1. ' On the request of Mohib Textile Mills Limited (Defendant No,1) and on the guarantee of its Directors; namely, Mr. Asif Saigol, Mr. Asif Saigol and Mr. Abid Saigol (defendants Nos.2 to 4) Pak-Libya Holding Company (Pvt.) Limited (plaintiff herein) extended Lease Finance Facilities to them. In connection with the aforesaid facilities defendant No,1 executed, inter alia, several Lease Agreements and Demand Promissory Notes while defendants Nos.2 to 3 executed Letters of Guarantee and Indemnity assuring payment of all sums due under the various Lease Agreements. The defendants committed breach of their promises and undertakings and after issuing legal notice to the defendants to pay the outstanding dues which were not responded to by the defendants, the plaintiff filed the present suit against the defendants for recovery of Rs,90,233,245 together with Markup, for possession of the Leased Machinery and Equipment, Permanent Injunction restraining the defendants from transferring, selling or dealing with the said machinery in any manner, and for losses and damages suffered by the plaintiff on account of breach of promise by the defendants.
2. ' After service of summons the defendants filed an application under section 10 of the Banking Act No, XV of 1997 for grant of leave to defend the Suit. While the proceedings were pending in this Court, the Lahore High Court at Lahore by its order, dated 28-10-1998 passed, inter alia, in C.O.
3. Nos.98, 100 and 103 of 1998 ordered compulsory winding up of Mohib Textile Mills Limited, (defendant No,1) and appointed Joint Official Liquidators of the company. In the order of winding up the Court observed that; "the Suits pending against the Company and its directors/ guarantors shall continue but execution proceedings shall remain stayed". On 15-1-1999 when the aforesaid fact was brought to the knowledge of this Court, the office was directed to issue notice to the Official Liquidators informing them about the pendency of this Suit against defendant No, 1 . Mr. Muhammad Afzal Awan, Advocate who was appearing for all the defendants was also directed to deliver a copy of such notice along with a copy of the Plaint to the Official Liquidators and supply proof of delivery of the notice to them. The hearing of the application for leave to defend on behalf of defendant Nos.2 to 4 was adjourned.
4. ' On 15-12-1998 Mr. Noorullah A. Manji, learned counsel for plaintiff was also directed to file a Fresh Statement of Account giving the break up of the amounts claimed from the defendants under various heads. He filed a Statement of Account as of 30-4-1998 showing an outstanding balance of Rs,62,358,094 after giving adjustment of Rs,32,428,579 paid by. Defendant No,1 to the plaintiff and excluding the Additional Charges of Rs,15,092,169 incorporated in the Statement.
5. ' On 11-2-1999 Mr. Afzal Awan for defendants sought time to file proof of having communicated the Court Order to the Official Liquidators and argued the case on behalf of defendants Nos.2 to 5. On the same day he accepted the Fresh Statement of Account filed by Mr. Manji and accordingly a Final Decree was passed against defendants Nos.2 to 4 jointly and severally in the sum of Rs,62,358,094 together with Markup at 18 per cent. Per annum (the rate demanded by the plaintiff's counsel and accepted by the defendants' counsel) from the date of Suit till the date of payment.
6. ' The matter has come up today for further proceedings against defendant No,
1. Mr. Awan has filed a signed Statement along with documents to show that he has communicated the Order of this Court to the Joint Official Liquidators about the pendency of this suit.
7. ' With regard to the proceedings against defendant No,1 Mr. Awan referred to section 316 of the Companies Ordinance, 1984 which reads as follows: "316. Suits stayed on winding up order. ---(1) When a winding up order has been made or a provisional manager has been appointed, no suit or other legal proceedings shall be proceeded with or commenced against the company except by leave of the Court, and subject to such terms as the Court may impose.
(2) The Court which is winding up the company shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of, any suit or proceeding by or against the company.
(3) On the basis of the above provision he submitted that the Court should not proceed against defendant No,1 until leave of the Lahore High Court which has ordered the winding up of the Company has been obtained. On reading the aforesaid provision it appears that as soon as a Court passes an order for winding up a company all legal proceedings by or against the company are stopped and cannot be proceeded without permission of the Court which passes the order of winding up. The permission to proceed with the pending proceedings can be given by the Court either in individual cases when such permission is sought or a general order can be. Passed stating that the pending all proceedings may be continued subject to such terms and conditions which the Court may deem fit and proper in the circumstances of the case. In my opinion, no leave of the Court in the present case is necessary because the Lahore High Court in its order, dated 28-10-1998 has stated that the suits pending against the Company and its Directors/ guarantors shall continue. After such unambiguous observations no further permission of the Lahore High Court is required.
8. ' Mr. Awan thereafter, contended that defendant No,1 Company is unrepresented as the - Official Liquidators have neither appointed him nor any other Advocate to defend the Company which is under liquidation. This contention of Mr. Awan is also not tenable because from the Order of the Lahore High Court allowing continuation of Suits against the company it is implied that the Advocates appointed or engaged by the company to defend it shall continue to perform their obligations. If such observations had not been made Mr. Awan would have been justified in contending that a fresh appointment or Vakalatnama from the Official Liquidators is necessary for him to represent the Company. From a bare reading of the Order of the Court allowing continuation of pending suits against the Company it is implied that the Court also granted permission to the respective Advocates to continue to perform their duties to defend the interests of the Company.
9. ' It would be appropriate here to refer to Order 3, Rule 4(2), C.P.C., relating to appointment of Pleader which reads as follows:--- "(2) Every such appointment shall be filed in Court and shall be deemed to be in force until determined with the leave of the Court by a writing signed by the client or the pleader, as the case may be, and filed in Court or until the client or the pleader dies, or until all proceedings in the suit are ended so far as regards the client."
10. In light of the above provision, an Advocate who is appointed by a party to represent him in Court undertakes to appear and plead for his client on all dates of hearing till such time he withdraws his power or his power is revoked by the client according to the Rules. In the present case neither Mr. Awan has withdrawn his power according to the Sindh Chief Court Rules nor the client (the Joint Official Liquidators herein) have revoked his power to defend the Company in these proceedings. In fact from the observations of the Lahore High Court it is clear that the power of Mr. Awan has not been determined and he has not been relieved from his responsibility to appear and act on behalf of his client i,e, defendant No,1 Company under liquidation. In the circumstances his appointment as an Advocate for the Company shall be deemed not to have been cancelled or revoked and shall continue to be in force.
11. Mr. Awan has already admitted his liability on behalf of defendants 'Nos.2 to 4 and a Final Decree in the sum of Rs,62,358,094 has been passed against them jointly and severally together with Markup thereon. In view of this position Mr. Awan concedes that the Fresh Statement of Account filed by Mr. Manji, learned Advocate for the plaintiff, is correct and that a decree against defendant No,1 may also be passed in the same terms. Consequently, the application for Leave to defend filed by defendant No,1 is rejected and the claim of the plaintiff is decreed against defendant No,1 as follows:--
(i) A Decree in the sum of Rs,62,358,094 together with Markup at the rate of 18 per cent. Per annum from the date of Suit till date of payment;
(ii) A Decree for possession of the Machinery and Equipment described in the Lease Agreements, dated 6-3-1994, 1-6-1994 and 14-11-1994 respectively; and
(iii) Costs of the Suit.
12. ' It is clarified that the decree shall be executable jointly and severally against all defendants.