HARIHAR NATH Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) THIS appeal directed against the order dated 1.9.1997 of the Patna High Court in LPA No.259/1996, relates to the applicability of Article 137 of Limitation Act, 1963 to a petition under Section 446(1) of the Companies Act, 1956, seeking leave of the Company Court to proceed with a pending suit.

(2.) NALANDA Ceramic and Industries Ltd. (second respondent herein, referred to as 'the company') was a company incorporated under the Companies Act, 1956 (for short 'the Act'). Appellant nos.1 to 3 were its Directors. The company had obtained certain credit facilities from the State Bank of India (first respondent herein and referred to as 'the bank'). The loans were secured by mortgage of the assets of the company. The repayment of the amounts advanced to the company was guaranteed by the appellants. On 28.11.1988, the bank filed a suit (Title Mortgage Suit No. 150/1988 on the file of the Special Subordinate Judge, Ranchi) against the company (defendant no.1), the appellants (defendants 2 to 4), and four others namely, State of Bihar, Bihar State Financial Corporation, I.F.C.I, and IDBI (defendant nos.5 to 8). In the said suit, the bank sought a decree for Rs.5,95,98,258.31 against defendants 1 to 4 (the company and the appellants) with interest thereon and several ancillary and consequential reliefs.

(3.) WHEN matters stood thus, an order for winding up the company was passed by the High Court on 24.10.1989. WHEN the said order came to its knowledge, the bank filed a further objection to the application under Section 22 of the SIC Act, contending that Section 22 of the SIC Act will not apply in view of the order for winding up. The bank also submitted that having regard to Section 446(1) of the Act, it required the leave of the court only to proceed against the company, but there was no bar for proceeding against the other defendants. The bank, therefore, prayed for dismissal of the application for stay (filed by appellant no.1 herein) and further prayed that while the proceedings as against the first defendant company may be kept in abeyance, the suit may be proceeded with against the other defendants.