Transferee-company may continue execution under amalgamation, with omitted property passing under the scheme and decree remaining enforceable.

A transferee-company that succeeded to a decree-holder's interest under an amalgamation scheme could continue a pending execution under section 146 CPC, and the absence of a formal substitution order under Order 21 Rule 16 was treated as a matter of form. An order allowing continuation of execution was valid where the earlier execution order had only been set aside with liberty to take further steps. The property was held to have passed under the amalgamation order, with rectification relating back to the original order, so escheat and bona vacantia did not apply. The decree remained executable against the judgment-debtors, including the sub-tenant, and the police-help direction was upheld.

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Issues: (i) whether the transferee-company, as successor to the decree-holder and owner of the disputed property under amalgamation, could continue the pending execution without a formal substitution order under Order 21 Rule 16 of the Code of Civil Procedure; (ii) whether the order permitting continuation of execution was invalid because the execution proceeding was said to be no longer pending or because the permission was granted without prejudice; (iii) whether the disputed property had vested in the State by escheat or bona vacantia, or whether it had passed to the transferee-company under the amalgamation order and its rectification; (iv) whether the decree had become a nullity after transfer of the property and whether it could be executed against the sub-tenant and with police help.

Issue (i): whether the transferee-company, as successor to the decree-holder and owner of the disputed property under amalgamation, could continue the pending execution without a formal substitution order under Order 21 Rule 16 of the Code of Civil Procedure;

Analysis: The transfer of the property under the amalgamation arrangements was treated as sufficient to bring the respondent within the category of a person claiming under the decree-holder. Section 146 of the Code of Civil Procedure permits continuation of proceedings by a person claiming under the original party, and the right to continue an execution proceeding was held to include the incidental right to be brought on record. The absence of a formal substitution order was treated as a matter of form, not substance.

Conclusion: The respondent was entitled to continue the execution, and the absence of a formal substitution order did not invalidate the proceedings.

Issue (ii): whether the order permitting continuation of execution was invalid because the execution proceeding was said to be no longer pending or because the permission was granted without prejudice;

Analysis: The setting aside of the earlier execution order did not amount to dismissal of the execution application, and liberty had been expressly granted to take steps for continuation. The words "without prejudice" were read as preserving the parties' rights on the merits of objections, not as rendering the permission tentative. The permission to proceed was therefore treated as a final order on the limited question of continuation.

Conclusion: The order permitting continuation of execution was valid.

Issue (iii): whether the disputed property had vested in the State by escheat or bona vacantia, or whether it had passed to the transferee-company under the amalgamation order and its rectification;

Analysis: The scheme of amalgamation contemplated transfer of the whole undertaking, including all movable and immovable properties, and the order under section 394(2) of the Companies Act, 1956 was construed in that context. The omission of the particular property from the schedule was treated as an inadvertent omission that did not prevent the property from passing under the transfer order. The rectification was characterised as a clarification taking effect from the date of the original order, and the doctrines of escheat and bona vacantia were held inapplicable because the transferee-company existed and succeeded to the transferor's undertaking.

Conclusion: The property passed to the transferee-company and did not vest in the State.

Issue (iv): whether the decree had become a nullity after transfer of the property and whether it could be executed against the sub-tenant and with police help.

Analysis: The decree was final and valid, and the executing court could not go behind it or re-examine the transferee's requirement for building and rebuilding. The transfer of the property after the decree did not extinguish the decree. The ground of eviction remained covered by the applicable tenancy provision, and the direction for police help was upheld in view of prior resistance during execution.

Conclusion: The decree remained executable against the judgment-debtors, including the sub-tenant, and the direction for police help was upheld.

Final Conclusion: The execution proceedings were maintainable in the hands of the respondent as transferee and successor, the property was held to have passed under the amalgamation order, and the objections to execution failed.

Ratio Decidendi: A transferee who succeeds to a decree-holder's interest under amalgamation may continue a pending execution as a person claiming under the decree-holder under section 146 of the Code of Civil Procedure, and an omitted property may still pass under a comprehensive amalgamation order construed with the scheme and clarified by rectification from the date of the original order.

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