Skip to content


The Fortune Commercial Bank Ltd. Vs. Vidyagauri J. Metha and ors. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtMumbai High Court
Decided On
Case NumberFirst Appeal No. 309 of 1950
Judge
Reported inAIR1951Bom274; (1951)53BOMLR72; ILR1951Bom403
ActsBanking Companies (Amendment) Act - Sections 10 and 11; ;Companies Act, 1913 - Sections 162; Banking Companies Act, 1949
AppellantThe Fortune Commercial Bank Ltd.
RespondentVidyagauri J. Metha and ors.
Appellant AdvocateG.J. Saldhana, Adv.
Respondent AdvocateR.B. Kotwal, Adv. for Respondent No. 1
Excerpt:
banking companies (amendment) act (xx of 1950), sections 10, 11 - application for winding up company--whether district court has jurisdiction to entertain such application--application pending in district court at date of amending act whether to be transferred to high court.; under 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 words 'any matter relating to or arising out of the winding up of a banking company' in section 10 of the act include an application for winding up.; union of south africa (minister of railways and harbours) v. simmer and jack proprietary mints, referred to.; under sections 10 and 11 of the banking companies.....vyas, j. 1. this appeal arises out of insolvency appln. no. 45 of 1949 of the dist. ct. of east khandesh in which the dist. j. of east khandesh has ordered under section 162, companies act (vii [7] 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 applt. company, one mr. k. g. chaudhari, had grossly mismanaged the affairs of the company to secure benefit to himself & his friends, that loans without 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 1-3-1949, the company was doing no business, that the.....
Judgment:

Vyas, J.

1. This appeal arises out of Insolvency Appln. No. 45 of 1949 of the Dist. Ct. of East Khandesh in which the Dist. J. of East Khandesh has ordered under Section 162, Companies Act (VII [7] 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 applt. company, one Mr. K. G. Chaudhari, had grossly mismanaged the affairs of the company to secure benefit to himself & his friends, that loans without 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 1-3-1949, 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 & that therefore it was just and equitable to wind up the company.

2. The original opponent company feeling aggrieved by the above-stated order has come in appeal.

3. At the very outset the applt's learned advocate has raised a point of law relating to the jurisdiction of the Dist. Ct. which has ordered the winding up. It was contended by him that the Dist. Ct. had no jurisdiction to proceed with the appln. for winding up after the passing of the Banking Companies (Amendment) Act, 1950 (XX [20] of 1950) & that the only Ct. which could deal with such an appln. after the passing of the above said Act was the H. C. For the purpose of this contention reliance is placed upon Sections 10 and 11, Banking Companies (Amendment) Act, 1950 (xx [20] 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 is situated, and notwithstanding anything to the contrary contained in the Indian Companies Act, 1913 (VII [7] 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.'

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 thecourse of such winding up, is pending in any Courtimmediately 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 he proceeding stands so transferred shall dispose of the proceeding as if this Act and the amendment made thereby were applicable thereto.'

4. Relying on these two sections it was contended by Mr. Saldhana for the applt. company that after 18-3-1950, on which date the amending Act xx [20] of 1950 was passed the only Ct. competent to deal with matters relating to or arising out of the winding up of a banking company is the H. C & that therefore the Dist. Ct. (East Khandesh) had no jurisdiction to proceed further with the appln. of the petnrs. 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 Cts. except the H. C.

5. Mr. Kotwal for petner. No. 1 argued that the amending Act cannot go beyond the scope of the mam 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 [10] of 1949), that the winding up proceedings 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 [20] of 1950 was Part III of the main Act under which Section 38 occurs, and that there fore 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 Ct. which could deal with the said winding up would be the H. C. & not the Dist. Ct. I am unable to agree. Of course, if Mr. Kotwal had succeeded in proving that what was sought to be amended by Section 10, 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 Part III of the mam Act & 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 (xx [20] of 1950) was enacted to amend only Part in of the mam Act, the winding up matters which arereferred 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 S 10 of the amending Act (XX [20] of 1950) was enacted to amend Part III only f the main Act, it would follow that the present winding-up matter, not being one under Section 38, Banking Companies Act, 1949 (since it 13 based on several grounds which are outside the purview of Section 38), but being one under the Companies Act, the Dist Ct. 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 [20] 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 & 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,' & 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.

