D.A Desai, J.:— This summons is taken out by the official liquidator of the Rajratna Naranbhai Mills Company Ltd. (in liquidation) (hereinafter referred to as “the company”) for a declaration that sale of 186 shares of the National Machinery Manufacturing Company Ltd. held by the company in liquidation in Execution Application No. 553 of 1966 in the City Civil Court at Ahmedabad, for recovery of the decretal amount of the decree made in Suit No. 1477 of 1966 is void and for a further direction directing the respondent to pay the amount of Rs. 16,740 with interest at 6 per cento per annum from 7th March, 1967, till repayment.

2. Facts necessary for the proper understanding of the questions raised in this summons may be briefly stated. Company Petition No. 21 of 1966 was presented on November 1, 1966, for an order for winding up the Rajratna Naranbhai Mills Co. Ltd. The court made an order on 26th June, 1967, winding up the company and simultaneously appointed the official liquidator as liquidator of the company. The liquidator proceeded to collect and take into his custody all the properties, effects, actionable claims to which the company was entitled. In the process the liquidator came across evidence showing that the company was the owner of 186 shares of the National Machinery Manufacturing Company Ltd. It also transpired that the respondent, Shri Manubhai Harilal Shah carrying on business in the name and style of New Quality Bobbin Works was the creditor of the company and the respondent filed the Summary Suit No. 1477 of 1966 in the City Civil Court at Ahmedabad on 29th August, 1966, for recovering the amount of Rs. 17,426.16. On the same day he applied for and obtained an ex parte order of attachment before judgment and attachment of the aforementioned 186 shares was sought and granted. On 1st November, 1966, Company Petition No. 21 of 1966 was filed for winding up the company. On that day the aforementioned suit was pending. On 10th November, 1966, a consent decree was made in the said suit and by that decree the company was directed to pay Rs. 17,426.16 with future interest and costs of the suit. Respondent filed Execution Application No. 443 of 1966 in the City Civil Court at Ahmedabad on 21st December, 1966. The Registrar of the Civil Court directed that the attached share certificates be handed over to the nazir. The chamber judge made an order that having regard to the provisions of Order 21, rule 76, the shares be sold through a broker. This order was made on 28th February, 1967. Further order was made on 3rd March, 1967, by which the Commissioner was directed to execute the necessary papers and proper deeds for transferring the shares to the purchaser. The Commissioner deposited in the court Rs. 16,740 being the sale proceeds of the aforementioned 186 shares. The respondent withdrew the amount on 7th March, 1967, and to the extent of the amount paid the decree was satisfied. The company was ordered to be wound-up by an order made on 26th June, 1967, and this order relates back to 1st November, 1966, when the winding-up petition was presented and winding-up proceedings are deemed to have commenced from 1st November, 1966. Thereafter, the official liquidator took out the present summons on 28th June, 1971, alleging that the execution proceedings and sale of the property of the company being after the commencement of the winding-up proceedings, are void under section 537 of the Companies Act as no individual creditor is entitled to recover any dues in this manner from the company since the commencement of the winding-up proceedings in respect of the company. The official liquidator has accordingly prayed for the reliefs hereinbefore mentioned.

3. Respondent appeared and filed his affidavit in reply contending that the respondent was not aware of the winding-up proceedings commenced against the company. He admitted having filed Summary Suit No. 1477 of 1966, to recover an amount of Rs. 17,426.16 and he further admitted having applied for and obtained an order of attachment of the shares in question. It was also alleged that the suit ended in a decree on 10th November, 1966, and subsequently execution application was filed and the shares which were already attached were sold and the amount realised from the sale of the shares was paid to the respondent. It was further alleged that attachment of shares and their subsequent sale are not void and the summons is liable to be dismissed. It was also alleged that section 537 is not attracted and that the application was barred by limitation.

4. In the further affidavit filed by the official liquidator it was alleged that the respondent was a near relation of the partner of the managing agent of the company in liquidation and when the suit was filed and attachment before judgment was obtained the company was already in insolvent circumstances and the partner of the managing agent desired to give an unfair advantage to his own relation and the sale and recovery of the money after commencementof the winding-up proceedings would not be binding on the official liquidator.

5. From the pleadings the contentions of the applicant-liquidator can be summarised as under:

Attachment and sale of 186 shares belonging to the company in liquidation, after commencement of the winding up proceedings, would be void under section 537 as the same was done without the leave of the court.

6. From the pleadings of the respondent, the contentions put forth by him can be summarised as under:

(1) The respondent was not aware of the winding-up proceedings.

(2) Attachment is valid and not liable to be declared void.

(3) Sale being prior to winding-up order was valid.

(4) Present application is not maintainable as such.

(5) Such an application even if it is found to be maintainable must be proceeded against the purchaser of the shares and not against the present respondent.

(6) Even if the applicant is entitled to relief he should be directed to file a civil suit.

(7) That the application of the official liquidator is barred by limitation.

7. At the hearing of this summons following contentions were pressed:

(1) The application is not maintainable inasmuch as:

(a) No leave of the court was necessary and, therefore, the question of execution being carried on without leave of the court does not arise;

(b) As there is no provision for making an application of the nature made by the official liquidator, the obvious remedy is by way of suit;

(c) Section 537 would apply to the transactions of the nature referred to therein made after the date on which actual winding-up order is made and not the deemed date from which winding-up proceedings are deemed to have commenced.

(2) This court has no jurisdiction to entertain this application in view of section 15 and connected provisions of the Code of Civil Procedure as such procedure leaves open two remedies to the official liquidator—one by way of a regular suit and another a summary application—procedure being arbitrary and discriminatory, the court cannot entertain such an application.

(3) The attachment which was levied before even winding-up petition was presented and which was confirmed by a decree passed on 10th November, 1966, would be valid and not void and the sale pursuant to the attachment of the attached property is valid and binding on the liquidator.

(4) The application is barred by limitation.

8. Section 441(2) of the Companies Act provides that winding up of a company by the court shall be deemed to commence at the time of the presentation of the petition for the winding-up. Section 442 confers powers upon the court to stay or restrain proceedings against the company against which the winding-up petition is presented. Section 446 provides for stay of suits or other legal proceedings against the company which is ordered to be wound up. It is material for certain purposes and, therefore, I would set it out. It reads as under:

“446.(1) When a winding-up order has been made or the official liquidator has been appointed as provisional liquidator, no suit or other legal proceeding 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.

