Case Law Companies 1954<\/p>\n
Petitioner Dhirendra Chandra Pal<\/p>\n
Vs Respondent Associated Bank of Tripura Ltd<\/p>\n
\n
DATE OF JUDGMENT:-06\/12\/1954<\/strong><\/p>\n BENCH:<\/strong><\/p>\n JAGANNADHADAS, B.<\/strong><\/p>\n BENCH:<\/strong><\/p>\n JAGANNADHADAS, B.<\/strong><\/p>\n MAHAJAN, MEHAR CHAND (CJ)<\/strong><\/p>\n BHAGWATI, NATWARLAL H.<\/strong><\/p>\n AIYYAR, T.L. VENKATARAMA<\/strong><\/p>\n CITATION: 1955 AIR\u00a0 213\u00a0 1955 SCR\u00a0 (1)1098<\/strong><\/p>\n ACT:<\/b><\/p>\n Banking Companies Act (X of 1949), ss. 45-B, 45-G\u00a0 (inserted by\u00a0 Act XX of 1950)*-Claims decided under s.\u00a0 45-B-Procedure to be followed.<\/p>\n HEADNOTE<\/b>: The object of the Banking Companies Act, 1949 is to\u00a0 provide a\u00a0 machinery\u00a0 for expeditious and speedy\u00a0 termination\u00a0 of proceedings\u00a0 in\u00a0\u00a0 liquidation and in the absence\u00a0 of any specific provisions of the Act to the contrary or any\u00a0 rules framed by the High Court under s. 45-G of the Act\u00a0 (inserted by\u00a0 Act XX of 1950) the normal procedure for\u00a0 deciding all claims under s. 45-B of the Act (inserted by Act XX of 1950) should be a summary proceeding originating with an\u00a0 applica-tion.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 But\u00a0 the court in its-discretion may\u00a0 think\u00a0 fit\u00a0 to direct or the rules of the High Court may provide\u00a0 that\u00a0 a suit\u00a0 is\u00a0 the proper remedy in view of the nature\u00a0 of\u00a0 claim made and the questions involved in such claim. Sree Bank v. Mukherjee ([1950] 55 C.W.N. 400), referred to.<\/p>\n JUDGMENT:<\/b><\/p>\n CIVIL APPELLATE JURISDICTION: Civil Appeal No. 91 of 1953. Appeal from the Judgment and Decree dated the 12th\u00a0 day\u00a0 of June\u00a0 1951\u00a0 of the High Court of Judicature at Calcutta\u00a0 in Appeal from Original Decree No. 56 of 1951 arising\u00a0 out\u00a0 of the Decree dated the 8th day of March 1951 of the said\u00a0\u00a0\u00a0 High<\/p>\n Court exercising its Ordinary Original Civil Jurisdiction in Suit No. 3993 of 1950. H.J.\u00a0 Umrigar, Rameshwar Nath and Rajinder Narain\u00a0 for the appellant. A.N. Sinha and P. C. Dutta for the respondent. 1954. December 6. The judgment of the Court was\u00a0 delivered by<\/p>\n JAGANNADHADAS\u00a0 J. -This is an appeal, by leave of\u00a0 the High Court of Calcutta under article 133 (1) (c) For these two sections 45-B and 45-G (inserted by Act XX\u00a0 of 1950) two now sections 45-B and 45-U wore inserted by s.\u00a0 10 of Act LII of 1953. 1099 of\u00a0 the Constitution, from its judgment\u00a0 in\u00a0 its\u00a0 appellate jurisdiction confirming that of a Single Judge of the Court. The point involved is a short\u00a0 one and\u00a0 arises\u00a0 on the Following facts. The respondent before us, Associated Bank of Tripura Ltd., went into liquidation on the 19th December, 1949. A month prior to the liquidation, i.e., on the\u00a0\u00a0\u00a0 19th<\/sup> November, 1949, the appellant before us and the Bank entered into\u00a0 an agreement whereby the appellant became a tenant\u00a0 of the Bank in respect of a certain parcel of land.\u00a0 One of the terms of the tenancy-agreement was that the appellant should vacate the land demised on 24 hours’ notice.\u00a0 After the Bank went into liquidation the Liquidator served on the appellant on\u00a0 the 18th April, 1950, a notice terminating his\u00a0 tenancy and\u00a0 calling\u00a0 upon him to vacate the land and to\u00a0 hand over possession by the end of April, 1950.<\/p>\n This not having been done,\u00a0 the Liquidator filed an application on\u00a0 the\u00a0 original side of the High Court under section 45-B of the\u00a0 Banking Companies Act for ejectment of the appellant and obtained anex parte decree against him on the 10th July, 1950.\u00a0 On the 28th\u00a0 August, 1950, the appellant applied for setting\u00a0 aside the ex parte decree but the application was dismissed on the 7th\u00a0 September, 1950.