Case Law Companies Act Shri Ram Narayan Vs The Shimla Banking & Industrial Company Ltd

PETITIONER:

SHRI RAM NARAIN

Vs.

RESPONDENT:

THE SIMLA BANKING & INDUSTRIAL CO.LIMITED.

DATE OF JUDGMENT:

09/05/1956

BENCH:

JAGANNADHADAS, B.
BENCH:
JAGANNADHADAS, B.
BOSE, VIVIAN
SINHA, BHUVNESHWAR P.

CITATION:
1956 AIR 614 1956 SCR 603
ACT:
Banking Companies Act, 1949 (X of 1949) as amended by Act
LII of 1953, ss. 45-A, 45-B, 45-C-Displaced Persons (Debts
Adjustment) Act, 1951 (LXX of 1951), ss. 3, 28-Overriding
effect as against all other laws-Purpose and policy of the
two Acts-Tribunal under Act LXX of 1961-Whether a Court-
Transfer of proceedings under s. 45-C of the Banking
Companies Act-Period of limitation.

 

HEADNOTE:
The appellant, a displaced person, bad a fixed deposit in
the Lahore Branch of the respondent Bank which had its
head-office at Simla, and he also had at the time a cash-
credit account in the Bank. As the Bank refused to pay the
amount of fixed deposit on its maturity but adjusted -it
towards part payment of the amount said to be due from him,
he filed an application to the Tribunal at Banaras under s.
4 of the Displaced Persons (Debts Adjustment) Act, 1951,
claiming the amount of the fixed deposit as a debt due from
the Bank. During the pendency of the application there were
proceedings taken for winding up the Bank in the High Court
of Punjab. On the 3rd January 1953 a decree was passed by
the Tribunal and the appellant filed an application before
it for execution of the decree, which, ultimately, was
transferred to the Bombay High Court under the provisions of
the Code of Civil Procedure. The appellant’s application
before the Bombay High Court for the attachment of the
property belonging to the Bank and situate in Bombay was
ordered on the 18th June 1954. On the 26th June 1954 the
Official Liquidator of the Bank obtained an order from the
Punjab High Court purporting to be one under s. 45-C of the
Banking Companies Act, transferring to itself from the Court
of the Banaras Tribunal the proceedings before it for
execution of the decree obtained against the Bank by the
appellant, and subsequently the order of attachment passed
by the Bombay High Court was set aside by the High Court of
Punjab on the ground that (1) the provisions of the Banking
Companies Act as amended in 1953 had an overriding effect,
and that exclusive jurisdiction was vested in the Punjab
High Court notwithstanding anything in the Displaced
-Persons (Debts Adjustment) Act, 1951 and (ii) there was a
valid order of transfer to the Punjab High Court, of the
execution proceedings taken by the appellant in respect of
his decree. The appellant appealed to the Supreme Court.
Held, that (1) in view of the wide and’ comprehensive
language of ss. 45-A and 45-B of the Banking Companies Act,
1949, as
604
amended in 1953, the proceeding to execute the decree
obtained by the appellant from the Tribunal against the Bank
and all other incidental matters arising therefrom are
within the exclusive jurisdiction of the Punjab High Court;
(ii) whatever may be the inter se position between the
provisions of the Banking Companies Act and those of the
Displaced Persons (Debts Adjustment) Act in so far as such
provisions relate to displaced debtors, the jurisdiction
clearly and definitely vested in the High Court by the very
specific and comprehensive wording of s. 45-B of the Banking
Companies Act cannot be said to be overridden or displaced
by anything in the Displaced Persons (Debts Adjustment) Act,
in so far as they relate to displaced creditors;
(iii) the Tribunal which is to exercise the jurisdiction
for executing the decree in question is a “court” within the
meaning of s. 45-C of the Banking Companies Act, whatever
may be its status when it passed the decree as a Tribunal;
(iv) having regard to the scheme and policy of ss. 45-B and
45-0 of the Banking Companies Act, in respect of pending
matters which have not been brought to the notice of the
Court by the Liquidator within three months, there is
nothing to prevent the Court exercising its power of
transfer at such time when it is brought to the notice of
the Court.

 

JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 313 of 1955.
Appeal by special leave from the judgment and order dated
the 12th May 1955 of the Punjab High Court at Chandigarh in
Liquidation Miscellaneous No. 72 of 1954.
J. B. Dadachanji. and Rameshwar Nath, for the appellant.
M. C. Setalvad, Attorney-General for India and Ratanlal
Chowla, for the respondent.
1956 May 9. The Judgment of the Court was delivered by
JAGANNADHADAS J.-This is an appeal by special leave against
an order of the High Court of Punjab dated the 12th May,
1955, in the following circumstances.
The appellant was a resident of Lahore who came over to
India in or about November, 1947, and took up residence at
Banaras as a displaced person. He
605
had, prior to the 15th August, 1947, a fixed deposit of Rs.
