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1965 DIGILAW 39 (KER)

Varkey Thomas v. Catholic Bank of India Ltd.

1965-02-10

P.T.RAMAN NAYAR

body1965
Judgment :- 1. The proceeding in respect of which leave is now sought under S.446 of the Companies Act was instituted in July 1964; the winding up order was made much earlier, in October 1961; and this application was brought only in November 1964. The question is whether once a winding up order has been made, leave is a condition precedent to the institution or whether subsequent leave can be granted Having regard to the purpose of the section, I am inclined to follow the view taken in People's Industrial Bank Ltd. v. Ram Chander Shukul AIR. 1930 All. 503, Nazir Ahmad v. Peoples Bank of N. I., AIR. 1942 Lah. 289 (F. B.), Krishna Pillai v. The Travancore National and Quilon Bank, Ltd. 1943 T.L.R. 458 (F. B.) and Suresh Chandra v. Bank of Calcutta 54 C.W.N. 832 that it can, in preference to the view taken in Peoples Bank, Lahore v. Fateh Chand AIR. 1936 Lah. 401, Re: Steel Construction, Ltd. 40 C.W.N. 312 and Harnarain v. Kanhaiyalal AIR. 1940 Cal. 166 that it cannot. As pointed in Puran Mal v. Central Bank of India AIR. 1953 Punj. 235 the word, "commenced" occurring in the section must, in relation to the words, "suit or other legal proceeding", be understood in the English sense as meaning the issue of process by the court rather than the presentation of the plaint or other paper by which a legal proceeding is instituted - in other words as observed in Krishna Pillai v. The Travancore National and Quilon Bank Ltd. 1943 T.L.R. 458 (F. B.) the bar is not against the party instituting the legal proceeding but against the court commencing the adjudication thereof by the issue of process. If that be so, the institution is not affected by the want of leave and the worst that can be said is that any proceeding taken by the court before the grant of the leave would be bad, a defect which can be remedied, if necessary, by taking the proceeding afresh after leave has been granted. 2. In this case the petitioner was, on his own showing, aware of the winding up order when he instituted the proceeding in question and he has no excuse whatsoever for not applying for prior leave. 2. In this case the petitioner was, on his own showing, aware of the winding up order when he instituted the proceeding in question and he has no excuse whatsoever for not applying for prior leave. Therefore, in allowing this application and granting leave, I impose the following conditions: - (1) That the petitioner do pay the liquidator Rs. 25 as costs of this application; and (2) That he pay the liquidator Rs. 100 for the latter's expenses in connection with the proceeding for which leave is now granted. These payments will not be costs in the proceeding in question and the leave will be effective only on the payments being made. Allowed.