09 May 1956
Supreme Court
Download

SHRI RAM NARAIN Vs THE SIMLA BANKING & INDUSTRIAL CO.LIMITED.

Case number: Appeal (civil) 313 of 1955


1

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 15  

PETITIONER: SHRI RAM NARAIN

       Vs.

RESPONDENT: THE SIMLA BANKING & INDUSTRIAL CO.LIMITED.

DATE OF JUDGMENT: 09/05/1956

BENCH: JAGANNADHADAS, B. BENCH: JAGANNADHADAS, B. BOSE, VIVIAN SINHA, BHUVNESHWAR P.

CITATION:  1956 AIR  614            1956 SCR  603

ACT: Banking  Companies Act, 1949 (X of 1949) as amended  by  Act LII  of 1953, ss. 45-A, 45-B, 45-C-Displaced Persons  (Debts Adjustment)  Act, 1951 (LXX of 1951), ss.  3,  28-Overriding effect  as against all other laws-Purpose and policy of  the two  Acts-Tribunal  under Act LXX of 1961-Whether  a  Court- Transfer  of  proceedings  under  s.  45-C  of  the  Banking Companies Act-Period of limitation.

HEADNOTE: The  appellant, a displaced person, bad a fixed  deposit  in the Lahore     Branch  of the respondent Bank which had  its head-office at Simla,    and he also had at the time a cash- credit account in the Bank.   As the Bank refused to pay the amount  of  fixed deposit on its maturity but  adjusted  -it towards part payment of the amount said to be due from  him, he filed an application to the Tribunal at Banaras under  s. 4  of  the Displaced Persons (Debts Adjustment)  Act,  1951, claiming the amount of the fixed deposit as a debt due  from the Bank.  During the pendency of the application there were proceedings taken for winding up the Bank in the High  Court of  Punjab.  On the 3rd January 1953 a decree was passed  by the  Tribunal and the appellant filed an application  before it  for  execution  of the decree,  which,  ultimately,  was transferred to the Bombay High Court under the provisions of the  Code of Civil Procedure.  The  appellant’s  application before  the  Bombay  High Court for the  attachment  of  the property  belonging  to the Bank and situate in  Bombay  was ordered  on the 18th June 1954.  On the 26th June  1954  the Official  Liquidator of the Bank obtained an order from  the Punjab High Court purporting to be one under s. 45-C of  the Banking Companies Act, transferring to itself from the Court of  the  Banaras  Tribunal the  proceedings  before  it  for execution  of  the decree obtained against the Bank  by  the appellant,  and subsequently the order of attachment  passed by the Bombay High Court was set aside by the High Court  of Punjab on the ground that (1) the provisions of the  Banking Companies  Act as amended in 1953 had an overriding  effect, and  that  exclusive jurisdiction was vested in  the  Punjab High   Court  notwithstanding  anything  in  the   Displaced -Persons  (Debts Adjustment) Act, 1951 and (ii) there was  a

2

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 15  

valid  order  of transfer to the Punjab High Court,  of  the execution  proceedings taken by the appellant in respect  of his decree.  The appellant appealed to the Supreme Court. Held,  that  (1)  in view of  the  wide  and’  comprehensive language of ss. 45-A and 45-B of the Banking Companies  Act, 1949, as 604 amended  in  1953,  the proceeding  to  execute  the  decree obtained by the appellant from the Tribunal against the Bank and  all  other  incidental matters  arising  therefrom  are within the exclusive jurisdiction of the Punjab High Court;  (ii)  whatever  may be the inter se  position  between  the provisions  of  the Banking Companies Act and those  of  the Displaced  Persons (Debts Adjustment) Act in so far as  such provisions  relate  to displaced debtors,  the  jurisdiction clearly and definitely vested in the High Court by the  very specific and comprehensive wording of s. 45-B of the Banking Companies  Act cannot be said to be overridden or  displaced by anything in the Displaced Persons (Debts Adjustment) Act, in so far as they relate to displaced creditors; (iii)     the Tribunal which is to exercise the jurisdiction for executing the decree in question is a "court" within the meaning  of s. 45-C of the Banking Companies  Act,  whatever may be its status when it passed the decree as a Tribunal;  (iv) having regard to the scheme and policy of ss. 45-B and 45-0  of  the Banking Companies Act, in respect  of  pending matters  which  have not been brought to the notice  of  the Court  by  the  Liquidator within  three  months,  there  is nothing  to  prevent  the  Court  exercising  its  power  of transfer  at such time when it is brought to the  notice  of the Court.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 313 of 1955. Appeal  by special leave from the judgment and  order  dated the 12th May 1955 of the Punjab High Court at Chandigarh  in Liquidation Miscellaneous No. 72 of 1954. J.   B.  Dadachanji. and Rameshwar Nath, for the appellant. M.   C.  Setalvad, Attorney-General for India  and  Ratanlal Chowla, for the respondent. 1956 May 9. The Judgment of the Court was delivered by JAGANNADHADAS J.-This is an appeal by special leave  against an  order  of the High Court of Punjab dated the  12th  May, 1955, in the following circumstances.  The  appellant  was a resident of Lahore who came  over  to India  in or about November, 1947, and took up residence  at Banaras as a displaced person.  He 605 had, prior to the 15th August, 1947, a fixed deposit of  Rs. 1,00,000  in  the  Lahore Branch of the  Simla  Banking  and Industrial  Co. Ltd. (hereinafter referred to as  the  Bank) which had its head-office at Simla.  He had also at the time a  cash-credit  account  in the  Bank.   The  fixed  deposit matured  in  1948.  The Bank did not pay the amount  to  the appellant  in  spite of repeated demands but seems  to  have adjusted  it towards part payment of a sum of  Rs.  4,00,000 which is alleged to have been due from the appellant to  the Bank  in  his cash-credit account and  which  the  appellant disputed  and  denied.   On  the  7th  November,  1951,  the Displaced Persons (Debts Adjustment) Act, 1951 (LXX of 1951) was  passed  providing  certain facilities  and  reliefs  to displaced  debtors  and displaced creditors.  Section  4  of that Act empowered the State Government to specify any civil

