TMI Blog1967 (9) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... ccording to law - 1082 OF 1967 - - - Dated:- 1-9-1967 - J.C. SHAH, S.M. SIKRI AND J.M. SHELAT. JJ. A.N. Khanna and Harbans Singh for the Appellant. P.C. Khanna and Maharaj Krishan Chawla for the Respondent. JUDGMENT Shah, J. The appellant, a private limited company, is engaged in the manufacture of electric conduit pipes. The respondent, who is a director of the company, presented a petition in the High Court of Delhi under sections 433 and 439 of the Companies Act, 1956, for an order for compulsory winding up of the company. The respondent claimed that it was "just and equitable" within the meaning of section 433( f ) of the Companies Act, 1956, to make an order for compulsory winding up because one o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring electric conduit pipes. The learned judge directed that the petition be not advertised and be dismissed. In appeal against the order passed by H.R. Khanna J., the High Court of Delhi held that under the Companies (Court) Rules, 1959, once a petition is admitted to the file, the court is bound forthwith to advertise the petition. The company challenges that order in this appeal. Rule 96 of the Companies (Court) Rules, 1959, framed by this court provides: "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, unless the petition is advertised; that is clear from the terms of rule 24(2). But that is not to say that as soon as the petition is admitted, it must be advertised. In answer to a notice to show cause why a petition for winding up be not admitted, the company may show cause and contend that the filing of the petition amounts to an abuse of the process of the court. If the petition is admitted, it is still open to the company to move the court that in the interest of justice or to prevent abuse of the process of the court, the petition be not advertised. Such an application may be made where the court has issued notice, under the last clause of rule 96, and even when there is an unconditional admission of the petition for winding up. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he High Court was bound to consider whether the view expressed by H. R. Khanna J., was right. For reasons already set out, in our judgment, the High Court erred in holding that a petition for winding up must be advertised even before the application filed by the company for staying the proceeding for the ends of justice, or to prevent abuse of the process of the court. The view taken by the High Court that the court must, as soon as the petition is admitted, advertise the petition is contrary to the plain terms of rule 96. Such a view, if aceepted, would make the court an instrument, in possible cases, of harassment and even of blackmail, for once a petition is advertised, the business of the company is bound to suffer serious loss and in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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