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TMI Blog2001 (6) TMI 763X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant, in this application, is a company registered under the provisions of the Act and it claims that it is engaged in the manufacture and production of pure and blended woollen fabrics. According to the assertion made in the application, the applicant-company had placed orders with the respondent-company on 12-6-1986 and 2-12-1987, for supply of 32 numbers of TFO Twister Machines; and towards the value of the said 32 Twister Machines, the applicant-company had paid an advance of Rs. 11,60,808 on 31-7-1986 and another sum of Rs. 24,89,448 on 3-12-1987. It is the further case of the applicant that out of the orders placed for supply of 32 machines in respect of which the amounts were advanced, as stated earlier, the respondent-company ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings pending before the arbitrator. ( b )However, the prayer made by the applicant to grant leave to the applicant to proceed with the arbitration proceedings, is resisted by the Official Liquidator. It is the case of the Official Liquidator that the applicant is an ordinary unsecured creditor and it is required to file its claim with the Official Liquidator as provided under section 528 of the Act, read with rules 148 to 179 of the Companies (Court) Rules, 1959 ( the Rules ); and for any reason, if the Official Liquidator disallows the claim of the applicant, the applicant has a right of appeal provided under rule 154 of the Rules; and therefore, there is absolutely no justification to allow the application. 3. Sri Krishnamurthy, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng for the Official Liquidator, strongly countering the contention of the learned counsel for the applicant, submitted that this is not a fit case where this Court should exercise, its discretion and permit the applicant to proceed with the arbitration proceedings. He pointed out that admittedly, the applicant is an unsecured creditor and the arbitration proceedings are only at the initial stage and if the arbitration proceedings are allowed to go on, the Official Liquidator will have to go to Khanpur and spend substantial money for conducting the proceedings; and the Official Liquidator has no funds for the said purpose. It is his further contention that no prejudice or injustice will be caused to the applicant if the applicant is not allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany court grants permission to the parties, no suit or other legal proceedings can either be commenced or if pending, can be proceeded with. Therefore, there is a statutory bar either to institute legal proceedings or proceed with the legal proceedings, if it had already been instituted, in respect of a company to which an order for winding up has been made or Official Liquidator has been appointed as a provisional liquidator unless the court grants leave. Therefore, when a request is made for grant of leave, this court will have to examine the prayer made for grant of leave keeping in mind the interest of the company i.e., all its creditors, shareholders and others who may be interested in the affairs of the company and also the perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to how the debts are to be proved is provided in the Rules from rule 147 onwards. Against the decision of the liquidator, an appeal is competent to the court under rule 164. After the dismissal of the claims, the Official Liquidator is required to settle a list of the creditors under rule 167 which is submitted to the court for approval. The list of the creditors once settled cannot be varied except under the order of the court. It is, therefore, evident that a special procedure has been provided in the Act and the rules for proof of the debt against the company by the creditors. Under these circumstances, I am of the view that no prejudice or injustice will be caused to the applicant if the leave sought for seeking permission to continue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng up proceedings, made without the leave of this Court, it wholly without the authority of law and it must be held as a nullity. Therefore, the question of permitting the applicant to continue the proceedings which has no legs to stand would not arise for consideration and it cannot be permitted. I am of the view that the prayer of the applicant to permit him to continue the arbitration proceedings must be rejected both on the ground that the application filed is not competent as the initiation of the arbitration proceedings and the reference to the arbitrator was made subsequent to the winding up order made by this Court, without the leave of this Court and also on the ground that the facts and circumstances of this case, do not entitle t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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