Ultra vires company court rules: audit rules for liquidator's accounts were held beyond the parent Act's rule-making power.

Rules 301 to 304 of the Companies (Court) Rules, 1959 were beyond the rule-making power conferred by the Companies Act, 1956 because they did more than fill procedural gaps. Section 643 authorised rules only on matters left to prescription by the Act, while section 462 vested the court with discretion over the audit of a liquidator's accounts. By prescribing the audit mode, auditor appointment and functioning, document production, and audit certificates, the rules trenched upon powers reserved to the court. The result was that those rules were ultra vires and unenforceable in winding-up proceedings by the court.

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Issues: Whether rules 301 to 304 of the Companies (Court) Rules, 1959 were within the rule-making power conferred by the Companies Act, 1956 and, in particular, whether the rules governing the audit of a liquidator's accounts were valid.

Analysis: Section 643 empowered the Supreme Court to make rules only for matters relating to winding up which the Act left to be prescribed, while section 462 left to the court the manner in which the liquidator's accounts were to be audited. The rules in question did not merely fill in procedural detail; they prescribed the mode of audit, the appointment and functioning of auditors, the production of books and vouchers, and the filing of audit certificates. Those matters trench upon the court's statutory discretion under section 462 and go beyond the authority conferred by section 643. As subordinate legislation, the rules could not override or contradict the express scheme of the Act or take away powers that the Act had vested in the court by necessary implication.

Conclusion: Rules 301 to 304 of the Companies (Court) Rules, 1959 were held to be beyond the rule-making power under the Companies Act, 1956 and therefore of no effect insofar as winding up by the court was concerned.

Final Conclusion: The impugned rules governing audit of liquidator's accounts were declared invalid for want of statutory authority, and the matter was left for administrative directions consistent with the Act.

Ratio Decidendi: Delegated rules cannot validly curtail or supersede powers expressly or by necessary implication vested in the court by the parent Act, and any rule made beyond the scope of the enabling provision is ultra vires and unenforceable.

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