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The Fortune Commercial Bank Ltd. Vs. Vidyagauri J. Mehta - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtMumbai High Court
Decided On
Case NumberFirst Appeal No. 309 of 1950
Judge
Reported in[1951]21CompCas122(Bom)
ActsIndian Companies Act, 1913 - Sections 162; Banking Companies (Amendment) Act, 1950 - Sections 10 and 11
AppellantThe Fortune Commercial Bank Ltd.
RespondentVidyagauri J. Mehta
Excerpt:
company - jurisdiction - section 162 of indian companies act, 1913 and sections 10 and 11 of banking companies (amendment) act, 1950 - appeal arises against order of district court in winding up of banking company - appellant contended that district court have no jurisdiction to proceed with application for winding up after passing of banking companies (amendment) act - application originally instituted in district court no application against banking company on ground that it was unable to pay debts - but interpretation which placed upon latter part of section 45a was in case of banking companies after coming into force of amending act under which jurisdiction of courts other than particular high court mentioned in section 45a taken away - held, proceedings of this case stand transferred.....vyas, j.1. this appeal arises out of insolvency application no. 45 of 1949 of the district court of east khandesh in which the district judge of east khandesh has ordered under section 162 of the indian companies act (vii of 1913) the winding up of the fortune commercial bank ltd., jalgaon, holding it proved on the evidence before him that the deceased managing director of the appellant company, on mr. k. g. chaudhari, had grossly mismanaged the affairs of the company to secure benefit to himself and his friends, that loans with out security to the extent of rs. 90,000 had been advanced to the directors of the company, that suspicious entries to cover up the fraud had been made in the accounts of the company by the deceased managing director, that since march 1, 1949, the company was.....
Judgment:

Vyas, J.

1. This appeal arises out of Insolvency Application No. 45 of 1949 of the District Court of East Khandesh in which the District Judge of East Khandesh has ordered under section 162 of the Indian Companies Act (VII of 1913) the winding up of the Fortune Commercial Bank Ltd., Jalgaon, holding it proved on the evidence before him that the deceased managing director of the appellant company, on Mr. K. G. Chaudhari, had grossly mismanaged the affairs of the company to secure benefit to himself and his friends, that loans with out security to the extent of Rs. 90,000 had been advanced to the directors of the company, that suspicious entries to cover up the fraud had been made in the accounts of the company by the deceased managing director, that since March 1, 1949, the company was doing no business, that the substratum of the company had gone, that therefore the object of this banking company could not be carried out and that therefore it was just and equitable to wind up the company.

2. The original opponent company feeling aggrieved by the abovestated order has come in appeal.

3. At the very outset the appellant's leaned advocate has raised a point of law relating to the jurisdiction of the District Court which has ordered the winding up. It is contended by him that the District Court had no jurisdiction to proceed with the application for winding up after the passing of the Banking Companies (Amendment) Act, 1950 (Act XX of 1950), and that the only Court which could deal with such an application after the passing of the above said Act was the High Court. For the purpose of this contention reliance is placed upon Sections 10 and 11 of the Banking Companies (Amendment) Act, 1950 (XX of 1950). This is how Section 10 of the amending Act runs :-

'In this Part and in Part III, 'Court' means the High Court exercising jurisdiction in the place where the registered office of the banking company which is being wound up is situated, or, in the case of a banking company incorporated outside India which is being wound up, where its principal place of business in situated, and notwithstanding anything to the contrary contained in the Indian Companies Act, 1913 (VII of 1913), or in any notification, order or direction issued thereunder or in any other law for the time being in force, no other Court shall have jurisdiction to entertain any matter relating to or arising out of the winding up of a banking company.'

4. Section 11 of the amending Act lays down :-

'Where any proceeding for the winding up of a banking company or any other proceeding whether civil or criminal, which has arisen out of or in the course of such winding up, is pending in any court immediately before the commencement of this Act, it shall stand transferred on such commencement to the Court which would have had jurisdiction to entertain such proceeding if this Act had been in force on the date on which the proceeding commenced, and the Court to which the proceeding stands so transferred shall dispose of the proceeding as if this Act and the amendments made thereby were applicable thereto'.