1,00,000 in the Lahore Branch of the Simla Banking and
Industrial Co. Ltd. (hereinafter referred to as the Bank)
which had its head-office at Simla. He had also at the time
a cash-credit account in the Bank. The fixed deposit
matured in 1948. The Bank did not pay the amount to the
appellant in spite of repeated demands but seems to have
adjusted it towards part payment of a sum of Rs. 4,00,000
which is alleged to have been due from the appellant to the
Bank in his cash-credit account and which the appellant
disputed and denied. On the 7th November, 1951, the
Displaced Persons (Debts Adjustment) Act, 1951 (LXX of 1951)
was passed providing certain facilities and reliefs to
displaced debtors and displaced creditors. Section 4 of
that Act empowered the State Government to specify any civil
court or class of civil courts, ,As the Tribunals having
authority to exercise jurisdiction under the Act for areas
to be defined therein. Section 13 of the Act enabled a
displaced creditor claiming a debt from any person who is
not a displaced person to make an application for recovery
thereof to the Tribunal having local jurisdiction in the
place where the said creditor resides, and provided for the
purpose a special limitation of one year from the date when
the Act came into force. Admittedly the appellant is a
displaced person, and the Bank is not a displaced Bank,
within the meaning of those expressions as defined in the
said Act. Taking advantage of these provisions, the
appellant filed on or about the 24th April, 1952, an
application (Case No. I of 1952) to the Tribunal at Banaras
constituted under section 4 of the Act, claiming the fixed
deposit amount of Rs. 1,00,000 as a debt due from the Bank.
During the pendency of this proceeding there was an appli-
cation on the 27th December, 1952, under the Indian
Companies Act, 1913 (VII of 1913) in the High Court of
‘Punjab by some creditors for the winding up of the Bank.
On the 29th December, 1952, an ex parte interim order was
passed by the High Court under section 171 of the Indian
Companies Act staying proceedings in all suits and
applications pending against
606
the Bank, at the time. The application-Case No. I of 1952-
filed by the appellant before the Banaras Tribunal was also
specified therein. It would appear however that before the
order was communicated to the Tribunal, the said case before
it was disposed of and a decree was passed on the 3rd
January, 1953, against the Bank for the sum claimed with
future interest at three per cent. per annum. On the 6th
January, 1953, the appellant filed an application before the
Tribunal for execution of the decree and it was numbered as
Execution Case No. 8 of 1953. It appears that on or about
the 27th January, 1953, one Mr. D. D. Dhawan was appointed
by the Punjab High Court as a Provisional Liquidator of the
Bank. On the application of certain petitioning creditors
in the winding up proceedings, the High Court passed another
order under section 171 of the Indian Companies Act on the
30th January, 1953, staying execution of the decree against
the Bank obtained by the appellant. This order also does
not appear to have been communicated to the Tribunal by the
Court. But the Tribunal was informed generally about the
situation by a letter of the Provisional Liquidator dated
the 13th March, 1953. Thereby, the attention of the
Tribunal was invited to section 171 of the Indian Companies
Act which enacted that pending proceedings could not be
proceeded with except with the leave of the Court. The
Tribunal was accordingly requested by this letter of the
Liquidator to stay further proceedings before it in Case No.
I of 1952. In view of this intimation, the Tribunal passed
an order dated the 20th March, 1953, staying execution,
notwithstanding a further application by the appellant dated
the 16th March, 1953, to proceed with the execution. On the
21st March, 1953, the Provisional Liquidator filed an appeal
in the Allahabad High Court against the decree of the
Tribunal obtained by the appellant against the Bank. That
appeal is said to be still pending. On the 24th September,
1953, the winding up of the Bank was finally ordered by the
Company Judge and the Provisional Liquidator was appointed
as the Official Liquidator for the purpose.
607
It is said that as against this order of a single Judge,
there is a Bench appeal now pending in the High Court of
Punjab. At this stage the Banking Companies (Amendment)
Ordinance, 1953, (Ordinance No. 4 of 1953), was promulgated
on the 24th October, 1953. This was repealed and
substituted, on the 30th December, 1953, by the Banking
Companies (Amendment) Act, 1953 (LII of 1953). On the 17th
February, 1954, the appellant filed a further application
before the Tribunal asking that the execution case filed be-
fore the Tribunal on the 6th January, 1953, which was stayed
in view of the letter of the Liquidator dated the 13th
March, 1953, should now be proceeded with having regard to
the various reasons set out in that application. Curiously
enough two of the reasons alleged were (1) that section 171
of the Indian Companies Act was overridden and varied by
section 45-C of the Banking Companies (Amendment) Ordinance
(Act), and (2) that the Tribunal Under the Displaced Persons
(Debts Adjustment) Act is not a Court and hence the stay
under section 171 of the Indian Companies Act or under
section 45-C of the Banking Companies Act has no application
to proceedings pending before the Tribunal. The application
of the 17th February, 1954, above-mentioned also prayed for
an order to send the case for execution to the Bombay High
Court on the ground that the Bank had property within the
local limits of the jurisdiction of the said High Court
against which it was intended to seek execution. On this
application, notice was issued to the Official Liquidator to
appear and show cause by the 24th April, 1954. The
Liquidator however did not appear. The Tribunal made an
order on the 24th April, 1954, transferring to the Bombay
High Court under section 39 of the Code of Civil Procedure
the said decree for execution. On the 8th June, 1954, the
appellant filed an application for execution before the
Bombay High Court (Application No. 123 of 1954) and asked
for attachment and sale of the right, title and interest of
the Bank in certain shares and securities belonging to the
Bank and lying with the Central Bank of India Ltd., Bombay
subject to the charge if
608
any on the said Bank. The attachment was ordered on the
18th June, 1954 and was affected on or about the 19th June,
1954.
