1992 (2) TMI 270 - HC - Companies Law

Summary

Issues:
1. Whether the Pradeshiya Industries and Investment Corporation (PICUP) requires leave of the High Court to proceed with a Special Leave Petition pending in the Supreme Court.
2. The interpretation of Section 446 of the Companies Act, 1956 regarding the requirement of seeking leave for legal proceedings during winding-up proceedings.

Analysis:
The judgment delivered by R.S. Dhavan, J. addresses the issue of PICUP seeking leave of the High Court to proceed with a Special Leave Petition pending in the Supreme Court. The court notes that there is no specific order from the Supreme Court mandating PICUP to seek leave from the High Court. The communication from PICUP's solicitor indicated that the Supreme Court directed PICUP to seek leave of the company court in Allahabad to proceed with the Supreme Court proceedings. However, the judge highlights that after a winding-up order, legal proceedings against the company require the High Court's permission. It is not customary for parties with claims against a company under winding-up to seek High Court's permission during the winding-up process. The judge emphasizes that the law prohibits initiating legal proceedings against a company under winding-up without the High Court's consent.

Furthermore, the judgment delves into the interpretation of Section 446 of the Companies Act, 1956. The judge points out the significance of subsection (4) of Section 446, which provides an exception for proceedings pending in appeal before the Supreme Court or a High Court. The judge emphasizes that if an appeal is pending before the Supreme Court or a High Court concerning a company under winding-up, the requirement of seeking leave shifts to the appellate court where the appeal is pending. Therefore, in the case of PICUP's application seeking leave to proceed with the Special Leave Petition, the judge concludes that the exception clause under Section 446(4) applies, and leave should be sought from the court where the appeal is pending. Consequently, the judge dismisses PICUP's application, stating that it is now concluded with this order.