Ref: M&Z/SUL/

Ref: M&Z/SUL/5192

Saturday, April 22, 2006

Registered/AD

Taj Textile Mills Limited

31-C-1 Ghalib Road

Gulberg-III

Lahore

Re:Legal Notice under Section 306 of the Companies Ordinance, 1984.We act on behalf of the Standard Chartered Bank Tufail Road Lahore Cantonment (theClient) under whose instructions we give you this notice regarding adjustment of your liability outstanding with the Client, the facts and circumstances whereof are explained below: -

1. That on your request, the Client allowed you certain finance facilities (hereinafter referred to as the Finance Facility), the repayment/adjustment of which were inter alia, secured by, hypothecation of stocks and personal guarantees furnished by its directors.

2. That as you defaulted to repay the Finance Facility as per agreed arrangements, therefore, the Client was constrained to file a suit (C.O.S No.37/2002) in the Lahore High Court, Lahore which was decreed on 2/04/2004 by the Lahore High Court, Lahore on the basis of the Compromise Agreement dated 31.03.2004 in favour of the Client and against you and the guarantors namely Mian Jehnagir Ellahi and Mian Tanveer Ellahi for a sum of Rs.137.499 Millions alongwith costs of Rs.15108.00 and markup at the rate of 5% per annum on the principal outstanding amount of Rs.86.050 Million w.e.f. 29.2.2004 till the payment/realization of the whole amount.

3. That in spite of various demands made by the Client, you have failed to repay and adjust the liabilities under the decree as per schedule incorporated in the Compromise Agreement dated 31.03.2004 which remains unadjusted as of date.

4. We, therefore, by this notice call upon you to adjust your liabilities under the decree, which amounts to Rs.146.839 Million as on 01.03.2006 within thirty days of the date of this notice failing which the Client shall be constrained to file petition in the court of Company Judge, Lahore High Court, Lahore for winding up of your company.

5. Please note that should the Client be forced to institute winding up proceedings, the costs of such proceedings and the risk as to consequence thereof shall be entirely on your account.

6. A copy of this notice has been retained in our office for our record.

Yours faithfully,

Mandviwalla & Zafar

IN THE LAHORE HIGH COURT, LAHORE

(Original Jurisdiction under Companies Ordinance, 1984)

Standard Chartered Bank, a banking company duly incorporated in England with branch office inter alia, at Tufail Road, Lahore Cantonment.

Petitioner

Versus

Taj Textile Mills Limited, a public limited company duly incorporated under the provisions of Companies Ordinance 1984 having its registered office at 31-C-1, Ghalib Road, Gulberg-III, Lahore.

Respondent

PETITION FOR WINDING UP OF THE RESPONDENT UNDER SECTION 305, 306, 309 & 314 OF THE COMPANIES ORDINANCE, 1984

Respectfully Sheweth:

1. That the correct address of the parties has been supplied in the heading of the petition which are sufficient for the purposes of notices and other process which may be issued by this Honble Court.

2. That the petitioner is banking company duly incorporated in England and a branch office inter alia, at Tufail Road, Lahore Cantonment.

3. That this petition is being filed by the petitioner bank through __________ and ____________, who being principal officers of the petitioner bank are fully conversant with the facts of the case and are duly authorized by power of attorney (Annex-A/1 & A/2) granted by the petitioner bank to sign, verify and institute these proceedings and do such other acts which are necessary and incidental thereto.

4. That the respondent a public limited company (the Respondent Company) duly incorporated under the Companies Ordinance, 1984 having its registered office at 31-C-1 Ghalib Road, Gulberg-III, Lahore. Copies of the Memorandum and Articles of Association and Certificate of Incorporation are appended as Annex-B/1 and B/2 respectively.

5. That the petitioner bank is a creditor of the Respondent Company and is qualified to file the present petition for compulsory winding up of the Respondent Company through this Honble Court on the grounds enumerated in the petition.

6. That believing and acting on the various representations made by the Respondent Company, the petitioner bank had extended certain finance facilities (hereinafter referred to as the Finance Facilities) to the Respondent Company and in consideration of, acknowledgement and to secure the Finance Facilities, the Respondent Company executed in favour of the petitioner various documents.

7. That subsequently Respondent Company willfully neglected/defaulted to repay the Finance Facilities as per agreed arrangements. In connection thereof the petitioner bank contacted the Respondent Company on several occasions through various means with the request to repay and liquidate its liabilities according to its contractual obligations but in vain.

8. That having failed to elicit any favourable response from the Respondent Company the petitioner bank on 18/09/2002 filed a suit (No.COS 37/2002) for recovery of Finance Facilities against the Respondent Company in the Lahore High Court, Lahore which was accordingly decreed on 02/04/2004 in favour of the petitioner bank and against the Respondent Company and its directors/guarantors for Rs.137.499 Million in terms of the Compromise Agreement dated 31.03.2004. Copies of plaint, the decree and the Compromise Agreement are appended as Annex-C/1, C/2 and C/3 respectively.

9. That the Respondent Company has not paid any installment under the decree dated 02.04.2004 and Compromise Agreement dated 31.03.2004 granted by the Lahore High Court, Lahore with the result that in terms of decree and Compromise Agreement an amount of Rs. __________ alongwith costs of Rs.15108.00 is payable in lumsum by the Respondent Company to the petitioner bank as on _________. The decree issued by the Lahore High Court, Lahore in favour of the petitioner bank has remained unsatisfied.

10. That the petitioner bank served a statutory notice dated ________ on the Respondent Company calling upon it to make payment of the petitioner banks dues. Inspite of this notice under Section 306 of the Companies Ordinance, 1984, the Respondent Company has failed to liquidate its liability under the decree for Rs.137.499 Million alongwith costs of Rs.15108.00 and markup at the rate of 5% per annum.

11. That the petitioner bank has filed this petition in the interest of public and the Respondent Company is liable to be wound up, inter alia, on the following:

G R O U N D S

a) That the Respondent Company is deemed under the law to be unable to pay its debts under Section 306 of the Companies Ordinance, 1984. Since despite service of notice by the petitioner bank, the Respondent Company has failed to liquidate its liability under decree for Rs.137.499 Million and alongwith mark up__________. Thus the petitioner bank is entitled to have the Respondent Company wound up.

b) That taking into account the financial position of the Respondent Company it is manifestly clear that the Respondent Company is unable to pay its debts.

c) That the affairs of the Respondent Company are being managed by persons who refuse to act according to the provisions of the Companies Ordinance, 1984 and its Memorandum and Articles of Association and obligations created by Contractual relationship with the petitioner bank.

d) That the Respondent Company has become commercially insolvent.

e) That even otherwise winding up of the Respondent Company in the fact and circumstances enumerated above, will be just and equitable.

13.In view of the foregoing circumstances and grounds it is respectfully prayed that this Honble Court may be pleased to make an appropriate order for:-

(i) Directing winding up of the Respondent Company.

(ii) Attachment of all movable and immovable properties of the Respondent Company.

(iii) Appointing a Provisional Manager and directing him to take over immediate possession of the assets/properties of the Respondent Company and to make inventory of the same so that the Respondent Company cannot temper with the same to the detriment of the petitioner bank.

(iv) Such other directions and orders this Honble Court may deem just and proper in the circumstances.

(v) Costs of the petition.

Respectfully presented by:

PETITIONER

Through:

Mandviwalla & Zafar

7-B-1, Aziz Avenue,

Canal Bank, Gulberg-V,

Lahore