\u00a0 Consequently the appellant filed the Present suit on the 12th September, 1950, in\u00a0 the\u00a0 original side of the High Court, asking for a declaration that the ex parte\u00a0 decree against him was made without jurisdiction and was\u00a0 a nullity and\u00a0 that\u00a0 he continued\u00a0 to\u00a0 be\u00a0 a\u00a0 tenant not with standing the said ex parte decree. The plaint does not specifically mention the reason for claiming the\u00a0 decree to be without jurisdiction or nullity.<\/p>\n But the point\u00a0 taken at the trial was that the Court had no power to deal with\u00a0 a question relating to the ejectment of the appellant from the demised land, in\u00a0 a summary proceeding\u00a0 initiated on an application but could pass\u00a0 the decree\u00a0 only on\u00a0 a suit regularly instituted. This contention was raised on the basis of\u00a0 a judgment of the Calcutta High Court given on the 24th<\/sup> August, 1950, that in respect of such a relief under section 45-B a summary proceed- 1411100 ing\u00a0 is not maintainable but that a suit has to\u00a0 be\u00a0 filed. This\u00a0 decision has\u00a0 since been reported\u00a0 in\u00a0 Sree\u00a0 Bank\u00a0 v.<\/p>\n Mukherjee(1). The\u00a0 learned\u00a0 trial Judge\u00a0 before\u00a0 whom the Present suit came up was of the opinion that though the\u00a0 ex parte decree for\u00a0 ejectment was\u00a0 obtained\u00a0 on\u00a0 a\u00a0\u00a0 wrong proceeding,\u00a0 there was no inherent lack of\u00a0 jurisdiction\u00a0 in the\u00a0 Court\u00a0 and that the fact of\u00a0 the decree having been obtained in a wrong proceeding did not render it a\u00a0 nullity. This view of the learned Judge was affirmed by the Appellate Bench. It has not been disputed before us that the relief by way of ejectment.\u00a0 Of the appellant from the land demised\u00a0 is one which\u00a0 would\u00a0 fall within the scope of section 45-B\u00a0 of the Banking Companies Act and that the Liquidator could obtain the\u00a0 said\u00a0 relief by an appropriate proceeding in\u00a0 the High Court. Indeed, the learned appellate Judges specifically held\u00a0 that\u00a0 the Court had \u00a0by virtue of\u00a0 section\u00a0\u00a0 45-B, jurisdiction over the subject-matter of the dispute and this view\u00a0 has not been challenged having regard to the wide and comprehensive language of the section. But what is urged is that\u00a0 the Court having followed the view taken in\u00a0 the Sree Bank\u00a0 Case\u00a0 (supra) (whose correctness was\u00a0 not\u00a0 challenged before it) that the appropriate proceeding to obtain such\u00a0 a relief was\u00a0 only\u00a0 a\u00a0 suit,\u00a0 it should have, consistently therewith, held the decree obtained on a mere application to be invalid.\u00a0 In the Court below the question as to\u00a0 whether the decree obtained on a wrong proceeding was one so\u00a0 wholly without jurisdiction as to be a nullity or whether\u00a0 it was vitiated\u00a0 only by\u00a0 a\u00a0 mere\u00a0 irregularity\u00a0 in\u00a0 the\u00a0 mode\u00a0 of obtaining\u00a0 the relief, and hence not open to attack\u00a0 in collateral\u00a0 proceedings was the subject-matter of\u00a0 elaborate consideration. It appears to us, however, that it would\u00a0 be more satisfactory to consider and decide\u00a0\u00a0 whether the basic assumption\u00a0 which gave rise to this argument, viz. That the appropriate\u00a0 proceeding under section 45-B was only\u00a0 a suit and\u00a0 not\u00a0 an application, is correct.\u00a0 It is necessary for this purpose to notice the relevant sections.\u00a0 Section 45-A of the Banking Companies Act, 1949, as amended by Act XX\u00a0 of 1950<\/p>\n (1)\u00a0 [1950] 55 C.W.N. 400.1101<\/p>\n defines ‘Court’ for the purposes of Part III and Part\u00a0 III-A of the Act as “the High Court exercising jurisdiction in the place\u00a0 where\u00a0 the registered office of the Banking\u00a0 Company concerned, which is being wound up, is situated”. The said section also provides that “notwithstanding anything to the contrary contained in the Indian Companies Act, 1913, or\u00a0 in any notification, order or direction issued thereunder or in any\u00a0 other law for the time being in force, noother\u00a0 court (i.e.