5. Relying on these two sections, it is contended by Mr. Saldhana for the appellant company that after March 18, 1950, on which date the amending Act XX of 1950 was passed, the only Court competent to deal with matters relating to or arising out of the winding up of a banking company is the High Court and that therefore the District Court (East Khandesh) had no jurisdiction to proceed further with the application of the petitioners after the passing of the amending Act. It is argued by Mr. Saldhana that the words of Section 10 of the amending Act are quite unambiguous and not subject to any limitation or reservation. I agree with him that the words 'no other court shall have jurisdiction to entertain any matter relating to or arising out the winding up of a banking company' are perfectly clear and exclude the jurisdiction of all Courts except the High Court.

6. Mr. Kotwal for petitioner No. 1 has argued that the amending Act cannot go beyond the scope of the main Act, i.e., that the provisions of the Banking Companies (Amendment) Act, 1950, cannot go beyond the scope of the Banking Companies Act, 1949 (X of 1949), that the winding up proceeding contemplated to be dealt with under the Banking Companies Act, 1949, are dealt with in Section 38 only of the said Act, that what was sought to be amended by Act XX of 1950 was Part III of the main Act under which Section 38 occurs, and that therefore Section 10 of the amending Act sought only to enact that for such winding up as is referred to in Section 38 of the main Act, the only competent Court which could deal with the said winding up would be the High Court, and not the District Court. I am unable to agree. Of course, if Mr. Kotwal had succeeded in proving that what was sought to be amended by Section 10 of the Banking Companies (Amendment) Act, 1950, was only Part III of the main Act, his argument would have had some force. Section 38 is the only section under the Banking Companies Act, 1949, which deals with winding up. It occurs under Par III of the main Act and deals with winding up which is based only on a limited ground, namely, the ground that the banking company is unable to pay its debts. It is therefore quite clear that if Section 10 of the amending Act (Act XX of 1950) was enacted to amend only Part III of the main Act, the winding up matters which are referred to in the said Section 10 would be only those which are mentioned in Section 38 of the main Act. Therefore if Mr. Kotwal's contention is right, namely, if Section 10 of the amending Act (XX of 1950) was enacted to amend Part III only of the main Act, it would follow that the present winding up matter, not being one under Section 38 of the Banking Companies Act, 1949 (since it is based on several grounds which are outside the purview of Section 38), but being one under the Indian Companies Act, the District Court would have jurisdiction to entertain it. It is accordingly necessary to examine whether what was sought to be amended by Section 10 of Act XX of 1950 was only Part III of the main Act. For submitting that what was sought to be amended was Part III of the main Act only, Mr. Kotwal has contended that the entire Section 10 of the amending Act constitutes one sentence only and that therefore the opening words of the section, 'In this part and in Part III', must govern the entire section. He has based this contention on the fact that there is only a comma, and not a full stop after the words 'where its principal place of business is situated' in the section. We are unable to agree with Mr. Kotwal's construction. In our opinion, if the words 'In this Part and in Part III' are again to be read between the words 'and' and' notwithstanding anything to the contrary', it would be difficult to construe the section at all.

7. The next contention of Mr. Kotwal is that the words 'any matter relating to or arising out of the winding up of a banking company occurring towards the end of Section 10 of the amending Act (XX of 1950) refer to a stage after the winding up order is made and do not include an application for winding up. To this also we are unable to agree. We cannot, in the absence of any good or sufficient reason, restrict the meaning of the language which is wide and clear, namely, 'any matter relating to or arising out of the winding up of a banking company,' so as to exclude from its operation a winding up application and make it refer only to a stage subsequent to the winding up order.

8. Mr. Kotwal has next invited the attention of the Court to Section 11 of the amending Act in which the words 'where any proceeding for the winding up of a banking company' are used and has based an argument thereon that if the Legislature had intended that Section 10 of the said act was to apply to any proceeding for winding up a banking company, it would have used the words 'no other Court shall have jurisdiction to entertain any proceeding for the winding up of a banking company' in Section 10. We have considered this submission but are not impressed by it. The Legislature is not bound always to repeat the same words for expressing the same meaning, but may chose different words meaning the same thing. Even if it be conceded that the words 'any matter arising out of the winding up of a banking company' may refer to a stage subsequent to the winding up order, there is no doubt that the words 'any matter relating to the winding up of a banking company' which are wide and do not admit of any narrowing down must include an application for a winding up order.

