CRP/6529/2012 of M/s. Acqua Dev India Ltd., Vs Kode Basava Venkateswar Rao, on 31 December 2024

COMMON ORDER

The Judgment Debtors1,2, and 5 filed C.R.P.No.6529[of][ 2012]against the order dated 31.07.2012in E.A.No.356 of 2008, E.P.No.33 of2003in O.S.No.10 of 1998 on the file of the PrincipalDistrict Judge,Ongole.

2. C.R.P.No.4657 of 2012 was filed by the 4*^ respondent-auctionpurchaser (auction-not confirmed) against the order[dated][ 31.07.2012][ in]E.A.No.357 of 2008 in E.P.No.33 of 2003 in O.S.No.10 of 1998 on the fileof Principal District Judge, Ongole.purchaser (auction-not confirmed) against the order[dated][ 31.07.2012][ in]E.A.No.357 of 2008 in E.P.No.33 of 2003 in O.S.No.10 of 1998 on the fileof Principal District Judge, Ongole.

3. a) One Kode Basava VenkateswaraRao,S/o Raghavaiah,1StrespondentinC.R.P.No.6529of2012and4threspondentinC.R.P.No.4657of 2012filed thesuit O.S.No.10of 1998 against M/sAcqua Dev India Limited and its Directors for recovery[of][ an][ amount][ of]Rs.6,61,027/- towards arrears of salary etc. The plaintiff[filed][ I.A.No.2067]of 1998 under Order XXXVIII Rule 5 of CPC and got attached[the][ landed]property of an extent of Ac.6.20 centsin different survey numbers ofMaddipadu village on 15.10.1998.The attachment was made absoluteon12.10.1999. Thedefendantsin thesuit wereset exparte and anexparte decree was passed on17.04.2003. The decreeholderfiledE.P.No.33 of 2003 to execute the decree and an auction was conductedrespondentinC.R.P.No.6529of2012and4threspondentinC.R.P.No.4657of 2012filed thesuit O.S.No.10of 1998 against M/sAcqua Dev India Limited and its Directors for recovery[of][ an][ amount][ of]Rs.6,61,027/- towards arrears of salary etc. The plaintiff[filed][ I.A.No.2067]of 1998 under Order XXXVIII Rule 5 of CPC and got attached[the][ landed]property of an extent of Ac.6.20 centsin different survey numbers ofMaddipadu village on 15.10.1998.The attachment was made absoluteon12.10.1999. Thedefendantsin thesuit wereset exparte and anexparte decree was passed on17.04.2003. The decreeholderfiledE.P.No.33 of 2003 to execute the decree and an auction was conducted on 10.11.2004. The revision petitioner in C.R.P.No.4657[of][ 2012] becamethe highest bidder. The executing Court did not confirm[the][ auction.]

b) One of the secured creditors filed Company Petition[No.84][ of]1996 on the file of the High Court of Andhra Pradesh against M/s AcquaDev India Limited, 1®‘ defendant in the suit, under Section 433 (e), 434(1) (b) and 439 of the Companies Act, 1956 for winding up of M/s AcquaIDev India Limited.On contest, the company petition[was][ allowed on]05.08.1999.M/s Acqua Dev India Limited was wound upunder theprovisions of the Companies Act and the Official Liquidator[was][ directed]to take charge of the properties including ten pumps.

c) Neither the pendency of the company petition nor the winding uporder was brought to the notice of the Civil Court.[The][ defendants][ in][ the]suit were set exparte and the Civil Court passed an exparte decree. TheDirectors of the 1®* defendant filed E.A.No.356 of 2008 under Sections 47and 151 of CPC to declare the decree dated 17.04.2003 as null and void.He also filed E.A.No.357 of 2008 under Sections 47 and 151of CPC todeclare the sale and other execution proceedings conducted by the Courtafter 05.08.1999 as null and void.