6. 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 [20] of 1950) refer to a stage after the winding up order is made & do not include any appln. 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 appln. & make it refer only to a stage subsequent to the winding up order.

7. Mr. Kotwal has next invited the attention of the Ct. to Section 11 of the Amending Act in which the words where any proceeding for the winding up of a banking company' are used & 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, bat are not impressed by it. The Legislature is not bound always torepeat the same words for expressing the same meaning, but may choose different words meaning the same thing. Even if it be conceded that the words 'any matter ariaing 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 worda 'any matter relating to the winding up of a banking company' which are wide & do not admit of any narrowing down must include an appln. for a winding up order.

8. Mr. Kotwal for resp. 1 has next drawn our attention to Section 45 B & has argued that the words 'which may relate to the winding up of the banking company' occurring therein mean the exclusion of an appln. 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 & all questions of priorities & all other questions whether of law or of fact & 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 a banking company' occurring in Section 10.

9. 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, Edn. 2, Vol. 31, Article 626 at p. 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.'

I do not see how these observations help Mr. Kotwal. The language used in Section 10 of Act XX [20] of 1950 is entirely free from ambiguity, is quite general & clear and is not subject to 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 appln for winding up. We are accordingly unable to accept Mr. Kotwal's argument that Section 10 of the Amending Act (XX [20] of 1950) does not take away the jurisdiction of the Dist. Ct. to proceed with & decide the winding upmatters, except those that are dealt with in Section 88, Banking Companies Act, 1949. The Ct.'s attention was invited by Mr. Kotwal to the decision in Union of South Africa v. Simmer and Jack Proprietary Mines (1918) A. C. 591: 87 L. J. P. C. 117. It was a case in which by Ordinance LIV [54] of 1903 (Transval), as amended by Ordinance XXXI [31] of 1905, the Lieutenant-Governor was authorized to make regulations for the protection & preservation of the surface of mines & of railways, & for laying down conditions under which such railways may be undermined. A regulation framed under the above Ordinance provided as follows :

'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.'

A question arose whether under Ordinance LIV [54] of 1903, as amended by Ordinance XXXI [31] 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 p. 596) that in the opinion of their Lordships, it was not a legitimate interpretation of mere amending provisions to hold that they completely alter the character of the principal law unless clear language was found indicating such an intention. It is also important to bear in mind that Ordinance XXXI [31] of 1905 provided specifically that it & the Ordinance of 1903 (LIV [54] of 1903) were to be read as one. As I have already pointed out, the relevant words in the case 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 & therefore I have no doubt that Mr Saldhana's contention for the appct. company, namely, that after the passing of the amending Act (xx [20] of 1950) the only Ct. which was competent to deal with such applns. was the H. C. must be accepted.

10. It appears quite clear that the wordsnotwithstanding anything to the contrary contained in the Indian Companies Act, 1913 (VTI [7] of 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 underS. 162, 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 (VII [7] of 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, Banking Companies Act, 1949, but also extends to the winding up proceedings under the Companies Act.

11. We have already seen that Section 10 of the amending Act lays down which is the Ct. 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 cases from the Ct. which becomes incompetent to proceed with them in virtue of the amending Act, to the competent Ct. There is no 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 Dist. Ct. since that was the Ct. of competent jurisdiction to entertain & decide proceedings for the 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 Ct. which is referred to in the immediately preceding section, namely, the H. C. Therefore reading Ss. 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 Dist. Ct. at the date of the 'amendment of tbf Banking Companies Act, 1949, by Act xi [20] of 1950, the only competent Ct. to which they must be transferred is the H. C.

