' This is an application under section 305/306 of the Companies Ordinance, 1984 seeking compulsory winding up of Hamaliya Textile Mills (Pvt.) Limited respondent herein on the ground of latter's inability to pay its debts.
2. According to the facts stated in this petition the Bank of Credit and Commerce International (Overseas) Limited had in July, 1989 advanced loan for expansion and modernization of their Mills to the extent of Rs,54,200,000 as term finance facility vide sanction letter dated 30-7-1989. An agreement for finance was executed between BCCI and the respondent company. Various documents which have been mentioned in the petition were executed by the respondent to secure the repayment of loan. In July, 1991 liquidation proceedings took place against BCCI in England and Luxemburg. It appears that State Bank of Pakistan acting under Banking Companies Ordinance, 1979 prepared a scheme for the amalgamation of BCCI with another Banking Institution as a result thereof the liquidators of BCCI agreed to the amalgamation of BCCI Pakistan with Habib Bank Limited. This scheme was approved by the Federal Government under section 47(8) of the Banking Companies Ordinance, 1962 on 8-3-1992. The assets and liabilities along with business of BCCI was taken over by Habib Bank Limited on 14-3-1992.
3. The respondents who were defaulters in the repayment of loan were called upon to clear their liabilities. On 30-4-1995 while admitting their liability the respondents requested for renewal of the loan which, however, was not agreed to by the petitioner. Various efforts having been made failed to bring about any result. The petitioner served the respondent with a statutory notice calling upon it to repay the loan. That notice remained un complied with. According to the petitioner a sum of Rs,90,307,726 is outstanding against the respondent which is unable to pay the same and is, therefore, liable to be wound up.
4. In the written reply filed by the respondent various preliminary objections have been raised inter alia that the petitioner has already filed a suit for recovery of said amount; that the assets of the respondent company far exceed its liabilities and when the respondent company is a viable concern and as such should not be wound up.
5. The arguments of the learned counsel for the parties have been heard. It has been rightly pointed out by the petitioner's learned counsel that in the written statement/reply filed by the respondent the liability of the respondent towards the petitioners has not been disputed or denied.
Even otherwise, the claim of the petitioner is fully supported by various documents placed on record, inter alia, agreement for finance dated 4-9-1989, the agreement acknowledging the deposit of title deeds in order to create mortgage, demand promissory notes, letters of guarantee.
At this stage, it may be mentioned that originally the respondent company was named as ZMH Textile Mills (Pvt.) Ltd. And was, later on, renamed as Himalya Textile Mills Limited. Learned counsel for the petitioner has also placed or record a copy of decree passed by this Court as Banking Court in COS No,81 of 1998 for a sum of Rs,77.148 million on the basis of the consent of the parties. The decretal amount was to be paid in instalments as per schedule attached with the decree. He has stated that the respondent has failed to comply with the decree and failed to repay according to the schedule. The notice under section 306 of the Companies Ordinance, 1984 was served upon the respondent by the petitioner on 19-4-1995. In response to which the respondent undertook to clear the liability for the payment of outstanding dues and requested for approval of the repayment plan and withdrawal of notice. Again in its letter dated 16-5-1995 respondent No,1 admitted the liability and undertook to discharge the liability by making payment of Rs,1 million every month.
Unfortunately, however, these promises failed to bear any fruit.
6. Learned counsel for the respondent in the first instance submitted that the loan was advanced to the petitioner by BCCI and not Habib Credit and Exchange Bank Limited the petitioner herein which has no locus standi to file this petition. It was pointed out that there is nothing on record to show that the petitioner had stepped into the shoes of the respondent.
7. In the written statement, it has been categorically admitted that the scheme for amalgamation of BCCI was duly approved by the Government of Pakistan and BCCI was amalgamated with Habib Bank Limited. This contention of the learned counsel has, thus, no force. It will be seen from a perusal of the written statement/reply filed by the respondent that no objection as to he locus standi of the petitioner has been raised nor the fact that the petitioner has stepped into shoes of respondent No,1 been denied. Furthermore, from the correspondence placed on record it is evident that after amalgamation of BCCI with Habib Bank Limited the respondent has been dealing with the petitioner and has been addressing letters to it seeking time for repaying of the loan amount due.
8. It was next argued by the respondents' counsel that the petition was not maintainable as a suit has been filed for recovery of the same loan on the basis of which this petition has been instituted by the petitioner, before the Banking Court. However, learned counsel for the respondent is unable to show any law which bars the petitioner from seeking winding up of the company on the ground of its inability to pay the debts on account of pendency of suit for recovery of money. On the other hand, the Companies Ordinance, 1984 visualizes the situation where the suits have already been filed by or against the company and provides in section 316 that on order of winding up being passed the proceedings in the suit would be stayed. Reference may be made to Messrs Industrial Development Bank of Pakistan v. Messrs Trade and Industries Publications Limited 1989 M LD 374. Be that as it may, this discussion has now become academic inasmuch as the suit filed by the petitioner has since been decreed as mentioned above by this Court as Banking Court on 8-7- 1998.
9. It was lastly argued by the learned counsel that the assets of respondents are in excess of its liability and as such the company cannot be wound up. This contention is against with any force.
The mere fact that the company owns certain properties or fixed assets is not of any consequence while considering the question as to whether or not the company is unable to pay its debts. On the other hand, what is to be seen is as to whether the company is in a position to meet its current obligations and liabilities. The answer to this question in the present case has to be in negative. It is to be seen that despite the notice served upon the respondent it failed to discharge its liabilities and as such a presumption arises under section 306 of the Companies Ordinance, 1984 that the company is unable to pay its debts. Furthermore, the decree passed by the Banking Court had also remained unsatisfied. In Messrs Sindh Tech. Industries Ltd. v. Messrs Investment Corporation of Pakistan 1998 SCM R 1533 it was held that the company which has failed to discharge its liability within the statutory period, shall be presumed to be unable to pay its debts.
' In view of the above, this petition is allowed. An order of winding up of respondent No,1 company is passed. Mr. Iftikhar Ahmad Sipra, Advocate and Mr. Nazir Hussain Taskin, Advocate are appointed as official liquidators with a direction to take over the assets and books of the company. They shall proceed with winding up of the company and submit their report within one month.
' To come up on 30-11-1998.