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of <h1>Court allows continuation of bank's suit against respondent-company for non-payment of dues under Companies Act, 1956.</h1> <h3>Industrial Development Bank of India Versus Official Liquidator of Madan Industries Ltd.</h3> The court granted permission for the continuation of a suit filed by a bank against a respondent-company for non-payment of dues. The court emphasized the ... Winding up - Suit stayed on winding up order, Custody of company’s property Issues:1. Application for reliefs under sections 446(1), 453, and 537 of the Companies Act, 1956.2. Grant of leave for continuation of Suit No. 2945 of 1990.3. Appointment and continuation of the receiver of the High Court of Bombay.4. Recovery of dues by sale of movable and immovable properties of the respondent-company.5. Transfer of suit to winding up court under section 446(3).6. Imposition of conditions for granting permission to continue the suit.7. Entitlement to continuation of the receiver over the properties of the respondent-company.8. Conflict between the appointment of receiver and official liquidator's role under section 456.9. Consideration of interests of all creditors and workmen in the liquidation proceedings.Analysis:1. The applicant, a bank, sought reliefs under sections 446(1), 453, and 537 of the Companies Act, 1956, related to a suit filed against a respondent-company for non-payment of dues secured by mortgaged and hypothecated properties. The applicant requested leave to continue the suit pending in the Bombay High Court, appointment of a receiver, and recovery of dues through property sale.2. The court considered the timeline of events, noting that the suit was filed before the winding-up order. The court emphasized the importance of obtaining leave under section 446(1) to proceed with legal actions against a company under liquidation. The court granted permission to continue the suit, subject to a condition of depositing a specified sum with the official liquidator.3. The applicant also sought the continuation of the receiver over the respondent-company's properties. However, the official liquidator argued that the appointment of a receiver conflicts with the official liquidator's role under section 456, which mandates control over company assets in liquidation. The court, considering the interests of all creditors and workmen, declined to pass orders on this request, suggesting the official liquidator approach the Bombay High Court for appropriate actions.4. The court highlighted the need to maintain equitable administration of company assets during liquidation, preventing certain creditors from gaining undue advantage. It directed parties to seek further orders from the winding-up court after addressing receiver-related matters with the Bombay High Court. The court partially allowed the application, subject to specified conditions and further court approvals.
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