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Issues: (i) Whether a winding-up petition must be advertised immediately upon admission. (ii) Whether the court has inherent power to stay or suspend advertisement of a winding-up petition to prevent abuse of the process of court or to secure the ends of justice.
Issue (i): Whether a winding-up petition must be advertised immediately upon admission.
Analysis: Rule 96 of the Companies (Court) Rules, 1959 contemplates alternative courses at the stage of admission, including notice to the company before directions on advertisement. Rule 24 makes advertisement necessary before hearing, but does not compel immediate advertisement upon admission. The requirement of advertisement before hearing does not exclude judicial control over the timing of advertisement.
Conclusion: No. A winding-up petition need not be advertised immediately upon admission.
Issue (ii): Whether the court has inherent power to stay or suspend advertisement of a winding-up petition to prevent abuse of the process of court or to secure the ends of justice.
Analysis: The inherent power preserved by Rule 9 of the Companies (Court) Rules, 1959 enables the court to make directions necessary for the ends of justice and to prevent abuse of process. Where the petition is alleged to be not bona fide or to have been presented for an ulterior purpose, the court may consider whether advertisement should be restrained or postponed pending determination of that objection.
Conclusion: Yes. The court has inherent power to stay or suspend advertisement in an appropriate case.
Final Conclusion: The appeal succeeded on the procedural issue, and the matter was sent back for reconsideration in accordance with law on the question whether advertisement should be restrained.
Ratio Decidendi: The rules governing winding-up petitions do not require automatic advertisement on admission, and the court may, by virtue of its inherent powers, postpone or restrain advertisement where necessary to prevent abuse of process or to secure the ends of justice.
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