At this stage the Official Liquidator obtained an order on
the 26th June, 1954, from the Punjab High Court purporting
to be one under section 45-C of the Banking Companies Act,
transferring from the Court of the Banaras Tribunal, the
proceedings before it for execution of the decree in Case
No. 1 of 1952, obtained. against the Bank by the appellant.
It would appear that the Tribunal, on receipt of this order,
informed the High Court by letter dated the 14th July, 1954,
that the execution proceedings had already been transferred
to the High Court of Bombay and that no proceedings relating
to the execution case were at the time pending before it.
Thereafter the Liquidator made an application dated the 28th
October, 1954, to the Punjab High Court for setting aside
the order of the Bombay High Court dated the 18th June,
1954, directing attachment of the shares and securities be-
longing to the Bank in the possession of the Central .Bank
of India Ltd. Bombay. The main grounds on which this
application was made are-
(1)That the order of the Tribunal at Banaras in execution
Case No. 8 of 1953, transferring the decree for execution to
the Bombay High Court more than six months after the passing
of the winding up order, without obtaining leave from the
Punjab High Court,was null and void.
(2)That the proceedings taken in execution against the
Bank in the Bombay High Court were also null and void in
view of sections 171 and 232 of the Indian Companies Act.
(3)That in view of the Banking Companies (Amendment) Act,
1953, it is only the Punjab High Court that has exclusive
jurisdiction to entertain and decide all claims between the
Bank and the appellant and to deal with the execution
proceedings initiated by the appellant against the Bank.
(4)That the execution proceeding was in fact transferred by
the Punjab High Court to itself by its order dated the 25th
June, 1954, and all questions
609
arising therefrom have to be dealt with and disposed of by
the Punjab High Court itself.
The appellant contested this application in the Punjab High
Court on various grounds. The main contentions were-
(1)That the provisions of the Banking Companies Act could
not override the provisions of the Displaced Persons (Debts
Adjustment) Act, 1951, and that the proceedings thereunder
are not affected by the Banking Companies Act.
(2)That in any case there was no valid order of transfer to
the Punjab High Court of the execution proceeding relating
to the decree obtained by him against the Bank in the
Banaras Tribunal.
These contentions were negatived by the Punjab High Court.
It was held that the provisions of the Banking Companies Act
of 1953 had an overriding effect and that exclusive
jurisdiction was vested thereby in the appropriate High
Court notwithstanding anything in. the Displaced Persons
(Debts Adjustment) Act, 1951. It was also held that there
was a valid order of transfer to the Punjab High Court, of
the execution proceedings taken by the appellant in respect
of his decree. It was therefore held that the order of
attachment obtained by the appellant from the Bombay High
Court was invalid. The said order was accordingly set
aside. It is against this order that the present appeal has
been brought.
Both the above contentions have been strenuously urged
before us on behalf of the appellant and equally strenuously
opposed on behalf of the Bank. The learned Attorney-General
for the Bank placed reliance on section 232 of the Indian
Companies Act at the forefront of his argument and pointed
out that under the said section no attachment could have
been made without leave of the Court when the Bank was in
the process of being wound up by order of the Court. On the
other side it has been suggested that neither section 171
nor section 232 of the Indian Companies Act are applicable
to these proceedings in view of the Banking Companies Act as
amended in 1953. This suggestion,proceeds on a
misconception and ignores
610
section 2 of the Banking Companies Act which specifically
provides that the provisions of the Act shall be in addition
to and not in derogation of the Indian Companies Act as
expressly provided. Hence no leave under section 232 of the
Indian Companies Act having been obtained, this might have
been enough to dispose of the case against the appellant if
the order of attachment had been set aside by the Bombay
High Court itself, on the application of the Liquidator to
it. Since in this case the order to set aside attachment
was passed by the Punjab High Court, the question has to be
gone into as to the jurisdiction of that Court to interfere
with the order of the Bombay High Court or to declare it to
be void. That jurisdiction can only be supported on the
view, that exclusive jurisdiction over the matter was vested
in the Punjab High Court, under the Banking Companies Act,
and that a valid order of transfer of the execution
proceeding to the said Court had been made in exercise of
the powers under that Act. These questions have, therefore,
to be dealt with.
On the facts above stated one matter is clear, viz., that
the attempt of the appellant is to realise the amount due to
him under the decree by getting at the assets of the Bank
which is under liquidation ignoring the purported adjustment
of the deposit made by the Bank towards its alleged dues
from him under his cash-credit account. His proceeding to
execute the decree by attachment is in substance an attempt
to constitutes himself an independent preferential creditor.
So far as the decree is concerned, we wish to say nothing
about its validity or otherwise since the matter is pending
in appeal before the Allahabad High Court. What we are
concerned with now is the proceeding in execution of that
decree and the appellant’s attempt to get at the assets of
the Bank in satisfaction thereof. There can be no doubt
that,, apart from any argument available under the Displaced
Persons (Debts Adjustment) Act, 1951, which will be
considered presently, the matters which must necessarily
arise in the course of such an execution proceeding are
matters which would directly fall
611
within the scope of section 45-B of the Banking Companies
Act as amended in 1953 which runs as follows:
“The High Court shall, save as otherwise expressly provided
in section 45-C, have exclusive jurisdiction to entertain
and decide any claim made by or against a banking company
which is being wound up (including claims by or against any
of its branches in India) or any application made under
section 153 of the Indian Companies Act, 1913 (VII of 1913)
by or in respect of a banking company or any question of
priorities or any other question whatsoever, whether of law
or fact, which may relate to or arise in the course of the
winding up of a banking company, whether such claim or
question has arisen or arises or such application has been
made or is made before or after the date of the order for
the winding up of the banking company or before or after the
commencement of the Banking Companies (Amendment) Act,
1953”.
There has been some faint argument before us that the
questions that arise in execution in this case and
particularly the question relating to attachment which has
been effected by the Bombay High Court, are not questions
which fall’ within the scope of section 45-B. In our
opinion this contention is so obviously untenable, in view
of the very wide and comprehensive language of the section
that, it requires no more than to be mentioned and rejected.
If, therefore, the proceeding to execute the decree obtained
by the appellant in this case and the claims and matters
which must necessarily arise in the course of that execution
fall within the scope of section 45-B, the execution
proceeding in this case would prima facie be within the
exclusive jurisdiction of the High Court under section 45-B
subject to the two questions that have been raised in the
case which are (1) whether there is anything in the
Displaced Persons (Debts Adjustment) Act, 1951, which
overrides this jurisdiction, and (2) whether in view of the
fact that the original execution application to the Tribunal
was made before the Banking Companies (Amendment) Ordinance
and Act of 1953, came into force., there has been any valid
order under section 45-C of
612
the Banking Companies Act by the Punjab High Court
transferring the pending execution proceeding to it-
self.
So far as the first of the above questions is concerned,
learned counsel for the appellant relies on sections 3 and
28 of the Displaced Persons (Debts Adjustment) Act, 1951.
Section 28 declares that the civil court which passed the
decree as a Tribunal shall be competent to execute it.
Section 3 runs as follows:
“3. Overriding effect of Act, rules and orders:Save as
otherwise expressly provided in this Act, the pro-visions of
this Act and of the rules and orders made thereunder shall
have effect notwithstanding anything inconsistent therewith
contained in any other law for the time being in force, or
in any decree or order of a court, or in any contract
between the
parties”.
On the strength of these sections learned counsel for the
appellant argues that the jurisdiction, which the Tribunal
has under section 28 for executing the decree must prevail
over the jurisdiction of the High Court in respect of this
matter under section 45-B of the Banking Companies Act. On
the other hand, the respondent relies on section 45-A of the
Banking Companies Act, which runs as follows:
“The provisions of this Part and the rules made thereunder
shall have effect notwithstanding anything inconsistent
therewith contained in the Indian Companies Act, 1913 (VII
of 1913), or the Code of Civil Procedure, 1908 (Act V of
1908), or the Code of Criminal Procedure, 1898 (Act V of
1808), or any other law for the time being in force or any
instrument having effect by virtue of any such law but the
provisions of any such law or instrument in so far as the
same are not varied by, or inconsistent with, the provisions
of this Part or rules made thereunder shall apply to all
proceedings under this Part”.
Now the question as to which of the provisions of these two
Acts has got overriding effect in a given case, where a
particular provision of each is equally applicable to the
matter is not altogether free from difficulty. In the
present case, prima facie by virtue
613
of section 28 of the Displaced Persons (Debts Adjustment)
Act the jurisdiction to execute the Tribunal’s decree is in
the Tribunal. But it is equally clear that the jurisdiction
to decide any of the claims which must necessarily arise in
the execution of the decree is vested in the High Court by
virtue of section 45-B of the Banking Companies Act. Each
of the Acts has a specific provision, section 3 in the
Displaced Persons (Debts Adjustment) Act and section 45-A in
the Banking Companies Act, which clearly indicates that the
relevant provision, if applicable, would have overriding
effect as against all other laws in this behalf. Each being
a special Act, the ordinary principle that a special law
overrides a general law does not afford any clear solution
in this case. In support therefore of the overriding effect
of the Displaced Persons (Debts Adjustment) Act of 1951 as
against section 45-B of the Banking Companies Act, learned
counsel for the appellant called in aid the rule that a
later Act overrides an earlier one. (See Craies on Statute
Law, pages 337 and 338). He urged that the Banking
Companies (Amendment) Act of 1953 should be treated as part
of the 1949 Banking Companies Act and hence overridden by
the Displaced Persons (Debts Adjustment) Act of 1951 and
relied on the case in Shamarao V. Parulekar v. The District
Magistrate, Thana, Bombay(1) and on the passage therein at
page 687 which is as follows:
“The rule is that when a subsequent Act amends an earlier
one in such a way as to incorporate itself, or a, part of
itself, into the earlier, then the earlier Act must
thereafter be read and construed (except where that would
lead to a repugnancy, inconsistency or absurdity) as if the
altered words had been written into the earlier Act with pen
and ink and the old words scored out so that thereafter
there is no need to refer to the amending Act at all”.
