Reliance Dyes and Chemical Co. v. Abhyudaya Paper Mills Ltd
1992-02-25
R.S.DHAVAN
body1992
DigiLaw.ai
JUDGMENT R.S. Dhavan, J. - Pradeshiya Industries and Investment Corporation (hereinafter referred to as "the PICUP") by its application, A-7, seeks leave of this court to proceed with Special Leave Petition No. 3580 of 1987 : Pradeshiya Industrial and Investment Corporation v. Abhyudaya Paper Mills Ltd. a matter pending in the Supreme Court. The application has been filed under section 446 of the Companies Act, 1956. 2. There is no order of the Supreme Court by which PICUP may have been required to seek leave of the High Court, in its original jurisdiction, of the company judge, that unless permitted, the special leave petition cannot proceed before the Supreme Court. On record there is a communi cation between PICUP and its solicitor, Khaitan Company, New Delhi. 3. This is what the solicitor wrote to its client, PICUP :- "This is to inform you that the above-mentioned matter had come up for hearing today before the Hon'ble Justice Shetty and Mr. Justice Sahai, when Mr. Gopal Subramanium, advocate, as briefed by us along with Mrs. Aruna Jain and the undersigned appeared on your behalf. After hearing the submissions, the Hon'ble court has directed that as the winding up proceedings are pending in the Allahabad High Court, proceedings in the Supreme Court could not be heard further. Accordingly, the Hon'ble court was pleased to adjourn the matter to August 21, 1990, and also directed the petitioners to seek leave of the company court in Allahabad if they wanted to proceed with the Supreme Court proceedings. We would request you to please do the needful and inform us accordingly." 4. It is correct to say that, after a winding up order has been passed, no suit or other legal proceedings can be initiated, or, if pending on the date of the winding up order, it cannot proceed against the company, except by leave of the High Court and subject to such terms as the High Court may impose. Thus, it is not usual that parties having claims against a company whose winding up is sought, seek permission of the High Court, during the course of winding-up proceedings to either file a suit on their claims or, if a suit is pending, to proceed with it. On this aspect, apparently, there is no issue nor can there be any controversy. Such is the law. 5.
On this aspect, apparently, there is no issue nor can there be any controversy. Such is the law. 5. But, it is unusual that, in reference to the context, the company judge may make an order granting leave to a party for approaching the Supreme Court. The Supreme Court made no order in the present case nor has any order been shown to the court that the Supreme Court desires that leave of the company judge be sought before proceeding with the special leave petition filed by the PICUP. The only aspect on record is the communication of the solicitor. 6. Probably, what has not been noticed by learned counsel for PICUP is what has been prescribed in sub-section (4) of section 446 of the Act, aforesaid. In so far as it is relevant, exception is given in the aforesaid sub-clause. The relevant provisions of section 446, aforesaid are : "446. Suit stayed on winding up order.-(l) When a winding up order has been made or the official liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of winding up order, shall be proceeded with against the company except by leave of the court and subject to such terms as the court may impose .. . (4) Nothing in sub-section (1) or sub-section (3) shall apply to any proceeding pending in appeal before the Supreme Court or a High Court." 7. There must have been a purpose why Parliament inserted sub-section (4) in section 446. The exception starts operating after an appeal is pending whether before the Supreme Court or the High Court. If any proceeding was pending before the High Court relating to a company against which a winding up order has been passed and, if an appeal has been filed, the context changes. Leave has to be sought from the appellate court whether under section 483 of the Companies Act, 1956, before the High Court, or an appeal before the Supreme Court. 8. In either case, it would come within the exception clause and leave to be sought from the court where the appeal is pending. 9. The application of PICUP, A-7, is thus laid to rest with this order.