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TMI Blog1981 (12) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany which is undergoing liquidation, in favour of the respondents in this revision petition. Now, a question has arisen as to whether these respondents who are ready and willing to pay the amount that is due and payable to the decree-holder have to pay after giving notice to the Official Liquidator as per Section 531(A) of the Companies Act (1 of 1956) which is equivalent to Sections 320 and 321 of the Indian Companies Act of 1948. After Viswanatha Sastri Committee's Report had been accepted by the Central Government, Act 1 of 1956 came into the Statute Book of Bharat and the old Section 321 of the old Companies Act had been remodelled and put in a refined way so as to suit the Company Law of the country by way of provisions under Section 531(A) of the Companies Act (1 of 1956). In the instant case, on 23rd June, 1976, I.A. No. 645 of 1976 was filed by Uma Investments Private Limited for final decree. The order of winding up had emanated from the competent Court on 23rd July, 1976 in C.P. No. 441 of 1976. On 9th August, 1976 the final decree was passed. On 19th August, 1976, the present execution petition was filed in which the order under revision was pronounced with respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an impleading of the Official Liquidator for the winding up of the company in C.P. No. 441 of 1976 does not seem to have been represented to the Court which passed the final decree in O.S. No. 687 of 1973 on 9th August, 1976 as mentioned above. 4. It is brought to the notice of this Court that C.R.P. No. 2608 of 1977 was filed before this Court under Section 115 of the C.P.C, to revise the order made in E.P. No. 277 of 1976 in O.S. No. 687 of 1973 by the learned II Additional Subordinate Judge, Coimbatore, and while disposing of the same, this Court has observed as follows: The reason given by the Executing Court, that, because the assignment came to be effected in favour of the Revision Petitioner on 22nd August, 1974, and after that assignment, steps were taken by the decree-holder, Uma Investments Private Limited to have the final decree passed, and that it is not open to the assignee to rely upon the assignment, cannot be held to be correct. Nor does it affect the locus standi of the original decree-holder to have the final decree passed. Therefore, the Civil Revision Petition is hereby allowed and the Execution Petition is remitted back to the II Additional Subordinat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uidator, the Court cannot compel a notice being given to the Official Liquidator. It is not a case of any provision actually existing as it is that a notice has to be given to the Official Liquidator so as to enable the Court to order notice to the 1st defendant. It is common knowledge that when once a public limited company had become a subject-matter of liquidation and that a competent officer has been appointed by the Court as Official Liquidator, it is that person who has to be given notice of each and every proceeding that is taking place with respect to that company even subsequent to the assignment. It is not as if the execution petition was filed prior to the appointment of the Official Liquidator. E.P. No. 277 of 1976 was filed on 19th August, 1976. The Official Liquidator had been appointed even as early as 22nd April, 1976 in C.P. No. 441 of 1976. Under these circumstances, this Court considers that notice must necessarily be given to the Official Liquidator with respect to the transaction of assignment which had led to the institution of E.P. No. 277 of 1976. It is not as if the assignment of decree must stand a scrutiny of the judicial forum and this is possible by giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nables a transferee to apply for execution of the decree the first proviso to Order 21, Rule 16 enjoins that notice of such application shall be given to the transferor and the judgment-debtor and that the decree shall not be executed until the Court has heard their objections, if any, to its execution. It is one thing to say that the decree may not be executed by the transferee until the objections of the transferor and the judgment-debtor are heard. It is an altogether different thing to say that the assignment is of no consequence until the objections are heard decree-holder and transferee is effected by the deed of assignment. If the judgment-debtor has notice of the transfer, he cannot be permitted to defeat the rights of the transferee by entering into an adjustment with the transferor. If the judgment-debtor has no notice of the transfer and enters into an adjustment with the transferor before the transferee serves him with notice under Order 21, Rule 16, the judgment-debtor is protected. 9. In Braj Lal v. Atkinson A.I.R. 1920 Pat. 146, it has been held as follows: A judgment-debtor who fails in an execution proceeding to object to the execution on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng does not entail dismissal of the proceeding. The suit or proceeding without leave of the Court may be regarded as ineffective until leave is obtained, but once leave is obtained the proceeding will be deemed to be instituted on the date of granting leave. 13. In K. Vadivelu v. Official Liquidator , it has been held has follows: Commencement of the proceedings does not depend upon the issue of process so as to attract the bar of lis. The words commence and institution -appear to be synonumous. In Ponnuswami v. Kaliaperumal A.I.R. 1929 Mad. 480, it was held that a suit commences with the presentation of the plaint. The same view was taken by a Bench of the Lahore High Court in Peoples Bank of Northern India, Ltd., Lahore v. Fateh Chand Co., and another A.I.R. 1936 Lah. 401. The word 'Commenced' occurring in Section 446 of the Companies Act has to be understood in the light of the expression Shall be proceeded with occurring in the same section. The expression shall be proceeded with is intended to cover the case of those suits or other legal proceedings which were pending at the time of the liquidation proceedings. * * * But as regards new suit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt, and the several assignments of rights made by the defunct company are now questioned, it is needless to observe that the Official Liquidator of the Company concerned has to be given notice. 16. As already stated the point for consideration in the instant revision petition is, whether notice has to be given to the Official Liquidator as per the provision of Section 561(A) and in accordance with the provisions of o. 21 R. 16 of the C.P.C. In construing the entire decision in this case, this Court considers that it is just and equitable that notice has to be given to the Official Liquidator under the circumstances of the case, and therefore, it orders notice. 17. The result is, this Civil Revision Petition is allowed and the entire matter is remitted back to the lower Court by setting aside the order under revision for being considered a fresh by the executing Court in the light of the observations made by this Court and in accordance with law. Both the sides should be given opportunity to adduce evidence, if any, both oral and documentary. Under these circumstances, the Civil Revision Petition is allowed. Under the circumstances, there is no order as to costs. - - TaxTM ..... 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