Leave to sue a company in liquidation cannot be granted after the limitation period; application dismissed by the court.

Leave to commence or continue proceedings against a company after a winding-up order requires prior judicial leave and that leave must be obtained while the suit remains within the statutory period of limitation; authorities cited allow leave where it was sought and granted before limitation expired. The court held there is no basis to grant leave to revive or validate a suit once the limitation period has elapsed because that would permit commencement of a time barred action. Outcome: application for leave dismissed.

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Issues: Whether leave under section 446 of the Indian Companies Act to continue or commence a suit against a company in liquidation can be granted by the court after the period of limitation for filing the suit has expired.

Analysis: Section 446 requires leave of the court to commence proceedings against a company after a winding-up order. Where a suit is instituted without such leave it remains dormant and can be validated only if leave is sought and granted while the suit is still within the period of limitation. Authorities permitting leave to be granted after filing relate to cases where leave was obtained while the suit remained within time; no precedent was shown permitting leave to revive a suit after the limitation period had expired. Granting leave after limitation would enable commencement of a time-barred suit, which the law of limitation forbids. The court therefore examined the interplay between the statutory requirement of leave under section 446 and the bar of limitation and concluded that leave cannot be granted once the suit is time-barred.

Conclusion: Leave under section 446 of the Indian Companies Act cannot be granted after the period of limitation for the suit has expired; the application for leave is dismissed.

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