Statutory amalgamation and impleadment rules bar execution against transferees not made parties to the suit.

Where a statutory amalgamation order dissolves the original defendant and requires pending proceedings to continue only against the resulting entity, a decree cannot be executed against transferee corporations or the State unless they were impleaded in the suit. The transferees must be given an opportunity to defend the claim, including filing written statements. On that basis, the ex parte decree and execution proceedings were set aside, and the suit was restored for fresh trial after impleadment of all necessary parties, including the corporation, the State and the asset purchaser.

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Issues: (i) whether, after amalgamation and dissolution of the original defendant under the statutory amalgamation order, the decree obtained against it could be executed against the transferee corporation and the State without their being impleaded in the suit; (ii) whether the ex parte decree and execution proceedings should be set aside and the suit remanded for fresh trial after impleadment of the transferees.

Issue (i): whether, after amalgamation and dissolution of the original defendant under the statutory amalgamation order, the decree obtained against it could be executed against the transferee corporation and the State without their being impleaded in the suit.

Analysis: The general rule under Order XXII Rule 10 of the Code of Civil Procedure, 1908 and Section 146 of the Code of Civil Procedure, 1908 is that a person claiming under a party may be proceeded against and may also come on record to defend its interest. Ordinarily, a successor-in-interest is bound by proceedings against the transferor if it chooses not to intervene. Here, however, the amalgamation order issued under Section 396 of the Companies Act, 1956 specifically dissolved the original company and provided that pending proceedings could continue only against the resulting company in the manner stated in the order. In that setting, the plaintiff was required to bring the resulting company, and thereafter the State and other transferees, on record before obtaining a decree.

Conclusion: The decree could not be treated as executable against the transferee corporation and the State in the absence of their impleadment in the suit under the amalgamation order.

Issue (ii): whether the ex parte decree and execution proceedings should be set aside and the suit remanded for fresh trial after impleadment of the transferees.

Analysis: Since the amalgamation order altered the identity of the party against whom the suit had to proceed, and since the transferees were entitled to an opportunity to file their written statements and contest the claim, the execution proceedings founded on the ex parte decree could not stand. The proper course was to undo the decree, close the execution, and remit the suit for adjudication afresh after bringing on record all necessary parties, including the corporation, the State, and the purchaser of the assets.

Conclusion: The ex parte decree and the execution orders were liable to be set aside, and the suit was rightly remanded for a fresh trial after impleadment of the necessary parties.

Final Conclusion: The appeal succeeded, the execution was terminated, and the underlying suit was restored for a de novo trial with all necessary transferees on record.

Ratio Decidendi: Where a statutory amalgamation order dissolves the original defendant and expressly provides that pending proceedings may continue only against the resulting entity, a decree cannot be executed against transferees who were not impleaded in the suit, and the proper remedy is to set aside the decree and permit fresh adjudication after impleadment of all necessary parties.

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