Chapter # 04
The Court
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The Court
Section 2(1) defines the ‘court as the court having jurisdiction
under the companies’ ordinance, 1984
Section 7 of the ordinance specifies that the court having
jurisdiction under the ordinance shall be the high court having
jurisdiction in the place at which the registered office of the
company is situated.
However, the federal government may empower any civil court to
exercises all or any of the jurisdictions conferred upon the curt by
the companies’ ordinance, 1984. Under such circumstances the
court shall be the under whose territorial jurisdiction the registered
office of the company is situated.
Where a company is being wound up the registered office for the
purpose of winding-up shall mean the place which has the longest
been the registered office of the company during the six months
immediately before the filling of petition for winding-up.
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Constitution of the Company
Banches
The chief justice of each high court is empowered too constitute
one or more benches in each high court to exercise the
jurisdiction vested by the companies ordinance 1984. These
benches are known as company benches. At least one company
bench must be constituted in each high court.
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Matters requiring confirmation
or sanction of the court
1) Confirm the reduction of share capital [96& 97]
2) Order to include word “and reduced” as part of name of a
company reducing its capital.
3) Settle the list of creditors entitled to object the reduction of
capital.
4) Dispense with consent of creditor on security given for his debt
5) Approval of the minutes with respect to the alteration of share
capital.
6) Require a company to publish reason of reduction of capital for
information to public.
7) Settlement of the list of persons liable to contribute in case of a
winding-up of a company.
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Matters requiring confirmation
or sanction of the court
8) Cancellation of the resolution varying the shareholders’ rights.
9) Staying a suit and all proceedings relating to the suit.
10) Approval of the manner of calling the meeting for the purpose of
approving the benefits to the trustees.
11) Fixation of the rights and remuneration of the receiver or
manager arising in connection with the performance of his
function.
12) Variation of the rights and remuneration of the receiver or
manager.
13) Filing of statutory report after the register of debenture holders.
14) Filling of statutory report after the expiry the stipulated period
instead of initiating the winding-up of the company
15) Declaration of the election of all or any of the directors as invalid
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Matters requiring confirmation
or sanction of the court
16) Declaring a director to be lacking of fiduciary behavior.
17) Search and seizure of books and papers by registrar.
18) Removal of director chief executive managing agent etc of the
company (on an application of SECP)
19) Payment of compensation for annulment or modification of a
contract with a director, chief executive managing agent, etc of
the company.
20) Sanction of the compromise or arrangement made by creditors
and members.
21) Winding-up if the compromise or arrangements under section
284 is not workable, with or without any modification therein.
22) Amalgamation of the company
23) Winding-up
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Procedure of the Court
The court is required by law to dispose of the petitions and
announce its final judgment as expeditiously as possible. The
judgment shall be announced within ninety (90) days of the date of
presentation of petition or application to the court. The court is
further required to hear the case from day-to-day.
However under the extraordinary circumstances the court may
adjourn the hearing. The following conditions shall be satisfied for
adjournment of the hearing:
1) There exist some extraordinary circumstances;
2) There is sufficient cause of adjournment
3) The circumstances and causes shall be recorded in the
proceedings of the court while adjourning the hearing;
4) The court cannot adjourn the hearing for more than fourteen
(14) days at one time; and
5) The total adjournment should not be more than thirty days in all
The court is required to follow the summary procedure while
exercising its jurisdiction under the companies’ ordinance, 1984
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Appeal against order of the
Court
Any person who is not satisfied with any of the orders judgment
announced by the court may file an appeal before the supreme
court of Pakistan in the same manner and subject to the same
conditions as are applicable to an appeal against the orders of the
high court.
However if the decision of the court relates to the winding-up of
company not having share capital or a company having a paid-up
of a capital less than rupees one million then the appeal before the
supreme court shall lie only if the supreme court grants permission
for such appeal.
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Reference by Federal
Government or SECP
The federal government or the SECP may make a reference to the
court on any question or matter having special significance
requiring orders, determination or action concerning the affairs of
the company or any action of any of its officers (including an
auditor, liquidator or agent of the company).
The court may make such order, as it may deem just and equitable
under the circumstances.
Making of a reference as above shall be without prejudice to the
powers. Jurisdiction and authority exercisable by federal
government or SECP under the companies act ordinance 1984.
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Thank you
for
being with Me
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