Law:

Section:

(a) Companies Ordinance (XLVH of 1984)-- ----Ss. 305 & 306---Winding-up proceedings of Company---Expressions "unable", "unwilling" and "debt"---Connotation---Winding-up proceedings is not a substitute for suit to recover debt---Expression "unable" does not necessarily mean "unwilling" while word "debt" will refer to all creditors as a class.--[Words and phrases]. (b) Companies Ordinance (XLVH of 1984)-- ----Ss. 305 & 306---Object of scrutiny in winding-up of Company---Basic object of scrutiny in winding-up proceedings is to ascertain solvency or insolvency of Company and not to investigate into truth or otherwise into claims of creditors--Where, however, winding-up proceedings were filed with intention to pressurise the Company to settle disputed debts, same would amount to abuse of process of law ---Presumption arising under Ss.305 & 306, Companies Ordinance, 1984, that Company was unable to pay its debts, would not arise in the event of bona fide dispute as to liability---Where, however, liability to pay debt was not denied but allegations of mala fides were raised against petitioner, heavy burden would be on Company concerned to establish such allegations---Any debt which could not be disputed on legitimate and bona fide grounds, in the event of inability to pay, would furnish valid ground for winding-up. Parke Davis & Co. Limited v. Bliss & Co. Limited, Karachi PLD 1982 Kar. 94; Smith Kline & French of Pakistan Ltd v. Spencer & Co. Pakistan Limited 1989 MLD 38; Trade & Industry Publications Limited v. Industrial Development Bank of Pakistan PLD 1990 SC 768; Sindh Glass Industries Ltd. v. N.D.F.C. PLD 11196 SC 601; Judicial Miscellaneous No.72 of 1989; Abdullah Bhai v. Saria Rope Mills Ltd. PLD 1971 Kar. 597; Hashmi Can Company Ltd. v. K.K. & Co. (Pvt.) Ltd. 1992 SCMR 1006; Kaikobad Pestanjee Kakalia v. M/s. Almas (Pvt.) Ltd. 1997 MLD 149 and Metito Arabia Industries Ltd. v. Gammon (Pakistan) Ltd. 1997 CLC 230 ref. (c) Companies Ordinance (XLVII of 1984)--- ----Ss. 305 & 306---Winding-up of Company---Essentials---Company had not disputed its liability to pay dues of at least 24 petitioners in terms of statement filed…

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