Judgment : Mukherjea, J. This appeal is directed against an order by which a learned Judge granted leave under Sec. 446(1) of the Companies Act to the appellant to institute a suit against the respondent represented by its provisional Liquidator on paying a sum of Rs. 250 as costs of the Company. It appears on a perusal of the order that the learned Judge directed payment to be made to the provisional Lequidator on his stating through his Solicitor that he had no funds in his hands. It is clear that the order was made to enable the provisional Liquidator to defend the suit which the appellant intended to file against the Company. 2. The appellant who was the petitioner before the learned Judge, stated in its affidavit that the petitioner was a secured creditor and was desirous of filing a suit for enforcing its security and realising its dues. 3. Mr. H. M. Dutta, learned Counsel appearing in support of the appeal, contended before us that in granting leave to institute the suit the learned Judge should not have put his client on terms. He stated that payment has been made to the provisional Liquidator as directed by the learned Judge. The suit has been filed. He has preferred the appeal because similar orders have been made in other cases by other learned Judges and in some of those, substantial amounts have been directed to be paid. To call upon creditors to put the provisional Liquidator in funds as a condition precedent to grant of leave under Sec. 446(1) seems to have hardened into a practice. 4. Sub-section (1) of Sec. 446 of the Companies Act under which the order has been made, provides that when an Official Liquidator has been appointed as a Provisional Liquidator, no suit or other legal proceedings shall be commenced except by leave of the Court and subject to such terms as the Court may impose. The Sub-Section is substantially the same as Sec. 231 of the English Companies Act, 1948. 5. It is clear from the Sub-Section that discretion has been conferred on the Court in the matter of granting leave and a specific provision has been made for putting the applicant on terms in appropriate cases. The discretion is, however, to be judicially exercised on proper principles. In the present case, the appellant was a secured creditor. 5. It is clear from the Sub-Section that discretion has been conferred on the Court in the matter of granting leave and a specific provision has been made for putting the applicant on terms in appropriate cases. The discretion is, however, to be judicially exercised on proper principles. In the present case, the appellant was a secured creditor. A secured creditor has the right to stand outside the winding up and enforce his claim against the security. He cannot be compelled, at least not ordinarily to prove his claim before the Official Liquidator. It is, clear that if he prefers not to involve himself in the liquidation proceedings, he has to institute a suit for enforcement of his claim against the security for recovery of his dues. Leave to file such a suit should not, therefore, be refused except for compelling reasons. 6. It is stated in Palmer's Company Law, 21st Edition at page 771 that secured creditors are, as a matter of course, given liberty to proceed with any action for enforcing their securities. In Buckley on the Companies Acts, 13th Edition at page 499 it is said: "Except in special circumstances, a mortgagee will have leave, as a matter of course, to continue a foreclosure action, unless the company offer to give him at once foreclosure or sale as the case may be, that is, practically to offer him at once judgment in his action. The mortgagee is independent of the winding up proceedings. and his action is to enforce the claim not against the company, but to his own property". For these propositions, the learned editors of Palmer and of Buckley rely on the judgments of Jessel, M. S. and James, L.J. in (1) Lloyd v. David Lloyd & Co. (1877)6 Ch. D. at page 339. In that case, the learned Master of the Rolls said : "Now, as a rule the mortgagee has a right to realise his security, and of course, as incidental to that, a right to bring an action for foreclosure. Those who say that he should be restrained from bringings or proceeding with such an action must show some special grounds for restraining him, or must say, we can offer the mortgagee all he is entitled to, foreclosure or sale, as the case may be atonce without any proceedings in the action. Those who say that he should be restrained from bringings or proceeding with such an action must show some special grounds for restraining him, or must say, we can offer the mortgagee all he is entitled to, foreclosure or sale, as the case may be atonce without any proceedings in the action. That, of course, would be a reason for refusing leave to commence a threatened action. But short of that, it appears to me that the Court ought not under the 87th section of the Act (Companies Act, 1862) interfere with the rights of a mortgagee." 