Now there is no question about the correctness of this
dictum. But it appears to us that it has no application to
this case. It is perfectly true as stated therein that
whenever an amended Act has to be
(1) (1952) S.O.R. 683.
614
applied subsequent to the date of the amendment the various
unamended provisions of the Act have to be read along with
the amended provisions as though they are part of it. This
is for the purpose of determining what the meaning of any
particular provision of the Act as amended is, whether it is
in the unamended ‘part or in the amended part. But this is
not the same thing as saying that the amendment itself must
be taken to have been in existence as from the date of the
earlier Act. That would be imputing to the amendment
retrospective operation which could only be done if such
retrospective operation is given by the amending Act either
expressly or by necessary implication. On. the facts of
that case the question that was considered arose in the
following circumstances. There was an order of detention
under the Preventive Detention Act of 1950. That Act was
due to expire on the 1st April, 1951. But there were
subsequent amendments of the Act which extended the life of
the Act up to 1st October, 1952. The amending Act provided
inter alia that detention orders which had been confirmed
previously and which were in force immediately before the
commencement of the amending Act “shall continue to remain
in force for so long as the principal act is in force”. The
question for consideration was whether this indicated the
original date of expire of the principal Act or the extended
date of the principal Act. The Court had no difficulty in
holding that it obviously related to the latter,
notwithstanding that the principal Act was defined as
meaning “Act of 1950”. It was pointed out that the phrases
“principal Act” and “Act of 1950” have to be understood
after the amendment as necessarily meaning the 1950 Act as
amended, i.e., which was to expire on the 1st October, 1952.
In the present case what we are concerned with is not the
meaning of any particular phrase or provision of the Act
after the amendment but the effect of the amending
provisions in their relation to and effect on other
statutory provisions outside the Act. For such a purpose
the amendment cannot obviously be treated as having been
part of the original Act itself so as to
615
enable the doctrine to be called in aid that a later Act
overrides an earlier Act. On the other hand, if the rule as
to the later Act overriding an earlier Act is to be applied
to the present case, it is the Banking Companies (Amendment)
Act, 1953,. that must be treated as the later Act and held
to override the provisions of the earlier Displaced Persons
(Debts Adjustment) Act, 1951. It has been pointed out,
however, that, section 13 of the Displaced Persons (Debts
Adjustment) Act, uses the phrase “notwithstanding anything
inconsistent therewith in any other law for the time being
in force” and it was suggested that this phrase is wide
enough to relate even to a future Act if in operation when
the overriding effect has to be determined. But it is to be
noticed that section 45-A of the Banking Companies Act has
also exactly the same phrase. What the connotation of the
phrase “‘for-the time being” is and which is to prevail when
there are two provisions like the above each containing the
same phrase, ate questions which are not free from-
difficulty. It ;Is, therefore, desirable to determine the
overriding effect of one or the other of the relevant
provisions in these two Acts, in a given case, on much
broader considerations of the purpose and policy underlying
the two Acts and the clear intendment conveyed by the
language of the relevant provisions therein.
Now so far as the Banking Companies Act is concerned its
purpose is clearly, as stated in the heading of Part III-A,
for speedy disposal of winding up proceedings. It is a
permanent statutory measure which is meant to impart speedy
stability to the financial credit structure in the country
in so far as it may be effected by banks under liquidation.
It was pointed out in Dhirendra Chandra Pal v. Associated
Bank of Tripura Ltd.(1) that the pre-existing law relating
to the winding up of a company. involved considerable delay
and expense. This was sought to be obviated so far as Banks
are concerned by vesting exclusive jurisdiction in the
appropriate High Court in respect of all matters arising in
relation to or in the course of
(1) [1965] 1 S.C.R. 1098.
616
winding up of the company and by investing the provisions of
the Banking Companies Act with an overriding effect. This
result was brought about first by the Banking Companies
(Amendment) Act, 1950 and later by the Banking Companies
(Amendment) Act, 1953. Sections 45-A and 45-B of Part III
brought in by the 1950 Act vested exclusive jurisdiction in,
the appropriate High Court to decide all claims by or
against a Banking Company relating to or arising in the
course of winding up. But sections 45-A and 45-B of the
Part III-A substituted by 1953 Act are far more
comprehensive and vest not. merely exclusive jurisdiction
but specifically provide for the overriding effect of other
provisions also.
