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TMI Blog1953 (7) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... company instituted Civil Suit No. 304 of 1949 against Shri Durga Das Kapur for the recovery of rupees 9,766/5/9. 7. On 26-11-1949, Shri Durga Das defendant put in written pleas. 8. On 14-3-1950; the Court fixed the preliminary issues set out hereunder: (1) Has the plaintiff got 'locus standi' to file this suit? (2) Whether the value of the suit for purposes of court-fee and jurisdiction is correct? 9. On 17-5-1950, Shri Durga Das basing himself on the provisions of Section 45-A of the Act of 1949 objected to the jurisdiction of the Court to entertain the suit. 10. Finding that under Section 45-A of the Act High Court has exclusive jurisdiction to try the suit the Court ordered on 17-5-1950, that the suit stood transferred to the High Court under Section 11 of Act 20 of 1950. 11. In the High Court the plaint in Civil Suit No. 304 of 1949 together with the relevant papers was received on 15-6-1950. On 4-8-1950, Mr. Kundan Lal Gosain appeared for the banking company in this Court and applied for attachment before judgment of the monies payable to the defendant by Shri Hans Raj Saval. In this Court Civil Suit No. 304 of 1949 was registered as Civil Orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejudice to its powers under Section 37, the Court shall order the winding up of a banking company if it is unable to pay its debts and the Court shall also order the winding up of a tanking company if the Reserve Bank applies in this behalf to the Court. 17. From a perusal of the provisions of Section 38 of the Act of 1949 it is plain that the provisions of that section are not restrictive of the provisions of the Act contained in Sections 162 and 231 of the Act, as indeed is expressly stated by the words without prejudice to the provisions contained in Section 162 or Section 271, Companies Act, 1913 . From the words used in Section 33 of the Act of 1949 it cannot be sustained that a banking company cannot be wound up by the Court under Clauses (i), (ii), (iii), (iv) and (vi) of Section 162 of the Act. By Section 38(1) of the Act of 1949 provision was made for the winding up of a banking company if it refuses to meet a lawful demand at one of its offices or branches within two working days, if such demand is made at a place where there is an office or branch or within five working days if such demand is made at any other place. Section 38(2) of the Act of 1949 authorises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... squith said at p. 132: If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. One of these in this case is emancipation from the 1939 level rents. The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs. 20. Applying the rule of construction laid down in -- AIR 1953 SC 244 (B)' to the present case the conclusion is irresistible that the order made by the Court under Section 221 of the Act is an order of the Court for winding up of the company by the Court for the purposes of Section 45F of the Act of 1949. That being the position of law, in computing the period of limitation for Civil Original No. 192 of 1950 the banking com-pany is entitled to the exclusion of one year immediately preceding the date of the order passed by this Court under Section 221 of the Act on 6-8-1948. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within time on 4-8-1949 it will be within time on 4-8-1950. In order to determine this a reference may here be made to certain provisions of the Indian Companies Act and Indian Banking Companies Act. 33. Section 155, Companies Act prescribes the mode of winding up as follows: 155(1) The winding up of a company may be either- (i) by the Court; or (ii) voluntary; or (iii) subject to the supervision of the Court. 34. Section 170 deals with compulsory winding up. Section 203 provides for voluntary winding up and Section 221 winding up subject to the supervision of the Court. Section 225 deals with the effect of supervision order and Section 225 (2) is relevant for the purposes of this case and is as follows: 225(2) Except as provided in Sub-section (1), and save for the purposes of Section 196, any order made by the Court for a winding up subject to the supervision of the Court shall for all purposes, including the staying of suits and other proceedings be deemed to be an order of the Court for winding up the company by the Court and shall confer full authority on the Court to make calls or to enforce calls made by the Liquidators and to exercise all other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that an arrangement has been made whereby the company can pay its depositors in full as their claims accrue. This section does not in any manner affect the question which is now in dispute. Again Section 44 is a restriction on a bank holding a licence from the Reserve Bank going into voluntary liquidation, but it does not in any way affect the banking companies which are already being wound up voluntarily. But whatever be its effect it has no connection with the case now before us where a banking company has gone into voluntary liquidation and an order making it subject to the supervision of the Court has been passed. 36. In my opinion the words of Section 225 do make the order of supervision under Section 221 to be an order for winding up of the company. In a recent case -- '(1952) AC 109 (C)', Lord Asquith while dealing with the provisions of the Town and County Planning Act, 1947, made reference to the effect of the words 'deemed to be' and observed: If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affair ..... 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