Leave of the winding-up court is required for execution against a company in liquidation; execution without leave is void.

Sections 171 and 232 of the Companies Act require court leave for proceedings against a company in liquidation and render any attachment, distress or execution effected without such leave void; accordingly, leave obtained merely to continue an underlying suit does not authorise subsequent execution or sale and fresh leave must be obtained at the execution stage. The provisions aim to ensure single-agency asset distribution and protect pari passu treatment of creditors. A secured creditor who realises security outside the winding-up process may be unaffected, but once legal proceedings for realisation are initiated the statutory leave requirement applies.

---

---

Issues: Whether leave of the winding-up court is a condition precedent to the execution of a decree against a company in liquidation, where leave had earlier been granted to continue the underlying suit.

Analysis: Sections 171 and 232 of the Indian Companies Act require court permission for suits or other proceedings against a company after a winding-up order; Section 232 prescribes that any attachment, distress or execution put in force without leave is void. The provisions are read together: Section 171 imposes the requirement of leave for commencement or continuation of proceedings and other analogous processes, while Section 232 supplies the consequence for non-compliance. The object of these provisions is to ensure a single agency for distribution of the company's assets and to protect pari passu distribution among creditors. Leave obtained merely to continue the suit does not automatically authorise execution or the levying of attachment or sale; fresh leave is required at the execution stage. A secured creditor who realises security without resort to the winding-up court may be outside the winding up, but where legal proceedings for realisation are initiated, the statutory leave requirement applies.

Conclusion: Leave of the winding-up court is a condition precedent to the levying of execution or enforcement resulting in sale against a company in liquidation; leave to continue the suit does not dispense with fresh leave for execution. The appeal is allowed and respondents must obtain leave of the winding-up court before proceeding with execution.

Ratio Decidendi: Leave of the winding-up court is required for execution, and any attachment, distress or execution put in force without such leave is void under the Indian Companies Act.

---