Law:

Section:

Companies Ordinance (XLVII of 1984)-------Ss.305, 306 & 325---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), Ss.4 & 9---Companies Court Rule, 1997, R.7---Civil Procedure Code (V of 1908), O.VII, R.11---Winding up petition, rejection of---Overriding effect of Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Bank filed winding up petition before Companies Judge on the ground of default in payment of finances---Respondent-company sought rejection of petition on the ground that relation between bank and company was that of customer and financial institution, therefore, only remedy available with bank was to file recovery suit before Banking Court---Validity--Before invoking S.4 of Financial Institutions (Recovery of Finances) Ordinance, 2001, respondent, in company jurisdiction, had to establish that there was a provision in Companies Ordinance, 1984, which was inconsistent with the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001, it was only then that provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001 would override inconsistent provisions of Companies Ordinance, 1984---Exclusiveness of jurisdiction of Banking Court was confined to only those matters which were in the jurisdiction of Banking Court---If a company was solvent and was able to pay debts, then winding up order could not be passed against it, even if the company had neglected to pay debts to a particular creditor---Winding up order could only be passed if it was established before the court that company was unable to pay its debts---If a creditor, whether it was a financial institution or not, was to file suit for recovery of its debts, it could invoke jurisdiction of Banking Court or ordinary civil court as the case might be---However if creditor could establish before Company Judge that company was unable to pay its debts, such creditor could invoke jurisdiction of Company Judge under S.305 of Companies Ordinance, 1984, for winding ,up of the company, thus Financial Institutions (Recovery of Finances) Ordinance, 2001 and Companies Ordinance, 1984, covered two different situations---Application…

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