1. This is a first miscellaneous appeal from an order of the learned Additional Subordinate Judge, U. A. D., dated 18-2.1950 by which he ordered the execution to proceed in the following circumstances.
2. On 13-9-1948 the decree-holder in this case obtained a decree in the sum of Rs. 6,000 odd from the Court of the Subordinate Judge, U. A. D., at Silchar. After the passing of the decree an application was made to this Court in the exercise of its jurisdiction under the Companies Act, under Section 153, Companies Act. The Court, by its order, dated 1-10-1948 ordered that until the final disposal of the petition, the commencement and continuation of all suits and proceedings against the Company be stayed. The scheme was finally sanctioned by Ram Labhaya J., on 14-7-1949.
3. On 13-11-1948, the decree-holder started execution proceedings. On 7-3-1949, judgment-debtor 1 filed a petition praying for the stay of further proceedings for a period of six months on certain grounds. It would appear from the orders which the learned Subordinate Judge has passed from time to time that the proceedings in execution were adjourned to enable the judgment-debtor to obtain an order of stay from the High Court.
4. Apparently the learned Subordinate Judge was not aware of the order of this Court dated 1-10-1948 by which all proceedings which had commenced or were being continued against the Company were stayed. It is contended by Mr. Gupta for the opposite party that there was no final order passed by Ram Labhaya J., under the provisions of Sub-section (5) of Section 153, Companies Act, when passing the final order sanctioning the scheme, and that in the absence of an order under Sub-section (5) of Section 153, Companies Act, the executing Court was not bound to stay the execution of the decree.
5. This contention is clearly untenable. The order staying all proceedings, including execution proceedings, having been passed in 1948 when the petition for sanctioning the scheme was still pending, continued to be in force when the final order sanctioning the scheme was passed. The order staying the proceedings, dated 1-10-1948, could have been vacated only if Ram Labhaya J. had declined to sanction the scheme. On the scheme being sanctioned, it was not necessary to pass a formal order making the Rule issued on 1-10-1948 absolute.
6. The principal objection raised by Mr. Gupta to the appeal is that no appeal lies in that no final order has been passed in this case, which would attract the provisions of Section 47, Civil P. C. This contention has been dealt with in a judgment of the Division Bench of the Calcutta High Court in a case reported in Mahiganj Loan Office, Ltd. v Beharilal, 41 cal. W.N. 406, where it is stated 'An objection by the judgment-debtor that the decree has been superseded by the scheme sanctioned is an objection under Section 47, Civil P. C.' We find ourselves in agreement with this view and overruled the objection of Mr. Gupta.
7. The third point raised by Mr. Gupta was that the order passed by this Court on 1-10-1948 refers only to unsecured creditors, and that as the decree-holders in this case were secured creditors, it did not affect them. We are unable to accept this contention having regard to the terms of the order dated 1-10-1948 which refers to all the creditors; nor is there any substance in Mr. Gupta's contention in this behalf based upon the interpretation of Sub-section (6) of Section 153, Companies Act.
8. Mr. Gupta invited our attention to para. 7 of the petition of the decree-holder, dated 16-1-1950, in which it is stated that certain payments were made by the judgment-debtor to the decree-holder. Mr. Gupta's argument is that having made the payment, the judgment-debtor has waived the terms of the scheme which had given certain privileges to judgment-debtors against whom decree had been passed. This contention is clearly untenable. A judgment-debtor, if he wishes to pay earlier than the date prescribed by the sanctioned scheme, is not prevented from doing so. Such a payment cannot be regarded as a waiver.
9. The result is that the appeal succeeds. In the circumstances of this case, we make no order as to costs. The order of the learned Subordinate Judge ordering the execution to proceed is set aside.
10. We wish to point out that the scheme which has been sanctioned by this Court lays down the terms by which decrees exceeding Rs. 250 are to be enforced.
11. I agree.