1 chs875-10.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CHAMBER SUMMONS NO.875 OF 2010 IN EXECUTION APPLICATION (L) NO.565 OF 2006 IN SUMMARY SUIT NO.3049 OF 2004 The Mahalaxmi Glass Works Pvt Ltd .. Plaintiff/ Decree holders versus M/s.Janta Glass Works & Ors .. Defendants/ Judgment debtors Mr.Simil Purohit a/w Mr.Prakash Shinde, Ms.Dhwani Mehta i/by M.Dhruva & Co for plaintiff. Mr.H.Toor i/by Mishra & Co for the defendants-judgment debtors. CORAM : S.C.DHARMADHIKARI, J. 19th October 2011. P.C.: . This is a chamber summons moved by the judgment debtors. 2} It is contended on behalf of the judgment debtors in support of this chamber summons that the decree is sought to be executed against a limited company. The decree is passed against the firm and its partners. 2 chs875-10.doc The decree is not passed against this limited company. The decree is sought to be executed as it stands and that is impermissible in law. It is contended that if the decree holders wish to go ahead and execute the subject decree, it is incumbent upon them to amend the proceedings and only thereafter continue the execution. There is no amendment of the decree. The application for execution and title thereof remains the same. The decree is dated 5th October 2005. The limited company has been incorporated on 22nd February 2006. In these circumstances, unless and until there is compliance with law, the decree cannot be executed. Further, as far as the limited company is concerned, there is a mandate flowing from the Companies Act, 1956. The limited company cannot be proceeded with, save and except, compliance with that mandate. In these circumstances and when attached properties are also subject matter of the proceedings before the Debt Recovery Tribunal instituted by the UCO Bank, then, all the more this Court should not direct sale of the same. Two parallel forums will proceed against the company and that would only complicate the issues. In these circumstances, this chamber summons be made absolute. 3} Upon perusal of the chamber summons and the affidavit in 3 chs875-10.doc support, I do not find any substance in these contentions. In the affidavit in reply, the decree holders have clarified that the decree was passed against M/s.Janta Glass Works, a partnership firm carrying on business at 4, Parekh Market, M.G.Road, Ghatkopar, Mumbai 400 077 and all its partners are carrying on business as partners of defendant No.1. As far as the limited company is concerned, it is M/s.Janta Glass Ltd. It is very clearly stated in its Memorandum of Association that the very partners and persons constituting the firm have later on organised themselves and formed a limited company. There is a resolution which they have passed on 1st July 2005 to register a joint stock company within the meaning of section 566 of the Companies Act, 1956, as a company limited by shares under the provisions of Chapter IX of the Companies Act, 1956. The main objects are to carry on the business which is that of the firm. Therefore, the firm has been taken over with all assets and liabilities and any doubt has been clarified by stating in the memorandum itself that all properties of the firm, movable and immovable property, tangible and intangible, including actionable claims belonging to firm shall be vested in the company and all liabilities of the firm shall continue to be liability of the company after its registration in accordance with Part IX of the Companies Act, 1956 and the company 4 chs875-10.doc shall pay, observe, satisfy, perform and fulfill all agreements, arrangements and liabilities of the firm entered in the name of the firm. 4} Once, such is the factual position and the firm has been taken over by the limited company with all its assets, properties and liabilities, then, mere continuation of the name of the firm and its partners in the title of the execution application will not be of any relevance. Mr.Toor’s argument over looks the fact that what is required to be complied with is only some procedural matters. If an execution application can be amended in terms of the general power to amend conferred by the Code of Civil Procedure, 1908 and by taking recourse to Order XXI, Rule 17 of the Code, but that has not been done, that by itself and without anything more will not disentitle the decree holder from proceeding in execution. All the more, that does not mean that the judgment debtors can resist the decree or execution thereof. The decree has become final. This is not a case of the Court going behind the decree, but execute it in accordance with law. The Court can, therefore, for the purposes of execution look at the decree and if the judgment debtors’ liabilities are taken over by an entity which has been formed by very judgment debtors then this Court in the peculiar facts of this case 5 chs875-10.doc and on the decree holders requests can take note of this aspect and proceed with the execution. Precisely, that has been done and any error or inaction on the part of the decree holder will not be of any significance. In these circumstances and when there is a clear take over of the firm’s assets and liabilities, then, the execution can proceed. For all these reasons, there is no merit in this chamber summons and it is dismissed. If any amount is already deposited in this Court, there is no need to clarify that the registry shall make appropriate adjustments in the decree and thereafter proceed to recover the balance sum without accrued interest. 5} Liberty to apply for other reliefs. (S.C.DHARMADHIKARI, J)