Now, the Displaced Persons (Debts Adjustment) Act is one of
the statutory measures meant for relief and rehabilitation
of displaced persons. It is meant for a temporary situation
brought about by unprecedented circumstances. It is
possible, therefore, to urge that the provisions of such a
measure are to be treated as being particularly special in
their nature and that they also serve an important national
purpose. It is by and large a measure for the rehabili-
tation of displaced debtors. Notwithstanding that both the
Acts are important beneficial measures, each in its own way,
there are certain relevant differences to be observed. -The
first main difference which is noticeable is that the
provisions in the Displaced Persons (Debts Adjustment) Act
are in a large measure enabling and not exclusive. There is
no provision therein which compels either a displaced debtor
or a displaced creditor to go to the Tribunal, if he is
satisfied with the reliefs which an ordinary civil court can
give him in the normal course. It is only if he desires to
avail himself of any of the special facilities which the Act
gives to a displaced debtor or to a displaced creditor and
makes an application in that behalf under sections 3, or
5(2), or 13, that the Tribunal’s jurisdiction comes into
operation. At this point it is necessary to notice the
further difference that exists in the Displaced Persons
(Debts Adjustment) Act between applications by displaced
debtors and ap-
617
plications by displaced creditors against persons who are
not displaced persons. So far as the applications by
displaced debtors are concerned, section 15 in terms
provides for certain consequences arising, when the
application is made to the Tribunal by a displaced debtor
under section 3 or section 5(2), i.e., stay of all pending
proceedings, the cessation of effect of any interim orders
or attachments, etc. and a bar to the institution of fresh
proceedings and so forth. But the terms of section 13
relating to the entertainment of an execution proceeding by
the said Tribunal on a decree so obtained, do not appear to
bring about even the kind of consequences which section 15
contemplates as regards applications by displaced debtors.
Section 13 is, in terms, only an enabling section and
section 28 merely says that “it shall be competent for the
civil court to execute the decree passed by it as a
Tribunal”. They are not couched in terms vesting exclusive
jurisdiction in the Tribunal. Whatever, therefore, may be
the inter se, position, in a given case, between the
provisions of the Banking Companies Act and the provisions
of the Displaced Persons (Debts Adjustment) Act, in so far
as such provisions relate to displaced debtors, we are
unable to find that the jurisdiction so clearly and
definitely vested in the High Court by the very specific and
comprehensive wording of section 45-B of the Banking Com-
panies Act with reference to the matters in question, can be
said to be overridden or displaced by anything in the
Displaced Persons (Debts Adjustment) Act, 1951, in so far as
they relate to displaced creditors.
It is also desirable to notice that so far as a claim of a
displaced creditor against a non-displaced debtor is
concerned the main facilities that seem to be available are
(1) the claim can be pursued within one year after the
commencement of the Act (presumably even -though it may’
have been time barred), (2) a decree can be obtained on a
mere application, i.e., without having to’ incur the
necessary expenses byway of court-fee which would be payable
if he had to file a suit, (3) the creditor has the facility
of getting his claim adjudicated upon by a Tribunal which
has
80
618
jurisdiction over the place where he resides, i.e., a place
more convenient ‘to him than if be had to file a suit under
the ordinary law in which case he would have to file a suit
at the place where the defendant resides or part of the
cause of action arises. There may also be a few other minor
facilities. But what is necessary to notice is that the
overriding provision of the Banking Companies Act, so far as
a displaced creditor is concerned, is substantially only as
regards jurisdiction. Section 45-A thereof, while providing
that the provisions of Part III-A and the rules made there-
under shall have effect notwithstanding anything in-
consistent therewith in any other law for the time being in
force, specifically provides that “the provisions of any
such law in so far as the same are not varied by or
inconsistent with, the provisions of that part or rules made
thereunder, shall apply to all proceedings under that Part”.
Therefore, in the present case the overriding effect of
section 45-B of the Banking Companies Act deprives him only
of the facility of pursuing his execution in the
jurisdiction of the Tribunal. But there is no reason why he
should not get the benefit of other provisions, if any,
which may give him an advantage and are not inconsistent
with any of the other specific provisions of the Banking
Companies Act. Having regard to all the above con-
siderations and the wide and comprehensive language of
sections 45-A and 45-B of the Banking Companies Act, we are
clear that a proceeding to execute the decree obtained by
the appellant from the Tribunal against the Bank in Case No.
I of 1952 and all other incidental matters arising therefrom
such as attachment and so forth are matters within the
exclusive jurisdiction of the Punjab High Court subject to
the provisions of section 45-C of the Banking Companies Act
as regards pending matters. This leads us to the question
whether in terms of section 45-C there has been a valid
transfer of the execution proceeding to the Punjab High
Court.
Before dealing with this question it is necessary to notice
the argument that section 45-C of the Banking Companies Act
has no application -at all to a pro-
619
ceeding pending before the Tribunal. The argument is that
section 45-C applies only to a proceeding pending in any
other Court immediately before the commencement of the
Banking Companies (Amendment) Act. It is urged that the
Tribunal under the Displaced Persons (Debts Adjustment) Act
is not a Court. In support thereof the judgment of one of
the learned Judges in Parkash Textile Mills Ltd. v. Messrs
Muni Lal Chuni Lal(1) has been cited to show that the
Tribunal constituted under this Act is not a Court. The
question that arose in that case was a different one, viz.,
as to whether the Tribunal had the exclusive jurisdiction to
determine for itself the preliminary jurisdiction on facts
and it is for that purpose the learned Judge attempted to
make out that a Tribunal was a body with a limited
jurisdiction, which limits were open to be determined by a
regular court when challenged. It is unnecessary for us to
consider whether the view taken by the learned Judge was
correct. No such question arises in this case and we are
quite clear that the Tribunal which is to exercise the
jurisdiction for executing the decree in question is “a
Court” within the scope of section 45-C of the Banking
Companies Act. Section 28 of the Displaced Persons (Debts
Adjustment) Act itself is reasonably clear on that point.