\u00a0 a\u00a0 court other than the one as above\u00a0 defined)\u00a0 shall have\u00a0 jurisdiction\u00a0 to entertain any matter relating\u00a0 to or arising \u00a0out of the winding up of a banking company”. Next is section 45-B (1) which is in the following terms:<\/p>\n “Notwithstanding anything to the contrary contained in the Indian Companies Act, 1913, or in any other law for the time being\u00a0 in force, the Court shall have full power\u00a0 to\u00a0 decide all claims made by or Against any banking company\u00a0 and all questions of properties and all other questions whatsoever, whether of law or fact, which may relate to or arise in the course of\u00a0 the winding up of the\u00a0 banking\u00a0 company\u00a0 coming within the cognizance of the Court”. Section 45-G authorises the Court to make rules -consistent with\u00a0 the\u00a0 Act concerning the mode of\u00a0 proceedings\u00a0 for the decision\u00a0 of\u00a0 claims and other proceedings\u00a0 under\u00a0 the Act. This\u00a0 group\u00a0 of sections in Part III-A constitute a wide departure\u00a0 from the corresponding provisions of the\u00a0 Indian Companies\u00a0\u00a0 Act.\u00a0 Under\u00a0 various\u00a0 sections \u00a0thereof the liquidator,\u00a0 after an order for winding up of a company\u00a0 is made,\u00a0 can approach a Company-Court for exercising\u00a0 certain powers in aid of and to expedite the process of liquidation. The procedure normally adopted for the purpose is by way\u00a0 of application.\u00a0\u00a0 But the scope of matters in respect of\u00a0 which the liquidator can obtain the help of the Company-Court\u00a0 by summary procedure is rather limited.\u00a0 In respect\u00a0 of\u00a0 other matters and particularly in the matter of collecting\u00a0 assets or recovering properties from third parties, (not covered by sections 185 and 186) the liquidator has to invoke the help of the 1102<\/p>\n appropriate Court in the ordinary way.This as is well known leads to a great deal of inevitable delay and expense. When in 1949 special legislation in respect of Banking\u00a0 Companies was taken up, it was one of the stated objects, to provide a machinery\u00a0 by\u00a0 which proceedings in liquidation of\u00a0 Banking Companies\u00a0 could be expedited and speedily\u00a0 terminated. It was found,\u00a0 however, that the Act of\u00a0 1949,\u00a0 as\u00a0 originally enacted,\u00a0 was inadequate to achieve that purpose.\u00a0 It is\u00a0 in this situation that the Amending Act of 1950 introduced into the Act of 1949 an entire Chapter, Part III-A, consisting of sections 45-A to 45-H under the heading “Special\u00a0 provisions for speedy disposal of winding up proceedings”. It\u00a0 appears to us that, consistently with this policy\u00a0 and\u00a0 with the scheme of\u00a0 the Amending Act, where the liquidator\u00a0 has\u00a0 to approach the Court under section 45-B for relief in\u00a0 respect of\u00a0 matters legitimately falling within the\u00a0 scope\u00a0 thereof, elaborate\u00a0 proceedings by way of a suit involving\u00a0 time and expense,\u00a0 to the detriment of the ultimate interests of the company under liquidation, were not contemplated.In the absence of any specific provision in this behalf in the Act itself and in the absence of any rules framed by\u00a0 the High Court\u00a0 concerned under section 45-G, the procedure\u00a0 must\u00a0 be taken\u00a0 to be one left to the judgment and discretion of the Court, having regard to the nature of the claim and of the questions therein involved.<\/p>\n In\u00a0 the Sree Bank Case (supra), the question that arose for direct consideration was\u00a0 one\u00a0 of\u00a0 limitation. But in considering\u00a0 it and when pressed with the argument that,\u00a0 if the appropriate proceeding was by way of an application\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 and not\u00a0 a suit, difficulties might arise as to the question\u00a0 of limitation,\u00a0 the\u00a0 learned\u00a0 Judges\u00a0 felt it\u00a0 unnecessary\u00a0 to consider\u00a0 whether or not the Limitation Act applies\u00a0 to the applications under section 45-B and if so what would be the period which would govern such applications. They proceeded to\u00a0 decide\u00a0 the particular case before them,\u00a0 viz.