NASIR ASLAM ZAHID, CJ- This petition for winding up of Pakistan International Insurance Company Limited (hereinafter referred to as "the Respondent") has been filed by the Controller of Insurance, Government of Pakistan, under Section 3(5D) and Section 53 of the Insurance Act, 1938, read with Section 305 of the Companies Ordinance, 1984. I had heard, at length, the arguments of Mr. Umer Qureshi, learned counsel for the petitioner, and Mr. S.M. Abbas, learned counsel for the respondent.
Learned counsel had also filed written arguments.
2. According to the memo of petition, the respondent was incorporated under the Companies Act, 1913, and was registered by the Controller of Insurance (the Petitioner) under section 3 of the Insurance Act, 1938, (hereinafter referred to as "the Act") in 1986 for doing all three classes of general insurance business, namely, Fire, Marine and Miscellaneous insurance business. In July 1986, the petitioner received a copy of the letter dated 17.7.1886 from M/s. East Cheap Reinsurance Management Service Limited addressed to the respondent informing that (he re-insurers had cancelled all their re-insurance treaties with the respondent since inception due to non-payment of premium by the respondent. In view of the contents of the said letter dated 17.7.1986, the petitioner served a show cause notice dated 24.7.1986 upon the respondent for alternate reinsurance arrangements by the respondent in place of the re-insurance arrangements they had made earlier with M/s. East Cheap Re-insurance Management Service Limited London. The Respondent was asked that alternate re-insurance arrangement be made within 10 days of the date of the notice and the respondent was also informed that if it desired to be heard in person, representative-of the respondent may appear before the petitioner on 4.8.1986. According to the petitioner, no satisfactory reply having been received, the petitioner issued two further show-cause notices and when the respondent failed to comply with the direction, petitioner cancelled the registration of the respondent by letter dated 2.11.1986 with effect from 15.12.1986. Cancellation of registration was done in exercise of the powers conferred upon the petitioner under section 3(4) (f) of the Act. The respondent filed an appeal against the cancellation of its registration before the Insurance Appellate Tribunal under section 110(1) of the Act but the said appeal was dismissed by the Tribunal on merits by its order-dated 28.11.1987. The respondent then approached this Court in further Appeal being Misc. Appeal No.44/1987 under section 1K)(12) of the Act but the said appeal Was dismissed as withdrawn on an application filed by the appellant. The order dated 6.3.1988 of the learned Single Judge of this Court dismissing the Miscellaneous Appeal filed by the respondent reads as follows: This is an application for withdrawal of the main appeal on the ground that the appellant has furnished the insurance cover to the extent of 11 percent as required under the rules. Mr. Umer Qureshi, learned counsel for the respondent submits that the respondent would scrutinize the insurance cover provided by the appellant and upon being satisfied then would renew the licence.
Mr. Imam Ali Kazi, learned Deputy Attorney General, is present on court notice.
The appeal is dismissed as withdrawn with no order as to costs and so also the stay application.
3. Thereafter, the respondent requested the petitioner by letter dated 7.3.1988 for revival of its registration with an undertaking that they would arrange the re-insurance treaties and get their confirmation within 45 days. The registration of the respondent was then revived vide letter dated 10.3.1988 of the petitioner on the basis of the undertaking given by the respondent. It may be observed here that by its letter dated 7.3.1988, the respondent had undertaken to provide confirmation of re-insurance arrangements within 45 day and in any case by 21.4.1988 and by letter dated 10.3.1988 after referring to the undertakings given by the respondent, the Controller of Insurance ordered as follows: "Now, therefore, the registration of the Pakistan International Insurance Co. Limited is hereby, revived with effect from 7th March 1988 under Sub-section (5) of Section 3 of the Insurance Act 1938 subject to the condition that the company abide by the undertakings given by them as stated in the above paragraphs."
According to the petitioner, inspite of the written undertaking of the respondent, it failed to fulfil its commitment within the specified period and, therefore, the petitioner withdrew the conditional revival order of the respondent by letter dated 21.6.1988 with effect from 1.8.1988 and since then the registration of the respondent stood cancelled.
4. It is also the case of the petitioner that it received a letter dated 16.8.1988 from the Federal Investigation Agency (FIA) whereby the petitioner was directed/instructed that any property of the respondent under lien of the department should not be released without prior approval of FIA since an investigation was going on regarding fraudulent acts of the Chairman of the respondent.
