' FALAK SHER, J.---Aggrieved by the granting of respondents winding-up petition (J. Miscellaneous 315 of 1994) perceived by section 305 read with 309 of the Companies Ordinance, 1984 for the appellant being unable to pay its debts and failure to commence its business since incorporation appointing the official assignee as the official liquidator by a learned Company Judge of the Sindh High Court, Karachi vide the impugned order dated 5-12-1995, present appeal was preferred solely urging the plea of lack of competency viz. The respondents being investors on profit and loss basis were not the creditors within the contemplation of the banked upon statutory provision thus were not competent to move the winding-up petition who had even failed to invest the covenanted sum.
2. Succinctly the resume of the necessary facts giving rise to the present appeal are that the appellant a Public Limited Company incorporated under the Companies Ordinance, 1984 under the name and style of American Marble Products Limited approached the Investment Corporation of Pakistan hereinafter referred to as the I.C.P., for financial assistance for their Syndicate Marble Manufacturing Unit situated at Hub Chowki, District Lasbella. Puruant whereto the I.C.P lead consortium affirming its approval vide letter dated 21-10-1986 executed agreements dated 15-5- 1985, 27-5-1986 and 12-4-1987 sanctioning loan facility in the nature of Long Term Participation Term Certificate (PTC) and LFM refinancing (SBP Scheme) in the form of investment amounting to Rs,9,5,88,000; Rs,1000,000 and Rs,3,000,000 respectively secured by a first continuing mortgage of all the present and future movable and immovable properties, uncalled capital, continuing floating charges on its current assets, created through Trust Deed, ranking pari passu with the mortgages, floating charges and hypothecations, if any, already in existence in favour of other creditors (2.02) disbursing profit at the fixed rate of 17% per annum of the face value of the PTC repayable in semi- annual instalment; to be treated as an item of expenses in the profit and loss account of the company (2.03); losses occasioned will first be adjusted against the existing reserves (2.04), the appellant shall redeem the P.T.C. In 12 half-yearly instalments commencing nearly two years after the commencement of commercial production (2.10) until the entire principal sum of syndicate investment of the PTC, the profit thereon and all other dues under the agreements, the Trust deed, the documents executed shall have been fully paid to the satisfaction of the syndicate or its members, the appellant shall neither alienate nor create any encumbrance on any Of its fixed assets with the previous permission in writing of the syndicate and on such terms and conditions as may be agreed to and prescribed in writing (2.12); in the event of any default the entire amount of Syndicate investment to become due and payable (5.01); covenanting to sell its assets to the I.C.P with resale agreement. Additionally executing demand promissory note dated 12-8-1986 and the Trust deed dated 10-6-1985 in favour of the respondents.
3. Upon failure of the appellant to honour its commitments was served with a statutory legal notice dated 21-7-1991 by the I.C.P. In the following terms:-- "On behalf of I.C.P. And other consortium members namely National Bank of Pakistan (N.B.P.), Habib Bank. Limited (HBL), United Bank Limited (UBL), . Muslim Commercial Bank Ltd. (M.C.B.) and Allied Bank of Pakistan (ABL), we give the following notice: ' That I.C.P-led Consortium invested an amount of Rs,95,88,000 in your company under Investment Agreement dated 15-5-1985 and also provided you financial assistance regarding sale and purchase of your company's fixed assets i,e, Rs,14,32,576 and Rs,34,82,976 under LFM financing agreements dated 27-5-1986 and 12-4-1987.
' That the above accounts are secured by way of registered mortgage of the fixed assets of your company.
' That you have failed/neglected/refused to pay the dues alongwith agreed mark-up despite repealed requests demands made to you from time to time.
' You are, therefore, hereby required to pay the dues alongwith the agreed mark-up within 30 days hereof failing which, we shall have no alternate but to file winding-up proceedings against you under section 306 of Companies Ordinance, 1984 in the Courts of Law at your sole risk as to costs and consequences which please note."
4. Which the appellant replied vide their letter dated 26th August, 1991 as under:-- "Subject: Payment of Dues ' Please refer to your Letter No,LD/LFT/275/A-408, dated July 21st, 1991 regarding payment of dues to I.C.P Limited consortium by our Company.
