1. The Joint Registrar has submitted this application making specific proposals in the light of the order dated 26th May, 1993 for the approval of this Court. .These proposals are as under:-- (1).The main business of the Company i.e. Printing and Publication of the Holy Qur'an and Religious Books, which is estimated to be of the value of Rs.168 Million approximately, be allowed to be taken over by Modarba Company to be formed under the name and style of "Taj Modarba Management Company" and this Modarba company will be authorised to float Modarba fund to the tune of Rs.200 Million. Finance to the extent of net assets value of Taj Company relating to printing business i.e. Rs.168 Million plus a goodwill amounting to Rs.5 Million will be made available to the Taj Company for subsequent payment to the affectees. The amount of encumbrances on the printing press to the extent of Rs.24.0 M will be paid out of this amount. It is also proposed that at least five financially and professionally sound parties out of the existing Modarba companies are being motivated to come forward in association with some other strong financial and industrial groups to contribute 50% funds and the remaining will be subscribed by institutions like Zakat Foundation, Fauji Foundation, Army Welfare Trust, Islamic International University and the General Public.
2. (2)The "Taj Modarba Management Company" will take over the management of Taj Company alongwith its assets i.e. printing presses and the building in which these presses are being run. The remaining property i.e. assets of Bahawalpur Board Mill, Taj Printing and Packages Industries (Pvt.)
3. Limited Hub, Balochistan, the Kawasaki Building located at 19 KM Lahore-Sheikhupura, Road, Shahdin Building will remaiq available and after sale of these properties, sale proceeds realized shall also be available for payment to the affectees after adjusting the amount due to the financial institution.
4. The Taj Company Limited as such will be liquidated and wound up and Liquidator be appointed to dispose of the afore noted remaining assets of the Taj Company and to settle claims of the depositors/creditors in accordance with the provisions of the Companies Ordinance, 1984. It is proposed that one of ,the Administrator may be appointed to a Committee which will consist of a representative each from the depositors and shareholders and a Government nominee.
5. GENERAL PROPOSALS: (1). The principal amount of loan outstanding against the properties of the Tai Company and subsidiary companies is Rs.93.42 Million and the mark-up agreed to be waived off stands at Rs.52.00 Million. The banks will be requested, as already agreed by them, to receive only principal amount and waive off the mark-up amount in spite of the fact that the principal amount has not been paid to them. The proposal that Banks be requested to waive off the entire loans amount treating it as bad debts is not acceptable to the Banks and the Government.
6. (2),The Government' would approach the Provincial Government for waiver of stamp duty on the sale of properties of the Taj Company and its subsidiary companies in the public interest. Bait-ul- Mal and Zakat Foundation will be requested to accommodate deserving cases of widows, orphans and persons of old age on the recommendation of the Board of Administrators. A self-contained proposal will be sent to National Zakat Council in this regard.
7. (3).The Central Board of Revenue will be approached to waive off the custom duty on the machinery reportedly lying in the bonded warehouse so as to reduce the financial burden of the Company.
8. (4).The Banks will be asked to advance appropriate amount of money against security on properties of the company and the amount so advanced be made payable to the Banks after sale of such properties.
9. (5).The Taj Company owns Shahdin Building at Lahore. The Federal Government will be requested to exempt the said building from the operation of Punjab Urban Rent Restriction Ordinance, 1959.
10. This building will thereafter be disposed of at best available price and in case no purchaser comes forward the Federal Government will be asked to request the Benevolent Fund Authorities to purchase the said Building. The amount received by the depositors from time to time in the form of profits, should be adjusted and treated as refund of principal due to the depositors.
11. With these proposals, it is asserted that depositors in any case will get 20% of their deposits and that to start with refund be allowed to the depositors having claim up to Rs.50,000. The Board of Administrators has concurred with the afore noted proposals as there is no alternative but to accept these proposals. It is pertinent to note that for almost one year every effort was made to procure purchasers of the assets of the Taj Company and its allied subsidiary concerns but no one came forward to purchase these assets. The public notices incurring expense of Rs.40,000 were published in daily newspapers of repute for the sale of Shahdin Building but not even a single valid offer was received. The Board of Administrators approached various business houses, but none showed any interest in purchasing these assets. They all are probably waiting for the liquidation of the Taj Company with a view to obtain these properties at throw away prices. Faced with this situation the Chairman, Corporate Law Authority was advised to devise a scheme by which appropriate value could be obtained for the assets of the Taj Company Limited, keeping in view the fact that the main business of the Taj Company i.e. printing and publication of the Holy Qur'an and Religious Books should continue uninterrupted. It goes without saying that the Taj Company had served Muslims for 60/70 years by making available Holy Qur'an and other religious Books of standard quality. This business can be continued profitably provided it is in the hands of persons who are devoted and intend to carry on the business of printing and publication of Holy Qur'an and Religious Books as a religious duty.
