TMI Blog1963 (6) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... Nellore, in A.S. Nos. 37 and 38 of 1956. These appeals arise out of two actions laid by the two appellants separately in O.S. Nos. 433 and 434 of 1954 to set aside the orders passed by the Subordinate Judge's Court, Nellore, in certain claim proceedings. For an appreciation of the contentions raised in these appeals, it is necessary to state a few material facts. In the year 1946, the appellant in L.P.A. No. 7 of 1962 and the appellant in L.P.A. No. 8 of 1962 who owned the transport vehicles, M.D.L. No. 564 and M.D.L. No. 428 and several others, formed a limited company called the Nellore Bus Transport Ltd., in which the transport vehicles belonging to the shareholders were pooled together and operated as. a fleet. One Subbarayudu, respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived, they brought two suits, O.S. Nos. 433 and 434 of 1954, to vacate the orders on the claim petitions on the allegation that the decree obtained against a defunct company was a nullity and that, at any rate, it could not be executed against the shareholders, who were entities distinct from the limited company. The suits were resisted by the defendant on the pleas that they were not maintainable, the remedy available to the plaintiffs being the one provided under section 47, Civil Procedure Code, that the decree was not a nullity and that, at any rate, it could be executed against the plaintiffs who, by withholding the information about the voluntary liquidation of the company, prevented the defendant from pursuing the remedies availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained against a company which has ceased to exist long before, that execution could not be levied against the properties of the appellants and even assuming that fraud was committed by the appellants, the only remedy available to the judgment-creditor was the one provided by section 243 of the Indian Companies Act, 1913. When an enactment has provided a special remedy to enforce the rights of a party, it is only that remedy that could be taken advantage of by any person and an ordinary action in a court of law could not be maintained to enforce such rights, continues the learned counsel. To substantiate this proposition, the learned counsel cited to us the rulings in Durga Shankar v. Raghuraj Singh [1955] 1 S.C.R. 267 Guruvayur Deva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned from availing themselves of other remedies available to them under law. That apart, as argued by Sri Kuppuswamy, learned counsel for the respondent, that having committed fraud and prevented the respondent from taking steps to invoke the section, it is not open to the appellants to take advantage of their fraud and plead that since the decreeholder had failed to have recourse to section 243 he is disabled from taking action to realise the fruits of his decree. This doctrine is based on the doctrine of equitable estoppel. In fact, it is this that has appealed to both the courts below and our learned brother. Dealing with the issue whether the appellants were guilty of fraud, this is what the lower appellate court stated and which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rue, do not bind the respondent who is entitled to proceed against the assets of the N.B.T. Company wherever they exist and has rightly attached the two buses as those of the N.B.T. Company who is the second defendant in O.S. No. 3 of 1949." These observations make it abundantly clear that the appellants were guilty of fraud. This finding of fact which is binding on us and, in fact, which has not been challenged, stands in the way of the appellants building an argument on section 243. As a result of their conduct, the voluntary liquidation is of no avail to them, and the judgment-creditor could proceed on the footing of there being no liquidation for the purpose of execution of his decree. In a similar situation, a Bench of the Madras H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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