7. James, L.J. who was of the same opinion alluded to the reasons for which the relevant sections were enacted to enable the Court to interfere with actions against liquidators He observed : "These sections in the Companies Act and the corresponding legislation with regard to bankrupts, enabling the Court to interfere with actions, were intended, not for purpose of harassing, or impeding, or injuring third persons, but for the purpose of preserving the limited assets of the company or bankrupt in the best way for distribution among all the persons who have claims upon them. There being only a small fund or a limited fund to be divided among a great number of persons, it would be monstrous that one or more of them should be harassing the company with actions and incurring cost which would increase the calims against the company and diminish the assets which ought to be divided among all the creditors. But that has really nothing to do with the case of a man who for the present purpose is to be considered as entirely out side the company, who is merely seeking to enforce a claim, not against the company, but to his own property. The position of a mortgagee under such circumstances, is to my mind, exactly similar to that of a man who said, "you the company have got the property which you have taken from me; you are in possession of my property by way of trespass, and I want to get it back again' ......... The position of a mortgagee under such circumstances, is to my mind, exactly similar to that of a man who said, "you the company have got the property which you have taken from me; you are in possession of my property by way of trespass, and I want to get it back again' ......... Power was given to the Court to interfere with actions by restraining them or not allowing them to proceed, but this power was given because it was understood that the Court would exercise it with due regard to the rights of the third persons who are not members of the company, and who had not to come in and claim to share in the distribution of the Company'-assets among the creditors, and who were not, therefore, quasi parties to the winding up proceedings. The Court should have due regard to the rights of independent person." 8. In the present case, the learned Judge has granted leave to the appellant to institute the suit and pursuant to that leave the suit has been filed. The only question is whether the appellant who is a secured creditor should have been put on terms. 9. It is true that it has been said that leave should be granted to a secured creditor as a matter of course. It does not mean that in the case of secured creditors the Court in granting leave under Sec. 446(1) is left with no discretion at all. That discretion the Court enjoys under the statute. No distinction is made in the statute between secured and unsecured creditors. Never the less, the Section has to be read in the context of established legal principles. It follows that save in exceptional circumstances and then only for cogent reasons, secured creditors should be granted unconditional have to institute or to proceed with a suit against a company in liquidation. In the present case, the only reason which has been given is that the Provisional Liquidator has no funds to enable him to defend the suit which the appellant intended to file. It is unfortunate that the Provisional Liquidator has no funds. It does not seem to us that under any principle or precedent, a creditor is under a legal or even a moral duty to feed the Provisional Liquidator to contest the suit which he has filed to enforce his claim. It is unfortunate that the Provisional Liquidator has no funds. It does not seem to us that under any principle or precedent, a creditor is under a legal or even a moral duty to feed the Provisional Liquidator to contest the suit which he has filed to enforce his claim. There is no doubt that the winding up Court will devise ways and means, if need be, as to how the Provisional Liquidator will raise funds, whether by taking recourse to the petitioning creditor by raising loans or in other ways. We do not intend to lay down any inflexible proposition that the Court in no circumstances can direct an applicant, who asks for leave to file a suit or proceed with a suit, to put the Provisional Liquidator in funds. But an order like that, in our opinion, has to be supported by proper reasons. Impecuniosity of the Provisional Liquidator is hardly a valid reason for making such an order. 10. On parayer by the appellant for directing the Provisional Liquidator to remove the pledged goods from the godown where they are lying, the learned Judge refused to make any order. As a suit has already been instituted by the appellant, we do not propose to make any order on that prayer because we feel that the order, if it is to be made, should be made by the Court where the suit has been filed. The appellant will, therefore, be at liberty to apply for such an order or for any other interlocutory order by an application and the learned Judge will dispose of the application on merits. 11. In the view we have taken, the order of the learned Judge in so far as it directed the appellant to pay a sum of Rs. 250 to the provisional Liquidator is set aside. The appeal succeeds. Counsel appearing on behalf of the appellant stated before us that his client does not press for refund of the money which has been paid to the provisional Liquidator. We, therefore, do not make any order for refund. 12. There will be no order for costs save and except that the provisional Liquidator will be at liberty to retain his costs out of the assets in his hands. Masud, J : I agree.