KARACHI, Nov 15: The Supreme Court has suspended operation of the Sindh High Court order, whereby Bankers Equity Limited was ordered to wind up and the respondent State Bank was directed to appoint official liquidator in terms 51 of the Banking Companies Ordinance , 1962.

The bench comprised Justice Hamid Ali Mirza and Justice Tanvir Ahmad Khan.

Appellant, Rauf B. Kadri, represented by Rizwan Ahmed Siddiqui advocate, had preferred civil appeal under section 10(1) of the Companies Ordinance, 1984, directed against the order dated April 18, 2001 in J.M. No. 15 of 2000 by a Judge of the SHC in chambers.

The appellant, along with the appeal, had also filed miscellaneous application praying therein to grant interim status quo, suspend the order, also challenging the appointment of official liquidator from taking over the possession of properties of the appellant.

The counsel for appellant submitted that the company (BEL)) in liquidation was purchased by his client (representing the LTV consortium) at a stage when it was in total loss and they had put in time, money and efforts to make the BEL sail again.

The impugned order was passed when the appellant was not even given opportunity of hearing, he submitted. He further submitted that the BEL was a privatised banking company, therefore it could not be taken over on any ground whatsoever in view of section 7 of the Protection of Economic Reform Act, 1992.

He also submitted that the State Bank had issued notification, appointing Board of Directors for the appellant’s company, replacing the earlier Board of Directors and had appointed an official liquidator to take over the management and control of the appellant company.

He also submitted that new management of the BEL, after purchase from the government, initiated plan to bring reforms and the said plan paid rich dividends as in the first year of operations of the BEL after its privatisation, that is, June 30, 1997, the net profit rose to about Rs330 million.

It was his contention that the balance of convenience was prime facie in the appellant’s favour and in case the impugned order was not suspended, the appellant’s company would suffer irreparable loss and its financial position, image, goodwill and profit- bearing potential would be totally destroyed.

He also contended that the impugned order was totally in violation of provision of section 7 of the Protection of Economic Reforms Act, 1992.

The counsel for State Bank, opposing the appeal, submitted that the impugned order was legal and was not in violation of section 7 of the Protection of Economic Reforms Act.

The apex court bench in its order referred to section 7 of the Act which holds that “Prima facie the above provision of law places embargo against the taking over of ownership, management and control of any banking, commercial manufacturing or other company, establishment or enterprise when the same is transferred by the government so as to achieve the object of the said provisions of law, creating liberal environment for savings and investments.