| Case ID |
2030c845-e0c9-4a6e-870a-fba72746a648 |
| Body |
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| Case Number |
Civil Original No. 43 of 2011 |
| Decision Date |
Dec 05, 2019 |
| Hearing Date |
Dec 05, 2019 |
| Decision |
The Lahore High Court granted interim relief to the shareholders and contributors of Chenab Limited by allowing the company to resume its commercial operations temporarily until the disposal of the main application. The court emphasized that winding up should be considered a last resort due to its severe economic impacts, including loss of employment and revenue. The decision acknowledged the company's restructuring plan and the willingness of banks to assist in the revival process, underscoring the importance of commercial morality and public interest in its ruling. |
| Summary |
In the landmark case of Saudi Pak Industrial and Agricultural Investment Company Limited vs. Chenab Limited, the Lahore High Court deliberated on the complexities of winding up under the Companies Act, 2017. The court highlighted that winding up should be viewed as an extreme remedy, given its far-reaching consequences for employees and the economy. The case involved multiple stakeholders, including banks and legal representatives, advocating for the company's restructuring. The decision allowed Chenab Limited to resume operations, reflecting a judicial preference for rehabilitation over liquidation. The ruling is significant for its implications on corporate governance and commercial viability, encouraging distressed companies to explore revival options rather than face liquidation. The court's emphasis on commercial morality and public interest in preserving jobs and contributing to the economy is a vital precedent in corporate law. This case underscores the need for a balanced approach, ensuring that the interests of creditors are safeguarded while allowing companies to recover and thrive. |
| Court |
Lahore High Court
|
| Entities Involved |
SECP,
SAUDI PAK INDUSTRIAL AND AGRICULTURAL INVESTMENT COMPANY LIMITED,
Chenab Limited,
MCB Bank,
Pak Libya
|
| Judges |
JAWAD HASSAN, JUSTICE
|
| Lawyers |
Salman Aslam Butt, Senior Advocate Supreme Court,
Shoaib Rashid,
Hafsa Ahmad,
Manahil Khan,
M. Ali Khan,
Barrister Mian Sultan Tanvir Ahmad, Advocate Supreme Court,
Mr. Usman Ali Cheema, Advocate,
Abu Bakar, Advocate,
Majid Ali Wajid, Advocate Supreme Court,
Muhammad Irfan Hanjra, Advocate Supreme Court,
Aurangzeb Mirza, Advocate/JOL,
Jalal Ahsan, FCA/JOL,
Hafiz Talha for SECP,
Barrister Umair Khan Niazi, Additional Advocate-General
|
| Petitioners |
SAUDI PAK INDUSTRIAL AND AGRICULTURAL INVESTMENT COMPANY LIMITED
|
| Respondents |
CHENAB LIMITED
|
| Citations |
2020 SLD 878,
2020 CLD 339
|
| Other Citations |
Kesar Enterprises Ltd.'s case [2002] 112 Comp Cas 174 (Bom),
J Investment Corporation of Pakistan v. Sunshine Jute Mills Limited 2005 CLD 713,
Hala Spinning Mills Ltd's case 2002 SCMR 450,
Zulfiqar Hussain v. Bambino (Pvt.) Ltd. 2013 CLD 34,
Additional Registrar of Companies, SECP v. Schon Textile Limited 2008 CLD 475,
National Bank of Pakistan v. Punjab National Silk Mills Ltd. 1989 MLD 2963,
Abdul Rasheed Mughal v. ECSA (PK) (Pvt.) Ltd. 2006 CLD 852,
Sevior v. Morga [2012] VSC 480,
Prendergast v. Roclcross [2008] NSWSC 14,
Navjivan Trading Finance Ptv. Ltd's case, [1978] 48 Comp Cas 402 (Guj),
Tata Iron and Steel Co. case, [2001] 104 Comp. Cas. 533 (Guj),
American Express Bank Ltd. case, [1999] 96 Comp Cas 841 (Guj.),
Messrs Consolidated Exports Ltd. v. Messrs Dyer Textile and Printing Mills Ltd. PLD 1984 Kar. 541
|
| Laws Involved |
Companies Act, 2017,
Civil Procedure Code (V of 1908),
Companies (Court) Rules, 1997
|
| Sections |
305(2),
308,
313,
314,
O.XXXIX,Rr.1,2,
95
|