Farooqui that the applicant has no locus standi to file this application in these proceedings appears to be quite valid and not without substance. Although the Democle's sword is hanging over the corpus of the company, it is still very much alive and functioning. When winding up of a company is made, its demise is judicially pronounced and steps are being taken for its burial culminating in what is known as dissolution of a company. In such a situation all and sundry, subject to limitations, are permitted to participate in the proceedings, lodge their claims, raises objection and put forward their grievances whatsoever and the proceedings are somewhat similar to administration of estate left by a deceased or insolvent person. I am of clear view that even a shareholder having 20 of shareholding cannot be permitted to invoke section 179 of the Companies Ordinance, 1984 in these proceedings of winding up at this stage, for which separate and independent proceedings are contemplated in the said section itself. The application of Mrs. Salma Noorani under Section 314 of the Ordinance, read with Order 39, rules 1 and 2, C.P.C. Is misconceived and not maintainable.
20. ' In the result, the application is dismissed but with no order as to costs.