Law: Companies Ordinance, 1984

Section: 404

  Companies Ordinance (XLVII of 1984)... ---- S.404 --- Insolvency (Karachi Division and Dacca) Act (III of 1909), Second Sched., Rr. 9, 10, 11 & 12 --- Secured creditor surrendering his security to official assignee --Effect --- Rules incorporated in Second Sched. to Insolvency (Karachi Division and Dacca) Act, 1909, have been specifically made applicable to insolvent companies in winding up; such Rules would prevail and be observed, inter alia, in relation to the respective rights of secured creditors of the company ---Petitioner being a secured creditor had surrendered his security to official assignee/official liquidator in terms of R. 10 of Second Sched. to Insolvency (Karachi Division and Dacca) Act, 1909 to enable him to proceed in the manner provided under R. 12 thereof --- Official assignee could either redeem the security on payment to the creditor of assessed value or he could require that property comprised in any security so valued might be offered for sale Companies Ordinance (XMVII of 1984)-- ---- S. 404 --- Contract Act (IX of 1872), S. 176 --- Pledge of shares and Bank guarantees in favour of Company in winding up whether assets of the company ---Petitioner as pawnee was although in possession of shares in question, as security for repayment of the debt yet its position was different from ordinary pawnee under S.176, Contract Act 1872 under which a pawnee has a right to sell the pledged goods only after giving the pawnor reasonable notice of sale --- Petitioner was, thus, not an ordinary pawnee but was the holder of a duly executed blank transfer deed of shares by the pawnor, the effect of which firstly was that the latter (pawnor) had waived his right to be given a notice under S. 176, Contract Act, 1872 by the petitioner (pawnee) and secondly he had given further unfettered right to the pawnee to own or transfer the ownership of shares to any one --- Bank guarantee might be as good as cash but it was not cash --- Pledged shares coupled with transfer deed and Bank guarantees in favour of Company were, thus, assets of the Company. Words and phrases- ----"Assets" --- Meaning. Black's Law Dictionary, Sixth Edn., p.117 ref.…