JUDGMENT Sudhir Narain, J.
1. This is an application to recall the order dated 13.1.1997 whereby this Court allowed the application filed by UCO Bank under Section 446(1) of the Companies Act (in short the Act) against M/s Aurangabad Engineering Company Limited (in liquidation) granting permission to the applicant Bank to proceed with Suit No. 272 of 1987, UCO Bank v. Aurangabad Engineering Company Limited and others, pending in the Court of Vlth Additional District Judge, Bulandshahr.
2. The facts in brief are that UCO Bank had filed suit No. 272 of 1987 in the court of District Judge, Bulandshahr for recovery of Rs. 25,62,509.01 together with pendente lite and future interest against M/s. Aurangabad Engineering Co. Ltd. and against guarantors of the debt of the company, namely, (1) Raunak Ali. (2) Mohammad Waris (now represented by his heirs), (3) Asghar Ali and (4) Abdul Hasib. The suit was transferred to the Court of VIth Additional District Judge, Bulandshahr. While the suit was pending, Maharashtra Steel Limited Company filed Petition No. 6 of 1988 for winding up under Section 439 of the Act. This Court passed an order on 5.4.1989 for winding up of the said company. The UCO Bank filed application under Section 446 of the Act against M/s. Aurangabad Engineering Company Limited (in liquidation) praying for grant, of leave to pursue the proceedings of suit No. 272 of 1987 filed by it against the company (in liquidation) which was pending before the court of VIth Additional District Judge, Bulandshahr. The Official Liquidator opposed the application. The Court allowed the application of UCO Bank on 13.1.1997 and permission was granted to the Bank to proceed with the Suit No. 272 of 1987.
3. The contention of the Official Liquidator that the assets of the company in liquidation having already been sold in pursuance of the order passed by the court and the Bank had also filed its claim before the Official Liquidator, the application was not maintainable, was repelled. It was held that as the suit had also been filed against the guarantors and relief had also been claimed against them, the suit was maintainable at least so far as guarantors were concerned.
4. Hazi Raunak Ali Khan, one of the guarantors and defendant in Suit No. 272 of 1987, has filed this application to recall the order dated 13.1.1997.
5. I have heard Sri R. P. Agarwal, learned counsel for the applicant, and Sri Vinod Misra, learned counsel for the Bank.
6. Learned counsel for the applicant submitted that the defendants in the suit were entitled to be heard under Rule 117 of the Companies (Court) Rules, 1959 (in short the Rules) before an application under Section 446(1) of the Act was allowed by the Court. Admittedly the applicant was guarantor of the respondent company in respect of the loan advanced to it and was one of the defendants also. He was entitled to be heard before the application under Section 446(1) of the Act was allowed as Rule 117 of the Rules provides that an application under Section 446(1) for leave of the Court to commence or continue any suit or proceeding against the company shall be made upon notice to the Official Liquidator and the parties to the suit or proceeding sought to be commenced or continued. After winding up order is passed, the Court is to hear not only the Official Liquidator but also the parties to the suit or the proceeding sought to be commenced or continued. The applicant was defendant in the suit and was entitled to be heard before the Court passed an order Section 446(1) of the Act.
7. As the order has already been passed permitting UCO Bank to continue with the proceeding of the suit, I give an opportunity to the present applicant in respect of the application filed by the Bank under Section 446(1) of the Act, Sri R. P. Agarwal, learned counsel for the applicant, raised two objections. Firstly, that as the suit filed by the Bank had already been dismissed on the date it filed application under Section 446(1) of the Act, it was not maintainable and secondly, it was barred by time.
8. Learned counsel for the petitioner submitted that the suit filed by the Bank was dismissed for non-prosecution on 26.8.1992. On 14.9.1992, an application for restoration of such suit was moved and while that restoration application was pending the Bank filed an application on 13th July, 1993 under Section 446(1) of the Act in this Court to continue the proceeding in the suit. The restoration application has yet not been decided and is still pending.
9. The Court can permit the applicant to proceed with the suit or other legal proceeding under this provision. The words used are 'suit or other legal proceeding'. The restoration application in a suit is a proceeding in the suit. The word 'proceeding' is not defined in the Act.
The Supreme Court in Babu Lal v.
M/s. Hozari Lal Kishori Lal. AIR 1982 SC 818, held that the word 'proceeding' under Section 22 of the Specific Relief Act includes execution proceeding relying upon the definition in the Shorter Oxford Dictionary of the word 'proceeding'. The term 'proceeding' was held a very comprehensive term which generally speaking means a prescribed course of action for enforcing a legal right. It is not a technical expression with a defined meaning attached to it but on the ambit of whose meaning will be governed by the Statute.
