' The petitioners who are directors of Messrs Khurshid Brother (Pvt.) Limited, Faisalabad seek its winding up mainly on three grounds. Firstly, that the Company is bankrupt and is unable to pay its liabilities towards banks. Secondly, that, the substratum of the Company has extinguished and it has failed to function and run the business and stands closed for the last so many years. Thirdly, that it would be better that the company is wound up as none of the shareholders is in a position to invest money to run its affairs.
2. On presentation of the petition for winding up on 24-11-1993, notices were issued to their bankers four in number including Emirates Bank International Limited, Bank of Credit and Commerce International (Overseas) Limited, Bank of Oman and Muslim Commercial Bank Limited. Notices were also issued to Corporate Law Authority, now represented by Securities and Exchange Commission. In their replies they opposed winding up of the Company on the ground that the Company owned large sums to the aforesaid bankers. M/s. Emirates Bank International Limited also opposed the prayer for winding up. In their detailed reply they have stated that this petition is a cloak not only to avoid payment to the bankers but also to forestall revenue proceedings pending against the petitioner-Company. It is further stated that Messrs Big Wealth Company Hong Kong in fact was a Company flouted by the two petitioners/ directors in Hong Kong to which fictitious exports were made in order to retain huge amounts of foreign exchange abroad. Earlier the petitioners as a ground for winding up had stated that most of their investment had been lost and most of their funds were struck off while dealing with Messrs Big Wealth Hong Kong. The creditor bank has also pointed out that their suit for recovery of Rs,10,72,213 was pending before the Judge Banking Court, Faisalabad and that they had also obtained a decree against the directors from the High Court of Justice, Queen's Bench Division, ' Commercial Court, London. The claim of the Company that in order to discharge their liabilities the directors had disposed of their valuable commercial properties situated at Faisalabad is also disputed. It is pointed out that in fact in order to avoid payment to secured bankers and to defraud them the commercial properties mentioned in the petition were transferred to family members in a clandestine manner.
3. I have heard the learned counsel for the parties. The legal as well as factual objections to the winding up petition made by Messrs Emirates Bank International Limited appear cogent and relevant. Their claim that Messrs Big Wealth, a Company incorporated at Hong Kong was owned and operated by the two directors of the Company has not been disputed. In the petition it was stated that most of the exports made to the aforesaid Company proved to be total loss and the funds of the Company went down the drain. As noted earlier, it is the case of the creditors bank that if the veil of incorporation is lifted then the two petitioners/directors will emerge as owners and beneficiaries of both the Company sought to be wound up and the one incorporated by them in Hong Kong. The objection of the said creditor bank that incorporation of the Company in Hong Kong and export of consignment to it was made in order to drain out foreign exchange also finds no rebuttal from the petitioners/directors. The pendency of suits for recovery by a creditor banker and the passing of a decree against the directors by the High Court at England is again not disputed.
4. In the given situation I will agree with the respondent/Banks that the petition has been moved only in order to create a legal defence against the decrees already issued against the Company sought to be wound up or the suits for recovery pending before different Courts. Therefore, I am of the view that it will not be just and equitable that the Company should be wound up.
5. Petition rejected.
Petition rejected.