A liquidator in a winding up subject to the supervision of the court has the same powers as a liquidator in a voluntary winding up, including the power to institute suits without the sanction of the court.

( 1 ) V. Rajaraman, Liquidator of Globe United Engineering and Foundry Company Ltd. has instituted this suit for the recovery of Rs. 5,00,000 against the defendant M/s. Hindustan Brown Boveri Ltd. The defendant filed his written statement and then subsequently amended it. The defendant has raised a number of preliminary objections.

( 2 ) FIRSTLY, it is alleged that this Court has no jurisdication to entertain and try this suit since no part of the cause of action has arisen within the jurisdiction of the court and the defendant s registered office is situated in Bombay. The second objection is that the suit as framed and filed in the name of V. Rajaraman is not competent. Thirdly, it is alleged that no leave of the Court was obtained prior to the filing of the suit against the defendants.

( 3 ) IN the replication, the plaintiff submitted that no prior sanction was required for the institution of the suit by the plaintiff and went on to say that if any sanction is required the same can be granted even after the institution of the suit. On the pleadings of the parties, the following issue was framed on August 27, 1971

1. "whether this Court has territorial jurisdiction to enlertain and try the suit? On February 21. 1972, the following further preliminary issues were framed:- 2. Whether the suit on behalf of the plaintiff as framed, is competent? 3. Whether leave of the appropriate court was necessary before the institution of the present suit. If so, what is its effect on the present suit? 4. If the plaintiffs have obtained or arc granted sanction, from what date will the suit be deemed to have been instituted 5. Relief. By this order I propose to dispose of all the five issues. Issues 1, 3 and 4: These three issues can be decided together conveniently. The principal question as crystalized in these issues is: whether this Court has territorial jurisdiction to try the suit and whether any leave of the appropriate court was necessary before the institution of the suit, assuming that this court has jurisdiction to try this suit? The fourth issue will arise only if it is held that leave of the court was necessary before the institution of the present suit.

( 4 ) MR. Anoop Singh, the learned counsel for the defendant has only argued the question of leave. By order dated March 12, 1969, in P. No. 8 of 1969 (Globe Motors Ltd. v. Globe United Engineering and Foundary Co. Ltd.) (1) Hardy, J. ordered that the voluntary winding up of Globe United Engineering and Foundary Ltd. shall continue subject to the supervision of the court with liberty to creditors, contributories and other to apply to the court in accordance with the provisions of section 522 of the Companies Act. In view of this order it cannot be disputed that Globe United Engineering and Foundary Co. Ltd. is under voluntary winding up subject to the supervision of the court and that the order of Hardy, J. was made in terms of section 522 of the Companies Act, 1956.

( 5 ) THE Liquidator on behalf of and in the name of the company has instituted the suit for the recovery of Rs. 5 lakhs against the dant. The question is, whether this court has jurisdiction to entertain and try this suit. Part VII of the Companies Act 1956 (hereinafter REFERRED TO to as the Act) deals with the subject of "winding up". Section 425 of the Act provides for the three following modes of winding up of a company. (1) by the court; or (2) voluntary; or (3) subject to the supervision of the court. Chapter IV of Part VII of the Act is headed as "winding up subject to supervision of Court". This chapter contains six sections i. e. , sections 522 to 527. The effect of a supervision order is that the liquidation continues as a voluntary one, and the rules applicable to voluntary liquidation continue to govern it, subject to a few exceptions and the conditions imposed by the court in the supervision order.

( 6 ) WHERE a company has gone into voluntary liquidation, the court may make an orde