Application for winding up admitted.

C. SHIVAPPA J.

For the The appellants in these two appeals are private limited companies, incorporated under the provisions of the Companies Act, 1956, having their registered office at No. 36, Walajah Road, Anna Salai, Chennai. The appellants have challenged the order of this court passed under company jurisdiction, in C.A. Nos. 408 and 409 of 1998 in C.P. Nos. 17 and 18 of 1997, in these appeals.

The aspect to be considered in these appeals is, whether the impugned order is devoid of various statutory safeguards against admission, advertisement and publication of winding up petitions ? In order to appreciate the legality of the impugned order, it is appropriate to refer to the objects of the company, the position of the parties and how the demand was made, which led to the filing of the company petitions. The main objects of the company are : (i) to carry on business of manufacturers, sellers, importers, exporters, suppliers, lessors or lessees and dealers of all kinds of power generation equipment including windmills and turbines, hydro-turbines, thermal turbines, solar modules, panels, (ii) to generate, accumulate, distribute, supply electricity and other power (subject to and in accordance with law) for the purpose of light, heat, motive power and for all other purposes for which electric and other energy can be employed; (iii) to carry on business of generating energy by any other non-conventional methods and deal in the said equipment, accessories and tools; (iv) to provide all types of engineering facilities including construction, technical consultancy and architectural services related to the use, application, installation, erection, operation and maintenance of all kinds of power generation and its related produce; (v) to enter into foreign collaboration, contract, sole selling agency agreement for installation, erection, operation and maintenance of all kinds of power generation equipment, products, either manufactured, sold, supplied and dealt with by the said company or by otherwise.The respondent was appointed as the advertising agent of the appellant companies, vide letter dated August 12, 1993, after having accepted the standard terms set out by the respondent. It is the grievance of the respondent herein that though bills were presented with supporting vouchers as required, even after acknowledgment, payments to the tune of Rs. 1, 52, 43, 258.98 with interest at 24 per cent. per annum, which comes to Rs. 36, 31, 954.59 in C.P. No. 17 of 1997 and Rs. 1, 11, 67, 630.80 with interest at 24 per cent. per annum amounting to Rs. 20, 13, 314 in C.P. No. 18 of 1997, have not been forthcoming from the appellants herein, in respect of several bills. Hence the respondent herein filed two company petitions viz., C.P. Nos. 17 and 18 of 1997 on January 17, 1997, under sections 433 and 439 of the Companies Act, 1956, for winding up the appellant companies and also filed two company applications in C.A. Nos. 408 and 409 of 1998 on March 6, 1997, for advertising the winding up petitions, under rule 24 of the Companies (Court) Rules (hereinafter referred to as "the Act" and "the Rules", for short), before this court under company jurisdiction. On March 19, 1998, the appellants herein filed four applications (two applications in each of the company petitions), viz., C.A. Nos. 470 to 473 of 1998, seeking revocation of the admission and stay of all further proceedings, inter alia, contending that the amount claimed is disputed and if the petitions are admitted it would make the court an instrument, in possible cases, of harassment and even blackmail, consequently, the business of the company is bound to suffer serious loss and injury. Without advertisement was directed to be published in the Government Gazette and local dailies by order dated June 9, 1998.

The learned senior counsel, T. R. Rajagopal, contended that on presentation of the winding-up petition, seeking advertisement thereof has certain serious consequences