| Case ID |
1408ec65-a249-4e3b-addd-b83bb6d5ce43 |
| Body |
View case body. Login to View |
| Case Number |
Judicial Company Misc. No. 30 of 2016 |
| Decision Date |
Apr 03, 2017 |
| Hearing Date |
Mar 30, 2017 |
| Decision |
The Sindh High Court approved the Scheme of Arrangement proposed by Gulshan Weaving Mills Limited, allowing the company to settle its outstanding liabilities with consenting creditors while clarifying that the scheme does not bind non-consenting creditors. The court emphasized that the interests of secured and unsecured creditors may align only to the extent of asset distribution, and that statutory rights of non-consenting creditors remain intact. The decision highlighted the need for a fair and equitable approach, ensuring that the rights of all creditors, especially those not consenting to the arrangement, are not compromised. The court reaffirmed that the scheme is effective only for those creditors who agreed to it, thus protecting the legal remedies of dissenting creditors against the company and its guarantors. |
| Summary |
In the case of Gulshan Weaving Mills Limited, the Sindh High Court addressed a significant matter concerning the enforcement of a Scheme of Arrangement under the Companies Ordinance, 1984. The petitioners sought approval for a compromise with their creditors to settle outstanding liabilities. The court's decision underscored the importance of creditor consent in such arrangements, affirming that while the Scheme could bind consenting creditors, it would not affect the rights of those who did not agree. This ruling serves as a critical reference point for future cases involving corporate restructuring and creditor rights, ensuring that all parties, particularly dissenting creditors, retain their legal avenues for recovery. The court's decision reaffirms the necessity for transparency and fairness in corporate dealings, highlighting the balance between facilitating company restructuring and protecting creditor interests. Legal professionals and companies alike should take note of this ruling as it sets a precedent for how Schemes of Arrangement are handled in the context of creditor consent and statutory rights. |
| Court |
Sindh High Court
|
| Entities Involved |
Bank of Punjab,
SECP,
Gulshan Weaving Mills Limited
|
| Judges |
MUHAMMAD SHAFI SIDDIQUI
|
| Lawyers |
Shoaib Raashid,
Mikael Azmat Rahim,
S. Imran Ali Shamsi,
Shahrukh Artani,
Haroon Shah
|
| Petitioners |
Others,
GULSHAN WEAVING MILLS LIMITED
|
| Respondents |
Not available
|
| Citations |
2018 SLD 471,
2018 CLD 389
|
| Other Citations |
Caravan East Fabrics Limited v. Askari Commercial Bank Ltd. 2006 CLD 895,
Commerz Bank AG v. Arvind Mills Ltd. (2002) 110 Camp. Cases 539 Gujrat,
Subramanyia v. Narayanswami AIR (38) 1951 Madras 48,
Venkataswami v. Kotilingam AIR 1926 Madras 184
|
| Laws Involved |
Companies Ordinance, 1984
|
| Sections |
284,
285,
286,
287
|