CHOTANAGPUR BANKING ASSOCIATION LTD Vs. STATE OF BIHAR

JUDGEMENT

(1.) On the above report of the Official Liquidator, I directed by Order No. 233(3) dated 24-4-1967 notice to issue to Shantilal Jain and Bhuralal Jain of Messrs. Dalsukh Sualal Hazaribagh, who have respectively filed insolvency cases 2 and 3 of 1966 in the court of the District Judge, Hazaribagh, to show cause why the hearing of those cases be not stayed or the cases themselves be not transferred to this Court for hearing. Nobody on their behalf has appeared to make any submission to oppose the prayer made on behalf of the Official Liquidator to pass an order either in terms as Indicated in my order No. 233 (3) or such other order as may be deemed fit and proper. Mr. Shreenath Singh learned Advocate for the Official Liquidator, has been heard at length, and for the reasons stated hereafter in my order, my considered view is that the District Judge, Hazaribagh, has no jurisdiction to entertain the two insolvency cases aforesaid at the instance of either of the petitioners as they are Directors of the firm Messrs. Dalsukh Sualal which is on the settled list of debtors of the Chotanagpur Banking Association Ltd. in liquidation, hereinafter to be called the Bank.

(2.) A decree was obtained by the Bank against the mortgagor debtor under section 45D of the Banking Companies Act, 1949 (Act 10 of 1949) hereinafter called the Act. It was put under execution under Section 45T(3) of the Act before the Certificate Officer, Hazaribagh, and the certificate case is pending. In the meantime, two of the proprietors of the debtor firm have filed the insolvency cases in the Court of the District Judge, Hazaribagh. The Official Liquidator received notices issued in the insolvency cases by the Court of the District Judge of Hazaribagh and then he directed his officer in charge at Hazaribagh to file a petition in the Court of the District Judge to the effect that this Bank was ordered to be wound up by the Patna High Court on 21-8-1958 and that under sections 45A and 45B of the Act the insolvency petitions could only be entertained by the High Court and no other court had any jurisdiction to entertain any such application in which the Official Liquidator or a Banking company in liquidation is a party. Copies of such petitions filed in the Court of the District Judge have annexed as annexures A-l and A-2 to the report of the Official Liquidator. The District Judge had fixed 28-4-1967 as the date for hearing on the question of maintainability of the two insolvency cases, as appears from memo No. 50 dated 1-4-1967 of the Registrar, Civil Court Hazaribagh, to the Official Liquidator, a copy of which is annexure B to the report. On receipt of the said memo, the Official Liquidator filed this report on the 18th April, 1967 praying to the Court to pass necessary order in this connection in order to avoid unnecessary cost of appointing a lawyer at Hazaribagh to argue the matter of maintainability before the learned District Judge. As stated above, a notice was issued to the debtors, but, nobody has appeared on their behalf to give any assistance to the Court in the matter.

(3.) With the object of avoiding distress to a large number of depositors of a banking company in liquidation, many of whom may be men of ordinary means, special provisions for speedy disposal of winding up proceedings of a banking company were made by introduction of Sections 45A to 45H In Part IIIA of the Act by an Ordinance promulgated in 1949 followed and replaced by Act 20 of 1950. Sections 45A and 45B were introduced to give exclusive jurisdiction to the High Court notwithstanding anything inconsistent therewith contained in the Companies Act or the Code of Civil Procedure or the Code of Criminal Procedure or any other law for the time being in force or any instrument having effect by virtue of any such law to entertain and decide any claim made by or against, a banking company which is being wound up or any application made under certain provisions of the Companies Act by, or in respect of a banking company or any question of priority or any other question whatsoever whether of law or fact which may relate to, or arise in the course of, the winding up of banking company. With reference to Section 11 of the amending Act of 1950, it was pointed out by a Special Bench of the Calcutta High Court in Jadunath Roy v. Bank of Calcutta Ltd., AIR 1952 Cal 506 "all proceedings in the suit" in which the banking company in Liquidation is a party "subsequent to the winding up arise in the course" of winding up. The test seems to be that if at any stage of a proceeding the liquidator becomes a party to it, it arises in the course of the winding up." Sections 45A and 45B as originally introduced by Act 20 of 1950 were found to be not quite tight and coercive to exclude the jurisdiction of other Courts so that the proceedings for winding up of a banking company may not be delayed. The Act was further amended in 1953 by Act 52 of 1953. Some amendment was brought about by Act 95 of 1956 also, which is not very relevant. The two sections -- Sections 45A and 45B -- as they read after amendment are as follows:-- "45A. The provisions of this Part and the rules made thereunder shall have effect notwithstanding anything inconsistent therewith contained in the Companies Act, 1956 or the Code of Civil Procedure, 1908 or the Code of Criminal Procedure, 1898 or any other law for the time being in force or any instrument having effect by virtue of any such law; but the provisions of any such law or instrument in so far as the same are not varied by, or inconsistent with, the provisions of this Part or Rules made thereunder shall apply to all proceedings under this Part. 45B. The High Court shall, save as otherwise expressly provided in Section 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 section 391 of the Companies Act. 1956, by or in respect of a banking company or any