d) In the affidavit filed in support of the petitions,it was pleadedabout the filing of the suit; attachment of property; exparte decree in thesuit;filingof companypetition;passingof wound-uporderdated05.08.1999 and publication of the samein newspapers.It was furtherpleadedthat becauseof the wound-up order dated05.08.1999,theplaintiff has no right to proceed in the suit, unless and until he gets theleave of the tribunal under Section 446 of the Companies[Act.][ When]once wound-up order waspassed,theCivilCourt’s jurisdictionwassubject to leave of the tribunal/company Court and[thus,][ the][ decree][ and]

judgment in the suitis without jurisdiction anditis void.It was furtherpleaded that since the decree is void, the executing[Court][ could][ not][ have]proceeded with the execution of the decree. The plaintiff got knowledgeof the order in company petition.

4. Acounterwasfiledonbehalfofthedecreeholder.It wascontended, interalia, that the defendants filed written statement and later,they were set exparte.It was not pleaded in the written[statement][ about]tthe company petition. The other Directors filed E.As.[as][ well][ as][ I.As.][ and]they were dismissed. The petitioners earlier filed[I.A.Nos.954][ and][ 955][ of]2007 and later not pressed the same.contended, interalia, that the defendants filed written statement and later,they were set exparte.It was not pleaded in the written[statement][ about]tthe company petition. The other Directors filed E.As.[as][ well][ as][ I.As.][ and]they were dismissed. The petitioners earlier filed[I.A.Nos.954][ and][ 955][ of]2007 and later not pressed the same.

5. The 4*^ respondent filed a separate counter.It was[contended][ that]earlier E.A.Nos.919 and 920 of 2004 were filed and they were dismissed.E.A.Nos.1517 and 1518 of 2004 for restoration were filed and they werealso dismissed. The5*^ defendantin the suit filedE.A.Nos.1022and1023 of 2007 and they were dismissed. The petitioners filed an appealbefore the High Court vide ASSR No. 10681 of 2008 against the judgmentand decree in O.S.No.10 of 1998 with delay and the[same][ was][ dismissed]on 10.11.2010.The 4*^ respondent filed E.A.No.138 of 2011 to reopenthe E.P.No.33 df 2003 for confirmation of sale and eventually, prayed todismiss the petition.earlier E.A.Nos.919 and 920 of 2004 were filed and they were dismissed.E.A.Nos.1517 and 1518 of 2004 for restoration were filed and they werealso dismissed. The5*^ defendantin the suit filedE.A.Nos.1022and1023 of 2007 and they were dismissed. The petitioners filed an appealbefore the High Court vide ASSR No. 10681 of 2008 against the judgmentand decree in O.S.No.10 of 1998 with delay and the[same][ was][ dismissed]on 10.11.2010.The 4*^ respondent filed E.A.No.138 of 2011 to reopenthe E.P.No.33 df 2003 for confirmation of sale and eventually, prayed todismiss the petition.

6. During the enquiry, the 2"*^ petitioner examined himself[as][ PW.1]and got marked Exs.AI to A13. The auction purchaser[examined][ himself]as RW.1 and no documents were marked. The decree-holder, except thefiling counter, seems did not contest.and got marked Exs.AI to A13. The auction purchaser[examined][ himself]as RW.1 and no documents were marked. The decree-holder, except thefiling counter, seems did not contest.

7. TheexecutingCourthavingheldthatthedecreepassedinO.S.No.10 of 1998 violates Section 446 and 537 of the Companies Act,O.S.No.10 of 1998 violates Section 446 and 537 of the Companies Act, V, 1956, however, dismissed E.A.No.356 of 2008. E.A.No.357 of 2008 wasallowed,inpart,bysettingasidethesaleheldon10.11.2004oncondition of judgments debtors depositing the decretal[amount][ and][ 5%][ of]solatium on that amount, after deducting the amount already deposited,within 2 months.It was further observed that the decree-holder is entitledto withdraw the amount deposited by him together with[interest][ accrued]thereon as well as 5% solatium. Against the said common order, theabove two civil revision petitions were filed.

