Home Case Index All Cases Companies Law Companies Law + HC Companies Law - 2018 (7) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (7) TMI 1858 - HC - Companies LawWinding up order recalled - the petition was advertised on or about September 14, 2015, but, according to principal respondent State Bank of India, the company petition did not appear in the list on the returnable date as indicated in the advertisements - Held that - By the order impugned, the company Court perceived that in the peculiar circumstances that the petition did not appear on the returnable date indicated in the advertisements and the matter remained adjourned for a substantial period of time, a fresh advertisement should have been directed to be published before the matter was considered at the post-advertisement stage. The company Judge cannot be faulted for such perception, since creditors of a company have a say at the post-advertisement stage and the company Judge has the discretion to not wind up the company despite its proven indebtedness to the petitioning-creditor if other creditors demonstrate that the company should not be wound up. On the point of principle, the order impugned cannot be questioned. In the meantime, the appellant herein preferred the present appeal. The date July 9, 2018 indicated in the order impugned by the company Court for fresh directions to be issued as to the advertisements could not adhered to, primarily, on account of the pendency of this appeal. The order impugned does not call for any interference. Since the date for directing fresh advertisements to be published has passed, such directions are issued hereby. The petitioning-creditor will cause advertisements to be published in the same newspapers in which the original advertisements had been published, indicating that the company petition will appear before the company Court on the first available working day two weeks after the date of the publication. The publication of the advertisements has to be simultaneous in the newspapers on a date within two weeks from today. The department is directed to ensure that the company petition appears in the list on the returnable date.
Issues Involved:
- Recall of winding up order - Adjourning winding-up petition due to reference to BIFR - Lack of appearance of company petition in the list - Allegations of propping up a friendly creditor - Fresh advertisement before hearing the matter - Discretion of company judge in winding up Recall of Winding Up Order: The appeal challenged the recall of an order winding up a company. The appellant, a creditor, initiated winding-up proceedings against the company, which were admitted in August 2015. However, due to a reference to the Board for Industrial and Financial Reconstruction (BIFR) in 2015, the winding-up petition was adjourned and subsequently remained adjourned sine die under Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. After the repeal of the Act, the petitioning-creditor revived the winding-up petition when the company failed to discharge its debt, leading to the order for winding up. Allegations and Fresh Advertisement: The State Bank, a secured creditor, contended that the company petition being adjourned sine die deprived other creditors of their say, and there should have been a notice or advertisement before hearing the matter again. They alleged that a friendly creditor was propped up to ensure the winding-up of the company. The company Court acknowledged the need for a fresh advertisement at the post-advertisement stage to allow other creditors to have a say before winding up the company. The company judge was perceived as not at fault for this decision, as creditors should have a chance to demonstrate why the company should not be wound up. Discretion of Company Judge: The judgment highlighted the discretion of the company judge in deciding whether to wind up a company, even if it is proven to be indebted to the petitioning-creditor. The order impugned by the company Court was not questioned on principle, but the delay in issuing fresh directions for advertisements led to the appellant filing the present appeal. The judgment directed the petitioning-creditor to publish advertisements in the same newspapers as before, with the company petition appearing before the company Court on the first available working day two weeks after publication, ensuring simultaneous publication in multiple newspapers. Conclusion: The judgment concluded that the order did not warrant interference, but due to the missed deadline for fresh advertisements, directions were issued for publication. The department was directed to ensure the company petition appears on the returnable date. The appeals were disposed of with no order as to costs, emphasizing the importance of proper procedures and creditor involvement in winding-up proceedings.
|