BEG UM ANWAR SULTANA vs ASSOCIATES Ltd., FAISALABAD and 6 others
This matter arises from a petition for leave to appeal directed against the dismissal of an Intra-Court Appeal by the Lahore High Court, which upheld the sale of a factory belonging to a company under winding-up proceedings. The core legal question involves the legality and protection of a sale of company assets conducted by the Income-tax Recovery Officer during winding-up proceedings, and whether the High Court correctly adjudicated upon setting aside or upholding the said sale under the Companies Act. The Supreme Court of Pakistan granted leave to appeal to examine the correctness of the High Court's adjudication, directing that the security be deposited and the limited stay already granted to continue.
- Whether the High Court correctly adjudicated the matter regarding the sale of company assets by the Tax Recovery Officer during winding-up proceedings?
- Can an application be maintained under section 183(5) of the Companies Act for the quashment of notices concerning company property sold during tax recovery proceedings?
- Section 183(5), Companies Act
ORDER
1. ' USMAN ALI SHAH, J.--Leave to appeal has been sought by the petitioners against the dismissal of the Intra-Court Appeal filed by Begum Anwar Sultana (now dead and represented by her legal heirs) by the Lahore High Court.
2. ' Petitioner Begum Anwar Sultana (now dead and represented by her legal heirs) submitted an application on 8-7-1980 for winding up of the Company and appointment of a Liquidator.
3. Consequently, a Liquidator was appointed on 26-11-1980 for the purpose. The Income-tax Recovery Officer initiated recovey proceedings against M/s A.B.M. Associates, respondents herein, as a, result of which a proclamation was made in the press on 2-4-1980 for the sale of Muslim Ginning Factory which fell into the share of Begum Anwar Sultana and on 15-9-1980 tenders were invited for the sale of the said factory. Two persons offered their tenders out of whom one was an old lessee of the concern and the other was his son i,e. Respondent No, 6 herein and ultimately, the said factory worth Rs, 70 Lacs was sold away in favour of the respondent No, 6 only for a sale consideration of Rs, 10 lass. Begum Anwar Sultana moved a petition for stopping the Tax Recovery proceedings and the respondent No,6 also filed an application claiming the protection of the sale of the factory in his favour by the Tax Recovery Officer, under the Companies Act. The stay application of the petitioner was rejected on 16-7-1980.
4. ' On 26-11-1980, the learned Judge seized the winding up matter, appointed the Official Liquidator and directed him to take charge of all the assets of the factory with an immediate effect.
5. Respondent No,6 moved an application under section 183(5) of the Companies Act for quashment of the said notice on the plea that the assets of the Muslim Ginning Factory no more belonged to A.B.M. Associates Limited as he has lawfully purchased it. Begum Anwar Sultana also filed application for setting aside the sale of the said factory in favour of the respondent No,
6. A learned Single Judge who heard both the matters accepted the application of respondent No, 6 and rejected that of the petitioner. The petitioner then filed Intra-Court Appeal in the Lahore High Court which was also dismissed by a Division Bench, vide impugned judgment.
6. After hearing the learned counsel for the petitioners, we consider it a fit case for the grant of leave to appeal to examine whether the learned High Court has correctly adjudicated the matter involved in this petition.
7. ' Security is Rs, 5,000.
8. ' Limited stay already granted on 12-2-1986 is to continue. Appeal is to be prepared on the present record with direction to the parties to add necessary documents, if any.
Cited by 1 case
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