Leave under company winding-up law was required before suing after liquidation, and the suit was dismissed as not maintainable.

A suit instituted against a company after a compulsory winding-up order was held not maintainable without prior leave under Section 171 of the Companies Act, because leave to continue or proceed was treated as available only where the proceeding had been instituted before the winding-up order. The Court also held that it could dispose of the matter at the interlocutory stage once it became clear that the suit could not be maintained against the company. The suit against the company was dismissed.

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Issues: Whether a suit instituted against a company after an order for compulsory liquidation could proceed without leave under Section 171 of the Companies Act, and whether the Court could dismiss such a suit at the interlocutory stage for want of leave.

Analysis: The Court held that, on its earlier construction of Section 171, leave to continue or proceed is available only where the proceeding was instituted before the winding up order. A suit brought after the winding up order without leave was therefore treated as incompetent against the company. The Court further held that it had inherent jurisdiction to dispose of the matter at the interlocutory stage once it became clear that the suit could not be maintained against the company.

Conclusion: The suit against the company was not maintainable without prior leave and was dismissed against the company with costs.

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