Secured creditors' right to be heard at winding-up petition admission stage affirmed under the Companies Act framework.

Secured creditors are entitled to intervene and be heard at the stage of admission of a winding-up petition. Section 557 of the Companies Act, 1956 allows the Court to consider the wishes of creditors in all matters relating to winding up, and that expression is broad enough to cover admission of the petition. Because admission can seriously affect the company's market standing and business confidence, the same principle that permits workers to be heard before admission and advertisement applies equally to creditors. The absence of a specific rule permitting opposition does not exclude that hearing right where the statute requires creditor wishes to be considered.

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Issues: Whether secured creditors are entitled to be heard at the stage of admission of a company petition for winding up.

Analysis: Section 557 of the Companies Act, 1956 recognises that in all matters relating to the winding up of a company the Court may have regard to the wishes of creditors and contributories. The expression "all matters relating to the winding up" is broad enough to include the stage of admission of the winding up petition. The admission of such a petition has serious consequences for the company, including damage to its market standing and business confidence. The principle that workers may appear and be heard before admission and advertisement of a winding up petition applies with equal force to creditors. The absence of a specific rule authorising creditors to oppose admission does not exclude their right to be heard where the statute expressly requires consideration of their wishes.

Conclusion: Secured creditors are entitled to intervene and be heard at the stage of admission of the winding up petition.

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