1985 (9) TMI 268

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....ashmir and was transferred to the file of this court by the order of the company judge dated August 1, 1980. A preliminary objection as to the maintainability of the suit was raided in the written statement on the ground that no leave had been obtained prior to its institution. Vide order dated November 9, 1984, sitting singly, I held that the order passed on August 1, 1980, impliedly granted post facto permission to the institution of the suit. The question still remains, as to whether post facto permission could be granted and be effective for the continuation of the suit instituted prior thereto. As there was a conflict on this question between the two Division Bench judgments of the Bombay and Madras High Courts, I referred the case to ....

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....ranted before the suit is commenced and not thereafter, if it is commenced after the date of the winding-up order. A contrary view was taken by the Gujarat High Court in Star Engineering Works Ltd. v. Official Liquidator of the Krishnakumar Mills Co. Ltd. (In liquidation) [1977] 47 Comp. Cas. 30 (Guj.) and the Madras High Court in State Bank of India v. Official Liquidator, Straps ( India) P. Ltd. [1979] 49 Comp. Cas. 514 (Mad.). To correctly appreciate the ratio of the two conflicting views, the provisions of both sections, i.e., section 171 of the 1913 Act and section 446 of the present Act, have to be noticed which read as under: Section 171: "When a winding up order has been made or a provisional liquidator has been appointed, no suit....

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....ction 17 and section 28(2) of the Provincial Insolvency Act, 1920, and the decisions on the interpretation of that provision. The decision of the Supreme Court in Bansidhar Shankar-lal's case [1971] 41 Comp. Cas. 21 (SC) had not been rendered till then. The Madras High Court in State Bank of India's case [1979] 49 Comp. Cas. 514 (Mad.), while interpreting the provisions of section 446, relying on the said Supreme Court decision, observed as under (headnote): "The difference brought about in the language of section 446 of the Companies Act, 1956, is only a drafting change and has not effected any change in the legal position gathered by the Supreme Court from the language of the corresponding section 171 of the Indian Companies Act, 1913, ....