1952 (8) TMI 13 - HC - Companies Law

Summary

Issues Involved:
1. Appointment of a receiver to enforce a balance order on contributories.
2. Jurisdiction of the High Court versus lower district courts under the Banking Companies Act.
3. Appropriateness of appointing a receiver versus using ordinary methods of execution like attachment and sale.

Issue-wise Detailed Analysis:

1. Appointment of a Receiver to Enforce a Balance Order on Contributories:
The judgment addresses an application for the appointment of a receiver to enforce a balance order on the contributories of Dhakuria Banking Corporation Ltd. (in liquidation). The balance order, dated December 4, 1951, allowed the applicant to enforce a call on the contributories except for one individual. The applicant, the official liquidator, sought a receiver for properties in Dhakuria and Bolepur, Santiniketan, to expedite the sale and avoid separate proceedings in different courts, which would incur more expenses for the banking company in liquidation.

2. Jurisdiction of the High Court versus Lower District Courts under the Banking Companies Act:
The respondents contended that the ordinary method of execution by attachment and sale should be preferred over the extraordinary method of appointing a receiver. They argued that under the Banking Companies Act, lower district courts lack jurisdiction to handle execution matters related to a banking company in liquidation. The applicant countered that the High Court, having exclusive jurisdiction under sections 45A and 45B of the Banking Companies Act, should handle the execution through a receiver to avoid jurisdictional issues and delays if the matter were referred back to the High Court from a district court.

The judgment references the Bharati Central Bank Ltd. v. Rathindra Nath Sen case, where it was determined that section 45H of the Banking Companies Act is an exception to sections 45A and 45B. This section allows the High Court to execute orders in the manner provided in the Civil Procedure Code, including transferring orders to any court for execution.

3. Appropriateness of Appointing a Receiver versus Using Ordinary Methods of Execution:
The court found that the grounds alleged in paragraphs 19, 20, and 21 of the petition were insufficient to depart from the ordinary method of execution by attachment and sale. The court emphasized that the ordinary processes should not be supplanted merely due to the location of the properties. The court also noted that the appointment of a receiver should be reserved for cases where ordinary methods are inadequate.

The court discussed the implications of section 45H of the Banking Companies Act, which allows orders to be enforced in the same manner as decrees under the Civil Procedure Code. However, it questioned whether this section re-creates jurisdiction in a court expressly divested of it by sections 45A and 45B. The court concluded that the ordinary methods of execution should be preferred unless specific grounds justify the appointment of a receiver.

Conclusion:
The court decided not to appoint a receiver, as the applicant did not demonstrate sufficient grounds to deviate from the ordinary methods of execution by attachment and sale. The enforcement order could be executed as a decree under the Civil Procedure Code, and the court emphasized the importance of local sales for publicity and fairness. Therefore, the application was dismissed, with no order for costs in favor of the respondents, but the liquidator was allowed to retain his own costs out of the estate.