8. HeardSriAmbatiSudhakar,learnedcounselforjudgmentdebtors/defendants1, 2 and 5 and Sri Prabhunath Vasireddy,learnedcounselrepresentingSri MadhavaRaoNalluri,learnedcounselforauction purchaser.debtors/defendants1, 2 and 5 and Sri Prabhunath Vasireddy,learnedcounselrepresentingSri MadhavaRaoNalluri,learnedcounselforauction purchaser.9.Sri Ambati Sudhakar, learned counsel for judgment debtors[would]submit that the decree in O.S.No.10 of 1998 is nullity[because][ of][ wound]up order in C.P.No.84 of 1996 dated 05.08.1999. The[leave from]thetribunalisnecessary andtheauctionpurchaserisawareoflegalproceedings.HewouldsubmitthatinpursuanceoftheorderinE.A.No.357 of 2008, the entire amount was deposited[and][ the][ sale][ is][ not]confirmed in favour of the auction purchaser. The auction purchaser hasno right to challenge the proceedings.submit that the decree in O.S.No.10 of 1998 is nullity[because][ of][ wound]up order in C.P.No.84 of 1996 dated 05.08.1999. The[leave from]thetribunalisnecessary andtheauctionpurchaserisawareoflegalproceedings.HewouldsubmitthatinpursuanceoftheorderinE.A.No.357 of 2008, the entire amount was deposited[and][ the][ sale][ is][ not]confirmed in favour of the auction purchaser. The auction purchaser hasno right to challenge the proceedings.

10. Per contra, Sri Prabhunath Vasireddy, the learned counsel[would]contend that the execution application filed under[ 47][ of][ CPC]isnot maintainable and the order in C.P.No.84 of 1996 was not brought tothe notice of the Court.He would also submit that E.As. filed by the othershareholders earlier were dismissed.The statutory appeal filed by therevision petitioners/judgment debtors against the decree[was][ dismissed]due to delay.He would submit that the plaintiffisnot awareof thecontend that the execution application filed under[ 47][ of][ CPC]isnot maintainable and the order in C.P.No.84 of 1996 was not brought tothe notice of the Court.He would also submit that E.As. filed by the othershareholders earlier were dismissed.The statutory appeal filed by therevision petitioners/judgment debtors against the decree[was][ dismissed]due to delay.He would submit that the plaintiffisnot awareof the liquidationproceedings.Earlier C.R.P.No.4657of 2012 wasallowedhowever, the order was reviewed and the C.R.P. was restored.

11. Now, the point for consideration is;

Does the common order passed by the executing Courtorder dated 31.07.2012 in E.A.Nos.356 and 357 of 2008 inE.P.No.33of 2003in O.S.No.10of 1998 onthefileof1Principal District Judge, Ongole, suffer from any illegalitywarranting interference by this Court?

12. As seen from the narration supra, there is no dispute regarding thefiling of suit O.S.No.10 of 1998 by the plaintiff against M/s Acqua DevIndia Limited and its Directors for recovery of amount[towards][ arrears][ of]salary; attaching the propertiesin I.A.No.2067 of 1998on15.10.1998and making attachment absolute on 12.10.1999 and passing[of][ decree]on 17.04.2003 (exparte).filing of suit O.S.No.10 of 1998 by the plaintiff against M/s Acqua DevIndia Limited and its Directors for recovery of amount[towards][ arrears][ of]salary; attaching the propertiesin I.A.No.2067 of 1998on15.10.1998and making attachment absolute on 12.10.1999 and passing[of][ decree]on 17.04.2003 (exparte).

13. It is also an undisputed fact that one of the secured creditors filedC.P.No.84 of 1996 seeking to wind up the company and an order passed»by the company Court wound up the company on 05.08.1999.In theexecutionof thedecree,without knowingthe wound-uporder,theproperty was put to auction andit was knocked down for an amount ofRs.9,10,000/-, however, the auction was not confirmed.

