1983 (8) TMI 228

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.... (hereinafter referred to as "the Act"), for grant of leave of the court to proceed with Title Mortgage Suit No. 258 of 1972 pending in the court of Subordinate Judge, First Court, Gaya. The salient facts for the decision of the point raised in this appeal may be stated here. It appears that the aforesaid title mortgage suit was filed on December 15, 1972, by the appellant, United Bank of India, against the company and a prayer was made for a mortgage decree as also personal decree against other defendants, some of whom were directors of the company. In 1975, one of the directors filed an application for winding up of the company, respondent No. 2. The said application was registered as Company Petition No. 2 of 1975. The bank objected t....

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....roceeding shall be commenced, or if pending at the date of the winding-up order, shall be proceeded with, against the company, except by leave of the court and subject to such terms as the court may impose." Reference was also made to section 537 of the Act. Mr. Chatterjee did not rely upon section 537, as according to him, on a plain reading of the said section, it has no application to the present case at this stage and he reserved the right to canvass the said question in future if occasion would arise. On a plain reading of sub-section (1) of section 446 of the Act, it is manifest that where a winding-up order has been passed, leave of the court is necessary for proceeding further with a pending suit or proceeding. The same decision ....

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....in exercise of a power of sale vested in him by the mortgage. It is not necessary to obtain liberty to exercise the power of sale, although orders giving such liberty have sometimes been made.' The secured creditor is thus outside the winding up and can realise his security without the leave of the winding up court, though if he files a suit or takes other legal proceedings for the realisation of his security, he is bound under section 231 (corresponding with section 131, Indian Companies Act) to obtain the leave of the winding up court before he can do so although such leave would almost automatically be granted. Section 231 has been read together with section 228(1) and the attachment, sequestration, distress or execution referred to i....