That section runs as follows:
“It shall be competent for the civil court which has been
specified as the Tribunal for the purposes of this Act to
execute any decree or order passed by it as the Tribunal in
the same manner as it could have done if it were a decree or
order passed by it as a civil court”.
It is quite clear on the wording of this section that it is
a civil court when it executes the decree, whatever may be
its status when it passed the decree as a Tribunal. There
is, therefore, no substance in this argument.
Now coming to the question whether there has been a valid
transfer of the execution proceedings to the Punjab High
Court, there can be no doubt that the
(1) [1955] 57 P.L. R. 107.
620
execution proceeding filed by the appellant before the
Tribunal on the 6th January,’1953, continued to remain
pending by the date when the Banking Companies (Amendment)
Act, 1953, came into operation. This appears from the
subsequent applications dated the 16th March, 1953, and the
17th February, 1954, which always relied on the earlier
application of the 6th January, 1953, as the main pending
application. This application was, therefore, a pending
application for the purposes of section 45-C of the Banking
Companies Act. The jurisdiction of the Punjab High Court
with reference to this execution proceeding must depend upon
whether or not there was a valid order of transfer of this
proceeding to itself under section 45-C. This section
contemplates, in respect of pending proceedings that (a) the
Official Liquidator is to make a report to the High Court
concerned within the time specified in sub-section (2)
thereof, (b) the High Court is to consider which out of
these pending proceedings it should transfer to itself, and
(c) the High Court should pass orders accordingly. It
further provides by sub-section (4) thereof that as regards
such of the pending proceedings in respect of which no such
order of transfer has been made the said proceeding shall
continue in the Court in which it is pending. It is with
reference to these provisions that on the 23rd November,
1953, the Official Liquidator appears to have submitted a
report to the Punjab High Court, requesting that certain
proceedings mentioned in lists A and B attached to the said
report should be transferred to the High Court under section
45-C(3). List A pertains to suits and List B to
applications under the Displaced Persons ‘Debts Adjustment)
Act, 1951. It is pointed out that list B which shows an
application before the Tribunal under section 19 of the
Displaced Persons (Debts Adjustment) Act, does not show the
execution application under section 28 of that Act then
pending in the Banaras Tribunal and with which we are
concerned. It is strenuously urged that this shows that
there was no application for transfer of this proceeding to
the Punjab High Court and that, therefore, there could
621
have been no transfer thereof and that accordingly by virtue
of section 45-C(4) of the Banking Companies Act the
jurisdiction in respect of the execution proceeding
continued to be with the Tribunal. It is urged that since
sub-section (4) of section 45-C enjoins that such proceeding
“shall be continued” in the Court in which the proceeding
was pending, there can be no question of any transfer
thereafter. It is pointed out that the view of the High
Court that there has been a valid transfer to itself is
based on an order passed on an alleged supplementary report
by the Liquidator on the 25th June, 1954, which is beyond
the three months’ time provided in section 45-C (2) and that
such an. order of transfer is invalid. It is also urged
that the transfer so made was without notice to the
appellant.
That there was in fact an order of transfer made by the
Punjab High Court specifically of this execution proceeding
with which we are concerned admits of no doubt as a fact.
This is also admitted by the appellant in his application
for special leave. The order itself is not before us nor
are the exact circumstances under which this order came to
be made, clearly on the record. So far as one can gather
from the papers before us the position seems to be this.
When the appellant filed his application to the Tribunal on
the 17th February, 1954 (by which he asked that its order
dated the 20th March, 1953, staying execution proceedings
should be vacated for reasons shown therein) notice to show
cause against it and for appearance therefor on the 24th
April, 1954, was sent to the Official Liquidator by the
Tribunal. The Official Liquidator not having appeared on
that date, the Tribunal, as already stated, passed the order
as prayed for on the 24th April 1954, transferring the
execution to the Bombay High Court. It may be mentioned at
this stage that an argument has been advanced that the
Liquidator, not having appeared on notice, can no longer
challenge the validity of the continuance of the execution
proceeding by the Tribunal and of the subsequent attachment
by the Bombay High Court. The question, however, is one
622
of jurisdiction depending on the validity of transfer made
by the High Court under statutory power. The argument is
without substance. To resume the narrative, the Official
Liquidator on receiving notice, addressed a letter dated the
19th March, 1954, to the Company Judge of the Punjab High
Court mentioning the fact that he, received a notice from
the Banaras Tribunal to appear and show cause on the 24th
April, 1954. He mentioned therein his doubt as to the
jurisdiction of the Tribupal to entertain the application
and requested that in order to avoid inconvenience and
expenditure an immediate transfer of the execution case
together with the appellant’s application to the Tribunal
for vacating the stay order should be made by the High Court
in exercise of the powers conferred on it by section 45-C of
the Act. On this the learned Judge appears to have passed
an order dated the 22nd March, 1954, issuing notice to the
appellant for appearance on the 2nd April, 1954. This
appears to have been adjourned from time to time and it
would appear that on the 25th June, 1954, to which date the
matter stood adjourned, the Liquidator addressed another
letter to the Company Judge, which is referred to in the
record as the supplementary report of the Liquidator.