14. Whether the petition under Section 47 of CPCis maintainable ornot?not?

15. It is appropriate to extract Section 47 of CPC, which[reads][ thus;]

Section47: Questionstobe determinedby the Court executing decree

(1) All questions arising between the parties to the suitin whichthedecree was passed, or their representatives, and relating to the execution,discharge or satisfaction of, the decree, shall be determined by the Courtexecuting the decree and not by a separate suit.

(2) XXX

(3) Where a question arises as to whether any person is[or][ is][ not][ the]representativeof a party, such questionshall,for the purposes of thissection, be determined by the Court.representativeof a party, such questionshall,for the purposes of thissection, be determined by the Court.

Explanation-1 - For the purposes of this section, a plaintiff whosesuit has been dismissed and a defendant against whom[a][ suit][ has][ been]dismissed are parties to the suit.

Explanation II.- (a) For the purposes of this section, a purchaser ofproperty at a sale in execution of a decree shall be deemed to be a party tothe suit in which the decree is passed; and(b)all questions relating to the delivery of possession of such property tosuch purchaser or his representativeshallbe deemed to be questionsrelating to the execution, discharge or satisfaction[of][ the][ decree][ within][ the]meaning of this section.

16. Thus, a perusal of Section 47 of CPC, the Executing[Court][ must]determine the questions relating to execution, discharge[or][ satisfaction][ of]the decree in the execution proceedings only and not by a separate suit.Explanation-1ofsub-rule(3)makesitclearthattheplaintiff anddefendant,whosesuitwasdismissed,arepartiestothesuit.Explanation-11 makesit clear that a purchaser of the property and anauction purchaser shall be deemed to be party to the[suit.]determine the questions relating to execution, discharge[or][ satisfaction][ of]the decree in the execution proceedings only and not by a separate suit.Explanation-1ofsub-rule(3)makesitclearthattheplaintiff anddefendant,whosesuitwasdismissed,arepartiestothesuit.Explanation-11 makesit clear that a purchaser of the property and anauction purchaser shall be deemed to be party to the[suit.]

17. The objection as to the nullity of the decree has to be decided bythe Executing Courtitself. A decree passed by aCourthavingnojurisdiction over the subject-matteris anullity anditsvalidity can bequestioned before the Executing Court also. The executing[Court][ can]decide whether the decree is void ab initio. The dispute[whether][ a][ decree]isnull andvoid duetotheCourt’slackof jurisdictionhastobenecessarily decidedunder Section 47of CPC.ImmadiLaxmiVs.Sreyabhilashi Chit Funds\ Sarwan Kumar Vs. Madanlal Agarwal^.Dhurandhar Prasad Singh Vs. Jai Prakash University^[Vasudev]Dhanjibhai Modi Vs. Rajabhai Abdul Rehman^the Executing Courtitself. A decree passed by aCourthavingnojurisdiction over the subject-matteris anullity anditsvalidity can bequestioned before the Executing Court also. The executing[Court][ can]decide whether the decree is void ab initio. The dispute[whether][ a][ decree]isnull andvoid duetotheCourt’slackof jurisdictionhastobenecessarily decidedunder Section 47of CPC.ImmadiLaxmiVs.Sreyabhilashi Chit Funds\ Sarwan Kumar Vs. Madanlal Agarwal^.Dhurandhar Prasad Singh Vs. Jai Prakash University^[Vasudev]Dhanjibhai Modi Vs. Rajabhai Abdul Rehman^

18. The question whether the provisions of Section 47 of the Code ofCivil Procedure can be invoked in the case of an ex parte decree and cana distinction be drawn between an ex parte decree anda decree onmerits for invoking the provisions of Section 47 of the CodeofcivilProcedure, was answered in affirmative by the Division Bench of thecomposite High Court in Kolli Purushotham Chowdhary Vs. Sri BalajiFinance Corporation and Anr®.

