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M/S Golcha Investment (P) Ltd. v. Shanti Chandra Barna .
Factual and Procedural Background
The Registrar of Companies filed Company Petition No. 100 of 1969 in the Bombay High Court on 8 August 1969, seeking winding-up of the appellant company under Section 433 of the Companies Act, 1956. Notice to show cause against admission and advertisement of the petition was served on the appellant on 1 September 1969, with the hearing fixed for 8 September 1969.
On the returnable date the company, through counsel, sought an adjournment to approach the Central Government. Kantawala, J. refused the request, holding that the Government had already heard the company, and passed an order admitting the winding-up petition and directing that it be advertised in specified newspapers and the Maharashtra Government Gazette.
The company filed Appeal No. 113 of 1969 before an appellate Bench (K.K. Desai and Vaidya, JJ.). On 12 September 1969 the Bench summarily dismissed the appeal and refused oral leave to appeal to the Supreme Court on the ground that the orders were interlocutory. The appellant thereafter obtained special leave from the Supreme Court, leading to the present appeal.
Legal Issues Presented
- Whether the order of the Company Judge admitting and directing advertisement of the winding-up petition was appealable under Section 483 of the Companies Act, 1956.
- Whether the appellate Bench of the Bombay High Court was competent to summarily dismiss Appeal No. 113 of 1969 without hearing it on merits.
Arguments of the Parties
Respondent (Registrar of Companies)
- Contended, through the Attorney-General, that the Company Judge’s order was merely an interim order and therefore not appealable under Section 483. Consequently, the company’s appeal before the Bombay High Court was said to be not maintainable.
Appellant Company
- Maintained that the Company Judge should have granted an adjournment.
- Argued that the Registrar’s petition disclosed no grounds for admitting or advertising the winding-up petition.
- Asserted that the appellate Bench had no power to summarily dismiss the appeal; it was entitled to a full hearing on merits.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Western India Theatres Ltd. v. Ishwarbhai Somabhai Patel (Bombay High Court) | Held that an order directing advertisement of a winding-up petition is appealable. | Cited to reject the respondent’s contention that the order was non-appealable. |
| Shankarlal Aggarwal v. Shankarlal Poddar, (1964) 1 SCR 717 (Supreme Court) | Specifically approved the Bombay decision recognising appealability of such orders. | Relied upon as binding authority to affirm that the appeal lay to the Bombay High Court. |
Court's Reasoning and Analysis
The Supreme Court first addressed the objection to maintainability. Referring to Western India Theatres and its approval in Shankarlal Aggarwal, the Court held that an order admitting and directing advertisement of a winding-up petition is indeed appealable under Section 483. Hence the company’s appeal before the Bombay High Court was competent.
Turning to the summary dismissal, the Court examined Chapter XLII of the Bombay High Court Rules, particularly Rule 966-A, which lists the limited classes of appeals that require an admission hearing. Appeals not falling within those categories “are entitled to be admitted as a matter of course.” Because the present appeal did not fall under Rule 966-A, the appellate Bench was obliged to admit it and decide it on merits. Its summary dismissal therefore constituted a procedural error.
Holding and Implications
HELD: The appeal is allowed; the summary dismissal order of the Bombay High Court's appellate Bench is set aside, and the case is remitted to that Bench for disposal in accordance with law. No order as to costs.
Implications: The ruling reaffirms that orders admitting and advertising winding-up petitions are appealable and clarifies that, under the Bombay High Court Rules, such appeals must be heard on merits rather than dismissed summarily. The decision primarily affects the parties by restoring their right to a substantive appellate determination; it does not announce a new legal principle.
