' This petition under section 305 of the Companies Ordinance, 1984 read with section 309 thereof and Rule 75 of the Companies (Court) Rules, 1977, has been filed by Additional Registrar of Companies, seeking winding up of the respondent company.
2. The winding up of the company is sought on the grounds, that the company defaulted in holding Eight Consecutive Annual General Meetings since the year 1996, it has suspended it's business for the last eight years, the company was not maintaining its' registered office at the notified address, the company was continuously sustaining losses, the company has failed to file statutory returns and no dividend was paid to the share holders.
' Accordingly the company was served with a show-cause notice, dated June 11, 2003, whereby it was afforded an opportunity to appear before the Commission on June, 25, 2003.
' Since neither any reply to the show-cause notice was filed, nor any one appeared before the Commission, sanction was accorded to the Registrar vide order, dated June 25, 2003 to file the instant petition.
3. In pursuance of the notices, objections to the petition were filed by one Zakaria Ghani claiming himself to be the major share holder of the company.
' Legal objections were raised to the effect that the proceedings were illegal having been taken without proper sanction, and the sanction was void and invalid, the same was accorded without affording opportunity of hearing to the company.
' Regarding the factual aspects, it was admitted that "due to unavoidable circumstances, the meeting could not be held". It was also admitted that "the working of the company was affected" the reason being pendency of criminal cases against the Directors. It was also not denied that election of Directors could not be held, by furnishing an explanation that Executive Director of the company Tariq Ahmed has filed a suit against his termination. Regarding the maintenance of office at notified address, it was submitted that it was illegally sealed by the landlord.
4. Arguments have been heard.
5. Mr. Jhamat Jethanand learned counsel appearing for the respondent resisted the winding up on the sole ground that the show-cause notice was not served upon the company. The company was not afforded opportunity of making representation before the sanction was granted and that no investigation in the affairs of the Company was undertaken to reveal the Commission of acts of omission and commission as enumerated in clause (c) of section 309 of the Ordinance.
6. The arguments addressed by learned counsel for the parties have been anxiously considered and the material placed on record has been scrutinized.
7. The contention raised by learned counsel for the respondent is absolutely untenable and devoid of force. In para. 13 of the objections filed on behalf of respondent, it is clearly mentioned that the respondent-Company was served with a notice to appear before the Commission. The Advocate for the respondent sent an application for adjournment, which was granted and subsequent date was intimated. Again an application was sent as the Advocate of the Company was busy before this Court.
' In presence of such categorical admission on behalf of respondent-Company it does not lie in their mouth to say that the Company was condemned unheard and that no opportunity of hearing was provided to them before passing the order of sanction authorizing the Registrar to institute instant petition.
8. It hardly needs to be emphasized that the purpose of serving a show-cause notice and the logic behind that was, manifestly to bring into the knowledge of the person concerned the allegations which he was required to explain, and to provide the party/person charged with certain acts of omission and commission, an occasion to enable it to vindicate its position vis-a-vis charges/ allegations.
' In the present case it could not be pleaded on behalf of the respondent-Company that they were not in knowledge of the allegations which they were required to clarify. In case a party has been offered an opportunity of hearing and showing cause but party itself chooses not to avail that opportunity none else could be blamed and/or held responsible for the eventualities and the consequences. In the case in hand, despite, service of show-cause notice the defendant- Company opted not to file any reply to the show-cause notice. The objections itself adequately and manifestly reveal that at least two opportunities were provided to the Company for the said purpose, but those were not availed of.
9. The perusal of the order passed by the Commissioner under subsection (b) of 309 read with section 305 of the Companies Ordinance, 1984 makes it abundantly clear that it was passed after scrutinizing the records of the Company. Entire state of affairs of the Company has been elaborately discussed in the above order which says that the accumulated losses of the Company till 1994 amounted to Rs.25,29,110. The order passed by Commissioner for grant of sanction is substantiated by cogent reasons, it has been passed after proper application of mind and seems to be based on legal dictates, absolutely valid and logical grounds.
10. The show-cause notice issued to the Company contains two charges:--
(i) That the Company committed default in not holding two Consecutive Annual General Meetings, as none was held since, 1994.
(ii) The Company suspended its business and its operation was closed since the year 1994.
' In their reply/objections filed before this Court the respondent-Company has admitted both the charges In para. 5 of their objections they have admitted that meeting could not be held, advancing the pretext of unavoidable circumstances.
' In para.7 of their objections which relate to business and operation of the Company, it has been admitted that due to filing of criminal case against the Directors the working of the Company was effected. It has also been admitted that since 1997 the office of the Company has been sealed. It is also not denied that the election of Directors was not held as alleged in para.9 of the petition, thereby offending provision of 178/180 of Companies Ordinance.
11. Taking an overall view of the case, in particular the prolonged non-functioning of the Company, mounting of losses, coupled with other manifest violations as apparent from the circumstances, I am satisfied that it is just and equitable that the Company should be wound up. Resultantly, the Company is directed to be wound up, in accordance with the provisions of the Ordinance.
12. Since Official Assignee is pre-occupied and is already Official Liquidator in a number of companies it does not appear appropriate to put more burden upon him.
13. Accordingly Mr. Sanaullah Khan Ghouri, Additional Registrar (0.S.) of this Court is appointed Official Liquidator. The Official Liquidator shall exercise all powers available to him under Companies Ordinance, 1984 to discharge his duties. The fee of the Liquidator shall be borne out of the funds of the Company.