19. The Hon’ble Apex Court in Desh Bandhu Gupta Vs. N.L.Anandobserved as follows;

17. Under Section 47 all questions relating to execution, dischargeorsatisfaction of the decree should be determined by the Executing Courtalone. The pre-sale illegalities committed in the execution are amenable tothe remedy under Section 47. Post-sale illegalities or irregularities causingsatisfaction of the decree should be determined by the Executing Courtalone. The pre-sale illegalities committed in the execution are amenable tothe remedy under Section 47. Post-sale illegalities or irregularities causing ’ 2002 SuppI (1) ALD 126

^ AIR 2003 SC 1475

^ AIR 2001 SC 2552

V^AIR 1970 SC 1475\1997 (6) ALD 717\1997 (6) ALD 717

®(1994)1 see 131

\

K

substantial injury to the judgment-debtor are covered under Order 21Rule90. Sub-rule (1) thereof covers the field of material irregularities or fraud inpublicity or conducting the sale. Sub-rule (2) enjoins proof thereof and thecourt should find that by reason thereof the applicant[sustained][ substantial]injury. The total absence of drawing up of the proclamationof sale andsettlement ofits term by judicial applicationof mind[renders]thesaleanullity being void.It is covered by Section 47. The non-application of mindwhether sale of a part of the property would satisfy[the][ decree][ debt]is amaterial irregularity doing substantial injury to the appellant attracting Order21Rule 90.In either case the sale is liable to be set aside.Itis true thatthere is distinction between mere irregularity and material irregularities andthe sale is not liable to be set aside on proof of mere irregularity.It must bematerial irregularity and the court must be satisfied[that][ on][ account][ thereof]substantial injury was sustained by the appellant. The sale of 550 sq. yardsfor recoveryof apaltry sumof Rs7,780.33,without sellingaportionthereof, caused substantial injury to the appellant.”

20. As seen from the oral and documentary evidence, the[defendants]having filed written statement djd not contest the suit and they were setexparte.Ex.A1is copy of order in C.P.No.84 of 1996, whereby the1Stdefendant-company is ordered to be wound up much prior[to][ the][ decree]in the suit. In such circumstances, in the considered opinion of this court,an application filed under Sec 47 CPC would definitely[maintainable.][ The]executing court has to necessarily decide as to the excitability of thedecree in such circumstances.having filed written statement djd not contest the suit and they were setexparte.Ex.A1is copy of order in C.P.No.84 of 1996, whereby the1Stdefendant-company is ordered to be wound up much prior[to][ the][ decree]in the suit. In such circumstances, in the considered opinion of this court,an application filed under Sec 47 CPC would definitely[maintainable.][ The]executing court has to necessarily decide as to the excitability of thedecree in such circumstances.

21. The next question falls for consideration is. Whether[leave][ from][ the]Company Court/Tribunal is necessary? and Whether the[Directors][ of][ the]company can maintain a petition under Section 47 of[CPC?]Company Court/Tribunal is necessary? and Whether the[Directors][ of][ the]company can maintain a petition under Section 47 of[CPC?]

22. Section 446of the Companies Act,1956, whichisrelevantisextracted below:extracted below:

/

Section 446:- Suits stayed on winding up order

(1) When a winding up order has been made or the Official Liquidatorhas been appointed as provisionalliquidator,nosuitorotherlegalproceeding shall be commenced, or if pending at the date of the winding uporder, shall be proceeded with, against thecompany, except by leave ofthe Tribunal and subject to such terms as the Tribunal may impose.

(2) Tribunal shall, notwithstanding anything contained in any other lawfor the time being in force, have jurisdiction to entertain,or dispose of— dispose of— of—

or dispose of— dispose of— of—

(a) any suit or proceeding by or against the company; (b) any claim made by or against the company (including claims by oragainst any of its branches in India);

(c) any application made under section 391by or in respect of thecompany;(d) any questionofprioritiesor anyother questionwhatsoever,whether of law or fact, which may relate to or rise in course of thewindingup of the company.whether such suit or proceeding has been instituted or is instituted orsuch claim or question has arisen or arises or such application has beenmadeoris madebefore or after the order for the winding up of thecompany,orbeforeorafterthecommencementoftheCompanies(Amendment) Act, 1960 (65 of I960).]

