OFFICIAL LIQUIDATOR vs DHARTI DHAN (p) LTD.

The Supreme Court held that under Section 442 of the Companies Act, 1956, the power to stay proceedings is discretionary and must be exercised judiciously, considering the totality of facts rather than mechanically. The Court clarified that the objective of Sections 442 and 446 is to expedite the resolution of claims in winding up proceedings, and a stay should not be granted merely to delay adjudication. The Court upheld the Rajasthan High Court's conditional stay order against the respondent company, emphasizing the need for a careful examination of circumstances before granting a stay.