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Haricharan Karanjai Vs. Ulipur Bank Ltd. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Reported inAIR1942Cal442
AppellantHaricharan Karanjai
RespondentUlipur Bank Ltd.
Cases ReferredRajshahi Banking Corporation v. Sura Bala Debi
Excerpt:
- .....applications for execution, the present proceeding for execution of the decree was started by the decree-holder in 1940. the bank took the objection that under the scheme mentioned above, the decree-holder could claim payment only in accordance with the, provisions of the scheme and not otherwise, and the application for execution was consequently not maintainable. this contention found favour with both the courts below, and they have allowed the objection of the judgment.debtor and dismissed the decree-holder's application for execution. the decree-holder has now come up on appeal to this court. the contention raised on behalf of the appellant in substance is that he was not a depositor at the time when the scheme was put forward or sanctioned by the court but had already become a.....
Judgment:

B.K. Mukherjea, J.

1. This appeal is on behalf of the decree-holder, and is directed against an appellate order of the District Judge of Rangpur, affirming that of the Subordinate Judge of that place, made in a proceeding under Section 47, Civil P. C. The material facts may be shortly stated as follows : The appellant was a depositor in the Ulipur Bank Ltd., and obtained a decree against the latter in respect of his deposit money on 8th July 1933. The Ulipur Bank which figures as the respondent in this appeal was in financial difficulties from some time past, and in or about April 1933, it embarked upon a scheme of arrangement and compromise with its creditors under Section 153, Companies Act. The application under that section was presented by the bank to this Court on 10th April 1933; and an order was made on 17th May 1933, directing the convening of a meeting of the depositors of the said Bank. The meeting was held on 30th July 1933, when the scheme was settled and it was finally sanctioned by this Court on 29th November 1933. The scheme provided inter alia that 'the creditors of the Bank shall not be entitled to demand payment of their dues at once except in terms of the scheme which shall remain in force for a period of ten years.'

2. After certain previous applications for execution, the present proceeding for execution of the decree was started by the decree-holder in 1940. The Bank took the objection that under the scheme mentioned above, the decree-holder could claim payment only in accordance with the, provisions of the scheme and not otherwise, and the application for execution was consequently not maintainable. This contention found favour with both the Courts below, and they have allowed the objection of the judgment.debtor and dismissed the decree-holder's application for execution. The decree-holder has now come up on appeal to this Court. The contention raised on behalf of the appellant in substance is that he was not a depositor at the time when the scheme was put forward or sanctioned by the Court but had already become a decree-holder, and as there was no arrangement with the class of creditors to which he belonged, he was not bound by the scheme.

3. The whole question therefore is whether the depositors who obtained decrees against the company formed a separate class of creditors from the others who had not obtained decrees, and it was necessary to convene a meeting of the decree-holder creditors before the scheme could be made binding on them. This question was raised in quite a large number of cases in recent years, and there is apparently a diversity of judicial opinion regarding it, In Barisal Loan Office Ltd. V. Shasthi Charan Bhattacharya ('35) 39 C.W.N. 1198, it was held by Guha and Lodge JJ. that the scheme of composition was applicable to all creditor a, including those who had already obtained decrees, and it was not necessary that there should be a separate meeting of the decree-holder creditors. This decision was affirmed by Mitter J. in Serajganj Loan Office v. Nilkantha Lahiri ('35) 22 A.I.R. 1935 Cal. 777. On the other hand, there are a number of cases where a different view has been taken and it has been held that depositors who obtained decrees against a banking company before any scheme was embarked upon by the latter, ceased to be depositors and became decree-holders. They would constitute a separate class from ordinary depositors and it was necessary that there should be a separate meeting of such creditors before the scheme could be sanctioned by the Court : vide Manikganj Trading and Banking Co. Ltd. V. Madhabendra Kumar Shaha : AIR1936Cal162 , Rajshahi Banking Corporation v. Sura Bala Debi ('36) 40 C.W.N. 1104 and Rajshahi Banking Corporation and Trading Corporation Ltd. V. Pulin Behari Mukherjee ('38) 42 C.W.N. 610. The Companies, Act was amended by Act 22 of 1936, and Sub-section (6) of Section 153 of the new Act, now expressly lays down that 'for purposes of this section unsecured creditors who may have filed suits or obtained decrees, shall be deemed to be of the same class as other unsecured creditors.' The Legislature, therefore, has r distinctly approved of the first set of judicial decisions referred to above and disapproved of the other| group.

4. It has been argued by the learned advocate for the appellant that in this case the decree was obtained in 1933, and the amended provision of 1936 cannot be held to he retrospective in operation. The Legislature however cannot be said to have altered the existing law by addition of these words in Section 153, Companies Act. The expression 'creditors of the same class' occurred also in the Act as it stood before amendment. The object of the added clause was to explain the meaning of the expression, in view of the uncertainty of judicial opinion which manifested itself on the point. In other words, the amending Act purported only to explain the meaning of a particular expression used in the earlier Act, and as such it must have relation back to the time when the prior Act was passed : vide Craies on Statute Law, p. 341. As has been pointed out by Maxwell in his 'Interpretation of Statutes' where it is gathered, from a later Act, that the Legislature attached a particular meaning to certain words in an earlier cognate one this would be taken to be a Legislative declaration of its' meaning there, (Maxwell, 8th-Edn., page 269). We hold therefore that the view taken by the Courts below is right.

5. The learned advocate for the appellant has contended further that as there was a previous execution case in connexion with this decree, and the decree was allowed to be executed without any objection by the Bank, the latter was now precluded from raising any objection. This point has not been dealt with in the judgment of any of the Courts below, and even if it was raised, there were no materials placed before the Court, upon which it could be substantiated. The result therefore is that the appeal fails and is dismissed. We make no order as to costs.

Blank, J.

6. I agree.


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