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Alphonse Ligouri Vs. Official Liquidator - Court Judgment

LegalCrystal Citation
SubjectBanking;Civil
CourtKerala High Court
Decided On
Case NumberC.R.P. No. 927 of 1964
Judge
Reported in[1967]37CompCas138(Ker)
ActsBanking Companies Act, 1949 - Sections 45B, 45C, 45C(3) and 45C(4); Banking Companies (Amendment) Act, 1953; Code of Civil Procedure (CPC) , 1908 - Order 21, Rule 58
AppellantAlphonse Ligouri
RespondentOfficial Liquidator
Appellant Advocate Leelamma Paikaday, Adv.
Respondent AdvocateParty in person
Cases ReferredComrade Bank Ltd. v. Jyoti Bala Dassi
Excerpt:
civil - attachment - sections 45 b, 45 c, 45 c (3) and 45 c (4) of banking companies act, 1949, banking companies (amendment) act, 1953 and order 21 rule 58 of code of civil procedure, 1908 - whether sub-court which is empowered to execute decree under section 45 c (4) has jurisdiction to entertain and dispose of claim petition or objection to attachment filed under order 21 rule 58 - order 21 rule 58 confers jurisdiction only on execution court to decide any claim or objection to attachment in summary manner - claim or objection to attachment is in substance objection to attachment at instance of third party - disposal of claim petition in summary manner incidental to execution proceedings - objection to attachment is in nature of defensive proceedings - sub-court has jurisdiction to..........of immovable properties effected before judgment on the ground that under section 456 of the banking companies act, 1949, the high court alone has exclusive jurisdiction to entertain and decide the same.2. the official liquidator filed report no. 82 in b, c. p. no. 6 of 1951, which relates to the winding up of the bank of meenachil ltd., under section 45c(2) of the banking companies act, 1949, bringing to the notice of this court the pendency of the proceedings to execute the decree in o. s. no. 42 of 1951 of the district court, kottayam, in the meenachil sub-court. since this court did not decide to transfer the execution proceedings to the file of this court under section 45c(2) of the banking companies act, 1949, the execution proceedings are being continued under section 45c(4).....
Judgment:
ORDER

Krishnamoorthy Iyer, J.

1. The Subordinate Judge of Meenachil in execution of the decree in O. S. No. 42 of 1951 passed by the District Court of Kottayam in favour of the Bank of Meenachil Ltd. (in liquidation) passed the order sought to be revised returning the claim petition or objection to attachment filed by the revision petitioner under Order 21, Rule 58, Civil Procedure Code, to the attachment of immovable properties effected before judgment on the ground that under Section 456 of the Banking Companies Act, 1949, the High Court alone has exclusive jurisdiction to entertain and decide the same.

2. The official liquidator filed Report No. 82 in B, C. P. No. 6 of 1951, which relates to the winding up of the Bank of Meenachil Ltd., under Section 45C(2) of the Banking Companies Act, 1949, bringing to the notice of this court the pendency of the proceedings to execute the decree in O. S. No. 42 of 1951 of the District Court, Kottayam, in the Meenachil sub-court. Since this court did not decide to transfer the execution proceedings to the file of this court under Section 45C(2) of the Banking Companies Act, 1949, the execution proceedings are being continued under Section 45C(4) of the Banking Companies Act, 1949, in the sub-court, Meenachil, where the proceedings ,were then pending.

3. Certain items of immovable properties which were attached before judgment on January 5, 1952, in O.S. No. 42 of 1951 are now sought to be proceeded against in execution of the decree in the sub-court, Meenachil. The revision petitioner preferred the claim or objection to attachment based on Ex. XI, a sale deed in his favour executed on April 22, 1950, by the judgment-debtor. It was this claim or objection to attachment that was refused to be investigated under Order 21, Rule 58, by the learned Sub-Judge, for the reason already mentioned.

4. The question to be decided is whether the Meenachil sub-Court which is empowered to execute the decree under Section 45C(4) of the Banking Companies Act, 1949, has jurisdiction to entertain and dispose of the claim petition or objection to attachment filed under Order 21, Rule 58, by the revision petitioner. We have no hesitation in holding that it has such jurisdiction disagreeing with the view taken by the learned Subordinate Judge.

