CALICUT BANK LIMITED (IN LIQUIDATION) BY OFFICIAL LIQUIDATORS Vs. NEKKAT ALIAS EPPURATH MANAKKAL PARAMESWARAN NAMBUDIRI S SON NARAYANAN NAMBUDIRI

JUDGEMENT

(1.) The only point for consideration in these two appeals is whether the decree-holder should obtain the sanction of the. Court which passed orders winding up the Calicut Bank (appellant) under Section 171 of the Indian Companies Act, for the purpose of continuing execution proceedings taken out against that Bank which is now under liquidation.

(2.) Both these appeals arise out of execution proceedings started by the decree-holders, and in both the appellant Bank was added as a party on the ground that it had obtained a subsequent mortgage of the properties which were sought to be sold in execution of the hypothecation decrees obtained by the decree-holders, in the two suits out of which these appeals arise. The Bank was a party to the suits and to the proceedings in execution. It went into liquidation subsequent to the filing of the execution petitions. The contention now is that the execution proceedings cannot be continued without the sanction of the Court which ordered the winding up of the Bank and appointed a liquidator.

(3.) The first Court held, that, as the Bank was only a puisne mortgagee, there was no relief granted as against the Bank, that the Bank had only a privilege of redeeming but not a liability to pay and that consequently it was not necessary that the sanction of the Court should be obtained and it relied upon the decision of this Court in Narayanachari V/s. Annamalai Chettiar . The appellate Court followed the same decision and dismissed the appeals. It however stated that, under Section 80 Civil Procedure Code, it was not necessary that a notice should be sent to a pro forma defendant if no relief is asked against him and that the same principle should be applied to the facts of this case. Hence these appeals by the Bank.