ADDITIONAL REGISTRAR OF COMPANIES, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN vs KOH-I-NOOR EDIBLE OILS LI

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ADDITIONAL REGISTRAR OF COMPANIES, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN VS KOH-I-NOOR EDIBLE OILS LIMITED S. 310---Companies Ordinance (XLVII of 1984) [since repealed], S.316---Winding up order of company during pendency of execution proceedings---Stay in execution proceedings---Application for leave to proceed in execution proceedings was filed by the applicant/ZTBL on the ground that besides the company since execution petitions were also against guarantors and mortgagors, thus, leave to proceed with execution petitions could be granted---Validity---Person claiming to be a secured creditor cannot be compelled to prove his debt in liquidation; such person could stand outside the winding up proceedings and rely upon his security---When such creditor asks for leave to sue, such prayer should ordinarily be granted unless there are special grounds to support the contrary course---In a judgment and decree, in which the judgment debtors also included the individuals besides the company, the execution would ordinarily be allowed to proceed against individuals because winding up proceedings were against the company and not against the individual judgment debtors who were jointly and severally responsible---Decrees in favour of the applicant were not only against the company under liquidation but same were also against some other judgment debtors including guarantors and mortgagors---For recovery of claim of the applicant, High Court in winding up petition could auction the assets of the company and distribute the amount realized but it could not proceed against the properties of individual mortgagors and guarantors of applicant, who were also judgment debtors in the above execution petitions---In cases where the company is necessary party to the action but there are other defendants as well, the Court generally grants leave---Considering that mortgagors and guarantors of applicant could not be proceeded against in the winding up petition, the same principle should also be applicable to the execution to the extent of guarantors and mortgagors---High Court was not bound to grant permission as prayed for rather High Court while granting permission could impose conditions in leave granting order as it might deem fit and appropriate---Application was partially allowed and applicant was granted permission to proceed with the execution petitions only to the extent of judgment debtors, who were impleaded as guarantors and mortgagors, however, execution petitions would not proceed against company.

ADDITIONAL REGISTRAR OF COMPANIES, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN vs KOH-I-NOOR EDIBLE OILS LIMITED S — 2025 CLD 44 LAHORE-HIGH-COURT-LAHORE

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