1936 (1) TMI 19 - Commissioner - Companies Law

Summary

Issues:
1. Validity of the order confirming the sale
2. Validity of the order refusing to set aside the sale
3. Necessity of permission from the liquidating Court for the proceedings to proceed

Analysis:
1. The case involved an exparte decree obtained by the Peoples Bank of Northern India against the firm Bundhelkhand Cycle & Motor Agency, which was transferred to Peshawar for execution. The property of the judgment-debtors was auctioned, and objections were raised by different sets of judgment-debtors to set aside the sale. The Lahore Court issued an order staying the proceedings at Peshawar, but the sale was confirmed by the successor of the executing Judge. Two appeals were filed at the District Court, where one appeal against the order confirming the sale was rejected as non-appealable. The other appeal, challenging the order refusing to set aside the sale, was dismissed by the appellate Judge, citing that no substantial injury had been caused by irregularities in the auction process.

2. The petitions for revision were presented to the Peshawar Judicial Commissioner's Court against the District Judge's orders. The auction-purchaser also filed a revision petition, which was dismissed as the decision was in favor of the party. The main case, covered by the two applications from the judgment-debtors, faced a preliminary objection regarding the necessity of permission from the liquidating Court (Lahore High Court) for the proceedings to proceed. The petitioners argued that since the bank initiated the proceedings, subsequent appeals and revisions did not require permission from the liquidating Court, citing legal precedents and the Companies Act.

3. The Court analyzed the relevant provisions of the Companies Act, specifically Section 171, which restricts legal proceedings against a company without the permission of the Court after a winding-up order. Referring to legal precedents and principles, the Court held that since the bank was the plaintiff and decree-holder, and the original proceedings were initiated by it, no permission from the liquidating Court was necessary for appeals or revisions filed by unsuccessful defendants. The Court overruled the preliminary objection, emphasizing that a company cannot benefit from initiating legal proceedings against individuals and then claim restrictions on appeals or revisions without the permission of the liquidating Court.

This detailed analysis covers the issues of the validity of the sale confirmation order, the refusal to set aside the sale, and the necessity of permission from the liquidating Court for the proceedings to proceed, as addressed in the judgment delivered by the Peshawar Judicial Commissioner's Court.