JUDGMENT Clough, J. - This is an application by the Bank of Calcutta for an order under sec. 277N of the Indian Companies Act staving the commencement and continuation of all actions and proceedings against the bank. The bank had its head office in Calcutta and 81 or 82 branches in various parts of the country. The petition was presented on 26th November, 1946. It was not supported by any report of the Registrar. Das, J., however, in exercise of the powers conferred by sec. 277N granted interim relief pending receipt of the report of the Registrar and fixed the 6th January, 1947. for hearing. By his order be imposed terms on the bank by which they were given liberty to pay up to 25 per cent. of the claims upon them or up to Rs. 5,000, whichever was less, and also to pay in full claims not exceeding Rs. 100. On 4th December, the Registrar appointed an auditor, Mr. J. N. Roy Chowdhury, R. A., to investigate the financial condition of the bank. 2. On 7th January, when the matter came up for hearing it seems that the auditor had not been able to do more than carry out a preliminary investigation into the affairs of the Head Office and an audit of some 9 branches. On that date interim relief was extended up to 17th March, 1947, and the time for submission of the report was extended to that date. 3. On 26th February, 1947, on the application of one of the creditors of the bank, the bank was permitted in the case of that particular creditor to pay its debts up to 35 per cent. instead of the figure 25 per cent. mentioned in the order passed on 26th November, 1946. 4. By 17th March, 1947, the auditor had carried out investigation into the affairs of a number of branches of the bank. The number is said to be 63. But he was able to report on only 45 branches and these did not include the Head Office. Page 4 of his report, which is annexed to an affidavit of Makhan Lal Ganguli, affirmed on 17th March, 1947. shows that there was a deficit at these 45 branches of nearly Rs. 31,45,000. The liabilities there were shown to be Rs. 57,34,239 against assets Rs. 25,89,858. These assets included the sum of Rs. 20,00,000 of book debts. 5. Page 4 of his report, which is annexed to an affidavit of Makhan Lal Ganguli, affirmed on 17th March, 1947. shows that there was a deficit at these 45 branches of nearly Rs. 31,45,000. The liabilities there were shown to be Rs. 57,34,239 against assets Rs. 25,89,858. These assets included the sum of Rs. 20,00,000 of book debts. 5. The auditor stated that he had no idea about the investments and other assets of the Head Office or other branches of the bank and accordingly was unable to suggest whether the sum of Rs. 21,04,000 said to be lying at the Head Office and which was said to be there at the credit of these 45 branches would be available for payment of the branches' liabilities. It would seem that other branches of the bank would have to show a better position than the 45 branches inspected, for the auditor's then statement was that though these 45 branches were said to be creditors of the Head Office to the extent of the figure Rs. 21,04,000 which I have mentioned, the accounts drawn up by the Head Office up to 22nd November, 1946, incorporating the transactions of all the branches indicated that the branches as a whole were indebted to the Head Office for the sum of Rs. 10,59,000. The auditor's conclusion is expressed in these words:-- I have no idea about the investments and other assets at the Head Office or other branches of the Bank and accordingly I am unable to suggest whether the sum of Rs. 21,04,416-12-2 now lying with Head Office will be available for payment of branch liabilities. Accumulated losses to date (2,99,152/-) and estimated loss on realisation of assets (3,57,478/-added together amount to Bs. 6,56,630/- which also must be made good by the Head Office if it claims that assets of the company are sufficient to meet all liabilities. If, however, the investments and other realisable assets acquired by the Head Office and the branches I have not inspected show a net surplus over the liabilities at Head Office and such branches sufficient to meet the above deficit at the forty-five branches I have completed, the bank may survive the present trouble. 6. If, however, the investments and other realisable assets acquired by the Head Office and the branches I have not inspected show a net surplus over the liabilities at Head Office and such branches sufficient to meet the above deficit at the forty-five branches I have completed, the bank may survive the present trouble. 6. The bank, however, represented to the learned Judge that it would be able to pay off at any rate 60 per cent of the claims of creditors and perhaps the entire existing demand liability within three months, provided it was permitted to make payments in cash and by adjustment of claims of creditors who are also debtors of the company "and otherwise." The words "and otherwise" were full of meaning. In the result on 17th March an order was made by which the interim moratorium was extended. The limit of 25 per cent. was extended to 60 per cent. without reservation as to the maximum figure of Rs. 5,000 previously imposed, and liberty was given to satisfy creditors by adjustment. 