Leave required before filing a Rule 63 suit against a company in liquidation under the Companies Act bar.

A suit under Order 21, Rule 63 CPC against a company in liquidation cannot be instituted without prior leave of the winding-up court. Section 171 of the Companies Act, 1913 was treated as creating an absolute bar on commencing or continuing any suit or other legal proceeding against such a company unless leave is obtained. Because a Rule 63 suit is brought by plaint as an independent original action in a court of first instance, it falls within the plain meaning of "suit" and also within the broader expression "legal proceeding". Leave was therefore required before institution, and the question was answered against the appellant.

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Issues: Whether a suit under Order 21, Rule 63 of the Code of Civil Procedure, 1908, brought against a company in liquidation, can be instituted without first obtaining leave under section 171 of the Companies Act, 1913.

Analysis: Section 171 creates an absolute bar against the commencement or continuance of a suit or other legal proceeding against a company in liquidation except with leave of the winding-up court. A suit under Order 21, Rule 63 is instituted by plaint as an independent original action in a court of first instance and is therefore a suit within the plain meaning of the section. The characterization of such a suit as a form of appeal for purposes of court-fee or as a defensive proceeding for purposes of other doctrines does not alter its true nature under section 171. The expression "legal proceeding" in the section, read with "suit", was treated as embracing original proceedings analogous to a suit and not proceedings arising within the suit itself.

Conclusion: Leave of the winding-up court is required before instituting a suit under Order 21, Rule 63 against a company in liquidation, and the question referred was answered against the appellant.

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