(2) 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 (including claims by or against any of its branches in India)

(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;

whether such suit or proceeding has been instituted or is instituted, or such claim or question has arisen or arises or such application has been made or is made before or after the order for the winding-up of the company, or before or after the commencement of the Companies (Amendment) Act, 1960.

(3) Any suit or proceeding by or against the company which is pending in any court other than that in which the winding-up of the company is proceeding may, notwithstanding anything contained in any other law for the time being in force, be transferred to and disposed of by that court.”

9. Section 456(1) provides that where a winding up order has been made or where a provisional liquidator has been appointed, the liquidator or the provisional liquidator, as the case may be, shall take into his custody or under his control, all the property, effects and actionable claims to which the company is or appears to be entitled. Section 456(2) provides that all the property and effects of the company shall be deemed to be in the custody of the court as from the date of the order for the winding up of the company. Section 457(1) provides that the liquidator in a winding up by the court shall have power, with the sanction of the court to institute or defend any suit, prosecution or other legal proceeding, civil or criminal, in the name and on behalf of the company. Section 537 provides as under:

“537.(1) Where any company is being wound up by or subject to the supervision of the court—

(a) any attachment, distress or execution put in force, without leave of the court, against the estate or effects of the company, after the commencement of the winding up; or

(b) any sale held, without leave of the court, of any of the properties or effects of the company after such commencement;

shall be void.

(2) Nothing in this section applies to any proceedings for the recovery of any tax imposed or any dues payable to the Government.’

10. I should also like to take notice of section 447 which provides that an order for winding up a company shall operate in favour of all the creditors and of all the contributories of the company as if it had been made on the joint petition of a creditor and of a contributory. The object of the winding-up proceedings of a company is to collect all the assets, properties and choses-in-action belonging to a company under liquidation and to distribute them to various persons having claim against the company keepihg in view priorities fixed by various provisions of the Companies Act. Ordinarily, a liquidator after collecting all the assets, properties and claims in favour of the company would first pay up any secured creditor if he has not chosen to remain outside the winding up and then a preferential creditor and thereafter unsecured creditors and balance amongst the contributories. While collecting the assets of the company it will be the duty of the liquidator to realise all claims subsisting in favour of the company. It must be his endeavour to collect all the assets of the company which have been unauthorisedly, dishonestly, fraudulently or illegally taken away from the company. In order to prevent the scramble for the assets of the company, the liquidator has to step in and to take possession of and protect the assets of the company. As observed by Lindley L.J in In re Oak Pits Colliery Co.1, the object of the winding up provisions of the Companies Act is to put all unsecured creditors upon an equality and to pay them pari passu. To accomplish this it was provided that any action, execution, distress or other process against the assets of the company should be suspended, otherwise winding-up would result into a scramble for the assets. Sections 531 to 537 grouped together under sub-heading “Effect of winding-up on antecedent and other transactions” provide for avoidance of certain transactions or recovery of payments made during certain period before the commencement of winding-up proceedings or from the commencement of winding up proceedings. There appears to be an underlying principle behind these sections. Once a company is ordered to be wound up, any transaction within certain period prior to the commencement of the binding up and all transactions after commencement of the winding up if not approved by the court as bona fide and valid, would not be binding on the liquidator. The principle is wholesome in that by these provisions a fetter is placed on the power of the directors to dispose of the property of the company, more so when financial stability of the company is lost or it appears to be under insolvent circumstances. Section 537 is one such section which provides that any attachment, distress or execution put in force, without leave of the court, against the estate or effects of the company after the commencement of the winding up, or any sale held, without leave of the court, of any of the properties or effects of the company after such commencement shall be void. It is immaterial and irrelevant while considering the case covered by section 537 that the person in whose favour sale is effected is in any way connected with the management of the company prior to the making of the winding up order.

11. Section 537 is clear and unambiguous. It provides that any attachment of the property of the company or sale thereof without leave of the court after commencement of the winding-up shall be void. In this case, it is admitted that 186 shares of National Machinery Manufacturing Company Ltd. belonged to and was of the ownership of the company in liquidation. Shares were the property of the company in liquidation, They were sold after 3rd March, 1967, and before 7th March, 1967, and sale proceeds to the tune of Rs. 16,740 were taken away by the respondent. The sale of the property of the company in liquidation took place after commencement of the winding-up proceedings which commenced on November 1, 1966. If there is nothing more, section 537 should operate and sale of the shares would be void. If the respondent has taken benefit under a void transaction, it is obligatory upon him to return it and one entitled to reclaim it would be the official liquidator of the company in liquidation.

12. Mr. Trivedi, learned advocate for the respondent, urged that unless there is a specific provision in the Companies Act providing for obtaining leave of the court in respect of a certain thing to be done, no leave of the court, is necessary and therefore, sale of the shares without leave of the court would not be void. It was urged that the expression “without leave of the court” in section 537(1) would only mean where leave of the court is necessary and sale is effected without leave of it. There is no warrant for this construction. Section 537 itself would mean that no sale of the property of the company in liquidation can be made without leave of the court after commencement of the winding-up proceedings except on the pain of its being declared void. Where a consequence of a thing being done without leave of the court is provided for, it implies that the leave of the court is necessary and otherwise consequence would follow. No separate or independent provision making it obligatory to obtain leave of the court need be made and consequence thereafter provided for. Therefore, the language of section 537 which is clear and unambiguous would show that any attachment, distress or execution put in force without leave of the court against the estate or effects of the company, or any sale held without leave of the court of any of the properties or effects of the company after commencement of winding up proceedings would become void. Anyone who wants to proceed against the property of the company in respect of which winding-up proceedings have commenced, must first obtain leave of the court, otherwise consequences provided in section 537 must follow.

