STATE BANK OF INDIA Vs. KRISHNA FASTENERS LTD.

JUDGEMENT

(1.) This application has been filed by the State Bank of India, under Sec. 446(1) of the Companies Act, 1956, praying that leave be granted to the applicant to pursue the proceedings of Suit No. 228 of 1988, pending in the Court of Civil Judge, Etah, and the Official Liquidator, High Court, Allahabad, may be permitted to be made a party to the said proceedings.

(2.) It has been stated by the applicant bank that the company (in liquidation) had applied for loan from the applicant bank for the purpose of its business. Two loans of Rs. 1.5 lakhs each was sanctioned under the lock and key account and factory type account. To secure the interest of the bank, the company (in liquidation) executed an agreement for cash credit and pleadged its goods to the said bank. Besides, two directors of the company executed an agreement for guarantee whereby they personally guaranteed the repayment of the bank's dues. One of the guarantors mortgaged his personal property in favour of the bank. The company (in liquidation) failed to repay the outstanding balance, hence, the bank filed a suit for recovery of Rs. 4,62,230.55 together with pendente lite and future interest. The said suit is pending in the Court of Civil Judge, Etah..In the meantime, winding up proceedings were initiated against the company being Company Petition No. 34 of 1986 and vide the order dated 22.7.1988, the company was ordered to be wound up by this court. According to the applicant, they had no knowledge about the winding-up proceedings or the order of winding-up prior to 31.8.1990. They learnt about the same only when a written statement was filed by one of the defendants in which it was mentioned that the winding up orders have already been passed against the company. Thereafter, after obtaining permission from the regional office, they contacted their counsel in the High Court and filed. the present application which according to them is within three years from the date of knowledge. The applicant has also filed an application under Sec. 5 of the Limitation Act in support of the present application under Sec. 446(1) of the Companies Act and has prayed for the condonation of the delay in filing the present application.

(3.) Separate counter affidavits have been filed by the official liquidator to the present application as well as the application under Sec. 5 of the Limitation Act. The applicant has filed rejoinder affidavits to the same.