Court Upholds Winding-Up Petition Ad Order, Emphasizes Workmen's Right to Be Heard

The court upheld the order directing the advertisement of the winding-up petition, dismissing the appeal. It found that the workmen had the right to be heard, and the defect in the original proceedings was cured through the full appellate hearing. The court emphasized the appellate jurisdiction's co-extensiveness with the original jurisdiction and noted that no winding-up order had been issued yet, allowing the workmen to present their case before the company court. The court denied the appellant's request for a certificate of fitness to appeal to the Supreme Court, citing the absence of substantial legal questions of general importance.

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Issues Involved:
1. Right of workmen to be heard before advertisement of winding-up petition.
2. Merits of the winding-up petition and whether the advertisement should have been ordered.

Issue-wise Detailed Analysis:

1. Right of Workmen to be Heard:

The primary contention was whether the workmen of the company had a right to be heard before the advertisement of the winding-up petition. The appellant-union argued that as per the Supreme Court's ruling in National Textile Workers' Union v. P. R. Ramakrishnan, the workmen have a right to be heard at the stage of advertisement of a winding-up petition. The workmen had made two applications (C.A. No. 109 of 1980 and C.A. No. 774 of 1980) seeking an opportunity to be heard, which were not considered before the order was passed. The appellant contended that the order made without hearing the workmen was in violation of natural justice and should be declared void.

The court acknowledged that the workmen had a right to be heard, and their applications were not posted as directed by the company judge. The court examined whether the breach of natural justice could render the order void and whether the appellate hearing could cure this defect. The court referred to various legal principles and precedents, including the observations in S. L. Kapoor v. Jagmohan and Swadeshi Cotton Mills Co. Ltd. v. Union of India, which emphasized that non-observance of natural justice is itself prejudicial.

The court concluded that the terminology of "void" and "voidable" is not absolute in public law situations. The court held that in judicial proceedings, a full-fledged appellate hearing where the aggrieved party is afforded an opportunity to present its case could cure the defect in the original proceedings. The court cited the Supreme Court's observation in State of U.P. v. Muhammad Nooh, which recognized that in certain cases, an appellate procedure could cure the original defect.

2. Merits of the Winding-Up Petition:

The second issue was whether, on the merits, the advertisement of the winding-up petition was warranted. The appellant-union adopted the arguments of the company's appeal (O.S.A. No. 9 of 1983), which was heard together with this appeal. The court, in its judgment in O.S.A. No. 9 of 1983, dismissed the company's appeal and held that the order directing advertisement did not call for interference. Consequently, this conclusion also applied to the present appeal, and the court held against the appellant on this point.

The court noted that the facts and circumstances leading up to the filing of the winding-up petition and the subsequent proceedings were detailed in the judgment of O.S.A. No. 9 of 1983, and it was unnecessary to repeat them. The court also observed that the workmen's union had the locus standi to represent the workmen, and it was not disputed that the workmen had sought an opportunity to be heard.

The court ultimately held that the defect in the original proceedings before the company court was cured by the full hearing afforded in the appeal. The court emphasized that the appellate jurisdiction was co-extensive with the original jurisdiction, and the appellant had availed itself of this jurisdiction. The court also noted that no winding-up order had been made yet, and the workmen could still urge their contentions before the company court.

Conclusion:

The court dismissed the appeal, holding that the order directing advertisement of the winding-up petition did not call for interference. The court also refused the appellant's oral application for a certificate of fitness to appeal to the Supreme Court, stating that the appeal did not involve any substantial question of law of general importance. The court granted a stay of the judgment's operation and further proceedings in the company petition until July 31, 1983, pending the appellant's intention to move the Supreme Court for special leave to appeal under Article 136 of the Constitution.

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