Demerger and share transfer shifted liability to the transferee, so ITDC could not be kept liable in execution.

A sanctioned demerger scheme and the subsequent share purchase agreement shifted the relevant business liabilities and pending proceedings to the transferee, so execution could not continue against ITDC merely because the decree had earlier been pursued in its name. The disclosed arbitration dispute and other outstanding liabilities formed part of the transaction record, and the purchaser could not avoid that position by alleging surreptitious insertion of terms while retaining the contract. The order discharging ITDC from liability under the decree was therefore upheld, and the challenge failed.

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Issues: Whether, after sanction of the scheme of arrangement and the subsequent share purchase agreement, the liability under the pending award and decree stood transferred away from ITDC so as to justify discharge of ITDC in execution proceedings.

Analysis: The sanctioned scheme of arrangement for demerger was binding and transferred the relevant business liabilities and pending proceedings to the transferee. The share purchase agreement also disclosed the outstanding litigation and liabilities, including the arbitration dispute, and the appellant had signed the agreement with that disclosure. A plea that the agreement contained information surreptitiously inserted did not help the appellant, particularly when the contract was not rescinded and the appellant continued with it. In execution, the court could not fasten liability on ITDC merely because the decree was being pursued and the appellant had remained unaware or inattentive to the disclosed liabilities. The governing principle was that continuation of proceedings by an assignee does not make the decree executable against the assignor when the liability has already shifted under the operative transactional and corporate arrangements.

Conclusion: The discharge of ITDC from liability under the decree was upheld, and the challenge to that order failed.

Final Conclusion: The appeal was rejected because the transferred liabilities and the approved demerger placed responsibility for the decree on the appellant rather than on ITDC.

Ratio Decidendi: Where a sanctioned demerger and a subsequent transfer agreement shift the relevant liabilities and pending proceedings to the transferee or purchaser, the assignor cannot be made liable in execution merely because proceedings had earlier been continued in its name.

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