BALIA, J. - (1.) DR. Jag Mohan Mathur and others had filed a petition for winding up M/s. Takshila Hospital Ltd. on the ground that it is just and equitable as envisaged under Sec. 433 (f) of the Companies Act, 1956 to wind up the Company because of various alleged malpractices and misdeeds attributed to Management of the Company. The petitioners are shareholders and contributors of the Company.
(2.) BY the order under appeals, the learned Company Judge opining that case for winding up of the company is made out by the petitioners who are contributory shareholders as stated in S. 433[f] of the Companies Act, 1956 (for short, "the Act") but he has thought it fit that it is more appropriate that instead of ordering winding up alternative remedy Act be invoked. He therefore did not admit the petition, and for this purpose an option was given to the petitioners to move an application under s. 397 of the Act within six weeks before the Company Law Board, which has jurisdiction under Sec. 397 to consider such applications in the first instance. Appeal against such order as may be passed lies to this Court. With this order, the company petition for winding up of the company petition was kept pending without admitting. In this event company petition was to be proceeded further,' in case the petitioners were not to make an application before Company Law Board under Sec. 397. Aggrieved with the order of learned Company Judge, recording finding against the Company in definite terms without even admitting the petition and inviting the objections and before hearing the objections if any, that may be, raised after the same is admitted, these appeals could be made, if after admitting the petition, the notice of petition were to be published. Findings on merit were also challenged. The petitioners had exercised such option by making an application under Sec. 397 before the CLB which is pending consideration. At the outset, it was contended by the petitioners that under the very scheme of Companies Act, the two proceedings at the instance of the same petitioners one u/sec. 397 and other under Sec. 433 cannot continue since the petitioner has in fact moved an application under Sec. 397 of the Act by exercising option given by the Court. These appeals have been filed by the appellants inter alia on the ground that once the application under S. 397 of the Act is directed to be moved and in fact it has been moved, this winding up petition cannot be proceeded further and the winding up petition ought to have been dismissed. That the findings recorded by the learned Company Judge results in predecision by the appellate forum and denude it of authority to come to its own finding as it is bound under Sec. 397 before making any order. Such finding even if expressed can have no binding force on the Company Law Board, for the purpose of entertaining and deciding the application of the petitioner under s. 397 of the Act. In this connection, attention has been invited to S. 443 (2) read with S. 434 (f) and 397 of the Act.
(3.) WE are of the opinion that the basic principle ingrained in Ss. 443[2] and 397 are the same viz. to stave up off the winding up of a company as far as possible which is to be resorted to only as a last course. All efforts are to be made for saving the company from being wound up. If the shareholders approach the Company Law Board then the Company Law Board has to form its own opinion that a case is made out for which the company could be wound up an just and equitable ground but it is not desirable to wind up the company. So also, where the Company Judge in the winding up petition comes to the conclusion that he is satisfied that for the petitioner alternative remedy is available and the petitioner is acting in reasonable manner, winding up petitions should be dismissed. If seen in that light, it is apparent that the direction given by the learned Company Judge inheres that while giving option to the petitioner and not admitting the winding up petition notwithstanding his prima facie conclusion it was desirable to see that if the petitioners choose to go before the Company Law Board under s. 397 of the Act, the matter must be examined there in the first instance and thereafter parties may have resort to their remedies against that order. The right of the respective parties to challenge the order of the learned Company Judge by way of appeal or otherwise is permitted by law. In case the prima facie conclusions reached by learned Company Judge remains in operation and matter remains pending, such right of appeal is likely to affect such remedies. From a long chain of judicial pronouncements, it is fairly well settled that a company which is sought to be wound up on just and equitable ground under S. 433 (1) of the Act ought not be so wound up unless resort to such an extreme step to bring and end to existence of company is necessity and causes cannot be dealt with through any alternative mechanism. ;