9. Mr. Kotwal for respondent No. 1 has next drawn our attention to Section 45B, and has argued that the words 'which may relate to the winding up of the banking company' occurring therein mean the exclusion of an application for a winding up order. His contention is that the words 'relating to the winding up of a banking company' in Section 10 of the amending Act should also be given the same meaning. It is not necessary for us to express our opinion whether the above mentioned words in Section 45B have a restricted meaning as contended by Mr. Kotwal. It is, however, to be remembered that Section 45B is dealing with claims made by or against any banking company and all questions of priorities and all other questions whether of law or of fact and it is in that context that perhaps the words 'which may relate to the winding up of the banking company' may have a restricted meaning. There is no such contextual reason at all to restrict the meaning of the words 'relating to the winding up of banking company' occurring in section 10.

10. The next contention of Mr. Kotwal is that an amending Act cannot go beyond the scope of the main Act. What is meant by him is that we should not construe Section 10 of the amending Act in such a way as to go against the spirit and scope of Section 38 of the main Act. Reliance is put on Halsbury's Laws of England, second edition, Volume XXXI, Article 626 at page 493, where it is observed : 'Mere amending provisions should not be interpreted so as to alter completely the character of the principal law, unless clear language is found indicating such an intention.'

11. I do not see how these observations help Mr. Kotwal. The language used in. Section 10 of Act XX of 1950 is entirely free from ambiguity, is quite general and clear and is not subject of any reservation. The words 'any matter relating to or arising out of the winding up of a banking company' would, in our opinion, include an application for winding up. We are accordingly unable to accept Mr. Kotwal's argument that Section 10 of the amending Act (XX of 1950) does not take away the jurisdiction of the District Court to proceed with and decide the winding up matters, except those that are dealt with in Section 38 of the Banking Companies Act, 1949. The court's attention was invited by Mr. Kotwal to the decision in Union of South Africa (Minister of Railways and Harbours) v. Simmer and Proprietary Mines. It was a case in which by Ordinance LIV of 1903 (Transvaal), as amended by Ordinance XXXI of 1905, the Lieutenant Governor was authorised to make regulation for the protection preservation of the surface of mines and of railways, and for laying down conditions under which such railways may be undermined. A regulation framed under the above Ordinance provided as following; 'No owner shall in any case carry on any mining operations under or near railways without first having given notice to the Inspector. Where mining operations have already taken place and where, in the opinion of the Inspector of Mines, it is necessary to protect the surface of a mine, some adequate means of support shall be provided to such extent as the Inspector may direct.'

12. A question arose whether under Ordinance LIV of 1903, as amended by Ordinance XXXI of 1905, a regulation could be framed to authorize the Inspector to order the filling up of the excavations which were made prior to the Ordinance. In the body of the judgment it was observed (at page 596) that in the opinion of their Lordships, it was not a legitimate interpretation of mere amending provisions to hold that they completely altered the character of the principal law, unless clear language was found indication such an intention. It is also important to bear in mind that Ordinance XXXI of 1905 provided specifically that it and the Ordinance of 1903 (LIV of 1903) were to be read as one. As I have already pointed out, the relevant words in the ease before us, namely, 'any matter relating to or arising out of the winding up of a banking company' do not admit of any ambiguity. They are quite plain and therefore I have no doubt that Mr. Saldhana's contention for the appellant-company namely, that after the passing of the amending Act (XX of 1950) the only court which was competent to deal with such applications was the High Court, must be accepted.

13. It appears quite clear that the words 'notwithstanding anything to the contrary contained in the Indian Companies Act, 1913, which are to be found in Section 10 of the amending Act, do show that the application of Section 10 is not to be limited only to winding up matters falling within the ambit of Section 38 of the main Act. Section 38 of the main Act deals with winding up based only on one ground (a banking company's inability to pay its debts), which is not the sole ground, but one of the grounds, for winding up proceedings under Section 162 of the Indian Companies Act. Therefore if the point of jurisdiction referred to in Section 10 of the amending Act is to relate only to winding up matters dealt with in Section 38 of the main Act, the words 'notwithstanding anything to the contrary contained in the Indian Companies Act, 1913' become devoid of purpose. They possess a meaning only if the point of jurisdiction dealt with in Section 10 is not limited to winding up matters referred to in Section 38 of the Banking Companies Act, 1949, but also extends to the winding up proceedings under the Indian Companies Act.

