Notice to Central Government under section 400 is required before final orders on petitions under sections 397/398.

Section 400 imposes a statutory requirement to give notice to the Central Government and consider its representations before the court passes a final order on petitions that in substance constitute applications under sections 397 or 398; where a petition lacks statutory qualification or fails to satisfy threshold averments it may be summarily dismissed without serving such notice. Practice: on admission for hearing (including service on the company) the court/registry must simultaneously cause notice to be served on the Central Government so the matter is heard with its representation; the same applies to composite petitions including winding up relief.

---

---

Issues: (i) Whether notice to the Central Government under section 400 of the Companies Act is mandatory before the court may finally hear or pass orders on petitions under sections 397 and 398; and (ii) what practice should be followed by the court when a petition under sections 397/398 (or a composite petition including those prayers) is presented.

Issue (i): Whether notice to the Central Government under section 400 of the Companies Act is mandatory before the court may finally hear or pass orders on petitions under sections 397 and 398.

Analysis: Section 400 requires that the court give notice of every application made under section 397 or 398 to the Central Government and take into consideration any representations before passing a final order under those sections. A petition that does not in substance constitute an application under section 397 or 398 (for example because the petitioner lacks statutory qualification or the averments do not satisfy the statutory requirements) is not an application within the meaning of section 400 and may be summarily dismissed without serving notice on the Central Government. Conversely, where a petition is admitted for hearing under sections 397 or 398 the object of section 400 is to ensure that the Central Government has an opportunity to be heard before a final order on the merits is passed; notice cannot be dispensed with merely because the court later decides to grant or refuse relief, nor can the necessity for notice be determined only after the decision is known.

Conclusion: Section 400 requires notice to the Central Government before the court passes a final order on petitions properly constituting applications under section 397 or section 398; but summary dismissal is permissible without such notice where the petition is not in substance an application under those sections or fails to meet statutory thresholds.

Issue (ii): What practice should be followed by the court when a petition under sections 397/398 (or a composite petition including those prayers) is presented.

Analysis: When a petition is presented the judge may either summarily dismiss it (where dismissal is appropriate for reasons such as lack of qualification or failure to plead required facts) or admit it. If the petition is admitted (including admittance for service on the company), the office should simultaneously issue notice to the Central Government so that the petition, when listed, will be heard with the company and the Central Government present and the court can then give directions after hearing both. The same practice applies to a standalone petition under sections 397 or 398 and to composite petitions that include winding up and relief under sections 397/398.

Conclusion: The established practice is that a judge may summarily dismiss unsuitable petitions without notice to the Central Government; but if the petition is admitted for hearing the court/office must cause notice to be served on the Central Government and the matter should be heard after service and consideration of any representation by the Central Government.

Final Conclusion: In the present case the court directed that notice be issued to the Central Government and adjourned the appeal for hearing after such service; a remand for fresh hearing may follow after the Central Government has been heard.

---