Law: Companies Ordinance, 1984

Section: 282(3)

Companies Ordinance (XLVII of 1984)--- ----S. 282-J(3)---Winding up of company---Misappropriation of funds---Intricate questions---Determination---Veil of incorporation---Effect---Security and Exchange Commission of Pakistan as regulator of respondent company sought its winding up mainly on misappropriation of public funds as there was some dispute over ownership of a property---Validity---Veil of incorporation under such circumstances was inevitable to be pierced/lifted---Under the umbrella of a corporate entity fraud could not be allowed to be nourished and grow---Intricate questions required trial and forensic auditing of both the companies before such questions could be answered---Forensic audit and trial jurisdiction of High Court was only be to the extent of Company under liquidation---Numerous questions were present, which needed determination before property in question could be cleared and that was after forensic audit and recording of evidence/cross-examination--- Entire exercise of forensic audit and recording of evidence could not take more than five months; i.e. two months for forensic audit and three months for recording evidence---High Court decided to hear winding up petition in the light of forensic audit and evidence---High Court directed to maintain status quo by parties in respect of property in question---Petition was adjourned sine die in circumstances. Littlewoods Mail Order Stores Ltd v. IRC [1969] W.L.R. 1241, 1254 and United State v. Milwaukee Refrigerator Co. (1905) 142 Fed:247 ref. ORDER MUHAMMAD SHAFI SIDDIQUI, J.---Securities and Exchange Commission of Pakistan under section 282J(3) of Companies Ordinance, 1984, as was applicable at the relevant time, filed this petition as being regulator of the respondent company called Natover Lease and Refinance Ltd. (henceforth Company 1), for its winding up. Company 1’s predecessor was earlier incorporated under Companies Ordinance 1984 in December 1984 under original name as “Natover Motor Lease Limited” to carry out business of leasing, which later transformed into a public limited company on 18.03.1999 and renamed as Natover Lease and Refinance Limited i.e. company 1. 2. The winding up of…

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