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TMI Blog1956 (7) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... er 11, 1955, and the learned Judge made the following endorsement : "Accepted. Petitioners waive service. Hearing 2nd of December." It may be pointed out that before this petition was filed the respondent company had given notice of the presentation of the petition to the appellant company and in answer to that notice the appellant .company appeared before Mr. Justice Coyajee and all that Mr. Justice Coyajee's endorsement indicates is that the appellant company had waived service, of the petition. On December 1, 1955, Mr. K. M. Modi, managing director of the appellant company, made an affidavit setting out his defence to the case sought to be made out by the petitioners for the winding up of the appellant company, and in this affidavit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , that section 202 conferred upon a party aggrieved a substantial and valuable right of appeal and that the court must be anxious not in any way to cut down or impair that right. At same time we expressed the opinion that if an order made under section 202 was merely a procedural order which in no way affected the rights or liabilities of parties such an order would not be appealable. As we shall presently point out, it is unnecessary for us at this stage to decide whether the order made by Mr. Justice Desai is procedural or affects the rights of parties, because the view we take is that Mr. Justice Desai made this order without exercising his jurisdiction to hear the appellants and deciding their contentions as he was bound to do at thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e court, or that the petitioner has failed to make out that he is a creditor, if it is a creditor's petition, in which case it would be futile to have the petition advertised and proceed to the final hearing of that petition. The principle underlying rule 733 is that a petition should not be heard on merits without giving an opportunity to all persons who are interested in the company from coming up before the court and putting before the court their point of view. In the winding up of a company the creditors are interested, the shareholders are interested, and therefore it is but right that before the court makes a final order on the petition these parties should be heard. But that does not mean that the discretion of the court is taken aw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion should not be proceeded with and further steps should not be taken. If the learned Judge is satisfied at that stage that the respondent has made out a proper case and has shown cause, he can dismiss the petition. If, on the other hand, the learned Judge feels that the respondent has not shown proper cause and that the petition must proceed to a final hearing on merits, he then makes the order under rule 733,directs the advertisement of the petition, and fixes the final hearing of the petition. This notice is essential because, as Mr. Purshottam has rightly pointed out, it is a very serious matter for any company to have the petition advertised without the company being heard in its defence. Mr. Desai was inclined cavalierly to suggest t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Desai. It is clear that in view of rule 733 the learned Judge could not have fixed the final hearing of this petition on December 2. If he wanted to hear the petition on merits on that day, the petition had to be advertised and the procedure laid down in that rule had to be carried out. Mr. Desai says that the learned Judge must have overlooked the provisions of rule 733. We refuse to believe that Mr. Justice Coyajee with his wide experience of company matters could possibly overlook the provisions of rule 733. It is clear that what the learned Judge intended was to hear the appellants on December 2, with regard to their contention that the petition should not be proceeded with, and this is borne out by the fact that Mr. Modi, the managi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Judge had made the order after considering these various alternatives and if he had done so after hearing the contention of the appellants and had come to the conclusion that there was no substance in their contention, then undoubtedly it could not be said that the learned Judge has not exercised his discretion. But as we have just pointed out, it is clear from the order of Mr. Justice Desai and the absence of any indication in the judgment to the contrary that Mr. Justice Desai felt that he was bound by the mandatory provisions of rule 733 and that he had to give effect to those provisions. The result, therefore, is that we must set aside the order of Mr. Justice Desai, and send the matter back to him with a direction that he will pas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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