A.M. PADMAKSHI Vs. SUDARSAN CHITS (INDIA) LTD.

JUDGEMENT

(1.) This is an application filed under S.446 of the Companies Act, 1956 read with R.105, 117 and 118 of the Companies (Court) Rules, 1159. The applicant as well as the 3rd respondent herein, are judgment debtors in O.S. No. 1 of 1972 of the Sub Court, Tellicherry in the suit filed by the 1st respondent company for realising an amount of Rs. 8,636. It was decreed on 31st July 1975. By the decree, a charge was created over the landed property extending to 7/2 cents under Re Sy. No. 407/3, 4 and 5 of Kannapuram amsom. The 1st respondent company filed E.P. No. 51 of 1975 and brought the property to sale. E.A. No. 126 of 1975 was filed by it seeking permission to bid the property in the auction. It was granted. In the meanwhile, the 3rd respondent paid Rs. 3,000. The 4th respondent filed the suit against the 1st respondent company, O.S. No. 349 of 1979, of the Sub Court, Tellicherry, for recovering a sum of Rs. 7,000 and odd and obtained a decree on 8th March 1980. In the said suit E.P. No. 85 of 1980 was filed by the 4th respondent on 12th June 1980, and he attached the decree obtained by the 1st respondent against the petitioner and the 3rd respondent (O.S. No. 1 of 1972). E.P. No. 150 of 1980 was thereafter filed in O.S. No. 1 of 1972 for sale of the property involved in that suit. The property was brought to sale on 2nd June 1983 and it was purchased by the 4th respondent. The sale was for Rs. 10,010 and after setting off the amount due under the decree, the balance of Rs. 3,010 was deposited in court which may go in satisfaction of the 1st respondent's decree against the applicant (decree holder in O.S. No. 1. of 1972). The sale was confirmed on 10th August 1983 and full satisfaction was entered in O.S. No. 349 of 1979 as per E.A. No. 296 of 1983. The applicant, the 3rd respondent, (Co-judgment debtor) the 1st respondent - decree holder in O.S. 1 of 1972 - (and the judgment debtor in O.S. 349 of 1979) as well as the 4th respondent, were parties in E.P. No. 150 of 1980. That E.P. was filed by the 4th respondent herein for sale of property involved in O.S. No. 1 of 1972, the property belonging to the applicant herein. There were several adjournments in that execution proceedings for payment. The property was brought to sale only on 2nd June 1983. The Amin went to the property on 1st October 1983 in pursuance to the order passed by court in E.P. No. 149 of 1983 in O.S. No. 1 of 1972 on application by the 4th respondent, dated 14th September 1983. After opening the locks, some of the rooms were delivered over to the 4th respondent. Two rooms could not be delivered due to some obstruction by one Govindan and Gangadharan. The Amin filed a report to that effect on 3rd October 1983 praying for Police aid for completing the delivery. The 4th respondent also filed E. A. No. 382 of 1983 in O. S.1 of 1972 making a similar request. That stood posted to 4th October 1983 and adjourned from time to time due to some objections raised by the applicant, the 3rd respondent and other persons. In the meanwhile, this application was filed in this court on 10th October 1983 and interim orders were obtained on 11th October 1983.

(2.) The main objection of the applicant is that the 1st respondent company was wound up and the Provisional Liquidator was appointed in C. P. No. 9 of 1981 by order dated 16th June 1981. The 2nd respondent was appointed as the Provisional Liquidator. The 4th respondent was incompetent to act as he did to attach the property on 23rd December 1982 and still later when it was brought to sale. It is alleged that the purchase of the property by the 4th respondent, after the appointment of the Provisional Liquidator, is opposed to S.446 of the Companies Act and the same is void under S.537 of the Act. So, it is prayed that the pending proceedings in O. S. No. 1 of 1972 and O. S. No. 349 of 1979 should be transferred to this court as also E. P. No. 150 of 1980. This application is opposed by the 4th respondent. It is stated that the winding up order passed by this court dated 16th June 1981 has been kept in abeyance by the orders passed in M.F.A. Nos. 578, 579 and 520 of 1981 by order dated 8th October 1982. [ ILR 1983 (1) Ker. 700 ] The provisions of S.446 are totally inapplicable. No leave is required to continue the proceedings in O.S.1 of 1972 and O. S. No. 349 of 1979 and no question of transferring the said proceedings to this court arises. It is also contended that mere appointment of a Provisional Liquidator does not affect the continuance of the pending proceedings and no leave of court is required. Thirdly, the 4th respondent contends that S.537 will apply only if there is a winding up order and S.537 should be read along with S.446(2) of the Act. In this case it cannot be said that the company is being wound up. It is also the 4th respondent's plea that at any rate the applicant is not entitled to invoke the provisions of S.537 of the Act and contend that the proceedings by way of sale in O. S. No. 1 of 1972 are void, illegal and therefore liable to be set aside, or that the proceedings in O. S. No. 349 of 1979 should be transferred to this court. This is all the more so, in view of the conduct of the applicant and the 3rd respondent in the execution proceedings. They took part in the entire proceedings, after the original order of winding up and appointment of a provisional liquidator were passed by this court on 16th June 1981 and after which date the 4th respondent to appropriate steps to bring the property to sale and purchased it.

(3.) S.446 and 537 of the Companies Act on which reliance was placed by counsel on both sides, may be quoted herein: