Execution of company court orders as decrees can qualify for rateable distribution under civil procedure law.
An order made under section 186(1) of the Indian Companies Act, 1913, when enforceable under section 199 as if it were a decree, is treated as an application for execution of a decree for the purposes of section 73(1) of the Code of Civil Procedure, 1908. Reading the execution provisions together, the applicant satisfies the statutory requirement of having applied for execution of a decree and may claim rateable distribution of assets. The narrower construction excluding such an order from section 73(1) is rejected, and the claimant's objection succeeds.
Issues: Whether an order made under section 186(1) of the Indian Companies Act, 1913 and enforced under section 199 of that Act can be treated, for the purpose of section 73(1) of the Code of Civil Procedure, 1908, as an application for execution of a decree so as to entitle the applicant to rateable distribution of assets.
Analysis: Section 199 of the Indian Companies Act, 1913 provides that orders made under the Act may be enforced in the same manner as decrees of the Court in a suit. Section 36 of the Code of Civil Procedure, 1908 similarly applies the provisions relating to execution of decrees to the execution of orders. Reading these provisions together, an execution application based on an order under section 186(1) is to be treated as an application for execution of a decree for the purposes of section 73(1). The requirement that the applicant must have applied for execution of a decree is therefore satisfied, and the narrower view that such an order falls outside the scope of section 73(1) is rejected.
Conclusion: The applicant was entitled to share in the rateable distribution, and the objection to its claim failed.
Final Conclusion: The appeal succeeded, the contrary orders were set aside, and the matter was sent back for adjustment of the parties' rights in accordance with the decision.
Ratio Decidendi: An order under section 186(1) of the Indian Companies Act, 1913, when made enforceable as a decree, is to be treated as an execution of a decree for the purposes of section 73(1) of the Code of Civil Procedure, 1908.
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