Leave of company court required before composite suit can proceed against a company in winding up and its guarantors.

Leave of the company court is required before legal proceedings can continue against a company in winding up, because the liquidation scheme protects the company's assets from unnecessary litigation. Where the company is a necessary party and its liability must first be determined, the presence of guarantors does not permit a composite suit to proceed without such leave. The guarantors' liability was treated as contingent on adjudication of the company's liability, so the suit could not continue against them in that form until leave was obtained.

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Issues: Whether a suit against a company under winding up could proceed without leave of the company court, and whether the suit could be continued against the guarantors when leave was required for proceeding against the company.

Analysis: The winding-up scheme under the Companies Act protects the assets of a company in liquidation from unnecessary litigation, and leave of the company court is required before legal proceedings are pursued against the company. The reasoning relied on the position of a secured creditor and on the principle that, where the company itself is a necessary party and its liability must first be determined, the presence of guarantors does not by itself permit continuation of the composite suit without such leave. The liability of the guarantors was treated as contingent upon adjudication of the company's liability.

Conclusion: Leave of the company court was necessary before the suit could proceed against the company, and the suit could not continue in its composite form against the guarantors until such leave was obtained.

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