14. We have already seen that Section 10 of the amending Act lays down which is the Court of competent jurisdiction for entertaining matters relating to or arising out of the winding up of a banking company. Section 11 deals with the transfer of pending case from the Court, which becomes in competent to proceed with them in virtue of the amending Act, to the competent Court. There is not doubt that the word 'court' in the expression 'is pending in any court immediately before the commencement of this Act' in Section 11 of the amending Act is the District Court, since that was the court of competent jurisdiction to entertain and decide proceedings for the winding up of a banking company till the date of amendment of the Banking Companies Act, 1949. There is also no doubt that the word 'Court' in the expression 'to the court which would have had jurisdiction to entertain' in the said Section 11 means the court which is referred to in the immediately preceding section, namely, the High Court. Therefore reading Section 10 and 11 of the amending Act, I feel no doubt that for the winding up proceedings in regard to a banking company which may be pending in the District Court at the date of the amendment of the Banking Companies Act, 1949, by Act XX of 1950 the only competent court to which they must be transferred is the High Court.

15. If we accept Mr. Kotwal's contention that what is enacted by Section 10 of the amending Act (XX of 1950) is that only in respect of the winding up referred to in Section 38 of the main Act the High Court is to be the competent Court to entertain the said proceeding, there will immediately arise a position which could not have been intended by the Legislature, a position in which a part of a winding up proceeding may be prosecuted in a District Court and another part of the same petition may be prosecuted in the High Court. For instance, a winding up petition against a banking company may be based on several grounds, one of the grounds being the company's inability to pay its debits. Now, if we are to accept Mr. Kotwal's construction of section 10 of the amending Act, the High Court will be the only competent Court to deal with the ground regarding the company's inability to pay its debts, and so far as the other grounds are concerned, the District Court would be the competent Court to proceed to deal with them. This means that in respect of one and the same winding up proceeding the High Court only would be competent to deal with a part of it, and the District Court would be competent to deal with the remaining portion of it. Surely, the Legislature could not have intended any such thing as this. Therefore we must reject the contention of Mr. Kotwal that only for the winding up which referred to in Section 38 of the Banking Companies Act, 1949, the High Court is the competent Court and that for other winding up proceedings in regard to the banking companies the District Court is the competent Court.

16. In view of my finding that in virtue of Section 10 of the Banking Companies (Amendment) Act, 1950, the High Court is the only Court of competent jurisdiction to entertain any matter relating to the winding up of a banking company, the winding up order passed by the District Judge of East Khandesh is set aside and it is ordered under Section 11 of the amending Act (XX of 1950) that the proceeding be transferred to the Original Side of the High Court.

Bavdekar, J.

17. The question before us is as to whether, after the coming into force of the Banking Companies (Amendment) Act (XX of 1950), the District Court which was properly seized of the present application had acted without any jurisdiction in proceeding further with the matter.

18. Two sections of Act XX of 1950 require consideration. The first in Section 10 which added to the Banking Companies Act (X of 1949) a whole Part, namely Part IIIA. The first section in that added Part was numbered Section 45A, and with the marginal note 'Court defined', it went on to say : 'In this Part and in Part III, 'Court' means the High Court exercising jurisdiction in the place where the registered office of the banking company which is being wound up is situated, or, in the case of a banking company incorporated outside India which is being wound up, where its principal place of business is situated, and notwithstanding anything to the contrary contained in the Indian Companies Act, 1913 (VII of 1913), or in any notification, order or direction issued thereunder or in any other law for the time being in force, no other court shall have jurisdiction to entertain any matter relating to or arising out of a banking company.'

19. Then Section 11 goes on to say : 'Transfer of pending proceeding in winding up to the Court exercising jurisdiction under this Act. - Where any proceeding for the winding up of a banking company or any other proceeding, whether civil or criminal, which has arisen out of or in the course of such winding up, is pending in any court immediately before the commencement of this Act, it shall stand transferred on such commencement to the Court which would have had jurisdiction to entertain such proceeding if this Act has been in force on the date on which the proceeding commenced, and the Court to which the proceeding stands so transferred shall dispose of the proceeding as if this Act and the amendments made thereby were applicable thereto.'

20. Now, the first point which the learned advocate who appears on behalf of the respondent has made is that the words in Section 10 'any matter relating to or arising out of the winding up of a banking company' do not mean an application for a winding up order. He says that many mattes arise after a winding up order is made in the course of the winding up of a banking company and the words 'any matter relating to or arising out of the winding up of a banking company' are used to denote such a matter distinguishing it from an application for a winding up order. The words 'relating to the winding up of a banking company' are wide enough however to mean even an application for a winding up order, and the usual rule is that unless there is any reason to the contrary, if the words have got a wider meaning, that meaning is not to be restricted. The learned advocate, who appears for the respondent, must therefore show some reason why the meaning of the words must be restricted, and he says that that meaning ought to be restricted because whenever the Act had any reason to refer to an application for a winding up order it has used a different terminology and the words 'relating to the winding up of a banking company' are used in order to denote not an application for a winding up order but proceedings arising subsequently during the course of a winding up proceeding. In support of this contention he relies first upon Section 11 of the amending Act. Now that section does say 'any proceeding for the winding up of a banking company or any other proceeding, whether civil or criminal, which has arisen out of or in the course of such winding up.' If we consider that after the words 'any proceeding for the winding up of a banking company' there are added the words 'or any other proceeding whether civil or criminal, which has arisen out of or in the course such winding up,' the former words would seem to be intended apply to an application for a winding up order. But this is the only section the learned advocate for the respondent had been able to point out to us in which for an application for a winding up order there are used special words, in this case the words 'any proceeding for the winding up of a banking company', and we cannot therefore restrict the meaning of the general words used in Section 45A on the ground that whenever the Act wanted to indicate an application for a winding up order it has used a different terminology. In order to support such an argument it was necessary to have the words 'any proceeding for the winding up of a banking company' used for an application for winding up order in more than one place, and because in one place only these words are used, it cannot possible be said that the Act used a different terminology whenever it wanted to signify an application for a winding up order.

21. The learned advocate for the respondent points out next the Section 45B; '(1) Notwithstanding anything to the contrary contained in the Indian Companies Act, 1913 (VII of 1913), or in any other law for the time being in force, the Court shall have full power to decide all claims made by the or against any banking company (including claims by or against any of its branches in India) and all questions of priorities and all other questions whatsoever, whether of law or fact, which may relate to or arise in the course of the winding up of the banking company coming within the cognizance of the Court.'

22. It may well be of course that the words 'relating to the winding up of a banking company' have in this section got a meaning which will exclude an application for a winding up order. On that question we express no opinion, but if those words have that meaning, that is because of the context in which they are used. The argument which, as a matter of fact, has been addressed to us is that the question of claims by or against a banking company and of priorities are not likely to arise before a winding up order is made. If at all, therefore, the words have got a restricted meaning which is sought to be attributed to them in this section, that is because of the context in which the words have been used. We cannot attributes to the words 'relating to the winding up of a banking company' in section 45A the same restriction unless there is anything in the context there which requires that they should be so restricted, and we do not find anything in the words of Section 45A which is restrictive of the general meaning of these words.

23. The next point which the learned advocate for the respondent has made is that the words 'notwithstanding anything to the contrary contained in the Indian Companies Act, 1913 (VII of 1913), or in any notification, order or direction issued thereunder or in any other law for the time being in force, no other court shall have jurisdiction to entertain any matter relating to or arising out of the winding up of a banking company' have reference merely to an application for a winding up order made under Section 38 of the main Act.

