The Narang Bank of India vs The Jagatjit Distilling and Allied Industries Ltd.

Mahajan, J.—This appeal is directed against the decision of the Tribunal appointed under the Displaced Persons (Debts Adjustment) Act (No. 70 of 1951)-hereinafter referred to as the Act. There is no dispute on facts. The petitioner Bank-The Narang Bank of India Limited hereinafter referred to as the Bank-is a displaced Bank. It acquired certain shares of the respondent Company (Messrs Jagatjit Distilling & Allied Industries Limited, Jagatjit Nagar, Hamira, District Kapurthala)-hereinaffer called the Company-from one Mr. P.L. Kapani. Mr. P.L. Kapani had, in turn, acquired these shares along with blank transfer deeds from five shareholders, namely, Tikaya Ram Chowdhary 100 shares, Chander Parkash Singh 100 shares, Chander Bhan 200 shares, Chander Bhan 100 shares and Shrimati Sushila Wati 500 shares, in all 1000 shares-Mr. Kapani had in fact pledged these shares with the Bank and had handed over to the Bank blank transfer deeds pertaining to these shares. These shares are of the value of rupees ten each and are partly paid up to the extent of Rs. 7/8/- each. The Company had made a call of Re. 1/- each share on these shares before the 15th August, 1947. The notice of the call was issued to the original shareholders and as they had not complied with the notice, the Company forfeited the shares on the 4th May, 1948. After the forfeiture, the Act came into force. On the 10th August, 1957, the Bank filed the present application u/s 19 of the Act claiming that the Bank held shares of the Company and the same may be converted into fully paid up shares. Section 19(2) of the Act provides for such conversion. It may be mentioned that before this application was made the Bank had obtained a decree under the Act against Mr. Kapani on the basis of the pledge on these shares with the Bank, and had exercised the option of taking over the shares in satisfaction of the amount due from Mr. Kapani u/s 17 of the Act. The present application was resisted by the Company. As many as 8 issues were framed and at the moment we are merely concerned with issue No. 2. The Tribunal has dismissed the application mainly on issue No. 2. Against this decision, the present appeal has been preferred.

Arguments have been addressed to me only on issue No. 2. Issue No. 2 is in these terms :

Whether the petitioner has a locus standi to present this application.

The contention of the learned counsel for the appellant is that the words ''any share held by him'' in sub-sections (1) and (2) of section 19 of the Act mean physically and beneficially held, and, therefore, the Bank which holds the shares along with the blank transfer deeds being a displaced Bank is entitled to move the Tribunal u/s 19 of the Act and get these partly paid up shares converted into fully paid up shares u/s 19(2) of the Act. This contention is controverted by the learned counsel for the respondent Company. The argument of the learned counsel for the respondent is that any share held by him has to be read in conjunction with the provisions of the Indian Companies Act wherein the Company will only recognise the person as a holder of the shares who is so mentioned in the books of the Company, that is, in the Register of the shareholders and in support thereof relies on the Division Bench decision of this Court in Jagatjit Distilling & Allied Industries Limited v. Shiv Ram Batta (1962) 32 Comp. Cas. 117 : (1963) 65 P.L.R. 328. This decision certainly supports the contention of the learned counsel for the respondent and being a Division Bench decision is binding on me sitting in Single Bench.

The learned counsel for the appellant, in the first instance, tried to distinguish this decision on the ground that this decision merely pertains to section 19(1) and has no relevancy so far as section 19(2) is concerned. His contention is that the words ''held by him'' in section 19(2) mean physically held by him. This argument loses sight of the fact that the words ''any share held by him'' occur not only in section 19(1) but also in section 19(2) of the Act and, therefore, only one meaning can be attributed to these words. Thus, whatever meaning is given to these words in section 19(1) must automatically be attributed to these words in section 19(2) of the Act. It cannot be held that the same words were used in the same section by the Legislature having two diametrically opposed meanings. The interpretation that these words must be given different meanings can only be held good in one eventuality where the context in which these words are used can justify a diametrically opposed meaning which cannot be said to be the case so far as the present provision is concerned. Moreover, in Jagatjit Distilling and Allied Industries Limited''s case (1962) 32 Comp. Cas. 117 : (1963) 65 P.L.R. 328, the prayer was both under Sections 19(1) and 19(2) and, therefore, it could not be held that the learned Judges were not aware of the meaning of these words in section 19(2) of the Act. In the aforesaid decision the words ''any share held by him'' have been given the same meaning in both the sub-sections (1) and (2) of section 19.

The second ground on which the aforesaid authority is sought to be distinguished is that the Division Bench has taken into account the provisions of the Indian Companies Act while interpreting section 19 of the Act. This, according to the learned counsel, cannot be done and for this reliance is placed on Pandit Ram Narain Vs. The State of Uttar Pradesh and Others, , wherein their Lordships of the Supreme Court held that in interpreting the same words in one statute, the interpretation placed on those words in another statute cannot be taken into consideration. So far as I am concerned, I am bound by the Division Bench decision of this Court referred to earlier, and if the appellant which so desires he can question it''s correctness in Letters Patent appeal with lies as a matter of right. In my view the Supreme Court decision in Ram Narain''s case is of no assistance to the learned counsel for appellant Bank.

The learned counsel for the appellant also contends that the Division Bench decision of this Court is wrong. He urges that the interpretation placed by the Division Bench is against the legislative intent, the dominent object of the Act and the context in which the words ''any share held by him'' are used and that is against the dictionary meaning of the word ''held''. As I have already said, the decision of the Division Bench is binding on me. All these considerations will be germane if the matter is taken up before the Letters Patent Beach which alone is competent to go into the question.

So far as the practical aspect of the matter is concerned, I see no difficulty in the way of the appellant provided it is found as a fact that the original share-holders whose names appear in the Register of Shareholders of the Company were displaced persons. This matter has not been enquired into in the present proceedings and naturally could not be, but in case in proper proceedings this matter is gone into and it is found that these five original owners are displaced persons under the provisions of section 19(1) of the Act, the shares will not stand forfeited. Therefore, any transferee of these shares can approach the Company and get the Register of Shareholders of the Company corrected. If the Company refused to correct the Register, the transferee has under the law the right to get it corrected through Court. The only effect would be that the transferee, though a displaced person in these circumstances, may not be entitled to the benefit of section 19(2) of the Act, but that will not cause any material injustice to the transferee because he will be a transferee of the shares of the value of. the shares to the extent of the amount partly paid on those shares and that in fact is the net result of section 19(2). In this view of the matter, I see no force in this appeal, and dismiss the same. In the circumstances of the case, there will be no order as to costs.