Company in liquidation must sue in its own name, but a misdescription of liquidators is a curable defect of form.
A company in liquidation retains capacity to sue, but proceedings must be instituted in the company's name and on its behalf through the liquidator under section 179(a) of the Indian Companies Act, 1913. A petition described merely as being by the joint liquidators was therefore in defective form, not because the claim was invalid, but because the description did not conform to the statutory mode of proceeding. The defect was treated as one of form only and was curable by amendment without introducing a new party, so the petition could be amended to comply with the statutory requirement.
Issues: (i) Whether a petition by a company in liquidation must be instituted in the name and on behalf of the company rather than in the name of the joint liquidators; (ii) whether the petitioners should be permitted to amend the petition to cure the defective description.
Issue (i): Whether a petition by a company in liquidation must be instituted in the name and on behalf of the company rather than in the name of the joint liquidators.
Analysis: Section 179(a) of the Indian Companies Act, 1913 empowers the official liquidator, with the sanction of the Court, to institute or defend proceedings in the name and on behalf of the company. A company in liquidation retains its corporate capacity to sue, though the power is to be exercised through the liquidator under the authority of the Court. On that basis, a proceeding described as being by the joint liquidators, instead of in the company's name, is not in the proper form.
Conclusion: The petition was required to be brought in the name and on behalf of the company, and the description in the name of the joint liquidators was defective.
Issue (ii): Whether the petitioners should be permitted to amend the petition to cure the defective description.
Analysis: The Court treated the defect as one of description only and applied the principle that amendment of such a pleading does not introduce a new party into the proceeding. Since section 179(a) of the Indian Companies Act, 1913 corresponds to the earlier provision relied upon in the analogous authority, the defect could be rectified by amendment without changing the substance of the claim.
Conclusion: The amendment was allowed so that the petition would conform to the requirements of section 179(a) of the Indian Companies Act, 1913.
Final Conclusion: The proceeding succeeded on the amendment application, with the defective description cured and costs awarded against the bank.
Ratio Decidendi: Where a company in liquidation retains the power to sue through the liquidator, a mistaken description of the proceeding as being by the liquidators instead of by and on behalf of the company is a curable defect of form and may be amended without introducing a new party.
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