FIRST ISLAMIC MODARABA vs DAWOOD CAPITAL MANAGEMENT LIMITED Ss — 2026 CLD 731 KARACHI-HIGH-COURT-SINDH

Case information

Citation: 2026 CLD 731 KARACHI-HIGH-COURT-SINDH
Court: Sindh High Court
Year: 2026
Reporter: CLD
Parties: FIRST ISLAMIC MODARABA vs DAWOOD CAPITAL MANAGEMENT LIMITED Ss
Subject matter: Criminal
Provisions referred to: S. 306; Limitation Act (IX of 1908); Companies Ordinance

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

Judgment text as reported

FIRST ISLAMIC MODARABA VS DAWOOD CAPITAL MANAGEMENT LIMITED Ss.305 & 306---Limitation Act (IX of 1908), First Sched., Art.181---Finance facility default---Delayed recovery action---Winding-up petition, belated filing of---Legal notice issued after lapse---Winding-up petition on time-barred debt, filing of---Impermissibility---Petitioner extended a Musharika finance facility of Rs.20 million to respondent in 2005, which remained unpaid---Despite reminders and a legal notice in 2010 no recovery was made leading to the filing of a winding-up petition---The petition was filed in 2010 over five years after the cause of action arose---Primary question requiring determination was “whether the winding-up petition based on an unpaid financial facility could be maintained when the underlying debt was time-barred, and if issuance of a statutory notice under Section 306 could extend or revive limitation?”---Held: When the time for recovery of a debt was itself time barred, any notice subsequent thereof was of no effect---Furthermore, S. 306 of the Companies Ordinance 1984, in itself provided that where such a notice was sent, the Company had thirty (30) days within which to settle such claim, after which a creditor could proceed towards the recovery process---Even in this regard, as per the petitioner's own submission, the notice was sent by the petitioner to respondent No.1 on 01.07.2010, whereas the petition was filed in October, 2010, i.e., 03 months post issuance of the notice---This negligence of approaching the Court three months post sending of their notice also remained unexplained, and showed a pattern of lethargy on part of the petitioner---Petitioner had approached the Court belatedly using the guise of seeking winding-up, in an effort to defeat limitation---Petition was barred under the law of limitation and same was dismissed, in circumstances.

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