' This is a petition under section 321 read with section 305/306 of the Companies Ordinance, 1984 (hereinafter referred to as the Ordinance, 1984) for winding-up of M/s Duty Free Shop (Pvt) Ltd., having office at Shahrah-e- Faisal, Karachi, (hereinafter for the sake of brevity referred as D.F.S.), It is fixed for hearing alongwith Official Assignee's reference, dated 19th May, 1998 as well as C.M.A.
523 of 1998 filed by the petitioner. I intend to dispose of all these items through this consolidated order.
2, The petitioner was a foreign bank incorporated in Luxembourg (hereinafter referred as to BCCI
(SA) which was ordered into liquidation by the High Court of Justice in England on 14th January, 1992 and some five persons were appointed as joint liquidators. This instant proceedings for winding up of D.F,S has been filed by one Mehmood Awan claiming himself to be the Attorney of John Parry Richards one of the joint liquidators of the petitioner's Bank. It is the case of the petitioner that BCCI Karachi was one of the Branches of BCCI Overseas which approached the petitioner Bank for credit facility for foreign bill purchase which was approved by the petitioner Bank vide Annexure-B filed with the petition. This credit line was for U.K. 500,000. It is the further case of the petitioner that in addition to the conditions mentioned in Annexure-B filed with the petition, the BCCI Karachi submitted Bank guarantees to the petitioner to secure the outstanding credit facilities obtained by the respondent. In this connection, petitioner has filed some 10 copies of Bank Guarantees as Annexures-C-1 to C-10, which are spread over the period 24th October, 1983 to 13th July, 1989. All these documents are extension of the original Bank guarantee bearing No, 388 of 1982 dated 14th July, 1982 which the petitioner has not filed on the grounds that this document was with the BCCI Karachi, which was subsequently merged with Habib Credit & Exchange Bank Karachi.
3. According to the petition an amount of U.S. $ 57,99,125 was outstanding against the respondent till 1st January, 1997, which the respondents have failed discharge despite clear service of notice upon them. In the petition, different circumstances have been narrated which may lave led to the bankruptcy of respondent company and which makes it liable for winding up. It is further stated in the petition that the liquidator of the petitioner Bank's are attempting to recover maximum amount possible from different sources in order to enable them to repay the creditors and that it will be just and equitable if the D.F.S. Is wound up. Following reliefs have prayed in the Memo. Of Petition:-
(1) Admit this petition and order the winding up of the Respondent.
(2) Appoint a provisional manager to forthwith take over the control and management of the assets of the respondent and prepare detailed inventories of the same.
(3) Grant permission for advertisements and notices.
(4) Appoint an official Liquidator upon the assets of the respondent.
(5) Direct the respondent to furnish security to the tune of US $6,206,548.27 with further markup at the rate of US$ 1,185.64 per day till the satisfaction of the claim. Upon failure of the respondent to furnish such security, this Hon'ble Court may be pleased to order the attachment of the properties/assse ts of the respondent including all trade receivables and stocks,
(6) Order the sale of properties and assets in favour of the petitioner.
(7) Order the sale of properties and assets in favour of the petitioner.
4. On the other hand, respondent have disputed correctness of the'contents of the winding up petition and have raised several grounds to the maintainability of the same. I have heard Mr. Ali Raza Advocate for the petitioner and Mr. Arshad Tayyab Ali Advocate for the respondent. Mr. Ali Raza argued that in view of Annexure-O which is financial statement of D.F.S. For the year ending on 30th June 1997, the liability of the petitioner is admitted and that after service of notice inability of the respondent company to pay its dues makes liable for winding-up. Reliance is placed. On the case:-- M/s. Sindh Glass Industries Ltd., v. M/s. National Development Finance Corporation., Karachi and 2 others (PLD 1996 SC 601 at 607) where it was held, inter alia, that if a Creditor serves a notice under section 306 (1) (a) of the Ordinance 1984 for repayment of the amount due, by registered post A/D and the company refuses or neglects to pay within 30 days. Thereafter or to secure or compound to the reasonable satisfaction of the Creditors, then company shall be deemed to be unable to pay its debts. It was further held by the Hon'ble Supreme Court that" It is the first and foremost duty of the Creditors to show that an amount as required by law is due and the company is indebted in a sum of money presently due and payable. The inability to pay an undisputed debt as a rule may lead to a conclusive proof of the facts that the company is unable to pay debts.
