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Issues: Procedure for substitution of petitioners in a winding-up petition under Companies (Court) Rules, 1959.
The judgment delivered by Justice D.K. Kapur pertains to a winding-up petition pending in the High Court. Several applications were filed in connection with the petition, seeking to support it. However, the winding-up petition had not been admitted, and only a notice to show cause had been issued to the respondent company. The court had not yet admitted or advertised the petition due to ongoing discussions about a possible compromise. The key issue addressed was whether these supporting applications should remain pending or be decided immediately. The judgment analyzed the relevant rules, specifically rules 34 and 101 of the Companies (Court) Rules, 1959, to determine the appropriate procedure to be followed in such cases. The judgment highlighted the procedure outlined in the Companies (Court) Rules, 1959, for the admission and advertisement of a winding-up petition. It emphasized the importance of preventing a petition from being withdrawn or failing at the behest of a single petitioner, to the detriment of other creditors or contributories. Rule 102 allows for the substitution of petitioners if a creditor or contributory withdraws, ensuring that the grievances of the substituted petitioner can be brought before the court. The judgment clarified that the procedure for substitution must be followed diligently to protect the interests of all parties involved in the winding-up petition. Regarding the procedure for appearing in a winding-up petition, the judgment discussed rule 34, which allows any person to oppose or support a petition by giving notice to the petitioner's advocate. It was determined that even before the admission or advertisement of the petition, third parties could appear before the court as supporting or opposing parties. The judgment emphasized the significance of following the prescribed rules, including giving notice under rule 34 and filing a list of persons intending to appear at the hearing. The court directed the petitioner to file a list in Form No. 10, listing the supporting applicants, to ensure their entitlement to be heard at the petition's hearing. In conclusion, the judgment provided clarity on how the supporting applications should be dealt with. It stated that the applications could be considered as an intimation to the advocate of the original petitioner regarding the intention of the applicants to support the petition. Once the list in Form No. 10 was filed, the applicants would be entitled to be heard in the main winding-up petition. The judgment highlighted that the applications need not be kept pending and could be disposed of, with the applicants being able to seek substitution as petitioners when the conditions specified in rule 101 arise. This approach aimed to streamline the process and ensure that the applicants could obtain the relief they sought at the appropriate time.
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