The Companies Act, 1956
632. Power to require limited company to give security for costs.
Where a limited company is plaintiff or petitioner in any suit or other legal proceeding, any 1[Court or Tribunal] having jurisdiction in the matter may, if there is reason to believe that the company will be unable to pay the costs of the defendant if he is successful in his defence, require sufficient security to be given for those costs, and may stay all proceedings until the security is given.
1. Subs for “Court”, the words by the Companies (Second Amendment) Act, 2002, w.e.f. 13th January, 2003.