13. Mr. Trivedi, however, contended that by applying the fiction enacted in section 441(2), winding-up order is relegated back to the date on which winding-up petition is presented. Mr. Trivedi urged that when a winding-up petition is presented and yet no winding-up order is made and between two dates the company being a going concern, the directors, in exercise of their authority, sell a property of the company and subsequently the company is ordered to be wound up and if by operation of section 441 the order relates back to the date of the presentation of the petition, it would be impossible for any one to obtain leave of the court. It was urged that no court would make an anticipatory order because still the order of winding up is not made. In approaching the matter from this angle, Mr. Trivedi overlooks the provisions contained in section 442. Section 442 provides that at any time after the presentation of a winding-up petition and before a winding-up order has been made, any suit or proceeding pending in any court against the company would ordinarily be stayed on an application made by the company or any creditor or any contributory. Cumulative effect of sections 441, 442 and 537 would be that on presentation of winding-up petition, a proceeding pending against the company would ordinarily be stayed and, therefore, no further proceedings can be taken till the final winding up order is made, and therefore no difficulty would arise even though the winding up order would relate back to the date on which the winding up petition is presented. There is no question of making any anticipatory order in these circumstances.

14. It was, however, contended that section 537(1) can only apply in respect of any attachment, distress or execution put in force or any sale of the properties or the effects of the company made after the date on which actual order of winding up is made and not the date from which winding-up proceedings are deemed to commence. It was urged that if this construction is not placed on section 537(1), it would lead to a startling result; Mr. Trivedi contended that if the construction canvassed for by him is not put on section 537, the court should be called upon to pass a number of anticipatory orders which the court would be loath or reluctant to pass and also a really solvent company may find it very difficult to carry on its normal business during the period between the presentation of the winding-up petition and making of the winding-up order. It is true that very often considerable time elapses between presentation of the winding-up petition and making of the winding-up order. Now, if the winding-up petition fails, section 537(1) would never come into play. If at a later date winding-up order is made, in view of the provisions contained in section 441 the order would relate back to the date of the presentation of the winding up petition. In the intervening period if the company except for its normal trading activity has sold its properties or effects the sale would be void. The court would never be required to make anticipatory orders because if winding up petition is presented, ordinarily under section 442 further proceedings in any court against the company would be stayed. Therefore, the question of making any anticipatory order does not arise at all. Now, if the expression used in section 537(1) is “commencement of the winding up” it would not be proper to give some other meaning to the expression than the one assigned to it in section 441. Wherever the legislature wanted to refer to the date on which winding-up order is made it has so done. In all other cases where the expression used is “commencement of winding-up proceeding” it would have the same meaning as provided in section 441. Therefore, it is not possible to accept the submission that section 537(1) can only come into play in respect of transactions entered into after the date on which the order of winding up the company is made and not between the period of the presentation of the winding-up petition and date of making winding up order.

15. This view taken by me gets support from the decision of the Division Bench of the Rajasthan High Court in Rajasthan Financial Corporation v. Official Liquidator, Bharatpur Oil Mills (P.) Ltd.. In that case, the Rajasthan Financial Corporation filed an application in the District Court for an order for sale of the company's assets and the first lot was already auctioned and sale was confirmed and possession thereof was delivered to the auction-purchaser. This was done after commencement of the winding-up proceedings and the official liquidator sought to set aside the sale under section 537 of the Companies Act. The company judge set aside the sale and directed the auction-purchaser to return the properties. This order was challenged before the Division Bench and it was urged that section 537 can only come into play if the sale takes place after the date on which actual order for winding up is made. Contention was negatived observing that one of the objects which section 537 aims to attain is to nullify the process of alienation of the assets of a company which is in the process of being wound up, the intention being to reserve the assets of the company for fair and equitable distribution to all the creditors and to generally negative all possibilities of a preference between creditors inter se from the date of the commencement of winding up proceedings. It is for this reason that all sales of property since the commencement of the winding up which would mean from the date on which winding-up petition is presented are declared void under section 537.

16. As a third limb of the first ground of attack, it was urged that there is no provision for making such an application as has been made by the official liquidator and, therefore, the present application is not maintainable. The application is made by the official liquidator under section 537. The official liquidator seeks a declaration that sale of the shares is void in view of the provisions contained in section 537 and consequently for an order for refund of the amount taken by the respondent. Question is whether this relief can be obtained by the official liquidator by way of an application to the company judge in charge of the winding-up proceeding of the company or he should be directed to file a suit. Contention is that there is no specific provision for making such an application. Section 446 which I have set out in extenso provides 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 any claim made by or against the company; 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. Sub-section (3) confers power upon the court to withdraw any proceeding either by the company or pending against the company in any court to itself and to dispose it of according to law. Therefore, when the High Court is conducting winding-up proceedings of a company ordered to be wound up, its jurisdiction is not confined to its ordinary jurisdiction but a special jurisdiction is conferred upon it by section 446(2). If there is a suit or a proceeding by the company or against the company pending in any court, the same can be withdrawn and disposed of by the High Court. It may be that such a suit or proceeding would not ordinarily lie in the High Court. But, the High Court acquires jurisdiction because the company is being wound up and because special jurisdiction in respect of the companies which are ordered to be wound-up is conferred by sub-section (2) of section 446. Scope and ambit of the jurisdiction can be properly inferred from clauses (b) and (d) of sub-section (2) set out above by me. The High Court would have jurisdiction to entertain and dispose of any claim made by or against the company. If the present claim made by the official liquidator could be said to be a claim made by the company, it would be covered by clause (b). Assuming that the claim presently investigated by the court in this summons is not a claim by the company because if the company was not ordered to be wound up it could not have made claim as is made by the official liquidator then the case would still be covered by residuary clause of widest import, namely, court will have jurisdiction to entertain or dispose of any other question whatsoever whether of law or fact which may relate to or arise in the course of winding-up of the company. It is a statutory duty cast upon the liquidator that on a winding-up order being made, he must collect all the assets, properties, effects and choses-in-action of the company. Section 456(2) again enacts a deeming fiction by which all those properties collected by the liquidator shall be deemed to be in custody of the court. If the liquidator fails to collect the assets of the company he would be charged for negligence in performance of duty. Therefore, while performing this duty if he comes across any sale of property of the company which would be void under any of the provisions of the Companies Act or any other law for the time being in force and which would not be binding on him as liquidator of the company, it would be equally his duty to take action to collect that asset. If this is the duty cast on the liquidator, simultaneously power was conferred upon him under section 457(1) to institute or defend any legal proceedings. If he has power to institute or defend legal proceedings and if in performance of his duty he comes across a transaction which is void against him, the transaction becoming void because of the winding-up proceedings, it would be a question of fact arising in the course of winding up of the company and this court will have jurisdiction to decide that question. This appears to me to be the scope and ambit of jurisdiction conferred upon the High Court under section 446(2). It is necessary to put liberal construction on section 446(2) so as to widen the jurisdiction of the High Court in dealing with all questions arising in winding up. Under the Companies Act, 1956, jurisdiction is conferred upon the High Court alone to entertain winding-up proceeding. It is in the interest of all concerned that winding-up proceeding shall be proceeded with expeditiously and brought to an end to avoid the agonies of large number of persons adversely affected by the fall of a company. The most important task assigned to the liquidator under the Companies Act while acting as liquidator of a company ordered to be wound up is to collect assets of the company and sell them and to distribute the realization amongst all those who have claims against the company and payment must be made according to priorities fixed by law. This appears to me not to be not only the foremost but the most basic duty of a liquidator of a company ordered to be wound up. Now, if the liquidator in course of winding up is required to file suits for recovering properties and assets of the company, one has only to imagine at what length of time winding-up proceedings can be brought to a close.

