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TMI Blog1971 (6) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... er the Income-tax Act, 1961 : " 1. Notice under section 156 demanding payment of Rs. 57,070 being the income-tax assessed against the company for the year 1970-71 ; 2. Notices under section 274 read with section 271 relating to the assessment years 1963-64 to l970-71 requiring the applicant to show cause why an order imposing penalty under section 271 should not be made ; 3. Notices under section 274 read with section 273 relating to the assessment years 1963-64 to 1968-69 requiring the applicant to show cause why an order imposing penalty under section 273 should not be made ; and 4. Notice under section 148 to reassess the income said to have escaped assessment for the year 1962-63. " In Application No. 138, the applicant submits th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent. Before doing so, it is necessary to read section 446 of the Companies Act : " 446. (1) When a winding-up order has been made or the official liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding-up order, shall be proceeded with, against the company, except by leave of the court and subject to such terms as the court may impose. (2) The court which is winding up the company shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of- (a) any suit or proceeding by or against the company ; (b) any claim made by or against the company (including claims by or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered is that of the Federal Court in Governor-General in Council v. Shiromani Sugar Mills Ltd. (In liquidation). In that case the question was whether an Income-tax Officer was entitled to take proceedings against an official liquidator under section 46(2) of the Indian Income-tax Act, 1922, to recover arrears of income-tax due from the company in liquidation as an arrear of land revenue, without the leave of the winding-up court under section 171 of the Indian Companies Act, 1913. This section corresponds to section 446 of the Companies Act, 1956. It was contended that for a proceeding to be within the scope of section 171 of the Indian Companies Act, 1913, it must be in the nature of a suit, and that it must also be a proceeding in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision cited before me is that of a learned single judge of this court in B. V. John v. Coir Yarn & Textile Ltd. One of the questions that arose for consideration in the above case was whether an adjudication on a reference made under section 10 of the Industrial Disputes Act, 1947, was a legal proceeding falling within the ambit of section 446 of the Companies Act, 1956. The learned judge held that only a proceeding in the nature of an action against the property of the company would come within the scope of the above section. He further observed that a suitor proceeding for which leave is necessary under section 446(1) must be a suit or proceeding capable of being withdrawn and disposed of by the winding-up court. It was accordingly held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quidation without the leave of the company court under section 446 of the Companies Act, 1956. Section 41 of the Life Insurance Corporation Act provides that no civil court shall have jurisdiction to entertain or adjudicate upon any matter which a Tribunal is entitled to decide or determine under that Act. The Supreme Court held that, in view of this provision, the Tribunal had exclusive jurisdiction to decide matters arising in a proceeding under section 15 of the Life Insurance Corporation Act, and that section 446 of the Companies Act would not, therefore, operate on such a proceeding. The court also added that the provisions of the Life Insurance Corporation Act, which is a special Act, would override the provisions of the Companies Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that such proceedings were not affected by section 446(1) of the Companies Act. The last decision cited before me is a Single Bench decision of the Calcutta High Court in Offcial Liquidator v. Commissioner of Income-tax. There is an elaborate and useful discussion of the whole case law in this decision ; and the learned judge held that an assessment proceeding under the Income-tax Act would not come within the scope of section 446(1) of the Companies Act. It is firmly established on the authority of the decision of the Supreme Court in Damji Valji Shah's case that section 446(1) of the Companies Act would not apply to all legal proceedings. Therefore, leave of the court to institute or continue a legal proceeding against a company whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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