TaxTMI 
TaxTMI 
2013 (1) TMI 227
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....der section 433 of the Companies Act, 1956 before the company court. The company court (learned single judge) by the impugned order: (a) admitted the petition; (b) directed the company to be wound up; (c) appointed the official liquidator and directed him to take charge of the assets and records of the company and proceed in accordance with law and (d) directed the citation to be published in the "Statesman" (English) and "Jansatta" (Hindi) for 16.03.2009. All these directions were issued in a single order - impugned in the present appeal - passed on 16.02.2009; the relevant paragraph is quoted below: "46. I, accordingly, admit this petition and direct that the respondent company be wound up. The official liquidator attached to this Court ....
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....e judgment refers to Rule 96 of the Companies (Court) Rules, 1959 framed by the court which states that when an application for winding up is presented it shall be posted before the judge in Chambers for admission and fixing a date for hearing and "for directions as to the advertisements to be published and the persons, if any, upon whom copies of the petition are to be served" and that the judge, if he thinks fit, direct that notice be given to the company before giving directions as to the advertisement of the petition. There is thus an opportunity to be provided to the company as contemplated by the rule. 4. It can still be argued that the opportunity to the company is required to be given only if the judge thinks it fit to do so and th....
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....n is inherent in the court and Rule 9 only reiterates that power. Similarly, in a later Supreme Court decision, in Cotton Corporation Of India v. United Industrial Bank, AIR 1983 SC 1272 it was held that: - "There is sufficient built- in safeguard in the provisions of the Companies Act and the Rules framed thereunder which would save the company from any adverse consequences, if a petitioner actuated by an ulterior motive presents the petition. This was taken notice of by this Court in National Conduits (P) Ltd. v. S. S. Arora, (1968) 1 SCR 430 : (AIR 1968 SC 279) wherein this Court set aside the order of the High Court of Delhi which was of the opinion that once a petition for winding-up is admitted to the file, the Court is bound to fort....
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.... answer to this contention is to be found in the judgment of the Supreme Court itself (supra). In the penultimate paragraph of the judgment (@ page 789), the court was examining the correctness of the view expressed by this court that the court must, as soon as the petition for winding up is admitted, advertise the petition. Rejecting the view, the Supreme Court observed: "Such a view, if accepted, would make the court an instrument, in possible cases, of harassment and even of blackmail, for once a petition is advertised, the business of the company is bound to suffer serious loss and injury." Recently, the Supreme Court had occasion to examine the question of issue of advertisement from the point of view of the company which is sought t....
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....en the aggrieved party has a remedy elsewhere. 28. In the above mentioned facts and circumstances of the case, we are of the view that the order passed by the Company Court ordering publication of advertisement in the newspaper would definitely tarnish the image and reputation of the appellant company resulting in serious civil consequences and, hence, we are inclined to allow this appeal and set aside the order passed by the Company Court dated 17.09.2009 in Company Petition 41 of 2009 and the judgment of the Division Bench of the High Court of Karnataka dated 21.10.2009 passed in OSA No. 36 of 2009, and we order accordingly. However, we make it clear that the observations and findings rendered by this Court in this proceeding will....