Bom HC | Decree passed against a company can’t be executed against an individual; proprietor’s application for discharge allowed

Bombay High Court at Goa: C.V. Bhadang, J., discharged the petitioner (proprietor of the defendant Company) of the notice served upon him in an execution case.

The respondent filed a civil suit against one Harshad Trading Company a company incorporated under the Companies Act. As per the suit title, the Company was not shown to be represented by any person. The suit was decreed ex-parte against the defendant company. Thereafter, the respondent filed an application for execution of the decree pursuant to which a notice was served on the petitioner. He filed for discharge on the ground that he was neither a Director nor an employee of the Company. It was contended that he was the proprietor of the Company, which are two separate entities. However, Executing Court dismissed the petitioner’s application.

The High Court noted that the decree was passed against  Harshada Trading Company alone. It was well settled:  “where the decree is against the Company, which is an independent entity, the decree cannot be executed against any individual, being a Director or a person responsible for the conduct of the business of the Company.”

On the factual score, the Court said, “It was for the respondent to point out as to what are the assets of the Company, against which the decree can be executed. Such details can be obtained by the decree-holder from the office of the Registrar of Companies (RoC). Without doing any such exercise, the respondent is trying to execute the decree against an individual and that too, without showing that the petitioner is in anyway related to the Company-Harshada Trading Company.”

In such view of the matter, the impugned order of the Executing Court was set aside and the petitioner was discharged. [Belarmina Gowda v. Ranjith Nath, 2019 SCC OnLine Bom 588, Order dated 04-04-2019]

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