This is an appeal against an order of Mr. Justice Coyajee dismissing a petition under the Companies Act. The petition was presented for the winding up of the first respondent company and in the alternative a prayer was made for appropriate orders under Sections 397, 398 and 402. At the hearing of the petition the prayer for winding up was given up; and substantially the controversy before Mr. Justice Coyajee was whether any directions should be issued under sections 397 and 398 of the Companies Act.

(2) A preliminary objection has been taken by Mr. Bhabha and that is that Mr. Justice Coyajee was in error in hearing the petition without notice having been given to the Central Government under section 400 of the Companies Act. Section 400 of the Companies Act provides that

"the Court shall give notice of every application made to it under section 397 or 398 to the Central Government, and shall take into consideration the representation, if any, made to it by that Government before passing a final order under that section."

Mr. Bhabha contends that the provisions of section 400 are mandatory and that no order can be passed on a Petition which constitutes an application under section 397 or section 398 without notice being given to the Central Government and, what is more, without the Court taking into consideration the representations, if any, made by that Government. Section 397 sub-section (1) deals with a complaint made by any members of a company who complain that the affairs of the company are being conducted in a manner oppressive to any member or members; and sub-section (2) confers the power upon the Court to make, instead of a winding up order, any order which it thinks fit to bring to an end the matters complained of. Section 398 enables a member to complain that the affairs of a company are being conducted in a manner prejudicial to the interests of the company or with regard to the various matters set out in sub-clause (b) of sub-section (1); and under sub-section (2), if the Court is of opinion that the affairs of the company are being conducted in the manner complained of, the Court may make such order as it thinks fit with a view to bringing to an end or preventing the matters complained of or apprehended. Section 399 lays down the qualifications for a member of the company to apply and it is not disputed in this case that the petitioner had the necessary statutory qualification under section 399 as far as share holding is concerned. Now, what is urged by Mr. Bhabha is that, as soon as a complaint is received by the Court under section 397 or section 398, it is incumbent upon the Court to give notice of this complaint to the Central Government and no action can be taken by the Court on the petition preferred under section 397 or section 398 without such notice being given and the representations, if any, of the Central Government being considered.

(3) Now, in this case, what happened was this. This was a composite petition, as it were, both for winding up and for directions under section 397 and section 398. It came before Mr. Justice K. T. Desai and he admitted it and directed notice to be served upon the company. Pursuant to that notice the company appeared before Mr., Justice Coyajee, and Mr. Justice Coyajee, after considering the various aspects of the matter, ultimately dismissed the petition. Now it is very desirable that we should lay down the proper practice that should be followed with regard to the giving of notice to the Central Government under section 400. Recently in Western India Theatres Ltd v. Associated Bombay Cinemas Ltd. Appeal No. 58 of 1956: (AIR 1959 Bom 170) my brother Dixit and myself were considering the practice that should be followed in the case of admission of petitions for winding up and we were called upon there to construe Rule 733 of the High Court Rules; and in that judgment we pointed out that the proper practice-which was the practice followed by this Court and which was in conformi

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