The court has inherent power under rules 6 and 9 of the Companies (Court) Rules, 1959 to recall an order of winding up based on settlement of claims against the company and its potential for profitable business, without necessitating fresh advertisement of the petition in the newspaper.

P. P. BOPANNA, J.

( 1 ) THE petitioners-directors have filed this application tinder the, provisions of rules 6 and 9 of the Companies (Court) Rules, 1959, read with section 151, Civil Procedure Code, and section 466 of the Companies Act, 1956 (in short"the Act"), for the following reliefs : "that this court may be pleased to recall the order dated February 6, 1987, passed by this hon'ble court in Company Petition No. 47 of 1986 for winding up of the company by name super Galaxy Drugs Pvt. Ltd. Alternatively, it is prayed that this court may be pleased to permanently stay the winding up order dated February 6, 1987, passed by this court winding up the aforesaid company in Company Petition No. 47 of 1986. "

( 2 ) THE petitioners are the directors of the company by name Super Galaxy Drugs Pvt. Ltd. (in liquidation ). They are also the only two share-holders. This company was ordered to be wound up by this court by its order dated February 6, 1987. It is not in dispute that the official liquidator, pursuant to the order of winding up, had complied with the necessary formalities of winding up. The respondent had invoked the jurisdiction of this court for the winding till of the aforesaid company under the provisions of section 433 (e) of the Act. But, before the official liquidator could take possession or the assets of the company (in liquidation), the petitioners, claiming to the the shareholders, had filed this application for the reliefs which I have experted above. The reason for filing this application is that subsequent to the order of winding up passed by this court, the petitioners had paid a sum of Rs. 5,168. 15 due to the respondent-company,. e. , the Petitioner in the company petition, and the balance was paid after the filing of this application and, therefore, the company (in liquidation) is not due in any sum to the respondent company and hence the order of winding up passed by this court in exercise of its jurisdiction under section 433 (e) of the Art would cause considerable prejudice to the petitioners. It is further submitted in the application that there are only two creditors of this company, viz. , J. T. Parameshwaraiah and Sri Veerabhadraiah, who have absolutely no objection to receive the amounts due to them after the company (in liquidation) starts making profits. They, in fact, had not entered appearance before this court when this court ordered advertisement of the company petition. It is further asserted in paragraphs 9 and 10 of the application that the drugs manufactured by the company (in liquidation) are well received in the market and the company has great potential to run its business profitably; that the assets of the company are valued at Rs. 5 lakhs and about 23 persons have come forward to invest in the equity capital of the company and each one of them has come forward to invest a sum of Rs. 10,000 in the equity capital of the company.

( 3 ) IN Support of these assertions, the petitioners have filed exhibits R-1, R-2. R-3 and R-4.

( 4 ) THIS application is not opposed by the respondent-company. It is also not opposed by the two creditors of the company (in liquidation ). But the official liquidator has objected to the first relief prayed for in the petition. It would be noticed that he has not filed his objections on the other averments made by the petitioners in support of their plea that it is just and necessary that the order of winding up made by this court should be recalled or alternatively the order of winding-up proceedings before this court in Company Petition No. 47 of 1986 should be permanently stayed.

( 5 ) MR. Udaya Holla, learned counsel appearing for the petitioners, has relied on rules 6 and 9 of the Companies (Court) Rules, 1959 (in short "the Rules"), and also on the two decisions of the supreme Court and the decision of this court which was affirmed in appeal in O. S. A. No. 7 of 1987.

( 6 ) I will first consider the earlier decisions of this court on this point. In Co

Click Here to Read the rest of this document