JUDGMENT <NAME>, J.

1. The above two second appeals are referred by <NAME>, in view of the conflicting decisions of this court on the admissibility of boundary recitals in documents not inter partes. In order to appreciate the reference. it is necessary to set out briefly the facts.

2. Defendants 1 and 2 are appellants in S. A. 1157 of 1963 and the 5th defendant is the appellant in S. A. 19 of 1964. Both second appeals arise out of O. S. 530 of 1960 on the file of <ORG>. Tiruvannamalai. The plaintiff instituted the suit for declaration of his title to the suit site in the village of Kalasapakkam and for possession. The plaintiff's case is that the suite site originally belonged to <NAME>, the father-in-law of the 3rd defendant <NAME> and the great grandfather of the 4th defendant minor <NAME>. The said <NAME> was in possession and enjoyment of the site by installing a country oil mill thereon. While so certain enemies of his complained to the <ORG> that he had encroached on the <ORG> land, and that he should be evicted. <NAME> contended that the property in question had been in his possession for over 30 years, and accepting this contention, the <ORG> issued an order dated 24-4-1880 recognising his rights. <NAME> died in or about 1910 leaving his son <NAME>. <NAME> was in possession and enjoyment of the suit site till his death, Thereafter, his widow, the 3rd defendant <NAME> and his son <NAME> were in possession and enjoyment of the suit site. They mortgaged the suit site as well as their house to one <NAME> on 29-5-1946 and subsequently sold the same to the plaintiff on 26-11-1946. The plaintiff's case is that, ever since his purchase, he had been in possession of the suit site and the house, and that in or about March 1952, defendants 1 and 2 trespassed into the suit site and constructed some walls thereon. The plaintiff filed applications before the <NAME> of Polur and the Revenue Divisional Officer, Tiruvannamalai, complaining about the trespass committed by defendants 1 and 2, and the <NAME> of Polur directed the plaintiff to establish his righted in a civil court. Thereupon the plaintiff filed O. S. 501 of 1954. The 5th defendant, the State of Madras, took up the plea of want of notice under Section 80, Civil P. C. and the suit dismissed on the preliminary point. Ultimately the order of the trial court was upheld by this court in S. A. 305 of 1957. The present suit has been filed, after the issue of the requisite notice to the <ORG>, for declaration of his title to the suit site and for possession.

3. Defendants 1 and 2 contended that the suit site was a Natham and was not assigned to any one. They denied the continuous possession and enjoyment of the suit site by <NAME> and his descendants. They also contended that the order dated 24-4-1880 relied on by the plaintiff, did not relate to the suit site and that the plaintiff and his predecessors-in-title had not been in possession and enjoyment of the suit site for a period of 12 years prior to the suit.

4. The 3rd defendant remained ex parte. The 4th defendant's mother and guardian filed a written statement disputing the necessity for <NAME> the son of <NAME>. to borrow and contending that the alienation by <NAME> was fraudulent.

5. The 5th defendant, the State of Madras filed a separate written statement contending that the suit site was not conveyed to any one, that it was shown as unoccupied waste in the village site plan, that defendants 1 and 2 had encroached on it, that they had been suitably dealt with under the Land Encroachment Act, and that the title to the suit site was still in the <ORG>.

6. The trial court dismissed the suit holding that the order passed by the <NAME> of Polur dated 24-4-1880 did not relate to the suit property, that there is no proof of plaintiff acquiring title by prescription and adverse possession and that the plaintiff was never in possession, much less in possession within 12 years prior to the suit. The plaintiff filed A. S. 251 of 1962, in <ORG>, Vellore, and the appellate Court allowed the appeal holding that the plaintiff had acquired title to the suit site by prescription even as against the <ORG> and that the plaintiff has proved his possession within 12 years prior to the suit. As already stated, defendants 1 and 2 filed S. A. 1157 of 1963 and the 5th defendant State of Madras filed S. A. 10 of 1964; subsequent to the filing of S. A. 1157 of 1963 the first appellant therein died and his legal representatives were brought on record as supplimental appellants 1 to 6.

7. Mr. <NAME>, the learned counsel for the appellants in S. A. 1157 of 1963, contends that the plaintiff has no title to the suit property on the following grounds. firstly the order of the <NAME>, <NAME>, Ex. A. 1 dated 24-4-1880 does not relate to the suit property. Secondly the documents relied on by the plaintiff to establish his continuous possession and enjoyment of the suit property, namely, Exs. A. 2 to A. 6 are documents not inter partes and the boundary recitals therein are inadmissible in evidence. Thirdly if the aforesaid documents are eschewed, the finding of the appellate court on the question of title by adverse possession cannot be sustained.