3

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 15  

court  or  class of civil courts, ,As the  Tribunals  having authority  to exercise jurisdiction under the Act for  areas to  be  defined therein.  Section 13 of the  Act  enabled  a displaced  creditor claiming a debt from any person  who  is not  a displaced person to make an application for  recovery thereof  to  the Tribunal having local jurisdiction  in  the place where the said creditor resides, and provided for  the purpose a special limitation of one year from the date  when the  Act  came into force.  Admittedly the  appellant  is  a displaced  person,  and the Bank is not  a  displaced  Bank, within  the meaning of those expressions as defined  in  the said  Act.   Taking  advantage  of  these  provisions,   the appellant  filed  on  or  about the  24th  April,  1952,  an application (Case No. I of 1952) to the Tribunal at  Banaras constituted  under section 4 of the Act, claiming the  fixed deposit amount of Rs. 1,00,000 as a debt due from the  Bank. During  the pendency of this proceeding there was an  appli- cation  on  the  27th  December,  1952,  under  the   Indian Companies  Act,  1913  (VII of 1913) in the  High  Court  of ’Punjab  by some creditors for the winding up of  the  Bank. On  the 29th December, 1952, an ex parte interim  order  was passed  by  the High Court under section 171 of  the  Indian Companies   Act  staying  proceedings  in  all   suits   and applications pending against 606 the Bank, at the time.  The application-Case No. I of  1952- filed by the appellant before the Banaras Tribunal was  also specified therein.  It would appear however that before  the order was communicated to the Tribunal, the said case before it  was  disposed  of and a decree was  passed  on  the  3rd January,  1953,  against the Bank for the sum  claimed  with future  interest at three per cent. per annum.  On  the  6th January, 1953, the appellant filed an application before the Tribunal for execution of the decree and it was numbered  as Execution  Case No. 8 of 1953.  It appears that on or  about the  27th January, 1953, one Mr. D. D. Dhawan was  appointed by the Punjab High Court as a Provisional Liquidator of  the Bank.   On the application of certain petitioning  creditors in the winding up proceedings, the High Court passed another order  under section 171 of the Indian Companies Act on  the 30th January, 1953, staying execution of the decree  against the  Bank obtained by the appellant.  This order  also  does not appear to have been communicated to the Tribunal by  the Court.   But the Tribunal was informed generally  about  the situation  by a letter of the Provisional  Liquidator  dated the  13th  March,  1953.   Thereby,  the  attention  of  the Tribunal was invited to section 171 of the Indian  Companies Act  which  enacted that pending proceedings  could  not  be proceeded  with  except with the leave of  the  Court.   The Tribunal  was  accordingly requested by this letter  of  the Liquidator to stay further proceedings before it in Case No. I of 1952.  In view of this intimation, the Tribunal  passed an  order  dated the 20th March,  1953,  staying  execution, notwithstanding a further application by the appellant dated the 16th March, 1953, to proceed with the execution.  On the 21st March, 1953, the Provisional Liquidator filed an appeal in  the  Allahabad  High Court against  the  decree  of  the Tribunal  obtained by the appellant against the Bank.   That appeal is said to be still pending.  On the 24th  September, 1953, the winding up of the Bank was finally ordered by  the Company  Judge and the Provisional Liquidator was  appointed as the Official Liquidator for the purpose. 607 It  is  said that as against this order of a  single  Judge, there  is  a Bench appeal now pending in the High  Court  of

4

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 15  

Punjab.   At  this stage the Banking  Companies  (Amendment) Ordinance, 1953, (Ordinance No. 4 of 1953), was  promulgated on   the  24th  October,  1953.   This  was   repealed   and substituted,  on  the 30th December, 1953,  by  the  Banking Companies (Amendment) Act, 1953 (LII of 1953).  On the  17th February,  1954, the appellant filed a  further  application before the Tribunal asking that the execution case filed be- fore the Tribunal on the 6th January, 1953, which was stayed in  view  of  the letter of the Liquidator  dated  the  13th March,  1953, should now be proceeded with having regard  to the various reasons set out in that application.   Curiously enough two of the reasons alleged were (1) that section  171 of  the  Indian Companies Act was overridden and  varied  by section 45-C of the Banking Companies (Amendment)  Ordinance (Act), and (2) that the Tribunal Under the Displaced Persons (Debts  Adjustment)  Act is not a Court and hence  the  stay under  section  171  of the Indian Companies  Act  or  under section 45-C of the Banking Companies Act has no application to proceedings pending before the Tribunal.  The application of the 17th February, 1954, above-mentioned also prayed  for an  order to send the case for execution to the Bombay  High Court  on the ground that the Bank had property  within  the local  limits  of the jurisdiction of the  said  High  Court against  which it was intended to seek execution.   On  this application, notice was issued to the Official Liquidator to appear  and  show  cause  by  the  24th  April,  1954.   The Liquidator  however  did not appear.  The Tribunal  made  an order  on the 24th April, 1954, transferring to  the  Bombay High  Court under section 39 of the Code of Civil  Procedure the  said decree for execution.  On the 8th June, 1954,  the appellant  filed  an application for  execution  before  the Bombay  High Court (Application No. 123 of 1954)  and  asked for attachment and sale of the right, title and interest  of the  Bank in certain shares and securities belonging to  the Bank  and lying with the Central Bank of India Ltd.,  Bombay subject to the charge if 608 any  on  the said Bank.  The attachment was ordered  on  the 18th June, 1954 and was affected on or about the 19th  June, 1954. At  this stage the Official Liquidator obtained an order  on the  26th June, 1954, from the Punjab High Court  purporting to  be one under section 45-C of the Banking Companies  Act, transferring  from  the Court of the Banaras  Tribunal,  the proceedings  before it for execution of the decree  in  Case No. 1 of 1952, obtained. against the Bank by the  appellant. It would appear that the Tribunal, on receipt of this order, informed the High Court by letter dated the 14th July, 1954, that the execution proceedings had already been  transferred to the High Court of Bombay and that no proceedings relating to  the execution case were at the time pending  before  it. Thereafter the Liquidator made an application dated the 28th October,  1954, to the Punjab High Court for  setting  aside the  order  of the Bombay High Court dated  the  18th  June, 1954, directing attachment of the shares and securities  be- longing  to the Bank in the possession of the Central  .Bank of  India  Ltd.   Bombay.  The main grounds  on  which  this application was made are- (1)That  the order of the Tribunal at Banaras  in  execution Case No. 8 of 1953, transferring the decree for execution to the Bombay High Court more than six months after the passing of  the winding up order, without obtaining leave  from  the Punjab High Court,was null and void. (2)That the proceedings taken in execution against     the Bank  in  the Bombay High Court were also null and  void  in

