Interpleader suits against a company in liquidation require leave of the company court before institution or continuation.

An interpleader suit against a company in liquidation falls within the wide expression "suit or proceeding" in section 446(1) of the Companies Act, 1956. Because such a suit brings rival claimants before the court in relation to the company's interest in the subject-matter, it is treated as a proceeding affecting the company in liquidation and is subject to the winding-up court's control. The absence of any express exclusion for interpleader proceedings, together with the scheme of section 446 and Order 35 of the Code of Civil Procedure, supports this construction. Such a suit cannot be instituted or continued without leave of the company court.

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Issues: Whether an interpleader suit against a company in liquidation is a suit or proceeding against the company within section 446(1) of the Companies Act, 1956, so as to require leave of the company court before institution or continuance.

Analysis: The expression "suit or proceeding" in section 446(1) is of wide amplitude and is not confined to actions directly enforcing a personal claim against the company's assets. An interpleader suit, though initiated by the stakeholder, necessarily brings the rival claimants to assert their claims inter se against the company's interest in the subject-matter, and the suit may ultimately proceed in the same manner as an ordinary suit against the company in liquidation. The statutory scheme of section 446 is to place control over such proceedings in the winding-up court so that claims affecting the company in liquidation are not pursued without leave. The absence of a specific exclusion for interpleader proceedings and the nature of the relief under Order 35 of the Code of Civil Procedure, 1908, support the application of the section.

Conclusion: An interpleader suit against a company in liquidation is a suit or proceeding against the company within section 446(1) of the Companies Act, 1956, and cannot be instituted or continued without leave of the company court.

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