7. The terms of that part of the order were as follows:-- It is further ordered that the said company be at liberty to make such payment to its creditors or to satisfy their respective claims by adjustment against the clues of the said company from its debtors or otherwise." In view of this order the bank proceeded to meet the demands of some of its creditors by assigning to them the debts due to it from its own debtors and also by making transfers of its book debts and other properties also. The report of the Registrar dated the 21st June, 1947, states that full advantage has been taken by the management of this provision. Most of the company's depositors have been paid off, that is to say, to the extent of 60 per cent. by adjustment with book debts. The Registrar very forcibly points out the danger of such course to other depositors; that it made possible the passing of the good book debts and properties and other investments to more influential depositors, that is to say, depositors who were creditors for large amounts and possibly to the detriment of other creditors of the bank in particular of small depositors. He states that he himself has received complaints from some of the small depositors in the bank that they could not get payment. He states that he himself has received complaints from some of the small depositors in the bank that they could not get payment. Had I considered that it was possible in this case to make an order for moratorium, one of the terms which I should require would certainly have been that no more payments were to be made by adjustment; but in the circumstances of this case, in my opinion, the order asked for ought not to be made. 8. Sec. 277N of the Indian Companies Act itself makes it plain that an order can he made only in the case of a banking company which is temporarily unable to meet its obligations. It must be established to the satisfaction of the Court that the difficulties can be got over. The section provides that the application is not maintainable unless accompanied by the report of the Registrar though there is provision for interim relief being given before the report is presented. The section does not stipulate what the report shall contain but Allsop, J., in the case of In re: Benares Bank, Ltd. I. L. R. (1939) All 988 has expressed the view that the object of obtaining the report is that the Registrar should examine and inform the Court of the financial position of the company. This is obviously the intention of the legislature in enacting this provision. The Court must have before it the result of an independent examination, and a report such as will satisfy it that the company's difficulties are temporary only and such as will be overcome if some time is given. There is no such report in this case. In the circumstances which I need rot go into, the auditor, although he had made an examination which I have already mentioned, prior to the 17th March, had to begin his work all over again; and when he did so, it was without many of the most important books of the company. In the result such inspection as he was finally able to carry out and report upon, was the inspection of only 24 branches. This did not include the Head Office. The report, such as it is. is of very little assistance to the Court, and is not one from which it is at all possible to appreciate and appraise the financial position of the company. This did not include the Head Office. The report, such as it is. is of very little assistance to the Court, and is not one from which it is at all possible to appreciate and appraise the financial position of the company. In the result, in my opinion, there is no report before me such as the section requires. 9. What I have in effect really been asked to do is to rely upon Statements as to the affairs of the company made in a series of affidavits including a number made by Makhan Lal Ganguli, the Chief Accountant of the Bank, and a statement of affairs of the bank as on the 31st May, 1947, which is annexed to his affidavit affirmed on the 22nd July, 1947, and which is said to be certified by the bank's auditors. I am asked to rely on certain observations of the auditor with regard to the appreciated value of certain articles held by the Bank. 10. The statement of affairs which I have mentioned show that on the 31st May, 1947, the total liability of the bank was Rs. 82,61,000. Of this sum the liability to depositors amounted to some Rs. 76,84,000. Against this the assets are shown at Rs. 87,85,000. Of this the amount in cash totals only Rs. 1,04,000 and in shares is shown at Rs. 5,37,000. The bulk of the assets consist of book debts said to amount to Rs. 60,22,000 and land, which is shown at a value of Rs. 18,77,000. It is said that the land is worth a great deal more than this figure and that it includes an undivided 10 annas share in about 68 bighas of land situated at Cossipore. There is also land situated at Regent Park, Ballygunge and various properties in the