12. If we accept Mr. Kotwal's contention that what is enacted by Section 10 of the amending Act (XX [20] of 1950) is that only in respect of the winding up referred to in Section 38 of the main Act the H C. is to be the competent Ct. 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 Dist. Ct. & another part of the same petn. may be prosecuted in the H. C. For instance, a winding up petn. against a banking company may be based on several grounds one of the grounds, being the Company's inability to pay its debts. Now, if we are to accept Mr. Kotwal's construction of Section 10 of the amending Act, the H. C. willbe the only competent Ct. to deal with the ground regarding the company's inability to pay its debts, & so far as the other grounds are concerned, the Dist Ct. would be the competent Ct. to proceed to deal with them. This means that in respect of one & the same winding up proceeding the H. C. only would be competent to deal with a part of it, & the Dist. Ct. 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 is referred to in Section 38, Banking Companies Act, 1949, the H. C. is the competent Ct. & that for other winding up proceedings in regard to the banking companies the Dist. Ct. is the competent Ct.

13. In view of my finding that in virtue of Section 10, Banking Companies (Amendment) Act, 1950, the H. C is the only Ct. of competent jurisdiction to entertain any matter relating to the winding up of a banking company, the winding up order passed by the Dist. J. of East Khandesh is set aside & it is ordered under Section 11 of the amending Act (XX [20] of 1950) that the proceedings be transferred to the Original Side of the H. C.

Baydekar, J.

14. The question before us is as to whether, after the coming into force of the Banking Companies (Amendment) Act (XX [20] of 1950), the Dist. Ct. which was properly seized of the present appln. had acted without any jurisdiction in proceeding further with the matter.

15. Two sections of Act XX [20] of 1950 require consideration. The first is Section 10 which added to the Banking Companies Act (x [10] of 1949), a whole part, namely, Part IIIA. The first section in that added Part was numbered Section 45A, & 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 [7] 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.'

Then Section 11 goes on to say:

'Transfer of pending proceedings 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 whichwould have had jurisdiction to entertain such proceeding if this Act had been in force on the date on which the proeeeding 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 theteto.'

16. Now, the first point which the learned advocate who appears on behalf of the resp. 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 appln. for a winding up order. He says that many matters arise after a winding up order is made in the course of the winding up of a banking company & 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 appln. for a winding up order. The words 'relating to the winding up of a banking company' are wide enough however to mean even an appln. for a winding up order, & 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 resp. must therefore show some reason why the meaning of the words must be restricted, & he says that that meaning ought to be restricted because whenever the Act had any reason to refer to an appln. for a winding up order it has used a different terminology & the words 'relating to the winding up of a banking company' are used in order to denote not an appln. 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 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 of such winding up,' the former words would seem to be intended to apply to an appln. for a winding up order. But this is the only section the learned advocate for the rasp, has been able to point out to us in which for an appln. for a winding up order there are used special worda, in this case the words 'any proceeding for the winding up of a banking company,' & we cannot therefore restrict the meaning of the general words uaed in Section 45A on the ground that whenever the Act wanted to indicate an appln. for a winding up order it has used a different terminology. In order to support such an argument it was necessary to hare the words 'anyproceeding for the winding up of a bankingcompany' used for an appln. for a winding up order in more than one place, & because in one place only these words are used, it cannot possibly be said that the Act used a different termimology whenever it wanted to signify an appln. for a winding up order.

17. The learned advocate for the resp. pointsout Best that Section 45B reads :

'(1) Notwithstanding anything to the contrary contained in the Indian Companies Act, 1913 (VII [7] of1913), or in any other law for the time being in force, the Court shall have full power to decide all claims made by 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.'

It may well be of course that the words 'relating to the winding up of a banking company' have in this seation got a meaning which will exclude an appln. 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 questions of claims by or against a banking company & of priorities are not likely to arise before a winding uporder is made. If at all 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 attribute 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, & we do not find anything in the words of Section 45A which is restrictive of the general meaning of these words.

