Liquidation and abatement: delay in impleading a liquidator does not end the suit if litigation continues

A suit does not abate merely because the plaintiff company goes into liquidation and the liquidator is not promptly brought on record. Applying Order 22 Rule 8, the decisive question is whether the liquidator or assignee declines to continue the litigation; mere delay or procedural omission is insufficient to infer abatement. Where the liquidator has continued participating in proceedings concerning the suit property, impleadment by amendment is a technical step that can be permitted, and the suit may proceed. The challenge to abatement failed, the amendment to implead the liquidator was allowed, and the sale process was directed to continue under the prior directions.

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Issues: (i) whether the suit had abated on the plaintiff company going into liquidation and the liquidator not being promptly brought on record; (ii) whether the plaint should be amended to implead the liquidator and the sale process should continue.

Issue (i): Whether the suit had abated on the plaintiff company going into liquidation and the liquidator not being promptly brought on record.

Analysis: Order 22 Rule 8 was treated as the governing provision. The relevant test is whether the assignee or receiver, in the case of insolvency or liquidation, declines to continue the suit. Mere delay in taking steps to implead the liquidator, or a lackadaisical approach in doing so, does not by itself amount to a refusal to continue the suit. In the absence of any order requiring an explanation from the liquidator, or any order for security for costs, and in view of the liquidator's continued participation in the proceedings and meetings concerning the suit property, there was no basis to infer abatement.

Conclusion: The suit had not abated and the objection seeking dismissal on that ground failed.

Issue (ii): Whether the plaint should be amended to implead the liquidator and the sale process should continue.

Analysis: Since the liquidator had been acting in relation to the suit property and had not declined to proceed with the litigation, impleadment was only a technical requirement. The circumstances justified bringing the liquidator on record by amendment, and the sale process was to proceed in accordance with the earlier directions governing the sale of the goods.

Conclusion: The amendment application was allowed and the receiver was directed to proceed with the sale in terms of the prior directions.

Final Conclusion: The liquidation of the plaintiff company did not extinguish the suit, the challenge to abatement was rejected, and the proceedings were permitted to continue with the liquidator properly brought on record.

Ratio Decidendi: A suit does not abate on a plaintiff's liquidation unless the liquidator or assignee declines to continue it; mere delay or procedural omission in impleading the liquidator is insufficient to establish abatement.

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