KARACHI, May 1: The Supreme Court stayed the liquidation of Ahmad Foods (Private) Limited on Friday pending hearing of its appeal within three months.
Justice Amir Hani Muslim of the Sindh High Court had ordered compulsory winding up of the company for its inability to clear its debt and appointed the SHC official assignee as its liquidator. The liquidation petition was moved by Zafar Mehmood Sheikh, former managing director of the company and brother of its incumbent MD, Ziauddin Sheikh, both sons of Sheikh Zamiruddin, the company’s founder who now runs the Naurus manufacturing concern.
The EX-MD had alleged in his petition that he pawned his personal property in favour of M/s Prudential Discount House, who extended a loan of Rs 11.8 million to Ahmad Foods. The loan was not paid and the creditor obtained a decree from a banking court. The property was ordered to be auctioned. He said he was competent to sue for liquidation of the company as its ‘contingent creditor’.
He requested the SHC company bench to declare the company insolvent and order its liquidation.
The SHC order was challenged by the company in the Supreme Court and its petition for leave to appeal came up before a three-member bench, comprising Justices Iftikhar Mohammad Chaudhry, Rana Bhagwandas and M. Javed Buttar, at the court’s Karachi registry.
Appearing for the petitioner, Advocate Kamaluddin Azfar submitted that the company was financially strong and stable. It paid Rs 40 million to another creditor bank, the Habib Bank, towards discharge of its loan liability during the current year. The allegedly unpaid loan and the amount claimed by the ex-MD were disputed and the matter was sub judice before the Sindh High Court. No liquidation order could have been passed during the pendency of the loan dispute.
The SHC liquidation order, the counsel argued, was liable to be set aside. He sought a stay order against the liquidation.
Appearing for the respondent, Tariq Mahmood submitted that if the petition/appeal could be heard and disposed of early, his client would have no objection to a suspension of the winding up process.
Admitting the petition, the bench stayed liquidation and ordered that the appeal be fixed for hearing within three months.
