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TMI Blog1932 (2) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... but subsequently on the 9th October, four of the signatories withdrew from the petition which was thenceforward prosecuted by the remaining 15 petitioners. It was alleged in the petition that by a special resolution passed at a general meeting of the shareholders held on the 16th of September, 1930, it was resolved to bring the company into voluntary liquidation, that Mr. Abdul Hamid Khan Niazi, Pleader, Peshawar, was appointed Liquidator, and in a subsequent meeting of the creditors held on the 12th of October, 1930, Syed Mahmud Eli Chishtie was appointed as an "Assistant Liquidator" on behalf, of the creditors, but that neither of these gentlemen had taken any steps to wind up the company. It was further stated that there was "a lack of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. It was admitted that a resolution for the voluntary liquidation of the company was passed in September, 1930, as alleged in the plaint, but it was stated that the resolution "had been set aside" in an award given by an arbitrator who had been appointed to settle the differences between various persons interested in the company. It was denied that A.R. Chishtie was the sole surviving director; on the other hand, it was claimed that Sultan Mohammad was the only director of the company. The other allegations in the petition were traversed, and it was averred that the petition was not a bona fide one, but had been inspired by A.R. Chishtie who was originally the Managing Director of the Bank, but had since been dismissed from that office. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... took place in March, April and May, 1931. It is admitted that the petitioners ware among the original shareholders of the company and shares in their names were registered for more than six months during the 18 months prior to the filing of the petition. In section 158 the term "contributory" is defined as meaning "every person liable to contribute to the assets of a company in the event of its being wound up" and section 156 lays down that in the event of a company being wound up, "every past member of the company is liable to contribute, if he has not ceased to be a member for one year or upwards before the commencement of the winding up." It is clear, therefore, that even if the facts alleged by the respondent Dr. Sultan Mohammad be take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any, explained that no balance sheet had been issued as the books of the Bank had been retained by Abdul Rahman Chishtie, the former Managing Director, though he ceased to hold that office more than two years ago. At the next hearing on 12th of February, 1932, however, the respondent produced a document (Exhibit R. 23) which he described as the balance sheet." This document had printed at the top the words "weekly statement showing liabilities and assets during the week ending 31st August, 1931," and it is not in the form prescribed for a balance sheet. It purports to have been "passed" by three persons Sultan Mohammad, Jagan Nath and Mohammad Sadiq Ali Khan, who had appended their signatures to it on the 17th January, 1932, and described t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the balance sheet, which the respondent has improvised for the occasion, is not a "balance sheet" in any sense of the term, and the two persons, one resident of the Panipat and the other of Chak Qazian in the Gurdaspur District, whom he himself had appointed as his co-directors on the 16th January, 1932, and whose signatures he had secured on this document, on the following day, are not legally qualified to act as such. It is not necessary for the purpose of these proceedings to examine in detail the constitution of the directorate of the Bank from the date of its incorporation to that of the presentation of the present petition. Various changes have taken place during, this period, and these are given in detail in the evidence of (P.W. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... give a definite finding on these rival versions, but it is clear that whichever of them is correct, the affairs of the Bank have been and are being conducted in a most unsatisfactory manner, and one or other of the parties is guilty of grossly improper, if not fraudulent, conduct. From what has been stated above, it is abundantly clear that a complete deadlock has arisen in the working of the company. It has no properly constituted directorate. It has not issued a single balance sheet during the five and a half years of its existence, nor have the accounts been ever properly audited. The head of one rival faction has kept in his possession for years the cash book, ledger and other documents, while the other has held the assets. According ..... X X X X Extracts X X X X X X X X Extracts X X X X
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