Relief undertaking protection under the Gujarat Act can stay execution against local assets while foreign proceedings continue.

A notification declaring an undertaking a relief undertaking under the Bombay Relief Undertakings (Special Provisions) Act, 1957 suspends enforcement of pre-existing rights, liabilities and remedies during its currency. The Act cannot be given extra-territorial effect, but it validly operates within the State to bar execution against the undertaking's properties situated in Gujarat. Proceedings in a foreign court may continue, yet enforcement of the resulting order within Gujarat remains stayed while the notification is in force. Accordingly, the undertaking's Gujarat assets were protected from execution of the foreign court order, and the receiver was not entitled to take possession of those assets.

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Issues: Whether the notification declaring the undertaking a relief undertaking under the Bombay Relief Undertakings (Special Provisions) Act, 1957 barred enforcement of orders passed by a court outside Gujarat against the undertaking's properties situated in Gujarat.

Analysis: Section 4(1)(a)(iv) of the Act suspends the enforcement of pre-existing rights, liabilities and remedies during the currency of the notification. The provision cannot be read as giving the State Legislature extra-territorial effect, but it can validly operate within the State so as to interdict execution against the relief undertaking's properties situated in Gujarat. The pendency of proceedings outside the State is not suspended, yet enforcement of the resulting order within Gujarat stands stayed for so long as the notification remains in force.

Conclusion: The notification protected the undertaking's properties in Gujarat from execution of the foreign court order, and the receiver was not entitled to take possession of those assets.

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