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Kartic Chandra Pal and anr. Vs. Noakhali Union Bank Ltd., (In Liquidation) - Court Judgment

LegalCrystal Citation
SubjectBanking;Commercial
CourtKolkata High Court
Decided On
Case NumberCivil Revn. Case No. 2639 of 1962
Judge
Reported inAIR1969Cal158
ActsBanking Companies Act, 1949 - Section 45B; ;Code of Civil Procedure (CPC) , 1908 - Section 47 - Order 21, Rules 58; ;Companies Act, 1913 - Section 171
AppellantKartic Chandra Pal and anr.
RespondentNoakhali Union Bank Ltd., (In Liquidation)
Appellant AdvocateSukumar Sen, Adv.
Respondent AdvocateSanti Prosad Banerjee, Adv.
DispositionPetition allowed
Cases ReferredDurgadas Kundu v. Central Calcutta Bank Ltd.
Excerpt:
- .....the first is that the bank having been directed to be wound up under the provisions of the banking companies act, for which proceedings were still pending before this court, the claim could be investigated only by this court and not by any other court, having regard to the terms of section 45b of the banking companies act, which, according to the decree-holder bank, confers exclusive jurisdiction on this court in the matter.7. secondly, the decree-holder bank also contended that the claim case could not be maintained before the alipore court without fresh leave from this court under section 171 of the indian companies act.8. the learned subordinate judge has accepted the above objections and given effect to the same, primarily the one under section 45b of the banking companies.....
Judgment:

P.N. Mookerjee, J.

1. This Rule raises an important question.

2. The point, which requires consideration in this case, is whether the executing court, before whom execution is pending, it having been transferred to that court by this Court, exercising Company jurisdiction, would have jurisdiction to entertain and decide a claim in relation to the said execution under Order 21 Rule 58 of the Code of Civil Procedure, in a case, where a banking company in liquidation is involved.

3. The relevant facts lie within a short compass and are as follows:

4. Opposite Party No. 1, Noakhall Union Bank Ltd., went into liquidation sometime in the year 1949 and winding up proceedings are still pending in this Court. In the meantime, it obtained a decree on May 13, 1953, in Suit No. 2650A/3 of 1950 from this Court on its original side for Rs. 4,100/- with costs against Opposite Party No. 2, Tulsi Charan Paul. This decree was, eventually, transferred for execution to Ali-pore. In course of this execution, which commenced in January 1956, certain immovable properties, alleged to belong to the judgment-debtor, were attached at the instance of the decree-holder Bank on April 16, 1959.

5. Thereupon, the present petitioners preferred a claim under Order 21, Rule 58 of the Code of Civil Procedure before the Alipore Court, which was executing the above decree, as aforesaid, and prayed for removal of the attachment on the ground that the said properties were notliable to be attached in the above execution inasmuch as the same belonged to the petitioners in their own right. Upon this. Misc. Judicial Case No. 2 of 1961 was started and the decree-holder Bank in liquidation objected to the entertainment of the above claim by the Alipore Court on several grounds, of which only two are relevant for our present purpose.

6. The first is that the Bank having been directed to be wound up under the provisions of the Banking Companies Act, for which proceedings were still pending before this Court, the claim could be investigated only by this Court and not by any other Court, having regard to the terms of Section 45B of the Banking Companies Act, which, according to the decree-holder Bank, confers exclusive jurisdiction on this Court in the matter.

7. Secondly, the decree-holder Bank also contended that the claim case could not be maintained before the Alipore Court without fresh leave from this Court under Section 171 of the Indian Companies Act.

8. The learned Subordinate Judge has accepted the above objections and given effect to the same, primarily the one under Section 45B of the Banking Companies Act, upon the view that, having regard to the terms of the said section, even though the execution may be pending before the Alipore Court and may be validly pending there, claim cases, arising out of the same, must be filed and dealt with by this Court, which would have exclusive jurisdiction to deal with the same under the said section, thus debarring other Courts from entertaining or dealing with such cases. He has also, in support of his view, referred to an unreported judgment of Debabrata Mookerjee, J., in C. R. No. 1859 of 1960, D/- 10-7-1961, the said judgment having since been reported in Comrade Bank Ltd. (In Liquidation) v. Jyoti Bala Dassi : AIR1962Cal86 . He has accordingly, given effect to the decree-holder's above objection and held that he had no jurisdiction to entertain the petitioners' claim case or to deal with the same and he has directed return of the petitioners' application under Order 21, Rule 58 of the Code of Civil Procedure to the filing lawyer for presentation to proper Court with a further direction that the execution case be stayed till a particular date, within which date the claimants must bring a stay order from this Court.