17. If a suit has to be filed it is implicit therein that it will have to go through the gamut of an appeal, second appeal, letters patent appeal and appeal to the Supreme Court. Winding-up proceedings would drag on interminably over decades with consequent hardship to everyone. In order to avoid this situation, sub-sections (2) and (3) were incorporated in section 446 by which special jurisdiction has been conferred upon the High Court to entertain certain types of proceedings or also withdraw certain types of proceedings by or against the company in liquidation pending in any court and transfer to itself and to dispose of the same. Therefore, section 446(2) would enable the High Court to entertain an application of the nature filed by the official liquidator and to grant relief in the matter.

18. Now, if the High Court could be moved by the liquidator it must be by way of an application in view of the provisions contained in sub-clause (b) of rule 11 which provides that all other applications under the Act or under the Rules shall be made by a judge's summons, returnable to the judge sitting in court or in chambers as provided in rule 12. Whenever power is conferred and duty is cast on the liquidator to do certain things in discharge of his duty as liquidator, in course of winding-up proceedings, it is not necessary that specific provision should be made that an application for certain relief could be made to the court. It would be implicit in the provisions casting duty on the liquidator along with the provisions by which jurisdiction is conferred on the High Court that proceedings of a certain nature in a winding up can be taken up before the High Court and that exactly has been done in this case.

19. I would now refer to some of the cases to which my attention was drawn at the Bar. In Grey Steel Casting and Finishing Co. P. Ltd. v. Adverts (Private) Ltd. facts were that Adverts (P.) Ltd. filed a suit against Ovation International (India) Pvt. Ltd., and obtained an order for attachment before judgment of certain properties of the company, during the pendency of the winding-up petition filed by Grey Steel Casting and Finishing Co. P. Ltd. against Ovation International (India) P. Ltd. Subsequently, petitioning creditor took out summons under section 442 for stay of further proceedings in the suit and for an injunction restraining the attaching creditor from taking any further proceedings therein. This summons was contested by the attaching creditor, inter alia, on the ground that such a summons could not be taken out more particularly by the petitioning-creditor but it should have been taken out by the provisional liquidator. Negativing the various objections raised by the attaching-creditor to the granting of the summons, it was held that any sale of any of the properties or effects of the company held in pursuance of attachment before judgment after the date of the filing of the winding-up petition would be void under clause (b) of section 537(1) as it would be a sale without the leave of the court after commencement of the winding-up proceedings. With regard to the maintainability of the summons, it was held that the summons was maintainable under section 442 of the Companies Act. Next case referred to was Official Liquidator v. Bhagwat Saran Garg [1970] 40 Comp. Cas. 657 All... In that case, the official liquidator took out two separate summonses one for recovering the arrears of rent from the tenant of the properties of the company in liquidation and another for directions for recovering possession of the properties forthwith. These two summonses were contested by the tenant, inter alia, on the ground that such a summons is incompetent and the official liquidator should be directed to file a suit. Negativing this contention it was held that the official liquidator can legitimately ask the court to give possession and issue directions under section 446(2) of the Companies Act without necessity of filing a regular suit against the lessee. In reaching this conclusion, reliance was placed on a decision of the Supreme Court to which I would presently refer. Suffice it to say that both the summonses were held maintainable.

20. I would next refer to Dhirendra Chandra Pal v. Associated Bank of Tripura Ltd., which, in my opinion, concludes the point. In that case the liquidator served a notice on the appellant who was a tenant of the land belonging to the bank in liquidation, terminating his tenancy and calling upon him to vacate the land and to hand over possession by the specified date. The liquidator took out a judge's summons on the original side of the High Court under section 45B of the Banking Companies Act for ejectment of the appellant. First an ex parte decree was made and which the tenant subsequently sought to get it set aside but his application was dismissed. The tenant thereupon filed a suit in the original side of the High Court asking for a declaration that the ex parte decree against him was made without jurisdiction and was a nullity and that he continued to be tenant notwithstanding the said ex parte decree. It was contended before the Supreme Court that no action could be taken by the liquidator under section 45B(1) of the Banking Companies Act, 1949, for recovering possession from the tenant but the liquidator should have filed a suit and the order of the High Court on the summons taken out by the liquidator was without jurisdiction and such a decree would be a nullity. section 45B of the Banking Companies Act is in pari materia with section 446(2) of the Companies Act. After referring to section 45B, the Supreme Court negatived the contention of the tenant that the ex parte decree made by the High Court in winding-up proceedings at the instance of the liquidator was a nullity and observed as under:

“It appears to us that, consistently with this policy and with the scheme of the Amending Act, where the liquidator has to approach the court under section 45B for relief in respect of matters legitimately falling within the scope thereof, elaborate proceedings by way of a suit involving time and expense, to the detriment of the ultimate interests of the company under liquidation, were not contemplated. In the absence of any specific provision in this behalf in the Act itself and in the absence of any rules framed by the High Court concerned under section 45G, the procedure must be taken to be one left to the judgment and discretion of the court, having regard to the nature of the claim and of the questions therein involved.”

21. Section 446(2) is more explicit in terms and confers jurisdiction upon the High Court to entertain all the questions that arise in a winding up. Whether the particular sale of the property of the company is void as having been made after commencement of the winding-up proceedings is necessarily a question that arises in winding up and such a question can be examined and disposed of at the instance of the liquidator by the High Court. All the matters legally falling within the scope of section 446(2) must be entertained by the High Court and it is implicit in the provisions contained in section 446(2) that elaborate proceedings by way of suit involving time and expense to the detriment of the ultimate interests of the company in liquidation were not contemplated.

