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Issues: Whether leave under section 446 of the Companies Act, 1956 could be granted after institution of the suit, and whether the applicant was entitled to leave to proceed with the eviction suit against the company in liquidation and the sub-tenant.
Analysis: The objection that prior leave was a condition precedent was rejected, as the governing law permits leave to be granted even after institution, with the proceeding treated as instituted on the date leave is obtained. The earlier order refusing to grant the summons did not decide the matter on merits and expressly reserved liberty to apply afresh, so the fresh application was not barred by res judicata or any analogous principle. The Court also held that the winding up court was not required to decide the merits of the rent-control dispute, the sub-tenant's status, or the Small Causes Court's jurisdiction at the leave stage. Since the Official Liquidator did not require the premises and the tenancy rights were not an asset for liquidation, no prejudice to the company in liquidation was shown. The suit was not frivolous or bound to fail on the face of the record, and the dispute was fit to be tried in the competent forum.
Conclusion: Leave to institute and proceed with the eviction suit was granted, subject to the condition that any decree would not be executed against the company in liquidation without leave of the Court.
Ratio Decidendi: Leave under section 446 of the Companies Act, 1956 may be granted even after suit institution, and it should ordinarily be granted where the dispute is arguable, does not prejudice the liquidation estate, and can properly be decided by the trial court rather than in winding up proceedings.
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