Winding-up admission requires prima facie debt and default; opposing creditors cannot intervene before admission.

At the admission stage of a winding-up petition, once a prima facie debt and default are shown after statutory notice, the petition should be admitted unless a legally sustainable ground to refuse admission is established. Creditors opposing winding up have no right to intervene at the admission stage under the procedural scheme, because they may be heard later after admission when all creditors can participate. On the facts, the petitioning creditors' debts were admitted, notice of demand went unanswered, and the company's assertions of assets, bank finance, or a future revival scheme were unsupported; the petitions were therefore admitted.

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Issues: (i) Whether creditors opposing winding up had a right to be heard at the stage of admission of the petition; (ii) Whether the winding-up petitions should be admitted on the facts shown.

Issue (i): Whether creditors opposing winding up had a right to be heard at the stage of admission of the petition

Analysis: The relevant procedural scheme under rule 96 of the Companies (Court) Rules, 1959 contemplated notice to the company before directions for advertisement of the petition. It did not contemplate intervention by other creditors at the admission stage. The inherent power preserved by rule 9 could not be used to distort that scheme. Creditors opposing winding up would not be prejudiced by admission of the petition, because they would have an opportunity to be heard after admission, when all creditors could be heard together. The Court therefore treated the attempted intervention as premature.

Conclusion: The opposing creditors had no right to intervene at the admission stage, and their applications were to be considered later.

Issue (ii): Whether the winding-up petitions should be admitted on the facts shown

Analysis: The debts due to the petitioning creditors were admitted and statutory notice of demand had been served without reply. The company failed to produce any reliable material to substantiate its claim of ample assets, and adverse inference was drawn from the withholding of relevant documents. Mere assertions of solvency, expected bank finance, or a possible future revival scheme were not sufficient to defeat a prima facie right to have the petition admitted. At the admission stage, once a prima facie case for winding up was made out, the petitions ought to be admitted, leaving all wider considerations for the substantive hearing.

Conclusion: The petitions were admitted.

Final Conclusion: The company could not resist admission of the winding-up petitions by speculative assertions of assets or prospective finance, and the matter was directed to proceed in the lead petition with further steps for advertisement and hearing.

Ratio Decidendi: At the admission stage of a winding-up proceeding, once a prima facie debt and default are shown after statutory notice, the petition should be admitted unless a legally sustainable ground to refuse admission is established; creditors opposing winding up do not have a right to intervene before admission.

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