Inherent powers permit recall of a winding-up order when consistent with company law and needed to do justice.

The company court's inherent powers under rule 9 of the Companies (Court) Rules, 1959, read with rule 6 and section 151 of the Code of Civil Procedure, extend to recalling a winding-up order where such relief is not inconsistent with the Companies Act, 1956. The statutory scheme in Part VII provides for winding-up procedure and stay of proceedings, but it does not exclude recall in appropriate circumstances. The court relied on the principle that inherent powers may be exercised to secure the ends of justice and prevent abuse of process. On the facts, the petitioning creditor had been satisfied and the other creditors did not object, so the winding-up order was recalled and set aside.

---

---

Issues: Whether the company court has inherent power under rules 6 and 9 of the Companies (Court) Rules, 1959, read with section 151 of the Code of Civil Procedure, 1908, to recall a winding-up order already made under section 433(e) of the Companies Act, 1956, instead of limiting relief only to a stay under section 466 of that Act.

Analysis: Rule 6 makes the practice and procedure of the court and the provisions of the Code applicable to company proceedings so far as they are applicable, while rule 9 expressly preserves the inherent powers of the court to pass orders necessary for the ends of justice or to prevent abuse of process. The statutory scheme in Part VII of the Companies Act, 1956 provides for winding-up procedure and for staying proceedings after a winding-up order, but it does not expressly or impliedly exclude the court's inherent power to recall an order where the circumstances justify such relief. The reasoning also drew support from the Supreme Court's recognition that a winding-up order can be revoked or recalled and that inherent powers may be exercised where not inconsistent with statute. On the facts, the applicant company had satisfied the petitioning creditor, the other creditors did not oppose, and the court found no statutory bar to recalling the order rather than confining relief to a stay.

Conclusion: The company court had jurisdiction to recall the winding-up order, and the application for recall was maintainable and allowed.

Final Conclusion: The winding-up order was set aside in exercise of the court's inherent powers, leaving the company petition to be dealt with further in accordance with law.

Ratio Decidendi: The inherent powers preserved by rule 9 of the Companies (Court) Rules, 1959, read with rule 6 and section 151 of the Code of Civil Procedure, 1908, are available to the company court to recall a winding-up order when such recall is not inconsistent with the Companies Act, 1956 and is necessary to do justice between the parties.

---