5

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 15  

view of sections 171 and 232 of the Indian Companies Act. (3)That  in view of the Banking Companies  (Amendment)  Act, 1953,  it is only the Punjab High Court that  has  exclusive jurisdiction to entertain and decide all claims between  the Bank  and  the  appellant and to  deal  with  the  execution proceedings initiated by the appellant against the Bank. (4)That the execution proceeding was in fact transferred  by the Punjab High Court to itself by its order dated the  25th June, 1954, and all questions 609 arising  therefrom have to be dealt with and disposed of  by the Punjab High Court itself. The appellant contested this application in the Punjab  High Court on various grounds.  The main contentions were- (1)That  the provisions of the Banking Companies  Act  could not override the provisions of the Displaced Persons  (Debts Adjustment)  Act, 1951, and that the proceedings  thereunder are not affected by the Banking Companies Act. (2)That in any case there was no valid order of transfer  to the  Punjab High Court of the execution proceeding  relating to  the  decree  obtained by him against  the  Bank  in  the Banaras Tribunal. These  contentions were negatived by the Punjab High  Court. It was held that the provisions of the Banking Companies Act of  1953  had  an  overriding  effect  and  that   exclusive jurisdiction  was  vested thereby in  the  appropriate  High Court  notwithstanding  anything in. the  Displaced  Persons (Debts  Adjustment) Act, 1951.  It was also held that  there was  a valid order of transfer to the Punjab High Court,  of the execution proceedings taken by the appellant in  respect of  his  decree.  It was therefore held that  the  order  of attachment  obtained by the appellant from the  Bombay  High Court  was  invalid.   The said order  was  accordingly  set aside.  It is against this order that the present appeal has been brought. Both  the  above  contentions have  been  strenuously  urged before us on behalf of the appellant and equally strenuously opposed on behalf of the Bank.  The learned Attorney-General for  the Bank placed reliance on section 232 of  the  Indian Companies  Act at the forefront of his argument and  pointed out  that  under the said section no attachment  could  have been  made without leave of the Court when the Bank  was  in the process of being wound up by order of the Court.  On the other  side it has been suggested that neither  section  171 nor  section 232 of the Indian Companies Act are  applicable to these proceedings in view of the Banking Companies Act as amended   in   1953.    This   suggestion,proceeds   on    a misconception and ignores 610 section  2 of the Banking Companies Act  which  specifically provides that the provisions of the Act shall be in addition to  and  not in derogation of the Indian  Companies  Act  as expressly provided.  Hence no leave under section 232 of the Indian  Companies Act having been obtained, this might  have been enough to dispose of the case against the appellant  if the  order  of attachment had been set aside by  the  Bombay High  Court itself, on the application of the Liquidator  to it.   Since in this case the order to set  aside  attachment was passed by the Punjab High Court, the question has to  be gone into as to the jurisdiction of that Court to  interfere with the order of the Bombay High Court or to declare it  to be  void.   That jurisdiction can only be supported  on  the view, that exclusive jurisdiction over the matter was vested in  the Punjab High Court, under the Banking Companies  Act, and  that  a  valid  order  of  transfer  of  the  execution

