Introduction

Pakistan was established as an independent sovereign state on August 14 1947. Prior to this date Pakistan formed part of the British colony of India. At its birth Pakistan inherited the legal system prevalent in British India and the Pakistan insolvency legislation is a derivative of the same. Bankruptcy law applies primarily to the insolvency of individuals and is contained in the Provincial Insolvency Act 1920 and the Insolvency (Karachi Division) Act 1090 and does not form the subject matter of this Report. Winding Up or liquidation law applies to companies and is contained in the Companies Ordinance 1984. Corporate rescue i.e. restructuring or receivership is also covered by the Companies Ordinance. Additionally, new legislation has been enacted in 1997 to provide for recovery of corporate debt by banks and development finance institutions, namely the Banking Companies (Recovery of loans, advances, credits and finances) Act 1997. Recovery of debts due may also be initiated under the Civil Procedure Code, 1882.