| Case ID |
160fa150-4870-4a2f-ac51-4eb4a469ae97 |
| Body |
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| Case Number |
Letters Patent Appeal No. 34 of 1952 |
| Decision Date |
Apr 15, 1953 |
| Hearing Date |
|
| Decision |
The court accepted in part appeal No. 37 of 1952 and ordered Saeed Ahmad to pay Rs. 10,000. Appeal No. 34 of 1952 was dismissed. The court held that the payment of Rs. 10,000 being made during the pendency of the winding up proceedings was void under section 227 of the Companies Act. The court emphasized that payments made after the presentation of a winding up petition cannot be validated unless under exceptional circumstances. The payment to Ghulam Dastgir was also deemed void as it was made after the winding up order and did not constitute a payment for work done for the company, thus reinforcing the principles of equitable distribution among creditors. |
| Summary |
This case involves Indo Enamel Works Ltd. in liquidation, which sought to recover funds from its directors Saeed Ahmad and Ehsan Elahi under the Companies Act, specifically sections 185 and 227. The court analyzed the legality of payments made during the winding-up process, emphasizing that any transactions involving company funds post-winding up must adhere to strict legal scrutiny to ensure fair treatment of creditors. The court ruled that payments made to directors post-petition were void unless validated by the court. This case highlights the complexities of corporate law and the protection of creditor rights during liquidation proceedings, making it significant for legal practitioners in corporate insolvency. |
| Court |
Lahore High Court
|
| Entities Involved |
Official Liquidator,
INDO ENAMEL WORKS LTD.
|
| Judges |
MUHAMMAD KHURSHID ZAMAN,
B. Z. KAIKAUS
|
| Lawyers |
Mahmood Ali,
Nazar Muhammad,
A. D. Malik
|
| Petitioners |
INDO ENAMEL WORKS LTD., (in liquidation) through Official Liquidator
|
| Respondents |
Saeed Ahmad,
IHSAN ELAHI
|
| Citations |
1953 SLD 27 = 1953 PLD 375
|
| Other Citations |
Not available
|
| Laws Involved |
Companies Act, (VII of 1913)
|
| Sections |
185,
227
|