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TMI Blog1968 (8) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... td. for Rs. 89,632.50 and as costs Rs 2,724.88. When the decree-holders filed execution proceeding in order to execute the decree, an objection was filed by the judgment-debtor-company mainly on the following two grounds: (i)That the execution case was barred by limitation. (ii)That the Bombay High Court had passed orders on January 21,1959, for winding up the said company and appointing an official liquidator. After the said objection was filed in the execution case. Misc. Case No. 14 of 1963 was registered and after hearing both the parties the learned Additional Subordinate Judge, Patna, passed the following two main orders: (1)That the Patna High Court had no jurisdiction to pass the decree after the Bombay High Court had passed ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted case of the parties that the winding up order was passed on January 21, 1959, and the money decree in question was passed on July 1, 1959. Therefore, the suit was proceeding against the company without the leave of the court, i.e., the Bombay High Court. It is also admitted that leave has not been obtained in this case. Therefore, the only question which falls for consideration is whether, in such circumstances, the decree passed should be considered as void or Voidable. No doubt, in the section the word "shall" is used, but now it is well established that "shall" may be read as "may". ''It depends"upon the legislative intent and the object for which the safeguard has been made in the section. The object of this section is to prevent a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of a single judge of the Calcutta High Court in Roopnarain Ram Chandra Private Ltd. v. Brahmapootra Tea Co. ( India) Ltd. AIR 1962 Cal. 192. This relates to section 446 of the new Act and his Lordship has held at page 194 as follows: "The court has full jurisdiction to entertain suits and to pass decrees where the company is a party to the suit and such company is in the course of liquidation. It is true that the provisions in the Companies Act and the rules thereunder contemplate that if the suit is pending on the date of the presentation of the winding up petition or on the date of the winding up order the suit or proceeding is not to be continued except by leave of the court. Leave to proceed with the suit in such circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the English statute law on the same subject. The only difference is that the word "suit" has been substituted for the word "action". The company law is not a part of the indigenous law of India. It has come from England. It is, therefore, permissible, in construing sections of the Indian statute, to refer to the English case law on the subject. In Nazir Ahmad v. Peoples Bank of Northern India Ltd. [1943] 13 Comp. Cas 1; AIR 1942 Lah. 289 (FB) their Lordships of the Full Bench quoted with approval the following passage of Mr. Solomon Judah at pages 280-281 of his commentary on the Act: "If a suit is continued without leave obtained under the section the decree is not binding on the liquidator. Where a suit was instituted against a com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by plea to the further maintenance of the action, but only, if at all, by application to the court in which the proceedings under the winding-up order were being pursued". The question is thus merely one of interpretation, i.e. , whether section 171 of the Companies Act was intended to entail as a necessary consequence the dismissal of a suit instituted without leave or whether it was Intended that the suit should be stayed until leave was obtained. It was held in the Full Bench decision of Nazir Ahmad v. Peoples Bank of Northern India Ltd. [1943] 13 Comp. Cas. 1 , 5, 20; AIR 1942 Lah. 289 (FB). at page 290 as follows: "As already indicated, the words used were borrowed from the English law, where they had a recognised legal meaning attac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave held at page 840 as follows : "We, therefore, hold that the court has jurisdiction to give leave to proceed with a suit or other legal proceeding against a company in liquidation, even though such leave was not obtained before its commencement". In view of all these decisions and the above considerations, in my opinion, the orders of the court below, so far as point No. 1 is concerned, cannot stand. The decree in the execution is not void but it is only voidable at the instance of the liouidator. Learned counsel appearing on behalf of both the parties have urged that no order need be passed so far as point No. 2 is concerned, i.e., regarding the limitation, because now this will be decided by the appropriate court where the liquidatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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