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TMI Blog1951 (8) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... uted that but for certain special legislation to which I shall presently refer the suit would have been triable by the City Civil Court in Bombay as the subject-matter of the suit is below Rs. 25,000. The question that we have to consider is whether the jurisdiction of the City Civil Court has been ousted and whether special jurisdiction has been conferred upon the High Court by reason of the suit having been filed by the Official Liquidator in the course of the winding up of the Associated Banking Corporation of India Ltd. An Act was passed by the Dominion Legislature, being the Banking Companies Act, 1949 (X of 1949), to amend the law relating to banking companies, and Part II of that Act deals with suspension of business and windin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng company. Therefore jurisdiction of all courts other than the High Court as defined in section 45A was clearly ousted with regard to all matters which relate to or arise out of the winding up of a banking company. Section 45B conferred power upon the High Court to decide all claims made by or against any banking company including claims by or against any of its branches in India, and all questions of priorities and all other questions whatsoever, whether of law or fact, which may relate to or arise in the course of the winding up of the banking company, coming within the cognizance of the court. Now, the narrow question that we have to consider is whether a suit filed by the Official Liquidator to recover a claim due to a banking compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relations between the bank and the debtor, that the suit does not arise out of the winding up, that it is not by reason of the supervention of the winding up that the Official Liquidator became entitled to recover this amount, that the cause of action was already there, and the cause of action did not arise by reason of the banking company being wound up. According to the learned Judge these provisions only apply when a right is conferred upon the banking company by reason of the winding up. The claim must arise directly by reason of the supervention of the winding up. But if the claim does not so directly arise and the claim already existed, the mere winding up does not make that claim a matter relating to or arising out of the winding up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t this argument overlooks one or two important considerations. It is one thing to say that the company before it is wound up is enforcing contractual right and the contractual obligation of the debtor in filing a suit to recover the debt due to the banking company. It is entirely a different thing to say that the Official Liquidator with the sanction of the court is recovering the debt due by the debtor to the company under section 179 because the Official Liquidator is not concerned with the contractual rights or obligations. He is primarily concerned to wind up the affairs of the company and to distribute its assets. Therefore, in filing the suit what he is doing is helping to wind up the affairs of the company and also assisting the ulti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is compelled to file suits to recover debts in different places in India against the debtors where they might be residing or where the cause of action might have arisen, then a speedy disposal of winding up proceedings would be impossible. The liquidator would be in a position to wind up the affairs of the company and distribute its assets. Therefore if the sole purpose and the whole object of this legislation is to wind up the affairs of banking companies as expeditiously as possible, then it stands to reason that the Legislature must have intended that the assets should be realised as quickly as possible, and when the Official Liquidator files a suit against a debtor of the banking company, all he is doing is to attempt to realise part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ency Act and under section 105 of the Bankruptcy Act, 1914. Now, it will be noticed that the language used by the Legislature in our section 7 and section 105 of the English Act is merely "a question which may arise in any case of insolvency." The language used in the Banking Companies Act is much wider. It is not merely a matter arising out of the winding up or a matter arising in the course of the winding up, but also a matter relating to the winding up of a banking company. Mr. Daji has appealed to us not to give a construction to section 45B and section 45A which may result in debtors of the company in any part of India having to answer a summons issued by this court or creditors of a banking company being compelled to file suits in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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