Holding

A court that has made a winding‑up order, even if the order is held in abeyance, constitutes the "court which is winding up the company" and therefore has jurisdiction under section 446(2)(b) to entertain claim petitions.

Summary

Sudarsan Chits (India) Ltd. was ordered to be wound up under the Companies Act, 1956, but the High Court held the winding‑up order in abeyance while a scheme of compromise was being implemented. The company sought a direction that the provisional liquidator file claim petitions under section 446(2)(b) to recover debts owed to the company, arguing that the court which made the winding‑up order was still the "court winding up the company". The Kerala High Court rejected the application, holding that no winding‑up proceeding was pending and therefore the court lacked jurisdiction. The Supreme Court held that a winding‑up order, even when held in abeyance, remains subsisting and the court that made it (or the court before which a provisional liquidator is appointed) is the "court winding up the company" with jurisdiction under s.446(2)(b). The appeal was allowed, the High Court order set aside, and the direction to the provisional liquidator was granted.

Issues considered

The scope and ambit of the term "court which is winding up the company" under section 446(2)(b) of the Companies Act, 1956, particularly when a winding‑up order is held in abeyance.
Whether the High Court had jurisdiction to entertain a claim petition under s.446(2)(b) in the circumstances of the case.

Legislation cited

Companies Act, 1956s. 10, s. 2(II), s. 391, s. 439, s. 443, s. 444, s. 446(1), s. 446(2), s. 450, s. 456, s. 457, s. 483
Companies (Amendment) Act, 1960

Subjects

Companies Actwinding upsection 446provisional liquidatorclaim petitionabeyancescheme of compromisejurisdiction

Judgment

511

SUDARSAN CHITS (I) LTD. A
v.
O. SUKUMARAN PILLAI & ORS .
• August 16, 1984
B
(D.A. DESAI, V. BALAKRISI!NA ERADI AND V. Kl!AL!D, JJ.)

The Companies Act, 1956 (I of 1956), Section 446 (2) (b)-Scop• of.

Words and phrases-Meaning of "Court which is winding up the company"
-Section 446 (Z)-Companies Act, 1956.
c
The appellant, a limited company governed by the Companies Act,
1956 (for short, the Act) challenged before a Division Bench of the High
Court the order or the Company Judge, winding up the appe1lant ..company
and appointing Official Liquidator, on three petitions moved by the crediiors
under s. 439 of the Act on tbJ ground that the appellant-company was un-
able to pay its debts. The appellate Bench of the High Court disposed of
D
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 sba11 be held in abeyance on certain undertakings being
filed by the appellant .. company within the prescribed time before the
High Court to abide by the conditions imposed in the judgment; (ii) the
E
Official Liqui~ator will be considered as appointed to function as the provj ..
sional 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 tben the scheme of compromise anlil
arrangement was being irr1p1ernented meticulously. In the course of imple ..
mentation of the scheme the appellant-company moved an application before F
the _Appel1ate Bench praying that the J)rovisiooal 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 Court. Res·
poodent No. 1 opposed this application. The High Court while rejecting
the application, held that as the winding up proceeding in respect of the G
appe11ant-company is no more pe~ding and there is no court which could be
said to be the court winding up the company J the claim petition on behalf
of the company which is not being wound up could not be instituted as con-
templated by s. 446 (2). Hence this appeal by special leave.

Allowing the appeal, J:l

..\
512 SUPREME COURT REPORTS [1985] I S.C.R.
A 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 Ille court winding up a
company by sec. 446(2) (b) of the Act. Section 171 of the Indian Companies
Act 19131 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 Com·
B panies 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 Liqui·
dater in order to realise and recover the claims and sub .. isting debts owed to
the company had the unenviable fate of filing suits. To save the company ....
c 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 enJarged 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 c;:;urt as would advance the object and
D at any rato 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 Liquidaior has been appointed as provisional Liquidator,
no suit or other !,;,gal proceeding sb11l ba commenced, or if pending at
the date of the winding up order, shall be proceeded with, against the
E company, except by leave of the Court and subjeCt to such terms as the
Court may impose. It envisages two situations in which the court will
h:ive juaisdiction lo m1k~ the order thereunder contemplated. These tNo
situations are : where a winding up order his been mad<! or where the
official Liquidator has been appointed as provision1l Liquidator. The
first of the two situations envisages an order for winding up of the company
F having been ma-1e and which is hubsisting. The second situati"o is where
without making a winding up order 1 the Court has appointed official liqui~
dator to be the provisional Liquidator as contemplated by Sec. 450(1).
[518D, Sl9E, F)

