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TMI Blog1931 (5) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... clause ( vi ) of section 162 of the Indian Companies Act, 1913, hereinafter referred to as the Act, for the winding up of the Bharat Bank Limited, Delhi, hereinafter referred to as the bank. On the 16th of March, 1951, the court ordered : "Notice to the Bharat Bank Limited and the Punjab National Bank Limited. Citations in the Government Gazette, the Tribune of Ambala and the Hindustan Times of Delhi." On the 27th of March 1951, the bank applied under section 151 of the Code of Civil Procedure that the petition under section 162 of the Act may not be advertised in the Government Gazette, the Tribune of Ambala and the Hindustan Times of Delhi. On the 28th of March, 1951, Shri Harish Chandra applied inter alia that in case the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho, in the opinion of the Court, has a right to present a petition for winding up and who is desirous of prosecuting the petition." Clearly, if the original petition for the winding up of the bank is validly presented and the case is one in which the petitioner does not proceed with due deligence on his petition, it is open to the court to substitute as petitioner another person who, int he opinion of the court, has a right to present a petition for winding up and who is desirous of prosecuting the petition. The effect of such substitution is that the person who has been substituted takes the place of 1he first petitioner and is entitled to prosecute the petition as if it were his own. For corresponding provisions in the Insolvency jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the proceedings of the extraordinary general meeting of the shareholders of the Punjab National Bank Limited. I do not dispute the correctness of the copy of the proceedings. The balance-sheet and the articles of association of the Bharat Bank Limited (Exhibits G and J) may be read as evidence in the case. I then admit that Exhibit K is a true copy of the articles of agreement between the Bharat Bank Limited and the Punjab National Bank Limited. I, however, dispute the validity of the agreement, copy-whereof is Exhibit K. The Bharat Bank Limited has placed on record a copy of the proceedings of the extraordinary general meeting of the shareholders of the Bharat Bank Limited held on the 30th day of March, 1951. I do not dispute that an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove, Shri Kirpa Ram applied for the winding up of the bank under clause ( vi ) of section 162 of the Act. Clearly, the power given by clause ( vi ) to the Court should not be exercised unless there is very strong ground for acting upon it because companies are governed by majority of their own members and where there is a domestic tribunal which has powers to decide upon a question, it should, if possible, be left to the domestic tribunal. In the present case an extraordinary general meeting of the shareholders of the bank was held on the 30th March, 1951, at 6, Daryaganj, Delhi. In that meeting the shareholders passed the resolutions set out hereunder : "(1)Resolved that the agreement executed on 10th day of March 1951, between the Bhara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions Nos. (1) and (2) set out in an earlier part of this order, the shareholders of the bank have acted in the interests of the bank. But it is said that inasmuch as it has become difficult for the bank to run as an economic unit, the continuation of the petition would be just. In my judgment however the mere fact that it has become difficult for the bank to run as an economic unit and that urgent steps are necessary to avoid recurring losses does not show that the agreement. Exhibit K, is injurious to the interests of the shareholders and depositors of the bank and that the winding up of the bank would be for the benefit of the depositors and shareholders of the bank. Mr. Amar Nath Khanna then urges that the agreement, Exhibit K, contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Reserve Bank under section 36 of the Banking Companies Act, 1949, to object to the agreement, Exhibit K, if they think fit. In considering the question whether Shri Harish Chandra should be allowed to prosecute the petition for the winding up of the bank, it is to be borne in mind that the shareholders of the Punjab National Bank Limited have in an extraordinary general meeting held on the 14th of April, 1951, unanimously approved the scheme of assumption of liabilities and assets of the bank by the Punjab National Bank Limited on the terms and conditions contained in the agreement, Exhibit K. Indeed, the agreement, Exhibit K, has been given effect to by the two banks and I have no doubt that the continuation of the petition for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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