6

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 15  

proceeding  to the said Court had been made in  exercise  of the powers under that Act.  These questions have, therefore, to be dealt with. On  the facts above stated one matter is clear,  viz.,  that the attempt of the appellant is to realise the amount due to him  under the decree by getting at the assets of  the  Bank which is under liquidation ignoring the purported adjustment of  the  deposit made by the Bank towards its  alleged  dues from  him under his cash-credit account.  His proceeding  to execute the decree by attachment is in substance an  attempt to constitutes himself an independent preferential creditor. So  far as the decree is concerned, we wish to  say  nothing about its validity or otherwise since the matter is  pending in  appeal  before the Allahabad High Court.   What  we  are concerned  with now is the proceeding in execution  of  that decree  and the appellant’s attempt to get at the assets  of the  Bank  in satisfaction thereof.  There can be  no  doubt that,, apart from any argument available under the Displaced Persons   (Debts  Adjustment)  Act,  1951,  which  will   be considered  presently,  the matters which  must  necessarily arise  in  the course of such an  execution  proceeding  are matters which would directly fall 611 within  the scope of section 45-B of the  Banking  Companies Act as amended in 1953 which runs as follows: "The High Court shall, save as otherwise expressly  provided in  section 45-C, 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 153 of the Indian Companies Act, 1913 (VII of  1913) by  or  in respect of a banking company or any  question  of priorities or any other question whatsoever, whether of  law or  fact, which may relate to or arise in the course of  the winding  up  of  a banking company, whether  such  claim  or question  has arisen or arises or such application has  been made  or is made before or after the date of the  order  for the winding up of the banking company or before or after the commencement  of  the  Banking  Companies  (Amendment)  Act, 1953". There  has  been  some faint argument  before  us  that  the questions   that  arise  in  execution  in  this  case   and particularly  the question relating to attachment which  has been  effected by the Bombay High Court, are  not  questions which  fall’  within  the scope of  section  45-B.   In  our opinion  this contention is so obviously untenable, in  view of  the very wide and comprehensive language of the  section that, it requires no more than to be mentioned and rejected. If, therefore, the proceeding to execute the decree obtained by  the  appellant in this case and the claims  and  matters which must necessarily arise in the course of that execution fall  within  the  scope  of  section  45-B,  the  execution proceeding  in  this case would prima facie  be  within  the exclusive jurisdiction of the High Court under section  45-B subject  to the two questions that have been raised  in  the case  which  are  (1)  whether  there  is  anything  in  the Displaced  Persons  (Debts  Adjustment)  Act,  1951,   which overrides this jurisdiction, and (2) whether in view of  the fact that the original execution application to the Tribunal was made before the Banking Companies (Amendment)  Ordinance and Act of 1953, came into force., there has been any  valid order under section 45-C of 612 the   Banking  Companies  Act  by  the  Punjab  High   Court transferring the pending execution proceeding to it-

7

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 15  

self. So  far  as the first of the above questions  is  concerned, learned  counsel for the appellant relies on sections 3  and 28  of the Displaced Persons (Debts Adjustment)  Act,  1951. Section  28 declares that the civil court which  passed  the decree  as  a  Tribunal shall be competent  to  execute  it. Section 3 runs as follows: "3.  Overriding  effect  of Act, rules  and  orders:Save  as otherwise expressly provided in this Act, the pro-visions of this  Act and of the rules and orders made thereunder  shall have effect notwithstanding anything inconsistent  therewith contained  in any other law for the time being in force,  or in  any  decree  or order of a court,  or  in  any  contract between the parties". On  the strength of these sections learned counsel  for  the appellant  argues that the jurisdiction, which the  Tribunal has  under section 28 for executing the decree must  prevail over  the jurisdiction of the High Court in respect of  this matter under section 45-B of the Banking Companies Act.   On the other hand, the respondent relies on section 45-A of the Banking Companies Act, which runs as follows: "The  provisions of this Part and the rules made  thereunder shall  have  effect  notwithstanding  anything  inconsistent therewith  contained in the Indian Companies Act, 1913  (VII of  1913),  or the Code of Civil Procedure, 1908 (Act  V  of 1908),  or  the Code of Criminal Procedure, 1898 (Act  V  of 1808),  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". Now the question as to which of the provisions of these  two Acts  has  got overriding effect in a given  case,  where  a particular  provision of each is equally applicable  to  the matter  is  not  altogether free from  difficulty.   In  the present case, prima facie by virtue 613 of  section 28 of the Displaced Persons  (Debts  Adjustment) Act the jurisdiction to execute the Tribunal’s decree is  in the Tribunal.  But it is equally clear that the jurisdiction to decide any of the claims which must necessarily arise  in the  execution of the decree is vested in the High Court  by virtue  of section 45-B of the Banking Companies Act.   Each of  the  Acts  has a specific provision, section  3  in  the Displaced Persons (Debts Adjustment) Act and section 45-A in the Banking Companies Act, which clearly indicates that  the relevant  provision,  if applicable, would  have  overriding effect as against all other laws in this behalf.  Each being a  special  Act, the ordinary principle that a  special  law overrides  a general law does not afford any clear  solution in this case.  In support therefore of the overriding effect of  the Displaced Persons (Debts Adjustment) Act of 1951  as against  section 45-B of the Banking Companies Act,  learned counsel  for  the appellant called in aid the  rule  that  a later  Act overrides an earlier one. (See Craies on  Statute Law,  pages  337  and  338).   He  urged  that  the  Banking Companies (Amendment) Act of 1953 should be treated as  part of  the 1949 Banking Companies Act and hence  overridden  by the  Displaced  Persons (Debts Adjustment) Act of  1951  and relied on the case in Shamarao V. Parulekar v. The  District Magistrate,  Thana, Bombay(1) and on the passage therein  at page 687 which is as follows: "The  rule is that when a subsequent Act amends  an  earlier

