Back
HIGH COURT OF CALCUTTA
B. C. Mitra
BANK OF COMMERCE LTD. - Appellant
Versus
ARUN KUMAR CHOWDHURY - Respondent
. Of .
Decided On : June 1, 1964
BANKING COMPANIES ACT - SECTION 45B - JURISDICTION - WINDING UP OF BANKING COMPANY - CLAIM BY BANKING COMPANY IN LIQUIDATION - EXCLUSIVE JURISDICTION OF HIGH COURT - THIRD PARTY - NO RIGHT TO INTERFERE WITH RECEIVER IN DISCHARGE OF DUTIES - PARTNERSHIP ACTION - NO RIGHT OF PLAINTIFF TO SECURITY FOR FUTURE CONTINGENT CLAIM.
Fact of the Case:
The Official Receiver of a Bank in Liquidation filed an application under Section 45B of the Banking Companies Act, 1949, for determination of the rights of the bank and of the respondents to a sum of Rs. 1,00,000 lying to the credit of the Court in a Title Suit. The said sum was deposited to protect the claim of the respondent No. 1 against the respondent No. 2, if a decree was passed in favour of the respondent No. 1 against the respondent No. 2, in the said Title Suit. The 4th Subordinate Judge rejected the application of the Joint Receivers appointed by the High Court to withdraw the said sum. Hence, the present application.
Finding of the Court:
The High Court held that it had exclusive jurisdiction to decide any claim made by a banking company in liquidation 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 has arisen or arises before or after the date of winding up of the banking company. The powers conferred upon the High Court under Section 45B are plenary in nature and embrace all claims made by a banking company in liquidation and all other questions of law or fact which may arise in the course of the winding up of a banking company and the powers exercised by the High Court under Section 45B and exclusive in nature and no other Court has jurisdiction to deal with such questions. The plaintiff in a partnership action is not entitled to any special protection regarding his alleged claims on mere allegations in the pleadings without anything more. The appointment of a Receiver in a partnership action operates as an injunction for both parties to the suit. A Receiver is appointed not for the benefit of any party to the litigation, but to protect the property and preserve it for equal benefit of those who are interested in its distribution and to keep the property within the control of the Court. The respondent No. 1 had no right to object to the withdrawal of the sum of Rs. 1,00,000 by the Joint Receivers. The fund which is now lying to the credit of the Court of the 4th Subordinate Judge at Alipore is not a fund over which the respondent No. 1 has any right whatsoever.
Issues: 1. Whether the High Court had exclusive jurisdiction to decide the claim made by the banking company in liquidation? 2. Whether the plaintiff in a partnership action is entitled to any special protection regarding his alleged claims on mere allegations in the pleadings without anything more? 3. Whether the appointment of a Receiver in a partnership action operates as an injunction for both parties to the suit? 4. Whether the respondent No. 1 had any right to object to the withdrawal of the sum of Rs. 1,00,000 by the Joint Receivers?
Ratio Decidendi: 1. The High Court has exclusive jurisdiction to decide any claim made by a banking company in liquidation 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 has arisen or arises before or after the date of winding up of the banking company. 2. The plaintiff in a partnership action is not entitled to any special protection regarding his alleged claims on mere allegations in the pleadings without anything more. 3. The appointment of a Receiver in a partnership action operates as an injunction for both parties to the suit. 4. The respondent No. 1 had no right to object to the withdrawal of the sum of Rs. 1,00,000 by the Joint Receivers.
Final Decision: The application filed by the Official Receiver of the Bank in Liquidation was allowed. The Joint Receivers were directed to apply to the Court of the 4th Subordinate Judge at Alipore for payment to them of the sum now lying to the credit of that Court, a sum of Rs. 1,00,000 in terms of the decree of this Court, dated August 30, 1963, in the said Suit No. 289 of 1959. The respondents and each one of them and their servants, agents and assignees, if any, were restrained from raising any objection to the application to be made by the joint Receivers in terms of this order or from in any way interfering with the withdrawal of the said sum of Rs. 1,00,000 by the joint Receivers.
( 2 ) THE petitioner had filed a suit in this Court being Suit No. 289 of 1959 (Bank of Commerce Ltd. (in Liquidation) v. Sailendra Nath Sinha and another) claiming a declaration that an alleged assignment dated March 18, 1958, made by the respondent No. 2 in this application, was a sham and fictitious transaction and the same was invalid and void. In this suit a decree was passed by consent on August 30, 1963, upon leave being granted to the liquidator to enter into the compromise. By the said decree two Solicitors of this Court Sambhunath Ghose and Asoke Kumar Dutt were appointed Joint Receivers and were directed to apply for withdrawal of a sum of Rs. 1,00,000/- out of the money lying to the credit of the Court of the 4th Subordinate Judge at Alipur, in Title Suit No. 36 of 1954.
( 3 ) PURSUANT to the direction given to the Joint Receivers under the said decree of this Court dated August 30, 1963, the Joint Receivers applied before the 4th Subordinate Judge at Alipore, in Title Suit No. 36 of 1954, for withdrawal of the said sum out of the money lying to the credit of the said Court. The Subordinate Judge directed notice of the application to the parties in the Title Suit No. 36 of 1954. The respondent No. 1 in this application appeared in the said application by the Joint Receivers and filed a petition of objection, objecting to the withdrawal of money by the Joint Receivers, pursuant to and in terms of the said decree of this Court. The ground of objection of the respondent No. 1 was that, the money lying to the credit of the Court of the Subordinate Judge was deposited to protect the claim of the respondent No. 1 against the respondent No. 2, if a decree was passed in favour of the respondent No. 1 against the respondent No. 2, in the said Title Suit No. 36 of 1954.
( 4 ) BY an order dated October 3, 1963, the 4th Subordinate Judge at Alipore rejected the application of the Joint Receivers. This application has been occasioned by reason of the said order of the 4th Subordinate Judge at Alipore.
( 5 ) IN order to appreciate the merits of the rival contentions of the parties in this application, it is necessary to refer to several proceedings in this Court, as a direct result of which certain sums of the 4th Subordinate Judge at Alipore.
( 6 ) ON August 7, 1950, an order was made for winding up of the bank by this Court, and the petitioner was appointed the official liquidator. Thereafter misfeasance proceedings were commenced by the petitioner against the directors of the bank in this Court. By an order dated March 28, 1956, made in the misfeasance proceedings various properties including premises No. 5, Sadananda Road, were attached, and by an order made on May 14, 1956, by this Court, the petitioner obtained an order of attachment of sum of Rs. 2000/- payable monthly and every month as rent of premises No. 5, Sadananda Road, to the respondent No. 2 by one Chand Mohan Chakravarty, the Receiver appointed in Title Suit No. 36 of 1954 (Arun Kumar Chowdhury v. Sailendranath Sinha and another) now pending in the Court of the 4th Subordinate Judge at Alipore. I
AI
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