24. Now, that section enables a court which, prior to the coming into force of the amending Act, may have been a District Court or a High Court, to entertain an application for a winding up order against a banking company form the Reserve Bank which it possibly could not do before. It also provides that upon receiving such an application or when the applicant is some one else but the company is unable to pay its debts, the court shall order its winding up. The learned advocate who appears for the respondent contends that what the first part of Section 45A enacts is that the only court which can entertain an application for the winding up of a banking company on the ground that it is unable to pay its debts is the High Court and the jurisdiction the main Act conferred on the other courts to entertain an application against a banking company on the ground that it is unable to pay its debts is taken away. But the learned advocate says that the jurisdiction to entertain an application against a banking company which does not include that ground still subsists, and he says that that result follows because Section 45A in the first instances amends the definition of the word 'court' only for purposes of Part III. Now, in the first instance it is not correct to say that Section 38 of the main Act confers any new jurisdiction on any court. It is true that but for it an application could not have been made by the Reserve Bank for winding up a banking company, but that is not conferring new jurisdiction. Secondly, the reason why the definition of 'court' in Section 5 (e) of the Act was not amended generally by the amending Act was the word 'court' is to be found not only in Chapter III, but also at any rate in one place in the Act, which is in Part IV, and if the intention obviously was that the word 'court' should have its ordinary meaning in other parts, it would not have done to amend the definition of 'court' generally. If the definition of 'court' had been amended generally to mean a 'High Court' in that case it would be only the High Court which would be restricted to taking cognisance only in the circumstances mentioned in Section 46 of the Act. In the second instance, it is true that the first part of Section 45A says that the court will mean the High Court only 'In this Part and in Part III'. So far as Part III, therefore, is concerned, the effect of the amendment in the first part is that the District Court cannot entertain an application for a winding up order against a banking company form the Reserve Bank. But Section 45A does not stop with the first part. It has got a second part and the second part in categorical terms says that no other court will have jurisdiction to entertain any matter, among others relating to the winding up of a banking company. The learned advocate for the respondent says that Section 45A merely amends Part III. We see no reason for holding so. It does undoubtedly amend Part III, but in itself it is first of all a first section in a new Part, Part IIIA. In the second instance, it cannot possibly be said that it merely amends Part III without restricting the general words at the end of the sub-section, and it is not argument in favour of restricting the effect of the general words that it is only an amendment of Part III. This is arguing in a circle. The learned advocate for the respondents says next that there is only a common at the end of the first part of Section 45A and consequently the words form the first part could be read into the second part. We do not think that the comma makes any particular difference to the argument. It is true that if, instead of a comma, there had been a semicolon or a full stop, the case of the learned advocate would have been weaker. But the case with the comma is obviously weaker that the case without a comma, and we do not think that even if we read the section without a comma, the effect of the latter part of the section can be restricted. It is true that whenever there are two clauses joined by 'and', if there are many words which have reference to both clauses, then, they may be found in the first part and need not be repeated in the second part, and it is perfectly reasonable for anyone who has got to deal with two clauses connected by 'and' to say that looking to the context the words form the first part should be read into the second. But, in our view, in this case it cannot be done, because if words 'In this Part and In Part III' are read again after the word 'and', the clause makes no meaning. The clause will read 'In this Part and in Part III, notwithstanding anything to the contrary contained in the Indian Companies Act, 1913 (VII of 1913), or in any notification, order or direction issued thereunder or in any other law for the time being in force, no other court shall have jurisdiction to entertain any matter relating to or arising out of the winding up of a banking company.' The words 'no other court shall have jurisdiction' do not connect with the words 'In this Part and in Part III,' and it is obvious therefore that is not correct to argue that these words ought to be read in the second part. They can be read in the second part only provided in the first instance grammatically they will have a place in it. In the second instance there is nothing in the context which would militate against their being taken there. But in this case the very first condition is not satisfied. Consequently the words 'In this Part and in Part III' cannot be read in the latter part of Section 45A.

