SABIR AHMAD and anothers vs Messrs NAJMA SUGAR MILLS LIMITED
This matter arises from a petition seeking the appointment of a provisional manager for the respondent company, Messrs Najma Sugar Mills Limited, on grounds of commercial and technical insolvency, loss of substratum, and inability to meet current financial demands. The core legal question is whether a provisional manager should be appointed at an interim stage based on allegations of financial distress and operating losses before the final disposal of the winding-up petition. The Lahore High Court held that allegations regarding commercial insolvency, loss of substratum, and running at a loss are matters relevant to the final disposal of the winding-up proceedings and do not warrant the interim appointment of a provisional manager merely because a company is incurring losses. The court laid down the principle that interim relief such as the appointment of a provisional manager will not be granted at a preliminary stage when the underlying grounds of insolvency and loss of substratum require detailed examination during final arguments.
- Whether a provisional manager can be appointed at an interim stage solely on the ground that a company is running at a loss?
- Are allegations of commercial and technical insolvency relevant to the final disposal of a winding-up petition rather than interim applications?
- Whether the loss of a company's substratum justifies the immediate appointment of a provisional manager before final arguments?
ORDER
1. ' Learned counsel for the petitioners in support of appointment of a provisional Manager relies upon re: PICIC v. National Silk and Rayon Mills Limited (PLD 1976 Lah. 1538), re: Maqbool Elahi v. Rasul & Co.
2. Limited (PLD 1970 Lah.539), re: United Bank Limited v. Pak Wheat Products Ltd. (PLD 1970 Lah. 235), re: National Bank of Pak: an v. Punjab National Silk Mills Ltd. (PLD 1969 Lahore 194) and re: Muhammad Ismail Ali Charan v. Pak Por C amic Limited (PLD 1973 Kar. 491).
2. The submission made in that regard viz. Inability of the respondent to meet its current demands, being commercially and technically insolvent, that substratum of the company has gone and that it is not meeting its current demands are .Relevant to the final disposal of the winding up. Therefore, it does not appear appropriate to make a direction at this stage merely for the reason that a company is going in loss. All these aspects will be considered at the time of final arguments.
3. Therefore, for the moment this application cannot be granted. Dismissed.
4. Main Case ' To come up for final arguments on 19-10-2004
Cited by 2 cases
- Messrs PAK BRUNEI INVESTMENT COMPANY LIMITED vs NEW ALLIED 2019 CLD 301
- Pervez Arshad & Muhammad Junaid Arshad vs Rauf Textile & Printing Mills 2019 CLD 72, 2018 SHC 808