1. This is an application under Sections 45-A and 45-B of the Banking Companies Act (X ofd 1949 as amended by Act LII of 1953) for a declaration that the proceedings in I. P. No. 19 of 1958, on the file of the Sub Court, Masulipatam and the order of adjudication passed therein are null and void and not binding on the Vijiya Commercial Bank Ltd. (in liquidation).
(2) The facts giving rise to this application are these. The Vijaya Commercial Bank Ltd., (hereinafter referred to as the banking company) was wound up by an order of the High Court of Judicature. Madras, made in O. P. No. 417 of 1953. As Nadella Sivaramaakrishnaiah (hereinafter referred to as the debtor) was, on the date of the winding up order, indebted to the banking company, he was included in the lists of debtors prepared by the liquidator. By an order of the Madras High Court, dated 7th December, 1954, he was directed to pay a sum of Rs. 7,692-9-9 with further interest and a certificate was accordingly issued under Section 45-D (6) of the Banking Companies Act (hereinafter referred to as 'the Act').
The debtors, having defaulted to pay the amount within the time allowed, the liquidator initiated proceedings in execution and an extent of Ac. 3-35 cents of which he was the owner, was attached on the 19th October, 1957, in E. P. No. 43 of 1957 on the file of the Sub Court Masulipatam. While so, on the 10th October, 1958, Nadella Rama Subbiah (2nd respondent) who, it is alleged, is closely related to the debtor filed a petition under Section 11 of the Provincial Insolvency Act for the adjudication of the debtor as an insolvent. The 2nd respondent alleged that the debtor and another owed him a sum of Rs. 1,200/- under a promissory note executed by them and that the debtor had fraudulently executed a mortgage deed in favour of one Basaviah. The debtor was adjudged insolvent by an order of the Sub Court, dated 7th January, 1959.
(3) It would appear that notice of the insolvency proceedings was not given to the banking company. Pursuant to the order of attachment obtained by him, the liquidator attempted to bring to sale the properties of the debtor. At this juncture, the Official Receiver, Krishna, moved the Sub Court for stay of the sale on the ground that the debtor had been adjudged insolvent and that his properties had vested in him. Thereupon the Court staved the sale and dismissed the execution petition filed by the liquidator.
The latter part of the Report of the judgment in Vijaya commercial Bank Ltd. v. Nadella Sivaramakrishanayya, which was begun on p. 48 of the Andhra Pradesh section has been omitted as it has since been found that the judgment has already been printed on pp. 17-20 of the Andhra Pradesh section.