Belated stay of winding up proceedings refused despite collusion allegations; claimant directed to pursue verification before Official Liquidator.

A stay of winding up proceedings was sought on allegations that the winding up orders were procured by collusion and that the company had falsified its accounts. The court noted that the grievance had already been pursued through criminal complaints, proceedings under the Negotiable Instruments Act, and an arbitral award, and that counsel had been present when the provisional liquidator was appointed and when the company was finally wound up. The application was therefore treated as highly belated and was rejected, with liberty to file a claim before the Official Liquidator for verification in accordance with law.

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Issues: Whether the applicant was entitled to stay of the winding up proceedings, and whether the application could be entertained despite long delay.

Analysis: The application sought stay of winding up on allegations that the winding up orders had been procured by collusion and that the company had falsified its accounts. The grievance had already been addressed through criminal complaints, proceedings under Section 138 of the Negotiable Instruments Act, 1881, and an arbitral award in favour of the applicant. The application was filed after several years despite the applicant's counsel having been present when the provisional liquidator was appointed and when the company was finally wound up. In these circumstances, the request for stay was held to be highly belated. The applicant was also noted to have an alternative course of remedy by filing a claim before the Official Liquidator for verification in accordance with law.

Conclusion: The stay application was rejected and dismissed as belated, with liberty to the applicant to pursue its claim before the Official Liquidator.

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