Sub-Sec. (2) of Sec. 446 confers jurisdiction on the Court wbich is
G winding up the company to entertain and dispose of proceedings set out in (

clauses (a) to (d). The expression ccourt which is winding up the company,
wil1 comprehend the Court before which a \Viuding up petition is pending
or wblch has made an order for wind iag 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 \Vinding up proceeding'\ would clearly show that the
jurisdictic,>Q of tQe <;oqrt to entertain and dis.pose of proceedings set QQt
B
SUDARSAN CHITS v. O. P. PILLAI 513

in sub-els. (a) to (d) of sub-sec. (2) can be invoked in the court which i! A
winding up the company. [520B-C)

(3} Where a winding up petition is pendinsi meaning thereby that
an official Liquidator is appointed as provisional Liquidator wbi~ is a
stage in the process of winding upJ the court before which such proceeding
.B
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 windiug up petition
fails the proceedings pending in the court may have to be transfered 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 c
intiated under sub-sec, (2) will have to be proceeded with till they are
finaUy disposed of because winding up order will relate back to the date
of the presentation of the winding up petition. Io this" view of the matter
no_ anomalous situation can ever arise. Therefore,; the apprehension Or the
High Court that if such jurisdiction is conferred on tho court at a stage
anterior to the winding up order beirig made but subsequent to the appoint· D
ment of official Liquidator as provisional Liquidator an anamalous· sitU:atioD
would arise is not well founded. [5!3B, 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
E
subsist. Now, 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
s. 446(2). [5228-C]

(5)
In the instant case. The winding up order made by the learned F
Company Judge in respect of the appellaat-comp~ny bas neither been
• quashed set. asideJ cancelle~ revoked nor recalled. Therefore, the winding
up order was effectively sribsisting but inoperative for the. time" being,
having all the potentiality of being rejuvenated or being brought back to
lire. The High Court was in error ia rejecting the application, since its
• approach in giving a restricted meaning to the expression 'court which is G
winding up the company• under sub sec. (2) by restricting it to the· first
situation under section 446(1) overlookst he obj'ects and purpose sought to be
achieved by introducing sub-section (2) in section 446. [521G, H, 522A,'F]

O.fflcial Liquidator v. Kadir and Ors. (1977) Kerala Law Times 30
and Faridabad Cold Storage and Allied lndus1ry v. Official Liquidator,
Amonia Supplies Corporation P. Ltd. 48 Company Cases; QVer-rqled. H
514 SUPREME COURT REPORTS [1985] l s.c.R.

A CIVIL APPELLATE JURiSDiCTION : Civil Appeal No. 2528
of 184.

From the Judgment and Order dated ihe 18th August, 1983 of
the Karnataka High Court in· CMP. No. 14913 of 1983 in MFA.
No. 518-20 of 1981.

B S. N. Kacker and Shiv Pujan Singh for tl!e Appellant.

K. M. K. Nair for the Respondent.

Gobind Bharathan and E. M. S. Anam for Intervener.
'
C The Judgment or"the Court was delivered by

DESAI, J. Sudarsan Chits (India) Ltd.-appellant herein, ('Com-
pany' for short) is governed by the Companies Act, 1956. Three
petitions b~ing Company Petitions Nos. 9/81, 8/81 and 49/81 were
•
D
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 chalknged in MFA Nos. 578, 579 and 520 of 1981 which
came up for hearing before a Division Bench of the Kerala High
E Court. The judgment of the Devision Bench is reported in Sudarsan
Chits (India) Ltd. v. G. Sukumaran Pillai.C1) The appeals were
disposed of after approving the scheme of compromise and arrange-
ment under Sec. 391 of the Companies Act directing that the
winding-up order shall be held in abeyance on certain undertakings
F to be filed by the Company before the court within the prescribed
time to abide by the conditions imposed L1 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 :
G
"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 Liqui-
dator will be considered as appointed to function as the

H, (l) ILR)981) Korala 700.
subARSAN CHITS v. o. i>. PILLAI (Desai, J.j 515
Provisional Liquidator subject to such restrictions ·on his A
powers and privileges as we may indicate here."

Since then the scheme of compromise and arrangement as set
out in the judgment of the Division Bench 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 B
were also informed that the scheme of compromise and arrangement
is being meticulously implemented under the supervision. of the
court as directed by the Appellate Bench.