Therein he only narrated the entire history of the suit and
of the execution proceeding and the circumstances which
rendered it necessary that an order of transfer should be
made immediately. Probably this was meant for opposing any
further adjournment. It appears at any rate that it was on
this date that the order of transfer was passed. All the
facts stated above can be gathered from the two letters of
the Liquidator dated the 19th March, 1954, and the 25th
June, 1954, and a further note of the Liquidator put up to
the Company Judge with reference to the letter dated the
14th July, 1954, received from the Tribunal which is all the
relevant material included in the paper book before us. The
actual date of the note does not appear from the record.
Unfortunately neither the original order of the Judge made
on the report of the Liquidator dated the 23rd November,
1953, nor the order of
623
transfer relating to this particular case, which appears to
have been made on the 25th June, 1954, on the letter of the
Liquidator dated the 19th March, 1954, are before us. We do
not know the exact terms in which those orders were made and
the reason why no specific order of transfer was made on the
first report and why an additional order of transfer was
made-as appears-so late as on the 25th June, 1954. In any
case the argument on behalf of the appellant on this part of
the case seems to be based on a misapprehension of the
facts. If, as appears, the order of the 25th June, 1954,
was made with reference to the letter of the Liquidator
dated the 19th March, 1954, -a fact which appears ears to be
admitted by the appellant in para 16 of his application for
leave to appeal to this Court-and what is called
supplementary report dated the 25th June, 1954, was nothing
more than bringing additional facts to the notice of the
Court by way of the history of the execution proceeding,
there appears to be no foundation in fact for the contention
that the order was made on a report filed beyond three
months provided under section 45-C(2) of the Banking
Companies Act. Sub-section (2) of section 45-C provides
that “the Official Liquidator shall, within three months
from the date of the winding up order or the commencement of
the Banking Companies (Amendment) Act, 1953, whichever is
later, or such further time as the High Court may allow,
submit to the High Court a report containing a list of all
such pending proceedings together with particulars thereof”.
The letter of the Official Liquidator dated the 19th March,
1954, is within three months of the commencement of the
Banking Companies (Amendment) Act, 1953, which came into
force on the 30th December, 1953, and there is nothing in
subsection (2) of section 45-C that two or more successive
reports may not be made within the prescribed period of
three months. It appears also from the papers above
referred to that notice was issued to the appellant with
reference to this letter of the 19th March, 1954, of the
Liquidator to transfer the execution application to itself.
It appears to us, therefore,
624
from such record as is before us, that the contention of the
appellant raising objection to the validity of the order of
transfer is untenable on the facts.’ Nor, are we satisfied
that even if the facts as to how the order of transfer dated
the 25th June, 1954, came to be made are shown to be
otherwise than above stated, there is any reason to think
that sections 45-C(2), (3) and (4) are to be construed so as
to make the power of the Court to transfer dependent on the
filing of a report by the Liquidator strictly within three
months. The various sub-sections, taken together seem to
imply the contrary. Section 45-C(1) definitely imposes a
bar on any pending matter in any other court being proceeded
with except in the manner provided therein. The
jurisdiction of that other Court to proceed with a pending
proceeding is made to depend on the fact that its pendency
is brought to the notice of the appropriate High Court and
its decision, express or implied, to leave it out without
transferring it to itself. Having regard to the scheme and
policy of sections 45-B and 45-C of the Banking Companies
Act, it appears more reasonable to think that in respect of
a pending matter which was not in fact brought to the notice
of the Court by the Liquidator within the three months,
there is nothing to prevent the Court exercising its power
of transfer at such time when, it is brought to the notice
of the Court. It is, however, unnecessary to decide that
point finally in this case since, to gay the least, all the
facts and the requisite records have not been properly
placed before us. We have been asked to send for all the
relevant records in order to ascertain the facts correctly
or to give an opportunity for the purpose. We do not think
it right to do so in the circumstances of this case. It is
necessary to point out, as admitted by the appellant in his
application for special leave that there has been an
application to this Court dated the 16th October, 1954, for
the grant of special leave specifically as against the order
of transfer of the Punjab High Court made on the 25th June,
1954, but that application ‘Was rejected. It
625
has been suggested that while so rejecting, this Court left
the matter open. There is nothing to substantiate it.
Therefore, an argument as to the invalidity of the order of
transfer cannot be entertained at this stage.
For all the above reasons we are satisfied that the view
taken by the High Court that it bad exclusive jurisdiction
in respect of the present matter and that there was a valid
transfer to itself by its order dated the 25th June, 1954,
is correct.
In the proceedings before the High Court a good deal has
been made as to the alleged suppression of .material facts
by the appellant from the Bombay High Court, in obtaining
the impugned order of attachment from that Court and the
learned Judge’s order also indicates that be was to some
extent influenced thereby. It appears to us that the
alleged suppression has no bearing on the questions that
arose for decision before the learned Judge, on this appli-
cation. The learned Attorney-General frankly conceded the
same. We have been told that there has been some
application for contempt in the Court on the basis of the
alleged suppression. We do not, therefore, wish to say
anything relating to that matter which may have any bearing
on the result of those proceedings.
In the result this appeal is dismissed with costs.
Appeal dismissed.
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