Secured creditor rights in liquidation may proceed in a regular suit, with impleadment of the liquidator allowed subject to security for costs.

A dispute over impleading a liquidator in a suit concerning an alleged secured debt was treated as a matter for ordinary civil adjudication, with the Court noting that a secured creditor's independent rights should not be curtailed merely because the other party is in liquidation. The reasoning also reflected that special circumstances were not shown to justify preventing the action, and that avoiding multiplicity of proceedings supported allowing the claim to proceed in the regular forum. Objections based on proposed leave conditions and a jurisdictional point under banking provisions were not accepted as reasons to refuse leave, and leave to implead the liquidator was granted subject to security for costs.

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Issues: Whether leave should be granted under section 171 of the Companies Act to implead the liquidator of a company in liquidation as a party defendant in a suit concerning a disputed claim and alleged secured debt.

Analysis: The claim was treated as one involving a secured creditor seeking to enforce rights arising out of an alleged security, and the dispute raised questions better suited to adjudication in a regular suit. No special circumstances were shown to justify restraining the petitioner from prosecuting the action, and the Court considered that independent rights of a secured creditor should not be curtailed merely because the other side had entered liquidation. The possibility of avoiding multiplicity of proceedings also supported allowing the matter to proceed in the ordinary forum. The objections based on the suggested terms of leave and the jurisdictional point under the banking provisions were not accepted as reasons to refuse leave.

Conclusion: Leave to implead the liquidator was granted, subject to security for costs.

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