18. The next point which the learned advocate for the resp. has made is that the words

'Notwithstanding anything to the contrary contained in the Indian Companies Act, 1913 (VII [7] 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 appln. for a winding up order made under Section 38 of the main Act.

19. Now, that section enables a Ct. which. prior to the coming into force of the amending Act, may have been a Dist. Ct. or a H. C. to entertain an appln. for a winding up order against a banking company from the Reserve Bank which it possibly could not do before. It also provides that upon receiving such an appln. or when the appct. is some one else but thecompany is unable to pay its debts, the Ct. shall order its winding up. The learned advocate who appears for the resp. contends that what the first part of Section 45A enacts is that the only Ct. which can entertain an appln. for the winding up of a banking company on the ground that it is unable to pay its debts is the H. C. & the jurisdiction the main Act conferred on the other Cts. to entertain an appln. 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 appln. against a banking company which does not include that ground still subsists, & he says that that result follows because Section 45A in the first instance 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 Ct. It is true that but for it an appln. could not have been made by the Eeserve 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 that the word 'Court' is to be found not only in chap. III, but also at any rate in one other place in the Act, which is in Part IV, & 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 H. C. which would be restricted to taking cognizance 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 Ct. will mean the H. C. 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 Dist. Ct. cannot entertain an appln. for a winding up order against a banking company from a Reserve Bank. But Section 45A does not stop with the first part. It has got a second part & the second part in categorical terms says that no other Ct. will have jurisdiction to entertain any matter, among other, relating to the winding up of a banking company. The learned advocate for the resp. says that Section 45A merely amends Part III. We see no reason for holding so. It does undoubtedly amend Part in, 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 no argument in favour of restricting theeffect of the general words that it is only an amendment of Part III. That is arguing in a circle. The learned advocate for the resp. saya next that there is only a 'comma' at the end of the first part of Section 45A & consequently the words from 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 than the case without a comma, & 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 any words which have reference to both clauses, then, they may be found in the first part & need not be repeated in the second part, & 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 from the first part should be read into the second. But, in our view, in this case it cannot be done, because if the 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 [7] of 1913), or in any notification, order or direction issued there under 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,' & it is obvious therefore that it is not correct to argue that these words ought to be read into 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.

20. 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 Dist Cts. intact, & 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 Dist. Ct. which was conferred by a notification of Govt.isaued under Section 3, Companies Act. Lei us see whether there is anything in these words which conflicts with either the words of the mam Act or the words of the Companies Act. The first part of Section 38 does not affect the question of any jurisdiction at all. That part permitted any Ct. which had jurisdiction, whether it was the H C. or the Dist. Ct., to entertain an appln. for the winding up of a banking company from the Reserve Bank & made it obligatory for the Ct. to wind up the company on receiving such an appln. or when the company was unable to pay its debts. The opening words of Section 38, Banking Companies Act were added in order to make it clear that the effect of Section 38 was not to prevent the Cts. which had jurisdiction from. entertaining applns. against banking companies either on the grounds mentioned under Section 162 or on the grounds mentioned under Section 271, 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 Cts. but the powers of the Cts., & 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 powers of the Cts. to entertain appln. for the winding up of companies on the grounds mentioned in Section 162, Companies Act, or the powers of the Cts. under Section 271 of the Act, were intact & were not taken away. This position is not changed because of Section 45A & there is therefore no conflict between the opening words of Section 38 & Section 45A. Now it is true that if the latter part of Section 45A of the Amending Act had not contained the words

'notwithstanding anything to the contrary contained in the Indian Companies Act, 1918 (VII [7] of 1913), or in any notification, order or direction issued thereunder,'

there would have been a conflict between the second part of Section 45 A & the Companies Act 10 so far as it confers jurisdiction upon a Dist. Ct. 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 [7] of 1913), or in any notification, order or direction issued thereunder.'

The words resolve the conflict & give preference to the words of Section 45A which overrides the provisions of the Companies Act which gave jurisdiction to other H. Cs.& the Dist Ct. also when empowered by Provincial Govt. It is not correct to say therefore that the interpretation which we seek to place would raise any conflict.