25. A further point which has been made, however, is that the meaning of the words ought to be restricted because the opening words of Section 38 kept the jurisdiction of the District Courts intact, and it is said that in case we were to read the latter part of Section 45A generally there would be a conflict. Now the latter part of Section 45A takes away the jurisdiction of the District Court which was conferred by a notification of Government issued under Section 3 of the Indian Companies Act. Let us see whether there is anything in these words which conflicts with either the words of the main Act or the words of the Indian Companies Act. The first part of Section 38 does not affect the question of any jurisdiction at all. That part permitted any Court which had jurisdiction, whether it was the High court or the District Court, to entertain an application for the winding up of a banking company from the Reserve Bank and made it obligatory for the Court to wind up the company on receiving such an application or when the company was unable to any its debts. The opening words of Section 38 of the Banking Companies Act were added in order to make it clear that the effect of Section 38 was not to prevent the Courts which has jurisdiction from entertaining applications against banking companies either on the grounds mentioned under Section 162 or on the grounds mentioned under Section 271 of the Indian companies Act. The words which follow 'and without prejudice to its powers under Section 37' show quite clearly that what the opening words of Section 34 (8) are concerned with was not the jurisdiction of the Courts but the powers of the Courts, and in order to set at rest any doubt which may be raised or to obviate any arguments which might be made, the section provided that the power of the Courts to entertain applications for the winding up of companies on the grounds mentioned in Section 162 of the Indian Companies Act, or the power of the Courts under section 271 of the Act, were intact and were not taken away. This position is not changed because of Section 45A and there is therefore no conflict between the opening words of Section 38 and Section 45A. Now it is true that if the later part of Section 45A of the Amending Act had not contained the words 'notwithstanding anything to the contrary contained in the Indian Companies Act, 1913 (VII of 1913), or in any notification, order or direction issued thereunder,' there would have been a conflict between the second part of Section 45A and the Indian Companies Act in so far as it confers jurisdiction upon a District Court. But it is precisely to remove such a conflict that Section 45A contains the words 'notwithstanding anything to the contrary contained in the Indian companies Act, 1913 (VII of 1913), or in any notification, order or direction issued thereunder.' The words resolve the conflict and give preference to the words of Section 45A which overrides the provisions of the Indian Companies Act which gave jurisdiction to other High court and the District Court also when empowered by Provincial Government. It is not correct to say therefore that the interpretation which we seek to place would raise any conflict.

26. It is said, however, that the words 'notwithstanding anything to the contrary contained in the Indian companies Act, 1913 (VII of 1913),' which find a place in section 45A, were not placed there with the intention of resolving the conflict. It is said that those words could find a place there even if there was no intention to take away the jurisdiction of the District Court. The learned advocate who appears for the respondent draws our attention in this case to Section 164 of the Indian Companies Act, under which provision in matters in which the jurisdiction is of the High Court and not of the District Court, the High Court could, after making an order of the winding up of a company, direct all subsequent proceeding to be had in a District Court, and thereupon under the provisions of Section 164 the District Court shall, for the purpose of winding up the company, be deemed to be 'the court' within the meaning of the Indian Companies Act and it has got the same powers for the purpose of the winding up as the High Courts has. But this argument ignores the words 'or in any notification, order or direction issued thereunder.' The words 'in any notification, order or direction issued thereunder.' have obviously got reference to the jurisdiction of the District Court, because the jurisdiction of the District Court under the Indian Companies Act is not conferred upon that Court by the Act. It is conferred by a notification issued by government under the provisions of Section 3 of that Act. In our view, therefore, these words were specifically inserted in Section 45A to resolve the conflict and it was not the intention in enacting these words merely to provide for the High Court not sending the papers in regard to the winding up to a District Court after the winding up order was made. As a matter of fact, if that was the sole intention, suitable words could have been added to the first part of Section 45A and the words simply would have been that 'notwithstanding anything to the contrary contained in Section 164 of the Indian Companies Act, the High court shall not send the proceeding for the winding up of a company to a District Court.' We do not think that, if the intention was as the learned advocate for the respondent suggested it was, the words would have urn in the manner in which they do now.