9. Against this order, the present Rule was obtained by the petitioners and it was contended on their behalf that the Alipore Court, being in seisin of the execution case validly under the law, had jurisdiction to entertain and deal withthe petitioners' claim case notwithstanding Section 45B of the Banking Companies Act. It is this question which, primarily, requires consideration in this Rule, although there is also a subsidiary question, namely, whether leave should have been taken by the petitioners under Section 171 of the Indian Companies Act for presenting their claim petition to the Alipore Court.

10. In our view, this Rule should succeed and both the above points should be answered in favour of the petitioners. On the main question, namely, that, under Section 45B of the Banking Companies Act, it is clear that, although Section 45B, apparently, gives exclusive jurisdiction to this Court to deal with claims by or against banking companies in liquidation, contemplated under the said section, it also permits execution of such decrees by other Courts on appropriate transfer of the same by this Court to the said Courts. This, in effect, was the decision of this Court in Bharat Central Bank Ltd. (In Liquidation) v. Rathindra Nath Sen, (1950) 54 Cal WN 975. Indeed, this Court on the present occasion, too, actually transferred the decree in question for execution to the Alipore Court, presumably on the view taken in the above decision. If there is a valid transfer of the decree for execution to the Alipore Court, it must be taken that the order of transfer embraces the whole process of execution, or, in other words, the transferee Court, unless the order of transfer is recalled or modified by the transferor Court, will have full powers in the matter of the execution in question, and indeed, the same powers as the transferor or the original Court to proceed with and complete the entire process of execution. That would, necessarily, involve consideration by it of all objections to the said process, namely, whether under Section 47 of the Code or under Order 21, Rule 58. Indeed, these claims are really incidental to the main execution and are as much integral parts of the same as objections under Section 47, the only difference between the two sets of proceedings being that, while, in one case, claim or objection is made by a third party, who, again, under the terms of Order 21 Rule 58 itself, would be deemed to be a party to the execution proceeding, in cases of objections under Section 47, they are put forward by the judgment-debtors. In substance, there is no difference between the two Both are for the purpose of resisting the execution of the decree in the manner, desired by the decree-holder There can be no question that objections under Section 47 of the Code to execution proceedings would have to be dealt with by the executing Court, even if it is the transferee Court, and the transferee Court will have full jurisdiction to deal with the same. There can be no adequate or valid reason for making a distinction or difference in the case of claims under Order 21, Rule 58 of the Code.

11. It is true that the decision in : AIR1962Cal86 has taken a contrary view, but, with all respect to the learned Judge, Debabrata Mookerjee J., we are unable to agree with his view. We feel that the correct approach was made in cases like the present by the Madras High Court, where two Division Benches expressed the same view, as we have expressed above, in the cases of Palghat Wariar Bank Ltd. v. Padmanabhan, : AIR1951Mad348 and Malli Selva Iyer v. Madurai Mercantile Bank Ltd. (In Liquidation), (1962) 1 Mad LJ 261.

12. In this Court, too, a Division Bench has since taken the same view in the unreported decision of this Court in the case of Durgadas Kundu v. Central Calcutta Bank Ltd. (In Liquidation), decided on 3-2-1965 (Cal.)

13. We would, accordingly, hold that, notwithstanding Section 45B of the Banking Companies Act, the Alipore Court would have jurisdiction in the instant case to entertain the petitioner's claim and to proceed with the Misc. Case, started upon the same.

14. We are also of the view that the order of this Court, transferring the decree for execution to the Alipore Court, carried with it the necessary leave under Section 171 of the Indian Companies Act to proceed with the whole gamut of execution there, or, in other words, to proceed with all stages in the process of execution, including claims and objections thereto in the Alipore Court. No leave or fresh leave under the said section was, therefore, necessary to be obtained by the petitioners for preferring their claim before the Alipore Court.

15. In the above view, we would make this Rule absolute, set aside the order of the learned Subordinate Judge and direct him to proceed with the petitioners' Misc. case in accordance with law in the light of the observations made in this judgment.

16. There will be no order for costs in this Rule.

T.P. Mukherji, J.

17. I agree.


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