NEW JUBILEE INSURANCE COMPANY LTD. vs THREE STARS HOSIERY MILLS (PVT

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NEW JUBILEE INSURANCE COMPANY LTD. VS THREE STARS HOSIERY MILLS (PVT.) LTD. Ss.305 & 306---Petition for winding up of a company by a creditor, filing of---Company unable to pay its debts---Outstanding insurance premium, non-payment of---Notice of demand for deeming a company unable to pay its debts, requirement of---Scope---Non-issuance of notice of demand fatal for the case of creditor seeking winding up---Creditor seeking winding up of a company to prove that a company is unable to pay its debts---The entire case of the petitioner was that the respondent company should be deemed unable to pay its debts under clause (a) of S. 306(1) of the erstwhile Companies Ordinance, 1984 (the Ordinance) as it neglected to pay the outstanding insurance premium---Respondent company had pleaded that no such notice of demand was served on it---Held: Since the respondent company had pleaded that no such notice was served on it, to rebut that, the petitioner did not file any postal or courier receipt or any acknowledgment of the respondent company to show that notice was sent to or served upon it---The notice of demand contemplated under clause (a) of S. 306(1) of the Ordinance was required to be served on the respondent company, by causing the same to be delivered by registered post or otherwise, at its registered office---Since the said provision imposed a penal obligation upon the debtor company, it was to be construed strictly---Though the notice relied upon by the petitioner listed outstanding premium payable by four associated companies including the respondent, it was addressed only to the director of the respondent company, i.e. to an associated company and that too at Multan---It was neither addressed to the Respondent nor to the registered office of the respondent which was at Karachi---Even if the associated company was dealing with the petitioner on behalf of the respondent company, to seek winding-up of the respondent company under clause (a) of S. 306(1) of the Ordinance, the notice of demand had to be sent to the respondent company which was a separate legal entity from its associated company---It was apparent that the petitioner did not send any notice of demand to the respondent company as required by clause (a) of S. 306(1) of the Ordinance---Resultantly, the petitioner could not rely on Cl. (a) of S. 306(1) to raise the presumption that the respondent company was unable to pay its debts---Petition was dismissed, in circumstances.

NEW JUBILEE INSURANCE COMPANY LTD. vs THREE STARS HOSIERY MILLS (PVT — 2025 CLD 1708 KARACHI-HIGH-COURT-SINDH

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