8

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 15  

one  in such a way as to incorporate itself, or a,  part  of itself,  into  the  earlier,  then  the  earlier  Act   must thereafter  be read and construed (except where  that  would lead to a repugnancy, inconsistency or absurdity) as if  the altered words had been written into the earlier Act with pen and  ink  and the old words scored out  so  that  thereafter there is no need to refer to the amending Act at all". Now  there  is  no question about the  correctness  of  this dictum.  But it appears to us that it has no application  to this  case.   It is perfectly true as  stated  therein  that whenever an amended Act has to be (1)  (1952) S.O.R. 683. 614 applied subsequent to the date of the amendment the  various unamended  provisions of the Act have to be read along  with the amended provisions as though they are part of it.   This is  for the purpose of determining what the meaning  of  any particular provision of the Act as amended is, whether it is in the unamended ’part or in the amended part.  But this  is not the same thing as saying that the amendment itself  must be  taken to have been in existence as from the date of  the earlier  Act.  That  would  be  imputing  to  the  amendment retrospective  operation  which could only be done  if  such retrospective operation is given by the amending Act  either expressly  or  by necessary implication.  On. the  facts  of that  case  the question that was considered  arose  in  the following  circumstances.  There was an order  of  detention under  the Preventive Detention Act of 1950.  That  Act  was due  to  expire  on the 1st April,  1951.   But  there  were subsequent amendments of the Act which extended the life  of the Act up to 1st October, 1952.  The amending Act  provided inter  alia that detention orders which had  been  confirmed previously  and which were in force immediately  before  the commencement  of the amending Act "shall continue to  remain in force for so long as the principal act is in force".  The question  for consideration was whether this  indicated  the original date of expire of the principal Act or the extended date  of the principal Act.  The Court had no difficulty  in holding   that   it  obviously  related   to   the   latter, notwithstanding  that  the  principal  Act  was  defined  as meaning "Act of 1950".  It was pointed out that the  phrases "principal  Act"  and "Act of 1950" have  to  be  understood after  the amendment as necessarily meaning the 1950 Act  as amended, i.e., which was to expire on the 1st October, 1952. In  the present case what we are concerned with is  not  the meaning  of  any particular phrase or provision of  the  Act after   the  amendment  but  the  effect  of  the   amending provisions  in  their  relation  to  and  effect  on   other statutory  provisions outside the Act.  For such  a  purpose the  amendment  cannot obviously be treated as  having  been part of the original Act itself so as to 615 enable  the  doctrine to be called in aid that a  later  Act overrides an earlier Act.  On the other hand, if the rule as to the later Act overriding an earlier Act is to be  applied to the present case, it is the Banking Companies (Amendment) Act,  1953,. that must be treated as the later Act and  held to override the provisions of the earlier Displaced  Persons (Debts  Adjustment)  Act, 1951.  It has  been  pointed  out, however,  that, section 13 of the Displaced  Persons  (Debts Adjustment)  Act, uses the phrase "notwithstanding  anything inconsistent  therewith in any other law for the time  being in  force"  and it was suggested that this  phrase  is  wide enough  to relate even to a future Act if in operation  when the overriding effect has to be determined.  But it is to be

9

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 15  

noticed  that section 45-A of the Banking Companies Act  has also  exactly the same phrase.  What the connotation of  the phrase "’for-the time being" is and which is to prevail when there are two provisions like the above each containing  the same  phrase,  ate  questions  which  are  not  free   from- difficulty.   It ;Is, therefore, desirable to determine  the overriding  effect  of  one or the  other  of  the  relevant provisions  in  these  two Acts, in a given  case,  on  much broader considerations of the purpose and policy  underlying the  two  Acts  and the clear  intendment  conveyed  by  the language of the relevant provisions therein. Now  so  far as the Banking Companies Act is  concerned  its purpose is clearly, as stated in the heading of Part  III-A, for  speedy  disposal of winding up proceedings.   It  is  a permanent statutory measure which is meant to impart  speedy stability  to the financial credit structure in the  country in so far as it may be effected by banks under  liquidation. It  was pointed out in Dhirendra Chandra Pal  v.  Associated Bank  of Tripura Ltd.(1) that the pre-existing law  relating to the winding up of a company. involved considerable  delay and expense.  This was sought to be obviated so far as Banks are  concerned  by  vesting exclusive  jurisdiction  in  the appropriate High Court in respect of all matters arising  in relation to or in the course of (1)  [1965] 1 S.C.R. 1098. 616 winding up of the company and by investing the provisions of the  Banking Companies Act with an overriding effect.   This result  was  brought about first by  the  Banking  Companies (Amendment)  Act,  1950 and later by the  Banking  Companies (Amendment)  Act, 1953.  Sections 45-A and 45-B of Part  III brought in by the 1950 Act vested exclusive jurisdiction in, the  appropriate  High  Court to decide  all  claims  by  or against  a  Banking Company relating to or  arising  in  the course  of  winding up.  But sections 45-A and 45-B  of  the Part   III-A   substituted  by  1953  Act   are   far   more comprehensive  and vest not. merely  exclusive  jurisdiction but specifically provide for the overriding effect of  other provisions also.  Now, the Displaced Persons (Debts Adjustment) Act is one of the  statutory measures meant for relief and  rehabilitation of displaced persons.  It is meant for a temporary situation brought   about  by  unprecedented  circumstances.   It   is possible,  therefore, to urge that the provisions of such  a measure  are to be treated as being particularly special  in their nature and that they also serve an important  national purpose.   It  is by and large a measure for  the  rehabili- tation of displaced debtors.  Notwithstanding that both  the Acts are important beneficial measures, each in its own way, there are certain relevant differences to be observed.  -The first  main  difference  which is  noticeable  is  that  the provisions  in the Displaced Persons (Debts Adjustment)  Act are in a large measure enabling and not exclusive.  There is no provision therein which compels either a displaced debtor or  a  displaced creditor to go to the Tribunal,  if  he  is satisfied with the reliefs which an ordinary civil court can give him in the normal course.  It is only if he desires  to avail himself of any of the special facilities which the Act gives  to a displaced debtor or to a displaced creditor  and makes  an  application in that behalf under sections  3,  or 5(2),  or  13, that the Tribunal’s jurisdiction  comes  into operation.   At  this point it is necessary  to  notice  the further  difference  that exists in  the  Displaced  Persons (Debts  Adjustment)  Act between applications  by  displaced debtors and ap-

