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Bharat Petroleum Corporation Ltd. vs National Organic Chemical Industries ... on 28 November, 2003
Mr.Sudhir Gupta, Sr.Advocate, with Mr.Digvijay Anand, appearing on behalf of the respondents, has referred to the decision in Bharat Petroleum Corporation Ltd.'s case (supra) in which the Single Bench of the High Court of Bombay has observed that the provisions of Section 557(1) of the Act can also be applied at the stage of admission. It was a case pertaining to the creditors to be heard in a company petition and they were permitted to intervene at the stage of admission. In our opinion also, as the creditors have a right under Rule 96 to obtain a copy of the petition, obviously they are entitled to be heard at the stage of admission, in case they apply.
A. K. Kraipak & Ors. Etc vs Union Of India & Ors on 29 April, 1969
The making of a winding up order on a petition for winding up would therefore almost certainly have an adverse consequence on the workers inasmuch as the continuance of their service would be seriously jeopardisd and their right to work and earn their livelihood would be disastrously imperilled. Now it is an elementary principle of law, well settled as a result of several decisions of this Court and particularly the decisions in State of Orissa v. Dr.Bina Pani, (1967) 2 SCR 625 : (AIR 1967 SC 1269; A.K.Kraipak v. Union of India, (1970) 1 SCR 457 : (AIR 1970 SC 150) and Maneka Gandhi v. Union of India, (1978) 2 SCR 621: (AIR 1978 SC 597) that no order involving adverse civil consequences can be passed against any person without giving him an opportunity to be heard against the passing of such order and this rule applies irrespective whether the proceeding in which it is passed is a quasi-judicial or an administrative proceeding. The audi alteram partem rule which mandates that no one shall be condemned unheard is one of the basic principles of natural justice and if this rule has been held to be applicable in a quasi-judicial or even in an administrative proceeding involving adverse civil consequences, it would a fortiori apply in a judicial proceeding such as a petition for winding up of a company. It is difficult to imagine how any system of law which is designed to promote justice through fair play in action can permit the Court to make a winding up order which has the effect of bringing about termination of the services of the workers without giving them an opportunity of being heard against the making of such order. It would be violative of the basic principle of fair procedure and unless there is express provision in the Companies Act, 1956 which forbids the workers from appearing at the hearing of the winding up petition and participating in it, the workers must be held entitled to appear and be heard in the winding up petition.
National Textile Workers' Union vs P.R. Ramakrishnan & Others on 5 May, 1983
The decision of the High Court of Bombay in Hy-Line International (supra) has been relied upon by the learned counsel for the appellant-applicant in which reference has been made to the National Textile Workers' Union (supra). In para 4, it has been observed that the court has discretion to allow interested persons to participate in the proceedings so as to oppose the admission of the petition. In the instant case, once the discretion has been exercised by the Company Judge, we find that the exercise of such a discretion is based upon the facts & circumstances of the case and it cannot be said to be suffering with illegality or arbitrariness so as to warrant interference in the appeal.
Section 557 in The Companies Act, 1956 [Entire Act]
Maneka Gandhi vs Union Of India on 25 January, 1978
The making of a winding up order on a petition for winding up would therefore almost certainly have an adverse consequence on the workers inasmuch as the continuance of their service would be seriously jeopardisd and their right to work and earn their livelihood would be disastrously imperilled. Now it is an elementary principle of law, well settled as a result of several decisions of this Court and particularly the decisions in State of Orissa v. Dr.Bina Pani, (1967) 2 SCR 625 : (AIR 1967 SC 1269; A.K.Kraipak v. Union of India, (1970) 1 SCR 457 : (AIR 1970 SC 150) and Maneka Gandhi v. Union of India, (1978) 2 SCR 621: (AIR 1978 SC 597) that no order involving adverse civil consequences can be passed against any person without giving him an opportunity to be heard against the passing of such order and this rule applies irrespective whether the proceeding in which it is passed is a quasi-judicial or an administrative proceeding. The audi alteram partem rule which mandates that no one shall be condemned unheard is one of the basic principles of natural justice and if this rule has been held to be applicable in a quasi-judicial or even in an administrative proceeding involving adverse civil consequences, it would a fortiori apply in a judicial proceeding such as a petition for winding up of a company. It is difficult to imagine how any system of law which is designed to promote justice through fair play in action can permit the Court to make a winding up order which has the effect of bringing about termination of the services of the workers without giving them an opportunity of being heard against the making of such order. It would be violative of the basic principle of fair procedure and unless there is express provision in the Companies Act, 1956 which forbids the workers from appearing at the hearing of the winding up petition and participating in it, the workers must be held entitled to appear and be heard in the winding up petition.
Gwalior Sugar Co. Ltd., Dabra vs Shyam Saran Gupta And Co., Kanpur on 18 September, 1968
Reliance has been placed on decision of the High Court of M.P. in Gwalior Sugar Company Ltd.'s case (supra) in which it has been observed thus:
Hy-Line International vs C And M Hy-Line Farms (P) Ltd. on 9 January, 2004
The decision of the High Court of Bombay in Hy-Line International (supra) has been relied upon by the learned counsel for the appellant-applicant in which reference has been made to the National Textile Workers' Union (supra). In para 4, it has been observed that the court has discretion to allow interested persons to participate in the proceedings so as to oppose the admission of the petition. In the instant case, once the discretion has been exercised by the Company Judge, we find that the exercise of such a discretion is based upon the facts & circumstances of the case and it cannot be said to be suffering with illegality or arbitrariness so as to warrant interference in the appeal.
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