10. Admittedly the restoration application was pending on the date the Bank filed application under Section 446(1) of the Act. In pursuance of the order passed by the Court permitting the bank to proceed with the suit, the civil court is entitled to decide the restoration application and other proceeding in the suit filed by the bank.
11. The next submission of the learned counsel for the applicant is that the application filed by the bank under Section 446(1) of the Act was barred by time. This Court had passed an order for winding up of the respondent company on 5.4.1989 but the bank filed the application under Section 446(1) of the Act on 13th July, 1993. It is urged that permission should have been sought within a period of three years from the date of the order of winding up of the company was passed by the Court. He has placed reliance upon Article 137 of the Limitation Act which provides that any application for which no period of limitation is provided elsewhere for filing an application under the Limitation Act, 1963, it can be filed within three years when the right to apply accrues.
12. Section 446(1) is in two parts, first that no suit or other proceeding shall be commenced against the company except by leave of the Court and the second part is with regard to pending suit or proceeding in any Court but it shall not be proceeded with except by leave of the Court. In regard to the first part, the suit or proceeding has to commence and for that the Court before granting permission is to examine as to whether any suit, proceeding or claim made by the company is barred by time and in that respect, it will examine the provision in regard to filing of the suit or claim but where the suit or any proceeding is already pending In any Court or before any authority, the company court is only to grant leave to the applicant to proceed with such suit or proceeding. This does not provide for any limitation. An application filed under Article 137 of the Limitation Act envisages that the applicant has claimed a relief before a Court or an authority but if any application is filed which does not claim any relief in the suit or any proceeding, such an application is not covered by Article 137 of the Limitation Act, 1963.
13. In Kerala State Electricity Board, Trivandrum v. T. P. Kunhaliumma, AIR 1977 SC 282. where a petition under Sections 10 and 16(5) of the Indian Telegraph Act, 1885 read with Section 51 of the Indian Electricity Act, 1910 was filed claiming compensation against the Kerala State Electricity Board and the Board having assessed the compensation but the claimant was dissatisfied with such assessment. filed a petition before the District Judge under Section 16(3) of the Indian Telegraph Act. 1885 for enhancement of the compensation, the Supreme Court held that the petition was barred by Article 137 of the Limitation Act. This Article was held to be applicable not only to an application filed under the Code of Civil Procedure but also in respect of other Statutes also where no specific limitation is provided for filing an application. In this case the petition was filed claiming enhancement of compensation before the District Judge.
14. In R. C. Abroi and Company (P.) Ltd. (in liquidation) v. A. R. Chaddha and Company, (1979) 49 Comp Cases 77, the Full Bench of the Delhi High Court held that an application filed under Section 446(a)(b) of the Act read with Section 543 of the Companies Act, 1956 for recovery of Rs. 1078,10 against the respondent company was barred by time on the ground that the word 'claim' in clause (b) of Section 446(2) of the Act means a claim enforceable in law and unless the claim is legally enforceable it cannot be entertained by or against the company under the said provision. The limitation to enforce the claim was held three years on the basis of Article 137 of the Limitation Act.
15. In M/s. Malini Rao v. Hotel Dwaraka and others, (1997) 90 Comp Cases 179, where a petition was filed under Section 583(4) of the Companies Act. 1956 for winding up of the respondent company on the ground that the petitioner was a partner of the firm by virtue of partnership deed and on the death of her father, who was one of the partners, the firm stood dissolved and the other respondent Nos. 2 to 12 continued the business but they having not settled or rendered accounts the company was liable to be wound up under clause (a) of subsection (4) of Section 583 of the Companies Act, 1956 which provides that the Court can pass order for winding up if the company is dissolved or has ceased to carry on business and is carrying on business only for the purpose of winding up, the Court held that the cause- of action for filing the winding up petition arose when the firm stood dissolved on the death of the partner and the application having not been filed within a period of three years as provided under Article 137 of the Limitation Act, 1963, it was barred by time.
16. These cases have no application to the facts of the present case as in these cases, the claims were made or the relief was sought for from the Court. The bar of limitation is not applicable where an applicant is only seeking leave to continue any suit which was instituted prior to the order of winding up was passed by the Court. The grant of leave to proceed with the suit does not affect any vested right of the parties, and therefore, the provisions of the Limitation Act do not apply to such a situation.
17. In view of the above discussion, the submission of the learned counsel for the applicant, that the application filed by the bank for grant of leave to continue with the suit or proceeding was barred by time, is untenable. I do not find any merit in the application. It is accordingly dismissed.