1984 (8) TMI 243 - HC - Companies Law

Summary

Issues:
1. Transfer of ejectment applications to High Court for trial.
2. Interpretation of section 446 of the Companies Act, 1956.
3. Adjourning trial proceedings in light of winding-up order.

Transfer of Ejectment Applications to High Court:
The appellants, owners of flats leased to a respondent-company, filed ejectment applications due to rent default. The respondent-company went into liquidation, leading to the appointment of a provisional liquidator. The appellants sought permission to continue the proceedings before the Rent Controller or transfer them to the High Court. The High Court ordered the transfer of the ejectment applications for trial, notices were issued to the liquidator, and the trial commenced in accordance with section 446(2) of the Companies Act, which allows courts winding up a company to entertain such suits.

Interpretation of Section 446 of the Companies Act, 1956:
Section 446 of the Companies Act, 1956, prohibits legal proceedings against a company once a winding-up order is made and an official liquidator is appointed as the provisional liquidator, except with the court's permission. The provision grants jurisdiction to the winding-up court to entertain suits, claims, applications under section 391, and other related questions. It also allows for the transfer of suits or proceedings pending in other courts to the winding-up court. This section aims to regulate legal actions against a company in liquidation.

Adjourning Trial Proceedings in Light of Winding-Up Order:
The trial of the ejectment applications initiated by the appellants against the respondent-company had commenced in the High Court following the transfer and issuance of notices to the liquidator. However, the learned single judge adjourned the proceedings sine die pending other related applications. The High Court, in allowing the appeals, set aside the adjournment orders, emphasizing that the trial should not be delayed unjustly. The interests of justice necessitate the continuation of the trial, as per the earlier orders transferring the proceedings to the High Court.

In conclusion, the High Court allowed the appeals, directing the parties to appear before the learned single judge for further proceedings, emphasizing the need to uphold justice without undue delay in the trial of the ejectment applications against the respondent-company in liquidation.