Auction sale and winding-up bar: procedural irregularity alone was insufficient, and prior attachment meant execution was already in force.

An auction sale was not set aside for want of a fresh proclamation because the omission was treated as a procedural irregularity only, and no substantial loss to the judgment-debtor was proved. The Court held that a later willingness by another public body to buy the property at a higher amount did not establish that a fresh proclamation would have produced a better bid. It also held that the winding-up bar did not render the sale void, because winding-up commences on presentation of the petition and the execution had already been put in force through prior attachment. The appeal therefore failed and the sale was upheld.

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Issues: (i) whether the auction sale was vitiated by material irregularity for want of a fresh proclamation and whether any substantial loss was shown; (ii) whether, after commencement of winding-up proceedings, the execution sale was void under the Companies Act because the execution had been put in force after commencement.

Issue (i): whether the auction sale was vitiated by material irregularity for want of a fresh proclamation and whether any substantial loss was shown

Analysis: The sale had been adjourned and re-fixed without a fresh proclamation, which was treated as an irregularity. However, the Court held that the objection could succeed only if the appellant established substantial loss. The later willingness of another public body to acquire the property for a higher amount did not show that, had a fresh proclamation been issued in March 1920, a better bid would in fact have been obtained. No material was found to support a finding that the judgment-debtor suffered substantial loss because of the omission.

Conclusion: The irregularity did not vitiate the sale, as no substantial loss was proved.

Issue (ii): whether, after commencement of winding-up proceedings, the execution sale was void under the Companies Act because the execution had been put in force after commencement

Analysis: The winding-up was held to commence on presentation of the petition. The Court construed the expression "any attachment, distraint or execution put in force" as a whole and concluded that the relevant execution was already in force when the property had been attached long before the petition. The sale was therefore not one initiated after the commencement of winding-up within the meaning of the section, and the statutory bar did not apply.

Conclusion: The sale was not void under the Companies Act.

Final Conclusion: The appeal failed on both grounds, and the sale was upheld with costs, while the Official Liquidator was allowed to take his costs out of the company assets.

Ratio Decidendi: For the purpose of the winding-up bar, execution is treated as put in force when the attachment has already been effected before commencement of winding-up, and a sale will not be set aside for procedural irregularity unless substantial loss is shown.

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