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1967 DIGILAW 153 (BOM)

PRESIDENCY INDUSTRIAL BANK LTD. v. HINDUSTAN LEATHER INDUSTRIES LTD.

1967-12-18

J.L.NAIN

body1967
JUDGMENT This is an application dated October 29, 1964, for execution of a decree dated December 12,1952, of the Court of the Civil Judge, Senior Division, Poona, in Special Civil Suit No. 84 of 1952. The application has been filed by the Bank of Karad Ltd. because by an order dated April 26, 1962, made by the Reserve Bank of India under section 44A (4) of the Banking Com. panies Act, 1949, the judgment. creditors, the Presidency Industrial Bank Ltd., were amalgamated with the applicants. The amount claimed is Rs. 28,997.75 and costs. The mode in which the assistance of the Court is required is by issue of notices under Order XXI, rules 16 and 22 of the Code of Civil Procedure and by attachment and sale of certain properties of the judgment debtors. Pursuant to a chamber order dated May 7, 1965, the execution application was amended by sub8tituting the names of the two sons of the judgment. debtor No. 2.R. G. Vijayakar as his legal representatives in his place, on the allegation that the said R. G. Vijayakar was dead and by seeking attachment and sale of certain properties of the said Vijayakar in the hands of the said legal representatives. 2. The applicants have stated that the decree was registered 0n March II, 1953. The applicants have stated in the execution application that the first application, being Civil Application No. 160 of 1953 for execution, was made by the judgment-creditors on July 16, 1953, to the Court of the Civil Judge, Senior Division, Poona, and the said application was decided on September 15, 1953, by transfer of the decree to this Court for execution. Pursuant to that transfer, an application for execution was made in this Court in November 19.0:3, but in the meanwhile, judgment debtor-company No.1 had been ordered to be wound up, the application for execution in this Court was abandoned and treat. ed as filed on November 2, 1965. The second application for execution of the decree was made to the Court of the Civil Judge, Senior Division, Poona, on November 3, 1955, being Darkhast No. 251 of 1955. The said application was dismissed on June 13, 1956. ed as filed on November 2, 1965. The second application for execution of the decree was made to the Court of the Civil Judge, Senior Division, Poona, on November 3, 1955, being Darkhast No. 251 of 1955. The said application was dismissed on June 13, 1956. The said execution application was made against judgment-debtor No. l only, and the Court held that the decree could not be executed against any of the judgment debtors until the judgment-creditors had exhausted all their remedies against the property of judgment debtor No.1 which was charged with the payment of the amount under clause (5) of the consent decree. The third application for execution was made to the learned Civil Judge, Senior Division, Poona, on February 22, 1958, and was disposed of on April 14, 1958. Thereafter on April 1, 1964, the present applicants made an application to the Civil Judge, Senior Division, Poona, for transfer of the decree to this Court for execution and on September 12, 1964, the decree was ordered to be transferred to this Court. The present execution application was filed on October 29, 1964. On the present application notices were ordered to be issued under rules 16 and 22 of Order XXI of the Civil Procedure Code. 3. Notices under Order XXI, rule 16 was dismissed by my learned brother Kantawala J. on November 22, 1965, stating that "Dismissed with costs as the application is not made to the Court which passed the decree". It is the notice under Order XXI, rule 22 of the Civil Procedure Code that has been argued before me. 4. The first objection to the execution taken by all the judgment debtors and the legal representatives of judgment-debtor No.2 Vijayakar is that the present applicants are not entitled to execute the decree as being transferees by operation of law, they must first apply to the Court which passed the decree for execution of the decree and that they have not done so, therefore, they are not entitled to apply for execution to this Court. On behalf of the applicants it is contended that the application for transfer of the decree made to the Poona Court under section 39, Civil Procedure Code, on April 1, 1964, wag such an execution application by the present applicants. I am afraid, this contention is not correct. On behalf of the applicants it is contended that the application for transfer of the decree made to the Poona Court under section 39, Civil Procedure Code, on April 1, 1964, wag such an execution application by the present applicants. I am afraid, this contention is not correct. It has been held by the Privy Council in the case of Banku Behari v. Narain Das (1) that an application for transmission of a decree from one Court to another was not by itself a revival of the decree within the meaning of the Indian Limitation Act, inasmuch as an order thereon is a ministerial act of an officer of the Court, and not the judicial act of a Judge. 