# SHRI RAM NARAIN v. THE SIMLA BANKING & INDUSTRIAL CO. LIMITED

- **Citation:** [1956] 1 S.C.R. 603
- **Court:** Supreme Court of India
- **Decided:** 1953-01-03
- **Case number:** Civil Appeal No. 313of1955
- **Bench:** VIVIAN BosE, Jagannadhadas, B. P. Sinha
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/shri-ram-narain-v-the-simla-banking-industrial-co-limited-1249
- **Pages:** 23

## Headnote

Banking Oom.panies Act, 1949 (X of 1949) as amended by Act
LII of 1958, ss. 45-A, 45-B, 45-0-Displaced Persons (Debts Adjustment) Act, 1951 (LXX of 1951), ss. 8, 28-0verriding effect as against
all other laws-Pitrpose and policy of the two Acts-Tribunal under
Act LXX of 1951-Whether a Oourt-Transfer of proceedings
under s. 46-0 of the Banking Oompanies Act-Period of limitation.
The appellant, a displaced person, had 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
Bans.rs.a 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 B&nk obtained an order from the
Punjab High Court purporting to be one under s. 45-C of the Banking Companies Act, transfening 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 (i)
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 anythin~ in the Displaced Persons (Debts Adjustment) Act, 1951 and (ii) 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. '.l'b11 appellanh appealed to the Supreme Court.
Held, ths.t (i) in view of the wide and comprehensive l&ngu11ge
of as. 45-A and 45-B of the Banking Companies Act, 1949, as
1956
•
May9
1956
Shri Ram N attain
v.
The Simla Bank·
ing and Industrial
Co. Limited.
604
SUPREME COURT REPORTS
[1956]
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 jurisdic·
tion 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 il'.Jompanies 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.
11court" within the meaning of
a. 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-C 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 suoh time when it is brought
to the notice of the Court.

## Text

_Characters 0–39,213 of 51,737. This is a partial read: ask again with offset=39213 for what follows._

