Mandatory notice and valid authority govern company petitions; consent cannot bypass statutory alteration of articles or an unauthorised compromise.

Statutory advertisement of a company petition must comply strictly with the minimum notice period and must disclose the material reliefs sought; a notice that is late or vague is defective and cannot be treated as a mere irregularity. An order altering the articles of association cannot be sustained as a consent order if the statutory procedure for alteration has not been followed, because private compromise cannot override the company's constitutional requirements. Counsel can bind a client to compromise only with express authority, and any later ratification must be clear and established; absent that, shareholders are not bound.

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Issues: (i) whether the statutory advertisement of the company petition complied with the prescribed period of notice and disclosed adequate particulars of the reliefs sought; (ii) whether an order altering the articles of association could validly be made as a consent order without following the statutory procedure; (iii) whether counsel had authority to enter into the compromise and whether the shareholders were bound by any ratification.

Issue (i): whether the statutory advertisement of the company petition complied with the prescribed period of notice and disclosed adequate particulars of the reliefs sought

Analysis: The notice was published only twelve days before the hearing in one newspaper and five days before the hearing in the Gazette, whereas the rule required not less than fourteen days' notice. The notice also failed to set out the material reliefs sought in the petition and merely referred in general terms to removal of respondents and other reliefs. The statutory requirement of notice was treated as mandatory, not as a curable irregularity, and the omission of particulars was held to prejudice shareholders who were entitled to know the real scope of the proposed changes.

Conclusion: The notice was defective in time and particulars, and the objection succeeded in favour of the petitioning shareholders.

Issue (ii): whether an order altering the articles of association could validly be made as a consent order without following the statutory procedure

Analysis: The order expressly recorded that the entirety of it was passed by consent after discussion with counsel. Since the order effected alteration of the articles, the statutory procedure governing alteration could not be bypassed merely by consent between the parties. A compromise could not supersede the requirements of the Act for altering the company's constitution.

Conclusion: The consent order, so far as it altered the articles, was not sustainable and the challenge succeeded.

Issue (iii): whether counsel had authority to enter into the compromise and whether the shareholders were bound by any ratification

Analysis: The vakalat did not confer express authority on counsel to compromise. In the absence of such authority, a compromise entered into by counsel could not bind the client. The later conduct relied upon did not amount to clear ratification, particularly where the basis of the order had not been fully disclosed to the affected party.

Conclusion: Counsel lacked authority to compromise and no binding ratification was established; the affected shareholders were not bound.

Final Conclusion: The applications were substantially allowed: the petitioning shareholders were permitted to come on record and contest the matter, while the request to restrain the administrators was refused; substitution of one administrator was also ordered.

Ratio Decidendi: Where a company petition is required to be advertised in a prescribed manner, compliance with the minimum notice period and disclosure of the material reliefs sought is mandatory, and a compromise or consent order cannot validly override statutory procedure for altering a company's articles unless counsel has express authority and the compromise is properly binding on the parties.

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