GOVERNMENT OF ORISSA versus M/S. ASHOK TRANSPORT AGENCY AND ORS.

Citation: [2004] SUPP. 5 S.C.R. 1081 · Decided: 05-11-2004 · Supreme Court of India · Bench: R.C. LAHOTI · Disposal: Appeal(s) allowed

Judgment (excerpt)

' ,;. 
,) 
GOVERNMENT OF ORISSA 
v. 
M/S. ASHOK TRANSPORT AGENCY AND ORS. 
NOVEMBER 5, 2004 
[R.C. LAHOTI, CJ., G.P. MA THUR AND 
P.K. BALASUBRAMANY AN, JJ.] 
Code of Civil Procedure, 1908; O. lX R. 9; O.XX/l R. l O; Ss.115 and 146/ 
Companies Act, 1956; Section 396: 
A 
B 
c 
Recovery Suit against a Government company filed by a claimant/ 
creditor-Dismissed by trial Court-Application for restoration of the suit-
lssuance of Amalgamation order by the Central Government merging the 
company with State-Corporation, allowing creditors to enforce their claims 
against the company-Suit restored and decreed ex-parte--Decree not satisfied D 
by the judgment debtors-E.xecuting Court held the decree executable as against 
the Corporation and the State Government-Challenge to-Dismissed by High 
Court--On appeal, Held: Since judgment debtors did not prosecute a defence 
against execution of the decree by getting themselves impleaded in the suit, it 
is not open to them to challenge the executability of the decree-As all the 
parties not impleaded before proceeding in the suit, ex-parte decree set aside E 
and the suit revived and remitted to the trial Court for disposal afresh in 
accordance with law-Orissa Mining Corporation Limitation (Amalgamation) 
Order, 1991; Clauses 7 and 12-Constitution of India, 1950-Article 2d(J). 
Respondent, a transport Agency (creditor) filed a recovery suit 
against a Government company. The suit was dismissed for default by F 
the trial Court. Respondent filed an application for restoration of the suit, 
which was heard by the Court, but order was not pronounced. In the 
meantime, Government of India issued an Amalgamation order merging 
the Government Company with the Orissa Mining Corporation Limited, 
a Government of Orissa Company. In terms of the order, the rights and G 
obligations of the Government Company were also taken over by the 
Corporation with liberty given to claimants to continue prosecution of 
their suits. Later, the Government of Orissa in exercise of powers 
conferred under Article 213(1) of the Constitution got the company 
1081 
H 
1082 
SUPREME COURT REPORTS [2004) SUPP. 5 S.C.R. 
A transferred and vested in itself and later sold it to Tata Iron & Steel 
Company. 
The Court restored and decreed the suit ex-parte. The decree having 
not been satisfied, Respondent filed an Execution Petition against the 
B 
Judgment debtors, viz. the Company, the Corporation and the State 
Government. The Executing Court held that the decree was executable 
as against the Corporation and the State government as they were 
successor-in-interest of the judgment debtor. Revision Petition filed by 
the aggrieved parties was dismissed by the High Court. Hence the present 
appeal. The appeal was heard by a Division Bench of the Supreme Court. 
c There arose a difference of opinion and the matter was referred to the 
present Bench of three Judges. 
Allowing the appeal, the Court 
HELD: 1.1. It was for the Corporation, and subsequently for the 
D State of Orissa, to get themselves impleaded in the suit and to prosecute 
a defence, not inconsistent with the defence already set up by the defendant 
in its written statement. Neither the Corporation nor the Government of 
Orissa took that step. In such a situation, normally, it is not open to the 
Corporation or the Government of Orissa to challenge the executability 
of the decree as against them. (1087-D-E] 
E 
1.2. By virtue of Clause 12 of the Amalgamation order, a dissolution 
of the defendant-company was brought about and it was provided that 
no person shall make, assert or take any claims demand or proceedings 
against the dissolved company, but claimants like the appellant and other 
F 
creditors were not deprived of their right to proceed with the enforcement 
of their claims against the dissolved company in terms of the Order. The 
appellant was given the right to proceed with the suit as against the 
Corporation in terms of Clause 7 of the Order and also an obligation was 
cast on the appellant to implead the Corporation as well in the suit, and 
to proceed with the same. [1087-G; 1088-BI 
G 
1.3. On the terms of the Amalgamation Order, the claimant did have 
the right to proceed with the pending application for restoration and the 
suit as against the Corporation by taking appropriate steps in that behalf. 
It was the plain duty of the Company to bring to the notice of the Court 
the fact of promulgation of the Amalgamation order so as to 

Excerpt shown. Read the full judgment & AI analysis in Lexace.