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Issues: Whether the winding up order could be recalled in exercise of the Court's powers under the Companies Act and the inherent jurisdiction of the Court, and whether the company could be revived subject to safeguards for creditors and claimants.
Analysis: The application was supported by settlement of the known secured and unsecured claims, a long period of inactivity without any lodged claims, and an undertaking to protect any future legally admissible claim. The objection that revival could be pursued only through a formal scheme under section 391 of the Companies Act, 1956 was treated as a technical one in the facts of the case. The Court held that it had power to consider a genuine and viable proposal for revival and to impose appropriate conditions so that recall of the winding up order would not prejudice any creditor or claimant. The Court further held that adequate notice and a reserve fund were necessary safeguards, and directed publication of notice and retention of part of the available funds in fixed deposit for a specified period.
Conclusion: The winding up order was recalled and the company was permitted to be revived, subject to directions protecting the interests of any existing or future creditor or claimant.
Ratio Decidendi: A winding up order may be recalled and revival permitted where the proposal is genuine and viable and the Court, by appropriate conditions, can safeguard the rights of creditors and claimants who may otherwise be prejudiced.
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