12. The Chairman, Corporate Law Authority has now contacted the sponsors of Modarba companies which are financially and professionally sound parties and they have come forward to take over the business of the Taj Company by floating Taj Modarba Management Company in the manner noted above. This appears, in the circumstances, to be the only viable proposal as by taking over the assets and liabilities of the Taj Company alongwith the management, the work of printing and publication of Holy Qur'an and Religious Books will continue uninterrupted. If the Taj Company is liquidated and the assets are then sold out, the property, the valuable manuscripts and other printing material will go waste. The purpose of section 290 of Companies Ordinance, 1984 is to avoid winding up of the Company if possible. I have no doubt in my mind that winding up of the Taj Company would unfairly prejudice not only the shareholders but also the creditors. 11 On deposit of a sum of Rs.173 Million after constituting Modarba fund, the assets of the company will be transferred to the Modarba company (to be formed) after payment of the principal amount of Rs.24 Million to the banks. In this Manner, the Modarba management company will receive the assets of the. Taj Company without any liability. The shareholders obviously will not be entitled to receive any amount as the liabilities exceed the value of the assets.
13. The other actions proposed to be taken by the Corporate Law Authority through the good offices of the Federal Government and the Provincial Government, shall be taken in hand and appropriate orders/notification may be got issued.
14. The amount of deposits received is Rs.2550.2 Million. The principal amount of loan payable to Banks is Rs.93.52 Million. The total liabilities thus comes to Rs.2643.64 Million. These depositors have been receiving profits in the shape of interest and the amount so recovered by them is deducted, the net liability on account of deposits comes to Rs.134,52,99,617.37. The management of the Taj Company, i.e. Directors have been receiving the deposits bypromising payment of the interest/profit on these deposits at the rate of 18 % per annum. In some cases interest/profit at the rate of 22 % to 24 % was offered and paid. The depositors were lured by such exorbitant rate of interest and they continued making deposits though these deposits were not backed by any security. These depositors were aware that no financial institution in the country was paying such an exorbitant rate of interest on deposits. These depositors as such were indulging in speculative business and are also partly responsible for the loss they are now suffering. Some of these depositors have received in the name of profit money much in excess of the amount deposited by them. If the arrangements as are being envisaged are not made, the depositors would not be receiving the amount even to the extent contemplated` herein.
15. For all these reasons, I am of the view that in the interest of justice as well as in the situation noted above, it will be fair and reasonable to direct that the amount received as profit/interest by the depositors be adjusted against the principal amount of deposit and after adjusting the amount so received, if any amount remains payable out of the principal amount, the same will be paid according to the proportionate ratio depending on the total amount realised, out of the assets of the Taj Company Limited and its subsidiary companies.
16. It is further directed that the present Board of Administrators shall continue to function till the time that the Modarba Management Company is formed, the Modarba fund is raised and the amount of Rs.173 Million is made available to the Taj Company Limited. After transfer of the assets to the Modarba company, the Board; of Administrators will stand dissolved and an order may then be obtained for appointment of a committee comprising one nominee of the Court, one nominee 'of the depositors and one nomipee of the Federal Government to look after the sale of the properties and payment of the claims.
17. In the meanwhile the present Board of Administrators shall proceed *to pay 20% of the amount of deposits after adjustment of the amount received as interest by the depositors to the depositors who had deposited amount up to Rs.50,000. These payments will be released on the production of the 'original deposit slip out of the amount available with the Board of Administrators in the account of the Taj Company Limited.
18. This order will, however, be carried into effect after thirty days from today so that any one, who feels aggrieved of this order or any part thereof may avail his remedy before the higher forum in accordance with law. This application stands disposed accordingly.