A charge on property created by operation of law can be enforced under Sec. 45b of the Banking Companies Act, 1949, in the case of a banking company which is being wound up.

1. This order will dispose of Letters Patent Appeals Nos.214 and 333 of 1969. Both these appeals are directed against the order of the learned single judge passed under Sec.45b of the Banking Companies Act, 1949 (10 of 1949), Excepting one point, the other points are common to both the appeals. It is not necessary to set out the facts in both the appeals. We confine ourselves to the facts in L. P. A. No.214 of 1969.

2. On the 27th of June, 1946, Manohar Lal Budhwar mortgaged the cotton and ginning factory, Jhang, with the Colony Bank Ltd. to secure an advance of Rs.1,10,000. Soon after came the partition of India and Jhang fell in what is now West Pakistan. At the date of partition, 15th August, 1947, the banks claim against M. L. Budhwar amounted to Rs.1,14,905. M. L. Budhwar died in 1951, leaving behind four sons, Pratap Kumar Budhwar and three others. His claim regarding the cotton and ginning factory was settled at Rs.5,26,951 by the Settlement Commissioner under the Displaced Persons (Claims) Supplementary Act, 1954 . On the 29th August, 1956, the legal representatives of Budhwar received the compensation. The amount of compensation was paid partly in cash and partly by allotment of a plot at Allahabad. On the 18th of February, 1957, the banking companys claim was verified. The intimation of this verification was sent to the rehabilitation authorities on 31st March, 1964. The representative of the displaced banking company approached the rehabilitation authorities for payment of the proportionate share of the compensation, which under Sec.6 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954, had to be paid to the descendants of Budhwar, to discharge the liability of Budhwar to the banking company. This representation was not accepted because it was stated that in the meantime the compensation had been paid partly in cash and partly by sale of a plot. On the 6th November, 1964, an application was filed in this court under the Banking Companies Act for realisation of the banking companys share. This petition was returned on the 15th of October, 1965, on the short ground that this court had no jurisdiction because the banking company was not wound up. On the 22nd April, 1966, the winding-up order of the banking company was made by this court and on the 28th of February, 1967, the present petition was filed. This petition was contested by the appellant, one of the sons of Budhwar, alone.

3. The learned single judge, after hearing the parties, passed the impugned order wherein he held that the claim was within limitation and the same can be recovered out of the immovable property, No.6-A, Stretchy Road, Allahabad. Pratap Kumar Budhwar being dissatisfied with this order had preferred an appeal under Clause 10 of the Letters Patent.

4. Mr. H. L. Soni, learned counsel for the appellant, contended that the order of the rehabilitation authorities, exhibit P-1, whereby they refused to entertain the banks claim had become final and, therefore, no application lay under Sec.45b of the Banking Companies Act. He referred to Sec.36 of the Act. In our opinion, this contention is not sound. The matter would have been different if the rehabilitation authorities had kept cash amount out of compensation payable to the appellant for payment to the banking company. That was not done. The compensation was paid partly in cash and partly by transfer of property, that is, the plot. The amount due to the bank by operation of law becomes a charge on the plot. There is nothing in the Displaced Persons (Compensation and Rehabilitation) Act which provides a machinery how the charge is to be enforced. The only provisions to which reference has been made at the Bar are Sections 6 and 7. The relevant part of Sec.6, for our purpose, is quoted below : "6. (1) Where a debt due to a banking company is secured by a mortgage, charge or lien on any immovable property belonging to a displaced person in West Pakistan in respect of which com