Law: Companies Act, 2017

Section: XIX,159(1),159(2),160

(a)    Companies Act (XIX of 2017)--- ----Ss. 159(1) & 159(2)---Proceedings of election of Board of directors assailing of--Material irregularities in proceedings---Effect---Petitioner, being shareholder of the Private Limited Company ( the Company ), challenged the election process of the Board of Directors of the Company---Held: Section 159(1) of the Companies Act, 2017 ( the Act, 2017 ) mandates that the existing Board of Directors shall, through a duly convened meeting, fix the number of directors to be elected in the upcoming general meeting---Record revealed that no such resolution was passed by the existing Board to fix the number of directors to be elected---Furthermore, the respondents failed to produce any documentary evidence establishing compliance with the statutory requirements of Ss. 159(1) & 159(2) of the Act, 2017---Such non-compliance strikes at the root of the election process and renders the entire exercise invalid, vitiating the election proceedings---High Court declared the election of the Board of Directors of the Company as illegal, void ab initio and without lawful authority, being violative of the mandatory provisions of the Act, 2017 and set aside the entire election process and resolutions passed ;consequently, directing the existing Board of Directors to proceed election process in compliance with provisions of Ss. 159(1) & 159(2) of the Act, 2017---Petition, filed by shareholder of Company, was allowed accordingly. Tariq Aziz and others v. Makhdum Ahmed Mahmud and others 2022 CLD 1279 and Shahid Mahmood & Company (Pvt.) Limited and 2 others v. Zahid Mahmood and 5 others 2025 CLD 408 ref. Dewan Salman Fibre Limited v. Dewan Petroleum (Pvt.) Limited 2016 CLD 1049 distinguished. (b)    Companies Act (XIX of 2017)--- ----Ss. 159(1), 159(2) & 160---Power of the Court to declare election of Directors invalid---Locus standi/threshold---Scope---Petitioner, being shareholder of the Private Limited Company ( the Company ), challenged the election process of the Board of Directors of the Company---Held: Petitioner, along with supporting shareholders, held more than 10% of the voting power,…