Winding-up proceedings do not automatically void prior arbitration award or section 34 challenge under Companies Act protections.

A pending winding-up petition and a later winding-up order did not automatically invalidate an arbitral award or a section 34 challenge. Section 441(2) only creates a deeming fiction for the commencement of winding up and does not by itself render prior proceedings void. Section 446(1) becomes relevant only after a winding-up order and restrains continuation of pending proceedings except with leave. Here, the award was made before the winding-up order, the section 34 petition was also filed before that order, and the winding-up point had not been raised earlier. The challenge under sections 441(2) and 446(1) therefore failed.

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Issues: Whether the arbitral award and the order under section 34 could be invalidated on the ground that the company had been wound up after the award but with a winding-up petition pending earlier, so as to attract sections 441(2) and 446(1) of the Companies Act, 1956.

Analysis: The pending winding-up petition and the later winding-up order did not render the award automatically void. Section 441(2) creates a deeming fiction as to the commencement of winding up, but that fiction does not by itself make every prior proceeding bad in law. Section 446(1) operates when a winding-up order is made and protects the company from continuation of pending proceedings except with leave. On the facts, the award was made before the winding-up order, the section 34 petition was also filed before that order, and the appellants had not raised the winding-up position before the arbitrator or the learned Single Judge. The challenge was therefore unsupported both on facts and in law.

Conclusion: The challenge based on sections 441(2) and 446(1) failed and the award could not be set aside on that ground.

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