2009 (2) TMI 462 - HC - Companies Law

Winding up - Effect of winding up order, Winding up - Circumstances in which a company may be wound up

Issues Involved:
1. Invocation of Section 483 of the Companies Act, 1956.
2. Condonation of delay in filing and re-filing the appeal.
3. Publication of the factum of admission of the company petition.
4. Requirement of notice before directing publication of the admission.

Issue-wise Detailed Analysis:

1. Invocation of Section 483 of the Companies Act, 1956:
The appellant, a company in liquidation, invoked Section 483 of the Companies Act, 1956, challenging the order dated 7-8-2008, which directed the publication of the admission of Company Petition No. 129 of 2004. The petition was initially admitted on 26-5-2005 due to the appellant's failure to file a reply despite repeated opportunities. The appellant was present during the admission, and the matter was listed for publication on 28-7-2005. The appellant challenged this order by filing Company Appeal No. 13 of 2008.

2. Condonation of Delay in Filing and Re-filing the Appeal:
The appellant filed applications to condone a delay of 1,050 days in filing the appeal and 72 days in re-filing it. The appellate bench condoned the 72-day delay in re-filing but declined to condone the 1,050-day delay in filing, stating that no sufficient cause was shown for such an inordinate delay. The bench emphasized that delays should be condoned to advance substantial justice only when no gross negligence or deliberate inaction is attributable to the party. The delay was deemed deliberate and lacking bona fides, thus rejecting the condonation request and dismissing Company Appeal No. 13 of 2008.

3. Publication of the Factum of Admission of the Company Petition:
The appellant had previously filed Company Application No. 732 of 2006, seeking details of dues from the respondent to settle accounts. However, the learned Company Judge directed the publication of the factum of admission on 7-8-2008, observing that the appeal against the order of admission had been dismissed. The appellant argued that if the details of dues were provided, they could have been settled, and the publication was premature. However, the court held that the publication was within jurisdiction following the dismissal of the appeal.

4. Requirement of Notice Before Directing Publication of the Admission:
The appellant contended that the court should have issued a notice before directing the publication of the admission, citing the Supreme Court judgment in National Conduits (P.) Ltd. v. S.S. Arora. The respondent countered that no such notice was required under the Rules or the cited judgment. The court agreed with the respondent, stating that Rule 96 of the Companies (Court) Rules, 1959, does not mandate issuing a notice to the company before publication. The court further clarified that the Supreme Court judgment in National Conduits (P.) Ltd. did not establish a precedent requiring notice before publication. Instead, it upheld the discretion of the Company Judge to suspend the advertisement of a petition in appropriate cases.

Conclusion:
The court dismissed the appeal, affirming that the learned Company Judge acted within jurisdiction by directing the publication of the admission. The appellant's arguments failed to demonstrate any procedural or legal errors warranting interference with the order dated 7-8-2008. The court emphasized that the delay in filing the appeal was inordinate and deliberate, lacking sufficient cause, and thus, the dismissal of the appeal and subsequent publication order were justified.

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