The company court has wide discretion to stay or dismiss winding up proceedings in the best interest of the company.

( 1 ) THE appellants are contributories and shareholders of the Howrah Motor Company Ltd. (hereinafter referred to as the said company) and the appeal is from an order dated 15th March, 2002 passed by the Company Judge in a winding up proceeding being Company petition No. 240/98, holding that the settlement between the said company and the petitioning creditor Luxmi Tea Company, has been arrived at in the best interest of the company and no winding up order was made in view of that settlement.

( 2 ) MATERIAL facts of the case are that by two separate cheques the petitioning creditor, the second respondent in this appeal, lent and advanced on diverse dates in January, 1996, Rs. 16 lakh and also Rs. 1 crore to the company and the company was to pay on this intercorporate loan an interest @ 24% per annum and the loan was for a period of 6 months.

( 3 ) AS the company failed to pay the loan, a winding up petition was presented by the 2nd respondent, the petitioning creditor, in the month of August, 1998. On such petition, the winding up Court by an order passed on or about 2nd of september, 1998, admitted the petition and granted certain instalments as the company could not dispute the claim. The learned Company Judge also directed that in default of such payment the petitioning creditor shall be at liberty to publish advertisement. Thereafter, on or about 24th September, 1998 a suit was filed in the Original Side of this Hon'ble Court by some of the shareholders of the said company. The suit was numbered 287/98 (Soumendra nath Dey and Ors. vs. Howrah Motor Company Ltd. ). The suit was between two groups of shareholders of the said company and the plaintiffs were alleging mismanagement of the said company against the defendants arid inter alia, prayed for framing of scheme of management and an administration of the company and also prayed for injunction restraining the defendants, the other group, from dealing with or disposing of assets and properties of the said company. The said suit ;was of representative character and the plaint was signed by Mr. Debraj Dey who is one of the appellants and some of the present appellants are parties to the said suit as heirs of Chandranath Dey. It may be noted that the second respondent, the petitioning creditor, was not a party to the said suit.

( 4 ) IN the meantime as the company could not pay the instalments advertisement was published on or about 3rd January, 1999.

( 5 ) THE Company Petition thereafter appeared before the Company Judge on 17th March, 1999. On that date a representation was made before the company Judge on behalf of the company that some time is required for the company to frame a scheme. Some of the workers appeared before the Company judge and submitted that the company had assets to pay the dues of the creditor and they opposed winding up. The company also wanted to pay its dues to workers and to the creditors. Considering these submissions, the learned company Judge granted some time to the company to bring about a scheme as to how the company proposes to liquidate its dues. It may be noted that at this stage, pursuant to advertisement only the petitioning creditor, the Auto Traders and some workers appeared. Thereafter, in the month of May, 1999 the company filed a petition before the Company Court with a proposal to pay the dues of the petitioning creditor by selling its Guwahati property. On or about 22nd June, 1999 leave was given by the Company Court to deal with that property for the purpose of paying the dues of the petitioning creditor, the 2nd respondent.

( 6 ) BUT much prior thereto on 24th September, 1998, the Interlocutory Court in the aforesaid suit, filed by some of the shareholders of the said company, granted an injunction restraining the said company from selling any of its fixed assets or immovable property without the leave of the Court. Being placed in the aforesaid situation the company made an application before the in