8. We shall first take up the second question for consideration. The suit site is situate south of three houses belonging to <NAME> and his two Pangalis, <NAME> and <NAME>. The house belonging to <NAME> along with the suit site was purchased by the plaintiff on 26-11-1946. <NAME> sold his house to one <NAME> who, in his turn, sold it to one <NAME> under Ex. A. 4 dated 19-4-1922 <NAME> sold the house to the first defendant under Ex. A. 5 dated 12-3-1957. <NAME> sold his house to one <NAME> under a registered sale deed the registration copy of which is Ex. A. 2 dated 30-3-1914. <NAME>, in his turn, sold that house to one <NAME> under the original of Ex. A. 3 dated 6-2-1917. <NAME> died. His widow <NAME> divided the house into two portions and sold one portion to <NAME>,. <NAME>, in his turn, sold that portion of the house to one <NAME>, under the original of Ex. A. 6 dated 5-4-1948. the other portion in the house was sold by her to the second defendant under the original of Ex. B. 5 dated 24-7-1951. The recitals of the boundaries in Exs. A. 2. to A. 6 (not between parties to the present suit) describe the suit site as lying to the south of these three houses. The contention of the plaintiff is that the description of the suit site in Ex. A. 2 to A. 6 as 'Chekkumedu' of the descendants of <NAME> affords clinching proof of enjoyment of the site 'Chekkumedu' from 1914 to 1948. None of the defendants is a party to Exs. A. 2 to A. 6. The question is whether the recitals as to boundaries in the documents Exs. A. 2 to A. 6 not inter partes are admissible in evidence.

9. Before dealing with the case law on the point, we shall examine the relevant provisions of the Indian Evidence Act , relating to the admissibility of recitals as to boundaries in documents not inter partes. The relevant sections are Sections 11 , 13 , 32 , 155 and 157 . We shall first take up Section 11 , which deals with facts relevant when a right or custom is in question, one such fact under S. 13(a) being any transaction by which the right or custom in question was created, claimed, modified, recognised, asserted or denied. Even giving the widest interpretation to the word 'transaction' we consider it difficult to bring the recitals as to boundaries in documents not inter partes under any of the verbs "created" "modified" "recognised". "asserted" or "denied". We shall next take up Section 32 which deals with statements written or verbal of facts made by a person who is dead. In order to render a person's statement admissible under Section 32(3) , such a statement must be against his pecuniary or proprietary interest. Further what is admissible under Section 32(3) is only the statement and not the document containing the statement. We therefore, consider that the documents in question cannot be brought under Section 32(3) . Section 32(7) deals with the statements contained in any deal, will or other document which relates to any such transaction as is mentioned in Section 13(a) . In the view that we have taken that such documents are not admissible under Section 13(a) , they are not equally admissible under section 32(7) . Regarding Section 11 of the Act which also deals with relevancy of facts, there is a distinction between the existence of a fact and a statement as to its existence. <CITATION> , AIR 1934 All 406 (FB). The Section makes the existence of facts admissible, and not statement cannot fall under Section 32(3) , it cannot equally fall under Section 11 . Two other sections which have to be considered in this connection are Ss. 155 and 157. When the executant of the document containing recitals as to boundaries upon which reliance is placed, is himself a witness in the case, the recitals can be put to him under Section 157 as a former statement corroborating the desposition and he can be also confronted with the recitals under Section 155 .

10. We shall now consider the decisions of our court on the question whether the recitals as to boundaries in a document not inter partes are admissible in evidence. In Re <NAME>. 1910 Mad WN 668, <NAME>, J. held that recitals as to boundaries in a document not inter partes are not admissible under Section 32 of the Evidence Act. In <NAME> v. <NAME>, 1914 Mad WN 779 = (AIR 1915 Mad 746), a Division Bench consisting of <NAME> and <NAME> J. considered the question with reference to the admissibility of recitals as to boundaries in a document not inter partes under Section 13(a) of the Act. <NAME> observed--

"Ex. G is a sale deed of an adjoining site between strangers which, in specifying boundaries, describes the suit land as belonging to <NAME>. This is a transaction, but it is not a transaction by which the right of the Thangella people is asserted, claimed or even recognised; it is a transaction in which the said right is incidentally mentioned. It is not admissible under Section 13(a) and I agree with my learned brother following In Re Poddapaneri Narayanappa 1910 Mad WN 668 that it cannot be treated as an admission against interest." In that case the other learned Judge, <NAME>, J. observed:--

"The more difficult question for consideration is whether they can be admitted under Section 13 of the Evidence Act, There is no authority for the position that the recital in order that it may be admissible must have been made by a party to the suit or by a person through whom he claims. The language of the section imposes no such restriction. But I am inclined to think that these documents are not transaction by which the right in question was asserted or recognised; In the case of <ORG>, there can be no doubt that the transaction, namely. the sale deed did not assert or recognise the right of the Thengella people."

