SBT Vs. VASUDEVAN PILLAI

JUDGEMENT

(1.) THE decreeholder, the State Bank of Travancore, is the appellant. THE Bank obtained a decree in O. S. No. 89 of 1962 on the file of the Sub Court, Kottayam for recovery of Rs. 13,954. 07 with interest and costs against the respondent, and when execution was taken, the respondent filed E. A. No. 91 of 1971 under Act 11 of 1970 praying for determination of the amount due from him and also for allowing him to pay the amount in instalments. THE appellant objected to the reliefs claimed in E. A. No. 91 of 1971 on the ground that the debt is due to the State Bank of Travancore which is a subsidiary bank to the State Bank of India, coming within the exemption under S. 2 (4) (a) (ii) of act 11 of 1970. THE court below, relying on the proviso to S. 2 (4) (a) (ii), held that transfer of assets in favour of the appellant-Bank was an assignment, and therefore the exemption was not available to the appellant Bank. It is the correctness of this finding that is challenged in this appeal.

(2.) IT is common case that the debt was due originally to the Kottayam Orient Bank Ltd. The Reserve Bank of India, in exercise of the powers conferred by sub-section 4 of S. 45 of the Banking Companies Act, 1949 (10 of 1949), directed the amalgamation of the Kottayam Orient Bank Ltd. with the State Bank of Travancore under a scheme prepared by them. By virtue of the amalgamation, the assets and liabilities of the Kottayam Orient Bank Ltd. became vested in the State Bank of Travancore and it was by reason of this amalgamation that the appellant-Bank derived the right to file the suit against the respondent. Under S. 2 (4) of Act 11 of 1970, a debt has been defined as "any liability in cash or in kind, whether secured or unsecured, due from or incurred by an agriculturist on or before the commencement of this Act (11 of 1970), whether payable under a contract or under a decree or order of any court or otherwise". Under sub-clause (a) (ii) of that sub-section, the following class of debts has been excluded from the definition of debt.

(3.) IN Webster's Third INternational Dictionary, the word 'assign' has been defined as 'to transfer to another in writing one's title or interest in the property'. IN Sailendra Kumar Roy v. Bank of Calcutta, Ltd. (AIR. 1948 Calcutta 131) Chakravartti J. , referring to 0. 21 R. 16 of the Civil procedure Code, pointed out that a transfer by operation of law could take place on death or by devolution or by succession and that in these instances there was no transfer by assignment. The facts of that case indicate that the transfer there took place by virtue of an order under S. 153-A of the INdian companies Act sanctioning a scheme of amalgamation of Jessore Loan Company with the Bank of Calcutta Limited. That order provided for the transfer to the Bank of Calcutta of all the assets and liabilities of the Jessore Loan Company in accordance with the scheme of amalgamation and the question which arose for consideration was whether the transfer was by assignment or whether it was by operation of law. As stated earlier, it was held that the transfer was by reason of an order of the court and, therefore, was effected by operation of law and not by an assignment.