Company court may enlarge time after default and stay winding-up proceedings on terms protecting creditors' interests.

Rule 7 of the Companies (Court) Rules, 1959 empowers a company court to extend or abridge time fixed by court order even after the stipulated period has expired. In company proceedings, the court may adopt a broader equitable approach rather than a narrow creditor-debtor view, and may consider the likely consequences of an immediate winding-up order. Although default and delay in seeking relief are adverse factors, the court may still grant further time for compliance with consent terms and keep winding-up proceedings in abeyance on safeguards protecting the petitioners' interests.

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Issues: Whether the company court could enlarge the time for payment under the consent terms after default and grant a stay of further proceedings in the winding-up petitions.

Analysis: Rule 7 of the Companies (Court) Rules, 1959 empowers the court to extend or abridge time fixed by the rules or by an order of court for doing any act, and the power is available even when the application is made after the expiry of the stipulated time. In company proceedings, the court is not confined to a narrow creditor-debtor approach and may take into account the broader circumstances, including the likely consequences of an immediate winding-up order. The existence of default and the delay in approaching the court were relevant adverse factors, but the court held that the company had admitted liability, sought further time to meet its admitted debts, and deserved one more opportunity with safeguards for the petitioners' assets.

Conclusion: The application for extension of time and stay was allowed, and the time for payment under the consent terms was enlarged.

Final Conclusion: The company court exercised its discretionary power to grant further time for compliance with the settlement and to keep the winding-up proceedings in abeyance, while preserving the petitioners' security and related protections.

Ratio Decidendi: A company court may, under Rule 7 of the Companies (Court) Rules, 1959, enlarge time fixed by court order even after expiry, and may do so on terms that balance the debtor company's prospects with protection of the creditors' interests.

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