K.S Hegde, J.— This is an appeal by special leave. It arises from the decision of the appellate Bench of the Bombay High Court in Appeal No. 113 of 1969 on its file. That appeal was directed against the order made by Kantawala, J., in Company Petition No. 100 of 1969, a petition made by the Registrar of the Companies under Section 433 of the Companies Act, 1956 for winding-up the appellant company. The winding-up application was filed by the Registrar on August 8, 1969. In that petition notice was issued to the appellant to show cause why the petition should not be admitted and advertised. The petition was posted for hearing on September 8, 1969. The notice issued was served on the appellant on September 1, 1969. On the date of the hearing the appellant appeared through an advocate and asked for an adjournment of the proceedings. That prayer was rejected and thereafter the Company Judge passed the following order:
“Mr Chagla for Company applies for adjournment with a view to approach the Government. This petition is filed by the Registrar after the Central Government heard the Company so it is not necessary to adjourn it on this ground.
P.C Petition admitted to be advertised in Indian Express, Bombay Samachar and Maharashtra Government Gazette. Advertisement to appear on or before 29th September, 1969. Petition on board on 27th October, 1969.”
2. The appellant appealed against that decision. The appeal came up before K.K Desai and Vaidya, JJ., on September 12, 1969. The learned Judges summarily dismissed the appeal. Thereafter the appellant orally applied for leave to appeal to the Supreme Court. That application was rejected with these observations:
“Oral application for leave to appeal to Supreme Court dismissed because the orders made are all interlocutory orders.”
3. As against that order the appellant has brought this appeal after obtaining special leave from this Court.
4. The learned Attorney-General, who appeared for the respondent, urged that the appellant's appeal before the Bombay High Court was not maintainable and therefore we should reject this appeal. According to him the order made by Kantawala, J., was an interim order and such an order is not appealable under Section 483 of the Companies Act which provides) for an appeal from any order made or decision given in the matter of winding-up a company by the Company court. The question whether the order directing advertisement of a winding-up application is an appealable order under Section 202 of the Indian Companies Act, 1913, a provision similar to Section 483 of the present Act, came up for consideration before a Division Bench of the Bombay High Court in Western India Theatres Ltd. v. Ishwarbhai Somabhai Patel. That court Held that the order in question is appealable. That decision was specifically approved by this Court in Shankarlal Aggarwal v. Shankarlal Poddar (1964) 1 SCR 717. Therefore the contention of the learned Attorney-General that the appellant's appeal before the appellate Bench of the Bombay High Court was not maintainable cannot be sustained.
5. On behalf of the appellant it was urged that the company judge was not justified in rejecting the prayer for an adjournment and further according to the appellant Registrar's petition did not disclose any ground for admitting the winding-up petition and much less for advertising it. His further contention was the appellate Bench of the Bombay High Court was not competent to summarily dismiss the appeal. As we are in agreement with the appellant's contention that the appellate Bench of the High Court was not competent to summarily dismiss the appeal, we have not thought it necessary to go into the other contentions advanced on its behalf.
6. Chapter XLII of the Bombay High Court Rules provides for appeals to appellate court. Rule 965 thereof prescribes the form of memorandum of appeal. Rule 966 prescribes what documents should be filed along with the memorandum. Rule 966-A prescribes:
“In the following cases the appeal shall be placed, in the first instance, for admission before a Bench of the High Court to be appointed by the Chief Justice:
(1) An appeal from an order summarily rejecting a writ petition under Article 226 of the Constitution;
(2) An appeal from an order on an interlocutory application by way of Notice of Motion or Chamber Summons; and
(3) An appeal from an order on a Summons for judgment in a Summary Suit.
If the appeal is admitted, then the provisions hereinafter contained with regard to appeals shall apply to such appeal.”
7. From this rule it is clear that appeals other than those mentioned therein are not to be placed for admission. In other words they are entitled to be admitted as a matter of course. Therefore the appellate Bench erred in summarily dismissing the appeal. It was bound to entertain the appeal and dispose of the same on merits.
8. For the reason mentioned above we allow this appeal, set aside the order of the appellate Bench and send the case back to the appellate Bench for disposal of the same in accordance with law. In the circumstances of the case we make no order as to costs in this appeal.
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