Baidyanath Bayen vs Berhampore Bank Ltd.

M.M. Dutt, J.—This appeal is at the instance of the referring claimant Baidyanath Bayen and it is directed against the order of the District Judge, Murshidabad, holding that in view Section 45A and B of the Banking Regulation Act, 1949, he has no jurisdiction to entertain and dispose of the reference cases u/s 18 of the Land Acquisition Act, 1894.

The disputed land measuring 4.10 acres appartains to C.S. plot No. 1523, Khatian No. 469, Mouza Boargachi, in the district of Murshidabad. It was required by the Government of West Bengal under provisions of the West Bengal Land Development and Planning Act on or about June 28, 1951. The Respondent Berhampore Bank Ltd. was the mortgagee in respect of a portion of the disputed land. By an order of this Court dated November 18, 1949, this Court directed the winding up of the Respondent Bank. After the disputed land was acquired, a final mortgage decree was passed in favour of the Respondent Bank by the High Court on August 7, 1956. On March 25, 1958, the Collector made an award of compensation in the joint names of the Appellant and the Respondent. The Appellant, who was a tenant in respect of the disputed land, claims that he is entitled to the whole of the amount of compensation, while the Respondent who, as aforesaid was the mortgagee, makes a similar claim. Both of them not being satisfied with the award of the Collector made two separate applications u/s 18 of the Land Acquisition Act before the learned District Judge, Murshidabad, each claiming the entire amount of compensation and enhancement of the same. The application of the Respondent Bank Was numbered as L.A. Case No. 34 of 1961 and that of the Appellant as L.A. Case No. 36 of 1961. In this appeal, we are concerned with L.A. Case No, 36 of 1961.

The learned District Judge took the view that in view of Sections 45A and 45 B of the Banking Companies Act, 1949, as amended in 1953 and renamed as the Banking Regulation Act, 1949, by the Banking Laws (Application to Co-operative Societies) Act, 1965, the High Court alone has jurisdiction to dispose of the reference cases and that he has no jurisdiction in the matter. He has disposed of the said reference cases by the aforesaid finding without any direction as to the return of the applications u/s 18 for presentation to the High Court.

The only question that is involved in this appeal is whether the application under s, 18 of the Land Acquisition Act filed by the Appellant is barred by the provisions of Sections 45A and 45B of the Banking Regulation Act. Sections 45A and 45B are as follows:

45A. Part III-A to override other laws.''--The provisions of this part and the rules made thereunder shall have effect notwithstanding anything inconsistent therewith contained in the Companies Act, 1956, or the, Code of Civil Procedure, 1908, or the Code of Criminal Procedure, 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 insofar as the same are not varied by, inconsistent with the provisions of this part or rules made thereunder shall apply to all proceedings under this part.

45B. Power of High Court to decide all claims in respect of banking companies.--The High Court shall, save as other wise expressly provided in Section 45C, have exclusive jurisdiction to entertain and decide any claim made by Or against a banking company which is being wound up including claims by or against any of its branches in India or any application made u/s 39 of the Companies Act, 1956, 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 to 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.

By Section 45B exclusive jurisdiction has been conferred on the High Court to decide--(i) any claim made by or against a banking company which is being wound up, (ii) any application made u/s 391 of the Companies Act, 1956, (iii) any question of priorities, (iv) any other question whether of law or fact, which may relate to or arise in the course of the winding up of a banking company.

The object of the provisions of Sections 45A and 45B is for the expeditious disposal of the winding up of the banking company and to allow the liquidator to proceed with all proceedings in one Court, that is, the High Court.

In order to attract Section 45B, one of the conditions to be fulfilled is that there is a claim by or against the banking company in liquidation. In the instant case, the Appellant claims that he is alone entitled to the whole of the compensation money. On the other hand, the Respondent Bank opposes the claim of the Appellant and according to it, it is alone entitled to the whole of the compensation money. It is said on behalf of the Appellant that he has not made any claim against the Respondent Bank, but his claim is against the Government who is responsible for the payment of the compensation for the acquired land. Even assuming that the Appellant has not, by filing the application u/s 18, made any claim against the Respondent Bank, there is a claim by the Respondent Bank to the whole of compensation money. Section 45B will be attracted when there is a claim made by or against a banking company. In the instant case, there is a positive claim of the Respondent Bank in liquidation and prima facie Section 45B is attracted. It is true that the claim made by the Appellant is not directly against the Respondent Bank, but indirectly it is a claim against the Respondent Bank. In these circumstances, we are of the view that Section 45B applies in terms.