22. It, therefore, appears crystal clear that the present summons for getting relief under section 537 by the official liquidator is maintainable and the liquidator is not required to file separate suit. First ground of attack must necessarily, therefore, fail.

23. Second ground of attack was that this court has no jurisdiction to entertain the application because there is concurrent jurisdiction both in the High Court and the court which can entertain a suit for the same relief. It was urged that even if the High Court has jurisdiction under section 446(2) to entertain the present summons there is nothing in section 446(2) which excludes the jurisdiction of ordinary civil courts to entertain a suit at the instance of the official liquidator for the same relief. It was, therefore, urged that if the High Court and ordinary civil court has concurrent jurisdiction to entertain proceedings for granting the relief as sought in this summons, section 15 of the Code of Civil Procedure will come into play and the High Court will have no jurisdiction to entertain the present summons. To be frank, I was completely at a loss to understand this contention. If the submission starts by saying that the High Court has concurrent jurisdiction with ordinary civil court, I fail to see how that jurisdiction will be lost by the provision contained in section 15 of the Code of Civil Procedure. Section 15 provides that every suit shall be instituted in the court of the lowest grade competent to try it. It was urged that hierarchy of courts envisaged under the Code of Civil Procedure is the court of civil judge, junior or senior division, as the case may be. Next higher court is District Court and the highest court in the State is the High Court. Contention is that once jurisdiction of the ordinary civil court is not excluded to entertain a proceeding for granting relief as sought in this summpns, obviously, the liquidator should have approached the civil court of the lowest grade competent to try the proceeding in which the same relief could be granted. There is absolutely no merit in this contention. If special jurisdiction is conferred on the High Court by section 446(2) to entertain the present summons, it would not be lost by virtue of section 15 of the Code of Civil Procedure. Section 15 would operate where ordinary civil jurisdiction of the court is invoked and ignoring the court of lowest grade the party approached the highest. But, where special jurisdiction is conferred by a special statute, there is no justification for invoking section 15 because thereby the very purpose of conferring special jurisdiction would be nullified. If contention canvassed on behalf of the respondent is granted every time the liquidator would have to go to the court of civil judge which will have the effect of totally nullifying the effect of section 446(2) which was specifically enacted with a view to enable the liquidator to approach this court for expeditious disposal of intermediate proceedings in the course of a winding up of a company. Purpose for which section 446(2) is enacted would be wholly defeated if the construction canvassed by Mr. Trivedi is accepted. Again, section 446(3) enables the High Court to withdraw any proceeding pending in any court against a company that is being wound up and transfer it to itself and dispose it of. If, therefore, the liquidator files the suit suggested it can be withdrawn and transferred to the High Court. The procedure suggested will merely be an idle formality. Therefore, it is not possible to accept the submission that this court has no jurisdiction to entertain the present summons.

24. In passing Mr. Trivedi wanted to raise a peculiar contention which was nowhere pleaded in the affidavit-in-reply. It was urged that the procedure before the High Court under section 446(2) would be a summary procedure, while if the suit is filed, it would be governed by the Code of Civil Procedure and, therefore, the liquidator will have two remedies open to him, one by a regular suit and another a summary remedy under section 446(2) and it would be discriminatory in character. I am not prepared to even entertain this contention because there are neither pleadings nor there are averments in support of the contention.

25. The third ground of attack was that the attachment is valid and not void and, even if the sale is void, the liquidator should proceed against the person who had purchased the shares because that was the property of the company. I have already set out various relevant dates. Suffice it to say at this stage that this court at present is not concerned with the initial attachment before judgment obtained by the respondent because that is not challenged in this summons. The summons is directed against sale of the property. I must confess that attachment before judgment was obtained prior to the presentation of the winding-up petition. I have my own doubt whether the word “attachment” as used in section 537(1)(a) includes within its sweep attachment before judgment. But as attachment before judgment obtained by the respondent is not the subject-matter of dispute in this summons, I would not further dilate upon the point. This summons is directed against the sale of the property. Assuming for a moment that the attachment before judgment was levied prior to the presentation of the winding-up petition, that by itself does not validate the sale in execution which took place after the commencement of the winding up proceeding and which was held without leave of this court. Even if a valid attachment is levied, it does not create any interest in the attached property of the attaching-creditor. The effect of attachment of a property of the company which is being wound-up against the liquidator was recently considered by me in Company Application No. 59 of 1971* decided on November 30, 1971. In this connection, I have observed as under:

“In order to give full effect to the principle underlying the winding-up provisions of the Companies Act, the only approach to the problem would be that an attachment simpliciter of the properties of a company, which was subsequently ordered to be wound up without any further action being taken, would be of no consequence or effect against the official liquidator and the property could be disposed of by the official liquidator, wholly ignoring the attachment. Any other approach would run counter to the underlying thread in various provisions in the winding up chapter of the Companies Act.”

26. Therefore, even if the attachment was valid at its inception, it did not create any interest in the attached property in favour of the respondent. Attachment in execution of a decree under the Code of Civil Procedure creates no charge upon the attached property. It only confers a right on the decree-holder to have the attached property kept in custody for being dealt with by the court in accordance with law. It merely prohibits alienation but it does not confer any title or create any interest in the property in favour of the attaching-creditor. This being the effect of the attachment, even if the attachment was valid, it is of no significance.

27. Question is whether sale pursuant to the attachment is void. Execution proceeding in which the shares were sold was commenced after commencement of the winding-up proceedings. Execution was put into force after commencement of the winding-up proceeding without the leave of the court which would immediately attract section 537(1)(a). Sale was held without leave of the court after winding-up proceedings commenced, which would attract section 537(1)(b). Sale is, therefore, void and the position would not be improved by merely urging that the original attachment before judgment of the shares was valid. In this view of the matter the ratio of the decision in Amrita Lal Kundu v. Anukul Chandra Das would not assist the respondent in any manner.

28. Last ground of attack was that the present application is barred by limitation. Mr. L.T Shah, learned advocate for the official liquidator, repelled this contention by urging that no period of limitation is provided for an application of the type made by the liquidator and even if the respondent is right in urging that the period of limitation is three years, factually the application is within time in view of section 458A of the Companies Act. I will examine the second limb of the argument first.