S.C.R.
SUPREME COURT REPORTS
603
SHRI RAM NARAIN
v.
THE SIMLA BANKING & INDUSTRIAL CO.
LIMITED.
[VIVIAN BosE, JAGANNADHADAS and
B. P. SINHA JJ.]
Banking Oom.panies Act, 1949 (X of 1949) as amended by Act
LII of 1958, ss. 45-A, 45-B, 45-0-Displaced Persons (Debts Adjustment) Act, 1951 (LXX of 1951), ss. 8, 28-0verriding effect as against
all other laws-Pitrpose and policy of the two Acts-Tribunal under
Act LXX of 1951-Whether a Oourt-Transfer of proceedings
under s. 46-0 of the Banking Oompanies Act-Period of limitation.
The appellant, a displaced person, had 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
Bans.rs.a 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 B&nk obtained an order from the
Punjab High Court purporting to be one under s. 45-C of the Banking Companies Act, transfening 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 (i)
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 anythin~ in the Displaced Persons (Debts Adjustment) Act, 1951 and (ii) 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. '.l'b11 appellanh appealed to the Supreme Court.
Held, ths.t (i) in view of the wide and comprehensive l&ngu11ge
of as. 45-A and 45-B of the Banking Companies Act, 1949, as
1956
•
May9
1956
Shri Ram N attain
v.
The Simla Bank·
ing and Industrial
Co. Limited.
604
SUPREME COURT REPORTS
[1956]
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 jurisdic·
tion 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 il'.Jompanies 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.
11court" within the meaning of
a. 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-C 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 suoh time when it is brought
to the notice of the Court.
CIVIL APPELLATE JURISDICTION:
Civil Appeal
No. 313of1955.
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 .. G. Setalvad, Attorney-General for India and
Ratanlal Chawla, for the respondent.
1956. May 9. The Judgment of the Court was
delivered. by
JAGANNADBADAS J.-This is an appeal by special
leave against an order of the High Court of Punjab
dated the 12th Ma.y, 1955, in the following circumstances.
The appellant was a. resident of Lahore who ca.me
over to India. in or about November, 1947, and took
up residence a.t Ba.nara.s as a displaced person. He
S.C.R.
SUPREME COURT REPORTS
605
had, prior to the 15th August, 1947, a fixed neposit
t9s6
of Rs. 1,00,000 in the Lahore Branch of the Simla Shri Ram Narain
Banking and Industrial Co. Ltd. (hereinafter referred
v.
to as the Bank) which had its head-office at Simla. The Simla BankHe had also at the time a cash-credit account in the ;,.g and Indttstn"al
Bank. The fixed deposit matured in 1948. The Bank
Co. Limited.
did not pay the amount to the appellant in .spite ~f Jagan:;;;;,adasJ.
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 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. 1
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 application 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
SUPREME COURT REPORTS
[1956]
7956
the Bank, at the time.
The application-Case No. 1
si 1 R
N
. of 1952-filed by the appellant before the Banaras
"
a~ arain Tribunal was also specified therein. It would appear
Th• Simi~ Bank· however that before the order was communicated to
Ing and Indwtrial the Tribunal, the said case before it was disposed of
Co. Limited.
and a decree was passed on the 3rd January, 1953,
J
-dh d 1 against the Bank for the sum claimed with future
'1ganna
a as , . mterest 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. 1of1952.
In view of this intimation, the Tribunal passed an
order dated the 20th March, 1953, stayiog 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.
S.C.R.
SUP:B.EME COURT :B.EPO:B.TS
607
It is said that as against this order of a single Judge,
1956
there is a Bench appeal now pending in the High Shri Ram Narain
Court of Punjab. At this stage the Banking Comv.
panies (Amendment) Ordinance, 1953, (Ordinance TheSimlaBank·
No. 4 of 1953), was promulgated on the 24th October, ing and Induatrial
1953. This was repealed and substituted, on the 30th
Co. Limited
December, 1953, by the Banking Companies (Amend- J
dh d
J
ment) Act, 1953 (LII of 1953). On the 17th February,
aganna
a as •
1954, the appellant filed a further application before
the Tribunal asking that the execution case filed before 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
1956
Shri Ram N af'ai·n
v.
The Si1nla Banking and lndustf'ial
Co, Limited.
JagannadhadasJ.
608
SUPREME COURT REPORTS
[1956)
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 belonging 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. 8of1953, 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 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
S.C.R.
SUPREME COURT REPORTS
609
arising therefrom have to be dealt with and disposed
7956
of by the Punjab High Court itself.
Sh . R
N
.
The appellant contested this application in the
r•
a•:. aram
Punjab High Court on various grounds. · The main The Simla Bankcontentions wereing and Industrial
(1) That the provisions of the Banking Comc1. Limited.
panies Act could not override the provisions of the 1
dh d 1
Displaced Persons (Debts Adjustment) Act, 1951,
aganna
a as •
and that the proceedings thereunder are not affected
by the Banking Companies Aot.
(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
70
610
SUPREME COURT REPORTS
[1956
1956
section 2 of the Banking Companies Act which specifically provides that the provisions of the Act shall
Shri Ratn Narain
v,
be in addition to and not in derogation of the Indian
The Simla Bank· Companies Act as expressly provided. Hence no leave
;,,g and Industrial under section 232 of the Indian Companies Act havCo. LimUed,
ing been obtained, this might have been enough to
J
-di
J dispose of the case against the appellant if the order
aganna iadas .
h
h
·
B
of attac ment
ad been set aside by the
ombay
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 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 constitute 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 snch an execution proceeding are matters which would directly fall
S.C.R.
SUPREME COURT REPORTS
611
within the scope of section 45-B of the Banking Com7956
Panies Act as amended in 1953 which runs as follows: Sh .R-N
.
.
ri
am
araui
"The High Court shall, save as otherwise exv.
pressly provided in section 45-C, have exclusive jurisThe s;ni..za Bankdiction to entertain and decide any claim made by or ing and .1n~ustrial
against a banking company which is being wound up
Co. L•mited.
(including claims by or against any of its branches in JagannadhadasJ.
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 b~en 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
1956
Shri Ram Narain