Mr. Sudhis Das Gupta, learned Advocate appearing on behalf of the Appellant, has urged that the Land Acquisition Court exercising jurisdiction under the provisions of the Land Acquisition Act is not a full-fledged civil Court, but it is a special Court of exclusive jurisdiction to decide the disputes raised u/s 18 of the Land Acquisition Act. He submits that Sections 45A and 45B read with Section 45C do not confer jurisdiction on the High Court to decide the questions u/s 18 which are within the special jurisdiction of the Land Acquisition Court. He has drawn our attention to Section 3(d) of the Land Acquisition Act, as amended by West Bengal. u/s 3(d) the expression ''Court'' means a principal civil Court of original jurisdiction and includes the Court of any Additional District Judge, Spbordinate Judge or Munsif whom the State Government may appoint, by name or by virtue of his office, to perform, concurrently with any such principal civil Court, all or any of the functions of the Court under the Act within any specified local limits and in the case of a Munsif, upto the limits of the pecuniary, jurisdiction with which he is vested u/s 19 of the Bengal, Agra and Assam Civil Courts Act, 1887. The definition of the word ''Court'' no doubt indicates that it is a Court of special jurisdiction, but the question is whether Section 45B vests in the High Court the jurisdiction to decide the Land Acquisition cases. Section 45B is very wide and confers on the High Court the exclusive jurisdiction to entertain and decide any claim made by or against a banking company which is being wound up. It does not limit the jurisdiction of the High Court to any particular claim or claims made by or against a banking company, It follows, therefore, that whatever may be the nature of the claim, when such claim is made by or against a banking company, the High Court will have the exclusive jurisdiction to decide the same. The word ''exclusive'' is very significant for, in our view, it overrides the jurisdiction of all other Courts and Tribunals by necessary implication. In Shri Ram Narain Vs. The Simla Banking and Industrial Co. Limited, , it has been held by the Supreme Court that having regard to the wide and comprehensive language of Sections 45A and 45B of the Banking Regulation Act, it is clear that a proceeding to execute the decree obtained by a displaced creditor from the Tribunal under the Displaced Persons (Debts Adjustment) Act, 1951, against a Bank and all other incidental matters arising therefrom, such as attachment are matters within the exclusive jurisdiction of the Court that has directed winding up proceedings of the Bank. The said decision was made by the Supreme Court in spite of the fact that Section 3 of the Displaced Persons (Debts Adjustment) Act, 1951, provided for the overriding effect of the provisions of the Act and of the rules and orders made thereunder 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 parties.

Mr. Das Gupta, however, has strongly relied on a Subsequent decision of the Supreme Court in S.V. Kondaskar, Official Liquidator and Liquidator of the Colaba Land and Mills Co. Ltd. Vs. V.M. Deshpande, Income Tax Officer, Companies Circle I(8), Bombay and Another, . In that case, the Supreme Court had to consider the question as to whether--the income tax assessment proceedings would, be held to be such Other legal proceedings within the meaning of Section 446(2) of the Companies Act, 1956. In this connection, it may be stated that though Section 446(2), is to some extent similar to Section 45B of the Banking Regulation Act, yet Section 45B is much wider in scope than Section 446(2) of the, Companies Act. Be that as it may, the Supreme Court held that the assessment proceedings for computing the amount of tax were not such other legal proceedings within the meaning of Section 446(2). It was observed that the language of Section 446 must be construed as to eliminate such startling consequences as investing the winding up Court with the powers of an income tax Officer conferred on him by the income tax Act, because the Legislature, could not have intended such a result, That observation was made by the Supreme Court on a construction of Section 446(2) of the Companies Act. But as stated already, Section 45B of the Banking Regulation Act is much wider in scope than Section 446(2) of the Companies Act. The Supreme Court''s decision in S.V. Kondaskar, Official Liquidator and Liquidator of the Colaba Land and Mills Co. Ltd. Vs. V.M. Deshpande, Income Tax Officer, Companies Circle I(8), Bombay and Another, , does not lend support to the contention of Mr. Pas Gupta.

Section 45C of the Banking Regulation Act provides for transfer of suits or other legal proceedings to the High Court pending in any other Court immediately before the commencement of the Banking Companies (Amendment) Act, 1953, or the date of the Order for the winding up of the banking company, whichever is later. Section 45C does not apply to the instant case, for the proceeding before the learned District Judge u/s 18 of the Land Acquisition Act was started long after the date of the winding up order or the commencement of the Banking Companies (Amendment) Act, 1953. It is, however, argued on behalf of the Appellant that the word ''Court'' referred to in Section 45C(i), means ''civil Court'' and as the Land Acquisition Judge is not a civil Court, Section 45B does not contemplate to confer jurisdiction on the High Court to decide claims made by or against a banking company in liquidation, which are to be decided by a Court other than a civil Court. This contention is without any Substance. Even assuming that the Land Acquisition Court is not a civil Court, it is difficult to hold that Section 45C refers only to civil Courts. In our opinion, the word ''Court'' in Section 45C(1) refers to all Courts, excepting the High Court and the Supreme Court.

