HARICHARAN KARANJAI Vs. ULIPUR BANK LTD

JUDGEMENT

(1.) This appeal is on behalf of the decree-holder, and is directed against an appellate order of the District Judge of Rangpur, affirming that of the Subordinate Judge of that place, made in a proceeding under Section 47, Civil P. C. The material facts may be shortly stated as follows : The appellant was a depositor in the Ulipur Bank Ltd., and obtained a decree against the latter in respect of his deposit money on 8 July 1933. The Ulipur Bank which figures as the respondent in this appeal was in financial difficulties from some time past, and in or about April 1933, it embarked upon a scheme of arrangement and compromise with its creditors under Section 153, Companies Act. The application under that section was presented by the bank to this Court on 10 April 1933; and an order was made on 17 May 1933, directing the convening of a meeting of the depositors of the said Bank. The meeting was held on 30th July 1933, when the scheme was settled and it was finally sanctioned by this Court on 29th November 1933. The scheme provided inter alia that "the creditors of the Bank shall not be entitled to demand payment of their dues at once except in terms of the scheme which shall remain in force for a period of ten years."

(2.) After certain previous applications for execution, the present proceeding for execution of the decree was started by the decree-holder in 1940. The Bank took the objection that under the scheme mentioned above, the decree-holder could claim payment only in accordance with the, provisions of the scheme and not otherwise, and the application for execution was consequently not maintainable. This contention found favour with both the Courts below, and they have allowed the objection of the judgment.debtor and dismissed the decree-holder's application for execution. The decree-holder has now come up on appeal to this Court. The contention raised on behalf of the appellant in substance is that he was not a depositor at the time when the scheme was put forward or sanctioned by the Court but had already become a decree-holder, and as there was no arrangement with the class of creditors to which he belonged, he was not bound by the scheme.

(3.) The whole question therefore is whether the depositors who obtained decrees against the company formed a separate class of creditors from the others who had not obtained decrees, and it was necessary to convene a meeting of the decree-holder creditors before the scheme could be made binding on them. This question was raised in quite a large number of cases in recent years, and there is apparently a diversity of judicial opinion regarding it, In Barisal Loan Office Ltd. V. Shasthi Charan Bhattacharya ( 35) 39 C.W.N. 1198, it was held by Guha and Lodge JJ. that the scheme of composition was applicable to all creditor a, including those who had already obtained decrees, and it was not necessary that there should be a separate meeting of the decree-holder creditors. This decision was affirmed by Mitter J. in Serajganj Loan Office V/s. Nilkantha Lahiri ( 35) 22 A.I.R. 1935 Cal. 777. On the other hand, there are a number of cases where a different view has been taken and it has been held that depositors who obtained decrees against a banking company before any scheme was embarked upon by the latter, ceased to be depositors and became decree-holders. They would constitute a separate class from ordinary depositors and it was necessary that there should be a separate meeting of such creditors before the scheme could be sanctioned by the Court : vide Manikganj Trading and Banking Co. Ltd. V. Madhabendra Kumar Shaha , Rajshahi Banking Corporation V/s. Sura Bala Debi ( 36) 40 C.W.N. 1104 and Rajshahi Banking Corporation and Trading Corporation Ltd. V. Pulin Behari Mukherjee ( 38) 42 C.W.N. 610. The Companies, Act was amended by Act 22 of 1936, and Sub-section (6) of Section 153 of the new Act, now expressly lays down that "for purposes of this section unsecured creditors who may have filed suits or obtained decrees, shall be deemed to be of the same class as other unsecured creditors." The Legislature, therefore, has r distinctly approved of the first set of judicial decisions referred to above and disapproved of the other| group.