According to the petitioner, in view of the aforesaid letter of FIA, as a matter of abundant caution, an enquiry was made from Allied Bank of Pakistan, Binnori Town Branch, Karachi, by petitioner's letter dated 4.7.1988 for confirmation of the deposits of the respondent under lien of petitioner's department in PLS/TDRS amounting to Rs.19 lacs held by them in terms of the undertaking given by the Bank dated 11.1.1986 which was furnished to the department by the respondent at the time of its registration. In response to the letter dated 4.7.1988 of the petitioner, Allied Bank of Pakistan informed the petitioner by letter dated 15.8.1988 that the said undertaking dated 11.1.1986 furnished by the petitioner on behalf of the Bank was forged as the same was .Neither issued by the Bank nor the Bank held deposits of the respondent to the extent of Rs. 19 lacs. The Bank, however, informed that the Bank had deposits of Rs.19,000/- only of the respondent. The petitioner then requested the Head Office of Allied Bank of Pakistan and the Banking Council to investigate the matter and take further action. A letter was also written to FIA. In response to petitioner's letter, Head Office of the Allied Bank of Pakistan informed the department by letter dated 8.10.1988 that the total deposits of the respondent with the aforesaid Branch of Allied Bank of Pakistan was Rs.19,000/- only and there were chances of tampering with PLS/TDRS and issuance of letter on behalf to the Bank. There was no further response from Allied Bank of Pakistan, Banking Council or the FIA and, therefore, the petitioner's department informed the Ministry of Commerce in October, 1988, about the aforesaid facts and the correspondence exchanged between the petitioner's department and the aforesaid agencies.
5. In the circumstances, the present petition for winding up of the respondent has been filed on the grounds taken in Para 19 of the petition, which are as follows:
(a) Respondent is commercially insolvent;
(b) Respondent had failed to make re-insurance arrangements which is a mandatory requirement of the law;
(c) The company has played a fraud at the time of obtaining registration;
(d) There are several claims of public against respondent which are unpaid and as such the continuance of the respondent as a insurance company is prejudicial to the interests of the policy holders.
(e) It is just and equitable that the company should be wound-up.
It has further been stated in the memo of the petition that the statutory period of six months from the date on which the cancellation of registration took effect has already expired before this petition was filed (with reference to Section 3(5D) of the Act).
6. Syed Nasir Hussain Zaidi, Chairman of the respondent, filed his counter-affidavit stating that the petition has been filed with malafide intention to cause harm to the respondent and to the Chairman of the respondent company and the allegations against him are concocted and uncalled for. According to the Chairman of the respondent, in Misc. Appeal No.44/88 before this Court, there was an amicable settlement outside the court and, on account of the said settlement, the respondent withdrew the aforesaid appeal on the assurance given by the petitioner that the petitioner would withdraw the impugned orders and would revive the registration of the company.
According to the Chairman of the respondent, in view of the letter dated 10.3.1988 of the petitioner, the previous allegations became a closed chapter but, despite this, reliance had been placed by the petitioner on previous happenings with the dishonest intention to harm the respondent.
According to the respondent, the East Cheap Re-insurance Management Service Ltd. Of London had no concern with the existing treaties as the same were executed by M/S. Lander Eberli Shorter Limited and reference was make to their letter dated 23.7.86, but copy of the said letter Was not filed or brought on record. According to the respondent, as per the said letter dated 23.7.86, the agreement between M/s. Lander Eberli Shorter Limited was valid till 17.12.1987. The respondent's Chairman, in his counter-affidavit, has repeated the earlier averments that Misc. Appeal filed by the respondent in this Court was withdrawn in pursuance of the settlement between the parties and in view of the said settlement, the respondent withdrew the appeal and the petitioner revived the company's registration and thus all past allegations were washed-off. It is further stated in the counter-affidavit as follow: "That the company (respondent) undertook to provide the confirmation for 11.5. Per cent treaties for the year 1987 from M/s. Pana Harrison only within a period of 45 days and if the same was not arranged the same shall be arranged from Pakistan Insurance Corporation or any other foreign re- insurance company for which no undertaking was provided regarding time limit. The petitioner misconceived the under-taking given on 7.3.88 and illegally withdrew the revival of registration on 21.6.1988 effective form 1st August 1988."
