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Issues:
1. Dismissal of application under section 20 of the Indian Arbitration Act. 2. Jurisdiction of the court in matters related to liquidation and arbitration proceedings. Analysis: The judgment pertains to an appeal against the dismissal of an application under section 20 of the Indian Arbitration Act by the court of Shri Bakhshish Singh, Subordinate Judge Second Class, Jullunder. The appellant-company sought reference to arbitration regarding outstanding payments under a hire-purchase agreement. Respondents contested, claiming full payment and alleging forgery. The trial court, after examining evidence, dismissed the application based on the finding that the acknowledgment document was forged, and the respondents had paid the entire amount due under the agreement. In the appeal, the respondent argued that the court lacked jurisdiction to delve into the merits of the claim during the section 20 application. Additionally, a contention was raised that the appeal had become infructuous due to the company's liquidation. The judgment referenced a case from the Allahabad High Court, highlighting the limitations of a liquidator's powers in arbitration matters. However, a case from the Patna High Court was cited to support the maintainability of the application under section 20 even in the case of a company in liquidation. The judgment emphasized that the application under section 20 was made before the winding-up order, and the appeal was already in progress. This circumstance, coupled with the provisions of the Companies Act, indicated that the appeal had not become infructuous. The court had the authority to entertain and dispose of the appeal despite the company being under liquidation. The liquidator's right to continue the appeal was confirmed, and the appeal was allowed, setting aside the trial court's order. The matter was referred to arbitration as per the hire-purchase agreement, with instructions for further proceedings and cost allocation. In conclusion, the judgment clarified the jurisdiction of the court in matters involving liquidation and arbitration proceedings, affirming the continuation of the appeal despite the company's liquidation status. The decision allowed the appeal, directing the arbitration of the dispute and outlining procedural steps for the parties involved.
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