5. Their Lordships of the Supreme Court in Shri Ram Namin v. Simla Banking and Industrial Co., [1956] 26 Comp. Cas. 280 ; [1956] S.C.R. 603 have held that Sections 45A and 456 of Part III brought in by the 1950 Act vested exclusive jurisdiction in the appropriate High Court to decide all claims by or against a banking company relating to or arising in the course of winding up. But Sections 45A and 456 of Part III-A substituted by the 1953 Act are far more comprehensive and vest not merely exclusive jurisdiction but specifically provided for the overriding effect of other provisions also. In the case before us we are concerned with Sections 45(A), 456 and 45C of Part III-A substituted by the Banking Companies (Amendment) Act, 1953. Section 45C is as follows :

'45C. (1) Where a winding up order is made or has been made in respect of a banking company, no suit or other legal proceeding, whether civil or criminal, in respect of which the High Court has jurisdiction under this Act and which is pending in any other court immediately before the commencement of the Banking Companies (Amendment) Act, 1953, or the date of the order for the winding up of the banking company, whichever is later, shall be proceeded with except in the manner hereinafter provided.

(2) The official liquidator shall, within three months from the date of the winding up order or the commencement of the Banking Companies (Amendment) Act, 1953, whichever is later, or such further time as the High Court may allow, submit to the High Court a report containing a list of all such pending proceedings together with particulars thereof.

(3) On receipt of a report under Sub-section (2), the High Court may, if it so thinks fit, give the parties concerned an opportunity to show cause why the proceedings should not be transferred to itself and after making an inquiry in such manner as may be provided by rules made under Section 45U, it shall make such order as it deems fit transferring to itself all or such of the pending proceedings as may be specified in the order and such proceedings shall thereafter be disposed of by the High Court.

(4) If any proceeding pending in a court is not so transferred to the High Court under Sub-section (3), such proceedings shall be continued in the court in which the proceeding was pending.

(5) Nothing in this section shall apply to any proceeding pending in appeal before the Supreme Court or a High Court '.

6. Section 456 of the Banking Companies Act is as follows :

' The High Court shall, save as otherwise expressly provided in Section 45C, have exclusive jurisdiction to entertain and decide any claim made by or against a banking company which is being wound up (including claims by or against any of its branches in India) or any application made under Section 391 of the Companies Act, 1956, by or in respect of a banking company or any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in the course of the winding up of a banking company, whether such claim or question has arisen or arises or such application has been made or is made before or after the date of the order for the winding up of the banking company or before or after the commencement of the Banking Companies (Amendment) Act, 1953 '.

7. From the above it is seen that Section 456 is subject to the provisions under Section 45C of the Banking Companies Act. In the decision of the Supreme Court above referred to, their Lordships observed thus :

' Having regard to all the above considerations and the wide and comprehensive language of Sections 45A and 456 of the Banking Companies Act we are clear that a proceeding to execute the decree obtained by the appellant from the Tribunal against the bank in Case No. 1 of 1952 and all other incidental matters arising therefrom such as attachment and so forth are matters within the exclusive jurisdiction of the Punjab High Court subject to the provisions of Section 450 of the Banking Companies Act as regards pending matters'.

8. It was further observed thus : ' Section 45C(1) definitely imposes a bar on any pending matter in any other court being proceeded with except in the manner provided therein. The jurisdiction of that other court to proceed with a pending proceeding is made to depend on the fact that its pendency is brought to the notice of the appropriate High Court and its decision, express or implied, to leave it out without transferring it to itself'.