5. It is next contended by Mr. Desai for the applicants that Order XXI, rule 16, Civil Procedure Code does not apply in the present case as the assets of the Presidency Industrial Bank Ltd. were vested in the applicants neither by an act of the parties, nor by operation of law, but by an order of the Reserve Bank of India, under section 44A (4) of the Banking Companies Act, 1949. Reliance has been placed on the case of Sailendra Kumar v. Bank of Calcutta (2). This was a case where the amalgamation had taken place under section 153A of the Indian Companies Act, 1913. The Calcutta High Court held that where a Court acting under section 153A, Companies Act, sanctions a scheme of amalgamation of one company with another company and further, acting under sub. section (2) of that section, orders the transfer of the assets belonging to the former to the latter, the transfer takes place by virtue of the order passed by the Court, and that such transfer is not by assignment or operation of law within the meaning of the proviso to Order XXI, rule 16 and the latter company need not proceed under Order XXI, rule 16, Civil Procedure Code. It is not necessary for me to state whether I agree with this judgment in so far as it decides about vesting of assets under section 153A of the Indian Companies Act, 1913. I am not called upon to do this, because in the present case the vesting Look place under section 44A (6) of the Banking Companies Act, 1949. There is a material difference between the two provisions. I am not called upon to do this, because in the present case the vesting Look place under section 44A (6) of the Banking Companies Act, 1949. There is a material difference between the two provisions. Under section 153A of the Indian Companies Act, 1913, where a Court sanctions a scheme of amalgamation, it also by a separate order provides for the transfer and vesting of the assets of the company which is amalgamated in the company with which it is amalgamated. In that case, the transfer does take place by an order of the Court. Whether such a transfer is or is not a transfer by operation of law, it is not necessary for me to decide. But under section 44A (6) of the Banking Companies Act, 1949, on the sanctioning of a scheme of amalgamation by the Reserve Bank, the property of the amalgamated banking company shall by virtue of the order of sanction be transferred to and vest in the banking company which under the scheme of amalgamation is to acquire the business of the amalgamated banking company. While under section 153A (2) of the l1h1ian Companies Act, 1913 the vesting takes place by a separate order of the Court, under sub-section (6) of section 44A of the Banking Companies Act, 1949, once the Reserve Bank sanctions a scheme of amalgamation, the transfer takes place by operation of law and no vesting order if made or is required to be made by the Reserve Bank of India. Therefore, in case of a transfer or vesting of the kind which I have before me, the provisions of Order XXI, rule 16 are applicable and the applicants have failed to comply with the said provisions and are not entitled to execute the decree in this Court. 6. It has been held in the case of Kirtilal Jivabhai v. Chunilal Manilal (1) that a decree holder entitled to execute a decree as such must appear to b9 a decree holder on the face of the decree. The executing Court can only execute the decree provided his name appears as decree holder on the face of the decree itself. The executing Court cannot look to anything outside or beyond the decree in order to satisfy itself that the person who is applying is the decree holder. The executing Court can only execute the decree provided his name appears as decree holder on the face of the decree itself. The executing Court cannot look to anything outside or beyond the decree in order to satisfy itself that the person who is applying is the decree holder. The judgment in the said case further provides that Order XXI, rule 16 contemplates two cases of a transfer of a decree, one by assignment in writing and other by operation of law. If the transfer is by assignment in writing, it is obligatory upon the Court to give a notice of the application to the transferee and the judgment-debtor, and the decree cannot be executed until the Court has heard their objections, if any. The application must be made to the Court which passed the decree and it must be an application for execution. No separate application need be made under Order XXI, rule 16. All that the rule requires is that the transferee must apply for execution to the Court that passed the decree. Although Order XXI, rule 16 does not in terms require that on an application for execution under the said rule the Court should pass an order that the applicant is the transferee of the decree, it is desirable that ordinarily such an order should be made. But even without the passing of a formal order, there must be a recognition by the Court that the person who has applied for the execution of the decree is a transferee within the meaning of Order XXI, rule 16. But for such recognition the person who applies for execution would be a stranger to the decree and would not be entitled to maintain the application. In my opinion, this expression of opinion applies equally well to a transfer by operation of law as this kind of transfer is also provided for by Order XXI, rule 16, Civil Procedure Code. 7. However, these questions really do not arise in view of the fact that a notice under Order XXI, rule 16 has been dismissed by my learned brother Kantawala J. on November 22, 1965, on the ground that the application was not made to the Court which passed the decree. The applicants have not gone in appeal against the said order. Principles of res judicata apply to execution applications also. The applicants have not gone in appeal against the said order. Principles of res judicata apply to execution applications also. I, therefore, hold that the applicants are not entitled to apply to this Court for execution of the decree. [The rest of the judgment is not material to this report.] Application dismissed.