In <NAME> v. <NAME>, AIR1928 Mad 105(2), <NAME> followed the decision in 1910 Mad WN 668 and 1914 mad WN 779 = (AIR 1915 Mad 746). The learned Judge observed:--

"It is obviously a mere statement of boundary and as such cannot be classed with any of the verbs in Section 13 created, claimed, modified, recognised, asserted or denied; "Mentioned" would be appropriate verb. which means considerably less than asserted. Therefore, it must be held that Exs. E. H. A., & B are not admissible in evidence."

In <NAME> v. <NAME>, AIR 1956 Mad 226 = 1955-2 Mad LJ 687,. <NAME>, J. held, without referring to the judgments in 1910 Mad WN 668 and 1914 Mad WN 779 = (AIR 1915 Mad 746) that the recitals in a document not inter partes are admissible under Sections 11 , 13 , 32(3) and 157 of the Evidence Act. The learned Judge, however, held that probative value to be attached to such documents will depend upon the circumstances of each case and may vary all the way from zero to almost clinching evidence. In the unreported judgment in S. A. No. 1036 of the 1956 (Mad) Subbian Konar v. <NAME> Mudaliar,. <NAME>, J. disagreed with the view expressed by <NAME> J. In AIR 1956 Mad 226. <CITATION> AIR 1940 Mad 450 dealing with Section 157 , <NAME> observed:--

"It is, however, contended that when the executant of the document containing a recital of boundary upon which reliance is placed is himself a witness in the case, the recital can be let into evidence under Section 157 , Evidence Act . as a former statement corroborating the deposition. The only express decision on this point to which my attention has been drawn is contained in <NAME> v. <NAME>. AIR 1927 Cal 230. That decision does not discuss the precise terms of Section 157 , but proceeds on a concession that the recital of a boundary in a document not inter partes can be admitted to corroborate a witness who himself is the executant of the document. It must however be pointed out that Section 157 does not make all previous statements admissible to corroborate the testimony of a witness but only two classes of statements;

(1) a statement made by a witness relating to the same fact at or about the time when the facts took place and (2) a statement made before any, authority legally competent to investigate the fact. Clearly the second of these categories had no reference to recitals in deeds. But can it be said that a recital of a boundary in a mortgage deed is a statement made at or about the time when the fact took place ? With some hesitation I think that it can. One cannot of course speak of a boundary as a fact which took place at one time or another. But what is to be got from this statement is not really the effect of the boundary but the fact that land on the boundary was at a particular time in the possession of a particular individual and the statement in the mortgage deed that so and so was in possession of the land on such and such a boundary is in my opinion a former statement made at the time when the fact of possession was taking place--a contemporaneous statement regarding the occupation of land on the boundary. In this view, it is admissible under Section 157 , Evidence Act .

11. The above decision was referred to by Kuppuswami Ayar, J. in <CITATION> . 1947-1 Mad LJ 60 = (AIR 1947 Mad 345).

12. We shall now refer to some of the decisions of other <ORG>. In <NAME> v. <NAME>. AIR 1924 Cal 1067, a Division Bench of <ORG> disagreeing with judgments of the same court held that recitals as to boundaries in documents not inter partes are not admissible under Section 11 or Section 13 or under S. 32(3) . In <NAME> v. <NAME>. AIR 1926 Cal 948. another Division Bench of Calcutta High Court after referring to the conflict of decisions of that court on the question followed the decision in AIR 1924 Cal 1067 and held that recitals in a document not inter partes are not admissible under Section 11 or S. 13 of under S. 32(3) . A third Division Bench of <ORG> took a similar view in <CITATION> . AIR 1927 Cal 918. In <NAME> v. <NAME>., AIR 1935 Pat 167 (FB), a Full Bench of <ORG> dealing with the identical question, held that such documents between strangers containing recitals regarding boundaries are inadmissible under Sections 11 and 32(3) of the Evidence Act. <CITATION> , <ORG> took the same view, distinguishing the decision of <NAME> in <NAME> v. <NAME>. AIR 1956 Mad 226. <CITATION> . AIR 1961 Mys. 160, <ORG> followed the decisions of <ORG> and distinguished the decision of <NAME> in the aforesaid case.

13. On a consideration of the aforesaid decisions, we hold that the decision of the Division Bench of this court in 1914 Mad WN 779 = (AIR 1915 Mad 746) is in accordance with preponderance of authorities in various <ORG> that recitals as to boundaries in documents not inter partes are inadmissible in evidence under Sections 11 , 13(a)  32(3) and 32(7) . As pointed out by <NAME>, J. in AIR 1940 Mad 450, the only method by which recitals in a document not inter partes could be admitted in evidence is by examinations of the executant of the document are found. In this view we hold that judgment of <NAME>, J. in AIR 1956 Mad 226 is wrongly decided. The result is that Exs. A. 2. to A. 6 in the present case are inadmissible in evidence.

