UNITED BANK OF INDIA Vs. OFFICIAL LIQUIDATOR MAKSUDPUR

JUDGEMENT

(1.) This appeal under clause 10 of the Letters Patent is directed against the order of the company judge, dated April 12, 1976, passed in Company Petition No. 2 of 1975 rejecting the application of a bank by which a prayer was made under Section 446 of the Companies Act, 1956 (hereinafter referred to as " the Act"), for grant of leave of the court to proceed with Title Mortgage Suit No. 258 of 1972 pending in the court of Subordinate Judge, First Court, Gaya.

(2.) The salient facts for the decision of the point raised in this appeal may be stated here. It appears that the aforesaid title mortgage suit was filed on December 15, 1972, by the appellant, United Bank of India, against the company and a prayer was made for a mortgage decree as also personal decree against other defendants, some of whom were directors of the company. In 1975, one of the directors filed an application for winding up of the company, respondent No. 2. The said application was registered as Company Petition No. 2 of 1975. The bank objected to the winding up of the said company and alternatively prayed that the bank may be permitted to proceed with the suit. Winding-up order was passed on October 31, 1975, and the bank's application for leave to proceed with the suit was rejected as premature. Thereafter, the bank filed another application after the winding-up order was passed, under Section 446 of the Act. This application was filed on February 27, 1976, and the said application has been rejected by the impugned order. The appellant has thereafter come to this court.

(3.) The learned company judge in the impugned order has referred to the decision in M.K. Ranganathan v. Government of Madras [1955] 25 Comp Cas 344 (SC); AIR 1955 SC 604, but he was of the view that intervention of the court is needed only when the actual stage for effecting sale, etc., is reached. According to the learned company judge, no application for leave to prosecute a pending suit was necessary. Mr. K.D. Chatterjee, learned counsel appearing for the appellant bank, contended that the learned company judge was not correct in holding that leave of the court is not necessary to prosecute a pending suit. Reliance has been placed by Mr. Chatterjee upon the provisions of Section 446(1) of the Act. As Subsection (1) only is relevant, it will be appropriate to quote the said subsection here. It reads thus:--