TMI Blog1980 (4) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... passing of this resolution Kanwar Ram Chander had filed a suit against the said company for recovery of Rs. 13,000 which was decreed on November 6, 1967, and on July 15, 1968, he got attached the land belonging to the company, measuring 22 bighas, 8 biswas bearing Khasra No. 31 and 410/28 situated at Asadpur, Delhi. The executing court by order dated September 6, 1968, directed sale of the said land but the auction did not take place. On January 3, 1969, the liquidator filed a petition under section 518 of the Act alleging that Kanwar Ram Chander and six others had obtained seven money decrees against the company, that Kanwar Ram Chander, decree-holder, got attached the said land, that the land had been acquired by the Union of India and notifications under sections 4, 6 and 9 of the Land Acquisition Act had been issued and prayed that the attachment and order for sale of the land passed by the court of Ch. Shamsher Singh, sub judge, 1st Class, Delhi, in Suit No. 761 of 1977 and Execution Case No. 77 of 1968 be set aside and the land be ordered to be released and that further proceedings in execution be stayed. The seven decree-holders filed application C.A. No. 115 of 1969 befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Acquisition Act, 1894. They, however, state that they are still entitled to attach the land in question with a view to leave no room for doubt in regard to their locus standi for taking appropriate proceedings in case compensation for land is assessed and it is found to be necessary that the application for enhancement of compensation is to be made. Mr. Mehra has no objection to this being done subject to the law of the land, but he says that this will not give any preference to these petitioners as far as their right to realise their debt from the company is concerned. I have heard the learned counsel for the parties. The contention of the petitioners subject to the provisions of the Land Acquisition Act seems to be justified. Petitioners Nos. 2 to 7 may be allowed to take out execution and to have attachment of the land in question subject to the law in force. This attachment will not give them any special priority except to the extent permissible in law. The learned counsel for the parties are agreed that no further order is called for in C.A. No. 190 of 1969. This application is, therefore, disposed of in terms of this order. No costs". According to this order the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , C.A. No. 269 of 1973, of the liquidator on the ground that the liquidator having failed to file an appeal against the order of the executing court dismissing his objections against the auction sale, is debarred from moving the company judge to get the sale declared as null and void. 3.The liquidator in voluntary winding-up proceedings is authorised to act under section 526 of the Companies Act without any order from the company judge and that he waived his right, if any, when he allowed the executing court to conduct the auction sale. Point No. 1 : The company, M/s. Tanwar Finance Private Ltd., is being wound up voluntarily under the supervision of the court. The attachment of the land belonging to the company had taken place on July 15, 1968, while the special resolution for voluntarily winding up was passed on November 16, 1968. The company judge by order dated April 15, 1969, on the agreement of the liquidator and the seven decree-holders stayed execution proceedings in their decrees and directed them not to get the property sold in execution without leave of the court under section 537 of the Act. He further directed that the question whether leave should be granted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchaser who might have the right in the land purchased to move for enhancement of compensation. As preference to the decree-holders was disallowed it is also obvious that the permission for sale was also refused to them. All these observations are based on the ground that there is no specific order granting leave to any of the decree-holders to get the land sold in execution of any decree. Reading the order dated January 19, 1970, as a whole, the conclusion is that the six decree-holders other than Kanwar Ram Chander were allowed to take out the execution and attach the land in question. Counsel for the appellant-auction purchaser on the other hand contends that Kanwar Ram Chander had already got the land attached and, therefore, this order be deemed to have permitted him to get the land sold. There is no force in this argument. Kanwar Ram Chander got the property attached prior to winding up. He prayed for leave to get the property sold but no order was passed granting him such leave. The other decree-holders, i.e. , petitioners Nos. 2 to 7 in C.A. No. 190 of 1969, were keen to get some benefit by getting the land attached and, therefore, they only obtained leave for attachment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the date of the winding-up order the same cannot be continued except by the leave of the court. Further, the company court has been given absolute powers to entertain or dispose of any suit pending before any court against the company. The company court has also power to transfer a case pending in any court to its own file and to dispose it of. Section 518 of the Act reads : "518. Power to apply to court to have questions determined or powers exercised. (1) The liquidator or any contributory or creditor may apply to the court ( a )to determine any question arising in the winding-up of a company; or ( b )to exercise, as respects the enforcing of calls, the staying of proceedings or any other matter, all or any of the powers which the court might exercise if the company were being wound up by the court. (2) The liquidator or any creditor or contributory may apply to the court specified in sub-section (3) for an order setting aside any attachment, distress or execution put into force against the estate or effects of the company after the commencement of the winding-up. (3) An application under sub-section (2) shall be made ( a )if the attachment, distress or execut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale conducted without leave. Under section 537 of the Act sale of any property of the company held after the winding-up order of the court without its leave is void. Thus, it will be seen that the proceedings under section 446 read with section 518 of the Act are independent of the proceedings under the CPC before the executing court. If the company court comes to the conclusion by interpreting its own order that no leave was granted for the sale of the property, the sale shall be deemed to be void within the meaning of section 537 of the Act. The question for decision is what is the effect of the order dated March 23, 1973, passed by the executing court confirming the auction sale. The order of the executing court, in view of section 537 read with sections 446 and 518 of the Act, must be held to be nonest because the sale was void having been held without leave of the company court. The order of the executing court thus cannot be said to be binding upon the company court. On the other hand the order passed by the company judge would be binding upon the parties and the executing court, because the company judge has power to decide such question notwithstanding any other provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether by the court. (3) In the construction of the provisions whereby the court is empower ed to direct any act or thing to be done to or in favour, of the liquidator, the expression 'liquidator' shall be deemed to mean the liquidator con ducting the winding-up, subject to the supervision of the court". It is contended by the learned counsel for the appellant that the liquidator in voluntary winding-up of the company subject to the supervision of the court has wide powers within the meaning of sub-section (1). His contention is that no restrictions were imposed upon the liquidator by the court, and, therefore, when the liquidator contested the auction proceedings before the executing court he is deemed to have power to consent to the sale either expressly or by implication. By "implication" he means that the liquidator contested the auction sale by filing objections against the sale and when his objections were dismissed and no appeal was pursued, he is deemed to have consented to the sale by the executing court. In other words the liquidator waived his right to object to the sale. There is no force in this argument. The liquidator has not sold the land in question. The land wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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