9. In the case before us in view of the report of the official liquidator there is at least an implied decision on the part of this court to leave the execution proceedings to be carried on in the Sub-Judge's Court, Meenachil, under Section 45C(4) of the Banking Companies Act, 1949. Then the only question to be decided is whether a claim petition or objection to an attachment contemplated by Order 21, Rule 58, Civil Procedure Code, is not within the jurisdiction of the court in which the execution proceedings are pending. Order 21, Rule 58, of the Code of Civil Procedure, confers jurisdiction only on the execution court to decide any claim or objection to an attachment in a summary manner and the decision is subject to the result of a suit under Order 21, Rule 63, of the Code of Civil Procedure. The revision petitioner on the basis of the claim petition wants the execution court to declare that the property attached before judgment and sought to be proceeded against in execution of the decree as the judgment-debtor's property is not the property of the judgment-debtor. A court invested with jurisdiction under Section 45C(4) of the Banking Companies Act, 1949, to execute a decree must necessarily decide this question also as it is a necessary step for the effective execution of the decree. If the judgment-debtor under the decree which is being executed by the subordinate court by virtue of Section 45C(4) objects to the execution of the decree on the ground that the execution application is barred by limitation or on the ground that there is satisfaction of the decree under Order 21, Rule 2, Civil Procedure Code, or that the property attached is not saleable in execution of the decree or that the attachment is invalid, it is not open to the execution court to direct the judgment-debtor to move for relief in the High Court on the ground that the jurisdiction to decide such matters is exclusively within the jurisdiction of the High Court. The jurisdiction of the execution court to decide such objections raised by the judgment-debtor cannot be doubted. A claim or objection to attachment is in substance an objection to the attachment at the instance of a third party and the disposal of such claim petition in a summary manner is only incidental to the execution proceedings. An objection to attachment or a claim petition within the meaning of Order 21, Rule 58, Civil Procedure Code, is in the nature of a defensive proceeding though not strictly so called by a stranger. In Mt. Zamrut v. Peoples Bank of Northern India Ltd., [1936] 6 Comp. Cas. 430, Middleton J.C. pointed out that in a case where the decree-holder has set the law in motion the position of a claimant who intervenes in an execution is analogus to that of a defendant in a suit. The learned judge observed with reference to Section 171 of the Indian Companies Act thus:

' It appears to me to be most inequitable that a company in liquidation should institute execution proceedings and rely upon Section 171 of the Companies Act to debar persons from defending their property in those execution proceedings. '

10. The same principle must apply to the case before us. If the contention advanced by the learned advocate appearing for the official liquidator is accepted it means that the objection to every step in execution of a decree has to be decided only by the High Court under Section 456 of the Banking Companies Act. This could not have been the intention of the legislature in enacting Section 45C(4) which is an exception to Section 456. The decision in Dkakuria Banking Corporation Ltd. v. Sm. Surabala Debi, [1953] 23 Comp. Cas. 295 on which much reliance was placed by the learned counsel for the liquidator cannot govern the case before us as it involved only the interpretation of the provisions of the Banking Companies Act, 1949, before its amendment in 1953. We do not therefore think it necessary to decide the applicability of the said decision to the case before us which has to be decided in accordance with the provisions introduced by the 1953 amendment.

11. It does not appear from Comrade Bank Ltd. v. Jyoti Bala Dassi, [1962] 32 Comp. Cas. 990, relied on by the court below in support of its conclusion, that there was a report to the High Court by the official liquidator under Section 45C(2) and a decision by the High Court for the continuance of the execution proceedings under Section 45C(3) of the Banking Companies Act, 1949, in the subordinate court when the petitioner under Order 21, Rule 58, Civil Procedure Code, was filed. The said decision proceeded on an interpretation of only Section 456 without any reference to Section 45C of the Banking Companies Act, 1949. The said decision cannot therefore apply to the facts of the case before us.

12. In the result we are of the view that the Subordinate Judge's Court, Meenachil, has got jurisdiction to dispose of the petition filed under Order 21, Rule 58, Civil Procedure Code, by the revision petitioner. We therefore set aside the order of the court below and allow the revision petition and direct the learned Subordinate Judge, Meenachil, to take back the petition filed under Order 21, Rule 58, Civil Procedure Code, to his file and dispose of the same in accordance with law. The revision petitioner will have his costs from the assets of the bank in the hands of the official liquidator.

Order

Krishnamoorthy Iyer, J.

13. Since it was brought to our notice subsequent to the delivery of judgment that the Subordinate Judge's court at Meenachil has been abolished, we directed the case to be posted for being spoken to and the case was posted today. We direct that the judgment delivered by us be corrected in the following manner. The words ' Subordinate Judge's court, Meenachil' in the first sentence in the last paragraph in page 7 of the judgment will be deleted and the word ' execution court' be substituted. Similarly, the words ' learned Subordinate Judge' in line six and the word ' Meenachil' in line 7 of the last paragraph at page 7 of the judgment will be deleted and in its place ' Subordinate Judge's court, Kottayam, which is the successor court,' be substituted. This order will be appended to our judgment and treated as part of it.


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