Lastly, Mr. Das Gupta has placed reliance on the object and reasons of the Banking Companies (Amendment) Act, 1953. It has been, inter alia, stated in the objection of the said Amendment Act that a Bank has a far larger number of debtors, than a Joint Stock Company of a comparable size and the necessity to pursue legal proceedings against each debtor, quite frequently in different Courts, involves considerable expenditure and immense delay. It is contended that Section 45B read with the object of the said Amendment Act by, which Sections 45A and 45B were incorporated in Pt. IIIA of the Banking Company Act, 1949, (now Banking Regulation Act, 1949) contemplates cases by or against the debtors of the banking company in liquidation and not cases like the instant one. We are unable to accept, this contention. In the first place, Sections 45A and 45B are clear and as such, there is no necessity for referring to the object and reasons of the said Amendment Act by which the said sections were inserted in Pt. IIIA of the Act. It has been already noticed that Section 45B is wide enough to include any kind of claim by or against a banking-company in liquidation. In these circumstances, we are unable to limit the scope of Section 45B with reference to the said object of the Amendment Act. It is not that the High Court will dispose of the reference cases or the disputes u/s 18 of the Land Acquisition Act dehors the provisions of the said Act. The provisions of the said Act will apply insofar as the same are not varied by, or inconsistent with, the provisions of Pt. IIIA, or rules made thereunder, as provided in Section 45A.

It is argued on behalf of the Appellant that when the District Judge decides the market value of the acquired land, he does riot thereby decide any claim by or against any party. It is contended that at-least the District Judge has jurisdiction to decide the case of both the parties as to the enhancement of the amount of compensation. It is difficult to say that the decision on the question of the market value of the land is not a decision of a claim by or against the banking company and that the District Judge will have jurisdiction to decide the same. But even assuming that to be so, there is one difficulty about the same. Section 18 contemplates one application, that is, one proceeding before the District Judge or the Land Acquisition Judge. The said proceeding may be regarding apportionment of the compensation, measurement of the area or enhancement of the amount of compensation. When there is a claim for apportionment and also for the enhancement of the amount of compensation in an application u/s 18, that application is generally heard on two instances, firstly, the claim for apportionment is disposed of and thereafter, the question of enhancement of compensation is taken up for consideration. These two steps are in the same proceeding arising out of one application. It is difficult to split up the application u/s 18 into two applications or the proceeding started thereby into two separate proceedings. For the purpose of convenience of considering the question as to apportionment and enhancement of compensation the above procedure is generally adopted by the Land Acquisition Courts, but for that it cannot be said that the two stages are two different and independent proceedings. Accordingly, the claim having been made by one application giving rise to a single proceeding, the same cannot be split up into two applications or two proceedings, so that the claim for the enhancement of compensation may be decided by the District Judge and the claim for apportionment of compensation may be decided by the High Court in view of Section 45B. In these circumstances, we are of the view that the application u/s 18 of the Land Acquisition Act will have to be decided by the winding up Court, that is, the High Court in its entirety.

Our attention has been drawn to a certified copy of the application filed on behalf of the Respondent Bank before the Collector of Murshidabad in Project Case No. 28 of 1950-51 on or about March 22, 1958. It appears from the application that in the acquired plot being the said plot No. 1523, the Respondent was a mortgagee in respect of only 10 acre thereof. If that be so, the High Court will have jurisdiction to decide the claim made by or against the Respondent Bank in respect of only 10 acre of plot No. 1523 and the claim of the Appellant to the compensation money in respect of the rest of the said plot or such portion thereof to which he had interest would be disposed of by the learned District Judge. The learned District Judge will, in that case, return the application of the Respondent Bank u/s 18 for presentation to the High Court. The Appellant will be entitled to file a fresh application u/s 18 to the High Court laying his claim to compensation money in respect of the said 10 acre of the acquired plot, if it is considered necessary. If, however, the learned District Judge finds that the claim of the Appellant and that of the Respondent Bank to the compensation money are in respect of the same quantity of the acquired plot he will return both the applications u/s 18 out of which L.A. cases Nos. 34 of 1961 and 36 of 1961 arise, for presentation to the High Court.

The appeal is disposed of as above, but in view of the facts and circumstances of the case, there will be no order for costs.

Sharma, J.

I agree.