10

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 15  

617 plications  by displaced creditors against persons  who  are not  displaced  persons.   So far  as  the  applications  by displaced  debtors  are  concerned,  section  15  in   terms provides   for  certain  consequences  arising,   when   the application  is made to the Tribunal by a  displaced  debtor under  section 3 or section 5(2), i.e., stay of all  pending proceedings,  the cessation of effect of any interim  orders or  attachments, etc. and a bar to the institution of  fresh proceedings  and  so  forth.  But the terms  of  section  13 relating to the entertainment of an execution proceeding  by the said Tribunal on a decree so obtained, do not appear  to bring  about even the kind of consequences which section  15 contemplates  as regards applications by displaced  debtors. Section  13  is,  in terms, only  an  enabling  section  and section  28 merely says that "it shall be competent for  the civil  court  to  execute  the decree  passed  by  it  as  a Tribunal".  They are not couched in terms vesting  exclusive jurisdiction  in the Tribunal.  Whatever, therefore, may  be the  inter  se,  position,  in a  given  case,  between  the provisions  of the Banking Companies Act and the  provisions of  the Displaced Persons (Debts Adjustment) Act, in so  far as  such  provisions  relate to displaced  debtors,  we  are unable  to  find  that  the  jurisdiction  so  clearly   and definitely vested in the High Court by the very specific and comprehensive  wording of section 45-B of the  Banking  Com- panies Act with reference to the matters in question, can be said  to  be  overridden or displaced  by  anything  in  the Displaced Persons (Debts Adjustment) Act, 1951, in so far as they relate to displaced creditors. It  is also desirable to notice that so far as a claim of  a displaced   creditor  against  a  non-displaced  debtor   is concerned the main facilities that seem to be available  are (1)  the  claim  can be pursued within one  year  after  the commencement  of  the Act (presumably even -though  it  may’ have  been time barred), (2) a decree can be obtained  on  a mere  application,  i.e.,  without  having  to’  incur   the necessary expenses byway of court-fee which would be payable if he had to file a suit, (3) the creditor has the  facility of  getting his claim adjudicated upon by a  Tribunal  which has  80 618 jurisdiction over the place where he resides, i.e., a  place more convenient ’to him than if be had to file a suit  under the ordinary law in which case he would have to file a  suit at  the  place where the defendant resides or  part  of  the cause of action arises.  There may also be a few other minor facilities.   But  what is necessary to notice is  that  the overriding provision of the Banking Companies Act, so far as a displaced creditor is concerned, is substantially only  as regards jurisdiction.  Section 45-A thereof, while providing that the provisions of Part III-A and the rules made  there- under   shall  have  effect  notwithstanding  anything   in- consistent therewith in any other law for the time being  in force,  specifically  provides that "the provisions  of  any such  law  in  so  far as the same  are  not  varied  by  or inconsistent with, the provisions of that part or rules made thereunder, shall apply to all proceedings under that Part". Therefore,  in  the present case the  overriding  effect  of section 45-B of the Banking Companies Act deprives him  only of   the   facility  of  pursuing  his  execution   in   the jurisdiction of the Tribunal.  But there is no reason why he should  not  get the benefit of other  provisions,  if  any, which  may  give him an advantage and are  not  inconsistent

11

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 15  

with  any  of the other specific provisions of  the  Banking Companies  Act.   Having  regard  to  all  the  above   con- siderations  and  the  wide and  comprehensive  language  of sections 45-A and 45-B of the Banking Companies Act, we  are clear  that a proceeding to execute the decree  obtained  by the appellant from the Tribunal against the Bank in Case No. I of 1952 and all other incidental matters arising therefrom such  as  attachment  and so forth are  matters  within  the exclusive  jurisdiction of the Punjab High Court subject  to the provisions of section 45-C of the Banking Companies  Act as  regards pending matters.  This leads us to the  question whether  in  terms of section 45-C there has  been  a  valid transfer  of  the execution proceeding to  the  Punjab  High Court. Before dealing with this question it is necessary to  notice the argument that section 45-C of the Banking Companies  Act has no application -at all to a pro- 619 ceeding  pending before the Tribunal.  The argument is  that section  45-C  applies only to a proceeding pending  in  any other  Court  immediately  before the  commencement  of  the Banking  Companies  (Amendment) Act.  It is urged  that  the Tribunal under the Displaced Persons (Debts Adjustment)  Act is  not a Court.  In support thereof the judgment of one  of the  learned Judges in Parkash Textile Mills Ltd. v.  Messrs Muni  Lal  Chuni  Lal(1) has been cited  to  show  that  the Tribunal  constituted  under this Act is not a  Court.   The question that arose in that case was a different one,  viz., as to whether the Tribunal had the exclusive jurisdiction to determine  for itself the preliminary jurisdiction on  facts and  it is for that purpose the learned Judge  attempted  to make  out  that  a  Tribunal  was  a  body  with  a  limited jurisdiction,  which limits were open to be determined by  a regular court when challenged.  It is unnecessary for us  to consider  whether  the view taken by the learned  Judge  was correct.   No such question arises in this case and  we  are quite  clear  that  the Tribunal which is  to  exercise  the jurisdiction  for  executing the decree in  question  is  "a Court"  within  the  scope of section 45-C  of  the  Banking Companies  Act.  Section 28 of the Displaced Persons  (Debts Adjustment)  Act itself is reasonably clear on  that  point. That section runs as follows: "It  shall be competent for the civil court which  has  been specified  as the Tribunal for the purposes of this  Act  to execute any decree or order passed by it as the Tribunal  in the same manner as it could have done if it were a decree or order passed by it as a civil court". It is quite clear on the wording of this section that it  is a  civil court when it executes the decree, whatever may  be its  status when it passed the decree as a Tribunal.   There is, therefore, no substance in this argument. Now  coming to the question whether there has been  a  valid transfer  of  the execution proceedings to the  Punjab  High Court, there can be no doubt that the (1)  [1955] 57 P.L. R. 107. 620 execution  proceeding  filed  by the  appellant  before  the Tribunal  on  the  6th January,’1953,  continued  to  remain pending  by the date when the Banking Companies  (Amendment) Act,  1953,  came  into operation.  This  appears  from  the subsequent applications dated the 16th March, 1953, and  the 17th  February,  1954, which always relied  on  the  earlier application  of the 6th January, 1953, as the  main  pending application.   This  application was, therefore,  a  pending application for the purposes of section 45-C of the  Banking