14. We shall take up the first question for consideration. The lower appellate court has held that possession of Periathambi is amply borne out by the order Ex. A. 1 Applying the presumption under Illustration (d) to Section 114 of the Evidence Act, the lower appellate court came to the conclusion that the plaintiff has established his claim to the suit site by adverse possession from 1880. We see no reason to differ from the conclusion of the lower appellate court.

15. We shall now take up the third question for consideration inasmuch as the two second appeals are referred to us for decision. We have to see whether there is other sufficient evidence to justify the finding of the lower appellate court that the plaintiff has established his claim to the suit site by adverse possession as against the <ORG> also. The learned Subordinate Judge relied upon the oral evidence of <NAME>, who is aged about 70 years, who stated that there is a <NAME> on the suit site belonging to <NAME> and his son <NAME> was having the <NAME> in the suit site. The learned Subordinate Judge has held that his evidence deserved credence and weight. We agree with the view of the learned subordinate Judge and hold that this evidence is sufficient to support the finding of the lower appellate court that the plaintiff has established his claim to the suit site against the <ORG> also by adverse possession.

16. In the result the second appeals fail and they are dismissed with costs.

17. Appeals dismissed.


PETITIONER: <ORG>. Vs. RESPONDENT: O. SUKUMARAN PILLAI & ORS. DATE OF JUDGMENT16/08/1984 BENCH: <NAME>, D.A. BENCH: <NAME>, D.A. ERADI, V. BALAKRISHNA (J) KHALID, V. (J) CITATION: 1984 AIR 1579 1985 SCR (1) 511 1984 SCC (4) 657 1984 SCALE (2)289 ACT: The Companies Act , 1956 , Section 446 (2) (b)-Scope of. Words and phrases-Meaning of "<ORG> which is winding up the company" - Section 446 (2)- Companies Act , 1956. HEADNOTE: The appellant, a limited company governed by the Companies Act , 1956 (for short, the Act) challenged before <ORG> of <ORG> the order of the Company Judge, winding up the appellant-company and appointing Official Liquidator, on three petitions moved by the creditors under s. 439 of the Act on the ground that the appellant-company was unable to pay its debts. The appellate Bench of <ORG> disposed of the appeals after approving the scheme of compromise and arrangement under s. 391 of the Act and directed that (i) the winding up order passed by the Company Judge shall be held in abeyance on certain undertakings being filed by the appellant company within the prescribed time before <ORG> to abide by the conditions imposed in the judgment; (ii) the Official Liquidator will be considered as appointed to function as the provisional Liquidator on the first payment of Rs. 25 lacs being made within four weeks of the judgment; and (iii) in case of any default the winding up order will stand confirmed. Since then the scheme of compromise and arrangement was being implemented meticulously. In the course of implementation of the scheme the appellant company moved an application before <ORG> praying that the provisional Liquidator be directed to file claim petitions under s. 446 (2) of the Act for realising the claims of the company which would further assist and facilitate the implementation of the scheme of compromise and arrangement as supervised by the <ORG>. Respondent No. 1 opposed this application. The High <ORG> while rejecting the application, held that as the winding up proceeding in respect of the appellant-company is no more pending and there is no court which could be said to be the court winding up the company, the claim petition on behalf of the company which is not being wound up could not be instituted as contemplated by s. 446 (2). Hence this appeal by special leave. Allowing the appeal, 512 ^ HELD : (1) It would be advantageous to notice the historical evolution of the provision as well as its present setting before considering the true scope and ambit of the jurisdiction conferred on the court winding up a company by sec. 446(2) (b) of the Act. Section 171 of the Indian Companies Act 1913, which did not contain any provision similar or identical to that of sec. 446(2), is re-enacted with little modification as Sec. 446(1) of the Companies Act 1956 Since there was no specific provision in the repealed Companies Act 1913 conferring jurisdiction on the court winding up the company analogous to the one conferred by sec. 446(2), the official Liquidator in order to realise and recover the claims and subsisting debts owed to the company had the unenviable fate of filing suits. To save the company which is ordered to be wound up from this prolix and expensive litigation and to keep all incidental proceedings in winding up before the court which is winding up the company, its jurisdiction was enlarged by sec. 446(2) to entertain petition amongst others for recovering the claims of the company. This was the object behind enacting s. 446(2) and therefore it must receive such construction at the hands of the court as would advance the object and at any rate not thwart it. [516H, 517A, B, 518A, B] 2. Section 446(1) provides that 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 <ORG> and subject to such terms as the <ORG> may impose. It envisages two situations in which the court will have jurisdiction to make the order thereunder contemplated. These two situations are: where a winding up order has been made or where the official Liquidator has been appointed as provisional Liquidator. The first of the two situations envisages an order for winding up of the company having been made and which is subsisting. The second situation is where without making a winding up order, the <ORG> has appointed official liquidator to be the provisional Liquidator as contemplated by Sec. 450(1). [518D, 519E, F] Sub-Sec. (2) of Sec. 446 confers jurisdiction on the <ORG> which is winding up the company to entertain and dispose of proceedings set out in clauses (a) to (d). The expression 'court which is winding up the company' will comprehend the <ORG> before which a winding up petition is pending or which has made an order for winding up of the company and further winding up proceedings are continued under its directions. Undoubtedly, looking to the language of Sec. 446(1) and (2) and its setting in Part VII which deals with winding up proceedings would clearly show that the jurisdiction of the <ORG> to entertain and dispose of proceedings set out 513 in sub-cls. (a) to (d) of sub-sec. (2) can be invoked in the court which is winding up the company. [520B-C] (3) Where a winding up petition is pending meaning thereby that an official Liquidator is appointed as provisional Liquidator which is a stage in the process of winding up, the court before which such proceeding is pending can be styled as a court winding up of the company and ipso facto it would have jurisdiction to entertain the proceeding enumerated in clauses (a) to (d) of sub-sec. (2) of sec. 446. If the winding up petition fails the proceedings pending in the court may have to be transferred to the court which can entertain the proceeding. But if the petition praying for winding up the company ends in a winding up order the proceedings intimated under sub-sec. (2) will have to be proceeded with till they are finally disposed of because winding up order will relate back to the date of the presentation of the winding up petition. In this view of the matter no anomalous situation can ever arise. Therefore, the apprehension of <ORG> that if such jurisdiction is conferred on the court at a stage anterior to the winding up order being made but subsequent to the appointment of official Liquidator as provisional Liquidator an anomalous situation would arise is not well founded. [513B, C] (4) It is now well settled that a winding up order once made can be revoked or recalled but till it is revoked or recalled it continues to subsist. Now, it the winding up order is subsisting the court which made that order or the court which kept it in abeyance will have jurisdiction to give necessary directions to the provisional Liquidator to take recourse to s. 446(2) . [522B-C] (5) In the instant case. The winding up order made by the learned Company Judge in respect of the appellant- company has neither been quashed set, aside, cancelled revoked nor recalled. Therefore, the winding up order was effectively subsisting but inoperative for the time being, having all the potentiality of being rejuvenated or being brought back to life. The High <ORG> was in error in rejecting the application, since its approach in giving a restricted meaning to the expression 'court which is winding up the company' under sub sec. (2) by restricting it to the first situation under section 446(1) overlooks the objects and purpose sought to be achieved by introducing sub-section (2) in section 446 . [521G, H, 522A, F] Official Liquidator v. Kadir and Ors. (1977) Kerala Law Times 30 and <CITATION> . 48 Company Cases; over-ruled. 514 JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2528 of