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

It appears to have !>een contended before the court that as E·
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, the Company
Court 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. F
Relying upon the decision in Official Liquidator v. Kadir aud Ors.(l\
and Faridabad Cold Storage and Allied Industry v. Official Liqui·
dator, Ammonia Supplies Corporation P. Ltd.(') 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 G
• a court which is winding up the company. Hence this appeal by
special leave.

After the special leave wai granted, a notice was served upon
the provisional Liquidator informing him that the appeal will be
(!) [!977] Kerala Law Times 30.
(2) 48 Company CaSiS 432. H
. . .
516 SUPREME COURT REPORTS [1985) I s.c.li.

A listed for final hearing on August l, 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 All India
Subscribers Association of Chits through its Secretary Mr. S. K.
Jain 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.

c 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-
D
(a} any suit or proceeding by or against the company;

(b} any claim made by or against the company (includ-
mg claims by or against any of its branches in
Indial;
E
(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
F 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
G or after the commencement, of the Companies (Amend- '
ment) Act, 1960."

Before we advert to the question of construction of Sec. 446
(2) (b), it wonld be advantageous to notice the historical evolution
of the provision as well as its present setting. Sec. 171 of the
}l Indian Companies Act, 1913, the predecessor of Sec. 446 (I) did
SUDARSAN CHiTS v. o. P. PILLAI (Desai, J.) 517
not contain any provision similar or identical to that of Sec. 446 (2). A
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 B
• the comp1ny analogous to the one conferred by Sec. 446 (2) .
Sub-sec. (2) was introduced to enlarge the jurisdiction of the court
windii1g 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 Committee appointed
for examining comprehensive amendment to the Companies Act
c
in its report recommended that 'a suit' by or against a company in
winding up should notwithstanding any provlSion 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 Com- D
panies (Amendment) Act, 1960. The Committee 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 E
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
F
Liquidator will have to file suits. To avoid this eventuality and to
• keep . all .incidental proceedin~s 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 G
• 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
(I) See para 207 of the Company Law Committee Report. H
SIS SUPREME COURT REPORTS [1985] I s.c.R..

A 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 parliament devised a cheap and
summary remedy by conferring jurisdiction on the court winding
up the company to entertain petitions in respect of cLtims for and
against the company. This was the object behind enacting Sec.
B 446 (2) and therefor, it must receive such construction at the lw.nds
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 Com-
c panies 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 u~ of a company, the Court shall forthwith cause intimation
thereof to be sent to the Official Liquidator and the Registrar. Sec.
446 (I) provides that when a winding up order has been made or
0
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. Then comes sub-sec. (2) of Sec. 446. It
E specifies the contours of the jurisdiction of the court which is
winding up the company. It confers special jurisdiction on the
Court which is winding up the company to do things that are set
out in the various sub-clauses notwithstanding anythings 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
F which otherwise it may not have enjoyed. 'J'.he court in the
Companies Act is defmed in Sec. 2 (II) to mean with respect to
any matter relating to a company (other then any offence against
this Act), the Court having jurisdiction under the Act with respect •
to that matter relating to that company, as provided in Section 10.
Section IO provides that the court having jurisdiction under the Act
G shall be the High Court 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 Court or District Courts subordinate to that High Court
in pursuance of sub-sec. (2). The winding up petition has thus to
be presented in the High Court before the Judge who is assigned
the work under the Companies Act. Therefore, the Court which is
H windini: up the Company will be the court to whom the petition for
subARSAN ciii'rs v. o. s. PILLAI (Desai, J.) Sl9

winding up was presented and which passed the order for w;nding A
up the Company. In this case, the order was made by the learned
Company Judge in the Kerala High Court directing winding up
the company. An appeal lies against the order for winding up the
Company under section 483 to the same court to which and in the
same manner in which and subject to the same conditions under
wh!ch, appeals lie from any order or decision of the court in cases B
within its ordinary jurisdiction. In exercise of this Appellate juris-
diction, the Appellate Bench 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 Company Judge would be revived,
• c
The Appellate Bench declined to direct the provisional Liqui-
dator to file clajm 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 Liquidator would be maintainable in .the course of
winding up of proceedings which means that the winding up pro-
D
' ceedings are pending. Undoubtedly, Sec. 446 (I) mani'fests the
legislative intention that the procedure therenndor prescribed could
be availed off when the Winding up order bas been made or where
the Official Liquidator is appointed as the provisional Liquidator.
Sec. 446 (I) invisages two situations in which the court will have
jurisdiction to make the order thereunder contemplated. These two E
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 court
has app:>inted Official Liquidator to be the provisional Liquidator.
Sec, 450 (I) of the Com panics Act confers power on the Company F
• Court to appoint Official Liquidator to be provisional Liquidator at
any time after the presentation of the winding up peti.ion and
before making of the winding up order. The Court before which
a winding up oetition is presented has power to appoint Official
Liquidator as provisional Liquidator of the Company even before
... ' making the winding up order. If ultimately winding up order is
made, the Official Liquidator acts as such. And Jet it be remembered
G

