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1935 DIGILAW 275 (CAL)

In Re: Steel Construction, Co. Ltd. v. .

1935-07-09

body1935
JUDGMENT Panckridge, J. - This is an application under sec. 169 of the Indian Companies Act to restrain a suit pending against the Steel Construction Co., Ltd. (in liquidation) in the Court of the First Subordinate Judge of Comilla. The winding up order was made on November 28th, 1932. Although the winding up proceedings were subsequently stayed, the stay order was vacated on June 5th, 1934. The suit was filed on April 6th, 1935. No leave of this Court was obtained by the Plaintiff, the Pioneer Bank, Ltd. An at-tempt was made to obtain leave ex parte from this Court, but the order granting leave has since been vacated. [See 39 C.W. N. 1259 (1935)] The suit. therefore, offends against the provisions of sec. 171 of the Indian Companies Act which is to the effect that: When a winding up order has been made, no suit or other legal proceeding shall be proceeded with or commenced against the company except by leave of the Court, and subject to such terms as the Court may impose. 2. There is no substantive application before me to grant leave, and the consequence is that the Court at Comilla has no jurisdiction to entertain the suit. 3. In these circumstances I have no hesitation in restraining the Pioneer Bank, Ltd., from proceeding with that suit. 4. It is suggested that this application might be adjourned so as to give the Pioneer Bank, Ltd., an opportunity of asking for leave. The Bank will act as it is advised, but in my opinion if such an application were made, the Court would have no jurisdiction to grant it. As I read sec. 171 it means that leave to proceed with a pending legal proceeding can only be granted where that proceeding has been initiated prior to the winding-up order. I do not consider that the Court has jurisdiction to give the Plaintiff leave to continue a suit instituted without leave subsequent to the winding up order. The liquidator is entitled as against the Opposite Party to the costs of this application. He will take them in the first instance out of the assets. [In re Suit No. 1-34 of the Court of Subordinate Judge of Commilla. House of Labourers, Ltd., v. Steel Construction Co. Ltd. Delivered on July 29, 1935]. 5. The liquidator is entitled as against the Opposite Party to the costs of this application. He will take them in the first instance out of the assets. [In re Suit No. 1-34 of the Court of Subordinate Judge of Commilla. House of Labourers, Ltd., v. Steel Construction Co. Ltd. Delivered on July 29, 1935]. 5. In a subsequent judgment delivered by the same learned Judge, on an application by the liquidator of the House of Labourers, Ltd., (in; liquidation) to have a suit which was then pending before the first Court of the Subordinate Judge of Comilla transferred to this Court under clause 13 of the Letters Patent, His Lordship after directing a transfer on the applicants furnishing security for costs, observed as follows:-- It must, however, be clearly understood that in conformity with my order of April 16, 1935, as soon as the transfer is made the stay order against the Steel Construction Co., Ltd., (being one of the Defendants, against whom the suit was filed subsequent to the order for its compulsory winding-up without the leave of the Court being first obtained) revives. I have recently held [in the case reported above] that a suit which is instituted without the leave of the Court against a limited 'company after an order for its compulsory winding up has been made is a nullity and that this Court has no jurisdiction to give the Plaintiff leave to proceed with it. I see no reason to change my view upon this matter.