As regards the allegation about the complaint of the FIA., it has been averred on behalf of the respondent that FIA had, later on, by letter dated 2.2.1989 withdrawn the earlier letter and that, according to FIA., charges against the Chairman and the respondent company had not been established and that the undertaking for Rs. 19 lacs was issued by Mr. Mohammad Asim, Manager Allied Bank Limited, Binnori Town Branch, Karachi, under his signature. It is additionally averred in the counter-affidavit that the petitioner is in possession of two undertakings for the sum of Rs.19 lacs each, one of Allied Bank of Pakistan Limited and the other of Indosuez Bank Limited. The allegation that the respondent is commercially insolvent has been denied stating that the respondent has more than Rs.42 lacs in State Bank of Pakistan and the treaty arrangements has been made with Pakistan Insurance Corporation vide letter dated 23.10.88 of PIC. The allegation about non-payment of any genuine claim has been denied and it is further stated that, "if permitted to function and transact the business of the Insurance Company, he (Chairman of respondent) is ready to give undertaking that he will satisfy all the claims against the said company within a short period of two years from the date the license/registration is revived" The averment of the petitioner that statutory period of six months under section 3(5D) of the Act had expired has been denied.
7. In the rejoinder filed by the Controller of Insurance himself, the pleas taken by the Chairman of the respondent in his counter-affidavit have been denied/challenged. In the rejoinder, reference was made to the several execution applications and the suits filed against the respondent in Lahore and Karachi with the purpose of establishing that various claims are pending against the respondent which have not been settled. Rejoinder is supported with documents showing decrees passed and executions pending against the respondent.
8. Reply to the rejoinder was filed by the Chairman of the respondent company stating that either the executions referred to in the rejoinder by the petitioner have been withdrawn or stay has been obtained from higher courts against the other execution applications. Additionally, it has been pleaded that in case of fraud, penalty is provided under section 104 of the Insurance Act and petition for winding up under Section 53 of the Act is not the proper remedy for any alleged fraud.
Reliance has also been placed on Section 309 of the Companies Ordinance, 1984, for the proposition that the winding up petition is not maintainable as the petitioner had not obtained prior sanction from the Corporate Law Authority, which is a mandatory requirement for filing a winding up petition.
9. In written and oral arguments, the counsel for the parties have reiterated their respective stands taken up in the pleadings.
10. (a) First, I may deal with the three preliminary objections raised on behalf of the respondent by Mr. S.M.Abbas, Advocate. In pleadings as well as in the written arguments, an objection has been raised about the maintainability of this petition for winding up of the respondent company on the ground that prior sanction from the Corporate Law Authority has not been obtained by the petitioner. In paragraph-15 of the written arguments of learned counsel for the respondent, the aforesaid preliminary objection has been taken as follows: "That so far as the winding up application under section 305 of the Companies Ordinance 1984 is concerned, it is submitted that for the purpose of entertaining an application for winding up of the respondent company is concerned, the petitioner has to adopt the procedure laid down in Section 309 of the said Companies Ordinance and before filing an application he has to obtain a permission form the Authority defined in Section 2 sub-section (3) which means Corporate Law Authority and under Section 309B, no application shall be maintainable in law unless previous sanction has been obtained from the said Authority. The law further provide that even the Authority shall not give any sanction unless the company has first been afforded an opportunity of making representation and of being heard."
Reference to Section 309(b) of the Companies Ordinance, 1984, shows that the argument is misconceived. Section 309 reads as under:
309. Provisions as to applications for winding up.- An application to the Court for the winding up of a company shall be by petition presented, subject to the provisions of this section, either by the company, or by any creditor or creditors (including any contingent or prospective creditor or creditors), or by any contributory or contributories or by all or any of the aforesaid parties, together or separately, or by the Registrar or by the Authority or by a person authorised by the Authority in that behalf: Provided that -
(a) a contributory shall not be entitled to present a petition for winding up a company unless -
(d) either the number of members is reduced, in the case of a private company, below two, or, in the case of any other company, below seven; or
(ii) the shars in respect of which he is a contributory or some of them either were originally allotted to him or have been held by him, and registered in his name, for at least six months during the eighteen months before the commencement of the winding up, or have devolved on him through the death of a former holder.
(b) the registrar shall not be entitled to present a petition for the winding up of a company unless the previous sanction of the Authority has been obtained to the presentation of the petition: Provided that no such sanction shall be given unless the company has first been afforded an opportunity of making a representation and of being heard:
(c) The Authority or a person authorised by the Authority in that behalf shall not be entitled to present a petition for the winding up of a company unless as investigation into the affairs of the company has revealed that it was formed for any fraudulent or unlawful purpose or that it is carrying on a business not authorised by its memorandum or that its business is being conducted in a manner oppressive to any of its members or persons concerned in the formation of the company or that its management has been guilty of fraud, misfeasance or other misconduct towards the company or towards any of its members; and such petition shall not be presented or authorised to be presented by the Authority unless the company has been afforded an opportunity of making a representation and of being heard:
(d) the Court shall not give a hearing to a petition for winding up a company by a contingent or prospective creditor until such security for costs has been given as the court thinks reasonable and until a prima facie case for winding up has been established to the satisfaction of the Court:
(e) the Court shall not give a hearing to a petition for winding up a company by the company until the company has furnished with its petition, in the prescribed manner, the particulars of its assets and liabilities and business operations and the suits or proceedings pending against it."
