VASTULAL Vs. OFFICIAL LIQUIDATOR PAREEK COMMERCIAL BANK LTD

JUDGEMENT

(1.) THESE appeals arise out of proceedings under sec. 235 of the Indian Companies Act (Act VII of 1913, hereinafter called The Companies Act) and are directed against the order passed by this Court calling upon the appellant to repay certain sums of money which he has been found to have illegally appropriated out of the assets of the Banking Company.

(2.) THE first question which arises is whether Special Appeal No. 5 of 1960 is maintainable. THE learned counsel for the respondent the Official Liquidator, Pareek Commercial Bank Ltd. , contends that under sec. 45 N of the Banking Companies Act, 1949 (Act X of 1949 as amended-hereinafter called the Banking Act) an appeal is provided against an order or decision of the High Court in a civil proceeding only when the amount or value of the subject-matter of the claim exceeds Rs. 5,000/ -. In this case the amount involved is much below Rs. 5,000/- and therefore, no appeal would lie. Mr. Chand Mal for the appellant asserts that the appeal is maintainable and sec. 45 N of the Banking Companies Act, has no application to this case. He relies upon sec. 202 of the Companies Act and sec. 18 of Rajasthan High Court ` Ordinance in support of his contention that an order passed under sec. 235 of the Companies Act being an order made in the course of the winding up proceedings is appealable and that the inhibition of sec. 45 N of the Banking Act cannot be invoked to defeat the right of appeal. THE learned counsel contends that proceedings under sec. 235 of the Companies Act are appealable as a matter of course under sec. 202 of the said Act. Sec. 235 provides that where in the course of winding up of a company it appears that any person who has taken part in the formation or promotion of the company or any past or present director, manager or liquidator, or any officer of the company has misapplied or retained or become liable or accountable for any money or property of the company, or been guilty of any misfeasance or breach of trust in relation to the company, the Court may, on the application of the liquidator or any creditor or contributory examine into the conduct of the person concerned and then compel him to repay or restore the money or property or any part thereof respectively with interest at such rate as the Court thinks just. THE order under this section can be passed notwithstanding the fact that the offence is one for which the officer is criminally responsible. Sec. 202 of the Companies Act provides for rehearing of and appeals from, any order or decision made or given in the matter of the winding up of a company by the Court. Appeals in such cases lie in the same manner and subject to the same conditions to which appeals may be had from any order or decision of the same Court in cases within its ordinary jurisdiction. It is, therefore, claimed that by virtue of sec. 202 of the Companies Act read with sec. 18 of the Rajasthan High Court ` Ordinance an appeal does lie against the order of a Single Judge to a Division Bench of this Court. THE learned counsel for the respondent, Liquidator, however, submits that the right of appeal under sec. 202 of the Companies Act must be read subject to the special provisions under the Banking Act which have application to the case. Part III A of the Banking Act makes special provisions for speedy disposal of winding up proceedings in cases relating to Banking Companies. Sec. 45-A of the Banking Act lays down that the provisions of this Part and the rules made thereunder shall have effect, 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. THE provisions of this part have therefore an overriding effect and will prevail against any other law if the provisions of that law are found to be inconsistent. Now sec. 45n of the Banking Act further says that where an application is made to the High Court under sec. 235 of the Companies Act against any promotor, director, manager, liquidator or officer of a banking company for repayment or restoration or any money or property and the applicant makes out a prima facie case against such person, the High Court shall make an order against such person to repay and restore the money or property unless he proves that he is not liable to make the repayment or restoration either wholly or in part. We need not refer to the other parts of the section, except sub-sec. (2) which provides also for an order of attachment in appropriate cases. Obviously on the authority of the section when an application under sec. 235 of the Companies Act is made to the court, the court acts under sec. 45 H of the Companies Act and parses appropriate orders. It has to follow the procedure which is laid down in that section in order to come to a finding whether the money or property is repayable or liable to be restored by the person against whom the application has been made. THE order passed under the provisions of this law would be necessarily subject to the restriction provided in sec. 45 N of the Banking Act as to the right of appeal. As already shown this section does not permit an appeal from any order or decision of the High Court in a civil proceeding under this Act when the amount or value of the subject-matter of the claim does not exceed Rs. 5,000/ -. It follows, therefore, that the appeal is not maintainable. THE contention of Mr. Chand Mal that he is entitled to a right of appeal under sec. 202 of the Companies Act read with sec. 18 of the Rajasthan High Court ` Ordinance therefore, cannot be sustained. THE provisions of the Banking Act in Part III-A of the Act as pointed out earlier over-ride those other provisions.