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CS Professional · Compliance Management, Audit and Due Diligence · Legal Framework Governing Company Secretaries

A suit filed by the dissolved company before 1980 was pending when the Company Secretaries Act, 1980 commenced. A defendant argues that it abated because the company stood dissolved. What is the position under the Act?

The suit does not abate. Section 32(4) says pending proceedings of the dissolved company continue and may be prosecuted and enforced by or against the Institute as though the Act had not been passed, with no refiling or Council resolution needed.

  1. AIt abates, because the dissolved company no longer exists
  2. BIt continues, and may be prosecuted and enforced by or against the Institute as if the Act had not been passedCorrect
  3. CIt must be refiled by the Central Government
  4. DIt continues only if the Council passes a resolution within two years

Explanation

Section 32(4) provides that pending suits, appeals or proceedings by or against the dissolved company do not abate, are not discontinued and are not prejudicially affected by the transfer. They may be continued, prosecuted and enforced by or against the Institute. No refiling or Council resolution is required.

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