JAINI ALI Vs. NARAYANA PILLAI

JUDGEMENT

(1.) THESE petitions have been heard together on a common question of jurisdiction. All of them are by debtors, two, O. Ps. 24 and 26 of 1960, under the insolvency law seeking an order of adjudication and the remaining two, O. Ps. 25 and 27 of 1960, seeking an analogous relief under S. 15 of Kerala Act 31 of 1958. With regard to none of them would this court ordinarily have jurisdiction, but it is said that it has-and exclusive jurisdiction at that-by virtue of S. 45b of the Banking Companies Act, since, among the party creditors, are certain banking companies in liquidation. In fact, the two insolvency petitions which were originally presented to the courts having jurisdiction under the insolvency law, have been returned by those courts for presentation to this court on the ground stated above.

(2.) S. 45b of the Banking Companies Act runs as follows: "45b. The High Court shall, save as otherwise expressly provided in S. 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 S. 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. " The short question is whether these petitions can be regarded as claims made by or against the banking companies that are being wound up, or as involving any question which may relate to or arise in the course of their winding up.

(3.) IT is true that, as pointed out in A. B. Corporation of India v. Nazaralli K. & Co. (AIR. 1952 Bombay 223) and in the Orissa decision already referred to, the words "may relate to" are of wider import than the words "arise in the course of". But, even so, I am unable to bring myself to say that the question whether a debtor should be adjudicated as an insolvent is a question which relates to the winding up of a creditor banking company. The Supreme Court has no doubt pointed out in Dhirendra chandra v. Associated Bank of Tripura (AIR. 1955 Supreme Court 213) and Ram narain v. S. B. & I Co. (AIR. 1956 Supreme Court 614) that the language of s. 45b is very wide and comprehensive, but, putting the widest construction on the language of the section, it seems to me that, as observed in Discount Bank of India v. A. N. Misra (AIR. 1953 Punjab 256), the relation must be something direct and intimate. Claims by or against a banking company in liquidation have an intimate and direct bearing on its winding up and on the functions of its liquidator, and it is well to remember that it was at a time when the statute did not expressly commit such claims to the exclusive jurisdiction of the High court, although that was obviously within its intendment, that the wide range of the words, "relating to" had to be relied upon to give effect to the intention. IT might be that the adjudication of the debtor affects in one way or other the realisation of its dues by the company, but that can scarcely make the question whether the debtor should be adjudicated or not, a question related to the winding up of the company. If that were so, even proceedings between a third party and a debtor of a banking company in liquidation might have to come to this court, for, on the failure or success of those proceedings might depend the realisation of the debt due to the company. As I have observed before, it is possible that, in the course of the insolvency proceedings, questions are raised or claims made for decision by the court and that these come within the scope of S. 45b. But I am of the view that the question whether a debtor should or should not be adjudicated on his own application- the position would be different if the company were the applicant -is not a question or claim coming within the scope of the section.