12

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 15  

Companies  Act.  The jurisdiction of the Punjab  High  Court with reference to this execution proceeding must depend upon whether  or not there was a valid order of transfer of  this proceeding  to  itself  under section  45-C.   This  section contemplates, in respect of pending proceedings that (a) the Official  Liquidator is to make a report to the  High  Court concerned  within  the  time specified  in  sub-section  (2) thereof,  (b)  the High Court is to consider  which  out  of these pending proceedings it should transfer to itself,  and (c)  the  High  Court should pass  orders  accordingly.   It further provides by sub-section (4) thereof that as  regards such of the pending proceedings in respect of which no  such order  of transfer has been made the said  proceeding  shall continue  in the Court in which it is pending.  It  is  with reference  to  these provisions that on the  23rd  November, 1953,  the Official Liquidator appears to have  submitted  a report  to  the Punjab High Court, requesting  that  certain proceedings mentioned in lists A and B attached to the  said report should be transferred to the High Court under section 45-C(3).    List  A  pertains  to  suits  and  List   B   to applications under the Displaced Persons ’Debts  Adjustment) Act,  1951.   It is pointed out that list B which  shows  an application  before  the Tribunal under section  19  of  the Displaced Persons (Debts Adjustment) Act, does not show  the execution  application  under section 28 of  that  Act  then pending  in  the  Banaras Tribunal and  with  which  we  are concerned.   It  is strenuously urged that this  shows  that there was no application for transfer of this proceeding  to the Punjab High Court and that, therefore, there could 621 have been no transfer thereof and that accordingly by virtue of  section  45-C(4)  of  the  Banking  Companies  Act   the jurisdiction   in  respect  of  the   execution   proceeding continued  to be with the Tribunal.  It is urged that  since sub-section (4) of section 45-C enjoins that such proceeding "shall  be continued" in the Court in which  the  proceeding was  pending,  there  can be no  question  of  any  transfer thereafter.   It  is pointed out that the view of  the  High Court  that  there has been a valid transfer  to  itself  is based on an order passed on an alleged supplementary  report by  the Liquidator on the 25th June, 1954, which  is  beyond the three months’ time provided in section 45-C (2) and that such  an.  order of transfer is invalid.  It is  also  urged that  the  transfer  so  made  was  without  notice  to  the appellant. That  there  was in fact an order of transfer  made  by  the Punjab High Court specifically of this execution  proceeding with  which we are concerned admits of no doubt as  a  fact. This  is also admitted by the appellant in  his  application for  special leave.  The order itself is not before  us  nor are  the exact circumstances under which this order came  to be  made, clearly on the record.  So far as one  can  gather from  the  papers before us the position seems to  be  this. When the appellant filed his application to the Tribunal  on the  17th February, 1954 (by which he asked that  its  order dated  the 20th March, 1953, staying  execution  proceedings should be vacated for reasons shown therein) notice to  show cause  against  it and for appearance therefor on  the  24th April,  1954,  was sent to the Official  Liquidator  by  the Tribunal.   The Official Liquidator not having  appeared  on that date, the Tribunal, as already stated, passed the order as  prayed  for  on the 24th April  1954,  transferring  the execution to the Bombay High Court.  It may be mentioned  at this  stage  that  an argument has been  advanced  that  the Liquidator,  not  having appeared on notice, can  no  longer