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
(I) it becomes clear that the court will have jurisdiction to make
the order therein contemplated, where a winding up order has been
made or pdor to the making up of the windini: up order, Official H
S20 SUPRIME COURT REFORTS t1985] I s.c.il.
A
Liquidator has been appointed as provisional Liquidator as contem-
plated by Sec. 450 (!).

Sub-sec. (2) of Sec. 446 confers jurisdiction on the court which
is winding up the company to entertain and dispose of proceedings
B 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 wh'ch has made an order for winding up
of the comp1ny anJ further winding up proceedings are continued
under its directions. Undoubtedly, looking to the language of Sec.
446 (I) and (2) and its setting in Part VII which deals with wmding
c 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) or sub-sec. (2) con be invoked in the court which is winding
up the company.

D Reverting to the facts of this case, the Appellate Bench held
that as the winding up pro 0 ~eding in respect of the appellant-•
company is no mor.• ponding, and there is no court which could. be
sa'd to he the court winding up the company and thererore, 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
E reaching this conclusion, the Appellate Bench gave a restricted
meaning to the expression 'court which is winding up the company'
in sub-sec. (2) by restricting it to the ftrst situation in Sec 446 (I)
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 -
F 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 ulti- •
mately the' winding up order 's not made, the proceedings initiated
under Sec. 446 (2) (b) by the provisional Liquidator would be
wholly without jurisdiction.
G
The approch of the High Court, 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
H Company. To accelerate the process of winding up so as to bring
siio ARSAN CHITS v. o. s. PiiLAI (Desai, i.) 521 -
0

them to an end, this sub-section was amended in its present form in A
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 Liquidatods appointed as provisional Liquidator which
is a stage in the process of winding up, the court before which such B
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 the High Court that if such jurisdiction
is conferred on the court at a stage anterior to the winding up order
being made but subsequent to the appintment of Official Liquidator
c
as provisional Liquidator an anomalous situation would arisen has
left us unimpressed. If the winding up petition fails the proceed-
ings pending in the court may· have have to be transferred to the
court which can entertain the proceeding. But if the petition praying
for winding up thr company ends in a winding up order the proceed- D
ings 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 consi- E
dered 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
Company Judge in respect of the appellant Company has neither
been quashed, set aside, cancelled revoked nor recalled. On the F
contrary after directing th'at 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
G
the implementation of.the scheme as sanctioned by the High Court,
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 asi.de. It continued to exist but was inoperative. Any
default on the part of the Company 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- H
522 SUPREME COURT REPORTs i1985) 1 s.c.it.

A 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, !he winding np proceedings are in fact pending and the
B 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
.C
order or the court which kept it in abeyance wiil have juris-
diction 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 wind-
ing up the Company i.e. the court of the Learned Company Judge
0 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 the Division Bench
because it was the Division Bench which was supervising the imple- i
mentation of the scheme of compromise and arrangement and it
was the Division Bench in the appeal before it against the order of
winding up that had kept the winding up order in abeyance. The
E
direction was rightly therefore, sought from the Appellate Bench.

Having thus .examined the matter from all angles, we are
of the view that the High Court was in error in rejecting the appli-
cation made on behalf of the appellant-Company for directing the
provisional Liquidator to prefer claims petitions on the materials
F and expenses to be furnished by the Company. The amounts
realised by the provisional liquidator on filing claim petitions Ehall •
be handed over to the Company and the appellant-Company i.s
under an obligation to use, spend, and appropriate them in the
implementation of the scheme under the supervision of the court.
G
This appeal accordingly suceeds and is allowed and the order
of the High Court under appeals is set aside. The application for
the directions to ths provisional Liquidator made by the appellant-
Company is granted and directions in terms of the prayer are here-
by made. The appellant shall bear its own costs.

M.L.A. Appeal allowed.