Law: Companies Act, 2017

Section: 280,281,282,283,285(8)

Companies Act (XIX of 2017)--- ----Ss. 280, 281, 282, 283 & 285(8)---Scheme of Arrangement---Rights of parties---Petitioners sought approval of understandings and arrangements reached at between borrower and financers/creditors---Validity---High Court could not sit as Court of appeal over and above wisdom disclosed by borrower and creditors while agreeing to certain terms of repayment, provided it was within the frame of company law and within the contours of Financial Institutions (Recovery of Finances) Ordinance, 2001---To such extent High Court was bound to watch and commercial wisdom of participant of the Scheme could not be pierced by a Bench who might have its own opinion---Company jurisdiction of High Court in such matters was peripheral and supervisory and not of an appellate authority---By taking into confidence all stakeholders, a policy was devised to settle and pay liabilities of all secured creditors in a befitting manner---To achieve such goal, charged assets of petitioner company were put to sale through Assets Sale Committee consisting of representatives of banks---High Court set aside all objections and approved the Scheme of Arrangement---Petition was allowed, in circumstances. Gulistan Weaving Mills Ltd. v. Al Baraka Bank (Pakistan) Limited 2018 CLD 737 rel. JUDGMENT MUHAMMAD SHAFI SIDDIQUI, J.---Petitioners includes the company (petitioner No.1), to whom finances were extended, and the creditors (petitioners Nos.2 to 10) who extended such finances. This petition seeks approval of certain understanding and arrangement i.e. Scheme of Arrangement dated 02.05.2019 reached between them in a meeting per requirement of applicable rules and law. This arrangement would bind all such classes of creditors encompassed in the Scheme, framed under sections 280 to 283 and 285(8) of Companies Act, 2017. 2. Petitioner No.1 being a company incorporated under Companies Ordinance, 1984 (as it then was) and pursuant to its Memorandum and Articles of Association authorized to carry on businesses as defined therein. Petitioners Nos.2 to 10 are the banking companies, which have extended finances to petitioner No.1 (to be treated under Financial Institutions…

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