(4) Nothing in sub-section (1) or sub-section (3) shall apply to anyproceeding-pending in appeal before the Supreme Court ora High Court.

23. A perusal of sub-section 1 of Section 446 would manifest thatupona winding up order, or upon the appointment of the OfficialLiquidator, thesuit or other proceedings, beit pending or to be instituted,shallnotproceed further except with the leave of the Tribunal.Thus, leave fromcompany Court/tribunal is a sine qua non to proceed further after thewinding up of a company is ordered.a winding up order, or upon the appointment of the OfficialLiquidator, thesuit or other proceedings, beit pending or to be instituted,shallnotproceed further except with the leave of the Tribunal.Thus, leave fromcompany Court/tribunal is a sine qua non to proceed further after thewinding up of a company is ordered.

24. The Hon’ble Apex Court in Harihar Nath and others Vs. StateBank of India and others^, considered the object of Section 446 of theCompanies Act and observed thus:Bank of India and others^, considered the object of Section 446 of theCompanies Act and observed thus:

18. The object of Section 446 of the Act is not to cancel, nullify or abateany claim against the company.Its object is to save the company whichhas been ordered to be wound up, from unnecessary litigation[and][ from]multiplicity of proceedings and protect the assets for equitable distributionamongitscreditorsandshareholders.Thisobjectisachievedbycompelling the creditors and others to come to the court which is windingup the company and prove their claims in the winding up. For this purpose,all suits and proceedings pending against the company are also stayedsubject to the discretion of the winding-up court to[allow][ such][ suits][ and]proceedings to proceed. When a winding-up order is passed, the effect isthat all the affairs pertaining to the companyin liquidation,includingallsuits/proceedings by or against the company, come within[the][ control][ and]supervision of the winding-up court. The winding-up[court][ has][ to][ decide]whetherit willlet the suit/proceeding to continueinthe court whereitispending, or it will itself adjudicate the suit/proceeding. Thus, under Section446(1), the winding-up court only decides about the[forum][ where][ the][ suit]has to be tried and disposed of...any claim against the company.Its object is to save the company whichhas been ordered to be wound up, from unnecessary litigation[and][ from]multiplicity of proceedings and protect the assets for equitable distributionamongitscreditorsandshareholders.Thisobjectisachievedbycompelling the creditors and others to come to the court which is windingup the company and prove their claims in the winding up. For this purpose,all suits and proceedings pending against the company are also stayedsubject to the discretion of the winding-up court to[allow][ such][ suits][ and]proceedings to proceed. When a winding-up order is passed, the effect isthat all the affairs pertaining to the companyin liquidation,includingallsuits/proceedings by or against the company, come within[the][ control][ and]supervision of the winding-up court. The winding-up[court][ has][ to][ decide]whetherit willlet the suit/proceeding to continueinthe court whereitispending, or it will itself adjudicate the suit/proceeding. Thus, under Section446(1), the winding-up court only decides about the[forum][ where][ the][ suit]has to be tried and disposed of...