Further, reliance was placed by Mr. Ali Raza on the following case--
(i) Trade and Industry Publications Limited v. Industrial Development Bank of Pakistan (PLD 1990 SC 768).
(ii) Industrial Development Bank of Pakistan v. Modern Poultry Farm Limited (1990 CLC 1030).
(iii) PICIC v. M/s. Indus Steel Pipe Ltd. (1993 MLD 94)
(iv) Messrs Habib Bank Limited v. Messrs Central Cotton Mills Ltd., (1998 CLC 474)
(v) Investment Corporation of Pakistan v. Messrs Glorex Textile. Limited (1998 CLC 731) {{URDU TEXT}}
5. In order to defeat the above winding-up petition, Mr. Arshad Tayyab Ali has raised the following objections:--
(a) The petitioner has no authority to file and prosecute the instant proceedings for winding-up.
(b) Petition is misconceived as it has been filed against a private limited company when in fact respondent is public limited company.
(c) That the proceedings are barred by lathes as the same was filed after a lapse of 12 years.
(d) That the claim is time-barred.
(e) That the claim of petitioner is doubtful and is not bona fide. Learned counsel for the respondent has placed reliance on the following cases:--
(I) - Shantilal Khushaldas & Bros. (Pvt.) Ltd. v. Smt. Chandanbala Sughir and another (1993) 77 Comp. Cas. 253).
(II) Diwan Chand Kapoor v. New Rialto Cinema (P.) Ltd. (1986) 6( Comp. Cas. 276).
(III) G. Loganayaki v. Moolangudi Chit Funds (Private) Ltd. (1979) 4c. Comp. Cas. 644).
(IV) Industrial Development Bank of Pakistan v. Sattar & Sons Ltd. (196' C.L.0 596).
(V) In re: Rishi Enterprises (1992) 73 Comp. Cas. 271).
(VI) P. Satyarazu v. Guntur Cotton Jute and Paper Mills Co., Ltd; (A.I. 1925 Madras 199).
(VII)P.R. Doraiswa mi Ayyar v. Coimbatore Easwara Sahaya Nidhi A.I. 1929 Madras 265).
(VIII) In re: Sulekha Works Ltd. (A.I.R 1965 Calcutta 98).
6. First, I would like to deal with the last objection of Mr. Arshad Tayy Ali that the claim of the petitioner is neither admitted nor a bona fide due cla as this question goes to the root of the controversy involved in this winding-proceedings. It is settled law that a Creditor, who wants winding up of company indebted to it, is required to show that a certain amount of money presently due and payable against such company and that such company unable to pay its debts only then the burden shifts upon the company with defending winding-up petition to raise legitimate and bona fide issue disputing the liability to pay. Such winding-up action which lacks bona fides and is intended to pressurize the company to pay the debt cannot succeed. If any reference is needed see Pakistan v. Standard Insurance Company Ltd; (1986 MLD 2762) Mullah Abdullah Bhai and 9 others v. Saria Rope Mills Ltd., (PLD 1971 Karachi 597) Trade and Industry Publication Ltd., (supra) Messrs Adage Advertisements Lahore v. Messrs Sheezan. International Limited., (1970 SCMR 184); Hashmi Can Company Limited v. K. K. & Company Private Limited (1992 SCMR 1006). With this view in mind, I would like to discuss the claim of the petitioner. It is an admitted fact that BCCI (SA) is at present under Liquidation and that the BCCI (Overseas Limited) which has its branches at Karachi stood guarantee on behalf of the Respondent. This BCCI SA (O.S) was amalgamated with the Habib Credit & Exchange Bank Limited, as a result of amalgamation policy framed under section 47 of the Banking Companies Ordinance, 1962. The petitioner was not able to file the original Bank Guarantee bearing No,388 of 1982 dated 4th July, 1982 in order to show what was the liability of the Respondent/D.F.S, and the BCCI (O.S). Working of all the three banks and other subsidiary of BCCI was Considered in detail by me in the case Asrar Hassan v. Habib Bank Limited and 4 others (PLD 1998 Karachi 167) where on the working of BCCI it was observed as follows:-- "However, the factual position that Mr. S.A Sarwana asserts is not so clear from the material that has so far come on record. The liquidation of BCCI (OS) and BCCI (SA) was ordered by the competent Courts on findings that .Their conduct was not overboard. Even in the present case, if it is true as Mr. S.A. Sarwana contends that the plaintiff was serving abroad, then the fact that the loans made to the plaintiff were disbursed through BCCI (Pakistan) at Karachi and the title documents were retained by BCCI (Pakistan) calls for detailed enquiry as it may well be that the activities of all the BCCI entities were so intertwined that the doctrine of piercing the corporate veil may be attracted. (For reference see the case of Union Council, Ali Wahan, Sukkur v. Associated Cement (Pvt) Ltd. (1993 SCMR 468).
