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TMI Blog1965 (2) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... om the several defendants of a sum of Rs. 60,000 with subsequent interest, the basis of the claim being that, as employees of the first plaintiff, defendants Nos. 2 to 8 and the husband of the first defendant were guilty of various acts of misfeasance and malfeasance in respect of the funds of the first plaintiff, and misappropriated the same to a tune of Rs. 1,16,000. The first plaintiff also prayed for a mortgage decree on the foot of a security which the second defendant had executed in his favour in relation to the same mishandling of the funds. The first defendant's husband was the secretary of the first plaintiff from 1926 till March 18, 1957, when he died, leaving his widow, the first defendant. Though the articles of association ves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff it was impleaded in that capacity on the ground that the interests of the first plaintiff had devolved on the second. Thereupon an additional issue was framed, namely, "Whether the Tanjore Permanent Bank, the newly constituted plaintiff, is entitled to continue the suit and get the reliefs prayed for in the suit". The parties went to trial on this preliminary issue, with the result the learned subordinate judge took the view that the second plaintiff had no locus standi to continue the suit and that, in fact, the suit was not a proper remedy, and dismissed the suit. The court below formed that view as, in its opinion, the suit was in substance one for damages for misfeasance, which could not survive the amalgamation of the first plaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Co. Ltd. [1959] 29 Comp. Cas 357 appears to be directly in point. That was a case of sanction by court of a scheme of amalgamation of two companies. The scheme ordered by the court provided that any suit or other legal proceeding, if pending in any court by or against the company which was amalgamated, be continued by or against the company with which the latter was amalgamated. On that basis an application was made for bringing the company, after amalgamation, on record, but it was dismissed on the view that the transfer to the applicant was no more than a mere right to sue for damages for breach of contract. Das Gupta, C.J., as he then was, and Bachawat J. held that the transfer being by order of a court of competent jurisdiction, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k is pending, the same shall not abate, or be discontinued or be in any way prejudicially affected but shall, subject to the other provisions of the scheme, be prosecuted and enforced by or against the transferee bank. It is, therefore, clear, as was the case in the Calcutta decision, that the right to continue the suit was something which was attached to the property to which it was incidental and which was under the scheme of amalgamation transferred from the first plaintiff to the second plaintiff : On that view it may not be necessary even to consider whether, on the averments in the plaint, the cause of action was something more than a mere right to sue for damages. But it is clear from the plaint that the second defendant had, as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransferee bank to continue an action pending against the banking company merged with it on amalgamation. That, in our opinion, is clearly a wrong view to take of the scope of the sub-section. It is true that the sub-section has not been cautiously worded and clarity has been sacrificed, apparently, for the sake of brevity. The object of the sub-section ex facie is to enable a banking company on its reconstruction or a transferee bank to continue certain things. It is clear that an action against either the one or the other pending on the relevant date is to continue. But it is argued that, so far as the transferee bank is concerned, what the sub-section contemplates is only the continuance of action against the banking company which was ama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , notwithstanding anything to the contrary, contained in any other provisions of the Act or in any other law or any agreement, award or other instrument for the time being in force. Obviously, the provisions of the scheme have an overriding effect and prevail over any other law. It is true equally that sub-clause ( e ) of sub-section (5) will prevail, but, in this context, the opening words of sub-clause ( e ), namely, "subject to the provisions of the scheme" assume importance. By those words it is plain that the provisions of the scheme will even prevail over the express provisions in that sub-clause as to the continuance of suits or proceedings. It was suggested at the bar that those words "subject to the provisions of the scheme" pertai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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