1959 (3) TMI 79

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....2. The Execution petition was opposed by the appellant, the Official Liquidator, on the ground that permission under Sections 171 and 232 of the Indian Companies Act was necessary before the decree could be put1 into execution. 3. The circumstances that have led up to this appeal may be briefly stated. The respondents sold Ac. 1-91 cents of land lo the Godavary Sugars and Refineries Ltd., for a sum of Rs. 3,800/- under a registered sale deed. Since the vendee failed to pay the sale price, the respondents instituted O. S. No. 2 of 1950 on the file or the Subordinate Judge's Court, Eluru, for recovery of the money due to them. Pending the suit, the company was wound up on a creditor's petition by the High Court of Madras (Original ....

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....ng up shall be void." It is seen that it is Section 171 that requires the obtaining of the permission of court for purposes indicated in that Section, while Section 232 only states the consequence of the failure to obtain leave as mentioned in Section 171. Thus, Section 232 is only supplementary to Section 171. It visits the non-observance of the conditions mentioned in Section 171 with penal consequence, in that it renders the sale void. Section 171 requires permission not only for the filing of a suit against a company which has been wound up by a court but in regard to all other proceedings, be they original proceedings or those analogous to suit. It applies to proceedings of all kinds. This is made clear by the judgment of the Federa....

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....ication of the company's property in the pari passu satisfaction of its liabilities envisaged in Section 211 and other Sections of the Act, cannot be made to work in coordination, unless all creditors (except such secured creditors as are "outside the winding up" in the sense indicated by Lord Wrenbury in his speech in Food Controller v. Cork 1923 AC 647 at p. 671), are subjected as to their actions against the property of the company up the control of the court." That being the intendment of these Sections, we think that leave of the court is a condition precedent to the levying of execution of decree even in a case where leave had already been obtained for continuing the suit. It may be that the case of a secured creditor realising....