KOTHARI, J. - (1.) THIS appeal under section 483 of the Companies Act, 1956 is directed against the order passed by the learned Single Judge on 5. 9. 2003 by which the Company Petition No. 24 of 2003, a winding-up petition under Section 439 read with section 433 (e) of the Act, was admitted by an exparte order and the petition was ordered to be advertised in accordance with the Companies (Court) Rules, 1959.
(2.) THE appellant-respondent company before the learned Single Judge which was sought to be wound up has preferred this appeal, inter alia on the ground that the learned Single Judge has committed a grave error in admitting the company petition straightway without a pre-admission notice to the company and directing the advertisement of the same in newspapers and this has caused serious prejudice to the respondent company. Shri Paras Kuhad, learned counsel for the company has urged before us that the impugned exparte order of admission and advertisement of the winding up the company deserves to be set aside and in view of the dispute raised by the appellant- respondent company as to be debt due, which according to him was a bona fide dispute, the company petition itself deserved to be dismissed. Per contra, learned counsel for the respondent- petitioner, Shri Rajmal Jain Vehemently supported the exparte order of admission and advertisement passed by the learned Single Judge Judge. We have heard learned counsel for the parties and have also perused the record. Rule 96 of the Companies (Court) Rules, 1959 which is relevant for the present purpose reads as under: " 96. Admission of petition and directions as to advertisement. Upon the filing of the petition, it shall be posted before the Judge in Chambers for admission of the petition and fixing a date for the hearing thereof and for directions as to the advertisements to be published and the persons, if any, upon whom copies of the petition are to be served. The Judge may, if he takings fit, direct notice to be given to the company before giving directions as to the advertisement of the petition. " Section 443 of the Companies Act, 1956 is also reproduced here as under for ready reference: " 443. Powers of Tribunal on hearing petition.- (1) On hearing a winding up petition, the Tribunal may- (a) dismiss it, with or without costs; or (b) adjourn the hearing conditionally or unconditionally; or (c) make any interim order that it thinks fit;or (d) make an order for winding up the company with or without costs, or; any other order that it thinks fit: Provided that the Tribunal shall not refuse to make a winding up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets, or that the company has no assets. (2) Where the petition is presented on the ground that it is just and equitable that the company should be wound up, the Tribunal may refuse to make an order of winding up, if it is of the opinion that some other remedy is available to the petitioners and that they are acting unreasonably in seeking to have the company would up instead of pursuing the other remedy. (3) Where the petition is presented on the ground of default in delivering the statutory report to the Registrar, or in holding the statutory meeting, the Tribunal may- (a) instead of making a winding up order, direct that the statutory report shall be delivered or that a meeting shall be held; and (b) order the costs to be paid by any persons who, in the opinion of the Tribunal, are responsible for the default. "
(3.) IT may be stated here that the word Tribunal" was substituted for the word "court" by Act No. 11 of 2003 but since the National Company Law Tribunal has not yet been constituted, the winding up petitions are maintainable in the High Court. The learned counsel for the appellant relied upon in the following judgments in support of this contention that straight- way exparte admission order should not have been passed by the learned Single Judge and only after giving an opportunity of hearing to the respondent company, appropriate orders in accordance with the above quoted provisions of Section 443 and Rule 96, could be passed. According to the learned counsel, if the company was given any opportunity of hearing before admission of winding up petitions, it could have demonstrated before the Company Judge that the winding up petition itself was not maintainable in view of the bona fide dispute between the parties and according to the settled law in this respect, the winding up jurisdiction could not be invoked in such circumstances; (i) The National Conduits (P) Ltd. vs. SS Arora (AIR 1968 SC 279); (ii) Cotton Corporation of India Limited vs. United Industrial Bank Limited & Ors. (AIR 1983 SC 1272), (iii) NEPC Agro Foods vs. Hindustan Thompson Associates, (Vol. 95 CC 532), (iv) Soujanya Hotels vs. Nalla Satyanarayana Murthy (1995 (1) CLJ 172 (AP), (v) Bipla Chemical Industries vs. Shree Kesharya Investment (Vol. 47) 1977 CC 211), (vi) Golcha Investment (P) Ltd. vs. Shanti Chandra Bafna (AIR 1970 SC 1128) and (vii) Pioneer Consolidated Co. of India Ltd. vs. Indian Turpentine and Rosin Co. (1984 Vol. 55 Company Cases 509 (Del ). We are of the view that though there are no fetters or restrictions on the powers of the Company Judge to pass appropriate orders at the time of exparte hearing of the winding up the petition at the admission stage, but we feel that admission order cannot be as a matter of routine and normally before admitting a winding up petition against a limited company registered under the Companies Act, a notice before admission should be issued to the company sought to be wound up, calling upon it to show cause in the matter. When the respondent company which is sought to be wound up is a working and running concern, it causes serious prejudice to the goodwill and day to day working of the company, if a winding up petition against it, is admitted and ordered to be advertised exparte. As observed by the Hon'ble Supreme Court in National Conduits's case (supra) that the view taken by the High Court that a petition for winding up must be advertised as soon as the same is admitted is not only contrary to the plain terms of Rule 96, but such a view, if accepted, would make a court an instrument in possible cases, of harassment and even of blackmail, for windind up the petition is advertised, the business of the company is bound to suffer serious loss and injury. ;