20. It is now well settled thatif any winding-up orderis passedduring the pendency of a suit against the company, andif the suit iscontinued without obtaining leave in spite of that bar containedinSection 446(1), the decree passed is only voidable at the instance ofthe liguidator, and not void ab initio.In fact, where[such][ decree has]been passed against the company and others, the only person who canavoid the decree on the ground of non-compliance with Section 446(1) oftheAct,is theOfficialLiquidatorof the companyandnottheotherdefendants. A suit/proceeding filed against a company, prior to the order ofits winding up, does not come to an end on the passing[of][ an order][ of]

winding up. The order of winding up merely stays further proceedings inthesuit/proceeding.Thesuit/proceedingbecomesdormant.Variousalternatives are possible when a suit gets so stayed. The plaintiff in the suitcan move an application under Section 446(1) of the Act, and when leaveis granted, proceed with the suit.If the leave is refused, the suit may betransferred to the Company Court for being tried and disposed of underSection 446(2)(a) of the Act. The plaintiff may also file an application fortransfer of thesuit to the Company Court for disposalunderSection446(2)(a). Alternatively, the plaintiff may get the suit dismissed with libertyto make a claim under Section 446(2)(b) of the Act. Evenif thesuitisproceeded with, without obtaining leave of the Company Court, either notbeing aware of the order of winding up or ignoring the provisions of Section446(1), the resultant decree will not be void, but only be voidable at theinstance and option of the Official Liquidator of the company ...” (emphasisis mine)

25. Thus, given the expression of the Apex Court, the contention of SriAmbati Sudhakar, learned counsel for judgment debtors that because ofthe order in C.P.No.84 of 1996, the decree in suit O.S.No.10 of 1998 is tobe treated as void, falls to ground. The judgment and decree, at the mostis voidable. However, leave of the company Court/Tribunal is necessaryto proceed further or the plaintiff can as well get the suit transferred to thecompany Court for adjudication.

26. In the case at hand, as discussed swpra there is no dispute aboutthe winding up order passed by C.P.No.84 of 1996 dated 05.08.1999.Itis also appropriate to extract Section 537 of the Companies Act, 1956which reads thus:the winding up order passed by C.P.No.84 of 1996 dated 05.08.1999.Itis also appropriate to extract Section 537 of the Companies Act, 1956which reads thus:

S.537. Avoidance of certain attachments, executions, etc., in windingup by Tribunal

(1) Where any company is being wound up by Tribunal—

'*

(a) any attachment, distress or execution put in force, without leave ofthe Tribunal against the estate or effectsof the company,afterthecommencement of the winding up; or (b) any sale held, without leave of the Tribunal of any of the propertiesor effects of the company after such commencement shall be void.

(2) Nothing in this section applies to any proceedings for the recoveryof any tax or impost or any dues payable to the Government.

27. Asseenfromthe commonorder underrevision,inEx.A12application filed by the other Directors, the learned District Judgeseemsrecorded a finding that the decreeis invalid because of the liquidationproceedings. The auction purchaser, who was examined as RW.1in hiscross-examination deposed that a few days after the Court auction, hecame to know about the liquidation proceedings, however,neither heenquired about those proceedings nor approached the official liquidator.The decree-holder for the reasons best known did not comeinto thewitness box to rebut the allegations of judgment debtors regarding hisknowledge of winding up the proceedings initiated before the companyCourt.application filed by the other Directors, the learned District Judgeseemsrecorded a finding that the decreeis invalid because of the liquidationproceedings. The auction purchaser, who was examined as RW.1in hiscross-examination deposed that a few days after the Court auction, hecame to know about the liquidation proceedings, however,neither heenquired about those proceedings nor approached the official liquidator.The decree-holder for the reasons best known did not comeinto thewitness box to rebut the allegations of judgment debtors regarding hisknowledge of winding up the proceedings initiated before the companyCourt.

28. Thus, the oral and documentary evidence makes it evident that thedecree was passedafter the winding-up order was passedbythecompanyCourtandwithoutobtainingleave.Eventhesalewasconducted contrary to Sections 446 and 537 of the Companies[Act.]Ofcourse, as per the expressions of the Apex Court,itis for the OfficialLiquidator to challenge the proceedings, but not the judgment debtorsregarding the voidability of the decree.

29. Given the discussion supra, this Court is of considered opinion thatthe decree cannot be declared as a nullity. Since the judgment andthe decree cannot be declared as a nullity. Since the judgment and decree is voidable, the E.A. filed by the Judgment Debtors, in the facts ofthis case, is maintainable.

