TULSI RAM SINHA Vs. AKHARA PANCHAYATI UDASI

JUDGEMENT

(1.) This small cause court civil revision under Section 25 of the Small Cause Courts Act arises out of an Execution Case No. 282 of 1955. An application for execution of the decree was made by the decree holder, the Akhara Panchayati, against Tulshiram Sinha the applicant in this revision. An objection was taken by the applicant that the decree was not liable to be executed against him until it had been put into execution against another judgment-debtor, namely, Benos Sericum Ltd., and there was a failure to realise the decretal amount from the said judgment-debtor. The applicant relied upon the decree itself. A plain copy of the decree has been handed over to me in regard to the correctness of which there is no dispute and which I am putting on the record. The relevant portion of the decree runs as follows:

(2.) In this revision it is contended that the Small Cause Court was in error in ordering execution as against the applicant.

(3.) There can be no doubt that the compromise decree clearly indicated that execution was to be levied in the first instance against the Benos Sericum Ltd., and it was only upon failure to realise the decretal amount from Benos Sericum Ltd., that execution could be had against other judgment-debtors. The apparent view of the court below that because the Company had gone into liquidation it had to be assumed that execution could not be had against it or that the decretal amount could not be realised from it, is obviously incorrect. When a Company goes into liquidation the effect is not to bring about a dissolution of the company. As observed by Viscount Cave in Employers Liability Assurance Corporation v. Sedgwick Collims and Co., 1927 A. C. 95 "a company which has been dissolved no longer exists as a separate entity capable of holding property or of being sued in court; but a company in liquidation, though the administration of its affairs has passed to the liquidator retains its complete existence. If the liquidation should be annulled, the company will resume its powers". This is the exact position under the Indian Companies Act also and it is only after the final meeting under Section 509 of the Indian Companies Act that a company is deemed to be dissolved.