Winding-up proceedings need not be stayed where a separate criminal complaint against a director is distinct in parties, reliefs and cause of action.

A winding-up proceeding against a company need not be stayed merely because a separate criminal complaint arising from the same transaction is pending against the managing director in his individual capacity. The court treated the two matters as distinct because they involved different parties, different reliefs and different causes of action: the winding-up petition concerned alleged non-payment of dues by the company, while the criminal complaint alleged fraud by the director personally. Authorities on stay of proceedings were found factually distinguishable. The request for stay was rejected, the applications were dismissed, and the company was directed to file its reply to the show-cause notice.

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Issues: Whether further proceedings in a winding-up petition could be stayed because of a pending criminal complaint against the managing director of the respondent-company in his individual capacity.

Analysis: The applications sought a stay of the winding-up proceedings pending disposal of a criminal case arising out of the same commercial transaction. The governing consideration was whether the two proceedings were in substance identical or whether they were distinct in parties, reliefs and cause of action. The winding-up petition was against the company for non-payment of dues and was then at the stage of a show-cause notice, whereas the criminal complaint was against the managing director personally for alleged fraud. The existence of a criminal case against an individual director did not make the company itself the accused, and the authorities relied upon on stay of proceedings were held to be distinguishable on their facts.

Conclusion: The request to stay the winding-up proceedings was rejected. The applications were dismissed and the company was directed to file its reply to the show-cause notice.

Ratio Decidendi: A winding-up proceeding against a company need not be stayed merely because a separate criminal complaint concerning the same transaction is pending against one of its directors in his individual capacity, when the two proceedings are distinct in parties, reliefs and cause of action.

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