The main legal point established in the judgment is that the Company Court has the jurisdiction to recall the winding up order, but valid grounds must be established for such recall. The exclusive jurisdiction of the Debt Recovery Tribunal to adjudicate the liability of the debtor and the principles for ordering winding up were also emphasized.

Permod Kohli, J.

1. Company petitions No. 416 of 2002 was presented by Winsome Textile Industries Ltd. under Section 439 read with Sections 433 and 434 of the Companies Act for winding up of M/s Mangla Context Limited, a company incorporated under the Companies Act. This Company was ordered to be wound up by order dated 16.1.2004 and official liquidator was appointed as the Liquidator of the company to take over the movable and immovable assets and properties of the Company. Subsequently, the assets and properties of the company were put to sale through the advertisement published in The Tribune in its issue dated 22.4.2006. Two applications being CA Nos. 449 and 498 of 2006 have been filed for confirmation of sale.

2. While these proceedings were pending, CA No. 387 of 2006 has been preferred by Ashwani Kumar son of Padam Kumar Jain, one of the promoters and shareholders of the Company (in liquidation) under Order 9 Rule 13 CPC for setting aside the ex parte order dated 23.3.2006 whereby this Court ordered the sale of the movable and immovable assets of the company (in liquidation) in absence of applicant. Two more CA. Nos. 815/2007 and 682/2007 have been filed for recalling the winding up order dated 16.1.2004. Simultaneously, another CA No. 364 of 2006 was preferred seeking stay of the operation of the winding up order. In this CA, the Company Court passed order dated 18.5.2006 which reads as under:

Mr. Suri states that on receipt of Rs. 25 lakhs the petitioner has settled his claim and has no objection if the winding up order is recalled. Learned Counsel for the petitioner-creditor further states that the petitioner shall withdraw the complaints filed by him under Section 138 of the Negotiable Instruments Act and CP 418 of 2002. Mr. Malik, learned Counsel representing the former management states that the management is ready and willing to settle the claim of the official liquidator towards liquidation expenses incurred by him after the order of winding up was passed. Mr. Vajpayee may communicate the said expenses to the applicant within two days. In the meantime, notice be also issued to the secured creditors-M/s. Canara Bank, Ludhiana and IDBI, Chandigarh for 25.3.2006.

3. This order was followed by another order dated 25.5.2006 which reads as under:

Learned Counsel for the applicant has tendered a sum of Rs. 25 lakhs vide draft No. 18346 dated 16.5.2006 to the petitioner-creditor. Mr. Deepak Suri has accepted the same without prejudice to his rights. Mr. Suri states that he undertakes to withdraw CP Nos. 416 and 418 of 2002 as well as the complaints filed against the Directors of the Company under Section 138 of the Negotiable Instruments Act. Mr. Malik has also handed over a sum of Rs. 8 lakhs by D.Ds. to the official liquidator towards the expenses incurred by him. The said amount is accepted by official liquidator subject to the order of winding up being recalled. Mr. Ashok Jagga and Mr. Alok Jain, Advocates representing Canara Bank and IDBI Bank, respectively, seeks some time to file reply.

4. In the meantime, C.A. No. 650 of 2006 came to be filed by the Canara Bank, one of the secured creditors for its substitution as petitioner-creditor in the winding up petition or impleadment as petitioner No. 2 therein. Vide order dated 16.11.2006, the Company court directed the transposition of the Canara Bank as petitioner in winding up petition i.e. CP No. 416 of 2002 and permitted to continue with the winding up petition earlier filed by Winsome Textile Industries Ltd.

5. Official liquidator as also the secured creditors, namely, IDBI Bank through Stressed Assets Stablisation Fund (hereinafter referred to as the SASF) and Canara Bank filed their objections opposing the petition for recalling the order dated 23.3.2006 as also recalling of the winding up order dated 16.1.2004.

6. The applicant seeks setting aside of the order dated 23.3.2006 and recalling of the order dated 16.1.2004 with the following averments:

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