1998 (3) TMI 527 - HC - Companies Law

Summary

Issues:
Permission to proceed with the original application under section 446(1) of the Companies Act, 1956 before the Debt Recovery Tribunal, Jaipur.

Analysis:
The petition sought permission under section 446(1) of the Companies Act, 1956 to continue with the original application filed by the petitioner before the Debt Recovery Tribunal, Jaipur. The petitioner, a bank, had provided financial assistance to the respondent company, and the accounts of the company had become irregular due to default, resulting in significant amounts due and recoverable by the bank. The respondent company's registered office fell within the territorial jurisdiction of the court, and the company had been directed to be wound up in a previous company court order due to failure to pay debts. The petitioner-bank, therefore, required permission to proceed with its application before the Debt Recovery Tribunal.

The court noted that notice of the petition was issued to the respondent company, but no opposition was raised. Counsel for the official liquidator and financial institutions stated no objection to the petition being allowed, emphasizing their status as secured creditors. An application for amendment of the petition was filed during the proceedings, which was allowed uncontested, and the amended petition was directed to be taken on record. The court highlighted the principle that permission to prosecute legal proceedings before a competent forum can be sought subsequent to filing, especially when unopposed.

After hearing the parties and considering the lack of opposition, the court found no legal impediment to granting the petitioner-bank permission to pursue its application before the Debt Recovery Tribunal, Jaipur. The permission was subject to the condition that the bank would not execute any decree or recovery certificate against the assets of the respondent company without prior permission from the company court. The court emphasized that the permission granted was without prejudice to any contentions that may be raised on behalf of the respondent company, ensuring a conditional approval for the petitioner-bank to proceed with the application before the Tribunal in accordance with the law.