THE PALGHAT WARIAR BANK LTD. (IN LIQUIDATION) THROUGH ITS OFFICIAL LIQUIDATORS Vs. MUNDAN KANDATH PURAKKAL RAMASWAMYS SON, PADMANABHAN AND ANR.

JUDGEMENT

(1.) THE interesting question of law debated before me in this second appeal is whether when a company in winding up attaches certain property in execution of a decree in its favour as that of its judgment -debtor, any claim petition by a third patty is to be regarded as "other legal proceeding" within the meaning of Section 171, Companies Act, which shall not be proceeded with or commenced against the company except by leave of the Court.

(2.) THE appellant before me is the plaintiff in the original suit who sued to set aside an order on a claim petition filed by defendant 1 on the basis of an assignment in his favour by defendant 2 regarding the rents of certain properties which had been attached by the plaintiff. The claim succeeded in the execution Court, and the case of the plaintiff is that the assignment was a sham transaction unsupported by consideration which was entered into by defendant 2 with a view to defeating the claim of the plaintiff in execution of its decree against defendant 2 in O. S. No. 195 of 1936 on the file of the District Munsif's Court at Palghat. Both the Courts below have found against the case of the plaintiff in the attack made against the transaction on its merits, and the only question which arises fair consideration is whether the claim proceeding started by defendant 1 and the order made on it by the execution Court should be regarded as null and void on account of want of the Court in the winding up under Section 171, Companies Act. On this latter question too, the Courts below have concurrently held against the plaintiff.

(3.) IT is observed in Palmer's Company Law, Edn. 19 by A. F. Topham K. C. at p. 404 :