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Jurisdiction of City Civil Court vs. High Court in a suit filed by Official Liquidator of a banking company under special legislation. Analysis: The judgment pertains to a dispute where the High Court had to determine whether it had jurisdiction to try a suit filed by the Official Liquidator of a banking company. The suit aimed to recover a sum below Rs. 25,000, a matter triable by the City Civil Court under normal circumstances. However, the Banking Companies Act, 1949, and its amendment in 1950 conferred special jurisdiction upon the High Court for matters related to the winding up of banking companies. The court analyzed sections 45A and 45B of the Banking Companies Act, which oust the jurisdiction of all courts other than the High Court and confer special jurisdiction on the High Court for claims and questions arising in the course of winding up proceedings. The key question was whether a suit by the Official Liquidator to recover a debt from a debtor was a matter relating to or arising out of the winding up of the banking company. The court considered the powers of the Official Liquidator under section 179 of the Companies Act, emphasizing that the suit filed by the Official Liquidator must have a connection with the winding up of the company. It was noted that the legislative intent behind the Act was to expedite the winding up of banking companies by concentrating all powers in one court, even if it inconvenienced litigants outside the jurisdiction of the High Court. Drawing parallels with insolvency laws, the court highlighted that the language used in the Banking Companies Act was broader than in insolvency laws, indicating that even matters related to the winding up fell within the High Court's jurisdiction. The judgment concluded that the High Court had jurisdiction under section 45B to decide the matter, thereby ousting the jurisdiction of the City Civil Court. In the final decision, the court set aside the earlier dismissal order, allowing the appeal and directing the liquidator's costs to be paid from the banking company's assets. The suit was to be sent back for further proceedings in accordance with the law. The judgment, delivered by Chagla, CJ., and Bhagwati, J., establishes the High Court's jurisdiction over suits filed by Official Liquidators of banking companies under special legislation, emphasizing the legislative intent to expedite winding up proceedings and concentrate powers for efficient resolution of banking company matters.
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