Proviso (b) in Section 309 lays-down that the Registrar shall not be entitled to present a petition for the winding up of a company unless the previous sanction of the Authority has been obtained to the presentation of the petition and that no such sanction shall be given unless the company has first been afforded an opportunity of making a representation and of being heard. The provision, therefore, places an embargo on the Registrar presenting a petition for winding up of a company by requiring him to obtain the previous sanction of the Corporate Law Authority. The aforesaid Saction 309 does not require prior sanction of the Authority for maintaining a petition by other persons or by the Controller of Insurance. As observed, the said preliminary objection is plainly misconceived.
(b) The other objection taken by Mr. S.M. Abbas, learned counsel for the respondent was that if the case of petitioner was that fraud had been committed by the respondent by making a false statement, Section 104 would have been attracted which provides for penalty for making a false statement, but this would not give any ground for winding up of the respondent. This argument is also misconceived. Provision of a penalty for making a false statement under section 104 of the Act does not debar' the Controller of Insurance from maintaining a winding up petition if such action on the part of the Insurance Company is covered by a ground for winding up.
(c) The other objection raised on behalf of the respondent by Mr. S.M Abbas Advocate, was that the application for winding-up under section 53 of the Act was not maintainable in law as it had not been established that there was noncompliance of any requirement of the Act for a period of three months. According to the respondent, compliance had been made within a period of 2 1/2 months and as such there was no subsisting failure attracting the provision of Section 53.
The proposition, as advanced, is not correct inasmuch as failure of compliance of any requirement of the Act for a period of three months as a precondition for maintaining a petition for winding-up of an Insurance Company is restricted to clause (ii) of Section 53 (2) (b) of the Act. If before expiry of the three months' period, compliance of requirement has been made by the Insurance Company, a winding-up petition will not be maintainable under clause (ii), but a petition filed by the Controller of Insurance under other grounds available to him under Section 53 would be otherwise maintainable.
The case of the petitioner is that the required re-insurance arrangements had not been made by the respondent inspite of notices given by the Department which had resulted in the cancellation of the registration of the respondent under Section 3(4) of the Act. No doubt there was default on the part of the respondent in not confrming arrangements of re-insurance as required, and more than three months had expired but then the petitioner did not resort to Section 53 of the Act. On the other hand, the respondent challenged the cancellation of the registration and, ultimately, there was a settlement outside the Court and the appeal before this Court under Section 110(12) of the Act was withdrawn and thereafter the registration of the respondent was revived. Later-on, according to the respondent, fresh re-insurance arrangements had been made and the pleadings and the documents on record do not contradict the assertion of the respondent in this regard. The contention of Mr. S.M.Abas is correct that the petitioner cannot, later-on, take advantage of the earlier default in making re-insurance arrangements by the respondent as a fresh opportunity was given by the petitioner to the respondent for making new re-insurance arrangements which was vailed of, according to the respondent, and the earlier cancellation of registration on account of re-insurance arrangements having been withdraw cannot be validly made a basis for maintaining a winding up petition under clause (ii) of Section 53(2)(b) of the Act.
11. However, in my view the case against the respondent is covered by clause (iv) of Section 53(2)
(b) of the Act. According to this provision, in addition to the grounds on which an order of winding up may be based, the Court may order the winding up of an insurance company, if the Controller of Insurance, who is authorised to do so, applies in that behalf to the Court on the ground that the continuance of the insurance company is prejudicial to the interests of the policyholders. In this context, reference may be made to two admitted documents. First is the letter dated 1.11.1988 of the Deputy Controller of Insurance, addressed to the respondent, which is reproduced here: "The Chairman, Pakistan International Insurance Co. Ltd., ,508 Uni Centre, 5th floor, Chondrigenous Road, Karachi Subject:- Treaty arrangements for 1988.
Dear Sir, Please refer to your letter No. PIIC/724/88 dated 22nd October, 1988 on the above subject.
2. You are requested to please let this Department know as to why your request for revival of registration be not refused on the following grounds: -
(1) Your company have played a fraud upon this Department at the time of its registration by furnishing a false undertaking to this Department that your company had deposited a sum of Rs.19,00,000/-(Rupees nineteen Lac) in the Allied Bank of Pakistan Ltd., Binnori Town Branch Karachi in P.(1).S. Term Deposits under lien of this Department M/S. Allied Bank of Pakistan Ltd., has recently informed this Department that the said undertaking was not issued by them and the actual amount deposited by your company in the said P.(1).S. Term Deposits is Rs.19.000/- (Rupees nineteen thousand) only. Copies of the letters dated 15.8.1988 and 8.10.1988 received from the said banked are enclosed at Annex "A". It was the condition of your own Articles of Association vide Article No.6 which reads as follows: "6. The Company shall not apply for registration as an insurer. Under the Insurance Act, 1938, unless:-
(1) The paid-up capital of the company is not less than twenty five lacs rupees; and
(II) Not less than 90% of the paid up capital invested in approved securities or in fixed deposits in any schedule bank in Pakistan and the scrips of such investments other than the deposit made under section 7 of the Insurance Act, 1938 shall be kept in trust with a scheduled bank free of any encumbrances or hypothecation, and such investment shall not be disposed off except with prior approval of the Controller of Insurance or to satisfy a decree of a Court against the company."
(2) Your company have utilized the registration Certificate for extracting public money by issuing guarantees or illegal investment companies which you are not honoring., You yourself are in the knowledge of such guarantees issued by your company.
(3) The Federal Investigation Agency has informed thus Department that your company has fraudulently and dishonestly obtained money from general public which is under enquiry in that Agency. They have given notice to this Department under Section 5(5) of the Federal Investigation Agency and instructed this Department not to transfer, alienate, release or assign in any manner, whatsoever the property of your company without prior permission from them, it means that you have no assets left with your company.
(4) A lot of claims are pending settlement with your company complaints of which have been received in this Department. The Department asked your company to furnish your observations but you did not even care to reply to the said letters.
(5) Your company is in the habit of issuing cheque which have been dishonored. An illustration of such complaint is the letter received in this Department from Mr. Qadeer, Advisor Commercial USAID- WAPDA., Power Dist. Project, Lahore a copy of which is enclosed at Annex 'B'.
Enel: As above.
Yours truly, Sd/- (M.Ansari)
Deputy Controller of Insurance."
The above letter of the Department had made the following allegations against the respondent:
(a) The respondent had played fraud upon the department at the time of its registration by furnishing of a false undertaking to the department that respondent had deposited a sum of Rs.19 lacs in Allied Bank of Pakistan Limited, Binnori Town Branch Karachi, in PLS Term deposits under the lien of the department and it came to light later on that the actual amount deposited by the respondent in the said PLS Term Deposits was only Rs.19,000/-
(b) Respondent had utilized the registration Certificate as an insurer for extracting public money by issuing guarantees for illegal Investment Companies, which guarantees were not being honored by the respondent and that the Chairman of the respondent was aware of such guarantees having been issued by the respondent.
(c) FIA had informed the department that the respondent had fraudulently and dishonestly obtained money from general public which was under enquiry in FIA.
(d) A number of claims were pending settlement with the respondent, complaints about which has been received by the department and despite having been called upon by the department to furnish their observations, the respondent did not even reply to the said letters.
(e) Respondent is in the habit of issuing cheques which have been dishonored and reference was made to a letter received in that regard by the department from one Mr. Qadeer, Adviser Commercial, USAID-WAPDA Power District Project, Lahore, copy of which letter had been sent alongwith letter dated 1.11.1988 of the Deputy Controller.
If the charges/allegations made in the said letter dated 1.11.1988 of the Deputy Controller of Insurance were false or incorrect, the same should have been denied. This was not done. On the contrary, the reply dated 6.11.1988 of the respondent company which is reproduced here shows otherwise: "The Controller of Insurance, Hajra Mansion, Zaibunnisa Street, KARACHI.
Dear Sir, We are in receipt of your letter dated 1st October 1988, and like to submit as under/parawise:-
1. Referring the first para with the clauses (I) and (II) of your letter we like to state that the same has been replaced by us long before and the deposits are lying with Indosuze Bank, Guarantee letter of which already submitted to you about a year back. Further confirmation can be vetted by the bank, if so required.
2. (a) The Guarantee business, there is no Insurance Company who have not issued the guarantees. We also issued the guarantees after having proper security from our clients and are in a position to pay the guaranteed amount.
(b) The investment company's case is under F.I.A, and other Government agencies and they have seized their properties for repayment. Minister of Interior has very kindly granted the time to our sister concern M/s. Moashh traders of Pakistan (Pvt) Ltd., for repayment of investors amount, which of course would be honored.
3. We have settled our accounts with F.I A. And the letter issued by them stands cancelled, if you have not received till date we will request F.I.A, to expedite the same.
4. You will appreciate that since the inception of the company, we are facing tremendous problems one after another which resulted heavy administrative loss, however, we assure you that all the genuine claims would be cleared before June 1989 and in future no such complaint would annoy you.
5. The cheque of Mr. Qadeer was not encashed due to seizure of our accounts by F.I A. And other financial crisis, which have already been overcome now and again We assure you that no such complaint would be received by you in future.
In conclusion we don't blame you or your department and request you to excuse us this time by giving a chance to establish ourselves.
Thanking you, we are, yours faithfully, Sd/- c.c. Minister of (Syed Nasir Hussain Zaidi)
Commerce. Chairman."
The aforesaid reply shows that the allegation about the deposit of Rs. 19,000/- by the respondent with Allied Bank of Pakistan, Binnori Town Branch, Karachi, instead of Rs. 19 lacs was not denied.
Instead, the reply was that the undertaking had been replaced by another undertaking of Indosuze Bank.
As regards furnishing insurance guarantees by the respondent on behalf of Investment Companies, who were doing illegal business of taking deposits from members of the public on promise of huge profits every month, the respondent, in his reply dated 6.11.1988, did not deny such allegation stating that such guarantees had been given but after having proper security from such "clients" and that respondent was in a position to pay the guaranteed amounts. One such Investment Company, being M/s. Moashh Traders of Pakistan (Pvt) Ltd., has been referred in the letter dated 6.11.1988 as , "our sister concern". It is also mentioned in the letter that the Minister of Interior has granted time to "our sister concern" for repayment of investor's amounts.
Pendency of number of claims against the respondent and their nonsettlement about which complaints had been made to the department by the claimants was not denied. On the contrary, in the said letter dated 6.11.1988, reference was made to the tremendous problems being faced by the respondent since its inception which resulted in heavy administrative losses. It was added that the respondent would clear all the genuine claims by June 1989 and in future no such complaint would be received by the department.
The allegation of issuance of cheques by the respondent, which were later-on dishonoured, was not replied/denied. The only reply given was that the cheque issued in favour of Mr. Qadeer was not encashed due to the seizure of the account of the respondent by FIA and "other financial crisis" which had been over .Come and an assurance was given that so such complaint would be received by the department in future.
The last line of the letter dated 6.11.1988 of the respondent is also significant and it may be reproduced again: "In conclusion we do not blame you and your department and request you to excuse us this time by giving a chance to establish ourselves."
12. An Insurer plays a very important role in the development of the trade and commerce and also in other financial fields in the country and an unreliable or financially unsound or bogus Insurer can play havoc in such fields and can also destroy or cause irreparable loss to the people, financially big or small, who rely upon such Insurers. As in the case of Banks, only genuine and financially sound Insurers should be allowed to carry on insurance business in the country.
13. The said allegations contained in the letter dated 1.11.1988 of the department have not been denied by the respondent. On the contrary, a clear impression is given that the allegations/charges levelled against the respondent are correct but the respondent wanted to be excused promising to act properly and within the bounds of law in future. Association of the respondent with the Investment Companies has not been denied. One such Investment Company was described as a "sister concern" of the respondent. One question from the learned counsel for the respondent, in the presence of the Chairman of the respondent, who was also the head of the said Investment Company, it was admitted that claims running into millions of rupees made by the depositors with the said Investment Company have not been rapid. Apparently, the respondent had given guarantees on behalf of the said Investment Company also for repayment of the amounts of the ^investors but, despite this, depositors' claims have not been settled.
14. In view of the above admitted factual position, I am of the view that such an Insurance Company should not be allowed to carry on any kind of insurance business in Pakistan and the continuance of the respondent as a company is clearly prejudicial to the interests of the Policy- holders. The actions and defaults mentioned herein above bring the case of the respondent within the mischief of clause (iv) of Section 53(2)(b) of the Insurance Act, 1938.
15. As a result, this petition is allowed, Pakistan International Insurance Company (Pvt) Limited is ordered to be wound-up. Controller of Insurance, Government of Pakistan, is appointed as the Official Liquidator.