' This is to inform you that I.C.P.-led consortium had sanctioned to the company the following loans:--
(1) Rs,9,588,000 (PTC financing) under the agreement dated 15th May, 1985.
(2) Rs,1,000,000 under the LMM financing agreement dated 27th May, 1986.
(3) Rs,3,000,000 under the LMM financing agreement dated 12th April, 1987.
(4) An amount of Rs,6,668,000 (Rupees six million six hundred sixty-eight thousand only) had been disbursed by I.C.P.-led consortium out of total loan (PTC financing) amounting to Rs,9,588,000 the balance undisbursed amount had been withdrawn by I.C.P vide its Letter No,LD/90/4861 dated August 5, 1990.
' Further an amount of Rs,399,233 had been disbursed by I.C.P out of the total loan of Rs,1,000,000 (LMM financing) under the LMM financing agreement dated 27th May, 1986. Furthermore, no disbursement from the loan of Rs,3,000,000 had been made by I.C.P. Under the agreement dated 12th April, 1987. But the mortgage/charge had been treated by I.C.P. Over the properties and assets of the company for the amount of Rs,3,482,976 areas (sic) you have demanded vide your letter under reference to the amount of Rs,9,388,000 under the Investment agreement dated 15th May, 1985, an amount of Rs,432,576 (which is sale/purchase price of LMM financing amount to Rs,1,000,000 and Rs,3,482,976 (the resale/purchase price of Rs,3,000,000 of LMM financing under the LMM financing agreement dated 27th May, 1986 and 12th April, 1987 respectively).
' We understand that the amount quoted and demanded by you in your letter under reference are not correct and not acceptable to us."
5. The respondents syndicate exhausting the patience eventually filed the winding-up Petition No, J.M. 315 of 1994 under section 305 read with 309 on 22-11-1994 before the Sindh High Court at Karachi, pressing into service clauses (c) and (e) thereof in particular, text whereof is reproduced below:-- if the company does not commence its business within a year from its incorporation, or suspends its business for a whole year. ----- if the company is unable to pay its debts.
6. To which the appellant objecting joined issue as to maintainability contending that neither the respondents are creditors nor the appellant a debtor within the contemplation of the statutory provisions being invoked for the respondents as investors had invested the complained of sum on profit and loss basis.
7. The learned Company Judge disagreeing with the submissions made by the appellant opining the financial assistance arrangement as a loan on the basis of documents adduced granted the winding up petition vide the impugned judgment dated 3-10-1995.
8. Reiterating the submissions present appeal has been recoursed which we are afraid is utterly misconceived since conjunctive reading of the agreements, the demand promissory note, the trust deed and the registered mortgages, charges, hypothecations, and the correspondence exchange between the parties referred to supra, patently demonstrate the intendment of the parties and the nature of the arrangements made as to its juridical classification being a loan facility explicitly described as a loan in the agreement dated 15-5-1985 comprising Long Term PTCs and LFM refinancing by the syndicate secured through mortgage of all present and future movable and immovable assets, uncalled capital, continuing floating charges, to rank pari passu with the existing mortgage/ charges with other creditors at fixed rate of profit, repayable bi-annually to be credited as expenses in the profit and loss account of the company restraining the appellant from alienating any of its assets, during subsistence of the encumbrances or charges of mortgages in favour of respondents syndicate in the event of default rendering the entire sum due and payable upon expiry of the notice period. Factum whereof even has been admitted in reply to the notice rendering unambiguously clear beyond the realm of doubt that the availed facility by the appellant from the respondents syndicate for all interests and purposes was a loan fully secured through proper documentation and not investment simpliciter. Further admittedly the appellant since its incorporation nearly a decade ago has not even commenced its business.
9. Likewise the submission as to failure of the respondents syndicate to disburse the entire loan facility on time, is equally ill-founded since in terms of (3.01) it preconceives performance of the undertaking by the appellant, which is lacking.
10. Resultantly, no exception could be taken to the impugned order and the appeal being devoid of any substance, fails and is hereby dismissed. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.