184. From the Judgment and Order dated the 18th August, 1983 of <ORG> in CMP. No. 14913 of 1983 in MFA. No. 518-20 of 1981.

<NAME> and <NAME> for the Appellant. <NAME> for the Respondent.

<NAME> and <NAME> for Intervener. The Judgment of the Court was delivered by <ORG>, <ORG> herein, ('Company' for short) is governed by the Companies Act , 1956. Three petitions being Company Petitions Nos. 9/81, 8/81 and 49/81 were moved by the creditors of the Company under Sec. 439 of the Companies Act praying for winding up of the Company on the ground that it was unable to pay its debts. The learned Company Judge passed an order winding-up the Company and appointed official Liquidator to be the Liquidator of the Company. This order was challenged in MFA Nos. 578, 579 and 520 of 1981 which came up for hearing before <ORG> of <ORG>. The judgment of the Division Bench is reported in <CITATION> .(1) The appeals were disposed of after approving the scheme of compromise and arrangement under Sec. 391 of the Companies Act directing that the winding-up order shall be held in abeyance on certain undertakings to be filed by the Company before the court within the prescribed time to abide by the conditions imposed in the judgment and if there be any default in the matter of performing of the conditions so imposed, and/or undertaking is not filed as directed therein, the winding-up order made by the learned Judge will stand confirmed. A further direction in this behalf given by the court is material and may be extracted:

"On the first payment of Rs. 25,00,000 being made within four weeks from this date the winding up order will be held in abeyance and thereupon the official Liquidator will be considered as appointed to function as the Provisional Liquidator subject to such restrictions on his powers and privileges as we may indicate here."