\u00a0 A case relating to a debt due to the Bank, on the view that\u00a0 “there is nothing in the Companies Act or the Banking Companies Act which permits a 1103 liquidator\u00a0 to recover debts from\u00a0 debtors\u00a0 of\u00a0 a\u00a0 Banking Company by a summary proceeding such as an\u00a0 application\u00a0 to the Company Judge” and therefore held that\u00a0 no application for recovery would lie and that only a suit should have been brought for which the period of limitation was the\u00a0 ordinary period provided in the Limitation Act. It appears\u00a0 tous, with great respect to the learned Judges, that this approach as\u00a0 to the nature of the proceeding required\u00a0 or\u00a0 permitted under\u00a0 section 45-B of the Banking Companies\u00a0 Act\u00a0 was not correct.\u00a0 The question is not whether section 45-B permitted summary proceedings but the question is whether the\u00a0 section prescribed definitely a particular method of proceeding and whether consistently with the policy of the Act it was not to \u00a0be presumed that a speedy and cheap remedy\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 was\u00a0 to\u00a0 be available\u00a0 to\u00a0 the\u00a0 Liquidator, unless \u00a0the \u00a0Court\u00a0 in its discretion\u00a0 thought fit to direct or the rules of\u00a0 the High Court provided that a claim of a particular nature had to be pursued by a suit.\u00a0 It is to be remembered that section 45-B is not confined to claims for recovery of money or\u00a0 recovery of\u00a0 property,\u00a0 moveable or immoveable, but\u00a0 comprehends all sorts\u00a0 of claims which relate to or arise in the\u00a0 course\u00a0 of winding up. Obviously \u00a0the\u00a0 normal\u00a0 proceeding\u00a0 that the section contemplated must \u00a0be taken to be a summary proceeding by way of application.<\/p>\n We\u00a0 are clearly of the opinion that in the present case the Court\u00a0 which passed the ex parte decree was fully\u00a0 competent to decide the matter raised before it on summary application and to pass the ex parte decree which has been challenged by the suit and that the decree of the Courts below\u00a0 dismissing the\u00a0 suit\u00a0 is correct. We are not to be\u00a0 supposed\u00a0 to have expressed\u00a0 any opinion on the question of\u00a0 limitation\u00a0 which was\u00a0 raised\u00a0 before\u00a0 the High Court in the\u00a0 Sree\u00a0 Bank Case (supra).\u00a0 That is a question which may have to be decided in an appropriate case when it is raised directly.The appeal is accordingly dismissed with costs.<\/p>\n Appeal dismissed, 1104<\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Case Law Companies 1954 Petitioner Dhirendra Chandra Pal Vs Respondent Associated Bank of Tripura Ltd DATE OF JUDGMENT:-06\/12\/1954 BENCH: JAGANNADHADAS, B. BENCH: JAGANNADHADAS, B. MAHAJAN, MEHAR CHAND (CJ) BHAGWATI, NATWARLAL H. AIYYAR, T.L. VENKATARAMA CITATION: 1955 AIR\u00a0 213\u00a0 1955 SCR\u00a0 (1)1098 ACT: Banking Companies Act (X of 1949), ss. 45-B, 45-G\u00a0 (inserted by\u00a0 Act XX … Read more<\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":""},"categories":[4928,2873],"tags":[2886],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts\/29751"}],"collection":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/comments?post=29751"}],"version-history":[{"count":1,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts\/29751\/revisions"}],"predecessor-version":[{"id":115535,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts\/29751\/revisions\/115535"}],"wp:attachment":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/media?parent=29751"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/categories?post=29751"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/tags?post=29751"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}