The Supreme Court has remanded the Mohib Textile Mills case "back to the Company Judge of the Lahore High Court", with instruction to organise its re-auction by keeping "best interests of the company and its creditors". The Court also asked the LHC to "keep the market value in view" by treating it as the "reserve price" in the resale proceedings. The Court pointed out that a firm of chartered accountants had estimated the value of the mills at Rs 3.2 billion, while its major creditor, the National Bank of Pakistan,, had fixed it at Rs 4 billion.
Another assessment made by National Accountability Bureau had estimated its market value at Rs 5 billion. But in the last auction, which was third in a series, the mills was transferred to a joint venture against its highest bid of Rs 1.081 billion in July, 2002.
The majority decision of the Court was made available here on Saturday following a determination by the referral Judge, Justice Sardar Muhammad Raza Khan, who lent his weight to the earlier dissenting judgement of Justice Faqir Muhammad Khokhar. It thus became a decision of two Judges, against one, and thus closed a tripartite litigation between the old owners, Saigol Brothers, the joint venture of Greenhouse and Harappa mills and the National Bank of Pakistan.
The latter had complained that the sale proceeds of the Mills did not meet its loans while the new buyers had settled with other members of the lending consortium.
The liquidation and sale of the Mohib Textile located at Muzaffargarh in southern Punjab was the largest in the corporate history of Pakistan, Chief Justice Nazim Hussain Siddiqui had assigned it to Justice Sardar Muhammad Raza Khan to re-hear the case as an umpire.
In his observations, Justice Khan had observed that the auction of "a huge concern like the one in dispute" had not been sufficiently advertised and publicised.
Secondly, Justice Khan also recalled the various evaluations of whatever was left of the Mohib Textiles and said that before confirming the sale the Company Judge of the LHC could have thought twice before accepting an offer of Rs 1, 081 billion which was "totally disproportionate to other expected prices".
Justice Khan also held that "The fresh offer of Green House of Rs 1.081 billion, given after withdrawal, ought to have been done in presence of the other bidders, if best way of re-auction was not selected. The conditions of this last offer are such that it amounted altogether to a new bid. Former management was not allowed sufficient time to fulfil terms of offer of highest bid, while on the other hand respondent No 4 was given convenient terms by allowing 30 days for initial deposit of 25 percent although, against the offer of former management, they were directed to deposit Rs 125 million in 2 to 7 days. This was through order dated 5.7.2000 and 7.7.2000. Respondent No 4 was allowed five years to repay through under Order XXI Rule 84 & 85 total auction price needs to be deposited within 15 days.
The final order of the Court, signed by Justice Sardar Muhammad Raza Khan and Justice Faqir Muhammad Khokhar, said that "by majority of two to one, Civil Appeal No 1540 of 2001 and also Civil Petition No 124-L of 2004 (after conversation into appeal), are accepted, the impugned orders dated 22.9.2000 and 10.11.2000 are set aside and the case is remanded to the High Court with direction that the assets of the appellant company be put to resale through auction. The learned Company Bench of Lahore High Court shall keep the market value in view and the same, in the given attending circumstances, shall be fixed as reserve price. It shall of course, be at liberty to make such arrangements and take such measures for management and administration etc of the Mills during interregnum as it may consider appropriate for the best interest of the company and the creditors."
Saigol Brothers as appellants were represented by Syed Najam-ul-Hassan Kazmi while Syed Ali Zafar and Haider Zaman Qureshi, Malik Muhammad Hussain, Raja Abdul Ghafoor appeared for the new buyers and the joint official liquidators. Raja Muhammed Akram pleaded the case of National Bank of Pakistan.
Comments
Comments are closed.