MALIK MUHAMMAD QAYYUM, J. - The petitioner is a leasing company. Under an agreement with the respondent, it had leased out certain equipment mentioned in para 7 (i) of this petition on the terms and conditions contained in the Equipment Lease Agreement dated 18.12.1991. A salient feature of this agreement was that agreed lease rental of Rs.194,915/- was payable on 20th of each month. The period of lease was for four years. A sum of Rs.700,000/- was deposited by the respondent as security for due performance of the agreement. The agreement stipulated that in the event of default, the petitioner shall have right to take possession of the equipment forthwith, terminate the lease and demand from the respondent the full amount of the agreed loss value and in addition thereto to claim compensation from the respondent company for all losses and damages.
2. According to the case of the petitioner, the respondent company failed to pay the lease rentals and as a result thereof, at the time of the filing of this petition a sum of Rs. 1,468,300/- was due and payable by the respondent company. The petitioner has been calling upon the respondent company to make payment of the aforesaid outstanding amount and in this behalf a statutory notice dated 8.4.1995 was also served, In reply to the notice, the respondent admitted its liability vide its letter dated 18.10.1994 and stated that it could not pay due to crises in the textile industry. At its request, the agreement between the parties was re-scheduled on 28.12.1994 but the rescheduled payment has not been made. The petitioner again on 17.6.1995 served a notice upon the respondent company but that notice has re-mined un-complied with, It may be stated here that two post-dated cheques were issued by the respondent but those were dishonoured.
3. In the reply filed by the respondent neither the receipt of the machinery nor the liability to pay lease rentals has been denied. On the other hand, general crisis in the textile industry, which according to the respondent, amounts to act of God, has been pleaded to claim frustration of the contract in view of doctrine of force majeure, It has further been stated in the reply that the amount claimed is exaggerated and mark up upon mark-up has been charged. Another plea taken was that as a civil suit has already been filed by the petitioner against the respondent, this petition is not maintainable. Second objection raised was that the lease rentals, do not amount to outstanding debt and as such the petitioner is not a creditor.
4. So far as the question of filing of suit is concerned, no discussion need be made and reference to Messrs Sindh G/ass Industries Ltd., Karachi Vs. Messrs National Development Finance Corporation, Karachi and two others (PLD 1996 SC 601) would suffice wherein it has been ruled that the pendency of the suit is no bar to filing a petition for winding up unless it is proved that it has been filed merely to pressurise the debtors and without bona fide intention.
5. Now coming to the question as to whether respondent company is unable to pay its debts, it may be stated that the respondent has not denied the execution of the lease agreement between the parties or agreement for rescheduling. 0n the other hand, a reading of the reply itself shows the inability of the respondent to pay its debts virtually stands admitted. The main thrust of the respondent is on the financial crisis prevailing in the industry in general and textile industry in particular, which, according to the respondent, amounts to force majeure. However, the learned counsel for the respondent is unable to substantiate the contention as to how the crisis in the textile industry would amount to act of God, resulting in the frustration of contract between Parties.
6. The fact that the lease rentals are due and payable stands established on the face of the record.
Furthermore,: I the letter dated 18.10.1994, the respondent had admitted its liability to pay the outstanding amount and requested rescheduling of the amount which was done on 28.12.1994 but again the liability was not discharged. Apart from the presumption which arises on account of non-compliance with the notice under Section 306 of the Companies Ordinance, 1984 that the respondent is unable to pay its debts, the aforesaid facts are sufficient to show that the respondent is unable to pay its debts.
7. So far as the question that the lease money is not a debt is concerned, I am unable to agree with the learned counsel for the respondent. If an amount is due under an agreement of lease, there appears to be no justification for not treating it to be a "debt" or the person claiming it to be a creditor. Under the agreement of lease a fixed amount is payable every month and on the expiry of each month and any amount which remains payable is an outstanding debt and vests the lessor with the status of a creditor.
8. In view of the above, this petition is allowed and an order of compulsory winding up of respondent company is passed arid M/s. Azar Latif Khan and Amir Rehman Warraich, Advocates are appointed as Official Liquidators with a direction to assume the charge and control of the company and its assets and proceed with its winding up in accordance with law.
To come up on 25.1.1999 for the report of the Official Liquidators.