FIRST NATIONAL BANK LTD Vs. OM PARKASH SHARMA

JUDGEMENT

(1.) AN application was made on 4th March, 1958, under section 45-H of the Banking Companies Act and under section 3 of the Contempt of Courts Act, against eight respondents. After making several allegations in the body of the petition, the official liquidator of the bank prayed-- (a) Respondents Nos. 1 to 6 be committed for contempt of Court, (b) They be ordered to restore to the bank the amounts which were illegally disbursed from 20th March, 1957, to 1st April, 1957, amounting to Rs. 6788. 38, (c) Set aside the sale of the machinery in favour of respondent No. 7. or, direct that the sale shall be deemed to be subject to the mortgagee rights of the bank.

(2.) THE respondents put in their written statements to the several allegations made. As many as ten issues were framed including those relating to the sale of the machinery, withdrawal of the amounts on account. of salary and covering the various points referred to in the parties' pleadings. The parties produced a fairly voluminous evidence in support of their respective cases.

(3.) DURING the course of the arguments, Mr. D. N. Avasthy raised an objection which was of a preliminary character, He contended on behalf of his clients that proceedings under section 45-H of the Banking Companies Act were not competent because the condition precedent was that an application is made to the High Court under section 543 of the Companies Act, 1956 against directors and other persons specified therein. Mr. Avasthy maintained that there was to reference whatever in this application to section 543 of the Companies Act and that it was in the main an application for contempt of Court.