21. It is said, however, that the words 'notwithstanding anything to the contrary contained in the Indian Companies Act, 1913 (VII[7] 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 Dist. Ct. The learned advocate who appears for the resp, draws our attention in this case to Section 164, Companies Act, under which provisionin matters in which the jurisdiction is of the H. C. & not of the Dist. Ct., the H C. could after making an order of the winding up of a company, direct all subsequent proceedings to be had in a Dist, Ct., & thereupon under the provisions of Section 164 the Dist Ct. shall, for the purpose of winding up the company, be deemed to be 'the Court' within the meaning of the Companies Act & it has got the same powers for the purpose of the winding up as the H. C. 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 Dist. Ct. because the jurisdiction of the Dist. Ct. under the Companies Act is not conferred upon that Ct. by the Act. It is conferred by a notification issued by Govt. 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 & it was not the intention in enacting these words merely to provide for the H. C. not sending the papers in regard to the winding up to a Dist. Ct. 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 & the words simply would have been that 'notwithstanding anything to the contrary contained in Section 164, Indian Companies Act, the High Court shall not send the proceedings for the winding up of a company to a District Court.' Wo do not think that if the intention was as the learned advocate for the resp. suggested it was, the words would have run in the manner in which they do now.

22. 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 beyrnd what was originally contemplated, & 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 Ct. which had jurisdiction under the Companies Act to entertain an appln. for a winding up order. It would be true to some extent, therefore, to say that the amendingAct increases 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 resp Union of South Africa v. Simmer and Jack Proprietary Mines (1918) A. c. 591: 87 L J P C 117 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 the principal Act, & the Inspector had made an order directing the filling up of these excavations. There were two contentions made before their Lordships of the P. C. 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 & 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 ib 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 said 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 &, the Ordinance of 1903 were to be read as one & there were general powers conferred by the Ordinance for 1905 for making a regulation in respect of the mines for the protection & preservation of the surface of mines & of: railways, & for laying down conditions under which such railways might be undermined. Their Lordships pointed out that inasmuch as the regulation could not he made under the original Ordinance unless there were any words in the new Ordinance which would permitthe 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 (p. 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 authorized in respect of abandoned excavations to make regulations for the protection and preservation of railways against future operations which may so affect those excavations as to endanger the railways.'

23. 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, & 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 applns. for the winding ap of a banking company should go before the H. G. which has jurisdiction under Section 45-A. Banking companies have got branches all over the country. It is exceedingly inconvenient that winding up applns. should go on before different Cts. on different grounds. It wasthought desirable, therefore, that there should be only one appln. for the winding up of a banking company, & the only way in which this could be provided was by directing that no Ct. shall have jurisdiction to entertain an appln. among others, for winding up a company except the H. C. which had jurisdiction as mentioned in the opening part of Section 45-A. If we accept the interpretation which the learned advocate who appears on behalf of the resp. asks us to accept, the result must inevitably be that against the same banking company winding up proceedings may go on in different places. As a matter of fact, it would be necessary sometimes to have more than one winding up proceedings in different places. Supposing there was an appln. for winding up a banking company pending at the time when the Act had come into force, the only appln. which would be transferred, if the argument of the resp. is accepted, would be the appln. in so far as itrelated to the inability of the banking company to pay its debts. It would hardly be theintention that part of the appln. shall be transferred to the H. C. & part of it should go on in the Dist. Ct. The appln. was originally instituted in the Dist. Ct. in this case. Of course, there is no appln. 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 45-Acould be only one, & 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 Cts. other than the particular H. C. mentioned in Section 45-A is taken away.

24. I, therefore, agree with the order proposed by my learned brother that the proceedings in this case will stand transferred to the Original Side of this Ct.

25. Per Curiam.--The rule in civ. Appln. No. 745 of 1950 comes to an end. No order as to costs. No order as to costs of the appeal.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //