Sh. ALA UD DIN vs THE OFFICIAL LIQUIDATOR, THE CENTRAL EXCHANGE BANK
This matter arises from winding-up proceedings of the Central Exchange Bank Limited, Lahore, wherein the Official Liquidator found the petitioner liable as a contributory for unpaid call money, uncalled liability, and interest on shares. The petitioner challenged his liability under section 184/38 of the Companies Act, disputing the transfer of certain shares and claiming credit for payments allegedly made. The High Court dismissed the application after recording evidence on all factual issues. On appeal, the Supreme Court addressed whether the petitioner's liability as a contributory could be set aside based on disputed questions of fact regarding share transfers and uncredited payments. The Supreme Court held that the concurrent findings of fact by the High Court regarding the delivery of share scrips, registration in company books, and the lack of credible evidence for the alleged payments were rightly decided, and found no ground for interference. The key principle laid down is that the Supreme Court will not interfere with concurrent findings of fact in company liquidation proceedings regarding contributory liability unless a substantial legal error is shown.
- Whether the Supreme Court will interfere with concurrent findings of fact regarding contributory liability in company winding-up proceedings?
- Does the absence of a formal executed instrument of transfer invalidate shareholding when share scrips are delivered and the holder is registered in the company books?
- Can a receipt issued by a dismissed employee of a bank without proof of authorization establish a valid payment against uncalled liability?
- Section 184, Companies Act
- Section 38, Companies Act
1. SAJJAD AHMAD, J.-In proceedings relating to the winding U, up of the Central Exchange Bank Limited, Lahore (in liquidation), Li the Official Liquidator, namely, the State Bank of Pakistan, SG has found the petitioner to be liable as a contributory of A, the Central Exchange Bank in the sum of Rs.
2. 24,685-2-9 an account of unpaid call money, uncalled liability and interest on account of 1029 shares of the company of the nominal value of Rs. 50 each held by him. The petitioner applied to the High Court under section 184/38 of the Companies Act, denying his liability for the sum settled against him. He denied the valid transfer to him of 180 shares, and alleged certain payments having been made to the Bank, for which he had not been given credit. The Company Judge dismissed his application after record--ing evidence on all the issues that arose from the pleadings of the parties.
3. All the objections raised by the petitioner against his liability related to questions of fact, which have been duly considered by the High Court on the evidence produced, and have been found against the petitioner. Before us, the learned counsel for the petitioner urged that the Official Liquidator had failed to prove the transfer of 180 shares, as no instrument of transfer was executed in the petitioner's favour, as required by law. It is not denied, however, that the share-scripts of the aforesaid shares were made over to the petitioner, which he had himself produced before the Company Judge. He was also recorded as a shareholder of those shares in the .Company's books.
4. The other point urged before us is that the petitioner has not been given credit for the sum of Rs.
5. 4,600 in spite of the receipt, Exh. D. W. 2/5, produced by him, which bore the signature of Abdul Majid, who was at the tithe acting as the cashier of the Bank. The aforesaid Abdul Majid appeared as a witness and supported the petitioner's case on this point. The High Court has disbelieved the evidence of this witness, as he was a dismissed employee. Of the Bank and had been arrested on the charge of embezzlement. He- was employed only as a ledger-keeper at the time, and no effort was made by the petitioner to show that he was also acting as the cashier with entitlement to receive deposits on behalf of the Bank and to make over receipts thereof. The petitioner failed to summon the original pay-in-slip from the Bank, which could have furnished primary evidence of the deposit of the amount, if it had been made, as alleged by the petitioner.
6. As the contentions raised merely pertain to questions of fact, which have been duly considered and rightly decided in the High Court, we see no ground for interference. This petition is dismissed.