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TMI Blog2003 (11) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... . No. 959 of 2002 For the Respondents/Defendant: D.D. Madon, Adv.,i/b., Ghagrat and Co. in Company Application Nos. 310, 352 to 361 of 2003 in C.P. No. 959 of 2002 JUDGMENT D.Y. Chandrachud, J. 1. These company applications have been taken out by several secured creditors who assert their right to be heard at the stage of admission of the Company Petition for winding up. The right of the secured creditors to be heard at the stage of admission is questioned by Bharat Petroleum Corporation Limited who is the petitioner before the Court in the Company Petition. 2. Insofar as the legal position is concerned, Section 557 of the Companies Act, 1956 provides in Clause (a) of Sub-section (1) that in all matters relating to the windin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustice P.N. Bhagwati (as the learned Chief Justice then was), speaking for the Constitution Bench of the Supreme Court held that the workers have a locus to appear and be heard in the winding up petition both before the winding up petition is admitted and an order for advertisement is made and after the admission and advertisement of the petition until an order is made for winding up of the company. Having due regard to the provisions of Section 557(1) of the Companies Act, 1956, the principle which has been laid down by the Supreme Court in the case of the workers must necessarily apply in the case of the creditors. There is an express statutory recognition of the position that this Court must have regard to the wishes of creditors and con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the majority in value of the creditors, and if, for some good reason, they object to a winding up order, the Court in its discretion may refuse the order. The wishes of the creditors will however be tested by the Court on the grounds as to whether the case of the persons opposing the winding up is reasonable; secondly, whether there are matters which should be inquired into and investigated if a winding up order is made. It is also well settled that a winding up order will not be made on a creditor's petition if it would not benefit him or the company's creditors generally. The grounds furnished by the creditors opposing the winding up will have an important bearing on the reasonableness of the case. 6. Counsel appearing on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave an opportunity to have their say at the time of admission. In my view, the interest of creditors has to be considered by the Court even at the stage of admission. The reasons are not far to seek and the facts of the case are fairly typical. In the present case, in the affidavit in support of the company application (Company Application No. 352 of 2003), it has been averred that State Bank of India leads the consortium of banks that advanced large sums of money to the respondent Company towards working capital facilities. The consortium consists of State Bank of India, Bank of Baroda, Canara Bank, Union Bank of India, State Bank of Indore, Corporation Bank. ABN Amro Bank N. V., Central Bank of India, Standard Chartered Bank, Bank of Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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