Law: Companies Act, 2017

Section: 313,314,337(e),414

Companies Act (XIX of 2017)--- ----Ss. 313, 314, 337(e) 414---Winding up proceedings stay of---Pre-conditions---Applicant/director/Chief Executive Officer of company under winding up sought stay of proceedings on the plea of formulation of revival plan and intention of induct further capital---Validity---Two conditions were required under S. 313 of Companies Act, 2017 to be satisfied for bringing an order of stay of winding up in existence (i) filing of an application either of the Official Liquidator or of any creditor or contributory or of the registrar or the Commission or a person authorized by it for stay of winding up proceedings; (ii) proof to the satisfaction of the Court that all proceedings in relation to the winding up ought to be stayed---If such two conditions were satisfied, High Court had discretion to stay winding up proceedings, either altogether or for a limited time by imposing appropriate terms and conditions---Consequence of winding up order was that all assets of the company would come under the control of Court and management of company would vest with liquidator instead of Directors and Chief Executive of the company---Applicant/director did not have any locus standi to file such petition---Only official liquidator was empowered under S. 337(e) of Companies Act, 2017 to institute or defend any suit, prosecution or other legal proceedings in the name and on behalf of the Company under liquidation---High Court declined to interfere in the matter as the application was not filed as per requirement of S. 313 of Companies Act, 2017 rather the same was filed by director/Chief Executive and that too without any authorization---Winding up proceedings were still underway and staying of the proceedings at such stage would cause delay in liquidation process and prejudice to the rights of other creditors, if any, as protected under S. 314 of Companies Act, 2017---Application was dismissed, in circumstances. Saudi Pak Industrial and Agricultural Investment Company Ltd. v. Chenab Limited 2020 CLD 339 and The Additional Registrar Company v. Al-Qaim Sugar Mills Limited 2021 CLD 931 rel. ORDER JAWAD HASSAN, J.---By this application under section 414 of…

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