' This is a winding up petition filed under section 305/306 of the Companies Ordinance, 1984 (hereinafter referred to as the Ordinance) on the ground mainly that the respondent mills has not been able to pay debt amounting to Rs,15,931,642.17.
2. Petitioner BCCI presently incorporated as Habib Credit and Exchange Bank Limited is a Banking Company whereas the respondent is a company incorporated under the Companies Act, 1913 presently governed by the provisions of Ordinance, 1984. At the request of the respondent, petitioner extended credit and banking facilities to the respondent in 1983. Respondent acknowledged its liability and furnished various security documents in favour of the petitioner for repayment of the loan amount. A sum of Rs,11,304,139.17 was outstanding and payable by the respondent as on 30-6-1986. Petitioner raised demand by way of a letter dated 31-12-1986 but without any response. Although the respondent acknowledged and admitted its liability from time to time, it neglected and failed to make any payment with the consequence that on earlier occasion Judicial Miscellaneous No,47 of 1987 and Judicial Miscellaneous No,9 of 1988 for winding up were filed in which the respondent while mitting its liability undertook to make payment in terms of the cowromise but subsequently failed to honour the commitment. As against a balance amount of Rs,15,931,642.17 as on 31-3-1990 respondent deposited only a sum of Rs,23,50,000 up to September, 1989 and neglected to pay the admitted debts as reflected in the orders passed in the earlier Judicial Miscellaneous disposing them of in terms of the undertaking hence this petition.
3. Notice of the petition was served on the respondent-company as well as the Registrar, Joint Stock Companies. In its counter-affidavit respondent did not admit various allegations made in the petition but generally denied that there was failure or negligence on its part in payment of its outstanding dues. Respondent pointed out that on earlier occasion in view of the business conditions repayment of loan was rescheduled from time to time. Filing of earlier Judicial Miscellaneous applications and disposal thereof in terms of undertaking/commitment is not disputed but it is urged that in view of continuously disturbed conditions in Hyderabad working of the respondent mills was adversely affected. Consequently meetings were held between the parties wherein respondent explained to the petitioner that it would not be possible to stick to stipulated schedule of payments who agreed to give concession in the repayment of loan but in fact the petitioner failed to reschedule the payments of loan as assured. It is further stated that the respondent mills is indebted to other banks as well to whom repayment of outstanding loan is being made and there is no dispute with such Banks.
4. On his part, Registrar Joint Stock Companies did not offer any comments.
5. Hearing of the petition was adjourned from time to time and mostly for the reason that the parties were negotiating a settlement out of Court. At the hearing, however, learned counsel for the respondent was unable to controvert the factum of availment of the advance facilities and liability of the respondent to repay the outstanding debt. He was also not in a position to controvert the circumstance that despite the commitment and undertaking made before this Court in the earlier two Judicial Miscellaneous applications respondent could not honour the commitment for reasons of financial constraints. On my query as to how much amount was paid after the disposal of the earlier Judicial Miscellaneous applications, Syed Shahenshah Hussain made a statement that six cheques worth Rs,75,000 each were paid to the petitioner from June to November, 1991 which were attached to Civil Miscellaenous Application 1126 of 1991 but from the record I find that this Civil Miscellaenous Application was dismissed by this Court on 21-4-1992 which is hardly a circumstance to be taken into consideration in view of heavy outstanding loan against the respondent.
6. Realizing the weakness of the respondent's case learned counsel urged at the Bar that this petition is not maintainable as it is hit by the provisions contained in section 6(4) of the Banking Companies (Recovery of Loans) Ordinance, 1979 which reads as under: "No Court other than a Special Court shall have or exercise any jurisdiction with respect to any matter to which the jurisdiction of a Special Court extends under this Ordinance, including a decision as to the existence or otherwise of a loan and the execution of a decree passed by a Special Court; and all proceedings, including proceedings following the filing of an arbitration award and proceedings for the execution of a decree within the jurisdiction of a Special Court, by whatever Court passed, which may be pending in any Court immediately before the commencing day shall stand transferred to the Special Court: ' Provided that nothing in this subsection shall be deemed to affect-- (a)the right of a Banking company to seek any remedy before any Court that may be available under the law by which the Banking Company may have been established or under that law as amended from time to time; or repealed by Banking Companies (Recovery of Loans, Advances, Credits and
(b) the jurisdiction of any Court such as is referred to in clause (a), or to require the transfer to a Special Court of any proceedings pending before any such Court immediately before the commencing day."
7. Notwithstanding the circumstance that Ordinance XIX of 1979 was Finances) Act, 1997 vide section 28 learned counsel vainly contended that on the date of filing the present proceedings Ordinance, 1979 was in the field, I see no merit in the argument because the present winding up petition is quite clearly maintainable under the provisions of section 305 of the Ordinance on the ground that the respondent company is unable to pay the debt. Bar of jurisdiction, if any, would arise in a suit exclusively triable by the Special Banking Court and not in the present proceedings which are quite evidently maintainable and within jurisdiction. At any rate with the repeal of 1979 Ordinance the argument is no longer helpful to the counsel and is completely misconceived on the face of it. To my mind neither the new Act of 1997 nor the Ordinance, 1979 bars the maintainability of the present petition. Obviously, winding up proceedings are not a substitute for recovery of loan amount and indeed the prayer before this Court is not for recovery of the loan amount. The argument being hyper-technical and without any substance must be repealed.
8. As the respondent-company appears to have lost its substratum and is no longer in a position to pay the heavy debt due against it despite the lapse of a long period, it is only just and equitable to direct winding up of the company which was ordered by a short order at the conclusion of the hearing on 16-12-1997. These are the reasons for the conclusion.