Mofussil. It is urged that the value of the land in Calcutta alone, at calculated even on a conservative figure, at the rate of Rs. 3,500 per cotta, would amount to Rs. 30,10,000. No survey or valuation of the land was carried out so as to enable the valuation to be placed before the Court on affidavit. The figure Rs. 3,500 per cotta is mentioned in a letter from the valuer which was obtained to-day, and which has been handed up to me. 3,500 per cotta, would amount to Rs. 30,10,000. No survey or valuation of the land was carried out so as to enable the valuation to be placed before the Court on affidavit. The figure Rs. 3,500 per cotta is mentioned in a letter from the valuer which was obtained to-day, and which has been handed up to me. In the affidavits before me the value of the land has been shown at a very different figure. In the petition there is an Exhibit B said to consist of a statement of assets of the bank in which the land at Cossipore is valued at an average rate of Rs. 1,300 per cotta and amounts to Rs. 14,00,000. The figure of Rs. 30,10,000 which I have just mentioned is calculated on a total of 43 bighas, whereas the figure of Rs. 14,00,000 is calculated on a total of 47 bighas. In the affidavits before me various reasons were given to explain why the landed property of the company had not been sold. I need not state then because it seems to me the real reason has not been given and is the one which has been mentioned in the course of the argument; namely, that the interest of the bank is an undivided 10 annas share and there is a partition suit at present pending with regard to this matter. However valuable this land may be, the bank will eventually have to resort to its book debts in order to pay its creditors in full. 11. There is a complication with regard to the Cossipore land as well as some of the other assets of the bank which is this: a great deal of the property which the bank shows as its assets was brought to it as the result of an amalgamation which took place in February, 1946. between the Bank of Calcutta, Ltd. and the Jessore Loan Co., Ltd. The amalgamation was the result of a scheme, details of which I need not mention except to observe that certain of the creditors of Jessore Loan Co. between the Bank of Calcutta, Ltd. and the Jessore Loan Co., Ltd. The amalgamation was the result of a scheme, details of which I need not mention except to observe that certain of the creditors of Jessore Loan Co. claim that the scheme resulted in the creation of a charge in their favour for the amount due to them under the scheme and that all the properties of the Calcutta Bank including the properties brought to the bank as the result of the scheme are charged with payment of the amount still due to the creditors of Jessore Loan Co. The amount still due under the scheme may amount to Rs. 5 lakhs but may also be very much less. 12. The position is that the Bank of Calcutta, Ltd. has already had a moratorium from the 26th November until to-day. It is claimed that the bulk of the creditors to a very large extent have been paid off but its liabilities are still very heavy indeed. The Registrar in what is relied upon as the report which sec. 277N of the Companies Act requires, has suggested a moratorium until 31st December, 1948. It is suggested by the learned Counsel appearing for the bank that if a further minimum period of eight months were given, the bank would be able to realise its assets and pay off all its creditors and would then be left with a balance of some Rs. 18 to 20 lakhs with which it could pay off its liabilities, and he also suggested that in the circumstances a moratorium for a further period of eight months should be granted. It seems to me that the suggestion which has been made is really one which should properly be made the subject-matter of a scheme on which the creditors would be entitled to express their views. I do not think that sec. 277N of the Indian Companies Act was intended to refer to cases where the bank requires some 18 months or perhaps much more time within which to pay up its creditors and where the situation is such that the bank in order to meet its creditors will have to realise most, if not all, of its assets. In the circumstances 1 do not think that the present case is one for a moratorium at all. It seems to me a case for an application under sec. In the circumstances 1 do not think that the present case is one for a moratorium at all. It seems to me a case for an application under sec. 153 if the Bank is to continue at all. In any event, in my view, in the absence of a report from the Registrar such as the section contemplates, it is not open to this Court to make an order for moratorium. In the circumstances the application is refused. The creditors supporting the petition will pay their own costs. The matter is a heavy one and I have received great assistance from the creditors who were opposing this application. In the circumstances the bank will pay three sets of costs to the creditors opposing the application. Certified for Counsel. The order for costs covers reserved costs, if any.