MUHAMMAD AQEEL SIDDIQI IN RE: Versus MUHAMMAD AQEEL SIDDIQI IN RE:

ORDER

1. This is an application under section 316 of the Companies Ordinance, 1984, praying for leave to proceed with the suit bearing No. 353 of 1987, filed by Pakistan Kuwait Investment Company, Limited, the applicants in this Court on its original side against the company in liquidation and its guarantors for recovery of loan amount of Rs.27,93,984 and sale of security given by the applicants to the a company. The suit was instituted on 14‑4‑1987 and on 16‑8‑1987 order of liquidation of the company was passed, as stated at the Bar.

2. The official liquidator has filed objections to the application. In the objections he has stated that he cannot properly defend the suit without legal assistance, which will entail lot of expenses and that the creditors can always file their claim before him, which can be examined and admitted by him in accordance with the provisions of the Companies Ordinance.

3. In my view this objection is not sufficient to refuse the prayer for firstly, the learned official liquidator stated at the Bar that the company in liquidation has assets and out of the sale‑proceeds the fees of advocate, if engaged to defend the suit, can be paid; secondly, the Official. Liquidator can himself appear before the Court and if he finds the claim just and proper he can admit the same and in such a k case, advocate will not have to be engaged. In any case, where a i suit to enforce a mortgage or security upon the company's property , is filed normally leave to proceed with the suit is granted particularly r in cases where a guarantor or guarantors are also joined as parties ; to the suit because presence of both the company in liquidation a represented by liquidator and guarantor or guarantors is either ‑necessary or proper in order to effectually and completely decide all I questions involved in the suit. I may here quote a passage from "Ghosh on the Company Law" (Pakistan Edition, 1977), which reads as follows:‑‑

4. "Proceedings will be, allowed to continue where they are to enforce a mortgage or security upon the company property or where the company is a necessary party to an action against other persons. (Emphasis supplied), or where an action is the most convenient method of trying a question, or where a share-holder has commenced proceedings for recession and rectification of the register before the winding up, or where the claim is for specific performance or for recovery of possession."

5. I, therefore, grant leave to proceed with the suit but on the condition that the applicants shall not claim the cost of the suit against the company in liquidation.

6. M.B.A./M‑341/K Order accordingly.