Since then the scheme of compromise and arrangement as set out in the judgment of <ORG> is being implemented and we were informed that an amount of Rs. 2.40 crores has already been disbursed amongst the claimants/creditors of the company. We were also informed that the scheme of compromise and arrangement is being meticulously implemented under the supervision of the court as directed by <ORG>.

In the course of implementation of the scheme, it became necessary to recover certain debts and claims due in favour of the <ORG>. For this purpose Civil Misc. Application No. 14913 of 1983 was moved before <ORG> praying for a direction that the provisional Liquidator be directed to file claim petitions under Sec. 446 (2) of the Companies Act in the <ORG> Court for realising the claims of the <ORG>, which would further assist and facilitate the implementation of the scheme of compromise and arrangement as supervised by the court. One <NAME> was impleaded as the first respondent and the provisional Liquidator was impleaded as the second respondent.

It appears to have been contended before the court that as there was no winding up proceeding pending before the Company Judge or the Appellate Bench and as the Company is being managed under the scheme of compromise and arrangement, <ORG> will have no jurisdiction to entertain the claim petition under Sec. 446 (2) of the Companies Act . This contention found favour with the Appellate Bench and the Civil Misc. Petition was rejected. Relying upon the decision in <CITATION> aud Ors.(1) and <CITATION> .(2) the court concluded that the right to avail of the remedy by filing a claim petition conferred by Cl. (b) of Section 446 (2) can be availed of only in a court which is winding up the company. Hence this appeal by special leave.

After the special leave was granted, a notice was served upon the provisional Liquidator informing him that the appeal will be listed for final hearing on August 1, 1984. Even after the intimation the provisional Liquidator did not choose to appear at the hearing.

C. M. P. No. 6062 of 1984 was moved on behalf of <ORG> through its Secretary Mr. <NAME> seeking intervention in the matter. Intervention was permitted.

Upon its true construction, what is the scope and ambit of the jurisdiction conferred on the court winding up a company by Sec. 446 (2) (b) is the only question of law that arises in this appeal and may be answered in the facts and circumstances of the case.

Sec. 446 (2) reads as under:

"446 (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 lay 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 had 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."

Before we advert to the question of construction of Sec. 446 (2) (b), it would be advantageous to notice the historical evolution of the provision as well as its present setting. Sec. 171 of the Indian Companies Act , 1913, the predecessor of Sec. 446 (1) did not contain any provision similar or identical to that of Sec. 446 (2). Sec. 171 only provided for stay of suits and proceedings pending at the commencement of winding up proceeding, and embargo against the commencement of any suit or other legal proceedings against the company except by the leave of the court. This provision with little modification is re-enacted in Sec. 446 (1). There was no specific provision conferring jurisdiction on the court winding up the company analogous to the one, conferred by Sec. 446 (2). Sub-sec. (2) was introduced to enlarge the jurisdiction of the court winding up the company so as to facilitate the disposal of winding up proceedings. The provision so enacted probably did not meet with the requirement with the result that the <ORG> appointed for examining comprehensive amendment to the Companies Act in its report recommended that 'a suit' by or against a company in winding up should notwithstanding any provision in law for the time being be instituted in the court in which the winding up proceedings are pending.(1) 'To give effect to these recommendations, sub-sec. (2) was suitably amended to bring it to its present from by Companies (Amendment) Act , 1960. The <ORG> noticed that on a winding up order being made and the Official Liquidator being appointed a Liquidator of the company, he has to take into his custody company property as required by Sec. 456. Sec. 457 confers power on him to institute or defend any suit, prosecution, or other legal proceeding, civil or criminal, in the name and on behalf of the company. Power is conferred upon him to sell the properties both movable and removable of the company and to realise the assets of the company and this was to be done for the purpose of distributing the assets of the company amongst the claimants. Now at a stage when a winding up order is made the company may as well have subsisting claims and to realise these claims the Liquidator will have to file suits. To avoid this eventuality and to keep all incidental proceedings in winding up before the court which is winding up the company, its jurisdiction was enlarged to entertain petition amongst others for recovering the claims of the company. In the absence of a provision like Sec. 446 (2) under the repealed Indian Companies Act , 1913, the official Liquidator in order to realise and recover the claims and subsisting debts owed to the company had the unenviable fate of filing suits. These suits as is not unknown, dragged on through the trial court and Courts of appeal resulting not only in multiplicity of proceedings but would hold up the progress of the winding up proceedings. To save the company which is ordered to be wound up from this prolix and expensive litigation and to accelerate the disposal of winding up proceedings, the <ORG> devised a cheap and summary remedy by conferring jurisdiction on the court winding up the company to entertain petitions in respect of claims for and against the company. This was the object behind enacting Sec. 446 (2) and therefor, it must receive such construction at the hands of the court as would advance the object and at any rate not thwart it.

