MATHU VARKEY Vs. GRAND EASTERN BANK LTD

JUDGEMENT

(1.) This is an application by the first defendant in the above suit which was instituted in this Court by the Official Liquidator of the Grant Eastern Bank Ltd. (In liquidation) by virtue of the exclusive jurisdiction conferred on this Court by S.45B of the Banking Regulation Act 1949 to entertain and decide any claim by or against a banking company which is being wound up. During the pendency of the suit, the applicant filed DRP. No. 8 of 1965 in the Munsiff's Court, Kottayam under S.15 of the Kerala Agriculturists Debt Relief Act, 1958, for a full settlement of his debts, including the debt for the recovery of which the Official Liquidator instituted the above suit. The above Act has been repealed and replaced by the Kerala Agriculturists Debt Relief Act, 1970; and S.15 of the new Act contains the corresponding provision for settlement of debts of an agriculturist debtor. The proceeding before the Munsiff was stayed by this Court on 25-3-1965 on the application of the Official Liquidator. The suit was for money due under a mortgage; and a preliminary decree was passed by this Court on 19-7-1966. There was an issue in the suit whether the applicant is an agriculturist entitled to the benefits of the Agriculturists Debt Relief Act. It was held by this Court that he is not an agriculturist as defined in that Act. The final decree in the suit was passed on 5-6-1970. The present application has now been filed for an order for continuing the proceeding which he has instituted in the Munsiff's Court.

(2.) The object of the applicant is obviously to subject the Official Liquidator to the jurisdiction of the Munsiff's Court, and obstruct 'the proceedings which he is taking under the Banking Regulation Act for recovery of the debt due from the applicant under the decree passed by this Court. Counsel for the applicant contended that a proceeding under S.15 of the Agriculturists Debt Relief Act like an adjudication proceeding under the Insolvency Act is not a proceeding which falls within the ambit of S.45B of the Banking Regulation Act, and that, therefore, the Munsiff's Court has jurisdiction to entertain an application under S.15 of the Agriculturists Debt Relief Act. In support of the above contention, counsel first relied on the decision of this Court in Jaini Ali v. Narayana Pillai ( 1961 KLT 174 ). In that case, the question arose whether petitions for adjudication under the Insolvency Act and petitions for settlement of debts under the Agriculturists Debt Relief Act would come within the ambit of the exclusive jurisdiction vested in the High Court under S.45B of the Banking Regulation Act. Raman Nayar, J. held that these proceedings do not involve determination of any claim by or against a banking company; and they do not. therefore, fall within the ambit of S.45B of the Banking Regulation Act. The above decision was approved and the same view has been taken by a Division Bench of this Court in John v. Palai Central Bank Ltd., ( 1961 KLT 648 ). That was a case where a creditor filed an application for adjudication of his debtor; and a banking company, who was another creditor, was one of the respondents in that application. The court held that the insolvency proceedings did not fall within the ambit of S.45B of the Banking Regulation Act.

(3.) A learned Single Judge of the Orissa High Court has taken a different view in H. Naik v. Jitendranath Das ( AIR 1954 Ori. 139 ). He held that the question whether a debtor of a banking company under Liquidation should be adjudged an insolvent and should get the protection of the insolvency law is a matter relating to the winding up of a banking company, and consequently the High Court has exclusive jurisdiction to decide this question and all other questions arising therefrom. This view has been accepted by a Division Bench of the Bombay High Court in the Exchange Bank of India and Africa v. Luxmichand (AIR 1962 Bom. 223) and also by a learned Single Judge of the Andhra Pradesh High Court in Lakshminarayana v. Vijaya Commercial Bank (AIR 1962 AP). A Division Bench of the Madras High Court In the matter of A. R. Sivaramakrishna ( AIR 1962 Mad. 75 ) dissented from the above decisions of the High Courts of Orissa and Andhra Pradesh, and took the view which the Kerala High Court has taken in the two decisions referred to above. The High Court of Patna has, In the matter of Chotanagpur Banking Association Ltd. (AIR 1969 Patna 184) dissented from the Madras decision, and agreed with the decisions of the High Courts of Orissa, Bombay and Andhra Pradesh. Judicial opinion is thus very much divided on this question.