v.
The Simla Bank.
Ing and Industrial
Co, Limited,
Jagannadhada$ J.
612
SUPREME COURT REPORTS
[1956)
the Banking Companies Act by the Pnnjab High Court
transferring the pending execution proceeding to itself.
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.
Overri~ing effect of Act, rules and orders:-
Save as otherwise expressly provided in this Act, the
provisions 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
t . ,,
par ies .
.
.
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 1898), 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
ayply t~ 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, primafacie by virtue
S.C.R.
SUPREME COURT REPORTS
613
of section 28 of the Displaced Persons (Debts Adjust1956
ment) Act the jurisdiction to execute the Tribunal's Sh . R n Nnt'ain
decree is in the Tribunal.
But it is equally clear
,., "'v.
that the jurisdiction to decide any of the claims which The Simla Bank·
must necessarily arise in the execution of the decree ing and Jndust..ial
is vested in the High Court by virtue of section 45-B
Co. Limited.
of the Banking Companies Act. Each of the Acts J
-;;;: d
J
has a specific provision, section 3 in the Displaced aganna
0 as •
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 Cl'aies 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 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 t.o
the amending A'.ct 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) [1962] S.C.R. 688.
614
SUPREME COURT REPORTS
(1956)
1956
applied subsequent to the date of the amendment the
various unamended provisions of the Act have to be
Shri Ram Narain
v.
read along with the amended provisions as though
The Simla Bank- they are part of it. This is for the purpose of detering and Industrial mining what the meaning of any particular provision
Co. Limited.
of the Act as amended is, whether it is in the uni g
dh d
J amended part or in the amended part. But this is
a a"na a as '
t th
h'
'
h
h
no
e same t mg as saymg t at t e 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 lat April, 1951.
B11t 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 expiry 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 "A ct 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
;
S.C.R.
SUPREME COURT REPORTS
615
enable the doctrine to be called in aid that a later
19sr;
Act overrides an earlier Act. On the other hand, if Sh . R-N
.
h
1
h l t
A t
"d'
1.
A t
r• am
ara111
t e ru e as to t e a er c overn mg an ear ier c
v
is to be applied to the present case, it is the Banking The Simi~ Bank·
Companies (Amendment) Act, 1953, that must be ing and Industrial
treated as the later Act and held to override the proCo. Limited.
visions of the earlier Displaced Persons (Debts Adjust-
-
ment) Act, 1951. It has been pointed out, however, JagannatlhadasJ.
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 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, are 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 ar.d 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) (1955] 1 S.C.R. 1098.
616
SUPREME COURT REPORTS
[1956]
1956
winding up of the company and by investing the provisions of the Banking Companies Act with an overShri Ram Narain
•·
riding effect. This result was brought about first by
The Simla Bank- the Banking Companies (Amendment) Act, 1950 and
ingand Industrial later by the Banking Companies (Amendment) Act,
Co. Limited.
1953. Sections 45-A and 45-B of Part III brought in
-
by the 1950 Act vested exclusive jurisdiction in the
JagannadhadasJ. 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 rehabilitation 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-
-
S.C.R.
SUPREME COURT REPORTS
617
plications by displaced creditors against persens who
1956
are not displaced persons. So far as the a pplica ti on s Sh . R
N
.
b
d. 1
d d bt
d
t•
15 .
,., am ara•n
y
1sp ace
e ors are concerne , sec 10n
. Ill
v.
terms provides for certain consequences arising, when The Simla Bank·
the application is made to the Tribunal by a displaced ing and Industrial
debtor under section 3 or section 5(2), i.e., stay of all
co. Limited.
pending proceedings, the cessation of effect of any J
-h
J
. t •
d
tt h
t
t
d
b
t th
agannPd adas •
m er1m or era or a ac men s, e c. an a ar o
e
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 Companies 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 by
way 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
SUPREME COURT REPORTS
[1956)
1956
jurisdiction over the place where he resides, i.e., a
-
place more convenient to him th 0 n if he had to file a
Shf'i Ram Nar'ain
·
JN
v.
suit under the ordinary law in which case he would
The Simla Bank- have to file a suit at the place where the defendant reing and Industrial sides or part of the cause of action arises. There may
Co. Limited.
also be a few other minor facilities. But what is necesJagannadhaaa•J. sBaryk~o nCotice is ~hatAthte o~erridingd_pro
1
vis1d·on odf _the
an mg ompames c , so ~ar as a 1sp ace ere 1tor
is concerned, is sqbstantially only as regards jurisdiction. Section 45-A thereof, while providing that the
provisions of Part III-A and the rules made thereunder shall have effect notwithstanding anything inconsistent 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 with
any of the other specific provisions of the Banking
Companies Act. Having regard to all the above considerations 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. 1 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-
-
S.C.R.
SUPREME COURT REPORTS
619
ceeding pending before the Tribunal. The argument
195§
is that section 45-C applies only to a proceeding pend- Sht" R m N rain
ing in any other Court immediately before the com-
' av.
a
mencement of the Banking Companies (Amendment) The Simla Bank·
Act.
It is urged that the Tribunal under the Dis- ing and 1naustria1
i
laced Persons (Debts Adjustment) Act is not a Court.
co. Limited.
n support thereof the judgment of one of the learned J
-;;,; d J
Judges in Parkash Textile Mills Ltd. v. Messrs Muni
a1tanna
a as '
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 th11-t 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
eonsiderwbether the view taken by thelearnedJudge
was correct. No such question arises in tl!is 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 dec;ee 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) 67 P.L R. 107.
620
SUPREME COURT REPORTS
[1956)
1956
execution proceeding filed by the appellant before the
Sh .R-N
. Tribunal on the 6th January, 1953, continued to re-
"
am
arain
•
d"
b
th d
h
h B
k"
C
v.
marn pen mg y
e ate w en t e
an mg omThe Simla Bank· panies (Amendment) Act, 1953, came into operation.
Ing and Industrial This appears from the subsequent applications dated
Co.