29. Section 458A of the Companies Act reads as under:

“458A. Exclusion of certain time in computing periods of limitation.— Notwithstanding anything in the Indian Limitation Act, 1908, or in any other law for the time being in force, in computing the period of limitation prescribed for any suit or application in the name and on behalf of a company which is being wound-up by the court, the period from the date of commencement of the winding-up of the company to the date on which the winding-up order is made (both inclusive), and a period of one year immediately following the date of the winding-up order shall be excluded.”

30. I will first proceed on the assumption that section 458A applies and the period of limitation is three years as contended by the respondent. Now, in computing the period of limitation as provided by section 458A, the period between the date on which the winding-up petition is presented and the date on which the order is made has to be excluded and the period of one year immediately following the date of winding-up order shall be excluded. The present summons is taken out by the liquidator for relief under section 537. Right to take action by the liquidator would arise on the making of the winding-up order. Winding-up order was made on 26th June, 1967. Period between November 1, 1966, when the winding-up petition was presented and June 26, 1967, when the winding-up order was made has to be excluded as provided by section 458A. A further period of one year will have to be excluded as provided by section 45, 8A. Therefore, limitation will begin to run from 26th June, 1968. Present petition was filed on 28th June, 1971. Period of limitation of three years would begin to run from June 26, 1968, and would expire on 26th June, 1971. The present summons ought to have been filed on 26th June, 1971. 26th June, 1971, and 27th June, 1971, were holidays and if the period of limitation expired on a holiday, limitation would be extended till the next working day. Next working day was 28th June, 1971. Therefore, apart from going through the various niceties argued before me, the present application is within time. This conclusion is reached on two assumptions one being that there is some period of limitation for such an application and that it is a period of three years and that section 458A applies.

31. Mr. Trivedi, for the respondent, urged that limitation for an application of the nature filed by the petitioner would be three years as such an application would be governed by article 137 of the Limitation Act of 1963. Article 137 is in the Third Division of the Schedule to the Limitation Act. Article 137 reads as under:

“Descripiion of suit Period of limitation Time from which period begins to run 137. Any other application for which no period of limitation is provided elsewhere in this Division. Three years When the right to apply accrues”

32. Article 137 corresponds to article 181 of the Limitation Act of 1908 and is a residuary article for all applications, including petitions. Mr. Trivedi conceded that the present application would not be covered by any particular article and, therefore, it would necessarily be covered by residuary article 137. Article 137 refers to application for which no period of limitation is provided elsewhere in the Third Division of the Schedule. Mr. Trivedi urged that summons taken out by the liquidator is an application for which no period of limitation is provided in any of the articles placed in the Third Division and, therefore, necessarily it would be covered by article 137. In support of this submission, he drew my attention to the definition of the “applicant” in section 2(a). It is an inclusive definition and it provides that “applicant” includes petitioner, etc. It was urged that in the Limitation Act of 1908, definition of the word “applicant” did not include the petitioner and this is an innovation made in order to cover all types of applications which can be commenced by a petition. Contention is that whenever a petition has to be filed the person who files the petition would be petitioner and he would be included in the definition of “applicant” and proceedings filed by him would be an application and if there is no particular article which provides a period of limitation for that type of application, article 137 would be attracted and the period of limitation would be three years commencing from the time when the right to apply accrues. Mr. L.T Shah sought to repel this argument by urging that article 137 applies only to an application which can be made under the Code of Civil Procedure or the Code of Criminal Procedure only. Mr: Shah urged that examining all the articles comprised in the Third Division of the Schedule the special feature that emerges from a bare perusal of the articles is that various articles provide for various types of applications that can be made either under the Code of Civil Procedure or under the Code of Criminal Procedure and residuary article 137 must be construed ejitsdem generis that it would only apply to applications which can be made either under the Code of Civil Procedure or under the Code of Criminal Procedure. Article 137 is entirely analogus to article 181 of the Limitation Apt of 1908. article 181 of the Limitation Act of 1908 came up for consideration before a number of courts and there was a cleavage of opinon as to whether it applies to all types of applications or only to those applications which can be made under the Code of Civil Procedure. The question came up before the Supreme Court in Sha Mulchand and Co. Ltd. v. Jawahar Mills Ltd.. Proceedings commenced upon a summons taken out by the official liquidator for rectification of the register of the company. It was contended that the application is barred by limitation and it was urged that application would be by article 181 and the period of limitation would be three years. Negativing this contention, the court observed as under:

“That article (181) has, in a long series of decisions of most, if not all, of the High Courts, been held to govern only applications under the Code of Civil Procedure. It may be that there may be divergence of opinion even within the same High Court but the preponderating view undoubtedly is that the article applies only to applications under the Code.”

33. That was the construction placed upon article 181 of the Limitation Act of 1908. The decision is an authority for the proposition that application by the liquidator in course of winding-up proceedings for decision of any question that would arise in winding-up would not be governed by article 181 and there would be no period, of limitation for such an application.

34. Since the repeal of the Limitation Act of 1908 and replacement of article 181 by article 137 a controversy is again raised whether article 137 applies only to the applications that can be made under the Code of Civil Procedure or any other application under any other statute. This question was examined by the Andhra Pradesh High Court in In re Vegetols Ltd. (In Liquidation). In that case summons was taken out by the liquidator under sections 468, 477 and 537 of the Companies Act, 1956, for a direction that the Indian Bank Ltd., Vellore, shall pay Rs. 25,417.15 to the official liquidator. Allegation was that the payment was made after the commencement of the winding-up proceedings and it would be void under section 536(2) unless the court otherwise directs. Summons was resisted, inter alia, on the ground that the application of the official liquidator was barred by limitation and reliance was placed on article 137 of the Limitation Act of 1963. After examining the previous case law on the subject, it was held that article 137 is corresponding to article 181 of the Limitation Act of 1908 and it would only apply to an application that can be made under the Code of Civil Procedure.

