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Issues:
- Claim for rateable distribution between a decree holder and the Official Liquidator. - Interpretation of section 199 of the Companies Act regarding payment orders. - Applicability of Civil Procedure Code provisions to payment orders. - Determination of assets held by the High Court for rateable distribution. - Application of section 73 of the Civil Procedure Code to distribution of assets. Analysis: The judgment pertains to an appeal under the Letters Patent concerning rateable distribution between a decree holder and the Official Liquidator enforcing a payment order under section 186 of the Companies Act. The Court noted that the execution of the decree was initially transferred to the District Judge by the Subordinate Judge during liquidation proceedings before being transferred to the High Court. The key issue was whether the holder of a decree is entitled to claim rateable distribution against the Official Liquidator as the holder of a payment order. The appellant argued against this entitlement, citing a previous case, Lyallpur Bank, Ltd. v. Ramji Das, which held that a payment order holder cannot claim rateable distribution against a decree holder. However, the Court found that this case did not fully consider the implications of section 199 of the Companies Act. The Court referenced a previous judgment, Tarya Ram v. Popat Ram, which established that a payment order under section 186 of the Companies Act should be treated as equivalent to a decree and enforceable as such. It was emphasized that the provisions of the Civil Procedure Code relating to the execution of decrees are applicable to the execution of such orders. Section 36 of the Civil Procedure Code states that provisions regarding the execution of decrees are applicable to the execution of orders to the extent possible. This aligns with section 73 of the Code, which deals with rateable distribution. The Court concluded that in the present case, the assets were held by the High Court, and both the decree holder and the payment order holder had applied for execution. The decree holder's application, initially made to the District Judge, automatically transferred to the High Court. As the decree holder had not obtained satisfaction, the High Court, as the executing Court, was mandated under section 73 to distribute the assets rateably. The Court emphasized that the nature of the order as a decree or not was immaterial, as section 199 of the Companies Act places orders on par with decrees for execution purposes. Rateable distribution under section 73 was deemed a method of enforcing a decree or an order akin to a decree. Consequently, the Court upheld the decision of the Judge in Chambers, dismissing the appeal and awarding costs.
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