1. ' MUSHIR ALAM, J.---Through this appeal under section 10(2) of the Companies Ordinance, 1984. The petitioner has impugned judgment, dated 19-12-1996, passed by learned Single Judge of this Court in J.M. 17 of 1994, dismissing the petition filed by the appellant for winding up of the respondent No,1 Company.
2. ' Brief facts, giving rise to this appeal are that, the petitioners claim to be shareholders in respondent No,1 Company i,e, Messrs Journalist Publications (Pvt.) Ltd. Winding up petition was filed on the ground inter alia, that the company was unable to pay its debts, that the affairs of the respondents were being conducted in oppressive manner and true and correct accounts were not being maintained. It was claimed that the petitioner's predecessor Afzal Siddiqui was granted declaration for the publication of newspaper Amn' who died on 16-4-1992. It is claimed that the shares of the deceased devolved on the petitioner and the appellant No,2 was elected as Director.
3. It was alleged in the winding-up petition that the respondent No,1 company failed to pay debts of Rs,34,04,590 to the petitioner which was advanced by the predecessor to the Company and furthermore a sum of Rs,11,91,05 are also due and payable to the petitioners. Such factual allegations were denied by the respondent. It was alleged that the predecessor was repaid the amount against acknowledgement and nothing is due and payable. Mr. Rizwan Amed Siddiqui learned counsel for the respondent supported the impugned judgment and contended that nothing was due and payable and made an offer at bar that the petitioner may approach the respondent No,1 to prove their claim and the respondent No,1 is still prepared to settle the amount if any, if found due and payable, to their satisfaction. It was further contended that the amount allegedly due was disputed and recourse to winding-up petition could not be had. In support of his contention he relied upon Brother Steel Mills Ltd. And others v. Mian Ilyas Miraj and 14 others PLD 1996 SC (543) (552) and Messrs Platinum Insurance Company Limited v. Daewoo Corporation, Sheikhupura through Director, Administration and Finance (PLD 1999 SC 1(22). We have heard the arguments and perused the record. For bringing a winding up petition on the ground inter alia that the Company is unable to pay its debt a creditor must show that the Company is in debited in a sum exceeding one per cent. Of its paid-up capital or Rs,50,000 whichever is less and said debit has not been cleared despite service of 30 days' notice upon the Company. A Company is "deemed unable to pay its debt" in terms of section 306 of the Companies Ordinance, where a creditor has served a notice on the company and made a demand under his hand requiring the company to pay the same and if the Company for 30 days thereafter, neglected to pay the amount or to secure or to compound it to the reasonable satisfaction of the creditor. Unless the statutory demand as envisaged under section 306 of the Ordinance, 1984 is made neglect of the company to pay the debt cannot be made the basis of presumption that the company is unable to pay its debts. Mr. Aziz Khan, Advocate, fairly conceded that no such notice under section 306 was served on the company. Even otherwise, a company cannot be regarded as unable to pay its debt within the meaning of section 306 of the Ordinance, 1984, simply because it has not paid the alleged debt which is disputed and the creditor has not so far established such debts by bringing any action in the Court of law. In the case Messrs Platinum Insurance Company Limited v. Daewoo Corporation, Sheikhupura through' Director, Administration and Finance (PLD 1999 SC 1) at page 22 it was held that "where a debit is disputed and is not established otherwise, then a debitor cannot resort to winding-up as a tool to coerce a Company to pay a disputed amount and in such case remedy would be by way of suit for the recovery of the amount and not a petition for winding-up".
4. ' It was further urged that the affairs of the Company were mismanagement and accounts were not properly maintained. Such contentions were dealt with by the learned Single Judge in detail and the discrepancies as per auditor's report for the year 1990 were pointed out to emphasise that same are false. Learned Single Judge, rightly observed that the auditor's report for the year 1990 pertains to the period when late Afzal Siddiqui was one of the Directors and directly involved in finance and administrative management of the Company. Petitioners can, therefore, hardly make any grievance on this account. As far the grievance of the appellant in relation to the discrepancies in the Income Tax Return was concerned, such concern was rightly dispelled by the learned Single Judge holding that such issue could be raised before the competent Authority.
5. Finding no merit in this petition the same was dismissed vide short order, dated 17-1-2002 and above are the reasons for the same.