Law:

Section:

Companies Ordinance (XLVII of 1984)-------Ss. 227, 229 & 476---Failure to make payment to Provident Fund Trust-Imposition of penalty---Amount payable to Provident Fund Trust by the Company, was withheld and Company had not made payment to said Fund as required under S.227 of Companies Ordinance, 1984---Company admitted default and submitted that the default was due to financial and liquidity problems in the relevant year---Representative of the Company had requested to condone unwilful and unintentional contravention of related provisions of Companies Ordinance, 1984 and had sought the approval of the Commission for a repayment schedule---Argument 'advanced on behalf of Directors of the Company that moneys in question were not paid to the Fund due to liquidity constraints, was not tenable because it was obligatory for the company to pay the employees contribution as well its own contribution within fifteen days from the date of collection thereof---Underlying purpose of S.227(2) & (3) of Companies Ordinance, 1984 was to protect the funds of the employees by obligating the company/trustees to deposit contributions in the safe/secured modes of investment/ deposits permitted under S.227(2) of Companies Ordinance, 1984---Directors having breached the mandatory requirements of S.227 of Companies Ordinance, 1984 as they had failed to ensure timely payment to the Provident Fund, action against them was necessary under S.229 of Companies Ordinance, 1984, whereunder punishment with a fine of Rs. Five thousand Rupees could be imposed and they would also be liable to pay loss suffered by the employees on account of such contravention--Considering that default was admitted by the Company which had also assured that the balance amount would be paid, taking a lenient view, instead of imposing fine on Chief Executive and Directors of the Company, only fine of Rs.5,000 was imposed on Chief Executive of the Company and all Directors were reprimanded to remain careful in future in compliance with mandatory statutory provisions. ORDER ALI AZEEM IKRAM, DIRECTOR (ENFORCEMENT).---The case before me pertains to the proceedings initiated against Messrs Pharmagen Limited (the…

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