| Case ID |
2e7f1d54-59fb-4dae-8d12-73403e6ea21a |
| Body |
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| Case Number |
Suit No.97 and Civil Miscell., Incous Applications |
| Decision Date |
Sep 05, 1997 |
| Hearing Date |
|
| Decision |
The Sindh High Court, presided over by Judge Rasheed A. Razvi, granted interim injunctions in the case involving Rasheed A. Razvi as the petitioner and Nizam Hashwani along with Hashwani Hotels Limited and 14 others as respondents. The court restrained the defendants from holding any Board of Directors meetings or forming any committee during the pendency of the suit. Additionally, the court prohibited Zaver Petroleum Corporation from acting as the Managing Agent for Oil and Gas Development Corporation (OGDC) and from allotting or approving the transfer of shares until the final decision. The court emphasized the importance of complying with the Companies Ordinance, 1984, ensuring that the elections of directors were conducted legally and without violating the company's Memorandum and Articles of Association. By granting the interim injunction, the court aimed to prevent any potential irreparable harm to the plaintiff and maintain the effective running of the company during the litigation process. |
| Summary |
In the landmark case adjudicated by the Sindh High Court on September 5, 1997, the petitioner Rasheed A. Razvi challenged the legitimacy of the directors elected by Hashwani Hotels Limited and 14 others. The core of the dispute revolved around the compliance with the Companies Ordinance, 1984, specifically sections 50, 73, 159(7), 178, 179, and 187(41). The plaintiff alleged that the election of three directors—Aziz Boolani, Avaz Muhammad Lakhani, and Abdul Monem Khan—was conducted in violation of statutory provisions and the company's Articles of Association. Represented by advocates Rasheed A. Akhund and Khalilur Rehman, the plaintiff sought both a declaration of illegality in the election process and an interim injunction to prevent further actions by the defendants that could harm the company's governance. The defendants, represented by Abdul Hafeez Pirzada, Rana Iqramullah, Abdul Monem Khan, and Choudhry Muhammad Jamil, contested these claims, asserting their eligibility and compliance with legal requirements.
The court meticulously examined the procedural aspects of the election, including the issuance of notices under section 159(7) and the qualifications of the directors under section 187(h). Citing precedents such as the China Fibre Company Limited case and the Muhammad Yasin Facto case, the judge underscored the necessity of maintaining transparency and adherence to corporate governance norms. The decision to grant the interim injunction was influenced by the demonstrable risk of irreparable harm to the plaintiff and the balance of convenience favoring the injunction. Additionally, the court called for the parties to engage a Commissioner to oversee evidence recording, ensuring an unbiased and thorough examination of the facts.
This case highlights the critical importance of following statutory procedures in corporate elections and serves as a precedent for future disputes involving director qualifications and corporate compliance. The ruling reinforces the judiciary's role in upholding corporate governance standards and protecting minority shareholders from potential abuses by majority stakeholders. By emphasizing the need for lawful and transparent election processes, the Sindh High Court reinforced the integrity of corporate institutions and provided a clear framework for addressing similar conflicts in the corporate sector. The involvement of key entities such as Zaver Petroleum Corporation and the Corporate Law Authority further underscores the interconnectedness of corporate governance, legal compliance, and effective management in ensuring the smooth operation of businesses. This case remains a significant reference point for legal professionals and corporate entities aiming to navigate the complexities of corporate law and governance. |
| Court |
Sindh High Court
|
| Entities Involved |
Hashwani Hotels Limited,
Zaver Petroleum Corporation,
Corporate Law Authority,
Oil and Gas Development Corporation (OGDC)
|
| Judges |
Rasheed A. Razvi
|
| Lawyers |
Rasheed A. Akhund,
Khalilur Rehman,
Abdul Hafeez Pirzada,
Rana Iqramullah,
Abdul Monem Khan,
Choudhry Muhammad Jamil
|
| Petitioners |
Rasheed A. Razvi
|
| Respondents |
Nizam Hashwani,
Hashwani Hotels Limited and 14 others
|
| Citations |
1999 SLD 529,
1999 CLC 1989
|
| Other Citations |
Messrs Chaina Fibre Company Limited, Khulna and Abdul Jabbar and 4 others PLD 1968 SC 381,
Secretary of State v. Mask & Company AIR 1940 PC 105,
Sardar Gulab Singh v. Punjab Zamindar Bank Ltd. AIR 1940 Lah. 243,
Parvaiz Aslam Mian v. Svnthetic Chemical Co. Ltd. PLD 1980 Kar. 401,
Farrukh K. Captain v. Exxon Chemical Pak. Ltd. and others PLD 1991 Kar. 441,
Karnal Distillery Company Limited, Karnal PLD 1956 (W.P.) Lah. 731,
Railway Sleepers Supply Company's case (1885) 29 CH 204,
Hector Shalling Limited's case (1936) 1,
Muhammad Ismail Ali Charan v. Pak Porko Ceramics Ltd..PLD 1973 Kar. 491 ref
|
| Laws Involved |
Companies Ordinance, 1984,
Civil Procedure Code, V of 1908,
Specific Relief Act, I of 1877
|
| Sections |
50(2),
73,
159(7),
178,
179,
187(41),
Order XXXIX, Rule 1,
Order XXXIX, Rule 2,
42,
54
|