DURGA PRASAD Vs. OFFICIAL LIQUIDATOR BANARAS BANK LTD

JUDGEMENT

(1.) This is an appeal from an order of the learned Company Judge dated 26-7-1956. The facts so far as they are relevant for the purpose of this appeal are these: On 1-7-1940, an order was made for the compulsory winding up of the Banaras Bank Ltd., and thereafter a Committee of Inspection was appointed pursuant to the provisions of Section 178 of the Indian Companies Act, 1913. The assets of the Bank included two houses, one at Saharanpur which the Bank had purchased in the year 1934 for Rs. 9,200/- and the other house at Hardwar which the Bank had purchased in the same year for Rs. 16,000/-. On 17-2-1941 an offer was received from one Roshan Lal of Rs. 18,000/- for these two houses. The offer was laid before the Committee of Inspection which, on 19-3-1941, resolved that the Official Liquidator should endeavour to get the offer increased to Rs. 20,000/-, but if he did not succeed in doing so he should accept the offer of Rs. 18,000/-. Sri Roshan Lal refused to increase his offer, and on 1-4-1941, the Official Liquidator reported to the Company Judge that the offer made of Rs. 18,000/-was fair and should be accepted. On 4-4-1941, the Court sanctioned the proposed sale, and on the 2nd August of that year a conveyance of the two houses was executed by the Official Liquidator in favour of Sri Roshan Lal.

(2.) In the year 1952 the Official Liquidator ascertained that on 6-10-1942, Sri Roshan Lal had executed a deed relinquishing his right, title and interest in the two houses in favour of Sri Durga Prasad, a member of the Committee of Inspection, and that in this deed it was recited that Sri Durga Prasad was the real owner of the houses which had been purchased Benami by Sri Roshan Lal "for certain reasons". Thereafter an application was made to the Court by the Official Liquidator under Section 45B of the Banking Companies Act for a declaration that the conveyance executed by the Official Liquidator in favour of Sri Roshan Lal on 2-8-1941, be declared void and that Sri Durga Prasad be directed to surrender and transfer the two properties to the Official Liquidator and deliver to me latter all documents of title relating thereto; in the alternative, it was prayed that Sri Durga Prasad be directed to pay to the Official Liquidator a sum of Rs. 7,200/- and such further sum as this Court might deem fit. The learned Company Judge by the order which is the subject of the present appeal directed Sri Durga Prasad to transfer the two houses to the Official Liquidator on repayment to him by the latter of the original purchase price of Rs. 18,000/-.

(3.) Sri Durga Prasad and Sri Roshan Lal now appeal. Two arguments have been advanced on their behalf. The first is that the original purchase of the two houses by Roshan Lal was not in fact a benami transaction. This argument was not strongly pressed and we agree with the learned Judge that in view of the pleadings it is not an argument now open to the appellants. A reply was filed by Sri Durga Prasad to the Official Liquidator's application and was adopted by Sri Roshan Lal. In paragraph 4 of his reply Sri Durga Prasad says: