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Judgment
Thomas P. Joseph, J.—Petitioner claims to be the Director of a private limited company of which the second respondent is stated to be Managing Director. First respondent obtained a money decree against the said company, in O.S. No. 238 of 2006 of the Sub Court, Palakkad and launched execution. The said company was set ex parte in the execution proceeding on 22.11.2010. An item of property belonging to the said company was sold in court auction on 13.06.2012. It is submitted that the company had filed E.A. No. 543 of 2011 to set aside ex parte order but that application is not so for disposed of by the executing court. It is also the version of petitioner that though subsequent to the sale and its confirmation, entire decree amount was paid to the first respondent/decree holder on 13.06.2011. Claiming interest in the property sold petitioner in his capacity as Director of the company filed E.A. No. 414 of 2012 purportedly under Sec. 47 of the CPC (for short "the Code") requesting to set aside the sale and seeking other reliefs. There, he claimed that there was no proper notice served on the company in the execution proceeding, service was attempted to be made through a local daily which had only nominal circulation in the area where the company is situated and that there was no effective service of notice of execution petition and notice under Rule 66 of Order XXI of the Code on the company. The application was resisted by the 3rd respondent/auction purchaser.
Executing court found that no objection was raised at the appropriate stage after notice under Rule 66 of order XXI of the Code was served on the company, claim made by the petitioner comes under Rule 90 of Order XXI of the Code and that it is barred by limitation. E.A. No. 414 of 2012 was dismissed. Petitioner is aggrieved.
Learned counsel for the petitioner has raised various contentions as to the maintainability of the petition under Sec. 47 of the Code and merit of contentions raised. It is also submitted that a Director of the company has interest in the property of the company and hence he is entitled to make a claim under Sec. 47 of the Code. Learned counsel also argued on non-service of notice on the company in the execution proceeding and under Rule 66 of Order XXI of the Code.
Learned counsel for the second respondent submitted that the second respondent is impleaded in his personal capacity and not as representing the company.
Learned counsel for the 3rd respondent supported the order of court below contending that petitioner has no interest in the property as he is only a Director and that there was proper notice on the company.
In N.G. George Vs. Shirly Varkey and Others, a Division Bench of this court has held that application under Rule 90 of Order XXI is not maintainable at the instance of a shareholder of the company as he has no locus standi to apply for setting aside sale of property of the company. I must bear in mind that the company has a separate legal entity, distinct from its director or shareholders and that a director cannot even be held liable for liabilities of the company. I must also notice that it is not as if petitioner claims to be authorised by the company to move the application on its behalf. On the other hand, E.A. No. 414 of 2012 is preferred by the petitioner claiming to be the director of the company. Hence I am not inclined to entertain challenge of petitioner.
I have referred to the contention learned counsel has advanced as to the lack of proper notice on the company before property was brought up for sale. Learned counsel, placing reliance on the decision in Desh Bandhu Gupta Vs. N.L. Anand and Rajinder Singh, followed in A.G.M. Constructions (P) Ltd. Vs. Shibu Kumar, S. and Others has contended that when there is no service of notice under Rule 66 of Order XXI of the Code, it is a pre-sale illegality coming within the mischief of Sec. 47 of the Code for which period of limitation prescribed is 3 years. Learned counsel submits that an application under Sec. 47 of the Code at the instance of the company is maintainable.
Since I am not dealing with that question, it is not necessary for me to go into that contention. If the company is otherwise entitled to move such application it is for the company to do so. It is also submitted that E.A. No. 543 of 2011 filed by the company to set aside the ex parte order is still not disposed of. Learned counsel submits that the said application may be directed to be disposed of along with the application which the company proposes to file under Sec. 47 of the Code. Though, I am not inclined to issue any such direction, it is appropriate that E.A. No. 543 of 2011 (if not already disposed of) is kept alive for a month from this day.
Resultantly, this civil revision is disposed of directing the Learned Sub Judge, Palakkad to keep alive E.A. No. 543 of 2011 in E.P. No. 155 of 2004 in O.S. No. 238 of 2006 (if not already disposed of) for one month from this day. If in the meantime any application is preferred by the company, learned Sub Judge can then consider disposal of E.A. No. 543 of 2011 as provided under the law and after hearing the parties concerned.
It is also directed that delivery of property to the 3rd respondent will stand adjourned to a day after one month from this day.