Back
Andhra Pradesh High Court
Judges : MANOHAR PERSHAD, MOHD.MIRZA
K.Venkata Subrahmanyam - Appellant
Versus
Premier Bank of India, Nellore - Respondent
Decided On : 02-02-66
DECREE EXECUTION - TRANSFER OF DECREES - BANKING COMPANIES ACT, 1949 - SECTION 6(2) - COMPANIES ACT, 1913 - SECTION 153-A - ORDER 21, RULE 16, CPC - TRANSFER OF DECREES FROM BANK TO CORPORATION - EFFECT ON EXECUTION - RIGHT OF BANK TO EXECUTE DECREES - CONSTRUCTIVE RES JUDICATA - APPLICABILITY.
Fact of the Case:
The Premier Bank of India, Ltd. (Bank) carried out both banking and chit fund business. In 1953, the Reserve Bank of India prohibited chit fund business by banks under Section 6(2) of the Banking Companies Act, 1949. The Bank formed the Premier Chit Corporation Ltd. (Corporation) and transferred all chit fund-related assets and liabilities to it with the High Court's approval under Section 153-A of the Companies Act, 1913. The Bank went into liquidation in 1958. Before the transfer, the Bank had obtained decrees against the appellants. The appellants argued that the Bank could not execute the decrees after the transfer as the title had vested in the Corporation.
Finding of the Court:
The High Court held that the Bank had the right to execute the decrees as the decrees were not transferred to the Corporation. The order approving the transfer did not specifically mention the transfer of decrees. A subsequent order clarifying the transfer order confirmed that the decrees were not included in the transfer. The Court also held that under Order 21, Rule 16, CPC, only the decree-holder or the person to whom the decree has been assigned in writing or by operation of law can execute the decree. Since the Corporation's name did not appear as the decree-holder, it could not execute the decree. The Court further held that the appellants were estopped from raising the plea that the Bank could not execute the decrees as they had not raised it in earlier execution proceedings and had made payments to the Bank.
Issues: 1. Whether the Bank had the right to execute the decrees after the transfer of chit fund business and assets to the Corporation? 2. Whether the appellants were estopped from raising the plea that the Bank could not execute the decrees?
Ratio Decidendi: 1. The transfer order did not specifically mention the transfer of decrees. A subsequent order clarifying the transfer order confirmed that the decrees were not included in the transfer. 2. Under Order 21, Rule 16, CPC, only the decree-holder or the person to whom the decree has been assigned in writing or by operation of law can execute the decree. Since the Corporation's name did not appear as the decree-holder, it could not execute the decree. 3. The appellants were estopped from raising the plea that the Bank could not execute the decrees as they had not raised it in earlier execution proceedings and had made payments to the Bank.
Final Decision: The Court dismissed the appeals filed by the judgment-debtors and allowed the appeal filed by the decree-holder.
( 1 ) L. P. AS. Nos. 59 to 61 of 1963 arise out of C. M. A. Nos. 419 and 420 of 1960 and 45 of 1961 respectively, while C. M. S. A. Nos. 65 of 1962 and 16 to 18 of 1963 arise out of A. S. Nos. 70 and 174 of 1961 and 89 and 90 of 1962 respectively on the file of the District Court, Nellore. In all these matters the appellants are the judgment debtors. C. M. S. A. No. 9 of 1962 is on behalf of the decree-holder, which arises out of A. S. No. 272 of 1960 on the file of the Additional District Judge, Nellore.
( 2 ) WE would first take up the L. P. As. and C. M. S. As. filed by the judgment-debtors.
( 3 ) THE facts giving rise to these proceedings are: The Premier Bank of India, Ltd. (hereinafter referred to as the Bank), registered under the Companies Act of 1913, was carrying on both banking and chit fund business at its branch at Nellore. In 1953, the Reserve Bank of India intimated to the Bank not to carry on the chit-fund business as it was prohibited by Sub-section (2) of Section 6 of the Banking Companies Act (X) of 1949 ). Accordingly, the Bank thought that it could not carry on the chit hind business and so formed another company by name the Premier Chit Corporation Ltd. (hereinafter referred to as the Corporation) and got it registered under the Indian Companies Act. By virtue of a resolution dated the 14/02/1953, the Bank transferred all its assets and liabilities relating to the chit-fund business to the Corporation. This resolution had to be sanctioned by the High Court under Section 153-A of the Indian Companies Act of 1913. The Bank, therefore, filed O. P. No. 288 of 1953 in the High Court of Madras for approving the transfer. The High Court of Madras by its order dated 2-11-1983 approved the transfer. Subsequently, the Bank went into liquidation on 17-11-1958. But it appears that prior to the obtaining of the sanction from the High Court, the Bank had obtained certain decrees against the appellant and some others. In O. S. No. 92 of 1952 (out of which L. P. A. No. 59 of 1963 arises) the Bank obtained a decree for Rs. 7,056 on 8-9-1953 in the Sub-Court, Nellore. O. S. No. 254 of 1952 was instituted by the Bunk in the District Munsif s Court Nellore (out of which L. P. A. No. 60 of 1963 arises) and a decree was passed in favour of the Bank on 18-7-1952 for a sum of Rs. 3,394. A third suit, O. S. No. 39 of 1950, was instituted by the Bank in the Sub-Court, Nellore (out of which L. P. A. No. 61 of 1963) and a decree for a sum of Rs. 9,206-11-8 was passed on 14-7-1950. O. S. No. 358 of 1952 was instituted by the Bank in the District Munsif s court, Nellore, out of which C. M. S. A. No. 65 of 1962 arises and a decree for a sum of Rs. 1,600 was passed in favour of the Bank on 31-7-1953. O. S. No. 155 of 1949 was instituted in the Sub-Court, Nellore, out of which C. M. S. A. No. 16 of 1963 arises and a decree for Rs. 16,000 was passed. O. S. No. 108 of 1950 was instituted in the District Munsif s Court, Nellore out of which C. M. S. A. No. 17 of 1963 and No. 18 of 1963 arise and a decree for Rs. 979-3-0 was passed. By virtue of the said decrees, the Bank filed various execution petitions and it is stated before us by Shri A. Gangadhara Rao, learned counsel for the decree-holders, that some monies were realised. When the present execution petitions were filed for executing the decrees, the judgment-debtors raised certain objections. Their objection was that after the order dated 2-11-1953 passed by the High Court in O. P. No. 288 of 1952 the Bank had no right to execute the decrees as the title, had vested in the Corporation. The execution Court rejected this contention In L. P. As. Nos. 16 to 18 of 1963, but accepted the contention in C. M. S. A. No. 65 of 1962. As against this decision of the executing Court, appeals were filed to this Court and as against the decision in C. M. As. appeals were preferred to the District Court. The District Court rejected these appeals. The High Court also rejected the a
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