The fasciculus of sections included in Part VII of the Companies Act bears the heading 'Winding up'. Sec. 443 sets out the circumstances in which a company may be wound up by the court. Sec. 444 provides that where the court makes an order for the winding up of a company, the <ORG> shall forthwith cause intimation thereof to be sent to the official Liquidator and the Registrar. Sec. 446(1) provides that 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 <ORG> and subject to such terms as the court may impose. Then comes sub-sec. (2) of Sec. 446. It specifies the contours of the jurisdiction of the court which is winding up the company. It confers special jurisdiction on the <ORG> which is winding up the company to do things that are set out in the various sub-clauses notwithstanding anything contained in any other law for the time being in force. Sec. 446 (2) thus conferred special jurisdiction on the court winding up the company which otherwise it may not have enjoyed. The court in the Companies Act is defined in Sec. 2 (11) to mean with respect to any matter relating to a company (other then any offence against this Act), the <ORG> having jurisdiction under the Act with respect to that matter relating to that company, as provided in Section 10 . Section 10 provides that the court having jurisdiction under the Act shall be the High <ORG> having jurisdiction in relation to the place at which the registered office of the company concerned is situate, except to the extent to which jurisdiction has been conferred on any District <ORG> or District <ORG>s subordinate to that High <ORG> in pursuance of sub-sec. (2). The winding up petition has thus to be presented in the High <ORG> before the Judge who is assigned the work under the Companies Act . Therefore, the <ORG> which is winding up the <ORG> will be the court to whom the petition for winding up was presented and which passed the order for winding up the <ORG>. In this case, the order was made by the learned <ORG> Judge in the Kerala High <ORG> directing winding up the company. An appeal lies against the order for winding up the <ORG> under section 483 to the same court to which and in the same manner in which and subject to the same conditions under which, appeals lie from any order or decision of the court in cases within its ordinary jurisdiction. In exercise of this Appellate jurisdiction, <ORG> entertained the appeals and directed that the winding up order shall be held in abeyance till the scheme is implemented and if any default is committed the winding up order made by the learned <ORG> Judge would be revived.

The Appellate Bench declined to direct the provisional <ORG> to file claim petition at the instance of the company under Sec. 446 (2) (b) on the sole ground that such a petition at the instance of the <ORG> would be maintainable in the course of winding up of proceedings which means that the winding up proceedings are pending. Undoubtedly, Sec. 446 (1) manifests the legislative intention that the procedure thereunder prescribed could be availed off when the winding up order has been made or where the official <ORG> is appointed as the provisional <ORG>. Sec. 446 (1) invisages two situations in which the court will have jurisdiction to make the order thereunder contemplated. These two situations are: where a winding up order has been made or where the official <ORG> has been appointed as provisional <ORG>. The first of the two situations envisages an order for winding up of the <ORG> having been made and which is subsisting. The second situation is where without making a winding up order, the court has appointed official <ORG> to be the provisional <ORG>. Sec. 450 (1) of the Companies Act confers power on the <ORG> Court to appoint official <ORG> to be provisional <ORG> at any time after the presentation of the winding up petition and before making of the winding up order. The Court before which a winding up petition is presented has power to appoint official <ORG> as provisional <ORG> of the <ORG> even before making the winding up order. If ultimately winding up order is made, the official <ORG> acts as such. And let it be remembered that where a winding up order is made, it relates back to the date when petition for winding up is presented. Referring to Sec. 446 (1) it becomes clear that the court will have jurisdiction to make the order therein contemplated, where a winding up order has been made or prior to the making up of the winding up order, official <ORG> has been appointed as provisional <ORG> as contemplated by Sec. 450 (1).

Sub-sec. (2) of Sec. 446 confers jurisdiction on the court which is winding up the company to entertain and dispose of proceedings set out in clauses (a) to (d). The expression 'court which is winding up the company' will comprehend the court before which a winding up petition is pending or which has made an order for winding up of the company and further winding up proceedings are continued under its directions. Undoubtedly, looking to the language of Sec. 446 (1) and (2) and its setting in Part VII which deals with winding up proceedings would clearly show that the jurisdiction of the court to entertain and dispose of proceedings set out in sub-cls. (a) to (d) of sub-sec. (2) can be invoked in the court which is winding up the company.

