GUPTESHWAR PRASAD SINGH Vs. ALLAHABAD BANK

JUDGEMENT

(1.) Defendant No. 2 is the appellant. The respondent No. 1 file the suit for recovery of Rs. 1,02,597.54 against the appellant and res- pondent No. 2. Claim was made on the basis of the balance in the cash credit account and the over draft account standing in the name of respondent No. 2. Respondent No. 1 had given accommodation to the appellant in the business name of respondent No. 2 for coal mines business of the appellant. For the purpose of securing loan besides executing promissory notes, the appellant also hypothecated the machinery, stock-in-trade and other movables of the colliery. After nationalisation of the coal mines belonging to the appellant, the coal mines' properties which were hypothecated by the appellant ceased to have a charge as it vested free from encumbrances in the Central Government under the provisions of the Coking Coal Mines (Nationalisation) Act, 1972 (hereinafter referred to as the Nationalisation Act). Respondent No. 1 demanded the amount outstanding in those two accounts from the appellant and as the same was not paid, the suit was filed. The appellant filed a written statement taking various technical objections regarding the maintainability of the suit. He contended that the suit was not maintainable in a civil court in view of the Section 23 of the Nationalisation Act. It was also contended that because the goods which were hypothecated belonged to the coal mine and the loan was taken for the purpose of coalmine, the appellant had no liability to reply any outstanding dues against that colliery. Consequently, the operation of the accounts also ceased so far the colliery belonging to a private individual was concerned. Since respondent No. 1 had preferred a claim before the Commissioner of Payments under the Nationalisation Act, it was not entitled to pursue the remedy before the civil court. 1. Against the judgment and decree dated 29-1-1977 passed by Shri S. N. Sinha* 2nd, Additional Subordinate Judge, phanbad in Money Suit No. 161 of 1974-

(2.) Respondent No. 3 is the Bharat Coking Coal Limited. It filed a written statement but the court below has not granted any relief against it. It has not appeared in this appeal.

(3.) The court below held that the civil court had jurisdiction. It further held that beceuse of the vesting of the coal mine in respondent No. 3, the liability of payment to respondent No. 1 did not cease. It decreed the suit but did not give interestpendente lite and future. Two points were urged on behalf of the appellants (1). That in view of the fact that the forum for making a claim against the erstwhile owner of a coalmine has been provided in the Nationalisation Act, the civil court has no jurisdiction. (2) In view of the fact that the movables which were hypothecated ceased to belong to the appellant, he had no liability to repay the dues of respondent No. 1.