KHALID SIRAJ TEXTILE MILLS LIMITED, LAHORE vs ADDITIONAL REGISTRAR OF COMPANIES, SECURITIES AND EXCHANGE COMMI

Fields are extracted from the reported citation and judgment text. Where a detail is not stated in the record, it is not shown.

KHALID SIRAJ TEXTILE MILLS LIMITED, LAHORE VS ADDITIONAL REGISTRAR OF COMPANIES, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN Ss. 301(m) & 304---Compulsory winding up of a company by Court which has shut down its business for several years---Scope---Court ordering winding up of company in haste by ignoring its revival business plan and the fact that it had become operational and profitable---Propriety---Petition for winding up the petitioner-company was filed by the Additional Registrar, Securities and Exchange Commission of Pakistan (SECP)---Court ordered compulsory winding up of the company on the ground that the business operations of the company had been shut down since November, 2013, which fell under section 301(m) of the Companies Act, 2017 ('the Act')---Held, that admittedly the company shut down its business in 2013 and despite all efforts the business remained closed till the year 2021---Company executed a business plan whereby they leased the factory for 3 years in order to generate funds, which was then to be reinvested in the company in order to make the factory functional---Recent financial reports tendered by the company showed that it had generated business and was making profit---Therefore, for all intent and purposes, the company had revived its business in the year 2021---Such revival took place between the time when the winding up petition was filed in 2019 and the final winding up order was passed by the Court in 2022---Fact that the SECP opted to ignore the revival plan reflected on their unnecessary focus on winding up the company rather than working on the revival of the company's business---In the present case, the SECP focused more on the fact that the business operations were shut down in November, 2013 notwithstanding the fact that they waited more than six years before filing the winding up petition and it took two years with just a few hearings for the order of winding up to be passed---Court acted in haste not only in passing an order for winding up but also ignored the contents of the (revival) business plan which indicated that the company had become operational and had made some profits as per its annual audit report of June, 2021---Over 350 persons were employed with the petitioner-company who would lose their jobs on the winding up of the company---All such facts were relevant to the winding up petition and in the very least, the High Court should have satisfied itself that the business remained closed even in 2022 when the order was passed---Petition for leave to appeal was converted into appeal and allowed, and impugned order of winding up passed by the High Court was set aside.

KHALID SIRAJ TEXTILE MILLS LIMITED, LAHORE vs ADDITIONAL REGISTRAR OF COMPANIES, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN Ss — 2022 CLD 1557 SUPREME-COURT

Case information

Judgment text as reported

Other judgments reported in 2022 CLD