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1970 Supreme(SC) 400

SUPREME COURT OF INDIA
J.C. SHAH AND A.N. GROVER, JJ.
Bansidhar Sankarlal, Appellant
Versus
Md. Ibrahim and another, Respondents.
Civil Appeal No. 1927 of 1966, D/- 25-9-1970.
Advocates appeared
Mr. G. L Sanghi, Advocate, and M/s. Jnanendra Lal and B. R. Agarwal Advocates of M/s. Gagrat and Co., for Appellant; Mr. Sukumar Ghose, Advocate, for Respondent No. 1.

Headnote:COMPANY ORDERED TO BE WOUND UP DURING PENDENCY OF SECOND APPEAL FILED BY COMPANY—LIQUIDATORS PROSECUTING SECOND APPEAL—FRESH SANCTION WHETHER NECESSARY FOR EXECUTION - SANCTION UNDER SECTION 457—WHETHER DISPENSES WITH LEAVE UNDER SECTION 446—EXECUTION OF DECREE AGAINST COMPANY ORDERED TO BE WOUND UP—LEAVE WHETHER CONDITION PRECEDENT -

       -there is no evidence on the record whether the liquidators obtained the sanction of the Court under Section 457. But, as held in the case of Bansidhar Sankarlal v. Md. Ibrahim, AIR 1971 SC 1292 :41 Com. Cas. 21 :1971 Tax L.R. 740, there is no reason to suppose that the liquidators did not obtain the sanction of the Court. If sanction of the Court under Section 457 to prosecute the appeal before the High Court was obtained, and it must be so assumed, it would be plainly unnecessary to obtain fresh sanction to the institution of execution proceeding at the instance of the successful party, for an execution application is only a continuance of the suit and the control of the High Court ensures during the execution proceeding also.

       -even granting that sanction under Section 457 does not dispense with the leave, under Section 446, to institute a proceeding in execution against a Company ordered to be wound up, there is nothing in the Act which makes the leave a condition precedent to the institution of a proceeding in execution of a decree against the Company and failure to obtain leave before institution of the proceeding entails dismissal of the proceeding. The suit or proceeding instituted without leave of the Court may be regarded as ineffective until leave is obtained, but once leave is obtained the proceeding will be deemed instituted on the date granting leave,

       

Judgment

SHAH, J. - Mohammed Ibrahim (hereinafter called "the plaintiff") instituted an action in the Court of the Subordinate Judge, Alipore for a decree in ejectment in respect of land occupied by the Luxmi Spinning and Weaving Mills Ltd. as his tenant. The suit was decreed on October 1, 1953. Before the decree was passed, the Company had executed on January 31, 1951 a deed in favour of Bansidhar mortgaging its fixed assets for securing repayment of Rs. 1,25,000/-. After the decree of the Trial Court, the Company executed on January 21, 1954 a second deed also in favour of Bansidhar mortgaging the fixed assets for repayment of an additional sum of Rs. 2,00.000/-. The decree of the Subordinate Judge in the plaintiff s suit was confirmed on August 4, 1951 Against that decree the Company and Bansidhar preferred Second Appeal No. 1380 of 1954 to the High Court of Calcutta. Bansidhar also filed a suit in the High Court of Calcutta on its original side to enforce the two mortgages in his favour and obtained a preliminary mortgage decree in the suit on May 13, 1955. Another creditor of the Company applied for and obtained on August 22, 1955 an order directing that the Company be wound up. The liquidators of the Company and Bansidhar prosecuted the Second Appeal No. 1380 of 1954. The decree of the District Court was confirmed by the High Court in its appellate jurisdiction on February 22, 1958. The plaintiff then instituted an application for enforcement of the decree in ejectment against the Company without obtaining leave of the High Court of Calcutta under Section 171 of the Indian Companies Act. 1913. On December 17, 1958, Bansidhar filed a petition contending that the application for enforcement of the decree was not maintainable without leave of the High Court which ordered that the Company be wound up. On the motion of the plaintiff the Company Judge granted leave to execute the decree in Second Appeal No. 1380 of 1951. The Subordinate Judge before whom the proceedings were pending, dismissed the application filed by Bansidhar, and the order of dismissal was confirmed by the Additional District Judge and by the High Court in Second appeal Bansidhar s petition for a certificate for appeal to this Court under Article 133 (1) 16) and (c) of the Constitution was also rejected. Bansidhar then preferred two petitions for special leave to this Court - one against the order of the High Court dismissing his Second Appeal against the order in the execution proceedings, and the other against the order of the High Court refusing to certify the appeal under Article 133 (1) (b) and (c) of the Constitution. This Court dismissed the petition against the order of the High Court in Second Appeal and granted special leave to appeal against the order of the High Court refusing to certify the case.

2. The order passed by the High Court in Second Appeal having affirmed the order of the District Court unless the appeal preferred to this Court involved some substantial question of law, of public or private importance, the case could not be certified under Article 133 (1) (b) even if the proposed appeal involved directly or indirectly some claim or question respecting property of value not less than Rs. 20,000/-. The High Court could not also certify the case as a fit one for appeal under Article 133 (1) (c) if in the view of the Court unless it raised a question of some general or public importance.

3. Counsel for the appellant says that the Subordinate Judge was incompetent to entertain the application for executing the decree in Second Appeal No. 1380 of 1954, unless the High Court of Calcutta in its company jurisdiction granted leave to execute the decree under Section 171 of the Indian Companies Act. 1913. Counsel urged that leave of the High Court is by the terms of Section 171 of the Indian Companies Act made a condition precedent to the institution of a proceeding against a Company ordered to be wound up by the Court, and that the application fo















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