13

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 15  

challenge  the validity of the continuance of the  execution proceeding by the Tribunal and of the subsequent  attachment by the Bombay High Court.  The question, however, is one 622 of  jurisdiction depending on the validity of transfer  made by  the High Court under statutory power.  The  argument  is without  substance.  To resume the narrative,  the  Official Liquidator on receiving notice, addressed a letter dated the 19th  March, 1954, to the Company Judge of the  Punjab  High Court  mentioning the fact that he, received a  notice  from the  Banaras Tribunal to appear and show cause on  the  24th April,  1954.   He  mentioned therein his doubt  as  to  the jurisdiction  of the Tribupal to entertain  the  application and  requested  that  in order to  avoid  inconvenience  and expenditure  an  immediate transfer of  the  execution  case together  with the appellant’s application to  the  Tribunal for vacating the stay order should be made by the High Court in exercise of the powers conferred on it by section 45-C of the  Act.  On this the learned Judge appears to have  passed an  order dated the 22nd March, 1954, issuing notice to  the appellant  for  appearance  on the 2nd  April,  1954.   This appears  to  have been adjourned from time to  time  and  it would appear that on the 25th June, 1954, to which date  the matter  stood  adjourned, the Liquidator  addressed  another letter  to  the Company Judge, which is referred to  in  the record  as  the  supplementary  report  of  the  Liquidator. Therein he only narrated the entire history of the suit  and of  the  execution proceeding and  the  circumstances  which rendered  it necessary that an order of transfer  should  be made immediately.  Probably this was meant for opposing  any further adjournment.  It appears at any rate that it was  on this  date that the order of transfer was passed.   All  the facts  stated above can be gathered from the two letters  of the  Liquidator  dated the 19th March, 1954,  and  the  25th June,  1954, and a further note of the Liquidator put up  to the  Company  Judge with reference to the letter  dated  the 14th July, 1954, received from the Tribunal which is all the relevant material included in the paper book before us.  The actual  date  of the note does not appear from  the  record. Unfortunately  neither the original order of the Judge  made on  the  report of the Liquidator dated the  23rd  November, 1953, nor the order of 623 transfer relating to this particular case, which appears  to have been made on the 25th June, 1954, on the letter of  the Liquidator dated the 19th March, 1954, are before us.  We do not know the exact terms in which those orders were made and the reason why no specific order of transfer was made on the first  report  and why an additional order of  transfer  was made-as  appears-so late as on the 25th June, 1954.  In  any case the argument on behalf of the appellant on this part of the  case  seems  to be based on a  misapprehension  of  the facts.   If, as appears, the order of the 25th  June,  1954, was  made  with reference to the letter  of  the  Liquidator dated the 19th March, 1954, -a fact which appears ears to be admitted by the appellant in para 16 of his application  for leave   to   appeal  to  this  Court-and  what   is   called supplementary report dated the 25th June, 1954, was  nothing more  than  bringing additional facts to the notice  of  the Court  by  way of the history of the  execution  proceeding, there appears to be no foundation in fact for the contention that  the  order  was made on a report  filed  beyond  three months  provided  under  section  45-C(2)  of  the   Banking Companies  Act.   Sub-section (2) of section  45-C  provides that  "the  Official Liquidator shall, within  three  months

14

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 15  

from the date of the winding up order or the commencement of the  Banking Companies (Amendment) Act, 1953,  whichever  is later,  or  such further time as the High Court  may  allow, submit  to the High Court a report containing a list of  all such pending proceedings together with particulars thereof". The letter of the Official Liquidator dated the 19th  March, 1954,  is  within three months of the  commencement  of  the Banking  Companies  (Amendment) Act, 1953, which  came  into force  on the 30th December, 1953, and there is  nothing  in subsection  (2) of section 45-C that two or more  successive reports  may  not be made within the  prescribed  period  of three  months.   It  appears  also  from  the  papers  above referred  to  that notice was issued to the  appellant  with reference  to  this letter of the 19th March, 1954,  of  the Liquidator to transfer the execution application to  itself. It appears to us, therefore, 624 from such record as is before us, that the contention of the appellant raising objection to the validity of the order  of transfer  is untenable on the facts.’ Nor, are we  satisfied that even if the facts as to how the order of transfer dated the  25th  June,  1954,  came to be made  are  shown  to  be otherwise  than above stated, there is any reason  to  think that sections 45-C(2), (3) and (4) are to be construed so as to make the power of the Court to transfer dependent on  the filing  of a report by the Liquidator strictly within  three months.   The various sub-sections, taken together  seem  to imply  the contrary.  Section 45-C(1) definitely  imposes  a bar on any pending matter in any other court being proceeded with   except   in  the  manner   provided   therein.    The jurisdiction  of that other Court to proceed with a  pending proceeding  is made to depend on the fact that its  pendency is  brought to the notice of the appropriate High Court  and its  decision, express or implied, to leave it  out  without transferring it to itself.  Having regard to the scheme  and policy  of sections 45-B and 45-C of the  Banking  Companies Act, it appears more reasonable to think that in respect  of a pending matter which was not in fact brought to the notice of  the  Court by the Liquidator within  the  three  months, there  is nothing to prevent the Court exercising its  power of  transfer at such time when, it is brought to the  notice of  the Court.  It is, however, unnecessary to  decide  that point finally in this case since, to gay the least, all  the facts  and  the  requisite records have  not  been  properly placed  before us.  We have been asked to send for  all  the relevant  records in order to ascertain the facts  correctly or to give an opportunity for the purpose.  We do not  think it right to do so in the circumstances of this case.  It  is necessary to point out, as admitted by the appellant in  his application  for  special  leave  that  there  has  been  an application to this Court dated the 16th October, 1954,  for the grant of special leave specifically as against the order of transfer of the Punjab High Court made on the 25th  June, 1954, but that application ’Was rejected.  It 625 has been suggested that while so rejecting, this Court  left the  matter  open.   There is nothing  to  substantiate  it. Therefore, an argument as to the invalidity of the order  of transfer cannot be entertained at this stage. For  all  the above reasons we are satisfied that  the  view taken  by the High Court that it bad exclusive  jurisdiction in respect of the present matter and that there was a  valid transfer  to itself by its order dated the 25th June,  1954, is correct. In  the  proceedings before the High Court a good  deal  has

15

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 15  

been  made as to the alleged suppression of .material  facts by  the appellant from the Bombay High Court,  in  obtaining the  impugned  order of attachment from that Court  and  the learned  Judge’s  order also indicates that be was  to  some extent  influenced  thereby.   It appears  to  us  that  the alleged  suppression  has no bearing on the  questions  that arose for decision before the learned Judge, on this  appli- cation.   The learned Attorney-General frankly conceded  the same.    We  have  been  told  that  there  has  been   some application  for contempt in the Court on the basis  of  the alleged  suppression.   We do not, therefore,  wish  to  say anything relating to that matter which may have any  bearing on the result of those proceedings. In the result this appeal is dismissed with costs. Appeal dismissed. 626