35. The question has been more elaborately examined in Town Municipal Council, Athani v. Labour Court, Hubli [1969] 36 F.J.R 177. The question came up before the court in an appeal against the decision of the Mysore High Court dismissing the writ petition filed by the appellant-municipality against the order of the Labour Court, Hubli, awarding certain compensation under section 33C(2) of the Industrial Disputes Act, 1947. Contention before the Labour Court was that all the applications were barred by limitation as they would be covered by article 137 of the Limitation Act, 1963. Labour Court negatived the contention and the decision of the Labour Court was challenged by the Municipality by filing a writ petition under article 226 of the Constitution. Petitions were dismissed and the Municipality carried the matter to the Supreme Court. While dealing with the contention that the applications were barred by limitation, reference was made to article 137 of the Limitation Act. The court examined the proposition from two independent angles, namely, (1) whether article 137 applies as its predecessor article 181 to applications under the Code of Civil Procedure only, or (2) that article 137 would only apply to the applications made to the court governed by the Code of Civil Procedure. From both the angles the court reached an affirmative conclusion that article 137 would not apply to the applications made under section 33C(1). The court examined the decisions under article 181 and then reached an affirmative conclusion that article 137 is not wider in its scope than article 181 and article 137 would only apply to applications made under the Code of Civil Procedure. In this connection it has been observed as under:

“It appears to us that the view expressed by this court in those cases must be held to be applicable, even when considering the scope and applicability of article 137 in the new Limitation Act of 1963. The language of article 137 is only slightly different from that of the earlier article 181 inasmuch as, when prescribing the three years' period of limitation, the first column giving the description of the application reads as “any other application for which no period of limitation is provided elsewhere in this division”. In fact, the addition of the word ‘other’ between the words ‘any’ and ‘application’ would indicate that the legislature wanted to make it clear that the principle of interpretation of article 181 on the basis of ejusdem generis should be applied when interpreting the new article 137. This word ‘other’ implies a reference to earlier articles, and, consequently, in interpreting this article, regard must be had to the provisions contained in all the earlier articles. The other articles in the third division to the schedule refer to applications under the Code of Civil Procedure, with the exception of applications under the Arbitration Act and also in two cases applications under the Code of Criminal Procedure. The effect of introduction in the third division of the schedule of reference to applications under the Arbitration Act in the old Limitation Act has already been considered by this Court in the case of Sha Mulchand & Co. Ltd. We think that, on the same principle, it must be held that even the further alteration made in the articles contained in the third division of the schedule to the new Limitation Act containing references to applications under the Code of Criminal Procedure cannot be held to have materially altered the scope of the residuary article 137 which deals with other applications. It is not possible to hold that the intention of the legislature was to drastically alter the scope of this article so as to include within it all applications, irrespective of the fact whether they had any reference to the Code of Civil Procedure.”

36. Thus, in terms it has been held that article 137 would only apply to applications under the Code of Civil Procedure and that its scope and ambit is the same as of its predecessor article 181 of the old Limitation Act, 1908. Mr. Trivedi, however, urged that the Supreme Court has not observed that article 137 would apply not only to applications under the Code of Civil Procedure but also to applications made to the court governed by the Code of Civil Procedure. Even if Mr. Trivedi is right, the ratio of the decision is not that both the conditions are mutually exclusive and when one or the other is attracted, article 137 can be invoked. It was, however, urged that an application to a court governed by the Code of Civil Procedure would be covered by article 137 and as the present application is made to the High Court which is a court governed by the Code of Civil Procedure, it would fall within the scope of article 137. That is not the correct reading of the judgment of the Supreme Court. In fact, having first held that the scope of article 137 is the same as the scope of article 181 of the Limitation Act of 1908, the court examined the case from a slightly different angle and reached the same conclusion. While the matter was being examined from the second angle, attention of the court was drawn to a Full Bench decision of the Bombay High Court in Manager, P.K Porwal v. Labour Court at Nagpur, which had taken a contrary view. While overruling that decision, the Supreme Court refused to attach any importance to the wider definition of the word “applicant” in the Limitation Act of 1963. Therefore, the point that article 137 would apply to any application not falling under the Code of Civil Procedure and such application would be covered by article 137 stands concluded by the judgment of the Supreme Court in Athani Municipality's case.

37. The application made by the liquidator is not one under the Code of Civil Procedure. It is a special application under the Companies Act made to the High Court on whom jurisdiction is conferred by section 10 of the Companies Act. Proceedings under the Companies Act would not ordinarily be governed by the Code of Civil Procedure. Power was conferred upon the Supreme Court under section 643 of the Companies Act to make rules providing for all matters relating to the winding-up of companies which, by the Act are to be prescribed and also to make rules providing for all such matters as may be prescribed, except those reserved to the Central Government. Power is also conferred upon the Supreme Court to make rules consistent with the Code of Civil Procedure as to the mode of proceedings to be had for winding-up a company, and for the voluntary winding-up of companies, for the holding of meetings of creditors and members in connection with the proceedings under section 391, and for giving effect to the provisions of the Act as to the reduction of the capital and generally for all applications to be made to the court under the provisions of the Act. Armed with these powers, the Supreme Court has enacted the Companies (Court) Rules, 1959. Rule 6 provides that, save as provided by the Act or by the Rules, the practice and procedure of the court and the provisions of the Code so far as applicable shall apply to all proceedings under the Act and the Rules. Thus provisions of the Code of Civil Procedure apply to the proceedings under the Companies Act—not by itself but by virtue of rule 6 enacted in exercise of the rule making power conferred upon the Supreme Court. Therefore, the present application is not an application under the Code of Civil Procedure and it would not be governed by article 137. Once article 137 is out of the way, there is no period of limitation prescribed for such application and the plea of limitation must fail.

