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1952 Supreme(Cal) 182
HIGH COURT OF CALCUTTA
P. B. Mukharji
DHAKURIA BANKING CORPORATION LTD. - Appellant
Versus
SURABALA DEBI - Respondent
. Of .
Decided On : AUGUST 25, 1952
The appointment of a Receiver is an extraordinary remedy and should not be granted unless there are sufficient grounds to show that the ordinary methods of execution by attachment and sale are not appropriate.
Headnote:
BANKING COMPANIES ACT - BALANCE ORDER - ENFORCEMENT - APPOINTMENT OF RECEIVER - JURISDICTION - CIVIL PROCEDURE CODE - SECTIONS 39, 42, 51 - COMPANY RULES, FORM 53, RULE 152 - COMPANIES ACT, SECTION 199 - BANKING COMPANIES (AMENDMENT) ACT, 1950, SECTIONS 45A, 45B, 45H - INTERPRETATION - APPLICATION FOR APPOINTMENT OF RECEIVER TO ENFORCE BALANCE ORDER - JURISDICTION OF HIGH COURT AND DISTRICT COURTS - MANNER OF ENFORCEMENT - APPOINTMENT OF RECEIVER AS EXTRAORDINARY REMEDY - GROUNDS FOR APPOINTMENT - CONVENIENCE AND FAIRNESS - LOCAL SALE OF PROPERTIES - PROPRIETY OF APPOINTING RECEIVER TO SELL PROPERTIES OUTSIDE JURISDICTION OF COURT.
Fact of the Case:
The Official Liquidator of the Dhakuria Banking Corporation Ltd. (In Liquidation) applied for the appointment of a Receiver to enforce a Balance order on the contributions made by the respondents. The order was made on 4-12-1951 and provided for the enforcement of a call on the contributories of the bank for payment of the balance of the amounts due in respect of the shares of the bank. The applicant sought the appointment of a Receiver of the properties mentioned in Dhakuria and at Bolepur, Santiniketan, against the respondents.
Finding of the Court:
The court held that the ordinary method of execution by attachment and sale should be followed in this case and that the appointment of a Receiver was not justified. The court found that the applicant had not shown sufficient grounds to depart from the ordinary mode of execution and that the appointment of a Receiver would not be in the best interests of the parties involved.
Issues: 1. Whether the High Court has exclusive jurisdiction to enforce orders under the Banking Companies Act, 1950, and whether other Courts are divested of jurisdiction to entertain any matter relating to or arising out of the winding up of a Banking Company? 2. Whether the appointment of a Receiver is the appropriate and convenient remedy for enforcing a Balance order under the Banking Companies Act, 1950? 3. Whether the ordinary methods of execution by attachment and sale should be followed in this case or whether the extraordinary remedy of execution by the appointment of a Receiver should be adopted?
Ratio Decidendi: 1. The court held that Section 45h of the Banking Companies Act, 1950, is an exception to Sections 45a and 45b, and that it empowers the High Court to enforce orders under the Act in the same manner as decrees of the Court are enforced under the Civil Procedure Code. 2. The court held that the appointment of a Receiver is an extraordinary remedy and should not be granted unless there are sufficient grounds to show that the ordinary methods of execution by attachment and sale are not appropriate. 3. The court held that in this case, the applicant had not shown sufficient grounds to justify the appointment of a Receiver and that the ordinary methods of execution by attachment and sale should be followed.
Final Decision: The court dismissed the application for the appointment of a Receiver and held that the ordinary methods of execution by attachment and sale should be followed.
( 1 ) THIS is an application for the appointment of a Receiver to enforce what is known as Balance order on the contributions. The order was made on 4-12-1951 and provides:"it is ordered that the said applicant be at liberty to enforce a call on the contributories of the said bank as set out in the Schedule annexed to the affidavit of the said applicant and specified in the Schedule hereunder written for payment of the balance of the amounts due in respect of the shares of the said Bank except that such call be not enforced on the said Promotho Nath Sanyal. "the applicant in that case was the Official Liquidator of the Dhakuria Banking Corporation Ltd. (In Liquidation ).
( 2 ) IN the tabular statement the applicant official Liquidator now before me asks for an order appointing a Receiver of the properties mentioned in Dhakuria and at Bolepur, Santiniketan, more particularly described in paras. 15 and 16 of the petition used in support of this summons. This order is asked as against Sm. Surabala Debi, Dwijendra Nath Chatterjee, Sm. Provarani Chatterjee, Satyendra Nath Chatterjee and Birendra Nath Chatterjee.
( 3 ) THE grounds alleged by the applicant to have this mode of execution by Receiver are expeditious sale, and avoidance of separate and independent proceedings in different courts which mean more expense to the banking company already in liquidation. These grounds are set out in paras. 19, 20 and 21 of the petition.
( 4 ) ON behalf of the respondents there is an affidavit by Satyendra Nath Chatterjee. The main points raised in that affidavit are first, that he has no knowledge of the order of 4-12-1951, and, secondly, that the sum is not payable by him. The defence raised is that the Dhakuria property No. 14, Station Road, is a debutter property dedicated to Deity Lakshmi Narayan and does not belong to Sm. Surabala Debi and other persons against whom a receiver is sought in tabular statement. Lastly, the defence is taken that the application is not maintainable and is misconceived.
( 5 ) THE defences about lack of knowledge of the order of 4-12-1951, and existence of an alleged de butter have not been pressed before me. The only point urged against this application is that the ordinary method of execution by attachment and sale should not be discarded in favour of the extraordinary method of execution by appointment of a receiver. The important argument advanced on behalf of the applicant is that under the Banking Companies Act the lower district Courts have no jurisdiction to deal with any question in execution in relation to a Banking Company in liquidation and therefore the most convenient course will be for this Court having exclusive jurisdiction to deal with the present execution through a receiver. It is contended by the respondents that this application should not be granted, first, on the ground that the Receiver is an extraordinary method of execution and the normal methods of execution should be followed and, secondly, that in this particular case the point on the Banking Companies Act is concluded by the decision of the Special Bench in -- 'bharati Central Bank Ltd. , v. Rathindra Nath Sen', 54 Cal WN 975 (A ).
( 6 ) IT is necessary to elaborate this last point. In that case Banerjee J. referred the matter to a Special Bench under Ch. V, Rule 3, Original Side Rules, and himself sat in the Special Bench and delivered the judgment. The unfortunate part in that decision is that no one appeared for the respondent and there was only the petitioner present and the decision of the Special Bench of two learned Judges was necessarily given on ex parte arguments. But in that judgment delivered by Banerjee J. with which Harries C. J. agreed, it is said at p. 978:"we are unable to read the sections of the Banking Companies Act in the manner Counsel suggests. It seems to us that Section 45h is an exception to Sections 45a, 45b and Section 11 and makes special provisions for enforcement of the order