7. From the documents filed by the petitioner, the respondent does not appear to be indebted to any other company. Statement of accounts shows that the respondents was earning profit during the period ended on 30th June, 1997. On 21-4-1998, the Official Assignee was appointed Commissioner to inspect the warehouse and show room of the respondent D.F.S. Who has filed his report which indicates that on 29-4-1998 when the Official Assignee visited the warehouse/show room the Bank Balance of the respondent with the different Banks was US $ 4,22,415.45 and rupees 2,92,95,180.43. In addition to that it was disclosed, to the Official Assignee that the Respondent Company has two immovable properties at Islamabad measuring 7200 square yards. Details of goods alongwith its value have also been filed. According to these inventories, the value of goods lying at the Display Centre at Karachi was assessed at Rs,1,29,25,449.01. The goods lying at delivery centre as per Annexure-B to the report were valued at Rs,1,19,64,329.54. Official Assignee has also filed statement of Bank balances of the respondent/D.F.S. None of these seven Banks as mentioned in the said statement have any account of respondent's company running in debit. All banks have shown credit outstanding. It is admitted by the Petitioner that the credit facility was extended in the year 1985; but when the last transaction took place, the entire petition is silent on this point. Again, it is admitted that there was no transaction between the petitioner and respondent after 1991, when the Bank was put under liquidation. BCCI (0.S) (now Habib Credit & Exchange Bank Limited) had also executed guarantee on behalf of the Respondent/D.F.S, but no action has been initiated by the petitioner for recovery of any claim, perhaps, due to the fact that there was a detailed agreement between the Liquidators on the one hand and the officials of the State Bank of Pakistan, which had resulted in merger of BCCI Karachi into Habib Credit & Exchange Bank. Mr. Arshad Tayyab Ali has referred to the contents of counter-affidavit where BCCI (SA) through its Liquidators have agreed for the full and final settlement of its claim with the BCCI (0.S). The transaction pertaining to the respondent/D.F.S was never made part of such agreement. The petitioner is not aware of the exact amount outstanding against the respondent; its claim is based on the figures as incorporated in the statement of the accounts of the Respondent. They neither filed the original copies of these each and every transaction which created liability to pay on the D.F.S, nor the original of the Bank guarantees. All these facts does not make it a good case for winding up the respondent/D.F.S as the amount claimed by the petitioner cannot be termed "amount due". The petitioner may have a good case for bringing a civil suit for recovery of money, but while seeking winding up of respondent/D.F.S, on the above claim, it will not be justified when in their own Annexure (Annexure- A) it is admitted that the respondent company comprises of three valuable organizations namely the Pakistan International Airlines having 55% of shares; Central Board of Revenue (Custom Welfare Fund) having 22-1/2% shares. While Overseas Workers Foundation have a total of 22-1/2% Shares. In such background, it cannot be said that resspondent/D.F.S is likely to go bankrupt and is unable to pay its debts, In my considered view, the objection raised by the respondent shows that there exists bona fide dispute as to the claim and its quantum.
8. As a result of above discussion, it is not necessary to consider the other legal objection, such as Power of Attorney or question of Limitation pertaining to the claim of petitioner, since I am satisfied that for the present proceedings, the claim of the petitioner is not bona fide. This petition merits dismissal (see Messrs. Metito Arabia Industries Limited v. Messrs Gammon (Pakistan) Limited (1997 CLC 230), Pakistan Industries Credit & Investment Corporation Limited v. Bawani Industries Limited (PLD 1998 Karachi 45) and Investment Corporation of Pakistan v. Messrs Noor Silk Mills Limited (1998 CLC 543). In my considered view, it would neither be just, nor fair and equitable to direct winding up of the respondent/D.F.S. Accordingly, this petition stands C dismissed. Consequently, Official Assignee's Report is taken on record and C.M.A. 523 of 1998 stands dismissed in view of the above order.