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TMI Blog2024 (8) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... execution - the judgment settles the position of law and therefore, it can be said that once the leave is granted to proceed with the suit, there is no need for the parties to file another application to seek execution of the decree awarded in their favor. It is no doubt that the execution proceedings are considered as continuation of the suit itself and the party in whose favour a decree has been granted can only reap the benefits of the same after execution of the said decree. On the aspect of whether the decree holder had obtained leave of the Court for continuance of the suit, it is evident that the Court did not comment on the same therefore, leading to the inference that the same was not obtained by the decree holder - it is also apparent that the decree was obtained from a foreign Court and therefore, the leave was sought to be taken at the time of its execution in India - Since the decree holder had filed for the leave of the Court for the first time, it is apparent that the Court had adjudicated the issue on the basis of the same. The present application is allowed and the petitioner/applicant is granted leave to execute the decree passed by the Madras High Court vide orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel appearing on behalf of the petitioner/applicant submitted that the petitioner being a secured creditor, is entitled to enforce the security created in its favor. 9. It is submitted that since the liability of the guarantors is distinct, co-terminus and independent of the liability of principal debtor, no prejudice would be caused to the respondent company. 10. It is submitted that the petitioner has a charge in respect of the machines that are subject matter of the lease agreement and therefore, it is entitled re-possess the said machineries as the same are subject matter of the lease agreement signed between the parties. 11. It is submitted that it is a settled position of law that the petitioner is statutorily mandated to take leave of this Court for pursuing the civil suit before the Madras High Court and therefore, the petitioner shall suffer irreparable hardship and loss if the permission under Section 446 of the Companies Act, 1956 is not granted. 12. In view of the foregoing submissions, the learned counsel for the petitioner/applicant submitted that the present application be allowed and reliefs be granted as prayed. 13. Per Contra, the learned standing counsel app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at permission may be granted to the applicant and it be ordered that if any decree is passed, it will not be executed without permission of the court. In view of above, the application is allowed in terms of prayer clause. Applicant is permitted to pursue the above noted suit against respondent company as well as the guarantor. However, it is clarified that, if any decree is passed, the applicant will not execute the same without the permission of this court. 22. The perusal of the above reproduced order makes it clear that even though, the petitioner was granted leave to continue with the proceedings before the Madras High Court, he was legally required to seek permission of this Court to execute the decree is passed in his favor. 23. Since the Madras High Court has passed the decree in favor of the petitioner vide order dated 24th November, 2023, the petitioner has approached this Court seeking permission for execution. 24. In summary, the petitioner/applicant has contended that since it had already been granted liberty to proceed with the suit, the said permission fulfills the statutory mandate as required under Section 446 of the Companies Act, 1956 and therefore, no requiremen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g in sub-section (1) or sub-section (3) shall apply to any proceeding pending in appeal before the Supreme Court or a high Court. 28. The perusal of the above said provision makes it crystal clear that in order to continue a suit against a company whose winding up proceedings are ongoing, the party seeking such continuance of suit should seek leave from the Court for the same. 29. From the above said provision, it is evident that the permission is required to be taken for the continuation of the suit and the provision is silent on the aspect of whether such permission is required for execution of the decree as well or not. 30. In Bansidhar Shankarlal v. Mohd. Ibrahim, (1970) 3 SCC 900 , the Hon ble Supreme Court dealt with the objection raised with regard to obtaining of leave for execution and held as under: 6. When the Second Appeal No. 1380 of 1954 was pending before the High Court of Calcutta at the instance of the Company and Bansidhar against the decree passed by the District Court in enjectment, the Company was ordered to be wound up by order of the High Court of Calcutta and the liquidators were appointed. The liquidators prosecuted the appeal. There is no evidence on the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suit itself and the party in whose favour a decree has been granted can only reap the benefits of the same after execution of the said decree. 33. Therefore, the need for such permission as sought by the applicant herein is only arising due to the order passed by this Court on 6th May, 2004, whereby, the applicant was granted leave to continue with the recovery suit filed before the Madras High Court. 34. Now coming to the issue on merits, the OL has replied to the captioned application by stating that the applicant comes under the category of unsecured creditor and therefore, even if permission is granted to execute the decree, the same would not serve any purpose due to paucity of funds with the judgment debtor. 35. On this aspect, it is pertinent to note that if the applicant was provided with the liberty to proceed with the suit, staying it s favorable decree would make the entire exercise futile and therefore, would render the resources and efforts a total waste. 36. Accordingly, this Court agrees with the contention of the applicant and therefore, holds that the arguments as advanced by the OL are subject matter of the execution proceedings and can be taken at a later stage. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court or a High Court] 10. In terms of the said provisions, it is mandatory to seek leave of the Company Court when winding up order has been passed or provisional Official Liquidator has been appointed to proceed with the legal proceedings pending at the date of the winding up order. 11. Now the question would be whether this Court exercising Section 446 (1) of the Act can permit the applicants to proceed with the execution proceedings. There is much difference between the proceedings related to the original suit and the execution. In the case of original suit, it. is the debt which has to be quantified whereas 111 the execution proceedings the crystallized quantification made by the Court requires to be executed. In the case of Basavaiah supra, the Division Bench of this Court in the context of the proceedings initiated under Section 33C [2] of the Industrial Disputes Act, 1947 ( I.D. Act for short) qua the leave sought under Section 446 (1) of the Act has observed that proceedings under Section 33C (2) of the I.D. Act are in the nature of execution proceedings and therefore do not require leave of the Company Court under Section 446 (1) of the Act, proceeds on an misco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt, after due notice to the Official Liquidator. The learned Counsel for Official Liquidator Respondent] has no objection for such permission being granted in these applications. As applicants, who are workmen, have been litigating for nearly two decades, interests of justice would be served if leave to proceed with the applications under Section 33-C (2) of I.D. Act is granted in these applications, instead of driving them to file fresh applications for leave under Section 446. 12. It is true that this Court has placed reliance on the judgments of the Hon'ble Apex Court to declare that the proceedings under Section 33C (2) of the I.D. Act even if they are in the nature of execution proceedings squires leave of the Company Court under Section 446 of the Act. This judgment would rather support the Official Liquidator than the applicants because even in the execution proceedings, leave of the Company Court under Section 446 of the Act is necessary. Consequently, in the proceedings under Section 33C (2) of the I.D. Act, the leave granted under Section 446 of the Act would enable the quantification of the claim of the employees against the Company by the Labour Court after due noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lder had obtained leave of the Court for continuance of the suit, it is evident that the Court did not comment on the same therefore, leading to the inference that the same was not obtained by the decree holder. 40. Apart from the above said distinction, it is also apparent that in the above reproduced case, the decree was obtained from a foreign Court and therefore, the leave was sought to be taken at the time of its execution in India. 41. Since the decree holder had filed for the leave of the Court for the first time, it is apparent that the Court had adjudicated the issue on the basis of the same. On the contrary, the applicant herein had already been granted the leave to continue the suit. Therefore, the same amounts to valid permission for continuance of the same and execute the rights obtained after that. 42. The applicants had duly approached this Court for leave to continue the pending suit before the Madras High Court and had obtained the same from this Court vide order dated 6th May, 2004 and the suit continued for 20 years till the time it was finally decided in favour of the applicant last year. 43. It is clear that the applicant must have spent considerable resources ..... X X X X Extracts X X X X X X X X Extracts X X X X
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