38. Alternatively, Mr. Trivedi contended that even if article 137 applies, section 458 A would not apply and, therefore, the present application would not be within time. That is a hypothetical argument because once article 137 is out of the way there is no period of limitation. Assuming that article 137 applies, it would be necessary to find out whether section 458A of the Companies Act would apply or not. I have already set out above section 458A. It was strenuously urged that exclusion of certain time in computing the period of limitation permitted by section 458A cannot be availed of because two conditions for the applicability of section 458 A which are cumulative in their character are not satisfied. Submission is that before section 458A can be attracted the suit or application must be in the name of and on behalf of the company which is being wound-up. Only in respect of such a proceeding, the extended period of limitation as provided by section 458A would be available. It is true that before benefit of the extended period of limitation can be availed of, the suit or application must be in the name or on behalf of the company. The present application is under section 537 and it is certainly in the name of the company. Mr. Trivedi urged that it is not on behalf of the company. It was urged that only that application could be said to be on behalf of the company which application could have been filed by the company if it was not ordered to be wound up. In other words, it was argued that cause of action must have been available even to the company if the company was not ordered to be wound up and then only it could be said to be an application on behalf of the company. In this connection it was contended that the liquidator of a company which is being wound up has two independent capacities: (i) as official liquidator of the company in liquidation, and (ii) as representative of the creditors and contributories of the company. Reference was made to Kent v. La Communaute Des Soeurs De Charite De La Providence. In that case action was commenced by Kent and others as liquidators of the Ville-Marie Bank against the respondent to recover $20,000 alleged to be owing by the respondents to the bank on a promissory note. The respondents admitted the debt claimed, but alleged that it was extinguished by compensation or set-off. The applicant moved for leave to amend the summons by adding description as liquidators of the bank. Both the application and notices were dismissed holding that the liquidators were “sans qualite” to bring the action in their own name. After the appeal was dismissed by the King's Bench Division, the matter was brought before the Privy Council. The Privy Council allowed the amendment and remanded the matter for decision on merits. In the process it was observed that the liquidator must sue in his own name or in that of the company according to the nature of the action, in his own name where he acts as representative of creditors and contributories, in that of the company to recover either its debts or its property Relying on this judgment, it was urged that the present application by the official liquidator is in his capacity as representative of the creditors and contributories because benefit of the application will flow to them and not as representative of the company and, therefore, it is not an application in the name of and on behalf of the company and section 458A would not be attracted. There is absolutely no merit in this contention. It is already pointed out that on a winding-up order being made, it is the statutory duty of the liquidator to collect assets of the company. If while collecting the assets, the liquidator comes across a disposition of property made by directors of the company which is void, the action brought by him to recover the same is part and parcel of the work of collecting assets of the company. To illustrate, 186 shares which were the subject-matter of the litigation belonged to the company and if the respondent under a void sale had not taken them away and got them sold so as to take them beyond the reach of the liquidator and if he is now called upon to return the shares or refund the proceeds, it is nothing more nor less than collecting assets of the company and that has to be done as in the name of the company and on behalf of the company. It is true that once all the assets are collected there would be just and equitable distribution according to the provisions of law amongst various persons having claims against the company. But, that does not mean that every action taken for collecting assets of the company by the liquidator is taken in his capacity as representative of the creditors and contributories and not the representative of the company. That would be putting a very narrow construction on section 456(1) which is not warranted. The action such as the present one is on behalf of the company.

39. It was, however, contended that if the company was not ordered to be wound up, it would not be open to the company to claim back shares and, therefore, if the present cause of action was not available to the company if it was not ordered to be wound up, it would not be a claim on behalf of the company but the claim arose in favour of the creditors and contributories of the company and the present action, therefore, by the liquidator is as the representative of the creditors and contributories. There is again no merit in this contention. It is true that if the company was not ordered to be wound up it could not have claimed back shares or sale proceeds thereof if it has submitted both to the decree and to the execution thereof. But a right may accrue under a statute in favour of the company and the right may accrue on the happening of certain events which may not be available before the happening of that event. The company must get back all those properties transferred in violation of certain provisions of the Companies Act on the happening of the event, viz., order winding up the company being made. If that right accrues after such an order is made, it is none-the-less a right of the company albeit to be exercised by the liquidator because of the winding-up order. But, it cannot be denied that right is the right of the company. Therefore, the present action is maintainable and the application is in the name of and on behalf of the company and not as a representative of the creditors and contributories. It is immaterial and irrelevant that the benefit of the action may ultimately flow to the creditors and contributories. Section 458A, therefore, would be attracted.

40. Having examined the contention of limitation from all possible angles, it may be answered from both the angles. First answer is that article 137 of the Limitation Act, 1963, would not apply to the present application and there is no other provision prescribing limitation for such an application and, as there is no period of limitation, the plea of limitation must fail. Assuming that article 137 applies and simultaneously section 458A of the Companies Act applies, the extended period of limitation would be available to the liquidator and if it is available, the present application, as pointed out earlier by me, is within time and, therefore, the plea of limitation must fail.

41. As all the contentions raised by Mr. Trivedi fail and as sale of shares is void and as the respondent has withdrawn the amount of Rs. 16,740, being the sale proceeds of shares deposited by the Commissioner in the City Civil Court and as the shares have passed from person to person, the respondent do refund Rs. 16,740 being the benefit taken by him under a void sale to the liquidator.

42. Mr. Trivedi urged that interest should not be awarded and the respondent should be given liberty to pay the amount by instalments. It was further urged that if the court grants the summons, the court must simultaneously in equity set aside satisfaction of the decree recorded in the City Civil Court and give liberty to the respondent to prove his debt before the liquidator. I think, looking to the circumstances of the case, I would not award interest, except future interest at the rate of 6 per cent, per annum. Question of instalments is slightly difficult because, according to the applicant, the respondent is carrying on business while the respondent has denied that he has been carrying on any business and stated that he is in service.

43. Respondent requested for instalments spreading over three years. That, in my opinion, is too long. In my opinion, the respondent should pay the whole amount in equal monthly instalments spread over 18 months commencing from 1st January, 1972. I direct that on the amount being paid, satisfaction of the decree obtained by the respondent in Civil Suit No. 1477 of 1966 must be set aside and the respondent is at liberty to prove his debt in winding up before the liquidator.

44. It is thus hereby ordered that the respondent do pay Rs. 16,740 to the petitioner by equal monthly instalments spread over 18 months commencing from 1st January, 1972. The respondent to pay future interest at the rate of 6 per cent. The applicant would be entitled to recover the whole amount at once if the respondent commits defaults in payment of any two instalments. On the full amount being paid satisfaction recorded in the decree obtained by the respondent against the company in Civil Suit No. 1477 of 1966 in the City Civil Court, Ahmedabad, should be set aside and the respondent to be at liberty to prove the debt in winding up before the liquidator.

45. Summons granted accordingly with costs.

February 28, 1972.

46. On a note being filed by Mr. B.S Trivedi, learned advocate for the respondent, the date for commencement of payment of instalment is modified to read as “1st March, 1972” instead of “1st January, 1972” in the final operative order made by me in this judgment.