Company liquidation leave is not a filing ; later permission validates proceedings from the date of grant.

Leave of the company court to proceed against a company in liquidation is not a condition precedent to filing a suit under section 446(1) of the Companies Act, 1956. The provision was treated as substantially in pari materia with section 171 of the Companies Act, 1913, with the added words regarded as explanatory rather than changing the settled legal position. A suit filed without prior leave remains ineffective until permission is obtained, but once leave is granted, the proceeding is treated as effective from the date of grant.

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Issues: Whether leave of the company court under section 446 of the Companies Act, 1956 could be granted after institution of a suit against a company in liquidation and whether such leave would validate the suit from the date of grant.

Analysis: Section 446(1) of the Companies Act, 1956 was held to be substantially in pari materia with section 171 of the Companies Act, 1913. The additional words in the later provision were treated as explanatory and not as altering the legal position earlier recognised by the Supreme Court. Leave to sue or continue proceedings against a company in liquidation was therefore not regarded as a condition precedent to institution. A suit filed without prior leave was ineffective until leave was obtained, but once permission was granted the proceeding took effect from that date.

Conclusion: Post facto leave can be granted under section 446(1) of the Companies Act, 1956, and the suit is validly treated as instituted from the date on which such leave is granted.

Ratio Decidendi: Leave of the company court to proceed against a company in liquidation is not a condition precedent to institution; if granted later, the proceeding becomes effective from the date of grant.

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