Winding-up petition advertisement becomes mandatory after admission; bona fide dispute alone will not justify deferring publication.

A winding-up petition, once admitted after both sides are heard, must ordinarily be advertised in the prescribed manner under the Companies (Court) Rules, 1959. The court may regulate or defer publication at the notice-before-admission stage, or use inherent power to prevent abuse of process, but that discretion narrows after admission. A plea that the dispute is bona fide or that publication may prejudice the company does not, by itself, justify withholding advertisement once the petition is admitted for final hearing. On the facts, the record showed a prima facie case of indebtedness and no abuse of process sufficient to displace the mandatory publication requirement.

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Issues: Whether, after a company petition for winding up has been admitted after hearing both sides, the company court can defer advertisement of the admission in newspapers on the ground that the dispute is bona fide and that publication would prejudice the company.

Analysis: The governing scheme under Rules 96 and 24 of the Companies (Court) Rules, 1959, as explained in the authorities relied on, permits the company court to regulate advertisement where the petition is at the stage of notice before admission or where the court has admitted the petition while retaining control over directions for advertisement. The inherent power under Rule 9 may also be invoked to prevent abuse of process. However, once notice before admission has been issued, both sides have been heard, and the petition is thereafter admitted for final hearing, advertisement becomes a mandatory requirement because a winding-up petition cannot be taken up for hearing unless it is advertised in the prescribed manner. The court also found that the materials on record supported a prima facie case of indebtedness and did not establish abuse of process so as to justify withholding publication.

Conclusion: The request to defer advertisement after admission was not maintainable on the facts, and the petition was liable to be advertised in accordance with the rules.

Ratio Decidendi: Where a winding-up petition has already been admitted after hearing both sides, advertisement under the Companies (Court) Rules is mandatory and cannot ordinarily be deferred merely on the plea of bona fide dispute or likely business hardship.

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