Oral evidence in winding-up: admissible at court's discretion but subordinated to necessity and expedition; mere directoral dispute insufficient.

Oral evidence and cross-examination in winding-up proceedings are permissible where the Companies Act and Original Side rules are silent, but admissibility is a judicial discretion to be exercised with regard to necessity and the statutory need for expedition; refusal of late oral evidence or adjournment may be upheld if it would cause undue delay. On the substantive point, the just-and-equitable ground requires conduct or circumstances making continuation untenable-mere disagreement between majority and minority, absent proof of misconduct, incapacity, or substratum failure, does not justify winding up; the court declined winding up on these facts.

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Issues: (i) Whether oral evidence and cross-examination may be permitted in winding-up proceedings and whether the learned Judge erred in refusing such leave; (ii) Whether on the facts the company ought to be wound up under the "just and equitable" clause.

Issue (i): Whether oral evidence and cross-examination are permissible in winding-up proceedings and whether refusal to allow oral evidence or an adjournment in the circumstances was improper.

Analysis: The procedural rules under the Companies Act and the Original Side rules do not expressly prohibit oral evidence in winding-up proceedings. Where the rules are silent, applicable provisions of the Code of Civil Procedure and the practice in England may be followed insofar as they are consistent with the Act and the rules. Authorities permit cross-examination of deponents and, where necessity or expediency requires, allowance of oral testimony, but the allowance is discretionary. The retrospective effect and public interest in speedy disposal of winding-up petitions require expedition; dilatory or belated applications for oral evidence or adjournment that would delay disposal are subject to stricter scrutiny.

Conclusion: The Court may permit oral evidence or cross-examination in winding-up proceedings, but it is a matter of judicial discretion to be exercised having regard to necessity and expedition. The learned Judge did not err in refusing leave to adduce oral evidence or to grant an adjournment in the facts of this case.

Issue (ii): Whether the facts shown in the statutory affidavit and affidavits established that it was just and equitable to wind up the company under section 162(vi).

Analysis: The "just and equitable" ground requires conduct or circumstances such that continuation of the company is untenable - for example a complete deadlock or substratum gone, lack of probity in management, or inability to conduct business. A mere difference of opinion between a minority and a majority directorate, absence of proof of misappropriation or malversation, continued profitable trading and the existence of goodwill weigh against winding up. The statutory affidavit is prima facie evidence; if it does not show a case calling for winding up, respondents are not necessarily required to be discredited by permitting extensive oral proof when delay would follow.

Conclusion: The allegations before the Court did not establish a just and equitable ground for winding up. The learned Judge correctly declined to order winding up.

Final Conclusion: The appeal is dismissed; the procedural discretion to refuse late oral evidence and the substantive refusal to wind up the company are upheld.

Ratio Decidendi: Where rules are silent, oral evidence in winding-up proceedings is admissible in the Court's discretion, but the discretion must be exercised in the light of the need for expedition in winding-up matters; a mere conflict of views between majority and minority directors, without proof of misconduct or incapacity to carry on business, is not a sufficient just and equitable ground for winding up under section 162(vi) of the Indian Companies Act.

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