TaxTMI 
TaxTMI 
2006 (4) TMI 253
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....in and referred to as 'the Bank'). The loans were secured by mortgage of the assets of the Company. The repayment of the amounts advanced to the Company was guaranteed by the appellants. On 28-11-1988, the Bank filed a suit (Title Mortgage Suit No. 150/1988 on the file of the Special Subordinate Judge, Ranchi) against the Company (defendant No. 1), the appellants (defendants 2 to 4), and four others namely, State of Bihar, Bihar State Financial Corporation, I.F.C.I. and IDBI (defendant Nos. 5 to 8). In the said suit, the Bank sought a decree for Rs. 5,95,98,258.31 against defendants 1 to 4 (the company and the appellants) with interest thereon and several ancillary and consequential reliefs. 3. Even prior to the said suit, other creditors had filed petitions for winding up of the Company, in Company Petition Nos. 1/79, 2/79 and 4/79 on the file of the Patna High Court, alleging that it was unable to pay its debts. During the pendency of the said company petitions, a notification dated 16-4-1984 was issued under the Bihar Relief Undertakings (Special Provisions) Act, 1982, declaring the Company as a relief undertaking, thereby preventing further progress of the petitions for windin....
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.... informed that an inquiry under section 16 of the SIC Act had been directed by the BIFR, it passed an order on 16-7-1990, staying the operation of the order of winding up dated 24-10-1989. The said stay order dated 16-7-1990 was vacated subsequently by the Company Court on 16-12-1994 and the winding up order was revived. 8. The Bank withdrew its revision petition (CRP No. 388/1990) on 4-4-1995. Thereafter, on 11-8-1995, the Bank filed an application under section 446(1) of the Act, seeking leave of the Company Court to proceed with its suit. The said application was resisted by the appellants herein, inter alia, on the ground that the application seeking leave was barred under Article 137 of the Limitation Act, 1963. The appellants contended that the application ought to have been filed within 3 years from the date of winding up, that is, on or before 24-10-1992 and the application filed on 11-8-1995 was barred by limitation. 9. The Company Court by order dated 17-9-1996 granted leave to proceed with the suit. The Company Court was of the view that hough article 137 of the Limitation Act was applicable to an application under section 446(1) of the Act, the provision relating to l....
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.... 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. Sub-section (2) of the said section provided that the court which is winding up the company shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of - (a) any suit or proceeding by or against the company; (b) any claim made by or against the company; (c) any application made under section 391 by or in respect of the company; (d) any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in course of the winding up of the company. The claims against a company made directly to the winding up Court under section 446(2)(b) of the Act, present no difficulty. Section 3(2)(a)( iii) of Limitation Act, 1963 provides that in the case of a claim against a company which is being wound up, for the purposes of the Limitation Act, a suit is instituted when the claimant first sends in his claim to the Official Liquidator. The period of limitation would be, of course, as prescribe....
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....round three years have elapsed from the date of the order of winding up, even though the 12 years period for filing the suit has not expired. So long as the suit is within time as on the date of filing the application for leave, the application will be entertained. While computing the period of limitation for the suit/proceeding, the time spent in obtaining leave to file the suit/proceeding will have to be excluded by applying the principle underlying section 15(2) of Limitation Act, 1963. Section 15(2) of Limitation Act provides that in computing the period of limitation for any suit of which notice has been given, or for which the previous consent or sanction of the Government or any other authority is required, in accordance with the requirements of any law for the time being in force, the period of such notice or, as the case may be, the time required for obtaining such consent or sanction shall be excluded. We may note that the Company Court may not examine the question of limitation for the suit or proceeding, leaving it to be dealt with by the court where such suit/proceeding is to be initiated. 14. This Court in Bansidhar Sankarlal v. Md. Ibrahim AIR 1971 SC 1292 indirectl....
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.... court seeking remedies for various causes of action, is not attracted to such applications under section 446(1) of the Act. However, as elaborate arguments were advanced on this issue, we will deal with it in some more detail. 17. An application seeking leave to proceed, in respect of a pending suit or proceeding (filed before the order of winding up) is not an application for enforcement of any claim or right. It does not seek any 'relief or 'remedy' with reference to any claim or right or obligation or liability. It is an application which is interlocutory in nature. An interlocutory application is not subject to any period of limitation, unless otherwise specifically provided by law. We are conscious of the fact that an application under section 446(1) seeking leave to proceed with the suit/proceeding, is not filed as an 'interlocutory application' in the suit/proceeding before the court where such suit/proceeding is pending. But an interlocutory application is nothing but an application in the course of an action. It is a request made to a court, for its interference, in a matter arising in the progress of a proceeding. Therefore, in a broad sense, the application under secti....
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....r for a limited time on such terms and conditions as the court deems fit, under section 466 of the Act. When the winding up is so stayed, a suit against the company (filed before the winding up order) which stood stayed under section 446(1) could be proceeded with, even though leave had not been obtained to proceed with the suit. We have referred to these alternative possibilities to show that having regard to the nature of an application under section 446(1) of the Act, it does not attract article 137. 19. We may next examine the position by even assuming that article 137 applied to an application under section 446(1) for leave to proceed with a pending suit. Article 137 is a residuary provision applicable to all applications and petitions filed in a court, for which no period of limitation is prescribed. It prescribes a limitation of three years and the period of limitation begins to run when the "right to apply accrues". To understand the meaning of the words "right to apply accrues", we may refer to the wording of article 137 and a few other articles in the Schedule to the Limitation Act: Article No. Description of suit Period of Limitation Time from which period begins t....