30. The propertyputto auctionis Ac.6.20cents.Asper EX.A11market valuecertificateasof 01.10.2004,thetotalvalueoflandisRs.24,42,040/-.The property wassoldinauction on10.11.2004forRs.9,10,000/-.The executing Court upheld the contention of judgmentdebtorsthattheauctionwasstagemanaged.InMadalaSuryaLakshmanaPrasadVs.KailakuriPattabhiRamaswamyandanother®, the learned single Judge of the composite High Court held thatthe judgment debtor cannotbe madetosufferfor thedefectsandirregularitiesin the sale effected by the executing Court.In fact,in thecaseat hand,the executingtheCourt whilesettingasidethesale,directed the judgment debtors to deposit the auction[amount][ with][ 5%]solatium and the judgment debtors complied with the[order.]The decreeholder seems to have withdrawn half of the amount by filing chequepetition.Regarding the withdrawalof the otherhalf,nomaterialisavailable onrecord.However,thiscourt presumes that[the]decreeholder might have withdrawn the amount, other he would[have][ contested]the revisions.market valuecertificateasof 01.10.2004,thetotalvalueoflandisRs.24,42,040/-.The property wassoldinauction on10.11.2004forRs.9,10,000/-.The executing Court upheld the contention of judgmentdebtorsthattheauctionwasstagemanaged.InMadalaSuryaLakshmanaPrasadVs.KailakuriPattabhiRamaswamyandanother®, the learned single Judge of the composite High Court held thatthe judgment debtor cannotbe madetosufferfor thedefectsandirregularitiesin the sale effected by the executing Court.In fact,in thecaseat hand,the executingtheCourt whilesettingasidethesale,directed the judgment debtors to deposit the auction[amount][ with][ 5%]solatium and the judgment debtors complied with the[order.]The decreeholder seems to have withdrawn half of the amount by filing chequepetition.Regarding the withdrawalof the otherhalf,nomaterialisavailable onrecord.However,thiscourt presumes that[the]decreeholder might have withdrawn the amount, other he would[have][ contested]the revisions.

31. If the sale is not confirmed, the right of the auction purchaser, beitdecree-holder or third party is in a nebulous stage, as held by the ApexCourt in Desh Bandhu Gupta Vs. N.L. Anand & Rajinder Singh®.Inthe case at hand,it is evident from the evidence that[the][ auction][ has][ not]been confirmed. When the auction purchaser applied for the reopening ofE.P.No.33of 2003,the judgment debtorsfiledthe aboveexecutionapplications.However, this Court will not adjudicate the issue regarding ® 2011 (5) ALT 267

^(1994)1 see 131

rM

the maintainability of revision filed by the judgment[debtors.][ That][ issue]will be decided in an appropriate case.

32. Given the discussion supra, this Court does not find any merit inboth the Civil Revisions. Hence, they are liable to[be][ dismissed.]both the Civil Revisions. Hence, they are liable to[be][ dismissed.]

33. Accordingly, the Civil Revision Petitions are Dismissed.However,no order as to costs.■As a sequel, pending miscellaneous petitions,if any, shall standno order as to costs.■As a sequel, pending miscellaneous petitions,if any, shall stand closed.

To

SD/- A.VIJAY BABUASSISTANT REGISTRAR//TRUE COPY//SECTION OFFICER

1. The Principal District Judge Ongole.2. OneCCto SRI. SUDHAKARA RAO AMBATI Advocate [OPUC]3. One CC to SRI. MADHAVA RAO NALLURI Advocate [OPUC]4. OneCCto SRI.PRABHU NATH VASIREDDY Advocate [OPUC]5. THREE CD COPIESTAC

I

HIGH COURT

DATED:31/12/2024

ORDERCRP.Nos.6529 & 4657 of 2012

DISMISSING THE CRPS

A\

5lO FEB 2025 \«»//^ Current Section.