Reverting to the facts of this case, <ORG> held that as the winding up proceeding in respect of the appellant company is no more pending, and there is no court which could be said to be the court winding up the company and therefore, the claim petition on behalf of the company which is not being wound up could not be instituted as contemplated by Sec 446 (2). In reaching this conclusion, <ORG> gave a restricted meaning to the expression 'court which is winding up the company' in sub- sec. (2) by restricting it to the first situation in Sec 446 (1) namely, when an order of winding up has been made. The Appellate Bench appeared to be of the view that where the official Liquidator has been appointed as the provisional Liquidator which implies that no winding up order has been made, jurisdiction under Sec. 446 (2) cannot be invoked. The Court felt that an anomalous situation would arise if claim petitions are moved under Sec. 446 (2) (b) at a stage when no winding up order has been made because if ultimately the winding up order is not made, the proceedings initiated under Sec. 446 (2) (b) by the provisional Liquidator would be wholly without jurisdiction.

The approach of <ORG>, with respect, overlooks the object and purpose sought to be achieved by introducing sub-sec. (2) in Sec. 446 by Amending Act 65 of 1960. As noted earlier, winding up proceedings dragged on far decades with no end in sight and with no benefit to the creditors and contributories of the Company. To accelerate the process of winding up so as to bring them to an end, this sub-section was amended in its present form in 1960 conferring jurisdiction on the court winding up the company to entertain amongst others any suit or proceeding by or against the company or any claim made by or against the company. If therefore, a winding up petition is pending meaning thereby that an official Liquidator is appointed as provisional Liquidator which is a stage in the process of winding up, the court before which such proceeding is pending can be styled as a court winding up of the company and ipso facto it would have jurisdiction to entertain the proceeding enumerated in clauses (a) to (d) of sub-sec. (2) of Sec. 446. The apprehension of <ORG> that if such jurisdiction is conferred on the court at a stage anterior to the winding up order being made but subsequent to the appointment of official Liquidator as provisional Liquidator an anomalous situation would arisen has left us unimpressed. If the winding up petition fails the proceedings pending in the court may have to be transferred to the court which can entertain the proceeding. But if the petition praying for winding up the company ends in a winding up order the proceedings initiated under sub- sec. (2) will have to be proceeded with till they are finally disposed of because winding up order will relate back to the date of the presentation of the winding up petition. In this view of the matter no anomalous situation can ever arise.

However, the narrow question which is required to be considered in this appeal is: whether the winding up proceedings were pending or had come to an end when the Appellate Bench froze the winding up order by keeping it in abeyance ? Let it be made at once clear that the winding up order made by the learned <ORG> Judge in respect of the appellant <ORG> has neither been quashed, set aside, cancelled revoked nor recalled. On the contrary after directing that the winding up order shall be held in abeyance, the Appellate Bench directed that official Liquidator shall continue to act as provisional Liquidator as provided by Sec. 450 and that itself is a stage in the winding up proceedings. When winding up order is kept in abeyance it is in a state of suspended animation. The fact that the Appellate Bench directed that pending the implementation of the scheme as sanctioned by <ORG>, the winding up order will be kept in abeyance itself without anything more shows that the order was neither cancelled nor recalled nor revoked nor set aside. It continued to exist but was inoperative. Any default on the part of the <ORG> in carrying out its obligation under the scheme by itself without anything more would revive the winding up order. Therefore, the winding up order was effectively sub-

sisting but inoperative for the time being, Having all the potentiality of being rejuvenated or being brought back to life.

Now if the winding up order was merely held in abeyance i.e. it was not operative for the time being, but it had not ceased to exist, the winding up proceedings are in fact pending and the court which made the winding up order would be the court which is winding up the Company. It is now well-settled that a winding up order once made can be revoked or recalled but till it is revoked or recalled it continues to subsist. That is the situation in this case. If the winding up order is subsisting the court which made that order or the court which kept it in abeyance will have jurisdiction to give necessary directions to the provisional Liquidator to take recourse to Sec. 446(2).

In passing it was stated that the Company sought the direction from the Appellate Bench and not from the Court which was winding up the Company i.e. the court of the Learned Company Judge which made the winding up order. That of course is true but even taking a very technical view of the matter, the appellant was perfectly justified in moving the petition before <ORG> because it was <ORG> which was supervising the implementation of the scheme of compromise and arrangement and it was <ORG> in the appeal before it against the order of winding up that had kept the winding up order in abeyance. The direction was rightly therefore, sought from the Appellate Bench.

Having thus examined the matter from all angles, we are of the view that <ORG> was in error in rejecting the application made on behalf of the appellant-Company for directing the provisional Liquidator to prefer claims petitions on the materials and expenses to be furnished by the Company. The amounts realised by the provisional liquidator on filing claim petitions shall be handed over to the Company and the appellant-Company is under an obligation to use, spend, and appropriate them in the implementation of the scheme under the supervision of the court.

This appeal accordingly succeeds and is allowed and the order of <ORG> under appeals is set aside. The application for the directions to the provisional Liquidator made by the appellant Company is granted and directions in terms of the prayer are hereby made. The appellant shall bear its own costs.

M.L.A. Appeal allowed.