27. It is argued, however, that if we were to accept this interpretation, we would be allowing an amending Act to increase the scope of the original Act beyond what was originally contemplated, and it is said that in the absence of any words which would enable us to put this interpretation, the amending Act ought not to be interpreted so as to increase the scope of the main Act. Now, it is true that the main Act did not itself take away the jurisdiction of any court which had jurisdiction under the Indian Companies Act to entertain an application for a winding up order. It would be true to some extent, therefore to say that the amending Act increase the scope of the principal Act, but the question is as to whether there are not specific words in the amending Act which increase its scope, because it is not contended that an amending Act can never increase the scope of the principal Act. As a matter of fact, the case which was relied upon, on behalf of the respondent. Union of South Africa (Minister of Railways and Harbours) v. Simmer and Jack Proprietary Mines was a case in which there was enacted under the powers given by an Ordinance a regulation which empowered an Inspector to direct in certain cases the filling up of excavations in the course of mining. The excavations were made not only before the amending Act but also before he principal Act, and the Inspector had made an order directing the filling up of these excavations. There were two contentions made before their Lordships of the Privy Council. One was that the regulation, as a matter of fact, did not permit the Inspector to make an order directing the excavations made long before even the first Ordinance to be filled up. This contention they accepted and the remarks which are relied upon were only made by them when answering a hypothetical argument that assuming that the regulation was capable of bearing the interpretation that it empowered the Inspector to fill up the excavations made before the first Ordinance, such a regulation was ultra vires of the powers conferred upon the authority which made it under the provisions of the Ordinances of 1903 and 1905. When dealing with this argument their Lordships and that if the words of the two Ordinances which were relied upon were given a meaning that the authority was given power to make such a regulation, then the amending Ordinance would be increasing the scope of the original Ordinance. In order to understand that argument it is necessary to state that the original Ordinance did not confer any powers upon the Lieutenant Governor who made the regulation to make a regulation for the protection of railways, with the result, therefore, that the regulation could not be made under the original Ordinance. It was said, however, that the Ordinance of 1905 provided that it and the Ordinance of 1903 were to be read as one and there were general powers conferred by the Ordinance of 1905 for making a regulation in respect of the mines for the protection and preservation of the surface of mines and of railways, and for laying down conditions under which such railways might be undermined. Their Lordships pointed out that inasmuch as the regulation could not be made under the original Ordinance unless there were any words in the new Ordinance which would permit the enacting power to be read as having been conferred retrospectively, the words could not be interpreted to mean that the Lieutenant Governor had got power to make the regulation which affected the excavations which had already been made. They said (page 596) : 'Adequate effect can be given to the words in question, consistently with the general prospective scope of the Ordinance, by holding that the Lieutenant-Governor is authorised in respect of a abandoned excavations to make regulations for the protection and preservation of railways against future operations which may so affect those excavation as to endanger the railways.'

28. The question, therefore, is as to whether even if the scope of the main Act is increased, this is done by special words in the amending Act, and, as I have already mentioned, there are special words in the amending Act which increase the scope of the main Act. It is easy to see why, as a matter of fact, the Legislature should have wanted to enact a provision by which all applications for the winding up of a banking company should go before the High court which has jurisdiction under Section 45A. Banking companies have got branches all over the country. It is exceedingly inconvenient that winding up applications should go on before different courts on different grounds. It was thought desirable therefore that there should be only one application for the winding up of a banking company, and the only way in which this could be provided was by directing that no court shall have jurisdiction to entertain an application, among others, for winding up a company except the High court which had jurisdiction as mentioned in the opening part of Section 45A. If we accept the interpretation which the learned advocate who appears on behalf of the respondent asks us to accept, the result must inevitably be that against the same banking company winding up proceedings may go on in different place. As a matter of fact, it would be necessary sometimes to have more than one winding up proceeding in different places. Supposing there was an application for winding up a banking company pending at the time when the Act had come into force, the only application which would be transferred, if the argument of the respondent is accepted, would be the application in so far as it related to the inability of the banking company to pay its debts. It would hardly be the intention that part of the application should be transferred to the High court and part of it should go on in the District Court. The application was originally instituted in the District Court in this case. Of course, there is no application against the banking company on the ground that it was unable to pay its debts. But the interpretation which can be placed upon the latter part of Section 45A could be only one, and that interpretation must necessarily be that in the case of banking companies, after the coming into force of the amending Act of 1950, the jurisdiction of the courts other than the particular High court mentioned in Section 45A is taken away.

29. I therefore agree with the order proposed by may learned brother that the proceedings in this case will stand transferred to the Original Side of this Court.

30. Appeal allowed.


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